As Sean Connery in The Untouchables said.. "He pulls a knife, you pull a gun. He sends one of yours to the hospital, you send one of his to the morgue." Is that the only way to handle conflict with China? Do they respect any other way?
Ed Wong's piece in today's NY Times contains the best explanation for why the Americans have not been able to come up with a China policy. At one point, President Trump said to Xi Jinping "make sure I win" by buying ag products from key states. How can we create a policy when we have self-interested things like that occurring?
Caixin just reported that the Chinese government has approved Delta and United Airlines to operate 2 flights a week between the US and China... how is this a good idea?
Couple different layers to this one. Basically, for the last few months the very few flights between the US and China were on Chinese carriers as China had suspended US carriers from operating in China. After a threat to suspend those carrier’s operations by US DOT, CAAC agreed to first allow one and later two daily flights from US carriers. So just restoring US access took a big diplomatic showdown. But underneath that you have to keep in mind, foreign nationals are still barred from entering China. So these flights are mainly for returning Chinese citizens (of which there are many hundreds of thousands globally).
While Beijing is rightly paranoid about intl travel reseeding outbreaks, I think most of these flights will be routed through Shanghai instead of Beijing and probably strictly monitored/quarantined. Having other flag carriers running flights isn’t ideal, but I think its a concession they were willing to make as the citizens stranded overseas were causing bad PR inside China for the regime.
This is new normal - some dodgy Chinese business person gets arrested for fraud somewhere, and bingo, a national of that country in China gets busted the next day on some spurious charge. It's like the Mafia.
Good Morning! Does anyone have any thoughts on how business contracts (primarily signed in Hong Kong) with Chinese companies will play out after the National Security Law goes into effect?
"ASSISTANT SECRETARY STILWELL: Well, I would go back to the actions in a results-oriented relationship, and this is one of our – I’m not going to answer the question right now. However, if you watch outcomes over the next couple weeks, you can see for yourself whether U.S. concerns – which have been expressed very publicly, not just this week in Hawaii but over the weeks coming out of D.C. – about this provocative behavior, and then just a long list of things: How about reciprocity? How about journalists who can’t report freely in the PRC and yet complain shrilly when they – or anything is done to Chinese journalists in the U.S.? The relationship needs to be more reciprocal. And we raised quite a few of these issues, and I’ll leave it to you to determine whether or not they are going to comply or not. Just watch the outcomes here in the next couple weeks and see.
I’m hopeful. Again, as I – we leave diplomatic space by not talking about this in detail where they feel like they’re boxed in. We leave them the diplomatic space to make decisions that demonstrate that they understand the need for this relationship to be more reciprocal and “win-win,” to use their term, on both sides. And so I always remain optimistic. I am often disappointed, but again, we’ll see if the presentation – if our interactions this week had the desired effect"
I think stepping up ag purchases while railroading the HK NSL is the CCP trying to suss out to what extent they can buy their way out of this predicament. Read in this context, Trump signing the Uighur rights bill he next day looks like confirmation that the admin will not unlink trade and human rights issues. The reasoning for this is probably tactical rather than principled, but it’s bad news for Beijing either way.
Also, this “reciprocity” concept is popping up more and more in US statements. I think it is transforming from a buzzword to an actual durable policy, but I’ll leave that analysis to people smarter than myself.
Has the administration ever really linked trade and human rights? Does Trump, rather than the people who work for him, actually care about human rights at all?
Trump signing the Uyghur Rights is surely a reflection of the overwhelming bipartisan support it had rather than any personal conviction or grand strategy.
I would argue it’s more about the CCP inability to unlink any of their core interests from the others that kind of forced his hand. If they they will cut off trade and farm purchases over things like a COVID inquiry it’s pointless for us to pretend that economic and political issues are on their own tracks. Trump is just confronting reality.
adding to the list of questions ... James Traub at Foreign Policy has a piece on the US no longer being free. I wrote about a Chinese perspective on US as a model for modernity - that if a couple thousand lives a month is the cost of doing business, what does that say about US concern for human rights? http://chinareflections.com/index.php/105-comments-on-policies-and-programs/449-what-do-you-think-of-western-civilization American "soft power" is certainly devalued. What impact on US, foreign and domestically?
Thanks for sharing, William, nice piece. Taking the larger view--that is, what is intrinsically correct, rather than what are a majority of people feeling at the moment--I think you'd agree (based on your renewal at home comment below) that liberalism/checks and balances/democratic ideology/independent judiciary/rule of law etc at least provide the opportunity for those not in direct control of the military and domestic security forces/secret police to control the men with guns and the elite who order them around.
While the US is struggling horribly, it remains the fact that the CCP starved to death 40 million of its citizens within living memory and has now condemned its country to decades of stagnation through its own unwillingness to transfer some of its wealth and power to ordinary Chinese by rebalancing, while the average Chinese has zero say in what happens or ability to do anything about horrible mismatches in domestic power or horrible policies. I'm donating a lot to Biden and plan to volunteer for his campaign if possible as well as spread the word in my own circles i.e. get more involved in civil society, and that's not a luxury any Mainland Chinese has. As I wrote in response to DC, the Eric Li camp (laughably and with horrible amnesia) says that's not necessary in China because the CCP is a uniquely virtuous group of individuals, but obviously the virtue he is really talking about is the virtue of aligned incentives for the CCP elite to get rich building infrastructure and other major SOE's over about a generation plus which caused the economy to grow for all, but now that their economic incentives are no longer aligned with the interests of their own population, we can see in Xi's desperate and shrill nationalism the CCP response to the situation--distraction and repression (or else absurd belief in actual Marxism itself, i.e. somehow "the contradictions will be resolved" in the CCP's favor by some mysterious Hegelian historical process).
Thanks for sharing these articles. I cant't help think Xi actually comes strengthened out of this. US model no longer look as attractive. And it gives Chinese leaders more backing for the China model. That's my impression from talking to Chinese friends and colleagues living in West as well. It seems to be assumption in West that Chinese people long for US-style democracy but that is far from my impression. They would generally like more freedoms but not western-style democracy. And see US system as people not caring enough about whole society but too much about individualism.
Respectfully, the United States does not have a monopoly on democracy, nor is it the only (viable?) liberal and democratic polity on the face of the planet.
I think that at least a few of the more thoughtful observers in China understand that democracy and pluralism come in many different varieties.
Indeed! Taiwan and South Korea handled COVID far better than China, and Japan has done very well also. I don't think any of us here in the West want China to become a carbon copy of the US; at least, I certainly don't. I'd like the Chinese people to find their way to whichever more liberal democratic model works best for them.
I do agree with most of the above. I mainly meant to reflect on my impression from talking to Chinese living here in West. Most of them seem to agree with the notion that it would be too risky for China to go down path of liberal democracy. Of course they may not represent the common view of Chinese people. But their views are noteworthy since they live in the Nordics and see how our democracies work here. Still most of them reject it would be right for China. They seem to a wide extent to reflect the views of people like Eric Li. At the same time they can be quite critical of China in certain areas. While also defending China in other areas - not least when it comes to relations with the West. Would be interested to hear what others experience in dialogue with Chinese friends/colleagues.
Again, it's important to realize that Eric Li's argument boils down to, "If your economy has been destroyed and so you need lots of infrastructure and fixed capital investment, the incentives of your elite (once freed from Marxist ideology so that they can pursue profit) will align with that of your population (allowed to pursue profit in certain limited areas of the economy) for about a generation--that is, the elite will own huge SOE infrastructure and other essential firms, and by building infrastructure and other major things will bring great benefits to everyone while getting super rich themselves." The positive results from CCP governance Li refers to have nothing to do with meritocracy or the flaws with democracy, and everything to do with basic economic incentives. Now that the CCP economic incentives are no longer aligned with those of the Chinese population at large, the issues with human nature--it's largely selfish and short-sighted in most people, unless counterbalanced by competing interests/checks and balances--are coming to the forefront. That is, rather than rebalance the economy by shifting CCP wealth and power to ordinary Chinese to ensure more permanent economic growth and prosperity, Xi has turned to other methods/ideologies plus repression to maintain his absolute power.
That said, if the US continues down its own horrible, increasingly Republican-tribal path, then we will have utterly failed to live up to the promise of liberal values (although those values at least provide a chance for populations to better themselves, unlike CCP "values"). So as William Markle said, it's all about nation building at home right now for the West, starting with things like BLM--can we really make our most oppressed minority equal? It would be amazing if we could and it's both our biggest moral imperative and national security imperative. If BLM actually achieves results, the contrast with the CCP will be stark--our minority has full rights, theirs is in concentration camps. Of course, the US is a long way from full equality for African Americans, but it should be an urgent domestic and foreign policy goal (and of course just a general human goal, among many other ones0.
