It is China week. You cannot pick up a newspaper without seeing headlines about China, many of which can be summed up as: “Hail the world’s next superpower!” Some see this as a threat, others as an opportunity. It is as if we have suddenly woken up to the existence of the world’s most populous country, hardly an insignificant dot on the global landscape, but an area of the world that many of us pushed out of our minds for decades. It was communist, it was closed, and it was poor. It was like a Riyadh villa, you know that life exists behind the high walls, but you don’t consider it your business to peek behind the wall.
President Hu Jintao seems to be the definition of pragmatism. He is, as Margaret Thatcher once said of Mikhael Gorbachev, a man we can do business with. Today’s China is one which has thought through its economic needs and is going about forging the deals it needs in order to continue to build onto its staggering economic growth. It is worthy of note that Hu’s first stop on his US visit was not Washington, but Seattle. His first meeting was not with President Bush but with President Gates, for Bill Gates has attained the stature of a world leader.
In choosing to meet with Gates in this way, Hu has shown a shrewd understanding of the new dynamics of corporate power. Business used to be faceless; the corporation was an entity in its own right with executives sometimes appearing like little more than pawns in the hands of a greater invisible power. Corporate power was opaque; it was built on a sophisticated network of vested interests. To a large extent corporations bought political power. They took a direct stake in the government of the day and employed armies of lobbyists to promote their interests. The American oil industry is a typical example of traditional corporate power. It is faceless but well connected. Its power lines lead directly to the White House, so much so that the current administration is often accused of letting the oil industry dictate its geopolitical agenda.
But there are signs of change. Some corporate giants are not playing the old political game. The new brand of CEOs are statesmen in their own right. They often own their companies making them rich as individuals, not just as corporations. A handful has annual incomes bigger than the GDP of smaller European states. Bill Gates is currently in Vietnam where he received a hero’s welcome. Just as he has done in China, Gates has dealt directly with the government in order to promote Microsoft’s interests.
Take for instance the issue of piracy. What Microsoft found in China is that piracy can be a good thing, it can open doors that would otherwise remain closed. The argument goes something like the reasoning of a drug-dealer. Give new users free access until they get hooked; once the habit is formed, they will pay and become long-term customers. The crucial point is that piracy must be part of a transition, both for consumers and for producers. Consumers may start off with counterfeit goods because that is all they can afford, but they should start to buy the real thing the moment their income enables them to do so.
According to Bill Gates, about three million computers get sold every year in China, but most users don’t pay for software. However “as long as they’re going to steal it, we want them to steal ours. They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.” Well it hasn’t taken Gates a decade to figure it out; Hu left Gates’ mansion in Seattle with an agreement that all new computer sales in China must have licensed software installed before they leave the factory.
After meeting Bill Gates Hu visited Boeing. Business done, he flew off to Washington to go through the steps of the political dance and gain some PR points with his audience back home. Hu’s message to Washington was a simple one: We are now your equals; we must deal with each other as partners. Whereas the best way to describe the attitude of the US government to China is that they tolerate it rather than embrace it. They are a little confused as to whether to treat China as a friend or foe, choosing to label China a strategic competitor. Consequently there was a distinct lack of friendliness in Hu’s welcome at the White House. This was not to be a state visit, Hu would not be treated to a state dinner, and yet he was welcomed with a 21-gun salute.
From Washington, Hu flew to Riyadh where no such confusion exists. The Sino-Saudi relationship is straightforward and transparent. It is dictated by economic symbiosis. Both Saudi Arabia and China see the long-term benefits of strategic cooperation. China is the perfect customer, the kind that does not think that buying a barrel of oil gives it the right to ask awkward questions about domestic issues. China’s foreign policy could be described as being based on mutual respect. They do not meddle in the domestic affairs of other countries and expect the same in return. They do not have geopolitical ambitions. Nor are they trying to export an ideology or a way of life. Their priorities are clear and overwhelmingly dictated by economics. They are simply forging alliances that will enable their country to continue to prosper. Improved and strengthened relations with China are a great opportunity for Saudi Arabia and not just in terms of long-term economic strategy. We have much to learn from a country that is currently experiencing double-digit growth and which has lifted more than 220 million people out of poverty in the last twenty years. Add to that the wisdom of aligning yourself with an emerging superpower and you understand why President Hu Jintao received and deserved such a warm welcome on his arrival in Riyadh.
