23. “” is an expression that appeared for the first time in a work written during the Yuan dynasty. It literally means “use 10,000 daggers, make 10,000 cuts.” The phrase is used in New Delhi to describe the tactic that Beijing is allegedly employing in order to weaken its neighbor.
24. A further two experts told the authors that Chinese academics are incapable of answering questions about why China does not use its influence over Pakistan to try to put an end to the terrorism. “China collaborates in the war against terror, but only if it represents a threat to its territorial integrity or to its people. Terrorism has many faces in Pakistan. If it doesn’t affect them, it doesn’t bother them,” one of them told us.
25. China plans to transform Gwadar into an energy hub and would therefore need to build an oil pipeline across Pakistan as far as Xinjiang in order to transport oil from Africa and the Middle East. In spring 2011 it was announced that China would be in charge of administering the port, but the Beijing government denied that it had further asked Islamabad to host a Chinese naval base.
26. “China and India: A Rivalry Takes Shape—Analysis,” Harsh V. Pant, Foreign Policy Research Institute, June 2011.
27. The Russian-bought Admiral Gorshkov aircraft carrier will be operational by 2013. It is further expected that a homemade aircraft carrier will be completed by 2015. Source: “China and India: A Rivalry Takes Shape—Analysis,” Harsh V. Pant, op. cit.; Pant is an expert in security and defense in the Asia Pacific at King’s College, London.
28. China, Taiwan and Vietnam all claim sovereignty over the Spratly Islands while Malaysia, Brunei and the Philippines claim parts of the archipelago. In 2002 these countries signed the Declaration on the Conduct of Parties in South China Sea, which, although it does not represent a step forward in terms of resolving the problem, was approved with the aim of avoiding military escalation in the region by committing the parties to following certain guidelines. The Declaration enjoins the claimants not to occupy any islet which was not previously inhabited. Since then, China, Vietnam and Malaysia have reinforced their presence on the previously occupied islets by building landing strips, barracks, watch towers and the necessary infrastructure to take in fishing communities of between 200 and 300 people. This is being done with the legal aim of demonstrating the “effective administration” of the territory which would be a key factor under the unlikely circumstances of the dispute being resolved at an international tribunal.
29. China occupied the Paracel Islands in 1974, taking advantage of the weakness of the Saigon government just before the end of the Vietnam War. Given the close ties between Moscow and Hanoi the aim was to take over the islands which Beijing feared could harbor a Soviet naval base in the future, dangerously close to the Chinese island of Hainan. The current stance of Chinese diplomats with respect to Vietnam’s claim on the islands is inflexible: “The Chinese position is: that’s it, it’s over, we don’t talk about it. It’s closed, finished, over,” according to Ian Storey, of the Institute of Southeast Asian Studies (ISEAS), whom the authors interviewed in Singapore.
30. The last major military conflict in the South China Sea was in 1988, when seventy Vietnamese sailors were killed in a clash with the PLA-Navy. Since then, a handful of fishermen have been killed, mostly in accidents.
31. China’s military budget for 2012 officially increased by 11.2 percent in comparison with 2011, reaching 670.3 billion yuan ($106 billion). While this figure is still a far cry from the United States’ military expenditure, which is placed at around $614 billion, experts criticize the opaqueness surrounding China’s military plans and argue that the real expenditure is likely to be far greater than official figures suggest, possibly two or three times greater. Beijing allegedly does not include its expenditure on the development and modernization of fighter aircraft and an aircraft carrier in this total, among other items. In 1994, China’s military budget barely exceeded $6 billion.
32. In the past, China has used ballistic-missile testing alongside—or even inside—Taiwan’s territorial waters to warn the island’s leaders against crossing what Beijing sees as a red line: a declaration of independence, for example. Proof of this can be seen in the launching of several Chinese missiles in 1995 and 1996 in Taiwan’s territorial waters, on the route of a significant part of its commercial naval traffic. This led to a response from the United States, whose president at the time, Bill Clinton, ordered the greatest American military deployment in Asia since the end of the Vietnam War. The United States government used the “Taiwan Reaction Act” to guarantee the defensive security of the island in the event of any future attack, which explains why the United States is Taiwan’s main supplier of arms. Source: “New China Missile Unit Near Taiwan: Spy Chief,” Agence France-Presse, May 26, 2011.
