CHINAMacroReporter

June 24, 2021
'China steps up crackdown on bitcoin mining industry'
‘China’s latest intervention places further pressure on what was once one of the world’s most vibrant markets for trading and mining digital currencies.’ ‘It comes at a time when many governments are scrutinising the industry’s effect on the environment and determining the types of financial oversight that should be applied to cryptocurrencies.’
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June 24, 2021
'Congress on China: Then and Now'
‘With the Senate voting on June 8, 2021, to adopt the United States Innovation and Competitiveness Act, it is safe to say that this is the most comprehensive action by Congress on China policy EVER.’ ‘The language of the United States Innovation and Competitiveness Act is about a long-term competition with China as opposed to war with an enemy.’
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June 24, 2021
'Hong Kong’s Apple Daily newspaper folds under government pressure'
Apple Daily was much more than a newspaper. To its fans, it was a defender of freedoms. To its foes, it was the defiler of national sovereignty.’
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June 24, 2021
The End of 'Apple Daily' - and Freedom of the Press in Hong Kong
Through arrests and freezing of assets, Beijing has forced the closing of Hong Kong’s last pro-democracy newspaper, the Apple Daily.
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June 20, 2021
‘Why do business and political leaders in the West persist in getting China so wrong?’
From that I suggested that to invest successfully in China, you have to understand – and be aware of - what those differences are.
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June 20, 2021
‘Why do business and political leaders in the West persist in getting China so wrong?
‘Why do business and political leaders in the West persist in getting China so wrong?’
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June 17, 2021
'Back-to-Back Rebukes of China Mark a Turning Point'
‘The one-two punch of public criticism smacks directly into Mr. Xi’s assertion that China won’t stand for lecturing by other nations, suggesting anxiety in key capitals is prompting governments to seek alignment with the U.S. over attempting to manage the relationship with Beijing on their own.’
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June 17, 2021
'Meet the New Chinese Economy, Same as the Old Chinese Economy'
If a recovery led by investment in real estate and industrial production, with consumption lagging behind, sounds familiar, it may be because the same could be said of the makeup of China’s growth before Covid-19.’
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June 17, 2021
Part 1 | 'Is China exporting inflation?'
‘Beijing is moving swiftly to protect its factories and workplaces from rising costs.’ ‘Still, rising prices in China, by far the world’s biggest manufacturer and exporter, could be felt around the world.’
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June 17, 2021
Bernie Sanders: 'Don’t Start a New Cold War With China'
‘The pendulum of conventional wisdom in Washington has now swung from being far too optimistic about the opportunities presented by unfettered trade with China to being far too hawkish about the threats posed by the richer, stronger, more authoritarian China that has been one result of that increased trade.’
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June 17, 2021
Part 2 | 'Is China exporting inflation?'
“Is China exporting inflation? In renminbi terms, it’s not so obvious. But in U.S. dollar terms, it starts to get more sizable.” ’
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June 13, 2021
'Forget about China': Clyde Prestowitz
Clyde Prestowitz has influenced U.S. foreign trade and investment policy for many decades, both inside and outside government.
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June 9, 2021
'Joe Biden Worries That China Might Win'
‘Biden worries that China is in competition for America, and not only that—they might win. This belief underpins the Biden doctrine.’
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June 9, 2021
'From the G7 to a D-10: Strengthening democratic cooperation for today's challenges'
‘A “Democratic-10” or “D-10” is aimed at rallying the world’s most powerful democracies around a common cause— advancing a rules-based democratic order based on shared values and common interests.’
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June 9, 2021
Biden Worries China Might Win
‘Biden has taken the vital first step of correctly diagnosing the strategic challenge facing the country.’ ‘Like Harry Truman at the start of the Cold War and George H. W. Bush at its end, the president now has an opportunity to create a framework for a new era.’
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June 9, 2021
Joe Biden: 'My trip to Europe is about America rallying the world’s democracies'
‘This is a defining question of our time: Can democracies come together to deliver real results for our people in a rapidly changing world?’
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June 9, 2021
'NATO & China's Challenges to Europe'
‘Even though China does not pose a direct military threat to NATO, contrary to Russia or terrorist groups, Beijing’s growing economic influence and diplomatic assertiveness in Europe coupled with its growing military relationship with Russia do have major implications for the transatlantic economy as well as its security.’
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June 3, 2021
5 | Two Caveats
‘Highlighting the strategic questionability of China’s policies doesn’t mean that Beijing’s fears of the outside world are completely unjustified.’
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June 3, 2021
1 | 'Wolf Warriors Killed China’s Grand Strategy—and We'll All Come to Miss It'
