CHINAMacroReporter

April 16, 2021
'Breaking China’s Stranglehold on the U.S. Rare Earth Elements Supply Chain'
‘China’s control of the supply of usable, refined rare earth elements undermines U.S. security and that of its allies.’
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April 16, 2021
'China’s economy springs back from pandemic hit with record growth'
“The headline year-on-year data really doesn’t tell us the story of how the economy has performed in the first quarter . . . in fact that performance was a bit disappointing. The silver lining is that March was better than the first two months.”
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April 16, 2021
'Hong Kong Newspaper Tycoon Jimmy Lai Jailed Over Role in Peaceful Protests'
“The wrongful prosecution, conviction and sentencing of these activists underlines the Hong Kong government’s intention to eliminate all political opposition in the city,”
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April 15, 2021
'Biden’s Afghanistan Withdrawal Is a Blow for China'
‘President Joe Biden’s decision to withdraw U.S. and NATO troops from Afghanistan at the end of summer is likely to confound Chinese calculations, both economic and geopolitical.’
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April 15, 2021
'TSMC faces pressure to choose a side in US-China tech war'
‘Taiwan Semiconductor Manufacturing Company (TSMC) has maintained its historic position of neutrality, reflected in the company’s strategy of “being everyone’s foundry”.’
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April 14, 2021
The Belt & Road in the Post-Pandemic World
In this issue of China Macro Commentary, I have focused just on the ‘Digital Silk Road’ and how it supports the business expansion of Chinese tech companies, and on BRI ‘connectivity’ projects: ports (China is involved in 93 around the world) and on the growing China-Europe freight trains traffic (This wasn't covered sufficiently in the Report, so I included a recent article from the Wall Street Journal), plus on the U.S.'s failure to meet the BRI challenge.
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April 13, 2021
'2021 Annual Threat Assessment of the U.S. Intelligence Community'
‘China increasingly is a near-peer competitor, challenging the United States in multiple arenas—especially economically, militarily, and technologically—and is pushing to change global norms.’
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April 13, 2021
In Battle With U.S. for Global Sway, China Showers Money on Europe’s Neglected Areas
‘The number of freight trains running between China and Europe topped 12,400 last year, 50% higher than in 2019 and seven times that of 2016, according to Chinese authorities.’
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April 11, 2021
'Why manufacturing matters to economic superpowers'
‘Whether such reshoring matters for national economies depends very much on the industry.’
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April 11, 2021
China in Jamie Dimon's Letter to Shareholders
‘China does not have a straight road to becoming the dominant economic power’.
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April 11, 2021
'Alibaba’s rivals on alert after China’s regulators hand out record fine'
“Everyone with a clear mind won't self-regulate, you just pretend that you do. Who will pay for the loss if you lost your competitive advantage because you self-regulated and others didn't?”
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April 10, 2021
Alibaba: 'Promote the healthy and sustainable development of the platform economy'
‘From the perspective of the long-term and healthy development of the platform economy, regulation by law and support for development are not contradictory, but are complementary and mutually reinforcing.'
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April 9, 2021
'The Best Explanation of Biden’s Economic Thinking I’ve Heard'
‘When President Biden’s thinking about the infrastructure investments necessary, a lot of it is in contraposition to what he is seeing China doing in terms of strategic investments.’
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April 8, 2021
Liu Ge: Competing with China a farfetched guise for US’ infrastructure plan
‘Historically speaking, it seems the only way for the US government to make costly public investments was to create an adversary that is presumed to threaten its security.’
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April 8, 2021
'Antony Blinken interview: The secretary of state offers a window into Biden's foreign policy decisions'
‘ “Our goal is not to contain China, hold China back, keep it down,” Blinken underlined.’
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April 8, 2021
'US adds Chinese supercomputing companies to export blacklist'
‘The Biden administration took its first trade action against China on Thursday, adding seven Chinese supercomputing developers to an export blacklist for assisting Chinese military efforts in a move that will likely further escalate frosty tensions between the world's two largest economies.’
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April 7, 2021
'Remarks by President Biden on the American Jobs Plan'
‘Look, do we think the rest of world is waiting around? Take a look. Do you think China is waiting around to invest in this digital infrastructure or in research and development?’
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April 7, 2021
China: 'Power Trader'
‘The theory of power trade better explains China’s economic and trade policies than does the theory of free trade or protectionism,’
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April 6, 2021
'Train Wreck: Ultimately companies have to choose.’
MUST READ: Bill Reinsch succinctly but brilliantly summarizes the situations in China and the U.S. and between the two.
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April 6, 2021
'Buy American!': Pushing U.S. Companies to Onshore Supply Chains
The debate about how to deal with China commercially ‘has moved in two directions: running faster—improving our innovation capabilities in critical technologies to better compete with China—and slowing China down by restricting its access to U.S. technology.’
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April 4, 2021
'Why Defending Taiwan is in the U.S. National Interest'
‘As long as Washington assesses that American security is best served by defending forward—an approach that has served the United States well over the past 70 years—Taiwan’s de facto independence will remain a key US interest and driver of American policy in Asia.’
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April 4, 2021
'Why China Is Going All "Wolf Warrior," All the Time'
‘All this is to say that, living in Beijing as I do, I think the current approach is predictable and consistent with everything else we are seeing in China in the New Era.’
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April 3, 2021
'With Swarms of Ships, Beijing Tightens Its Grip on South China Sea'