33. Just twenty-three countries currently recognize the Republic of China (Taiwan’s official name) as a sovereign nation, independent from the People’s Republic of China. The majority of these countries (twelve) are found in Central America, South America and the Caribbean. Most other nations, including all the big international players, subscribe to the “one-China” principle and support the continuance of the current status quo. In other words, they believe that Taiwan—like Tibet—is part of the People’s Republic of China.
34. Despite signing the ECFA, China has continued to boycott and put pressure on other nations to stop Taiwan from participating as a “country” in the international community. This has made it impossible for Taiwan to begin negotiations or sign commercial agreements with countries or regions of interest, such as the European Union or Japan. Contrary to the expectations of the Taiwanese government, this has led to a greater economic isolation of the island. Critics of the ECFA argue that China is using the process of regional economic integration to marginalize Taiwan by forcing the island to channel its relations with the rest of the world through Beijing. Source: “Taiwan Risks Trade Isolation, Group Warns,” Wall Street Journal, May 25, 2011.
35. During a conversation in May 2009 with the US deputy secretary of state, James Steinberg, Lee insisted that Beijing was in no hurry to integrate the island into Chinese territory and said that China is following the same economic strategy in Taiwan that it adopted with Hong Kong: investments, buying assets and increasing its economic influence to fit its long-term political objectives. “Senior Singapore leader says China’s leader has patience for Taiwan: WikiLeaks,” Want China Times, December 8, 2010.
36. President Chen’s former colleague, Tao Liu, also told the authors that “after Chen was elected he began to receive an enormous amount of pressure from Japan, the United States and the European Union. They told him that even though he had won the elections, he couldn’t declare independence; he couldn’t change the status quo.”
37. According to a poll carried out by the Taiwanese television station TVBS which was broadcast on November 12, 2008, 15 percent of the respondents thought that Chen had been arrested for political reasons.
38. The most controversial issue surrounding the aid package was China’s act of buying Costa Rican debt. Although it was announced that China would buy Costa Rican bonds when the relationship was first established, the details of the matter were not made public. The newspaper La Nación, which Arias described as a “little shit” during his interview with the authors, resorted to legal means to force the conditions of the deal to be published: a 2 percent interest rate and a repayment period of twelve years. China did not want the interest rate to be published “because it didn’t lend money at that interest rate to every country,” Arias told us in justification of the lack of transparency.
Several authoritative sources in San José who asked to remain anonymous assured us that the secrecy was really connected to another issue. Although the buying of bonds represented an acquisition by the Chinese state using its foreign currency reserves, and should therefore have been carried out via the State Administration of Foreign Exchange (SAFE), it was actually carried out through Bo An Investment Company,
a business registered in Hong Kong. According to these sources, this company served to allow somebody from Arias’s former government to pocket the 2 percent interest, which would never end up in the coffers of the Chinese State.
39. “China Refused Panama Offer to Drop Taiwan: WikiLeaks,” Agence France-Presse, May 14, 2011.
EPILOGUE
1. According to the Venezuela Violence Observatory (OVV), 155,577 homicides took place in the country between Chávez’s appointment as president in 1999 and 2011. This means that the number of homicides has almost quadrupled since he came to power and this trend is far from over: 2011 was the most violent year in Venezuela’s history. The so-called “breach of impunity” also reveals the dramatic nature of the situation: out of the total number of murders mentioned, 91 percent remained unpunished. Source: the authors’ interviews with the sociologist Roberto Briceño-León, director of the OVV.
2. The Rise and Fall of the Great Powers, Paul Kennedy (Vintage, 1989).
3. The quintessential example is seen in the automobile sector, which was declared strategic by the government with the aim of transforming China into one of the world’s heavyweights in the sector, like the United States, Germany or Japan. In order to do this, Beijing obliged foreign brands operating in the Chinese market to go into partnership with a Chinese manufacturer, with the aim of forcing a transfer of technology which would eventually allow China to achieve its objectives. Three decades later, Beijing is reaping the fruits of its labors: Shanghai has become the new Detroit and Chinese brands are aspiring to become global players in the medium term.
4. Chinese companies are accused of paying extremely low taxes in some African countries, either because of doubts surrounding the actual volume of exported products (which is what tax is paid on) or as a result of the tax holidays offered by the governments of these countries.
