In this picture taken on December 17, 2018, security personnel secure an area in front of a billboard featuring China's late paramount leader Deng Xiaoping on the eve of the 40th anniversary of China's "reform and opening up" policy in Shenzhen. China celebrates on December 18 the 40th anniversary of its transformative "reform and opening up" policy, which turned the world's most populous country into an economic juggernaut that now faces slowing growth and a stern US challenge. / AFP / Nicolas ASFOURI
Security personnel secure an area in front of a billboard featuring China's late paramount leader Deng Xiaoping on the 40th anniversary of China's "reform and opening up" policy. Nicolas Asfouri / AFP

Forty years on from Deng Xiaoping’s reforms, China stands at a crossroads



Exactly four decades ago, the Chinese Communist Party, under its new paramount leader Deng Xiaoping, decided to subordinate ideology to wealth creation, spawning a new aphorism: “To get rich is glorious”. The party’s central committee in December 1978, disavowing Mao Zedong’s dogma, embraced a principle that became Deng’s oft-quoted dictum: “Seek truth from facts”.

Mao’s death in 1976 had triggered a vicious and protracted power struggle. When the diminutive Deng — once described by Mao as a “needle inside a ball of cotton” — finally emerged victorious at the age of 74, he hardly looked like an agent of reform.

But having been purged twice from the party during the Mao years — including once for proclaiming during the 1960s that “it doesn’t matter whether a cat is black or white, as long as it catches mice” — Deng seized the opportunity to usher in transformative change.

The Four Modernisations programme under Deng, which involved investing in agriculture, industry, defence, and science and technology, remarkably transformed China and spurred its phenomenal economic rise. China’s economy today is 30 times larger than it was three decades ago.

If GDP is measured in terms of purchasing power parity, China’s economy is already larger than America’s, according to the International Monetary Fund and the World Bank.

Yet, four decades after it initiated reform, China finds itself at the crossroads, with its future trajectory anything but certain.

To be sure, when it celebrates the 70th anniversary of its communist revolution next year, China can truly be proud of its remarkable achievements. An impoverished, weakened nation in 1949, it has since risen dramatically and now commands respect and awe around the world.

China is today the world's largest, strongest and longest-surviving autocracy. This is a country increasingly oriented to the primacy of the Communist Party. But here's the paradox: the more it globalises while seeking to simultaneously insulate itself from liberalising influences, the more vulnerable it is becoming to unforeseen political shocks at home.

Its overriding focus on domestic order explains one unusual but ominous fact: China’s budget for internal security — now officially at $196 billion — is larger than even its official military budget, which has grown rapidly to eclipse the defence spending of all other powers except the US.

China’s increasingly restrictive internal machinery, aided by a creeping Orwellian surveillance system, has fostered an overt state strategy to culturally smother and silence ethnic minorities in their traditional homelands. This, in turn, has led to the detention in internment camps of at least one million Uighur Muslims from Xinjiang for “re-education”.

Emboldened by a muted international response, Beijing is now replicating its Xinjiang-style crackdown, including on Islamic practices, in other provinces with significant Muslim populations.

Untrammelled repression, even if effective in achieving short-term objectives, could sow the seeds of violent insurgencies and upheavals.

More broadly, China’s leaders, by showing as little regard for the rights of smaller countries as they do for their own citizens’ rights, are driving instability in the vast Indo-Pacific region.

Nothing better illustrates China's muscular foreign policy riding roughshod over international norms and rules than its South China Sea grab. It was exactly five years ago that Beijing began pushing its borders far out into international waters by mobilising its first dredger in service of building artificial islands. The islands, rapidly created on top of shallow reefs, have now been turned into military bases.

The island-building anniversary is as important as the 40th economic reform anniversary because it is a reminder that China has never abandoned its heavy reliance on raw power since the Mao era.

In fact, no sooner had Deng embarked on reshaping China’s economic trajectory than he set out to “teach a lesson” to Vietnam. The February-March 1979 military attack occurred just days after Deng — once dubbed the “nasty little man” by Henry Kissinger — became the first Chinese communist leader to visit Washington.

A decade later, Deng brutally crushed a student-led, pro-democracy movement at home. He ordered the tank and machine gun assault that came to be known as the Tiananmen Square massacre, in which hundreds, perhaps thousands, of demonstrators and bystanders died.

Yet the US continued to aid China’s economic modernisation, as it had done since 1979, when then president Jimmy Carter sent a memo to various US government departments instructing them to help China’s economic rise. In the naive hope that a more prosperous China would liberalise economically and politically, that approach remained in effect until recent years.

But now a fundamental shift in America's China policy is under way, as illustrated by the current trade war and Washington's newly unveiled "free and open Indo-Pacific" strategy. The tougher line against China has also been highlighted by the enactment of two new US laws — the Reciprocal Access to Tibet Act this month and the Taiwan Travel Act in March.