‘Not long ago, China asserted its claims on the South China Sea by building and fortifying artificial islands in waters also claimed by Vietnam, the Philippines and Malaysia.’
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April 2, 2021
'Genesis Celebrates Launch In China With Dazzling, World Record-breaking Drone Show Over Shanghai's Iconic Skyline'
'The spectacular visuals were coordinated to present the world of Genesis, delivering an audacious storytelling concept while also breaking the Guinness World Records for "The Most Unmanned Aerial Vehicles (UAVs) airborne simultaneously".’
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April 2, 2021
Mo' Infrastructure, Mo' Problems Copy
‘China’s reliance on building roads, railways and airports to support growth has caused a spike in debt, with some of that money funneled into unnecessary infrastructure and uneconomic boondoggle developments.’
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April 2, 2021
How Does the U.S. Compare to China?
Two reports from Bloomberg – ‘Biden Starts Infrastructure Bet With U.S. Far Behind China’ and ‘Biden’s Biggest-Ever Investment Plan for U.S. Still Trails China’ – highlight a few of the differences.
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April 2, 2021
USTR | '2021 National Trade Estimate Report on FOREIGN TRADE BARRIERS'
‘Made in China 2025 seeks to build up Chinese companies in the ten targeted, strategic sectors at the expense of, and to the detriment of, foreign industries and their technologies through a multi-step process over ten years.’
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April 2, 2021
‘2021 Report Card for America’s Infrastructure’
‘The 2021 Report Card for America’s Infrastructure reveals we’ve made some incremental progress toward restoring our nation’s infrastructure.’ ‘For the first time in 20 years, our infrastructure is out of the D range. America's Infrastructure Scores a C-.’
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April 2, 2021
'US to make it easier for diplomats to meet Taiwanese officials'
'Plan to loosen restrictions on contacts with Taipei threatens to provoke China.'
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April 2, 2021
Biden Starts Infrastructure Bet With U.S. Far Behind China
Even though he didn’t rely solely on the China challenge to justify his new American Jobs Plan; devoted to infrastructure and more, President Biden certainly he had China in his sights. Because as Jonathan Hillman, a senior fellow at the Center for Strategic and International Studies, wrote“The United States is entering what could be a decades-long competition in which economic and technological power will matter just as much, if not more, than military might.” “Starting this race with decaying infrastructure is like lining up for a marathon with a broken ankle.”
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April 2, 2021
President Biden Lays Out His ‘American Jobs’ Plan
‘It has become a cliché in U.S. policy circles that the best China policy is to invest in core U.S. capabilities: education, infrastructure, and research and development,’ writes Evan Medeiros of Georgetown University in ‘How to Craft a Durable China Strategy,’ in Foreign Affairs.
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April 2, 2021
'China’s Dangerous Double Game in North Korea'
‘Beijing’s North Korea policy is primarily motivated by a desire to counter U.S. power in the Asia-Pacific region and increase Chinese influence on the Korean Peninsula.
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April 2, 2021
'Japan’s Suga to Be the First Foreign Leader to Meet With Biden'
‘Japan walks a narrow line as it seeks to maintain close ties with its only military ally, the U.S., while avoiding damage to economic ties with its biggest trade partner, China.
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April 1, 2021
'Convicted in Hong Kong'
‘Everyone in the former British colony understands the message being sent from Hong Kong’s new masters in Beijing:’
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April 1, 2021
'U.S. dollar at risk as China races ahead on digital yuan'
‘So why should America care about any of this?’
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April 1, 2021
PRC Foreign Ministry Response to the USTR's 'National Trade Estimate Report'
‘The accusations and slanders made by the US against China's industrial policies are groundless.’
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March 31, 2021
'Consumer boycotts warn of trouble ahead for Western firms in China'
‘Western executives in China cannot shake an unsettling fear that this time is different.’‘Their lucrative Chinese operations are at rising risk of tumbling into the political chasm that has opened between the West and China.’
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March 31, 2021
'How the Pandemic is Changing the Belt & Road Initiative'
‘The building of roads, railways, ports, and power plants is giving way to a BRI centered on technology—primarily telecommunications, connectivity, health care, and financial services.’
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March 31, 2021
Chinese Boycotts are the Least of Your Worries
‘For chief executives [and boards] around the world, watching the Chinese government go after Swedish clothier Hennes & Mauritz AB is excruciating — facing the evaporation of your hard-won China business over political issues largely out of your control,’ writes Michael Schuman in Bloomberg.’ ‘But it could be the new normal.’ ‘As relations between China and the U.S. and its allies deteriorate, Western businesses could increasingly get dragged into the fray.’
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March 31, 2021
'The Threat the U.S. Isn't Answering'
‘If BRI meets little competition or resistance, Beijing could become the hub of global trade, set important technical standards that would disadvantage non-Chinese companies, lock countries into carbon-intensive power generation, have greater influence over countries’ political decisions, and acquire more power-projection capabilities for its military.’
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March 31, 2021
'China Is Missing from the Great Inflation Debate'
‘Once again, massive fiscal spending in the United States has invited warnings of inflation and triggered dark memories of the 1970s. But these fears are based on a model that has since been obliterated by economic realities – not least the rise of China, which has fundamentally reshaped the US and global economies.’
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March 31, 2021
'Dominating the Digital Silk Road'
‘China’s Belt and Road Portal reports the Digital Silk Road has enabled six thousand Chinese internet companies and more than ten thousand Chinese technology products to enter foreign markets.’
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March 31, 2021
'Biden administration maintains Trump policy on Hong Kong'
'State department concludes territory should not receive preferential treatment under US law.'