There are generally two narratives in mainstream Media 1) Eric Li’s view that somehow CCP’s “meritocracy” bureaucrats selection is vastly superior than western democracy’s elected officials or 2) Everything about Chinese system sucks and it will blow up. Truth is always in the middle, and if faced to make between these two choices, many reasonable Chinese living in the west would pick 1) on some of the issues, as many non Chinese would probably too. The key is actually to focus on facts and pragmatic things, rather than two extremes
I've always found Li to be a blowhard and apologist, to be frank, with his "meritocracy" claims. It stinks of being a nice convenient justification/explanation for Chinese economic growth since 1978. There was certainly nothing "meritocratic" about the CCP before 1978 (obviously). What changed was desperation over a failing system and so hence a willingness to abandon a failed entirely state-owned model--laudable, but hardly proof of a kickass meritocratic party.
The fact is that from 1978 until about 2010, the incentives of the CCP elite (once freed from communist ideology and free to pursue unlimited wealth) aligned with that of the population--the CCP elite could get rich owning profit-seeking SOE's, and they had destroyed the economy to such an extent by 1978 that massive opportunities were everywhere even for super inefficient SOE's (and obviously the worst of them were dismantled in roughly 50% of industries/GDP).
But now that the country no longer needs massive investment from horribly inefficient SOE's, there's no need for them--this is rebalancing. So the test is, will the CCP be willing to give up its power and privilege for the benefit of all Chinese? Human nature and history say no, of course not (and obviously this isn't happening under Xi, quite the opposite). The advantage of the Western model is that the non-elite at least have some means to fight the natural tendency among the elite to concentrate power and privilege in their hands. This to me is the right paradigm to look at politics and economics--human nature is pretty selfish, and so lots of safeguards are needed.
Eric Li doesn't comment on Isaiah Berlin's On Political Judgment http://ayman980.com/class/Readings/Berlin%20On%20Political%20Judgement.pdf Education does not provide wisdom in the art of governing or leadership; and vetting in CCP only prepares one for authoritarian values (hence the initial virus response). I am not arguing the US system is categorically better. But CCP is certainly not promoting its own system of governance anywhere else in the world, for good reason.
First of all, the "US model" constantly evolves over time. If "Western" values à la traditional European Enlightenment no longer support American primacy, I cannot think of a reason something else won't come out to better serve that purpose.
On a related note, to those growing up in mainland China, there are certain knee-jerk reactions when it comes to "the motherland" (祖国). Think about "guochi" (国耻, national shame associated with Middle Country/Qing Dynasty's downfall when confronted by Western powers in the 19th century), or their attitude towards separatism in Tibet, East Turkestan, Taiwan, and most recently, Hong Kong. The CCP has successfully exploited these narratives (e.g. using meticulously designed propaganda and "patriotism education") to shore up their legitimacy. And together with their information decoupling (e.g. WeChat and Weibo accounts catering to overseas Chinese students, most of whom do not read from local sources), the majority of Chinese cannot recognize how subconsciously they are under the influence.
As a result, liberal values that are learned even after moving to the West cannot easily override these conditioned responses from their younger selves' own experience. As Erik has noted here, even reasonable Chinese people would suddenly become irrational when certain buttons are pushed.
Just to clarify, that "something else" re America's future can come within the liberal idea, and it may well be the case that it addresses the limits and shortcomings associated with traditional European liberalism.
Other than first-generation Chinese immigrants, very few people in the US would find the Chinese model to be an attractive alternative even if the current ruling values completely collapse.
The ideas that “democracy is too risky” or that “the Chinese people aren’t ready for democracy” are explicitly pumped into people’s heads via the education system and media to the point that I found even reasonable people would repeat it mindlessly. Of course one week in Taiwan will disabuse you of this notion totally.
The key questions is what “democracy” is, as democracy comes in various forms, US’s electoral and UK’s parliamentary are certainly different. Chinese people will probably need to find the democratic system that works for them and the country, and over time to make it work
Do you believe that their apprehension regarding liberal democracy stems from fears about the long-term stability of the unified Chinese state under such a system, or does it come from somewhere else?
"China is not ready for democracy" is an old idea, even though it was promoted in the early 20th century when the west, particularly the US, was the model for modernism. But China is big, and diverse, as much or more so than the US. I doubt that we could get 20 contiguous states in the US to form a democratic union right now. Chinese history has been of contentious and individualistic states and regions, and the old assumption that a single leader is the only way to unify the population still applies, I think. And, as has been discussed, Chinese ideas now about democracy are often ill-formed. In particular, the contentious nature of democracy in the US looks like chaos. On a more practical level, there is no civil society to speak of - no organized way to contend for power or for ideas outside of CCP. Taiwan and South Korea and Japan democratized under different conditions. I think the general Chinese idea is right - you can't get there (to democracy) from where we are right now. Maybe in a few generations.
John Mearsheimer has long maintained that liberal hegemony is over https://www.youtube.com/watch?v=_ftquHoNc6A That seems to be true with or without our current dear leader. What the world - including young and educated Chinese - will be watching is whether we can fix democracy, fix liberalism, fix "life, liberty, and the pursuit of happiness" at home. Tall order, but another instance of "physician, heal thyself."
What is the appropriate response to China’s attacks on Australia? First trade sanctions and threats; and now massive cyber attacks. Are these intended to mine information or to undermine confidence in Australia’s ability to defend its people?
Think the goal is to intimidate Australia not to go against China. Not sure Australia has much of a credible response besides siding even more with the West.
The real threat to Australia in my opinion is if China stops importing food and commodities from Australia.
The Chinese haven't got a viable alternative to Australia for iron ore. But the climate of opinion in Australia has really changed recently, the scales have fallen from their eyes about China. I don't think they'll easily be brought back into the Chinese fold.
Could you elaborate on the new sentiment in Australia towards China? How would Australia deal aggressively against China when China is also it's biggest customer from a trade perspective?
It's a good question, but I'm not Australian myself and so don't have an insider view. But the Aussies are quite tough, and a response to the 85% duty on barley is, well, we'll plant something else. Beef is a bit trickier I think, so farmers will have to find an alternative.
My general point though is that even ordinary Aussies who don't pay much attention to China are now fed up with it, what with the 'Silent Invasion' and last year's university demos. See this in the Sydney tabloid the Daily Telegraph:
I have a big picture question in the absence of any specific ones. Looking solely at the China side in this question (not the US or the West), what do people think Xi actually sees as his endgame/motivaton? He has utterly failed to rebalance the economy (although it appears he'll be able to stay up to date on high tech stuff) and appears to have no interest in even trying, and he has managed to unite the entire world more or less (outside a few autocratic governments) against him (if fecklessly in the case of the Germans and some others).
He doesn't seem the type for wishful or hopeful thinking regarding his enemies, so it seems farfetched to say he has gambled everything on a sudden collapse of all major Western powers and alliances (again, the West has its potentially existential problems, but focusing on Xi this question). Did he decide that the party couldn't survive any further economic or political liberalization, and so chose to sacrifice everything in order to maintain absolute political power for the CCP? Is he just more foolish than we thought (he doesn't seem foolish, although nor does he seem theoretically/intellectually deep or wise, rather very strong and amoral and cunning)?
Lines of thought like these have led me to agree with Bill's occasionally posed question that Xi might be a dyed in the wool Marxist believer who is not foolish about his enemies, but just sincerely/ideologically believes Marxism is correct and that the capitalist powers will eventually fall and that everything the CCP does is by definition correct as it is leading towards the scientific truth of communism so maximizing its power and control is automatically the right policy. This seems in line also with John Garnaut's awesome piece on Xi's ideological foundations.
I feel like beginning to discuss these issues in these terms, rather than in purely economic or geopolitical/realist ones, might be more accurate and give us a leg up at not responding with anger or bewilderment at CCP propaganda but enable us to laugh at it, or unpack it with straightforward, effective retorts that might not have been so evident without a background in understanding CCP ideology. Time to delve back into the history of communist governments and ideology?
Anyone who says they know who Xi is is probably BS since Xi has a very small circle and the elders who picked him were probably surprised by his assertiveness. Having said that, if one focusing on facts, it’s probably logical to agree on a few things about him 1. He sees the need to curb corruptions and improve livelihood of the under-class as prerequisite for Government long term survival, notwithstanding any personal gains at the expense of rivals. You do see a much stronger grass root level support than affluent class or among elites 2. He is a 2nd generation leader, and probably feels a sense of leadership destination or entitlement to make China “better”, whatever that better means in his perspective. “2nd generation” political/wealth tends to be more aggressive than 1st generation. 3. Evidences thus far don’t seem to support strongly one way or the other, in terms of if he is a Marxist believer vs. taking whatever it takes to get to where he thinks the country needs to get to, there have been a lot of different speculations but hard to have conclusion
This analysis begs the main question though—is he aware that the main economic challenge facing the country is the need to rebalance? For the only way to help the underclass in any substantial way is through a major transfer of wealth from the wealthy (ie the ccp in particular which still controls 40-50% of the economy in a very inefficient way, the evidence for which is that the national debt has doubled catastrophically in a decade which is evidence the ccp infrastructure investment is now uNprofitable) to the underclass. But he seems to have ruled out any reform which will reduce the power, economic or political, of the ccp over the lives of the underclass, this dooming the economy to the fate of every other under consuming, investment led economy which is decades of stagnant on (bad I do mean every case, there are two dozen or so examples of the same model China is using all with the same result if you don’t rebalance).
