“As Donald Trump surrenders America’s global commitments, Xi Jinping is learning to pick up the pieces.”
There are several interesting points in this article. The first, is its main thesis which is that China is moving into the void left by the Trump administration’s neo-isolationism:
- For decades, China avoided directly challenging America’s primacy in the global order, instead pursuing a strategy that Deng, in 1990, called “hide your strength and bide your time.” But Xi, in his speech to the Party Congress, declared the dawn of “a new era,” one in which China moves “closer to center stage.” He presented China as “a new option for other countries,” calling this alternative to Western democracy the zhongguo fang’an, the “Chinese solution.”
The second is the way Chinese political elite see Trump:
- China’s leaders rarely air their views about an American President, but well-connected scholars—the ranking instituteniks of Beijing and Shanghai and Guangzhou—can map the contours of their assessments. Yan Xuetong is the dean of Tsinghua University’s Institute of Modern International Relations. …..he said, “I think Trump is America’s Gorbachev.” In China, Mikhail Gorbachev is known as the leader who led an empire to collapse. “The United States will suffer,” he warned.
- During the Mar-a-Lago meetings, Chinese officials noticed that, on some of China’s most sensitive issues, Trump did not know enough to push back. “Trump is taking what Xi Jinping says at face value—on Tibet, Taiwan, North Korea,” Daniel Russel, who was, until March, the Assistant Secretary of State for East Asian and Pacific Affairs, told me. “That was a big lesson for them.” Afterward, Trump conceded to the Wall Street Journal how little he understood about China’s relationship to North Korea: “After listening for ten minutes, I realized it’s not so easy.”
- Russel spoke to Chinese officials after the Mar-a-Lago visit. “The Chinese felt like they had Trump’s number,” he said. “Yes, there is this random, unpredictable Ouija-board quality to him that worries them, and they have to brace for some problems, but, fundamentally, what they said was ‘He’s a paper tiger.’
The third is the confusion in the White House as how to deal with China.
- Inside the new White House, there were two competing strategies on China. One, promoted by Stephen Bannon, then the chief strategist, wanted the President to take a hard line, even at the risk of a trade war. Bannon often described China as a “civilizational challenge.” The other view was associated with Jared Kushner, Trump’s son-in-law and adviser, who had received guidance from Henry Kissinger and met repeatedly with the Chinese Ambassador, Cui Tiankai. Kushner argued for a close, collegial bond between Xi and Trump, and he prevailed.
- Trump’s deference to Xi—the tributes and tender musings about chemistry—sent a message to other countries that are debating whether to tilt toward the U.S. or China. Daniel Russel said, “The American President is here. He’s looking in awe at the Forbidden City. He’s looking in awe at Xi Jinping, and he’s choosing China because of its market, because of its power. If you thought that America was going to choose you and these ‘old-fashioned’ treaties and twentieth-century values, instead of Xi Jinping and the Chinese market, well, think again.”
- In its national-security strategy, the Administration suggested that, to stop the theft of trade secrets, it could restrict visas to foreigners who travel to the U.S. to study science, engineering, math, and technology; it dedicated itself to a “free and open Indo-Pacific,” which, in practice, will likely expand military coöperation with India, Japan, and Australia. Robert Lighthizer, the U.S. Trade Representative, is considering several potential tariffs in order to punish China for its alleged theft of intellectual property and dumping of exports on U.S. markets. “We’re not looking for a trade war,” a senior White House official involved in China issues told me. “But the President fully believes that we have to stand up to China’s predatory industrial policies that have hollowed out U.S. manufacturing and, increasingly, high-tech sectors.”
The result: a “bunch of drunks in a car fighting for the steering wheel.”
- If the White House takes such actions, they could collide with Trump’s admiring relationship with Xi. In the meantime, many China specialists describe the Administration’s approach as inchoate. In the first eleven months of Trump’s Presidency, none of his Cabinet secretaries had given a major speech on China. The post of Assistant Secretary of State for East Asian and Pacific Affairs, the State Department’s top job for the region—once held by W. Averell Harriman, Richard Holbrooke, and Christopher Hill—remained unfilled. David Lampton, the director of China studies at the School of Advanced International Studies, at Johns Hopkins, told me, “I think this is like a bunch of drunks in a car fighting for the steering wheel.”
Finally, it addresses the question of whether China will supplant the US as a global power:
- Global leadership is costly; it means asking your people to contribute to others’ well-being, to send young soldiers to die far from home. In 2015, when Xi pledged billions of dollars in loan forgiveness and additional aid for African nations, some in China grumbled that their country was not yet rich enough to do that. China is not “seeking to replace us in the same position as a kind of chairman of planet Earth,” Daniel Russel said. “They have no intention of emulating the U.S. as a provider of global goods or as an arbiter who teases out universal principles and common rules.”
- According to Richard Haass the president of the Council on Foreign Relations, “More likely, the world is entering an era without obvious leaders, an “age of nonpolarity,”
Here are two articles from the Guardian looking at the dramatic changes in China’s constitution which have removed the limit on the President’s tenure in office to two terms of five years. The President in the Chinese political system is formally a limited position with mostly ceremonial powers. However, since 1993 the President has also been the General Secretary of the Communist Party of China, making it the de facto center of Chinese political power. This change represents a reversal of the policy implemented after the death of Chairman Mao, which was intended to split up and limit power in the Chinese political system.
