China wall

China's relationships with the world economy will be tested in 2019, when it celebrates some internal anniversaries while contending with competition from the United States and European Union for influence in the Middle East and Africa.

China will celebrate its recent history in ways that could be felt around the world, according to a Montana-based business journalist.

“When you have the same people in charge with very little accountability for 70 years, you get some baggage,” Dexter Roberts said at the University of Montana’s 17th annual International Conference on Central and Southwest Asia. He added that “2019 will be a critical year for China. These are some very sensitive anniversaries.”

They include the 100th anniversary of the May 4 Movement commemorating Chinese student demonstrations against the outcome of World War I colonial power shifts, which Mao Zedong credited as crucial to the formation of the Chinese Communist Party in 1949. And this June 4 is the 30th anniversary of what’s known outside China as the Tiananmen Square Massacre, when government troops attacked thousands of pro-democracy protesters in the capital city’s center.

Tension over the anniversaries has already revealed itself. On Thursday, camera maker Leica scrambled to disavow a 5-minute promotional video called “Tank Man,” which depicts a photojournalist shooting the famous image of a Beijing student standing in front of a line of tanks advancing on protesters at Tiananmen Square in 1989.

Roberts grew up in Missoula and started covering China for Bloomburg BusinessWeek in 1995. At the time, China’s economy had barely made it into the world’s Top 10, while Japan was surfing a business boom. Today, China’s economy is second only to that of the United States, and has ambitions to be No. 1.

“A lot of people were concerned when China reported 6.4% growth for the first quarter of 2019,” Roberts said. “The U.S. grew a little over 2% in the first quarter. But China’s growth last year was 6.6%, and that’s the slowest it’s been in 30 years. They’d been averaging around 10%.”

However, economic analysts also worry that growth appears fueled by loose credit policies underwritten by state-owned banks, which could lead to financial trouble. Roberts said China’s debt-to-gross domestic product ratio is nearing 300 percent, which is potentially destabilizing.

On the other hand, China’s Belt and Road Initiative intends to boost its economy by creating new markets for its goods throughout the world, according to Shanghai International Studies University (SISU) research fellow Qian Xuming. For example, China is providing both investments and engineering to construct a new seaport in Egypt that will help move commerce to both the European Union and Africa.

“This also benefits Middle East regimes,” said Xuming, who was also participating in the UM conference. “It helps reduce extremism and brings stability to the Middle East.”

Xuming said China intended its partnerships on seaports, rail lines and airfields to be commercial and not colonial. He acknowledged many of those investments were in politically unstable parts of Africa and the Middle East, making security a concern. But he added China does not plan on using its military to secure them.

“You have to protect your investment,” Xuming said. “That’s why we need U.S. cooperation to protect these investments. We need protection from the U.S. military in a cooperative way.”

Xuming and his SISU colleagues said China wanted to increase social and political stability within the Middle East through trade relations. However, they would not comment on whether that included concerns about the status of Xinjiang in northwest China, where more than 1 million Muslim Uighur Chinese have been sent to “re-education camps” to tamp down political unrest.

Roberts said the Xinjiang situation “was becoming one of the biggest human rights tragedies in the world.” The Chinese central government has accused Uighur separatists of bombings and other terrorist activity, and responded with a massive population surveillance system using DNA, facial recognition and other social credit identification to track people and enforce compliance.

“There is concern that some Uighurs ae coming across the (Chinese) border to foment unrest in Xinjiang,” Roberts said. “But what the government is doing in Xinjiang is sowing seeds for a much more violent future.”

China must also be careful in its trade strategies, according to Zhen Cao, UM’s Department of Modern and Classic Languages chairman.

“We see many trains loaded with goods going out of China, going West,” Zhen said. “When the trains come back, they’re empty. China gets very little from these areas. Lots of people are asking: Why invest so much in high-risk areas? From what I see, it’s more than just commercial. China wants to play a role as a world power, even if it’s not cost-effective.”

The problem with that, according to Bob Seidenschwarz of the Montana World Affairs Council, is that China must grow those outside markets to support its internal goals.

“They can’t afford to have the rest of the world slowing down, because they’re export-dependent,” Seidenschwarz said. “They have a burgeoning middle class that wants to be competitive with the United States and the European Union.”

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Natural Resources & Environment Reporter

Natural Resources Reporter for The Missoulian.