Agreed on the second point as I think most would—like in all communist systems, by the second generation a bureaucratic elite develops which has extreme (relative) wealth and privilege and intoxicating absolute power and the imperative for them is to preserve their wealth and privilege and absolute power above all else.
As to the third point, again it begs the question, clearly he thinks it needs to go in a far more nationalist, ideological, shrill and aggressive direction, but the question as I posed it is why? Why does he want this direction? You said it’s hard to have a conclusion, fine, but it’s an important question and we should lay out the evidence as we see it to have the best understanding possible. That’s the only critical thinking way to get st the problem and so our best to understand the situation we find ourselves in. And the framework I laid out was I thought it was likely to be because either a) he realized rebalancing would be impossible and so needed to distract the population from lack of rising living standards with nationalism and mao-style control over everyone’s daily life, or b) he doesn’t realize rebalancing is important because he’s a Marxist and believes “the contradictions will somehow he resolved.” This is really the key question: how does Xi View the major challenger facing the country (need to rebalance economically)?
Years of anti-corruption bought Xi a lot of power through fear, not respect. No Chinese official can claim he is 100% clean. Such power structure is unstable unlike coalitions which is held together by common (economic & political) interest.
Xi knew the first generation reformers from the Deng’s era were not his allies. Certainly the group of corrupted-power-money vested groups from Jiang’s era were not his friends.
Thus, he has to rely on the grass root and nationalism to use them to keep himself in power. The message therefore is: President Xi loves the people and he is sacrificing himself to take on these corrupted officials and resume Chinese rejuvenation.
He needs these "little red guards" as much they need him. They fed upon feverish national pride from time to time (e.g. Amazing China); they in turn forced the government on silly national issues that has no practical purposes - forcing US airlines to reclassify Taiwan; forcing NBA Daryl Morey issues etc.
Your framework makes sense. On #1. It’s clearly he is aware of some of it, but yet the track record is mixed at best. On one hand, the strong deleveraging policies Since 2015 and efforts to prevent real estate bubble shows the administration understands the economic challenge and trying to think long term, yet efforts on SOE reforms and support for private enterprises which generates most jobs in China are clearly lacking if not going backward by some measures. I’m just not sure more than a few people in the inner circle really knows the answer on that #3. Both scenarios have been speculated by experts, but only time would tell I suppose
Fair points and i have wondered about how to rationalise Chinese actions. I feel that they realize that they have become big enough, economically and militarily to bully countries on a bilateral basis, whether its India or Australia. Guess they also feel that it is difficult for countries to come together in a multilateral forum to gang up against China, given differing strategic objectives of each country and the lack of a unifying global leadership. As long as the world finds it difficult to come together on China, i feel they will persist with their thuggish actions and continue to colour outside the lines.
"Colour outside the lines" is a nice turn. Dynastic history says that all nations should pay tribute to zhongguo. You remember one of the 36 stratagems - "loot a burning house" - when others are disorganized or preoccupied, that is a good time to advance. So, along the lines of "the best defense is a good offense" Xi wants to control world markets and world opinion as much as possible. The markets provide jobs for Chinese (in Africa, the -stans, and at home), influence or control of international organizations will assure favorable rulings for China. Some actions just seem clumsy or only for home consumption - border actions with India, the South China Sea business, the Diaoyudao with Japan, threats to foreign academics and governments. Xi came in with a host of bad problems - debt, corruption, environmental. CCP was no longer the vanguard, it was an administrative party, and it needed to bolster legitimacy. Xi came in to purify CCP and the Chinese people, and in the meantime, give them something else to think about. So, Document No. 9 at home and wolf warrior actions abroad. One has to remember that survival of CCP is always the fundamental goal - and now, survival of Xi. Saber rattling at home and abroad keeps the foreigners at bay, keeps domestic enemies quiet until long after 2022, and might turn out well for China. Xi is the right man in the position at the right time. Bill published John Garnaut's speech from about a year and a half ago https://sinocism.com/p/engineers-of-the-soul-ideology-in and I think that works well as an explainer. Total ideological control is the plan - good for CCP, good for Xi, good for China.
China heavily utilizes its the huge number of small nations that stand with them at the United Nations. They are effectively re-writing global human rights policies, and I don't see any reason that they'll fail.
I think there is a fair chance you are right. That is the ultimate China fear - not IP theft, not South China Sea, not Belt and Road - but that devaluation of the person will become a more acceptable international business and government practice.
Yea if pressed I would currently say there are two possible explanations for Xi's behavior--one, he's aware that the economy has stalled out but is unwilling/unable to transfer resources from the CCP to the people to get consumption up to get it going again, and realizes that he can use nationalism/ideological control to maintain CCP legitimacy even as the economy grinds to a halt for a generation or two (Japan style), or two, with Garnaut and Bill, he really is a Marxist and either doesn't understand the importance of consumption/the issue with inefficient SOE investment/CCP control of half the economy, or simply thinks that with Marxist handwaving it will all somehow go away. Either way, given that his policy is fundamentally hostile towards everything outside his faction of the CCP, and therefore cooperation is impossible so it will come down to power, the fact that his economy can't consume enough to keep itself going and is facing decades of grinding rebalancing is bad news for him (just as the possibility that the US could reelect Trump and fundamentally destroy its prime institutions such as a law-abiding presidency, an independent judiciary and a non-political military is potentially bad for the US, but at least the US has a chance to stop that this fall).
Agree. But the calculus behind economic bullying/blackmail is that the other country will never, ever be willing not accept any short-term economic pain, and therefore will always cave on increasingly unfavorable terms. If someone is ever willing to accept such pain, then you have shot yourself in the foot, too, since your country can longer do business with that country. Since it's a terrible risk to say that every country will always cave, the likely thing is for decoupling to happen--albeit over the next 10 years as it will take time and incentives (carrots + sticks) to build up the manufacturing capacity China now has. So it just seems ultimately like a policy of total economic isolation for China from the developed world plus India which is over half of global GDP and essentially any market that is at all open and dynamic.
I think the caving has gone on for as long as it has because it simply helps other countries' leaders politically to bring in PRC business. But if the costs for bringing PRC business increase this could fundamentally change calculations across the globe.
For sure. In a very visceral way, no population likes to feel they are being bullied--and you are seeing a reaction against the CCP in virtually every significant population around the globe (with the exception of the big 3 dictator allies, Russia Iran North Korea). Australia is really the canary in the coal mine here as the population at large seems basically to have said "F off, CCP" due to the recent bullying and cyber warfare mass attack. Scary aggression from the CCP.
Thanks for sharing your views and I agree. I think most domestic populations have been sold the idea that China is a benign partner, and in fact preferable to the bullying West.
What is interesting is that the cyber operations targeting Australia are probably not very new and have probably been going on for a while. So actually once these pre-existing moves by China bloody shirts by the media, local populations may react differently.
Likewise. Yes, certainly Xi has taken advantage of the engagement paradigm and, more broadly, the entrenched view of the West as the dominant power and therefore for those concerned with immorality, the most important thing has been to restrict misuses of Western power (racism, imperialism, colonialism, etc). Those misuses are real and horrible and should be corrected, but they co-exist with the very laudable tradition of Wester liberal values (which have never been applied to the full Western population, hence BLM which is such an important movement, but which are still good and real and broadly enforced and of course better than the CCP's low-level ideological bludgeoning of its population into accepting CCP absolute power). I think the paradigm is shifting now as people realize the CCP goal is apparently to fully supplant Western liberal values with subservience to absolute CCP power, and so Xi will behind decreasing returns to the strategy of enlisting foreigners to say China is the bullied one as that strategy relies on the outdated "the West will be all-powerful forever and hence focusing solely one its abuse of that power is always the highest moral duty" view. Once people focus also on CCP issues, resistance will increase (as it has been).
I do think a recovery of the tradition of talking about liberal values is important to counter CCP propaganda, and trying to get more involved in telling accurately the story behind CCP propaganda in order to defend liberal values is a project I've been considering trying to get involved with/started on (in my own tiny way) at some point. Maybe "Friends of Sinocism" can get something going :).
I think he wants to be Qianlong, with certainly China’s neighbours as the new tributary states, and possibly many more countries around the world as well.
