28/10/2017 Dateline London

Hello and welcome

to Dateline London.

I'm Jane Hill.

This week, we discuss

an extraordinary few days in Spain,

what's next for Catalonia?

And in China, is President Xi

Jinping preparing to rule well

beyond the usual 10 year term?

And what could that

mean for all of us?

My guests, Celia Maza de

Pablo, from La Razon,

Stephanie Baker from Bloomberg News,

Thomas Kielinger from Die Welt,

and the CEO of China

Dialogue, Isabel Hilton.

Welcome to you all.

So, what an extraordinary period

we are witnessing in Spain.

The Catalonan Parliament voted

to declare independence on Friday,

prompting the government in Madrid

to strip the region of its powers,

remove the Catalan leader,

and fire senior police.

Fresh elections have been

scheduled for December.

Demonstrations for and against

independence went on into the night,

with doubtless more to come.

Celia, what is your reading? What on

Celia, what is your reading? What on

earth happens next?

This is

completely an unprecedented

situation. On one hand, we have a

region of Spain declaring unilateral

independence and we have a central

government that for the first time

in Spanish history is going to apply

Article 155 in order to take control

of the Catalan government and to

hold an election on the 21st of

December. Let me start explaining

because I think it's important to

the way the Catalan parliament

approved yesterday this declaration

of Independence. Half of the chamber

was empty and the members of the

separatist parties voted secretly,

because they know they could face

charges of up to 30 years in prison.

So, right now, they don't have the

consensus of the social Catalonia,

the support of the international

community, they don't have the

control of the territory, they don't

have the control of the economy. All

the key factors that we have seen

over the years with other

independents processes over the

world, they are not present in the

Catalan process. But having said

that, as you asked, what happens

next?

What does Madrid do? We know

what they say they are going to do,

sacking the police chiefs already,

factors like that, but the risks are

very high here, everybody watching

will remember the violence that

transpired on October one.

We have

to see how the separatist parties

are going to represent this next

Catalan election because it's

important to see first of all what

is going to be the legal situation

of the leaders of the separatist

parties by the 21st of December? The

Spanish prosecutor said that on

Monday, they will file shares of

rebellion against the leaders of

these parties. So, maybe there is a

possibility to see these people in

prison by the 21st of December. We

have to see if the separatist

parties are going to boycott this

election, we have to see if the

separatist parties are going to

introduce this election as the first

election of the Republic of

Catalonia. Obviously, this is going

to be a very important election but

as you say, before this election, we

have almost two months ahead, when

the central government is going to

take control of the Catalan

government and take control of the

police. Obviously, this is going to

escalate the tension because there

are some protests already organised

for the days ahead, and some members

of the Catalan government say

already that some civil servants are

going to follow the rules of the

central government. We have to see

if the Mossos squad, the Catalan

police will keep neutral. We will

have a very intense and interesting

days ahead.

It's an intense period

and we have to remember not

everybody in that region wants to

separate.

Exactly.

We talk about the

90% in the illegal referendum as

Madrid sees it in October, that was

only on a 43% turnout.

Business

leaders are worded about this, they

do not want this. Remember, Spain is

coming out of a deep economic crisis

and severe austerity measures -- are

worried. That has partly led to what

we see today, Catalonia is Spain's

wealthiest region, accounting for

about a fifth of the Spanish

economy. It was demanding a better

fiscal deal in the wake of this

severe austerity and it may have

been a miscalculation by Mariano

Rajoy, as the economy has recovered

and is doing better now, that the

forces for separation would weaken.

But that just hasn't happened, you

still have shockingly high

unemployment. Spain wide as well as

in Catalonia. And I think ironically

now, what you have is more than 1000

companies moving their headquarters

out of Catalonia to other regions,

and that means that tax receipts to

the region will decline, and the key

plank for the Catalonian separatist

movement was we are wealthy enough

to go on our own, it has been weak

and severely because businesses are

the camping. That's the real

question going on, no one will

recognise Catalonia -- camping

elsewhere. They don't seem to have a

plan, no one have spoken about a

currency to Catalonia, so I think

whatever happens on December 21,

whoever wins, I think instability

will remain and that will be a

damper on the economy.

I think you

made a good point because it's true

that more than 1000 companies moved

their headquarters from Catalonia to

other places in Spain. And of

course, the economic consequences on

Catalonia are going to be

consequences for the whole of Spain.