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March 31, 2021
'China Owns, Partially Owns, or Operates 93 Ports'
‘Chinese firms own, partially own, or operate at least ninety-three ports across the globe.’
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March 30, 2021
'Profit or principle is the hard choice for foreign companies in China' George Magnus
‘Business risks for foreign companies in China are increasing after the recent exchange of sanctions between Beijing and western governments.’‘For foreign companies in China, the options seem delicately balanced. If they stand up for principles, they may put revenues at risk and will incur extra costs as they develop new supply chains. Yet if they prioritise their China profits, they could do irretrievable damage to their brands at home and in other markets, falling foul of shareholders and changing governance requirements.’‘It is an invidious choice but the latter is likely to be far more damaging to longer term performance and earnings, and corrosive of trust in the brand.’
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March 30, 2021
'How China keeps stumbling on the global stage' John Pomfret
‘Across the globe, Xi’s diplomatic representatives in Europe, Beijing, Hong Kong, Canada, Australia and elsewhere, are lifting up rocks and smashing their own feet.’‘The moves are befuddling — with a buoyant economy and a practically covid-free country, China is poised to see its influence rise if it plays it smart. But it’s not; instead, it’s alienating individuals and nations across the world.’‘I’ve been studying China for my entire adult life and I have to admit to being bewildered by China’s performance.’‘But I’m in good company. Thirty-one years ago, the great political scientist Lucian Pye wrote, “Just when all appears to be going well, Chinese officials create problems for seemingly unaccountable reasons.” ’
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March 30, 2021
'An Alliance of Autocracies? China Wants to Lead a New World Order.'
‘The world is increasingly dividing into distinct if not purely ideological camps, with both China and the United States hoping to lure supporters.’
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March 29, 2021
'Global Cycle Notes: U-Turn': China
‘A U-shaped recovery in the services sector beckons, but it’s still difficult to describe just what it will look like. No event in economic history compares, and the range of outcomes for wages, prices, employment, and financial markets is large.’
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March 28, 2021
‘At a Crossroads: The Next Chapter for FinTech in China’
‘As financial innovation has gained traction and the firms driving it have grown into sizeable players, the dynamic between innovators and regulators has begun to shift. Regulatory agencies have started to be more proactive in supervising the activities of technology firms after realizing that the size of many technology firms and FinTechs means they could threaten financial stability and peace in society if their innovation efforts and business practices were overly aggressive.’
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March 28, 2021
'New Trade Representative Says U.S. Isn’t Ready to Lift China Tariffs'
'The U.S. isn’t ready to lift tariffs on Chinese imports in the near future, but might be open to trade negotiations with Beijing, according to U.S. Trade Representative Katherine Tai.'
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March 28, 2021
China is not just shackling Hong Kong, it is remaking it
After the National People’s Congress, ‘election reform’ in Hong Kong, the dustup between the U.S. and China in Anchorage, and China’s going all ‘Wolf Warrior’ on the EU, that’s not such a bad thing.
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March 26, 2021
Beijing Targets American Business-2
'American businessmen, wishing for simple, lucrative commercial ties, have long resisted viewing U.S.-China relations as an ideological struggle. But strategic guidance issued by the leaders of both countries make clear the matter is settled: The ideological dimension of the competition is inescapable, even central.'
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March 26, 2021
'H&M, Nike Pay With China Boycotts on Xinjiang Human Rights Stance'
‘While both Western and Asian companies have frequently been targets of Chinese nationalism over the years, the latest flurry signals a shift in strategy by President Xi Jinping’s government as it confronts a more unified approach from the U.S. and its allies.’
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March 26, 2021
'The Illiberal Tide'
But even more problematic is that the reporting on any given action by another country may look so benign to the non-Chinese reader that he or she dismisses it as something China, even when it reacts forcefully, couldn’t be serious about. That is a mistake. Too often what looks ‘benign’ to the rest of the world is as serious as a train wreck to Xi Jinping.
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March 26, 2021
Beijing Targets American Business-1
‘Beijing’s message is unmistakable: You must choose.’‘If you want to do business in China, it must be at the expense of American values. ‘‘You will meticulously ignore the genocide of ethnic and religious minorities inside China’s borders; you must disregard that Beijing has reneged on its major promises—including the international treaty guaranteeing a “high degree of autonomy” for Hong Kong; and you must stop engaging with security-minded officials in your own capital unless it’s to lobby them on Beijing’s behalf.’
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March 25, 2021
China Goes All 'Wolf Warrior' on the U.S. & the EU
Today is the Tracker’s first issue. Covered here are two events where China went all 'Wolf Warrior' first on the U.S. and then on the EU.
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March 25, 2021
3 | China explains why it is going all 'Wolf Warrior' on the EU
China has found that bullying works a lot of the time, Why is China engaging in "Wolf Warrior" diplomacy
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March 25, 2021
2 | In Anchorage, Yang Spoke for the Party Leadership
‘Yang's temper tantrum has been interpreted by some commentators as being all about Chinese domestic politics. But it would be a mistake to see Yang's performance as mere bluster designed for home consumption. In Anchorage, he was speaking for the top leadership of the Communist Party.’
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March 25, 2021
2 | More to come?
‘This isn't about siding with America, it's about defending European sovereignty against a bully.’
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March 25, 2021
1 | Bitter Alaska Meeting Complicates Already Shaky U.S.-China Ties
'Mr. Yang, also noted “important disagreements” remained, and in remarks to Chinese state media suggested Beijing wouldn’t back down.'
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March 25, 2021
1 | The first U.S.-EU alliance against China