I’m always struck by how Chiang Kaishek apparently wrote the characters for “avenging humiliation“ at the top of every new page of his diary.
agreed... do be more succinct in my thoughts - and building on your note: fundamentally maoist ideology + aspirations to rebuild the celestial empire + the thirst to avenge humiliation...
David I fully agree with you. My assessment is that on an individual level, Xi is as you say: 'a dyed in the wool Marxist believer who is not foolish about his enemies, but just sincerely/ideologically believes Marxism is correct and that the capitalist powers will eventually fall and that everything the CCP does is by definition correct as it is leading towards the scientific truth of communism so maximizing its power and control is automatically the right policy.'... I would add that that there is also the need to add a healthy dose of (1) 'With Chinese Characteristics' - in the sense that there is a parallel intense aspiration to return China to its rightful dominant position in the world, and; (2) the absolute need for the party to stay in control and maintain the related domestic narratives and nationalistic posturing
I have looked at China's "belt and road" program, in conjunction with the building of the islands in the South China Sea, and I see echoes of the Japanese "East Asia Co-Prosperity Sphere." The parallels that I am drawing are the economic initiatives to try to draw in the neighbors of China to the south and west, combined with strong bases and a strong navy to protect China from the US, away from the Chinese mainland, in the Pacific. What this would allow any Chinese leader is the ability to largely ignore the rest of the world unless the Chinese want to engage, at least in their minds. Again, similar to the Japanese strategy.
To your thinking above, this would allow the Chinese leader to experiment with, and make mistakes like, your illustrations of Xi's errors, and not worry about them, at least in the sense that they haven't been existential mistakes.
I think it's correct that Xi's experience with anything considered a western value has been a disaster for him politically. Market, liberty, religion have all blown up in his face.
This is also a man who had the audacity to completely ignore a text he read in the Rose Garden with Obama in 2015 on refraining from militarizing the SCS islands. This is the most obvious clue that he regards the liberal West as a joke.
Maybe Liu He is Gorbachev-in-waiting but I see no indication of the hawks in China losing the upper hand. In summary, I think Xi will only leave in a body bag and that he intends to "fight and win wars" as he has said.
Do you interpret POTUS's comments on decoupling yesterday, contradicting Lighthizer, as a reaction to the Bolton book assertions that POTUS offered extraordinary concessions to Xi (like overlooking the building of concentration camps) if China would buy more ag?
Wondering what people think about the potential effects if Trump restricts skilled immigration to the US even more? Will companies that need this type of talent (programmers, engineers, etc...) increasingly look to set up teams on the mainland (e.g., exactly what Zoom does?).
I feel like that's a much easier option for smaller companies who fly under the radar. For big companies, wouldn't that just put their China team at risk in China any time a US employee spoke out on something that's common sense in the US for young, liberal employees at tech companies (for instance, nobody is pro concentration camp at those places, or pro secret police/torture), but causes the CCP to become apoplectic?
Interesting point. I don't think that they will see China as an alternative for skilled workers from all over the globe, there, Canada would probably be a better alternative. However for purely Chinese engineering teams that may be an option. However, even with rising economic trouble in China, engineering talent is still scarce and if good, expensive.
Agreed. To that point, I wonder how Vancouver may effectively become extensions of Seattle/Bay Area tech companies and their need for talent in the same time zone.
Re the new COVID cases in Beijing, is there science behind claims that this is “from Europe” or “from imported salmon” (now debunked). Or is this just a political claim to redirect new outbreaks from abroad? Hit on Salmon imports should affect Europe as well. Retaliation for something?
Well it’s a bit of an unknown. But meat plants in Europe, US, and Brazil have been hotspots of Covid and then that meat is packed in frozen containers and sent to China for processing.
Even if the strain is from Europe, all virus strains of this COVID global pandemic originated from China so Beijing's claim here is curious. But it's hard to tell what's fact vs. fiction as Beijing can write up any scientific conclusion it wants to suit the narrative.
When is it no longer conscionable for Pottinger to stand by Trump, given — in light of the Bolton revelations — that he is clearly having little influence on issues of fundamental concern?
Things move pretty fast in Trumpland, it seems to me that Pottinger’s influence has only grown since the events described in Bolton’s book (which we will take for granted are true though I certainly don’t feel that is likely). Most of the stuff they have done recently that has any nuance seems to come from him. So I don’t see any reason he would step down from that perspective. As far as “conscionable”, I think for people who care about such things the damage is done when you start working for Trump, not when you quit or get fired.
James, I’ve been to the White House many times, and we don’t have an administration in history that has been is tough on China as has trump. As for Pottinger, I don’t think there’s been someone in the Nsc as powerful as Matt in terms of guiding and directing policy.
As for Trump, surprise, surprise… Donald Trump is not a promoter of human rights. Now is there anyone whoever thought he was?
I also don’t understand your standards. Hillary Clinton, and it’s very well documented, ran an entire operation to cover up her husbands issues with women. Did women throw Hillary under the bus?
I think the original thinking was August, but considering the meeting in Hawaii went so poorly, I suspect it could be accelerated to June.
In terms of US retaliation, the president remarked on a few actions that, in the grand scheme of things, are not terribly onerous.
(1) Suspend entry of certain foreign nationals from china (students from nat’l defense related universities)
(2) De-listing of non-compliant Chinese companies in US (likely waiting for legislation to pass, any delisting unlikely to happen for three years)
Eliminating policy exemptions for HK’s special treatment:
- End extradition treaty
- Adjust export controls jurisdiction to match Mainland (this is moving more quickly than the others, we understand)
- Issue State dept travel advisory for HK to elevated risk levels
- Take action to adjust HK’s treatment as travel territory separate from Mainland
- Sanction individuals directly and indirectly involved with eroding hk freedoms
- Take action to revoke Hong Kong's preferential treatment as a separate customs territory, e.g. potentially equivalent tariff levels as Mainland (this is the big one, but we understand that the administration is only in the early stages of evaluating this option and unwinding the special status is more complicated than the stroke of a pen. Go figure).
Trump, looking like a one-term president, seemed to revert to his old China approach of trade deal = $ with the Pompeo meeting in Hawaii. The subsequent Bloomberg story seems to confirm this was the central Trump ask in the meeting, likely in addition to virus transparency.
Am thinking about this too. It seems clear his main motivation for either staying with deal or leaving it, is how it impacts his re-election chance. If China steps up and buys a lot of agriculture I guess he would stick with it. If China doesn't he could be in catch-22. If he leaves deal, he risks China reducing purchases even more, which would hurt him in key swing states like Iowa and Ohio. He promised them a great deal and they've paid a high price already for his trade war. If he doesn't leave deal Biden could easily attack him for making a 'great deal' that didn't lead to anything… Am interested to hear other views as well
Pre-Covid, I’d really like to know the high price the United States paid for the trade war? Was it the record low unemployment, the increased income of farmers, based in large part lower oil prices?
—
I think Trump doesn’t win, but there’s a lot of self-serving, let’s re-engage with China logic, but I’m just not seeing In actual happenings
Also interested in Phase One fate... It would have been pretty inflammatory if the Chinese hadn't committed to accelerating purchases after the Hawaii meeting.... since they're very far behind target already! Anything other than re-commitment is tantamount to saying it's dead in the water. Good site here which tracks trade deal progress:
Seems to me that Trump retains 'option value' on the deal at the moment running into the election. Either it 'works', in which case he can tout it as an achievement/getting tough on China, or else it doesn't and he pulls the plug with: "too bad, it was a great deal but they didn't live up to it".
Wonder whether the Bolton book - and more importantly the political capital the Dems will make out of it - alters the landscape materially on Phase One? I.e. Trump has to do something to show that he's really 'tough' and not depending on Xi's good offices for re-election via agricultural purchases.
Hypothetically, if China was warming to the idea of a Trump re-election (on the basis that he's a bigger threat to US alliances/power structure/credibility than Xi ever could be) then they might work harder to prop up the deal. But then the Dems can say 'look, Xi's supporting his friend Trump for re-election'!
My view is that Trump's actions on China in 2020 are basically hollow and designed to preserve the Phase 1 deal and prop up the stock market.
The only reaction to the Bolton book seems to have been his signing the Xiuger act which happened the same day. The uniform condemnation of Bolton from other people in the room buries this I believe. Lighthizer was asked a "gotcha" question by Menendez and did seem candid and honest.
As to Trump's political calculations on Phase 1 and how they could change, the key overarching determinant is whether he is willing to crush the stock market. Any movement toward increased tariffs or restricting market access would be very negative for stock prices. He still talks about the market almost every day and thinks that it helps him politically.
I don't know the answer on that question (based on voter data) but I tend to believe that people voting for Trump based on China, immigration, and other non-establishment core beliefs he brought to the Republican mainstream don't own stocks and don't care about the market.