Thank you very much for reminding

that no, the vast majority of the

Catalonian people support

independence. Because in the last

Catalan election, it shows the

separatist parties had 48% of the

vote and in the illegal referendum

on the 1st of October, the turnout

was just the 48%. But bearing in

mind it was an illegal referendum,

we have to take these numbers with a

pinch of salt. And I think it's

going to be very interesting if the

silent majority that a lot of people

say in Catalunya, we are going to

see finally the silent majority

voting in this Catalan emergency

election.

If Hispania is so

confident the majority in Catalonia

don't want independence, Green he

should put it to the test and the

argument is over.

This goes back

decades, in 1991, Catalans demanded

autonomy, calling local elections

and got an overwhelming majority or

an autonomy statute, it was taken

away and it wasn't given again until

1979. However the immediate crisis

is resolved, this is not going to go

away because it has profound roots,

also in the question of whether the

Spanish constitution functions for

everybody. And it raises the

question of what is the law for and

who does the states belong to? If it

belongs to the machinery of state,

then you're constantly going to have

these disaffected communities that

are seeking a way to legitimise

themselves. And does the state

belong to the people or not? If so,

how do you test it? That's the

situation.

Thoughts about the rest

of the EU as well, very quick to

come out and defend Spanish unity.

Obviously for the purposes of

maintaining Spanish unity, you have

to redefine what the Constitution

means. If Catalonia thinks they have

a bad deal out of being called

autonomous since 1979, you have to

discuss this. What is also difficult

to understand for me in this

independence drive, if economic

grievances are one of the main

reasons for their protest, they are

going to make it more difficult for

themselves as a result of the

unilateral declaration of

independence. It's not going to be a

bed of roses, on the contrary. Their

own situation will deteriorate

dramatically and obviously Rajoy is

banking, thinking about the 21st of

December vote, that most of the

people in Catalonia will recognise

they are really on a very stiff

wicket here. And will then rally

behind the unitary voices. Of course

it's a big gamble, you cannot be

sure of Catalonia on the 21st of

December voting for maintaining

unity, it could go the other way and

then what will you have? You really

have a pretty nasty situation, you

are allowed an illegal referendum --

a legal referendum called an

election to go ahead and the result

is they want independence.

I'm sure

the economic argument carries away,

it didn't weigh in Scotland and is

certainly didn't in Brexit where we

will be poorer leaving the European

Union. You could argue that for

Yugoslavia, if you want greater

control of your own affairs, those

arguments can sound abstract and the

prerequisite of a nationalist

movement is a confidence in

identity. Looking at Europe in the

last 25 years, how many new states

do we have? Look at the Baltic

states, look at Czechoslovakia, the

Czech Republic and Slovakia. We have

accepted these new definitions of

national boundaries for 30 years and

the Catalans have a very strong

case, they are bigger than Portugal.

With respect, the comparison to

Brexit doesn't convince me because

Brexit was taken as a vision of a

unitary country called Great Britain

to exit the EU.

My point was the

financial arguments doesn't

necessarily weigh everything in

this.

I'm not...

Take Scotland.

It's

probably stronger in the case of

Catalonia because that is a country

within Spain, if they deny

themselves the advantage of being

part of the unity of the country,

they really face an economic crisis

such a huge proportion, that really

it is totally unconscionable.

That

would depend on whether finally the

EU would accept them as a member,

which they should if they get there

by a constitutional process and it

wouldn't do the EU good either to

have a collapsing Catalonia.

On this

topic, a final thought from you, a

crystal ball prediction, a couple of

months, as things stand this

weekend, what is your sense of what

we could be looking at on the 21st

of December?

I wish...

Big question,

I know...

I think it is going to be

very important, as I say, the way

the separatist parties are going to

present to their voters this

election. Having said that, I think

it is going to be crucial importance

to see the result. Because

obviously, I think that right now,

the majority of the Catalan people

don't want to see independence,

according to the last Catalan

election and according to the last

illegal referendum. But it is

obvious that 2 million Catalan

people are not happy there. So

obviously, the result of this

election is going to be vital to see

what is going to be the situation in

the near future for the Catalan

people. And obviously, if the result

shows there is a big support for the

kind of dialogue with Madrid in

terms of another referendum, legal

referendum oratorios something like

that, or something like that, it is

time to discuss the Constitution may

be. But I think according to the

opinion polls, there is some belief

that constitutional parties are

going to win this election.