‘The predominant feature of Chinese conduct today is not grand strategy but a belligerent, defensive nationalism that lashes out without heed of consequences.’ Sometime in 2020, China came unmoored from its grand strategy.
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June 3, 2021
4 | Why China Abandoned Its Grand Strategy
‘The most persuasive explanation is that China has poisoned itself through its own rhetoric.’
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June 3, 2021
6 | The Risks & the Dangers
‘The real danger is that once toxin has spread through the system, there is no knowing where it will end.’
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June 3, 2021
2 | Blame It on Xi
‘In China’s case, the Xi era has seen the accumulation of somewhat counterproductive policies that catalyzed a breakdown.’
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June 3, 2021
3 | Enter the ‘Wolf Warriors’
‘What changed in 2020 was that nationalism for its own sake became the predominant motif of Chinese conduct.’
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June 3, 2021
Killing China's Grand Strategy
Trend: Under the Xi Jinping administration, China has amped up abrasive ‘Wolf Warrior’ diplomacy; cracked down within its borders, despite protests and criticisms from other countries; become increasing bellicose in responding to those protests and criticisms, and any other pushback it doesn’t like; and increased its aggressive rhetoric and actions against neighbors. Risks: If this sounds like a problem just for the world’s Ministries of Foreign Affairs, think again – the impact extends deep into business and finance.
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May 30, 2021
'Final Thoughts'
'Just as Brzezinski foresaw the two new contending blocs –– requiring greater “geostrategic skill” –– that are forming today, Kissinger has emphasized the unprecedented dangers that AI could introduce into a divided world.’
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May 30, 2021
China's ‘Anti-Hegemonist Bloc’
‘To counter U.S. coalition building, China has enhanced its diplomatic, economic, and military relationship with both Russia and Iran in recent months, resulting in the closest ties these countries have had in the post-Cold War era.’
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May 30, 2021
Postscript: China Doubts U.S. Allies Support
'Chinese leadership is also cynical about the effectiveness of a U.S.-led Cold War-style bloc.’
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May 30, 2021
Biden’s ‘Anti-China Bloc’
‘Throughout President Joe Biden’s first 100 days in office, his administration has largely continued the Trump administration’s hawkish approach toward China.’ ‘President Biden has also made international coalition building to confront the growing power and influence of China his primary foreign policy initiative.’ ‘Chinese leaders and the public are not convinced by the statements recently made by President Biden that these U.S.-led alliances are “not anti-Chinese” and that the United States is “not looking for confrontation” with China.’
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May 30, 2021
What China Thinks About Biden's China Policy
And that is what makes Cheng Li’s ‘Biden’s China strategy: Coalition-driven competition or Cold War-style confrontation?' so valuable. Cheng has decades of close relationships with China’s leaders and high officials. They trust him not to attribute their comments and so speak freely and honestly to him. Cheng is the person I rely on most to convey China’s positions.
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May 30, 2021
Worse for China than Trump
‘Many Chinese now believe that the Biden administration could be more detrimental to U.S.-China relations than the Trump administration.’
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May 30, 2021
'Biden’s China strategy: Coalition-driven competition or Cold War-style confrontation?'
‘Senior officials on the foreign policy team have frequently emphasized three “C” words: competition, cooperation, and confrontation.’
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May 30, 2021
The Trump Legacy
‘From Beijing’s perspective, the hawkish approach to China in the final year of the Trump administration revealed that the Trump team sought to defeat and destroy China in much the same way that the United States defeated the Soviet Union in the Cold War.’
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May 27, 2021
'China Bets on Productivity Over Population to Drive Its Economy'
‘Beijing has a two-pronged approach to maintaining economic growth as its population shrinks.’ ‘First, it intends to slow the decline of the urban workforce by raising the retirement age and encouraging migration of more of the country’s 510 million rural residents to cities.’ ‘Second, it plans to raise productivity -- a measure of economic output per worker -- with the latest five-year plan emphasizing better vocational education and more investment in scientific research, automation and digital infrastructure.’ [see second chart above]
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May 27, 2021
'Why Demographics is (Close to) Destiny'
‘Demographics may not be destiny, but for students of geopolitics, they come close.’
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May 27, 2021
'Lousy demographics will not stop China’s rise'
‘The old maxim ‘demography is destiny’ no longer holds in the same way that it used to.’ ‘A shrinking and ageing population may not have the same gloomy implications in the 21st century.’
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May 27, 2021
'Sex and the Chinese Economy'
