China

China Club

By Andrej Mrevlje |

Last week’s rush of 46 countries to join the Asian Infrastructure Investment Bank (AIIB) founded by China, a country still called communist,  was a surprise for many international observers. As the New York Times reported from Beijing, the stampede of foreign countries to contribute their share of capital for the project – which might soon challenge the United States-controlled World bank – astonished even the Chinese. Among the countries that have joined what is now called the China Club are 14 members of the G20, which represents a congregation of the strongest economies of the world. What exactly the goal will be for AIIB, which will be handling  capital of $100 billion, has not been defined yet. But while the new investment bank does not represent an immediate challenge to international investment bodies like the World Bank and the Asian Development Bank, it definitely demonstrates a strong will and determination towards reform, or better, reorganization of the monetary system we inherited from World War II.  In one of the next issues we will look at the geopolitics of this Chinese move. Today we will focus on what brought us to the doorsteps of the forthcoming changes.

 

After many long years of observing China, I am convinced that fashion, food and art helped to build a bridge between post-Maoist China and the West. David Tang, for example, is a radical chic entrepreneur who has the capacity to turn  patriotism into a business, while helping to change China’s image at a crucial moment. Tang is a son of Chinese refugees who fled from China to Hong Kong after the Communists took over the country in 1949. In the British colony, his parents continued their successful real estate business. David Tang was born in 1954, and at the age of 13 went to London, where he completed his education. In September 1991, Tang opened his first China Club. Situated on the three top floors of the old Bank of China  – an art deco building in the heart of Hong Kong  – it immediately became the talk of the town. It was all about the Club’s retro-chic nature, designed and decorated according to the highest Chinese aesthetic standards. China Club’s layout was a combination of sophisticated dining rooms modeled after 1930 Shanghai tea houses and bars like Long March, designed and named after the heroic march of Mao’s People’s Liberation Army during the war against Japan. In the intimacy of separate, smaller rooms on another floor, guests could meet and chat or play cards and mahjong without being observed. The Club also had a well-furnished library with books on China and Chinese culture. The art, books and decoration were transgressive for the standards of mainland China. The library was full of books banned in China, portraits of Mao Zedong painted with the fleur of irony and in bright colors were hung on the walls. They were painted by young and unknown artists who transformed the revolutionary motives into decorative art. The objects, such as lights, silver, plates, furniture and even iconic objects from the period of the Cultural Revolution, were redesigned with subtle post-modern touches. China Club was – and still is – a highly exclusive and strictly private club, situated in a building still owned by the Chinese government. Mainland officials and businessmen use the venue for discreet meetings with their foreign counterparts. The Club also hosted a lot of business and art deals. But the most important dimension of this project was that it tore down a bit of the ideological wall between China and the rest of the world and established new networks among the business and financial elite on both sides. With the seductive combination of art, food and fashion, Tang managed to project a fresher, more colorful, and even joyful image and environment of new China. He could not have done that without acknowledgement from, if not the explicit consent of mainland China; especially when, in 1994, Tang opened another China Club in Beijing, situated in the 17th century palace built for the son of Emperor Kangxi of the Qing dynasty. For Chinese elite, the Club must have been something out of Dream of the Red Chamber , the best known classic Chinese novel in which the “truth becomes fiction; when the fiction’s true and real becomes not-real; where the unreal’s real.” China Club was also prestigious for western diplomats and corporate jetsetters based in Beijing, who loved to think of themselves as conquerors and were ready to pay for it. I remember that the membership fee to join the club was 10,000 dollars, a high enough barrier to create an exclusive place where elites from East and West could meet and mingle, but only as long as westerners were paying the checks. The service staff could be dressed in colorfully redesigned Maoist uniforms, or in more somber traditional qipaos and tuxedos. These kinds of scenes, even when shown behind high walls and protected from the public eye, as at the China Club, were inconceivable just a few years before. It’s as if China was trying to prove that 1989, the time of the terrible Tiananmen Massacre, is over for ever. But in reality it was not the Chinese authorities who had created this new image of the country, it was David Tang, who was attempting – with his redesigned and bloodless image of China – to mix elites of two separate worlds. In parallel, Tang was running a chain of retail shops called Shanghai Tang. Selling replicas of China Club’s inventory, the shops were not only promoting an alluring image of a new China, but also trying to extend a feeling of inclusion and importance among the consecrated elite who visited either of the China Clubs. Years later, when the cultural promotion had been lifted on a much higher level by countless Confucius centers around the world – run exclusively by the government in Beijing – David Tang sold many of his China-related businesses. The physical Shanghai Tang shops closed down recently and now only exist as an online shopping catalogue.  David Tang still owns China Clubs in Hong Kong, Beijing and Singapore, but never wanted to discuss his China Club project.