My view is that if Trump focuses on the S&P he will lose the election. If he refocuses on China's failings on the virus and general bad behavior he will win.
Agreed on the market angle and given the disconnect between SPX and the real economy a stock market focus is unlikely to pay big dividends (pun not intended) electorally! Deal collapse would be a big general risk-off trigger. Not least because the Phase One deal feels like a bit of a dam, holding back a more aggressive showdown - once it goes, all the other things which the national security apparatus want to apply follow quickly. Ironically it is the person who has set themselves up as the China hawk (ie Trump) that is - for the time being - holding back... the China hawks.
If the deal and market performance are intertwined on the way up, the danger is then presumably that if the market were to fall for some other reason - the rationale for keeping the deal intact is correspondingly weaker. Ie reflexive.
Interesting thought on Trump's reflexivity. There are arguments for and against I think.
For: Trump reacts reflexively to almost everything...often to his detriment.
Against: Narrowly on China, Trump has tweeted impulsively but done very little else impulsively. His moves on tariffs, Huawei, Taiwan, etc seem highly calculated and carefully considered.
My feeling is that ala 2019, Trump is more likely to act on China when the market is high - so he has some breathing room. He has always folded his hand and come back to the table with China after the markets convulsed (4Q 2018, 3Q 2019).
So, I'm sticking to my view that so far this year he hasn't done anything substantive on China because of the proximity of the election and weak market. What has now changed is that the market is nearly at all time highs and his poll numbers look terrible.
"The Ladakh clash should not have been a surprise. Similar events have been happening along the disputed border between China and India for years, but only the few most heated ones make the news. Beijing believes India is exploiting a temporary period of Chinese weakness, and is responding forcefully as a result. Strategically, it may not help China’s desired goal to keep India neutral. But since Beijing sees a neutral India as untenable to begin with, tactical gains that can bog India down along the disputed border, frustrate New Delhi’s regional and global ambitions, and remind India of the eventual need for compromise may not be the worst case in China’s cost-benefit analysis. Tactically, China appears to be aiming for what it achieved in the 1962 war. Despite what the outsiders might see as China’s mistake, China is unlikely to change its current strategic assessment. China and India will eventually find a face-saving mutual compromise to end the Ladakh standoff, as neither wants a war. However, the unsettled border will continue to destabilize, fester, and brew more clashes down the road."
Yun Sun writes: " Neither side will easily abandon their tactical objectives. In that sense, the current standoff is unlikely to see a quick resolution. The 2013 Daulat Beg Oldi incident saw a 20-day standoff before the Indians agreed to dismantle bunkers in the Chumar sector and the Chinese withdrew. "
Yes but since then the Indians have built an airstrip at Daulat Beg Oldi . In stead of many helicopter flights, 1 C-130 can re-supply a battalion (an a C-17 could supply a brigade)
The logistic imbalance of the past has been reversed there & potentially elsewhere
"China and India will eventually find a face-saving mutual compromise to end the Ladakh standoff" I predict that if that happens, incidents will shift to Sikkim or Arunachal --unless there is trouble w the Philippines , Vietnam etc . XJP wants the Wolfish stance, on top of systemic expansionism
Thank you for posting the link to Yun Sun’s analysis.
I have one big concerns: Has it not been the case that both sides have sought to make tactical gains in various areas along their shared border? If my understanding in this point is correct (I’m open to a debate), does this not suggest that the culpability for this shared?
Yun Sun has done great service in bringing out the Chinese perspective here. I broadly agree with her perspective. There are no good options for India.
Spavor and Kovrig are now officially charged. What are the options for this trial to go now? Will it be synced to the Meng extradition trial? What if Meng is extradited, which means a lengthy process to follow, can the sentencing be delayed to wait for the result?
I am wondering whether it is part of a broader effort to force a political solution to the Huawei issue with the US. If Huawei is really cut off from fabbing chips at TSMC, which is the implication of the latest US export control rules, its future is bleak.
Re: India-China, have any India watchers heard anything of India retaliating against Pakistan, with particular regard to Kashmir, so as to indirectly threaten China's access to the Persian Gulf/CPEC?
I don't think CPEC meaningfully constitutes an access path for China to the Persian Gulf, mainly due to the limited scale of transport infrastructure between China and Pakistan (essentially it's just the Karakoram Highway). I also think China is, at least for now, likely to seek de-escalation of the situation. In that context, interesting to see the AIIB announce a $750 million loan to India, followed very shortly by $500 million for Pakistan.
Would President Xi Jinping ever corroborate Bolton’s claim President Trump asked him for election help? Even if it wasn’t true? Or would that damage President Xi’s image?
As Sean Connery in The Untouchables said.. "He pulls a knife, you pull a gun. He sends one of yours to the hospital, you send one of his to the morgue." Is that the only way to handle conflict with China? Do they respect any other way?
Ed Wong's piece in today's NY Times contains the best explanation for why the Americans have not been able to come up with a China policy. At one point, President Trump said to Xi Jinping "make sure I win" by buying ag products from key states. How can we create a policy when we have self-interested things like that occurring?
https://www.nytimes.com/2020/06/18/us/politics/trump-china-bolton.html?searchResultPosition=3
Caixin just reported that the Chinese government has approved Delta and United Airlines to operate 2 flights a week between the US and China... how is this a good idea?
Couple different layers to this one. Basically, for the last few months the very few flights between the US and China were on Chinese carriers as China had suspended US carriers from operating in China. After a threat to suspend those carrier’s operations by US DOT, CAAC agreed to first allow one and later two daily flights from US carriers. So just restoring US access took a big diplomatic showdown. But underneath that you have to keep in mind, foreign nationals are still barred from entering China. So these flights are mainly for returning Chinese citizens (of which there are many hundreds of thousands globally).
While Beijing is rightly paranoid about intl travel reseeding outbreaks, I think most of these flights will be routed through Shanghai instead of Beijing and probably strictly monitored/quarantined. Having other flag carriers running flights isn’t ideal, but I think its a concession they were willing to make as the citizens stranded overseas were causing bad PR inside China for the regime.
As the overtly Canadian commentator here, I have a question about the PRC decision to formally charge “the two Michaels” with espionage.
Has there ever been an instance in which foreign nationals who’ve been formally charged for having allegedly “stolen state secrets” were acquitted?
Does this decision “seal the fates” of Michael Kovrig and Michael Spavor?
I'm not aware of any such person being acquitted.
This is new normal - some dodgy Chinese business person gets arrested for fraud somewhere, and bingo, a national of that country in China gets busted the next day on some spurious charge. It's like the Mafia.
Actually, I posed two questions. Apologies for the bad grammar.
Good Morning! Does anyone have any thoughts on how business contracts (primarily signed in Hong Kong) with Chinese companies will play out after the National Security Law goes into effect?
This official Briefing with Assistant Secretary for East Asian and Pacific Affairs David Stilwell On Readout of Secretary Pompeo’s Meeting With Poliburo Member Yang Jiechi https://www.state.gov/briefing-with-assistant-secretary-for-east-asian-and-pacific-affairs-david-stilwell-on-readout-of-secretary-pompeos-meeting-with-poliburo-member-yang-jiechi/#.XuwI9LrDatA.twitter is interesting. Stilwell makes the point more than once to "watch the outcomes here in the next couple weeks". The news this morning saying the Chinese side is accelerating purchases under the phase one deal may be part of this. That is the easiest thing to do to keep Trump happy, as Stilwell says I guess we will find out within the next couple of weeks whether there was progress on other issues.
"ASSISTANT SECRETARY STILWELL: Well, I would go back to the actions in a results-oriented relationship, and this is one of our – I’m not going to answer the question right now. However, if you watch outcomes over the next couple weeks, you can see for yourself whether U.S. concerns – which have been expressed very publicly, not just this week in Hawaii but over the weeks coming out of D.C. – about this provocative behavior, and then just a long list of things: How about reciprocity? How about journalists who can’t report freely in the PRC and yet complain shrilly when they – or anything is done to Chinese journalists in the U.S.? The relationship needs to be more reciprocal. And we raised quite a few of these issues, and I’ll leave it to you to determine whether or not they are going to comply or not. Just watch the outcomes here in the next couple weeks and see.
I’m hopeful. Again, as I – we leave diplomatic space by not talking about this in detail where they feel like they’re boxed in. We leave them the diplomatic space to make decisions that demonstrate that they understand the need for this relationship to be more reciprocal and “win-win,” to use their term, on both sides. And so I always remain optimistic. I am often disappointed, but again, we’ll see if the presentation – if our interactions this week had the desired effect"
I think stepping up ag purchases while railroading the HK NSL is the CCP trying to suss out to what extent they can buy their way out of this predicament. Read in this context, Trump signing the Uighur rights bill he next day looks like confirmation that the admin will not unlink trade and human rights issues. The reasoning for this is probably tactical rather than principled, but it’s bad news for Beijing either way.