The evolving paradigm shift, with its broad bipartisan support, is set to outlast Donald Trump’s presidency, underscoring new challenges for China at a time when its economy is already slowing and it has imposed tighter capital controls to prop up its fragile financial system and the yuan’s international value.

Simply put, the international factors that aided China's rise are eroding. The changing international environment also holds important implications for China domestically, including the Communist Party monopoly on power. Xi Jinping, who last year ended the decades-old collective leadership system to consolidate his power and this year scrapped the two-term limit on the presidency, no longer looks as invincible as he once did.

The juxtaposing of this month’s twin anniversaries helps shine a spotlight on a fact obscured by China’s economic success: Deng’s refusal to truly liberalise China has imposed enduring costs on the country, which increasingly bends reality to the illusions that it propagates. The price being exacted for the failure to liberalise clouds China’s future, heightening uncertainty in the Asia Pacific.

Brahma Chellaney is a geostrategist and the author of nine books, including Asian Juggernaut: The Rise of China, India and Japan

ROUTE TO TITLE

Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2

Company profile

Name: Tratok Portal

Founded: 2017

Based: UAE

Sector: Travel & tourism

Size: 36 employees

Funding: Privately funded

Blue Beetle

Director: Angel Manuel Soto
Stars: Xolo Mariduena, Adriana Barraza, Damian Alcazar, Raoul Max Trujillo, Susan Sarandon, George Lopez
Rating: 4/5 

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

How to join and use Abu Dhabi’s public libraries

• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.

• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.

• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.

• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.

• For more information visit the library network's website.

Tips for SMEs to cope
  • Adapt your business model. Make changes that are future-proof to the new normal
  • Make sure you have an online presence
  • Open communication with suppliers, especially if they are international. Look for local suppliers to avoid delivery delays
  • Open communication with customers to see how they are coping and be flexible about extending terms, etc
    Courtesy: Craig Moore, founder and CEO of Beehive, which provides term finance and working capital finance to SMEs. Only SMEs that have been trading for two years are eligible for funding from Beehive.
COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

JOKE'S ON YOU

Google wasn't new to busting out April Fool's jokes: before the Gmail "prank", it tricked users with mind-reading MentalPlex responses and said well-fed pigeons were running its search engine operations .

In subsequent years, they announced home internet services through your toilet with its "patented GFlush system", made us believe the Moon's surface was made of cheese and unveiled a dating service in which they called founders Sergey Brin and Larry Page "Stanford PhD wannabes ".

But Gmail was all too real, purportedly inspired by one – a single – Google user complaining about the "poor quality of existing email services" and born "millions of M&Ms later".

COMPANY PROFILE:

Name: Envision
Started: 2017
Founders: Karthik Mahadevan and Karthik Kannan
Based: The Netherlands
Sector: Technology/Assistive Technology
Initial investment: $1.5 million
Current number of staff: 20
Investment stage: Seed
Investors: 4impact, ABN Amro, Impact Ventures and group of angels

Company Profile

Company name: Yeepeey

Started: Soft launch in November, 2020

Founders: Sagar Chandiramani, Jatin Sharma and Monish Chandiramani

Based: Dubai

Industry: E-grocery

Initial investment: $150,000

Future plan: Raise $1.5m and enter Saudi Arabia next year

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Results:

Men's wheelchair 800m T34: 1. Walid Ktila (TUN) 1.44.79; 2. Mohammed Al Hammadi (UAE) 1.45.88; 3. Isaac Towers (GBR) 1.46.46.

Specs

Power train: 4.0-litre twin-turbo V8 and synchronous electric motor
Max power: 800hp
Max torque: 950Nm
Transmission: Eight-speed auto
Battery: 25.7kWh lithium-ion
0-100km/h: 3.4sec
0-200km/h: 11.4sec
Top speed: 312km/h
Max electric-only range: 60km (claimed)
On sale: Q3
Price: From Dh1.2m (estimate)

Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

'My Son'

Director: Christian Carion

Starring: James McAvoy, Claire Foy, Tom Cullen, Gary Lewis

Rating: 2/5

Dubai World Cup nominations

UAE: Thunder Snow/Saeed bin Suroor (trainer), North America/Satish Seemar, Drafted/Doug Watson, New Trails/Ahmad bin Harmash, Capezzano, Gronkowski, Axelrod, all trained by Salem bin Ghadayer

USA: Seeking The Soul/Dallas Stewart, Imperial Hunt/Luis Carvajal Jr, Audible/Todd Pletcher, Roy H/Peter Miller, Yoshida/William Mott, Promises Fulfilled/Dale Romans, Gunnevera/Antonio Sano, XY Jet/Jorge Navarro, Pavel/Doug O’Neill, Switzerland/Steve Asmussen.