OK, it

is a waiting game and now, we watch,

wait, listen and discuss again

before that date. Thank you to all

of you.

To China, where at the end of the 5

yearly Communist Party Congress,

President Xi has his "thought" now

written into the party constitution.

The unveiling of the Politburu,

the men who rule alongside him,

revealed no member young enough

to be the heir apparent.

In President Xi's three and a half

hour speech to Congress,

he set out a vision

not just for the five

years ahead, but for 30.

Isabel, is he planning

to go on and on?

He certainly is. And now he can.

Before the Congress, there was the

question of his own retirements

discussed and he has conducted a

very profound and some say savage

anti-corruption campaign for five

years to clear his path to power, in

the course he has made many enemies.

Was it safe for him to step down?

Probably not, but then how was he

going to stay in power? Now he has

given himself a status next to God,

he can occupy any position he likes

or none at all, he will still be

China's strongman. We are in a new

era now, back to the strongman

vision of politics.

And that is just

driven by that one man? Are the

apparatchiks around him? Who gives

the sucker.

The other thing about

this Congress, something like 70% of

the Central committee, the politburo

and the standing committee have

changed, those people are

substantially President Xi's men,

mostly men, and some are compromised

figures but there is no doubt he is

in charge. Who is the arbiter of Xi

Jingping's thought other than the

man himself? If you oppose Xi

Jingping, you oppose him, the party

and the country, not a comfortable

position to be in.

He is virtually

the Constitution personified, and it

is hard to see how anyone will ever

challenge him on present prospectus.

Indeed, but the degree of rupture,

this is a huge rupture from Deng

Xiaoping. People describe the killer

of Chairman Mao, then there was Deng

Xiaoping who saved the economy and

now Xi Jingping is saving the party.

The real history of that is that

Deng Xiaoping was regarded by

Chairman Mao as a monstrous enemy

who he repeatedly imprisoned and

tried to get rid of, accusing him of

trying to take the catalyst Road and

indeed he did as soon as Chairman

Mao dive. His legacy was to try and

ensure China never again suffered

from a strongman as he and the rest

of the country suffered -- the

capitalist road. He set up a more

central system, retirement ages and

ideas of terms in the party, ten

years and you retired at 69, created

by Deng Xiaoping to avoid this

situation where one man and his

thought and we'll dominated the

country.

How could that happen, the

Deng Xiaoping legacy was overturned

and it has stepped back into the

strongman ideology?

It has taken

five years and starts from a point,

if you think from when Xi Jingping

took over, the party was in crisis,

it was deeply corrupt. Nobody

believes in communism frankly in

China. I say nobody, there are

always some but the majority were

not desperately waking up thinking

they need a new guiding light of the

party's ideology. So, how do you say

the Communist Party in a state that

has practised state capitalism and

is open to the world, which is

largely not Communist? You have to

devise a message and build a strong

security structure, the message is

substantially nationalism,

reinvigorating the Chinese nation.

China was done down by foreigners,

we are back, it's our turn now and

it is a popular message. He also had

a message about the environment

which has been a big lytic at issue,

and about a little more fairness in

the distribution of benefits of the

last 20-30 years -- political issue.

Those are popular messages but the

guiding principle is a muscular

nationalism which we are all going

to feel.

You say economic the it's

fascinating.

As well as China 's

position on the international stage,

I thought it was significant how he

was putting forward China as filling

the vacuum on the international

stage left by Trump as he retreats

from American International

commitments, very much positioning

China as a leader in a more forceful

way then we have seen previously on

the world stage. But economic Lee,

he faces serious challenges right

now. My takeaway from the Congress

is this time, you didn't have these

clear economic targets outlined.

Five years ago, there was this goal

of doubling the size of the Chinese

economy, not much said about that

this time around, and I think he is

facing the challenges now. Not only

trying to revive the state-owned

enterprises, but how does he manage

the private sector? Particularly

these wealthy Chinese tycoons who

have de facto become a bit of a

critical force, because the private

sector is so much more productive

and contributing to economic growth.

We have seen this crackdown on

wealthy tycoons, and the government,

the Chinese government has demanded

a stake in some of China's biggest

technology companies and a role in

decision-making which is a great

grab by President Xi for China's

future. Broadly speaking, he needs

to move China away from this model

of low-wage export-oriented state

investment growth model, to one of

its more reliant on domestic

consumption and that will require

higher wages, how does he do that?