Also, this “reciprocity” concept is popping up more and more in US statements. I think it is transforming from a buzzword to an actual durable policy, but I’ll leave that analysis to people smarter than myself.
Has the administration ever really linked trade and human rights? Does Trump, rather than the people who work for him, actually care about human rights at all?
Trump signing the Uyghur Rights is surely a reflection of the overwhelming bipartisan support it had rather than any personal conviction or grand strategy.
I would argue it’s more about the CCP inability to unlink any of their core interests from the others that kind of forced his hand. If they they will cut off trade and farm purchases over things like a COVID inquiry it’s pointless for us to pretend that economic and political issues are on their own tracks. Trump is just confronting reality.
Is there any basis for Beijing to claim that it’s COVID outbreak is over? Or are we at the tip of the iceberg?
adding to the list of questions ... James Traub at Foreign Policy has a piece on the US no longer being free. I wrote about a Chinese perspective on US as a model for modernity - that if a couple thousand lives a month is the cost of doing business, what does that say about US concern for human rights? http://chinareflections.com/index.php/105-comments-on-policies-and-programs/449-what-do-you-think-of-western-civilization American "soft power" is certainly devalued. What impact on US, foreign and domestically?
Thanks for sharing, William, nice piece. Taking the larger view--that is, what is intrinsically correct, rather than what are a majority of people feeling at the moment--I think you'd agree (based on your renewal at home comment below) that liberalism/checks and balances/democratic ideology/independent judiciary/rule of law etc at least provide the opportunity for those not in direct control of the military and domestic security forces/secret police to control the men with guns and the elite who order them around.
While the US is struggling horribly, it remains the fact that the CCP starved to death 40 million of its citizens within living memory and has now condemned its country to decades of stagnation through its own unwillingness to transfer some of its wealth and power to ordinary Chinese by rebalancing, while the average Chinese has zero say in what happens or ability to do anything about horrible mismatches in domestic power or horrible policies. I'm donating a lot to Biden and plan to volunteer for his campaign if possible as well as spread the word in my own circles i.e. get more involved in civil society, and that's not a luxury any Mainland Chinese has. As I wrote in response to DC, the Eric Li camp (laughably and with horrible amnesia) says that's not necessary in China because the CCP is a uniquely virtuous group of individuals, but obviously the virtue he is really talking about is the virtue of aligned incentives for the CCP elite to get rich building infrastructure and other major SOE's over about a generation plus which caused the economy to grow for all, but now that their economic incentives are no longer aligned with the interests of their own population, we can see in Xi's desperate and shrill nationalism the CCP response to the situation--distraction and repression (or else absurd belief in actual Marxism itself, i.e. somehow "the contradictions will be resolved" in the CCP's favor by some mysterious Hegelian historical process).
Thanks for sharing these articles. I cant't help think Xi actually comes strengthened out of this. US model no longer look as attractive. And it gives Chinese leaders more backing for the China model. That's my impression from talking to Chinese friends and colleagues living in West as well. It seems to be assumption in West that Chinese people long for US-style democracy but that is far from my impression. They would generally like more freedoms but not western-style democracy. And see US system as people not caring enough about whole society but too much about individualism.
Respectfully, the United States does not have a monopoly on democracy, nor is it the only (viable?) liberal and democratic polity on the face of the planet.
I think that at least a few of the more thoughtful observers in China understand that democracy and pluralism come in many different varieties.
Indeed! Taiwan and South Korea handled COVID far better than China, and Japan has done very well also. I don't think any of us here in the West want China to become a carbon copy of the US; at least, I certainly don't. I'd like the Chinese people to find their way to whichever more liberal democratic model works best for them.
I do agree with most of the above. I mainly meant to reflect on my impression from talking to Chinese living here in West. Most of them seem to agree with the notion that it would be too risky for China to go down path of liberal democracy. Of course they may not represent the common view of Chinese people. But their views are noteworthy since they live in the Nordics and see how our democracies work here. Still most of them reject it would be right for China. They seem to a wide extent to reflect the views of people like Eric Li. At the same time they can be quite critical of China in certain areas. While also defending China in other areas - not least when it comes to relations with the West. Would be interested to hear what others experience in dialogue with Chinese friends/colleagues.
Again, it's important to realize that Eric Li's argument boils down to, "If your economy has been destroyed and so you need lots of infrastructure and fixed capital investment, the incentives of your elite (once freed from Marxist ideology so that they can pursue profit) will align with that of your population (allowed to pursue profit in certain limited areas of the economy) for about a generation--that is, the elite will own huge SOE infrastructure and other essential firms, and by building infrastructure and other major things will bring great benefits to everyone while getting super rich themselves." The positive results from CCP governance Li refers to have nothing to do with meritocracy or the flaws with democracy, and everything to do with basic economic incentives. Now that the CCP economic incentives are no longer aligned with those of the Chinese population at large, the issues with human nature--it's largely selfish and short-sighted in most people, unless counterbalanced by competing interests/checks and balances--are coming to the forefront. That is, rather than rebalance the economy by shifting CCP wealth and power to ordinary Chinese to ensure more permanent economic growth and prosperity, Xi has turned to other methods/ideologies plus repression to maintain his absolute power.
That said, if the US continues down its own horrible, increasingly Republican-tribal path, then we will have utterly failed to live up to the promise of liberal values (although those values at least provide a chance for populations to better themselves, unlike CCP "values"). So as William Markle said, it's all about nation building at home right now for the West, starting with things like BLM--can we really make our most oppressed minority equal? It would be amazing if we could and it's both our biggest moral imperative and national security imperative. If BLM actually achieves results, the contrast with the CCP will be stark--our minority has full rights, theirs is in concentration camps. Of course, the US is a long way from full equality for African Americans, but it should be an urgent domestic and foreign policy goal (and of course just a general human goal, among many other ones0.
There are generally two narratives in mainstream Media 1) Eric Li’s view that somehow CCP’s “meritocracy” bureaucrats selection is vastly superior than western democracy’s elected officials or 2) Everything about Chinese system sucks and it will blow up. Truth is always in the middle, and if faced to make between these two choices, many reasonable Chinese living in the west would pick 1) on some of the issues, as many non Chinese would probably too. The key is actually to focus on facts and pragmatic things, rather than two extremes
I've always found Li to be a blowhard and apologist, to be frank, with his "meritocracy" claims. It stinks of being a nice convenient justification/explanation for Chinese economic growth since 1978. There was certainly nothing "meritocratic" about the CCP before 1978 (obviously). What changed was desperation over a failing system and so hence a willingness to abandon a failed entirely state-owned model--laudable, but hardly proof of a kickass meritocratic party.
The fact is that from 1978 until about 2010, the incentives of the CCP elite (once freed from communist ideology and free to pursue unlimited wealth) aligned with that of the population--the CCP elite could get rich owning profit-seeking SOE's, and they had destroyed the economy to such an extent by 1978 that massive opportunities were everywhere even for super inefficient SOE's (and obviously the worst of them were dismantled in roughly 50% of industries/GDP).
But now that the country no longer needs massive investment from horribly inefficient SOE's, there's no need for them--this is rebalancing. So the test is, will the CCP be willing to give up its power and privilege for the benefit of all Chinese? Human nature and history say no, of course not (and obviously this isn't happening under Xi, quite the opposite). The advantage of the Western model is that the non-elite at least have some means to fight the natural tendency among the elite to concentrate power and privilege in their hands. This to me is the right paradigm to look at politics and economics--human nature is pretty selfish, and so lots of safeguards are needed.
Eric Li doesn't comment on Isaiah Berlin's On Political Judgment http://ayman980.com/class/Readings/Berlin%20On%20Political%20Judgement.pdf Education does not provide wisdom in the art of governing or leadership; and vetting in CCP only prepares one for authoritarian values (hence the initial virus response). I am not arguing the US system is categorically better. But CCP is certainly not promoting its own system of governance anywhere else in the world, for good reason.
First of all, the "US model" constantly evolves over time. If "Western" values à la traditional European Enlightenment no longer support American primacy, I cannot think of a reason something else won't come out to better serve that purpose.
On a related note, to those growing up in mainland China, there are certain knee-jerk reactions when it comes to "the motherland" (祖国). Think about "guochi" (国耻, national shame associated with Middle Country/Qing Dynasty's downfall when confronted by Western powers in the 19th century), or their attitude towards separatism in Tibet, East Turkestan, Taiwan, and most recently, Hong Kong. The CCP has successfully exploited these narratives (e.g. using meticulously designed propaganda and "patriotism education") to shore up their legitimacy. And together with their information decoupling (e.g. WeChat and Weibo accounts catering to overseas Chinese students, most of whom do not read from local sources), the majority of Chinese cannot recognize how subconsciously they are under the influence.