 

But China is now ready to move ahead. For more than a decade now Chinese leaders have been designing and building their own worldwide China Club.

On Jan 27, 1999, Dai Xianglong, the governor of the Central Bank of China, summoned the foreign and domestic press corps to a big hotel alongside the Avenue of Eternal Peace, not far away from Beijing’s  Tiananmen Square. More than 20 TV networks and about 300 hundred journalist and correspondents answered the call. This was an unusually big crowd of reporters for that time, largely thanks to a rumor that China was getting ready to devaluate its national currency, the renminbi. Leaked from Beijing, the news appeared in the Hong Kong press and immediately caused a panic on global financial markets. As such, many reporters and networks from Hong Kong were flown in specifically for the occasion. Compared to the crowd of foreign correspondents based in Beijing, Hong Kong reporters were better equipped to follow China’s financial markets, and thus better suited to deliver what Beijing had to tell the world. So when Dai Xianglong appeared on the stage with a poker-straight expression on his face, an eerie silence covered the hall.

“As the person in charge, I can say the renminbi will not be devalued,” said the bank chief. “During the Asian crisis, the renminbi was not devalued and at the moment there is no need to do so. However, I am pleased that the yuan has so much influence.” (The yuan is another word for the renminbi.) The underlying message of the the Chinese authorities’ performance for the media was that they could easily cause global panic with what amounted to a practical joke. This was the first PR exercise of the growing Chinese power. There were many more tests to come.

Indeed, not long after this incident, during a rare press conference with Chinese prime minister, Zhu Rongji, a foreign journalist, obviously briefed by confidential Chinese sources, asked Premier Zhu if the renminbi was to become the Asian euro. The Chinese premier did not answer the question, but the message was out of the bottle.

There were many more signs to read about the direction China was moving and how it was   engaging the international community. Most of them were just small demonstrations of China’s fast growing power seeking recognition from the rest of world. One of them  was hilarious.

In 2008, when China staged the Olympic games, the Olympic flame travelled around the world, going from Athens to Beijing. From the moment they took over the torch, the Chinese team went ballistic. It was an unprecedented and hysteric security operation. While the torch traveled around the world, we witnessed scenes similar to those of US presidents traveling to foreign countries. A torch advance team, clashes between civilians and the Chinese secret service agents protecting the Olympic flame, pushing and dragging between Chinese security details and those in other countries. And yet, no media or government raised their voice about this ridiculous, quasi-military Chinese operation on foreign soil.

 

While the torch event was a unique episode of extreme Chinese nationalism, the robust growth of Chinese economy created more permanent conditions for China to impact the rest of the world much more strongly. A feeling that the world is ready for a change and that China, along with other emerging countries, should get a better seat at negotiating table was growing stronger and finally became omnipresent. But not everyone got it immediately. I recently reread John Burns’s report from 2009, which was published just before the G20 Summit in London.

In his piece, charged with emotions and expectations, the veteran New York Times reporter discussed the ambitions of English Prime Minister Gordon Brown, who, in preparation for the summit, was pushing for changes of the old and obsolete international monetary system based on WWII-era agreements. From today’s perspective, it is interesting to note just how different perceptions of the global economy were five years ago, even among the world leaders. Burns, for instance, reported that Prime Minister Brown insisted on the major and decisive role Europe should play in the forthcoming changes of the international monetary system which should shot the United States from its perch.  And how should European Union be able such a  leading role  without its own common foreign policy strategy? Without common defence? While its economy is still combating with the recession and high level of unemployment? Considering also that the gravity of commerce had long ago moved away from the trans-Atlantic zone and towards Asia. Brown’s recipe sounded absurd: the former prime minister argued that a potential European market of 500 million consumers, along with European moral sensibilities, was prerogative enough for Europe to become a world leader. No wonder Brown few months later lost the elections.

To be continued.  

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