5. Qin defended China’s presence and modus operandi in Africa using a string of figures which were mostly taken from the report “China’s Foreign Aid,” published by the State Council in 2011. He specifically referred to the case of Zambia, which is presented as a model of Sino-African co-operation, explaining that China has invested $6 billion and created 6,000 jobs in the country. These figures are certainly impressive for anybody who has not, like the authors, had the chance to see for themselves the precarious working conditions offered to those 6,000 employees (described in Chapter 6) and the conflicts surrounding Chinese investments in Zambia.
6. A good example that highlights the importance of side effects is Nigeria. The risk of focusing only on development without paying any attention to justice or corruption has led the country into a climate of great violence. The report Illicit Financial Flows from Developing Countries: 2000–2009 published by Global Financial Flows points out that a total of $130 billion was lost in Nigeria as a result of corruption between 2000 and 2008. This represents an average of $15 billion per year, or between 4 and 9 percent of the country’s GDP.
7. “China’s Policy and Its Effects in Africa,” presented at the European Parliament on March 28, 2008.
8. “China Blocks Nam on Internet,” Jo-Maré Duddy, The Namibian, July 30, 2009.
9. Various Chinese state departments are in charge of controlling the press (newspapers, radio and television) as well as Internet content (blogs, news pages, chat rooms). The Central Department of Propaganda is the highest-ranking organization in terms of controlling cultural and journalistic content to ensure that they are in line with the official version stipulated by the Communist Party of China and its interests. However, the State Council Information Office and provincial and local governments also take charge of supervising news content.
The media and websites regularly receive what is known among Chinese journalists as the “Directives from the Ministry of Truth” (in reference to George Orwell’s 1984), according to the respected news website China Digital Times. Written in authoritative language and sent to the people in charge of editorial departments, these orders are used by the Chinese government to lay down the rules about what is publishable and what should be kept off the radar. After spending several months analyzing these directives, the authors began to understand that this paranoid control of the media spans every topic and format and—contrary to what is commonly believed in the West—also applies to topics which go beyond issues connected to human rights or democracy. Cases of corruption involving government officials, for example, are kept quiet, as are news stories covering the salary increases of China’s military, violent incidents against the authorities or genetic research projects.
The control of information goes beyond simply banning or eliminating content. Some experts such as David Bandurski, an analyst working on the China Media Project at Hong Kong University, point out that Beijing has 30,000 cyber-police officers at its disposal, who spend day and night trawling the Internet and blocking web pages, comments and other web content. As if that were not enough, the government has access to approximately 280,000 commentators who have been recruited to influence contributions to chat rooms, online forums and other sites of Internet debate and to make these look spontaneous. Many of these “red shirts,” or “50 cent communists” as Bandurski calls them, are students who earn half a yuan (five euro cents) for each comment that contributes to influencing the dominant direction in forums for debate in order to steer these towards favorable positions from the point of view of the authorities. This technique aims to neutralize undesirable public opinion by spreading the views of the Communist Party, according to this specialist. Source: “China’s Guerrilla War for the Web,” David Bandurski, Far Eastern Economic Review, July 2008.
10. China’s expansion is causing these institutions to gradually adapt or give way to the new Chinese logic and criteria. In 2010 the Export-Import Bank of the United States made the unprecedented decision to match the financial terms offered by the Exim Bank of China so that General Electric would be able to gain a supply contract for 150 locomotives in Pakistan. Japan has also made its financial demands more flexible in order to compete with China on the world stage. Source: “Western Nations Match China’s Game,” John Pomfret, Washington Post, January 12, 2011.
11. When China Rules the World, Martin Jacques (Allen Lane, 2009).
12. The China Fantasy: How Our Leaders Explain Away Chinese Repression, James Mann (Viking Penguin, 2007).
13. In March 2012, China approved a law which “legalized” disappearances or, in other words, the barely legal detentions which the police were enforcing at that point in time against dissidents and lawyers. This law eliminates many of the guarantees offered—at least on paper—by the former law, granting the police new and extraordinary powers. For example, it allows suspects to be detained for a period of up to six months in secret locations. Within the CPC, one year of debate was needed to reach consensus on the law. By comparison, China’s private property law, passed in 2007, needed about fifteen years, as it was vigorously resisted by the Communist Party’s old guard.
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