‘A rise in China’s male-female ratio may have contributed to between one-third and one-half of the increase in its trade surplus with other countries.’ ‘The sex imbalance thus likely underpins an important source of tension between China and the US. Yet bilateral engagement has paid scant attention to this linkage.’
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May 27, 2021
'Demography + Technology is Destiny'
The census showed that the number of births nationwide fell to the lowest level since 1961, following a nationwide, manmade, famine caused by Mao’s “Great Leap Forward” that killed tens of millions of people, and that China’s total population could peak in the next few years.
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May 27, 2021
'China: Births Falling'
‘China’s total population could peak in the next few years, spurring profound changes for the world’s second-biggest economy.’
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May 27, 2021
'Demography + Technology is Destiny'
The census showed that the number of births nationwide fell to the lowest level since 1961, following a nationwide, manmade, famine caused by Mao’s “Great Leap Forward” that killed tens of millions of people, and that China’s total population could peak in the next few years.
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May 27, 2021
'China: Getting Old Before Getting Rich'
‘Over the past two generations, China has seen a collapse in fertility, exacerbated by Beijing’s ruthless population-control programs.’ ‘With decades of extremely low fertility in its immediate past, decades more of that to come, and no likelihood of mass immigration, China will see its population peak by 2027.’
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May 27, 2021
'China Bets on Productivity Over Population to Drive Its Economy'
‘Beijing has a two-pronged approach to maintaining economic growth as its population shrinks.’ ‘First, it intends to slow the decline of the urban workforce by raising the retirement age and encouraging migration of more of the country’s 510 million rural residents to cities.’ ‘Second, it plans to raise productivity -- a measure of economic output per worker -- with the latest five-year plan emphasizing better vocational education and more investment in scientific research, automation and digital infrastructure.’ [see second chart above]
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May 27, 2021
'China: Getting Old Before Getting Rich'
‘Over the past two generations, China has seen a collapse in fertility, exacerbated by Beijing’s ruthless population-control programs.’ ‘With decades of extremely low fertility in its immediate past, decades more of that to come, and no likelihood of mass immigration, China will see its population peak by 2027.’
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May 27, 2021
'China: Births Falling'
‘China’s total population could peak in the next few years, spurring profound changes for the world’s second-biggest economy.’
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May 27, 2021
'Why Demographics is (Close to) Destiny'
‘Demographics may not be destiny, but for students of geopolitics, they come close.’
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May 27, 2021
'Sex and the Chinese Economy'
‘A rise in China’s male-female ratio may have contributed to between one-third and one-half of the increase in its trade surplus with other countries.’ ‘The sex imbalance thus likely underpins an important source of tension between China and the US. Yet bilateral engagement has paid scant attention to this linkage.’
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May 27, 2021
'Lousy demographics will not stop China’s rise'
‘The old maxim ‘demography is destiny’ no longer holds in the same way that it used to.’ ‘A shrinking and ageing population may not have the same gloomy implications in the 21st century.’
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May 20, 2021
'Apple in China: No Plan B'
“This business model only really fits and works in China. But then you’re married to China.” ‘The Chinese government was starting to pass laws that gave the country greater leverage over Apple, and Mr. Xi would soon start seeking concessions. Apple had no Plan B.’
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May 20, 2021
'Tim Cook and Apple Bet Everything on China.'
‘For Apple, a clean break with China is impossible.’
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May 20, 2021
'Apple held hostage by its Chinese puzzle'
"The massive and complete supply chain ecosystem in China is key to the iPhone maker's success, but it has also created a gigantic organism that would struggle to move somewhere else."
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May 20, 2021
‘Censorship, Surveillance and Profits: A Hard Bargain for Apple in China’
‘Apple built the world’s most valuable business on top of China. Now it has to answer to the Chinese government.’
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May 20, 2021
Apple in China
‘But just as Mr. Cook figured out how to make China work for Apple, China is making Apple work for the Chinese government.’ ‘Behind the scenes, Apple has constructed a bureaucracy that has become a powerful tool in China’s vast censorship operation.’
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May 20, 2021
'Apple Reaches $2 Trillion'
“This business model only really fits and works in China. But then you’re married to China.” ‘The Chinese government was starting to pass laws that gave the country greater leverage over Apple, and Mr. Xi would soon start seeking concessions. Apple had no Plan B.’
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May 15, 2021
‘Scenario Three: Leadership Challenge or Coup
‘By removing de jure term limits on the office of the presidency — and thus far refusing to nominate his successor for this and his other leadership positions — Xi has solidified his own authority at the expense of the most important political reform of the last four decades: the regular and peaceful transfer of power.’