"Europeans will have to step up their reaction against China after insults, intimidation and sanctions against scholars and MPs. This isn't about siding with America, it's about defending European sovereignty against a bully."
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March 24, 2021
'There Will Not Be a New Cold War' Thomas Christensen
‘China’s vital position in the global production chain and the lack of struggle for ideological supremacy between authoritarianism and liberal democracy mean that the rise of a new Cold War is unlikely.’
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March 21, 2021
Just About in Place
To help us understand the makeup of the team, The Wire China has put together a great chart with bios of each member.
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March 21, 2021
'A Taiwan Crisis May End the American Empire' Niall Ferguson
‘No matter what other issues Kissinger raised — Vietnam, Korea, the Soviets — Zhou steered the conversation back to Taiwan, “the only question between us two.” ’
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March 20, 2021
'After the protests - China is not just shackling Hong Kong, it is remaking it'
‘The old Hong Kong is gone. Judge Mr Xi’s China by what it builds in its place.’
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March 17, 2021
How to Meet the China Challenge
How the Biden administration characterizes the China – strategic competitor, rival, enemy, and the like – and how it develops strategies – containment, confrontation, competition, cooperation, or some combination of these - will have an impact, to a greater or lesser degree, on most every industry and every market.
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March 13, 2021
'China All but Ends Hong Kong Democracy With "Patriots Only" Rule'
‘The National People’s Congress on Thursday approved a drastic overhaul of election rules for Hong Kong that would most likely bar many pro-democracy politicians from competing in elections, cementing Beijing’s grip over the territory.'
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March 13, 2021
'Understanding China’s 2021 Defense Budget'
'Like previous years, the first day of the new National People’s Congress session was highlighted by the widely anticipated announcement of China’s 2021 defense budget. This year it is set at 1.36 trillion yuan ($209.16 billion), a 6.8 percent increase from the 1.27 trillion yuan budget set last year.’
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March 13, 2021
Xi’s Gambit: China Plans for a World Without American Technology
‘China’s new five-year plan, made public on Friday, at the National People’s Congress (NPC), called tech development a matter of national security, not just economic development, a break from the previous plan.’
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March 13, 2021
'The five-year plan's big target - A confident China seeks to insulate itself from the world'
The National People’s Congress concluded on Friday, March 11. As I’ve mentioned before, analyses of the impact of the plans and policies on China and the world will start to come out in a week or two. In the meantime and to keep you immediately informed, today’s issue covers the NPC’s outcomes more generally, beginning with a full summary from The Economist.
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March 12, 2021
‘Enter the Trump Buddha'
“Trump, the Buddha of Knowing of the Western Paradise.”
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March 11, 2021
Artificial Intelligence: How to Beat China
‘China is organized, resourced, and determined to win the technology competition. AI is central to China’s global expansion, economic and military power, and domestic stability.’
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March 11, 2021
China, Ai, & the Coming U.S. Industrial Policy
‘The government will have to orchestrate policies to promote innovation; protect industries and sectors critical to national security; recruit and train talent; incentivize domestic research, development, and production across a range of technologies deemed essential for national security and economic prosperity; and marshal coalitions of allies and partners to support democratic norms.'
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March 11, 2021
'Why Biden Should Ditch Trump’s China Tariffs'
‘President Joe Biden has to decide whether to rescind his predecessor’s China tariffs.’
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March 11, 2021
Then There are Semiconductors
‘While American companies pioneered semiconductors and still dominate chip design, many have outsourced the actual fabrication of chips, mostly to Asia.’
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March 11, 2021
'Hard lesson for HK opposition: Extreme political confrontation is not in the designs of China'
'The radical forces in Hong Kong thought they were strong!’
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March 11, 2021
'China Turns to Elon Musk as Technology Dreams Sour'
‘China is having its techlash moment. The country’s internet giants, once celebrated as engines of economic vitality, are now scorned for exploiting user data, abusing workers and squelching innovation. Jack Ma, co-founder of the e-commerce titan Alibaba, is a fallen idol, with his companies under government scrutiny for the ways they have secured their grip over the world’s second-largest economy.’
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March 11, 2021
For Industrial Policy: National Security Advisor, Jake Sullivan
‘While American companies pioneered semiconductors and still dominate chip design, many have outsourced the actual fabrication of chips, mostly to Asia.’
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March 10, 2021
'Beijing replicates its South China Sea tactics in the Himalayas'
‘Emboldened by its cost-free expansion in the South China Sea, Chinese President Xi Jinping’s regime has stepped up efforts to replicate that model in the Himalayas.'
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March 10, 2021
'China Crackdown on Hong Kong'
‘The scale of the protests really shook Beijing. All the previous protest movements had lasted a few months, at most. This time, there was huge support, and it wasn’t dying down on its own.’
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March 9, 2021
'Neither China nor the US fits neatly into any one box’ Yuen Yuen Ang
‘Binary narratives lie behind the common misconception that China’s economic success has vindicated autocracy. (The simplistic logic is that if China is not a democracy, it must be an autocracy, and when it prospers, that prosperity must be because of its autocracy). For liberal democracies, this raises the fear that the “China model” poses an ideological challenge to democracy.’
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March 7, 2021
Part 2 | 'How Biden Can Learn From History in Real Time' Copy
‘ “International relations scholars,” the political scientist Daniel Drezner has written, “are certain about two facts:'
