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Tom Miller is a senior analyst at Gavekal Research, managing editor of China Economic Quarterly, and the author of China’s Urban Billion: The Story Behind the Biggest Migration in Human History (2012). He explained more about his new book, China’s Asian Dream: Empire Building On The New Silk Road.

 

How long did it take to research the book? What was your approach?

Aside from a short trip to Myanmar in January 2013, I did all the on-the-ground research between March 2014 and September 2015—so 18 months in total. From my base in Beijing, I made research trips to Xinjiang, Kyrgyzstan, Kazakhstan, Yunnan, Myanmar, Laos, Cambodia, Singapore, Vietnam, Sri Lanka, India and Washington, DC.

I organized meetings with officials, government ministers, diplomats, journalists, academics, think-tankers, businesspeople and companies, usually in advance, but also relied on “walking and talking”. It’s amazing what you can find on the ground by hiring a taxi for the day, walking into offices, businesses and hotels, asking lots of questions, and generally being really pushy. I hitched rides on trucks, downed drinks with construction workers, accosted businessmen in departure lounges, questioned traders, and even chatted with monks and prostitutes. Back in the office I read hundreds of articles, reports and books, both in English and Chinese, and scoured investment data and corporate reports.

This research produced around 40 notes and articles for clients of Gavekal, which we published in 2014-15. In the spring of 2016 I filled in the holes in my research and turned these articles into a book. The whole process took the best part of two years.

You document how much China is investing in its neighbors, but is it working on the soft-power side?

China is always better at hardware than software. It is opening Confucius Institutes across Asia, but few people have much affection for China. State companies are beginning to learn that they need to pay more attention to social responsibility in order to avoid a backlash against Chinese investment on the ground. But Chinese firms and officials prefer to deal with elites rather than worry about winning over ordinary people. Chinese officials talk about “win-win” diplomacy and building a “community of common destiny”, but they rarely look beyond building hard infrastructure and delivering economic development.

Are Chinese companies learning from working abroad?

Some are. Take Myanmar, where a number of big investments were cancelled or put on hold after the political transition of 2011. Big state companies there have stepped up corporate social responsibility programs and are engaging public opinion. It is fair to say, though, that most Chinese enterprises pay less attention to how they are perceived than do firms from countries that have pernickety shareholders and international brand names to protect. Still, Chinese firms must do enough to ensure that projects stay on track, and the requirements are different in different countries. Chinese investors and construction companies are going through the same learning curve that European, US, Japanese and Korean firms went through before them. Some do a much better job than others.

What will success for China’s One Belt, One Road strategy look like, do you think?

“One Belt, One Road” is one part of a broader push to cement China’s position as the undisputed power of Asia. The aim is for China to sit at the heart of a trade and investment nexus and to develop a wide geopolitical sphere of influence. It wants to play a similar role in the East to that played by the US in the West. But the initiative is, in the first place, about domestic development and security. It is designed to create new markets for China’s capital goods exporters and construction firms, and bring prosperity to its own underdeveloped border regions. It is about creating strategic energy corridors and making multilateral institutions work better for China. And it is about drawing countries into China’s economic and geopolitical embrace. Essentially, Xi Jinping wants to “Make China Great Again”.

The Belt and Road cannot do all these things by itself. But if China can succeed in improving connectivity across Asia while boosting trade flows and simultaneously strengthening its geopolitical grip across the region—and if it can do that without writing off tens of billions of dollars of loans—I think we can call it a success.

You focus on China’s bilateral relations with its neighbors – but how important are multilateral institutions like ASEAN?

China prefers to deal with countries on a bilateral basis, where its economic heft gives it considerable leverage. But it also works with multilateral organization like ASEAN, partly because it has to and partly because multilateral bodies can help to deliver big trade deals. With the collapse of the Trans-Pacific Partnership, for example, China is pushing an alternative free-trade vision encompassing the 10 ASEAN countries and their six FTA partners: China, India, Japan, South Korea, Australia and New Zealand. It also knows that bilateralism has its limits, because small countries do not want to be reduced to Chinese vassals. Still, I am sure that China would prefer ASEAN to remain the loose and weak association of states it is today than for it to become a genuine economic and political power.

Finally, China approves of multilateralism wherever that means limiting the power of the US and its allies. With establishment of the Asian Infrastructure investment Bank, it has shown that it will create its own multilateral organizations to supplement what it perceives as the inequities of the current international architecture.

Published in Business Tianjin

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