Director of RAS Far East Institute: ‘China is paradoxically recovering quicker than the rest of the world’

“As soon as some crisis appears, the authorities in China immediately reduce taxes, increase the provision of the population, forgive debts”

Mr Maslov, as far as I am concerned, you see some patterns in China’s story that can explain what has happened to it in the last months.

China goes through cycles like any other country. The difference is that they have an ancient writing tradition, this is why these cycles are well recorded. For clear reasons, these cycles haven’t influenced the world a lot in the last millennia like now. For instance, China had a cycle that ended in the 14^th century with the coming of the great plague. And this plague then stretched into Europe. As China was as a huge country as it is now but with lower population density, while the population density in Europe was higher, the latter suffered more. While China recovered quickly. In the end, this favoured a change of dynasties: the last Chinese dynasty fell, and a new Manchuria one came in in the 17^th century.

Another cycle in the history of China linked with viruses was in the late 19^th century. China was already almost a semi-colonial country then. The plague appeared again at that moment that arrived in Europe, its last waves reached Europe and Russia in the 1920s. This weakened China, but it quickly recovered after this quickly.

In other words, we should understand that a crisis situation for China is the end of a big stage. What is happening now was considered by many a couple of months ago as the beginning of a huge crisis, it was said that China would never rise and the whole world would collapse. But we see a paradoxical situation: China is recovering quicker than the rest of the world, and, most importantly, it managed to turn all negativism due to image-related losses in its favour. I mean China has begun to be the only islet of stability and economic growth as proof of the efficiency of the system that everybody has been criticising.

If we briefly formulate the reason why China can overcome the gigantic crisis, this country hasn’t changed the basic management model for millennia. Executive titles have changed, the administrative division has changed, but the concept of a very close bind of authorities and people hasn’t changed. The authorities require strict compliance with certain moral and ethical obligations, but at the same time, they have cared about this people during all era, approximately like parents care about a child, including punishing the child if he or she behaves badly.

China is recovering quicker than the rest of the world, and, most importantly, it managed to turn all negativism due to image-related losses in its favour

As soon as some crisis appears, the authorities in China immediately reduce taxes, immediately take a set of measures to increase the provision of the population or, for instance, forgive debts: liberate small and medium businesses from taxes, postpone loan interest payments and so on. And thanks to it, the people sees that everything is fine, the authorities care about it, there aren’t such crises today that happened in the past when the epidemic led to a change of a dynasty. One of the key risks of the current situation for China was the potential destabilisation of the authorities or even partial change of the management. But the authorities supported the people, and nothing socially dangerous happened.

This is why we see now that China is leaving the epidemic completely updated: the authorities unexpectedly confirmed their legitimacy. It is what we cannot expect from any European country of the world.

“China solves territorial problems in one way: not by suppression, as many assume, but with colossal money injection”

Has there attempts at disrupting the country and system’s stability — not by people, as we already found out but some representatives or territories — during the epidemic in China? How severely were they prevented?

As a state, China has always grown thanks to the increased periphery. This formed historically. And if we take a substrate of Chinese culture (that’s to say, where it came from), we see that at first there were small settlements in the centre and south of today’s China. And the country expanded due to constant export of two things: culture and economy. China rarely seized territories militarily, it exported its administrative system, helped local kingdoms to strengthen its power and economic system, financed many enterprises. As we would say now, it constantly served as an investor. This is why some territories that were historically independent became Chinese now, and collective consciousness doesn’t remember that once they were independent.

Some territories were annexed later than others. Tibet and Xinjiang, of course, as well as some districts in the southwest of modern China are the most famous ones. And as relatively new territories, they have tried to obtain independence until recently, or there have been seen separatist moods of some groups. But China solves everything in one and the same way: not by suppression, as many assume, but with colossal money injection. It is an old mechanism.

For instance, in the last year, Tibet’s GDP where the local industry is developed worse than in most other regions of China has increased by 10% a year. GDP of the Xinjiang Uygur Autonomous Region has risen by almost 8%. This has happened due to centralised investments. Of course, it is a kind of bribe for the local population, but at the same time it is growth of well-being, the territories’ development pace is colossal.

China solves everything in one and the same way: not by suppression, as many assume, but with colossal money injection. It is an old mechanism

The locals understood during the crisis that if they began to separate on that wave, they wouldn’t rescue themselves because salvation is, first of all, centralised medicine, supply, financial support. This is why there weren’t any urges to separate from China and cause upheavals during the pandemic. The population, on the contrary, turned to the strong arm, the authorities, this is why there weren’t any destructive attempts during the coronavirus epidemic.

Attempts at separation appear in two cases: either some trouble hits the country with the weak power (then everybody escapes) or a groups all of a sudden says it wants independence amid absolute blossom when everybody calms down. This hasn’t happened in China now, though Americans tried to worsen the situation. There were published a lot of articles on Xinjiang citizens’ rights in the American press, but nothing happened.

“Outsiders almost don’t notice the fact that the population’s enthusiasm in China has gigantically gone up now”

Does it mean that Chinese authorities have the key merit in the normalisation of the situation?

I think that the system in general worked. And it wasn’t designed to fight precisely the coronavirus. There is strict power centralisation in China. And Xi Jinping anyway managed to suppress regional elites’ separatism. It is a very important process, I think, because China has always begun to collapse when regional elites obtained big financial independence and by formally obeying the state began to play their game. Xi Jinping had another goal (he unlikely thought the coronavirus would appear) got rid of the protest of regional elites. This is how the power became more centralised.

And this system worked well: it was possible to deliver its order to every city and village quite quickly, in case it was necessary to oust functionaries who committed an offence. The most important thing that was done in China was to provide the country from centralised funds. Unlike the USA and India where a system of states operates, where there are two types of taxes — centralised taxes and a state’s taxes, where a state’s management is an independent link to a certain degree, there is strict centralisation in China. And it is also important that unlike other countries, China has conserved a united system of ideological regulation because the communist party is saved. And this system worked.

What do you mean when talking about ideological regulation?

Thanks to ideological regulation China managed to update the point that the power and people are united and mutually dependent. The most important thing is that there wasn’t schism between the power and people during these tough times. The power showed it did everything correctly, that all of its points were correct and steps were effective, and the people supported it.

Outsiders almost don’t notice the fact that the population’s enthusiasm in China has gigantically gone up now. Nobody stimulated volunteering, it arose on its own, people want to help the authorities that have always helped them. The level of trust in power is very high.

The most important thing is that there wasn’t schism between the power and people during these tough times. The power showed it did everything correctly, that all of its points were correct and steps were effective, and the people supported it

In addition, one should understand that the same authorities seriously fought with all rumours with the help of strict measures. If funny videos and memes appeared at the beginning of the epidemic on the Chinese internet, in January, then all this stopped. The authorities began acting severely by fighting panicky moods, memes, jokes and flash mobs.

Roughly speaking China switched to a mobilised type of the economy without declaring it. In a word, the state took on the management and control over all resources, even private enterprises that formally remained in hands of private owners. I also mean the distribution of products, production volumes, money allocation, that’s to say, the state took the whole economy under total control.

And this was done quickly and psychologically painlessly. Though economically, the country carried losses. A mobilisation economy can’t stay for long because it wears an economy down. Most importantly, it doesn’t allow private businesses to develop. It is good only during a crisis. It seems that now China is step by step lifting strict executive measures and returning to market mechanisms.