That his main challenge going ahead

and how does he do that when he is

the all-powerful emperor.

You are

absolutely right and I think the two

are closely connected because if you

are a wobbly Communist Party facing

difficult economic times, more than

anything in the past 30 years, you

want to establish a fierce control

over every aspect. Hence we see

party sales, private companies being

obliged to have party cells, private

equity in these companies. But you

have an enormous debts, which maybe

three times the advertiser level, an

ageing population who are not going

to consume, a shrinking workforce.

You have a lot of headwinds and

surplus capacity in things like

steel and cement which cost a lot of

money. So, there is a two pronged

approach, you need to move up the

technology value chain and be

innovative, how that fits the

ideological top-down control remains

to be seen, and you need to

establish a presence in the road,

the building of infrastructure

across Asia. But also the

acquisition of high-tech firms and

there is beginning to be resistance

in Germany and other countries about

the idea that China is going to buy

up the most advanced technologies,

subsidise the companies that produce

them and then outcompete in third

markets. We will see all kinds of

international tensions on the terms

of trade in the coming years.

Underlying all of this is the

question, how do you maintain a

liberalised economy while at the

same time pressing ever more human

rights -- suppressing? China is

paradoxical, we used to think an

increase in economic liberalisation

naturally leads to political

freedom, we have been disabused of

that notion entirely. China has

become the second most important

economy in the world and yet

suppression is increasing, they are

becoming more authoritarian. Sooner

or later, the dichotomy of these two

developments, giving in to more

economic prowess at the same time by

suppressing human rights, will lead

to a conflict down the line, even in

China. China cannot escape, I'm

sure.

Does it change though, only if

other Western countries stop

investing and doing business? Will

that happen?

Not on the cards.

No,

it's not going to happen but there

is another point, and Thomas is

right. But when Mao Zedong had a

strong ideological line and total

control, the totalitarian version,

China was closed. There were very

few foreign influences, no news came

from outside and little from the

inside. Now China is trying to

operate in the world and what you

see, one of the interesting things

to watch is part of the party called

the United front work department,

that is what manages relationships

between the party and you and I for

example, or foreign universities.

That is the outfit that does

influence buying in other countries,

the outfit that many hundreds of

thousands of students who are

studying in universities abroad are

controlled by. You have this Chinese

presence everywhere and behind it

remains a united front work

department trying to pull the

strings and ensure that we all

accent the party line, not just the

Chinese.

I discover a sense of panic

almost in the higher echelons, when

they excluded foreign media to cover

the recent Congress. That is

obviously a step of panic.

The BBC,

New York Times were not allowed to

take...

They got that from President

Trump.

I see a similarity, you are

right but that seems to indicate

they worry about individual freedom

eventually getting the better of the

entire system of suppression.

Isobel, you say this is China trying

to engage with the outside world but

people watching will say OK, what

about human rights? Talking about

the economy and environment, what

about human rights, the issues of

Tibet?

If you look at what people

have said about that in the last

five years, you can hardly hear it.

The European Union hardly squeaks

about human rights anymore,

certainly the British don't. You

don't get much on Tibet either

because whenever anyone raises these

issues, China turns round and says

do you want to do business or not?

You do it on our terms. There is

going to be a real challenge to

Western values, not just in China,

but here. How strongly do we defend

our values in these circumstances?

How do we insist? Are our values

universe at -- universal order we

put them in our pockets to do a

business deal.

It all comes down to

economic 's?

Yes, you do get a sense

they are very much looking at what

led to the dissolution of the Soviet

Union, what followed and they are

keen to avoid the mistakes that were

made whereby the economy was

beholden in a rush to the oligarchs,

corruption followed and a weakening

of the state. And he seems very much

in tent on making sure that doesn't

happen, the so-called oligarchs of

China do not gain an upper hand in

the same way and it all remains

under Central party control.

And the

party is a party that people

respect, because the party has been

held in fairly widespread contempt,

for what it did in the past but also

once it stopped murdering its own

people, they then got rich. What's

to respect there? The

anti-corruption drive is popular

because people do think the party is

corrupt.

Thank you so much to all of you.

That's all we have

time for this week.

Do you join us again next week

same time same place,

but until then thank

you for watching and goodbye.