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May 15, 2021
Invitation to a Trivium Flash Talk: 'China's Data Environment from a Big-Picture Perspective.’
‘This talk is designed to cut through the tech and legal jargon, and lay out the top-level strategic rationale underpinning China's thinking on data. We'll cover:’
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May 15, 2021
Invitation to a Trivium Flash Talk: 'China's Data Environment from a Big-Picture Perspective.’
‘This talk is designed to cut through the tech and legal jargon, and lay out the top-level strategic rationale underpinning China's thinking on data. We'll cover:’
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May 15, 2021
After Xi: A Succession Crisis to Rock the World
A new risk to add to your analyses and strategic planning: A succession crisis in China. By removing term limits on his stay in office and by not naming a successor, Secretary General Xi Jinping ‘has pushed China towards a potential destabilising succession crisis, one with profound implications for the international order and global commerce,’ writes Richard McGregor of the Lowy Institute and Jude Blanchette of the Center for Strategic & International Studies
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May 15, 2021
‘Scenario Four: Unexpected Death or Incapacitation'
‘Even if the CCP’s claim that Xi Jinping has no designs to remain in office for life is true, his evisceration of succession norms leaves the country ill-prepared for his sudden death or incapacitation.’
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May 15, 2021
'Regime change in China is not only possible, it is imperative.'
‘We must make regime change in China the highest goal of our strategy towards that country.’ ‘The US and its allies cannot dictate to China the political system by which it is governed. But they can and must engineer conditions which embolden and enable those in China who also want regime change to achieve it.’
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May 15, 2021
After Xi: A Succession Crisis to Rock the World
A new risk to add to your analyses and strategic planning: A succession crisis in China. By removing term limits on his stay in office and by not naming a successor, Secretary General Xi Jinping ‘has pushed China towards a potential destabilising succession crisis, one with profound implications for the international order and global commerce,’ writes Richard McGregor of the Lowy Institute and Jude Blanchette of the Center for Strategic & International Studies
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May 15, 2021
'Regime change in China is not only possible, it is imperative.'
‘We must make regime change in China the highest goal of our strategy towards that country.’ ‘The US and its allies cannot dictate to China the political system by which it is governed. But they can and must engineer conditions which embolden and enable those in China who also want regime change to achieve it.’
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May 15, 2021
'After Xi: China's potentially destabilising succession crisis'
‘By removing de jure term limits on the office of the presidency — and thus far refusing to nominate his successor for this and his other leadership positions — Xi has solidified his own authority at the expense of the most important political reform of the last four decades: the regular and peaceful transfer of power.’ ‘In doing so, he has pushed China towards a potential destabilising succession crisis, one with profound implications for the international order and global commerce.’
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May 15, 2021
‘Scenario One & Two: Xi Steps Down'
‘In this scenario, Xi thwarts the current consensus by handing over his leadership positions to at least one individual from the current Politburo Standing Committee (as per existing regulations).’
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May 12, 2021
The Poem that Cost Billions
The billion dollar losses that came from quoting an 1,100-year-old poem, toWhy foreign companies in China have Stockholm Syndrome
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May 10, 2021
'A 1,100-Year-Old Poem Cost Meituan’s Outspoken CEO US $2.5 Billions'
‘On Monday, because of an 1,100-year old poem about events 2,200 years ago posted by the founder of food delivery giant Meituan, investors panicked, and sank the company’s market cap by $15.6 billion. And Meituan CEO Wang Xing, who posted the poem, lost $2.5 billion of his wealth.’
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May 9, 2021
'The Housing Bubble That Just Won’t Pop'
‘China’s cities are plagued by a diverging trend: high demand and exorbitant prices for residential properties in tier 1 cities and yet an oversupply in smaller, lower-tiered cities.’
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May 7, 2021
'Would China really invade Taiwan?'
‘Is Taiwan really "the most dangerous place on earth?" No. Or at least, not right now.’
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May 7, 2021
'Don't Help China By Hyping Risk Of War Over Taiwan'
‘China is marshaling its full range of capabilities to intensify pressure on Taiwan below the threshold of conflict.’ ‘Beijing's goal is to constantly remind Taiwan's people of its growing power, induce pessimism about Taiwan's future, deepen splits within the island's political system and show that outside powers are impotent to counter its flexes.' ‘Its approach is guided by the Chinese aphorism, "Once ripe, the melon will drop from its stem [瓜熟蒂落]," ’‘This strategy may require more time than war, but it would come at less cost and risk to Beijing.’
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May 7, 2021
'China Threat: A "perception gap" between the U.S. and Taiwan'