- “Jude Blanchette, an expert in Chinese politics from New York’s Conference Board research group, said: “It’s amazing. I just did not think this was possible. I just thought it was way too aggressive and bold [a move] and unnecessarily so.
- “It’s an unequivocal signal that Xi Jinping has designs to stay on past 2023. I don’t think there is any other way to read it other than the four-decade long project that Deng Xiaoping initiated to set hard term limits on power to make sure that a Mao figure never came back is being dismantled.
- “You just need to look a few thousand miles to the west in Russia to see what this
- potentially looks like”
This is another step in Xi Jinping’s consolidation of power:
- “Yet a man whose family was so deeply scarred by the excesses of Maoism is dismantling the changes designed to safeguard his party and country against further such disasters. After the Cultural Revolution, Mao’s successors resolved that never again should one person hold such power. Deng Xiaoping, and other survivors such as Xi’s father, sought to institutionalise politics. Their ideas were not codified, but they were crucial in limiting the power of the leader by setting a term limit and ensuring authority was exercised collectively.
- Xi has ripped up this unwritten rulebook. He is in charge, full stop. This week he became the only living leader since Mao to have his ideology enshrined in the party constitution under his name. His ideas are recorded as “Xi Jinping Thought”, on a par with Mao Zedong Thought, rather than Deng’s slightly less elevated “Theory”.”
“…the AIIB has stoked controversy because Asia already has a multilateral lender, the Asian Development Bank (ADB). Why is China creating a new development bank for Asia?
China’s official answer is that Asia has a massive infrastructure funding gap. The ADB has pegged the hole at some $8 trillion between 2010 and 2020. Existing institutions cannot hope to fill it: the ADB has a capital base (money both paid-in and pledged by member nations) of just over $160 billion and the World Bank has $223 billion. The AIIB will start with $50 billion in capital—hardly enough for what is needed but still a helpful boost. Moreover, while ADB and World Bank loans support everything from environmental protection to gender equality, the AIIB will concentrate its firepower on infrastructure.”
“But the real, unstated tension stems from a deeper shift: China will use the new bank to expand its influence at the expense of America and Japan, Asia’s established powers. China’s decision to fund a new multilateral bank rather than give more to existing ones reflects its exasperation with the glacial pace of global economic governance reform. The same motivation lies behind the New Development Bank established by the BRICS (Brazil, Russia, India, China and South Africa). Although China is the biggest economy in Asia, the ADB is dominated by Japan; Japan’s voting share is more than twice China’s and the bank’s president has always been Japanese. Reforms to give China a little more say at the International Monetary Fund have been delayed for years, and even if they go through America will still retain far more power. China is, understandably, impatient for change. It is therefore taking matters into its own hands.”
The Guardian also has a few interesting things to say about the new bank. In addition to echoing the Economist’s comments about competition between China and the US/Japan, it also argues:
“the world suffers from insufficient aggregate demand. Financial markets have proven unequal to the task of recycling savings from places where incomes exceed consumption to places where investment is needed.
When he was chair of the US Federal Reserve, Ben Bernanke mistakenly described the problem as a “global saving glut.” But in a world with such huge infrastructure needs, the problem is not a surplus of savings or a deficiency of good investment opportunities. The problem is a financial system that has excelled at enabling market manipulation, speculation, and insider trading, but has failed at its core task: intermediating savings and investment on a global scale. That is why the AIIB could bring a small but badly needed boost to global aggregate demand.”
In defence of the Asian Infrastructure Investment Bank
The earthquake in Nepal last week killed at least 5,800 people. As Nepal struggles to recover, it also “finds itself jammed between India and China in the geopolitical sense. Like the Himalayas themselves, Nepal lies between the two hulking giants of Asia that, from the days of Mao and Nehru, have historically had competing ideological visions for how to lead the poorer parts of the continent toward economic and political development.” Not surprisingly, both India and China are using the opportunity to try to extend their influence in the country. Once again, humanitarian aid has a political purpose.
Interesting take on the rise of China. Also of note: another historical analogy involving Germany. This time however it is Germany pre-WW1 not Pre-WW2, and the argument is not that we must always stand up to tyrants, but that being overly defensive guarantees a hostile response.
What, then, should Obama do? Despite all the uproar about corporate espionage and hacking, the first thing on his to-do list should be reassuring the Chinese government, and the Chinese people, that the United States seeks cooperation rather than confrontation. As Ross wrote: “The right China policy would assuage, not exploit, Beijing’s anxieties, while protecting U.S. interests in the region.” That doesn’t mean ignoring examples of egregious behavior by Chinese, but it means dealing with them in the right setting. For example, complaints about intellectual property theft can be pursued through the World Trade Organization, which China joined more than a decade ago.
“The Chinese economy is now worth $17.6tn, slightly higher than the $17.4tn the International Monetary Fund (IMF) estimates for the US.”
“if you look at per capita spending power – the value of all goods and services produced within a nation in a given year divided by the average population for the same year – then, even adjusted for PPP, China ($11,868) is still lagging a long way behind not only the United States ($53,001) but also the likes of Turkmenistan ($12,863) and Suriname ($16,080).”
“…how easy is it to accurately measure the size of the Chinese economy or even just parts of it?”
“Not very, ….distortions that happen at the village and provincial levels become amplified as they go out the statistical gathering chain.”
“The most important number in the world, for the past 30 years and next five years, is China’s growth rate. For 30 years its economy grew at a mind-boggling rate – roughly 10% a year but that stopped when the global economy hit problems in 2008 and it fell very sharply.”