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March 7, 2021
How the WTO Changed China
'WTO membership, the new consensus goes, has allowed China access to the American and other global economies without forcing it to truly change its behavior, with disastrous consequences for workers and wages around the world.’
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March 7, 2021
With growth on track, China starts to unwind stimulus
‘China was the first country to open its lending and spending taps in the face of the coronavirus downturn. Now, it is the first to start to close them, giving others a partial preview at the National People’s Congressof what the end of stimulus will look like. The most notable aspect is its gradualism.’
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March 6, 2021
'Taper test - With growth on track, China starts to unwind stimulus'
‘China was the first country to open its lending and spending taps in the face of the coronavirus downturn. Now, it is the first to start to close them, giving others a partial preview at the National People’s Congressof what the end of stimulus will look like. The most notable aspect is its gradualism.’
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March 5, 2021
Nursing China’s Debt Hangover
‘China official target of 6% annual economic growth, announced Friday, is so modest it’s clear something else is going on. A plausible theory is that this is part of a strategy to rein in debt.’
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March 4, 2021
China & the U.S.: Getting Each Other Wrong
China and the U.S. seem to be in the process of reassessing their views of each other’s strengths and weaknesses. Xi Jinping appears to be seeking some balance in his assessment of the U.S. And analysts in the U.S. have reversed a trend of opinion that ‘China is inexorably rising and on the verge of overtaking a faltering United States.' They argue instead ‘the United States has good reason to be confident about its ability to compete with China.’
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March 4, 2021
'NATO's Shifting Focus to China'
‘Consider, for example, a war escalating over the defense of Taiwan. “We should not forget that the main member state in NATO, the United States, is not only a transatlantic nation, but also a Pacific nation. And the question is, if at a certain stage, the U.S. were to be threatened by China, would that invoke Article 5 in the treaty?"'
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March 3, 2021
Missing: Has anyone seen Europe’s China plan?
‘Caught between Washington and Beijing, European capitals find themselves in lack of a strategic China policy.’
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February 28, 2021
Why Beijing was right to rein in Jack Ma's rogue Ant Group IPO
‘In July 2020, just before their IPO application, Ant Financial not only abandoned the word "financial" and renamed themselves Ant Group, they attempted to list not on the Shanghai or Shenzhen exchanges, where financial institutions list, but rather on the Shanghai STAR Market, which was created as an exchange for high-tech innovators.’
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February 27, 2021
The rivalry between America and China will hinge on South-East Asia
‘In the rivalry between China and America, there will be a main zone of contention: South-East Asia. Of the two competitors, China looks the more likely prize-winner.'
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February 26, 2021
'Inside Xinjiang’s Prison State'
‘After years of first denying the facilities’ existence, then claiming that they had closed, Chinese officials now say the camps are “vocational education and training centers,” necessary to rooting out “extreme thoughts” and no different from correctional facilities in the United States or deradicalization centers in France.’
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February 24, 2021
Japan Is the New Leader of Asia’s Liberal Order
‘In an era of Chinese bellicosity, North Korean provocations, and a raging pandemic, Japan’s inconspicuous ascent to regional leadership has gone mostly unnoticed.’
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February 23, 2021
‘Patriots’ Only: Beijing Plans Overhaul of Hong Kong’s Elections
‘China plans to impose restrictions on Hong Kong’s electoral system to root out candidates the Communist Party deems disloyal, a move that could block democracy advocates in the city from running for any elected office.’
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February 23, 2021
HSBC offers lesson in corporate realpolitik
‘HSBC’s Asia pivot is a lesson in corporate realpolitik. It is just as much a recognition of the new political reality facing every western company that is dependent on doing business with China. Businesses will have to choose between western markets and access to China, and between liberal and authoritarian value systems.’
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February 23, 2021
Germany Is a Flashpoint in the U.S.-China Cold War
'As goes Germany, so goes Europe — and that’s a real challenge for the U.S. Berlin leads a European bloc that could cast a geopolitical swing vote in the U.S.-China rivalry.’
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February 22, 2021
Remaking “Made in China”: Beijing’s Industrial Internet Ambitions
‘The Chinese government is placing large bureaucratic and financial bets on upgrading and digitizing its already dominant manufacturing base. Such efforts have coalesced around one key term: the “industrial internet” (工业互联网). The successful application of it across Chinese industry would prolong and elevate the “Made in China” era.’
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February 22, 2021
How American Free Trade Can Outdo China
‘When it comes to trade, a critical dimension of the U.S. and China competition, America is ceding the field. At the same time, China has expanded its trade footprint. When it comes to trade and investment agreements, China isn’t isolated. The U.S. increasingly is. Now we have to make up for lost ground. America can out-compete China, but first it needs to get back in the game.’
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February 21, 2021
China’s ‘two sessions’: why this year’s event is so important for Xi Jinping’s vision for the future
‘The ‘Two Sessions,’ the annual meeting of the National People’s Congress, the country’s legislature, and the top political advisory body, the Chinese People’s Political Consultative Conference, begins on March 5 and runs for about two weeks.’
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February 20, 2021
‘The Future of China’s Past: Rising China’s Next Act'
‘By the Party’s own acknowledgment, Deng’s initial arrangement has run its course. It is therefore time to develop a new understanding that will do for the Party in the next 30 years what Deng’s program did in the previous era.'
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Xi Jinping: ‘Crossing a threshold to outright dictatorship?’'