As a result, liberal values that are learned even after moving to the West cannot easily override these conditioned responses from their younger selves' own experience. As Erik has noted here, even reasonable Chinese people would suddenly become irrational when certain buttons are pushed.
Love this analysis
Just to clarify, that "something else" re America's future can come within the liberal idea, and it may well be the case that it addresses the limits and shortcomings associated with traditional European liberalism.
Other than first-generation Chinese immigrants, very few people in the US would find the Chinese model to be an attractive alternative even if the current ruling values completely collapse.
The ideas that “democracy is too risky” or that “the Chinese people aren’t ready for democracy” are explicitly pumped into people’s heads via the education system and media to the point that I found even reasonable people would repeat it mindlessly. Of course one week in Taiwan will disabuse you of this notion totally.
This
The key questions is what “democracy” is, as democracy comes in various forms, US’s electoral and UK’s parliamentary are certainly different. Chinese people will probably need to find the democratic system that works for them and the country, and over time to make it work
Do you believe that their apprehension regarding liberal democracy stems from fears about the long-term stability of the unified Chinese state under such a system, or does it come from somewhere else?
Thank you for sharing their perspectives. It's certainly valuable to hear!
"China is not ready for democracy" is an old idea, even though it was promoted in the early 20th century when the west, particularly the US, was the model for modernism. But China is big, and diverse, as much or more so than the US. I doubt that we could get 20 contiguous states in the US to form a democratic union right now. Chinese history has been of contentious and individualistic states and regions, and the old assumption that a single leader is the only way to unify the population still applies, I think. And, as has been discussed, Chinese ideas now about democracy are often ill-formed. In particular, the contentious nature of democracy in the US looks like chaos. On a more practical level, there is no civil society to speak of - no organized way to contend for power or for ideas outside of CCP. Taiwan and South Korea and Japan democratized under different conditions. I think the general Chinese idea is right - you can't get there (to democracy) from where we are right now. Maybe in a few generations.
John Mearsheimer has long maintained that liberal hegemony is over https://www.youtube.com/watch?v=_ftquHoNc6A That seems to be true with or without our current dear leader. What the world - including young and educated Chinese - will be watching is whether we can fix democracy, fix liberalism, fix "life, liberty, and the pursuit of happiness" at home. Tall order, but another instance of "physician, heal thyself."
What is the appropriate response to China’s attacks on Australia? First trade sanctions and threats; and now massive cyber attacks. Are these intended to mine information or to undermine confidence in Australia’s ability to defend its people?
Think the goal is to intimidate Australia not to go against China. Not sure Australia has much of a credible response besides siding even more with the West.
The real threat to Australia in my opinion is if China stops importing food and commodities from Australia.
The Chinese haven't got a viable alternative to Australia for iron ore. But the climate of opinion in Australia has really changed recently, the scales have fallen from their eyes about China. I don't think they'll easily be brought back into the Chinese fold.
Could you elaborate on the new sentiment in Australia towards China? How would Australia deal aggressively against China when China is also it's biggest customer from a trade perspective?
It's a good question, but I'm not Australian myself and so don't have an insider view. But the Aussies are quite tough, and a response to the 85% duty on barley is, well, we'll plant something else. Beef is a bit trickier I think, so farmers will have to find an alternative.
My general point though is that even ordinary Aussies who don't pay much attention to China are now fed up with it, what with the 'Silent Invasion' and last year's university demos. See this in the Sydney tabloid the Daily Telegraph:
https://www.dailytelegraph.com.au/blogs/tim-blair/latest-chinese-consulate-pansygram-arrives/news-story/be41045ed6624e7f3fa0f7cba40bc56d
Aussie media is also actively producing hit pieces on China
https://www.youtube.com/watch?v=VrmGefn9Gaw
I have a big picture question in the absence of any specific ones. Looking solely at the China side in this question (not the US or the West), what do people think Xi actually sees as his endgame/motivaton? He has utterly failed to rebalance the economy (although it appears he'll be able to stay up to date on high tech stuff) and appears to have no interest in even trying, and he has managed to unite the entire world more or less (outside a few autocratic governments) against him (if fecklessly in the case of the Germans and some others).
He doesn't seem the type for wishful or hopeful thinking regarding his enemies, so it seems farfetched to say he has gambled everything on a sudden collapse of all major Western powers and alliances (again, the West has its potentially existential problems, but focusing on Xi this question). Did he decide that the party couldn't survive any further economic or political liberalization, and so chose to sacrifice everything in order to maintain absolute political power for the CCP? Is he just more foolish than we thought (he doesn't seem foolish, although nor does he seem theoretically/intellectually deep or wise, rather very strong and amoral and cunning)?
Lines of thought like these have led me to agree with Bill's occasionally posed question that Xi might be a dyed in the wool Marxist believer who is not foolish about his enemies, but just sincerely/ideologically believes Marxism is correct and that the capitalist powers will eventually fall and that everything the CCP does is by definition correct as it is leading towards the scientific truth of communism so maximizing its power and control is automatically the right policy. This seems in line also with John Garnaut's awesome piece on Xi's ideological foundations.
I feel like beginning to discuss these issues in these terms, rather than in purely economic or geopolitical/realist ones, might be more accurate and give us a leg up at not responding with anger or bewilderment at CCP propaganda but enable us to laugh at it, or unpack it with straightforward, effective retorts that might not have been so evident without a background in understanding CCP ideology. Time to delve back into the history of communist governments and ideology?
Anyone who says they know who Xi is is probably BS since Xi has a very small circle and the elders who picked him were probably surprised by his assertiveness. Having said that, if one focusing on facts, it’s probably logical to agree on a few things about him 1. He sees the need to curb corruptions and improve livelihood of the under-class as prerequisite for Government long term survival, notwithstanding any personal gains at the expense of rivals. You do see a much stronger grass root level support than affluent class or among elites 2. He is a 2nd generation leader, and probably feels a sense of leadership destination or entitlement to make China “better”, whatever that better means in his perspective. “2nd generation” political/wealth tends to be more aggressive than 1st generation. 3. Evidences thus far don’t seem to support strongly one way or the other, in terms of if he is a Marxist believer vs. taking whatever it takes to get to where he thinks the country needs to get to, there have been a lot of different speculations but hard to have conclusion
This analysis begs the main question though—is he aware that the main economic challenge facing the country is the need to rebalance? For the only way to help the underclass in any substantial way is through a major transfer of wealth from the wealthy (ie the ccp in particular which still controls 40-50% of the economy in a very inefficient way, the evidence for which is that the national debt has doubled catastrophically in a decade which is evidence the ccp infrastructure investment is now uNprofitable) to the underclass. But he seems to have ruled out any reform which will reduce the power, economic or political, of the ccp over the lives of the underclass, this dooming the economy to the fate of every other under consuming, investment led economy which is decades of stagnant on (bad I do mean every case, there are two dozen or so examples of the same model China is using all with the same result if you don’t rebalance).
Agreed on the second point as I think most would—like in all communist systems, by the second generation a bureaucratic elite develops which has extreme (relative) wealth and privilege and intoxicating absolute power and the imperative for them is to preserve their wealth and privilege and absolute power above all else.
As to the third point, again it begs the question, clearly he thinks it needs to go in a far more nationalist, ideological, shrill and aggressive direction, but the question as I posed it is why? Why does he want this direction? You said it’s hard to have a conclusion, fine, but it’s an important question and we should lay out the evidence as we see it to have the best understanding possible. That’s the only critical thinking way to get st the problem and so our best to understand the situation we find ourselves in. And the framework I laid out was I thought it was likely to be because either a) he realized rebalancing would be impossible and so needed to distract the population from lack of rising living standards with nationalism and mao-style control over everyone’s daily life, or b) he doesn’t realize rebalancing is important because he’s a Marxist and believes “the contradictions will somehow he resolved.” This is really the key question: how does Xi View the major challenger facing the country (need to rebalance economically)?
Years of anti-corruption bought Xi a lot of power through fear, not respect. No Chinese official can claim he is 100% clean. Such power structure is unstable unlike coalitions which is held together by common (economic & political) interest.
Xi knew the first generation reformers from the Deng’s era were not his allies. Certainly the group of corrupted-power-money vested groups from Jiang’s era were not his friends.
Thus, he has to rely on the grass root and nationalism to use them to keep himself in power. The message therefore is: President Xi loves the people and he is sacrificing himself to take on these corrupted officials and resume Chinese rejuvenation.
He needs these "little red guards" as much they need him. They fed upon feverish national pride from time to time (e.g. Amazing China); they in turn forced the government on silly national issues that has no practical purposes - forcing US airlines to reclassify Taiwan; forcing NBA Daryl Morey issues etc.