‘While the U.S. talks up the medium-term military threat, the democratic island sees the moves as part of a bigger, more immediate problem: "gray zone" warfare from Beijing that is meant to wear down the morale of not just the Taiwanese military, but also the island's people.’
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May 7, 2021
'The most dangerous place on Earth'
‘Taiwan is an arena for the rivalry between China and America.’ ‘Although the United States is not treaty-bound to defend Taiwan, a Chinese assault would be a test of America’s military might and its diplomatic and political resolve.’
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May 7, 2021
'The Most Dangerous Place on Earth'
‘China's top priority now and in the foreseeable future is to deter Taiwan independence rather than compel unification,’ note Richard Bush (Brookings (retired)), Bonnie Glaser (German Marshall Fund in America), and Ryan Hass (Brookings Institution)
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May 7, 2021
'Another China-Related Risk for Investors & Corporations: Taiwan'
"Taiwan poses the biggest geopolitical risk in Asia and is likely to only increase, a reason it has to be built into investors’ [and corporates' models]" according to Arthur Kroeber, head of research at Gavekal.
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May 5, 2021
'Western companies in China succumb to Stockholm syndrome'
‘Senator Marco Rubio of Florida has a point when he calls Delta Air Lines “the height of hypocrisy” for opposing voter legislation in the US state of Georgia while partnering with a government he accuses of being “actively engaged in genocide” in Xinjiang.’
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May 4, 2021
'The Surprising Strength of Chinese-Japanese Ties'
At their summit in April, ‘after years of veiled messaging Japanese Prime Minister Yoshihide Suga U.S. President Joe Biden, ‘formally acknowledged that they are working together to deter China’s military power in Asia and compete with China economically.’
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May 3, 2021
'How Will the Digital Renminbi Change China?'
‘China's new digital renminbi by itself will not help the currency to challenge the US dollar’s global dominance.’ ‘Its true significance instead lies in its potential to shift the competitive balance of power between the country’s technology giants and traditional banks.’
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May 2, 2021
'Fanning the Flames of War'
I recently received an email from a former U.S. ambassador and influential senior foreign policy expert taking me to task for publishing so many hawkish posts about U.S. policy toward China in the ‘China Macro Reporter.’ These are, he said, ‘in some ways fanning the flames of a potential war. Please back down, at least a bit.’ ‘This is not the Malcolm I remember or know,’ he ended.
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May 2, 2021
‘A trend for hostility toward China, inflamed under Trump, is a recipe for American failure’
‘A trend for hostility toward China, inflamed under Trump, is a recipe for American failure.’ ‘Hostility toward China, much of it misinformed historically and strategically, has deepened in the United States in recent years, with a consensus hardening among both Republicans and Democrats that China is at root an adversary that must be thwarted.’ ‘Four years under President Donald Trump have enlarged and inflamed that trend, but it is a recipe for American failure.’ ‘The Joe Biden administration needs to seriously rethink Washington’s approach to Beijing.’
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April 30, 2021
'World Economic Outlook, April 2021: Managing Divergent Recoveries'
‘The upgrades in global growth for 2021 and 2022 are mainly due to upgrades for advanced economies, particularly to a sizeable upgrade for the United States (1.3 percentage points) that is expected to grow at 6.4 percent this year.
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April 29, 2021
Biden China Policy: What We Know at the 100 Day Mark
Friday, April 30, marks 100 days of the Biden Presidency.On Thursday, President Biden gave a speech to a Joint Session of Congress that summed up many of policies – including those on China - as he nears the 100-day mark.And several major media outlets and think tanks are getting an early start on their analyses.Here's Senator Lindsey Graham: "I'm not very impressed with the first 100 days.”‘ "He's been a disaster on foreign policy.” ’‘ “Russia and China are already pushing him around, so I'm very worried." ’
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April 29, 2021
'Biden’s First 100 Days: Setting the Table for U.S.-China Strategic Competition'
‘Biden is focused on accumulating as much leverage as possible to deal with China from a position of strength and to dispel the growing Chinese perception that the United States is a power in decline.’
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April 29, 2021
'What Joe Biden Said About China in His First Speech to Joint Session of Congress'
“We’re in competition with China and other countries to win the 21st Century.”
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April 29, 2021
'Biden's Speech Calls for U.S. to Take On China and Russia'
‘President Biden justified his broad vision to remake the American economy as the necessary step to survive long-run competition with China
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April 29, 2021
'What does Biden’s first 100 days tell us about his approach to China?'
‘What we have learned from the first 100 days is that we are likely to have both a confrontational and competitive relationship with China, similar to Trump’s policy but with some important nuances.’
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April 29, 2021
'China's Response to Biden's Speech'