The view from inside China appears to be quite different. Yes, the Chinese people may grumble about the Zero-COVID lockdowns, and just a few days a banner critical of Mr. Xi and his regime was unveiled over an overpass in Beijing.
by

Malcolm Riddell

|

CHINADebate

October 18, 2022
Xi Jinping: ‘Crossing a threshold to outright dictatorship?’'
Xi Jinping: ‘Chairman of Everything’

The Chinese Communist Party’s 20th National Congress which began on Sunday is a pretty ho-hum affair.

  • We already know Xi Jinping will emerge from the Congress with even greater power, no discernible opposition, and a new five-year term (with another likely to follow).
  • And, based on his nearly two-hour speech at the opening, we’ve learned that Mr. Xi doesn’t intend to change course.

These are good news both from the perspective of China hawks and of the Chinese people – just for different reasons.

  • And they reflect Mr. Xi's transformation from ' “Uncle Xi” to stern Communist monarch.'

1 | Crossing a threshold into outright dictatorship

If you are a China hawk, Mr. Xi’s staying in power and staying the course are good things.

  • Mr. Xi – for reasons both explicable and inexplicable – has pursued policies and actions that have often left China weaker and more isolated.
  • For China hawks, whatever weakens China weakens Mr. Xi’s capabilities to project his will.

As CSIS’s Jude Blanchette writes in ‘Party of One: The CCP Congress and Xi Jinping’s Quest to Control China’ in Foreign Affairs:‘The reactive, shortsighted, and often incoherent set of policies that Xi has promoted over the past five years intended to achieve his global ambitions and confront the country’s innumerable challenges have placed China on a worrying path of:’

  • ‘anemic economic growth,’
  • ‘declining global prestige, and’
  • ‘rising domestic repression.’

‘Chinese President Xi Jinping’s unprecedented third term as general secretary will drag the CCP back to the pathologies of the Mao era and simultaneously push it toward a future of:’

  • ‘low growth,’
  • ‘heightened geopolitical tension, and’
  • ‘profound uncertainty.’