Japan: Matera Sky/Hideyuki Mori, KT Brace/Haruki Sugiyama. Bahrain: Nine Below Zero/Fawzi Nass. Ireland: Tato Key/David Marnane. Hong Kong: Fight Hero/Me Tsui. South Korea: Dolkong/Simon Foster.

Dengue fever symptoms
  • High fever
  • Intense pain behind your eyes
  • Severe headache
  • Muscle and joint pains
  • Nausea
  • Vomiting
  • Swollen glands
  • Rash

If symptoms occur, they usually last for two-seven days

Formula 4 Italian Championship 2023 calendar

April 21-23: Imola
May 5-7: Misano
May 26-28: SPA-Francorchamps
June 23-25: Monza
July 21-23: Paul Ricard
Sept 29-Oct 1: Mugello
Oct 13-15: Vallelunga

BLACK ADAM

Director: Jaume Collet-Serra

Stars: Dwayne Johnson, Sarah Shahi, Viola Davis, Pierce Brosnan

Rating: 3/5

Navdeep Suri, India's Ambassador to the UAE

There has been a longstanding need from the Indian community to have a religious premises where they can practise their beliefs. Currently there is a very, very small temple in Bur Dubai and the community has outgrown this. So this will be a major temple and open to all denominations and a place should reflect India’s diversity.

It fits so well into the UAE’s own commitment to tolerance and pluralism and coming in the year of tolerance gives it that extra dimension.

What we will see on April 20 is the foundation ceremony and we expect a pretty broad cross section of the Indian community to be present, both from the UAE and abroad. The Hindu group that is building the temple will have their holiest leader attending – and we expect very senior representation from the leadership of the UAE.

When the designs were taken to the leadership, there were two clear options. There was a New Jersey model with a rectangular structure with the temple recessed inside so it was not too visible from the outside and another was the Neasden temple in London with the spires in its classical shape. And they said: look we said we wanted a temple so it should look like a temple. So this should be a classical style temple in all its glory.

It is beautifully located - 30 minutes outside of Abu Dhabi and barely 45 minutes to Dubai so it serves the needs of both communities.

This is going to be the big temple where I expect people to come from across the country at major festivals and occasions.

It is hugely important – it will take a couple of years to complete given the scale. It is going to be remarkable and will contribute something not just to the landscape in terms of visual architecture but also to the ethos. Here will be a real representation of UAE’s pluralism.

Women’s T20 World Cup Qualifier

UAE results
Ireland beat UAE by six wickets
Zimbabwe beat UAE by eight wickets
UAE beat Netherlands by 10 wickets

Fixtures
UAE v Vanuatu, Thursday, 3pm, Zayed Cricket Stadium
Ireland v Netherlands, 7.30pm, Zayed Cricket Stadium

Group B table
1) Ireland 3 3 0 6 +2.407
2. Netherlands 3 2 1 4 +1.117
3) UAE 3 1 2 2 0.000
4) Zimbabwe 4 1 3 2 -0.844
5) Vanuatu 3 1 2 2 -2.180

Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Abaya trends

The utilitarian robe held dear by Arab women is undergoing a change that reveals it as an elegant and graceful garment available in a range of colours and fabrics, while retaining its traditional appeal.

PAST 10 BRITISH GRAND PRIX WINNERS

2016 - Lewis Hamilton (Mercedes-GP)
2015 - Lewis Hamilton (Mercedes-GP)
2014 - Lewis Hamilton (Mercedes-GP)
2013 - Nico Rosberg (Mercedes-GP)
2012 - Mark Webber (Red Bull Racing)
2011 - Fernando Alonso (Ferrari)
2010 - Mark Webber (Red Bull Racing)
2009 - Sebastian Vettel (Red Bull Racing)
2008 - Lewis Hamilton (McLaren)
2007 - Kimi Raikkonen (Ferrari)

Indika

Developer: 11 Bit Studios
Publisher: Odd Meter
Console: PlayStation 5, PC and Xbox series X/S
Rating: 4/5

Heather, the Totality
Matthew Weiner,
Canongate 

Our legal advisor

Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.

Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation. 

Education: Sagesse University, Beirut, Lebanon, in 2005.

Draw:

Group A: Egypt, DR Congo, Uganda, Zimbabwe

Group B: Nigeria, Guinea, Madagascar, Burundi

Group C: Senegal, Algeria, Kenya, Tanzania

Group D: Morocco, Ivory Coast, South Africa, Namibia

Group E: Tunisia, Mali, Mauritania, Angola

Group F: Cameroon, Ghana, Benin, Guinea-Bissau

AUSTRALIA SQUAD v SOUTH AFRICA

Aaron Finch (capt), Shaun Marsh, Travis Head, Chris Lynn, Glenn Maxwell, D'Arcy Short, Marcus Stoinis, Alex Carey, Ashton Agar, Mitchell Starc, Josh Hazlewood, Pat Cummins, Nathan Coulter-Nile, Adam Zampa


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