‘It is natural for the two sides to have competition in some fields, but we should advocate fair competition, like competing with each other for excellence in a racing field, not beating each other on a wrestling arena.’
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April 26, 2021
'The New Age of Autarky'
‘The United States, China, and India are each now engaged in what seems like a paradoxical enterprise: the quest to increase their global status while also turning inward to become more self-sufficient.’
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April 26, 2021
'China Inside Out: A Conversation with Susan Shirk & Tony Saich'
‘The centralization of power, quite predictably, leads to this kind of echo chamber effect, which is really quite dangerous. And it's something that we should be factoring in when we think about how to deal with China now.’
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April 24, 2021
'Xinhua News Agency on the "Strategic Competition Act of 2021" in the U.S.' | 新华社评美“2021年战略竞争法案”
‘The bill is full of Cold War mentality and ideological prejudice, wantonly misinterpreting, slandering and discrediting China's development strategy and domestic and foreign policies, and grossly interfering in China's internal affairs.’
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April 23, 2021
'A new era of bipartisanship on China in Congress?
‘The Strategic Competition Act codifies a bipartisan U.S. position on a range of China-related issues and telegraphs to U.S. allies the federal government is unified.’
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April 23, 2021
'Xi at the Climate Summit: Domestic Obstacles to Carbon Neutrality'
‘Xi’s reticence at the summit could be driven by domestic considerations. He needs to balance divergent interests between domestic industrial groups and international expectations, the need to show China’s green image and also not be seen as caving to U.S. diplomatic pressure.’
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April 21, 2021
‘Scenario One & Two: Xi Steps Down'
‘In this scenario, Xi thwarts the current consensus by handing over his leadership positions to at least one individual from the current Politburo Standing Committee (as per existing regulations).’
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April 21, 2021
'Threat of Chinese sanctions tests Japan's resolve on Taiwan'
"We advise Japan to stay away from the Taiwan question. The deeper it is embroiled in, the bigger the price it will pay." Communist Party-backed Global Times' editorial.
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April 21, 2021
‘Scenario Four: Unexpected Death or Incapacitation'
‘Even if the CCP’s claim that Xi Jinping has no designs to remain in office for life is true, his evisceration of succession norms leaves the country ill-prepared for his sudden death or incapacitation.’
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April 21, 2021
‘Scenario Three: Leadership Challenge or Coup
‘By removing de jure term limits on the office of the presidency — and thus far refusing to nominate his successor for this and his other leadership positions — Xi has solidified his own authority at the expense of the most important political reform of the last four decades: the regular and peaceful transfer of power.’
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April 20, 2021
'Xi calls for new world order (again)'
‘We must not let the rules set by one or a few countries be imposed on others, or allow unilateralism pursued by certain countries [read America] to set the pace for the whole world.’
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April 20, 2021
'Beijing won total control of Hong Kong. Now, the "brainwashing" begins.'
April 15 was not a normal Thursday in Hong Kong. That occasion, the first “National Security Education Day” since China imposed a tough security law in June, was the most visible display of Hong Kong’s fall from a relatively free, boisterous territory to an ­Orwellian place that resembles the repressive mainland.’
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April 19, 2021
‘The US-Japan Joint Statement grossly interferes in China's domestic affairs'
‘The US-Japan Joint Leaders' Statement grossly interferes in China's domestic affairs and severely violates basic norms governing international relations. China deplores and rejects it.’
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April 19, 2021
'Tokyo Flexes Its Talons'
‘The alliance with Japan is the single most important international relationship America has.’
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April 18, 2021
'Taiwan in US-Japan statement: show of resolve or diplomatic calculus?'
"The statement shunned more specific language like 'defend Taiwan' to avoid unnecessarily provoking China."
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April 17, 2021
'Is growth in China soaring or slowing?: The answer depends on how you calculate growth'
‘It was China’s fastest growth on record, underlining the strength of its recovery. Yet it also illustrates the oddities in how GDP is reported.’
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April 17, 2021
'Margaret Ng's Statement at Conclusion of Today's Trial'
‘There is no right so precious to the people of Hong Kong as the freedom of expression and the freedom of peaceful assembly.’
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April 16, 2021
U.S.-Japan Joint Leaders’ Statement: “U.S. - JAPAN GLOBAL PARTNERSHIP FOR A NEW ERA”
‘President Biden and Prime Minister Suga exchanged views on the impact of China’s actions on peace and prosperity in the Indo-Pacific region and the world, and shared their concerns over Chinese activities that are inconsistent with the international rules-based order, including the use of economic and other forms of coercion.’
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The 'Longer Telegram' & Its Discontents