‘Rather than a moment of course correction, the 20th Party Congress sees the CCP—a regime that has long enjoyed a reputation of competence, pragmatism, and predictability—cross a threshold into outright dictatorship.’‘And, with it, a likely future of:’

  • ‘political ossification,’
  • ‘policy uncertainty, and’
  • ‘the ruinous effects of one-man rule.’

From this litany of woes, two of Mr. Blanchette’s comments are worth highlighting.First, the Chinese Communist Party haslong enjoyed a reputation of competence, pragmatism, and predictability.’

  • But no more.

For years, before Mr. Xi, whenever I would be asked about headlines of some crisis in China that portended its fall, I would counsel:

  • Be patient. There are a lot of smart people working to solve this – and their track record is pretty good.
  • Today, not so much.

Any solution now has to be in line with ‘Xi Jinping Thought.’

  • So the scope of debate about the solutions to any problem have narrowed dramatically.

Any solution to a serious problem now is subject to Mr. Xi’s sole decision.

  • Unlike the competent technocrats of the past, Mr. Xi’s track record, as Mr. Blanchette has described, is far from good.

Second, ‘the CCP is cross[ing] a threshold into outright dictatorship.’

  • Given the foregoing, this is worrisome enough in itself.

But, as Susan Shirk, chair of the 21st Century China Center at UC San Diego, notes in her NYT op-ed, ‘Xi Jinping Has Fallen Into the Dictator Trap’:

  • Mr. Xi ‘has concentrated more power in his hands than any Chinese leader since Mao Zedong, looming so completely over the country that he’s been called the “chairman of everything.”

‘Mr. Xi fell into the same trap that has ensnared dictators throughout history:

  • ‘He overreached.’
  • And ‘the costs of his overreach are piling up.’

Goodnews for China hawks.

2 | ‘With Xi, we will become powerful’

The view from inside China appears to be quite different.

  • Yes, the Chinese people may grumble about the Zero-COVID lockdowns, and just a few days a banner critical of Mr. Xi and his regime was unveiled over an overpass in Beijing.

But, as one author has pointed out, the Chinese people are better off as a whole than at any time in Chinese history, and they know it.

  • Or, as Harvard Kennedy School’s Tony Saich puts it: ‘We tend to forget that for many in China, and in their lived experience of the past four decades, each day was better than the next.’
  • This is reflected in the 2020 Harvard Kennedy School report, ‘Understanding CCP Resilience: Surveying Chinese Public Opinion Through Time,’ which found that more than 95% of the Chinese people are “relatively satisfied” or “highly satisfied” with the central government in Beijing.

And the Chinese people seem supportive of Mr. Xi’s tough stance on issues like Xijiang, Hong Kong, and Taiwan.

  • They are likewise supportive of Mr. Xi’s unleashing ‘wolf warriors’ on governments that ‘interfere with China’s 'internal affairs’ on these and other issues.

InWill China’s strongman become even stronger?’, a recent video discussion, Cheng Li of Brookings pointed out:

  • ‘We hear a lot of negative things – criticism - about Xi Jinping overseas.’

‘But we should put ourselves in the Chinese perspective.’

  • ‘In my observation, he is popular among the Chinese public for a number of reasons. Here are a few.’

‘The first is poverty elimination.’

  • ‘A World Bank report said 800 million Chinese got rid of poverty over the past 40 some years.’

‘Of course, Xi Jinping was not the leader from the start date - Deng Xiaoping started the process.’

  • ‘But Xi Jinping was the leader to complete it - particularly the most difficult period - with tremendous resources.’
  • ‘This resonates well among the Chinese public, as does his "common prosperity" initiative.’

‘Number two is the environment and green development.’

  • ‘When Xi Jinping came to power, six of the 20 most polluted cities in the world were located in China.’

‘About 10 years ago, when you arrived in China, you’d see the pollution in major cities – but things have changed dramatically.’

  • ‘Now, only three, maybe even fewer, of the world’s most polluted cities are in China - 15 or more are now in India.’
  • ‘That's dramatic change within a decade under Xi Jinping.’

Number three is military reform. Very quickly, three components.’

  1. ‘Xi Jinping transformed China’s People’s Liberation Army – the PLA - from the Russian model with its heavy emphasis on ground forces to an American model which emphasizes joint operations.’
  2. ‘He himself now has direct control over service forces and the operational theaters. Previously, these were run by committees or departments.’
  3. ‘He changed the military leadership, promoting many young officers, who are loyal to him and under his control alone.’

‘Number three and probably most important, Xi Jinping saved the Chinese Communist Party.’

  • ‘Remember 10 years ago, the Bo Xilai, Zhou Yongkang, and other scandals.’

‘People at that time - including myself - thought the Communist Party’s days were numbered.’