Why everyone wants to be George Kennan‘In 1947 X penned his history-changing “Sources of Soviet Conduct” in Foreign Affairs,’ wrote Edward Luce in the Financial Times in 2018.‘The piece, which crystallised America’s cold war containment strategy, was the making of George F Kennan’s life-long reputation as a master of geopolitics.’‘ As the architect of a doctrine that won the cold war.’
by

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CHINADebate

February 7, 2021
The 'Longer Telegram' & Its Discontents

In today’s issue:

1. Biden Lays Out His China Policy

  • 'Remarks by President Biden on America's Place in the World
  • 'Brookings experts analyze President Biden’s first foreign policy speech: Focus China'

2. The 'Longer Telegram' & Its Discontents

  • ' "Longer Telegram" Sets Off Fierce Global Debate'
  • ' "Longer Telegram" | To Counter China’s Rise, the U.S. Should Focus on Xi'
  • 'Why the ‘Longer Telegram’ Won’t Solve the China Challenge'

3. Calling Mr. Kennan

  • 'In Search of Today’s George Kennan'

4. A Look Back to 1947 & 'X'

  • 'The Sources of Soviet Conduct' by X

‘A proliferation of new policy ideas often accompanies a changing of the guard in Washington,’ writes Axios’ Bethany Allen-Ebrahimian.

  • ‘But this time around, growing concern over China's rise has driven debate into overdrive, as numerous stakeholders present competing visions for a U.S. response.’
  • ‘Numerous analysts are seizing this moment to showcase their ideas for containing China's authoritarianism and rejuvenating democracy, in the hope that their proposals might influence the Biden administration's future direction.’

‘Some U.S. strategists have made comparisons to the early days of the Cold War, when State Department official George Kennan published an anonymous essay based off a cable, later known as the "Long Telegram," that laid out what would become the U.S. strategy of containment toward the Soviet Union.’

  • ‘In November 2020, the Trump State Department's office of policy planning produced a 70-plus-page China strategy paper that openly drew inspiration from the Long Telegram but was not named after it.’
  • ‘Last week, the Atlantic Council published a lengthy strategy paper called "The Longer Telegram," attributed to an anonymous former U.S. senior official.’

With this in mind, let’s look at three points:

  1. Why everyone wants to be George Kennan
  2. Why the ‘Longer Telegram’ is no ‘Long Telegram’
  3. Why the ‘Longer Telegram’ or any other proposed China strategy won’t make any difference

1. Why everyone wants to be George Kennan

‘In 1947 X penned his history-changing “Sources of Soviet Conduct” in Foreign Affairs,’ wrote Edward Luce in the Financial Times in 2018.

  • ‘The piece, which crystallised America’s cold war containment strategy, was the making of George F Kennan’s life-long reputation as a master of geopolitics.’
  • ‘As the architect of a doctrine that won the cold war.’

In the past few years, there has been no shortage of folks trying to come up with that simple, ‘crystallized,’ Kennan-like doctrine from which all U.S. policy toward China could be organized.

  • No one has come close.

As Mr. Luce notes:

  • ‘America is desperate for the kind of strategic nous Kennan once personified.’
  • ‘A few years ago we may have looked to people such as Zbigniew Brzezinski or Henry Kissinger to offer some kind of answer.’
  • ‘The first is dead and the second places too high a value on his access to Trump, Putin, Xi Jinping and others, to risk plain talk.’

‘We need new minds.’

  • ‘All of us in Washington can point to dozens of smart foreign policy specialists in their own fields.’

‘But where is the grand strategist?’

  • Where indeed.

2. Why the ‘Longer Telegram’ is no 'Long Telegram'

Every so often I re-read Mr. Kennan’s ‘Long Telegram’ (excerpts below in ‘4. A Look Back to 1947 & “X” ’).

  • Each time I am struck by the brilliance of the analysis and the powerful simplicity of the ‘containment’ doctrine.
  • And each time, like a mathematician trying to solve some centuries’ old conundrum, I try to come up with the same kind of solution for U.S. strategy for China. No luck.
  • But if I ever were to come up with an idea, I wouldn’t consider publishing with any mention of George Kennan.

So it takes a lot of chutzpah to call your tract the ‘Longer Telegram’ (vice the ‘Long Telegram’) and to sign it ‘Anonymous’ (vice ‘X’).

  • And I was expecting something pretty terrific.
  • But invoking the spirit of Vice-presidential candidate Lloyd Bentsen: ‘Anonymous, you’re no X.’