  • ‘But all of sudden, Xi Jinping, through the anti-corruption campaign and the things I just mentioned changed the Party.’

‘Just to give you one example, 10 years ago, very few college students were interested in joining the Chinese Communist Party. What was the point?’

  • ‘People told them: "You should go into business. You go abroad." And so on.’

‘But 10 years later, there's a high percentage of students in China’s elite schools – Peking University, Tsinghua University, Fudan University, you name it – who are joining the Party.’

  • ‘Now, this does not necessarily mean they believe in communism.’
  • ‘But it does show they believe the Communist Party will be with them for a long time to come.’

‘These are just a few of the reasons for his popularity among the Chinese people.'

  • ‘So Xi Jinping may feel that he has some political capital to spend, rightly or wrongly, at this moment.’

Listening to Dr. Cheng reminded me of an expression common in China:

  • ‘With Mao, we stood up;
  • ‘With Deng, we became rich;
  • ‘With Xi, we will become powerful.’

Whether you chalk this sort of thinking – and the support of Mr. Xi - up to indoctrination, propaganda, or actual national pride, it means that where we see cracks in Mr. Xi and his rule, a lot of the Chinese people see a leader they love or at least respect and have confidence in.

  • And as long as he has the people behind him, don’t expect Uncle Xi to take a new direction any time soon.

That said, throughout history, popular leaders/autocrats/dictators (pick your appellation for Mr. Xi) have nonetheless taken their peoples down the paths to downfall and even destruction.

  • So, as Mr. Xi exits the Party Congress, both the China hawks and the Chinese people could both end up being right.

3 | From Uncle Xi to stern Communist monarch

Having considered the foreign view of Xi Jinping and the view of the Chinese people, let’s look at Mr. Xi himself.

‘In his first years as China’s leader, Xi Jinping paid for his own steamed dumplings in a cheap diner, casually rolled up his trouser legs to avoid splashes in the rain, and was serenaded with sugary pop tunes.’

  • ‘His image-makers cast him as “Xi Dada,” the people’s firm but genial “Uncle Xi.”

‘How vastly different now.’

  • ‘A decade on, Mr. Xi looms over the country like a stern Communist monarch, reflecting on China’s fallen ancient dynasties and determined to win its lasting ascendancy in a turbulent world.’

‘Chinese officials praise his speeches like hallowed texts, professing loyalty with a fervor that sometimes echoes Mao Zedong’s era.’

‘Mr. Xi, 69, presents himself as the history-steeped guardian of China’s destiny.’

  • ‘He cites the toppling of China’s ancient empires, determined to ensure that it does not again fall prey to political decay, revolt or foreign aggression.’
  • ‘He quotes advice to emperors on ensuring obedience, “like the arm commands the finger.” ’
  • ‘He has taken to using a grand, ancient-sounding Chinese motto, guo zhi da zhe: roughly meaning “the nation’s great cause.” It sounds like it could have been passed down from a sage; in fact, Mr. Xi or his advisers minted it in 2020.’
  • ‘ “Xi Jinping wants to show that he isn’t just a party leader but also almost a spiritual seer for China — a bold, visionary statesman,” said Feng Chongyi of the University of Technology Sydney.’

‘In Mr. Xi’s worldview, the party is the custodian of traditional Chinese hierarchy and discipline, set against the dysfunction of democracies.’

  • ‘ “He sees his historical role as breaking the historical cycle of dynastic rise and fall so the Communist Party remains in power pretty much forever,” said Neil Thomas of the Eurasia Group.’

‘He argues that the party’s centralized power can mobilize China to accomplish feats beyond the grasp of Western countries, like cutting rural poverty, leaping into new technologies, or — so it seemed for a while — efficiently halting the spread of Covid.’

  • ‘ “We must demonstrate the clear superiority of our country’s socialist system in being able to concentrate forces to achieve big feats,” Mr. Xi said at a meeting on technological innovation last month.’
  • ‘ “The superiority of our political system and system of governance is even more blazingly clear in its response to the Covid pandemic and winning the war on poverty,” Mr. Xi said in March.’
  • ‘ “The contrast between Chinese order and Western chaos has become even sharper.” ’

‘Mr. Xi is already looking well beyond the next five years, trying to build a lasting edifice of power and policies.’

  • ‘He is fleshing out his own creed and promoting cohorts of younger protégés, technocrats and military commanders who may advance his influence for decades.’

‘As the Party congress neared, senior Chinese officials garlanded Mr. Xi, the “core” leader, in vows of utter loyalty.’

  • ‘ “Embrace the core with a sincere heart,” said one.’
  • ‘ “At all times and in all circumstances, trust the core, be loyal to the core, defend the core,” said another.’

Is this a case of Xi Jinping's believing his own press rather than acknowledging the realities in China and the world?

  • No. This is who Mr. Xi believes he is: A man of destiny, confident in his judgment and certain of his success.

And woe to anyone who opposes him.