My take on what the big idea is is the same as Paul Heer’s. He wrote in The National Interest:

  • “All U.S. political and policy responses to China therefore should be focused through the principal lens of Xi himself”—is the author’s conclusion.’
  • ‘Washington should be seeking to escape from, and even try to effect the removal of, Xi’s leadership because that could restore U.S.-China relations to a potentially constructive path: “its pre-2013 path—i.e., the pre-Xi strategic status quo.” ’
  • ‘Washington should do this by directing its strategy “at the internal fault lines of domestic Chinese politics” because “the party is extremely divided on Xi’s leadership,” and particularly on his foreign policy assertiveness:’
  • ‘ “Xi’s critics contend that [his] ‘forcing of the pace’ has resulted in Beijing taking unnecessary risks by bringing about a fundamental change in U.S. strategy toward China much earlier than was either necessary or desirable.” ’

Mr. Heer continues:

  • ‘One of the author’s central premises is that “if leadership change were to occur, it would be more likely to move in the direction of a more moderate collective leadership” that would be easier for Washington to work with, and presumably less assertive and confrontational toward the United States.’
  • ‘ “If leadership change does not occur, then the objective is to maximize internal political pressures on Xi to moderate Chinese policy of his own volition or to roll back various of his international initiatives.” ’

A far cry from the elegance of ‘containment.’ And, as Mr. Heer argues, also:

  • ‘Perhaps the most problematic aspect of the “Longer Telegram's” emphasis on Xi.’

‘This is a profoundly misguided if not dangerous approach.’

  • ‘First, it almost certainly miscalculates (by exaggerating) the potential differences between Xi and any alternative leadership on the core issues in U.S.-China relations, or on the overall direction of Chinese foreign policy.’
  • ‘In addition, it would be a hazardous venture for Washington to attempt to exploit the internal fault lines of Chinese politics and play one faction or leader off against another.’
  • ‘This is precisely the kind of “intervention in China’s internal affairs” that fuels the visceral nationalism of Chinese leaders,’
  • ‘Such a venture almost certainly is more likely to be counterproductive than to yield the desired result of accommodation to U.S. goals.’

For me, though, despite some very good analysis, the Longer Telegram fails because it lacks the single organizing principle from which a comprehensive strategy could be developed and implemented.’

  • That Anonymous, along with so many others, didn’t succeed perhaps points to the complexity of the U.S. relationship with China within China itself.
  • In that case, we wait for our George Kennan in vain.
  • And Anonymous, if he cares about his/her reputation, will remain so.

Why the ‘Longer Telegram’ or any other proposed China strategy won’t make any difference

Whatever the merits or otherwise of the Longer Telegram, it has, as George Kempe, president of the Atlantic Council which published the essay, notes caused a stir:

  • 'The fierce global debate set off this week by a thought-provoking paper – “The Longer Telegram: Toward a New American China Strategy” – has underscored the urgency and difficulty of framing a durable and actionable U.S. approach to China as the country grows more authoritarian, more self-confident and more globally assertive.'
  • 'The 26,000-word paper, published simultaneously by the Atlantic Council and in shorter form by Politico Magazine, has served as a sort of Rorschach test for the expert community on China.'
  • 'The reactions have ranged between critics, who found the paper’s prescriptions too provocative, to proponents, who lauded its ground-breaking contributions.'

'Beijing took notice, not least because of the author’s apparent familiarity with Communist party politics and focus on President Xi Jinping.'

  • 'China’s Foreign Ministry spokesperson accused the anonymous author of “dark motives and cowardliness” aimed at inciting “a new Cold War.” '

While I acknowledge that anything that engenders serious debate about how the U.S. should manage its relationship with China is a good thing, I also acknowledge that neither the Longer Telegram nor any other proposal will make a whit of difference in the Biden team’s approach.

  • As covered in our last issue, the Biden team is already working off the same playbook on China.

And this week, the Boss confirmed it in his first foreign policy address. Regarding China, President Biden said:

  • “And we’ll also take on directly the challenges posed by our prosperity, security, and democratic values by our most serious competitor, China.”  
  • “We’ll confront China’s economic abuses; counter its aggressive, coercive action; to push back on China’s attack on human rights, intellectual property, and global governance.”
  • “But we are ready to work with Beijing when it’s in America’s interest to do so.  We will compete from a position of strength by building back better at home, working with our allies and partners, renewing our role in international institutions, and reclaiming our credibility and moral authority, much of which has been lost.”
  • “That’s why we’ve moved quickly to begin restoring American engagement internationally and earn back our leadership position, to catalyze global action on shared challenges.”

Maybe not George Kennan; but no doubt about the approach either.

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