Your framework makes sense. On #1. It’s clearly he is aware of some of it, but yet the track record is mixed at best. On one hand, the strong deleveraging policies Since 2015 and efforts to prevent real estate bubble shows the administration understands the economic challenge and trying to think long term, yet efforts on SOE reforms and support for private enterprises which generates most jobs in China are clearly lacking if not going backward by some measures. I’m just not sure more than a few people in the inner circle really knows the answer on that #3. Both scenarios have been speculated by experts, but only time would tell I suppose
Fair points and i have wondered about how to rationalise Chinese actions. I feel that they realize that they have become big enough, economically and militarily to bully countries on a bilateral basis, whether its India or Australia. Guess they also feel that it is difficult for countries to come together in a multilateral forum to gang up against China, given differing strategic objectives of each country and the lack of a unifying global leadership. As long as the world finds it difficult to come together on China, i feel they will persist with their thuggish actions and continue to colour outside the lines.
"Colour outside the lines" is a nice turn. Dynastic history says that all nations should pay tribute to zhongguo. You remember one of the 36 stratagems - "loot a burning house" - when others are disorganized or preoccupied, that is a good time to advance. So, along the lines of "the best defense is a good offense" Xi wants to control world markets and world opinion as much as possible. The markets provide jobs for Chinese (in Africa, the -stans, and at home), influence or control of international organizations will assure favorable rulings for China. Some actions just seem clumsy or only for home consumption - border actions with India, the South China Sea business, the Diaoyudao with Japan, threats to foreign academics and governments. Xi came in with a host of bad problems - debt, corruption, environmental. CCP was no longer the vanguard, it was an administrative party, and it needed to bolster legitimacy. Xi came in to purify CCP and the Chinese people, and in the meantime, give them something else to think about. So, Document No. 9 at home and wolf warrior actions abroad. One has to remember that survival of CCP is always the fundamental goal - and now, survival of Xi. Saber rattling at home and abroad keeps the foreigners at bay, keeps domestic enemies quiet until long after 2022, and might turn out well for China. Xi is the right man in the position at the right time. Bill published John Garnaut's speech from about a year and a half ago https://sinocism.com/p/engineers-of-the-soul-ideology-in and I think that works well as an explainer. Total ideological control is the plan - good for CCP, good for Xi, good for China.
Thank you.. Found John's speech to be very interesting ..
China heavily utilizes its the huge number of small nations that stand with them at the United Nations. They are effectively re-writing global human rights policies, and I don't see any reason that they'll fail.
I think there is a fair chance you are right. That is the ultimate China fear - not IP theft, not South China Sea, not Belt and Road - but that devaluation of the person will become a more acceptable international business and government practice.
Yea if pressed I would currently say there are two possible explanations for Xi's behavior--one, he's aware that the economy has stalled out but is unwilling/unable to transfer resources from the CCP to the people to get consumption up to get it going again, and realizes that he can use nationalism/ideological control to maintain CCP legitimacy even as the economy grinds to a halt for a generation or two (Japan style), or two, with Garnaut and Bill, he really is a Marxist and either doesn't understand the importance of consumption/the issue with inefficient SOE investment/CCP control of half the economy, or simply thinks that with Marxist handwaving it will all somehow go away. Either way, given that his policy is fundamentally hostile towards everything outside his faction of the CCP, and therefore cooperation is impossible so it will come down to power, the fact that his economy can't consume enough to keep itself going and is facing decades of grinding rebalancing is bad news for him (just as the possibility that the US could reelect Trump and fundamentally destroy its prime institutions such as a law-abiding presidency, an independent judiciary and a non-political military is potentially bad for the US, but at least the US has a chance to stop that this fall).
Agree. But the calculus behind economic bullying/blackmail is that the other country will never, ever be willing not accept any short-term economic pain, and therefore will always cave on increasingly unfavorable terms. If someone is ever willing to accept such pain, then you have shot yourself in the foot, too, since your country can longer do business with that country. Since it's a terrible risk to say that every country will always cave, the likely thing is for decoupling to happen--albeit over the next 10 years as it will take time and incentives (carrots + sticks) to build up the manufacturing capacity China now has. So it just seems ultimately like a policy of total economic isolation for China from the developed world plus India which is over half of global GDP and essentially any market that is at all open and dynamic.
I think the caving has gone on for as long as it has because it simply helps other countries' leaders politically to bring in PRC business. But if the costs for bringing PRC business increase this could fundamentally change calculations across the globe.
For sure. In a very visceral way, no population likes to feel they are being bullied--and you are seeing a reaction against the CCP in virtually every significant population around the globe (with the exception of the big 3 dictator allies, Russia Iran North Korea). Australia is really the canary in the coal mine here as the population at large seems basically to have said "F off, CCP" due to the recent bullying and cyber warfare mass attack. Scary aggression from the CCP.
Thanks for sharing your views and I agree. I think most domestic populations have been sold the idea that China is a benign partner, and in fact preferable to the bullying West.
What is interesting is that the cyber operations targeting Australia are probably not very new and have probably been going on for a while. So actually once these pre-existing moves by China bloody shirts by the media, local populations may react differently.
Likewise. Yes, certainly Xi has taken advantage of the engagement paradigm and, more broadly, the entrenched view of the West as the dominant power and therefore for those concerned with immorality, the most important thing has been to restrict misuses of Western power (racism, imperialism, colonialism, etc). Those misuses are real and horrible and should be corrected, but they co-exist with the very laudable tradition of Wester liberal values (which have never been applied to the full Western population, hence BLM which is such an important movement, but which are still good and real and broadly enforced and of course better than the CCP's low-level ideological bludgeoning of its population into accepting CCP absolute power). I think the paradigm is shifting now as people realize the CCP goal is apparently to fully supplant Western liberal values with subservience to absolute CCP power, and so Xi will behind decreasing returns to the strategy of enlisting foreigners to say China is the bullied one as that strategy relies on the outdated "the West will be all-powerful forever and hence focusing solely one its abuse of that power is always the highest moral duty" view. Once people focus also on CCP issues, resistance will increase (as it has been).
I do think a recovery of the tradition of talking about liberal values is important to counter CCP propaganda, and trying to get more involved in telling accurately the story behind CCP propaganda in order to defend liberal values is a project I've been considering trying to get involved with/started on (in my own tiny way) at some point. Maybe "Friends of Sinocism" can get something going :).
are made into bloody shirts*
I think he wants to be Qianlong, with certainly China’s neighbours as the new tributary states, and possibly many more countries around the world as well.
I’m always struck by how Chiang Kaishek apparently wrote the characters for “avenging humiliation“ at the top of every new page of his diary.
agreed... do be more succinct in my thoughts - and building on your note: fundamentally maoist ideology + aspirations to rebuild the celestial empire + the thirst to avenge humiliation...
David I fully agree with you. My assessment is that on an individual level, Xi is as you say: 'a dyed in the wool Marxist believer who is not foolish about his enemies, but just sincerely/ideologically believes Marxism is correct and that the capitalist powers will eventually fall and that everything the CCP does is by definition correct as it is leading towards the scientific truth of communism so maximizing its power and control is automatically the right policy.'... I would add that that there is also the need to add a healthy dose of (1) 'With Chinese Characteristics' - in the sense that there is a parallel intense aspiration to return China to its rightful dominant position in the world, and; (2) the absolute need for the party to stay in control and maintain the related domestic narratives and nationalistic posturing
the nineties were a long time ago, and Lucian Pye seems out of favor now. But I find his analyses on point regarding CCP domestically and internationally, and still useful in explaining Xi and his ideas. https://www.foreignaffairs.com/articles/asia/1990-09-01/china-erratic-state-frustrated-society and https://numerons.files.wordpress.com/2012/04/civility-social-capital-and-civil-society-explaining-asia-mit-paper.pdf and https://www2.gwu.edu/~sigur/assets/docs/scap/SCAP1-Pye.pdf All are good reading, even if they take some time.
Thanks for the rec! From a prior generation and hadn't heard of him but his stuff looks cool!
I have looked at China's "belt and road" program, in conjunction with the building of the islands in the South China Sea, and I see echoes of the Japanese "East Asia Co-Prosperity Sphere." The parallels that I am drawing are the economic initiatives to try to draw in the neighbors of China to the south and west, combined with strong bases and a strong navy to protect China from the US, away from the Chinese mainland, in the Pacific. What this would allow any Chinese leader is the ability to largely ignore the rest of the world unless the Chinese want to engage, at least in their minds. Again, similar to the Japanese strategy.
To your thinking above, this would allow the Chinese leader to experiment with, and make mistakes like, your illustrations of Xi's errors, and not worry about them, at least in the sense that they haven't been existential mistakes.
These are all good points.
I think it's correct that Xi's experience with anything considered a western value has been a disaster for him politically. Market, liberty, religion have all blown up in his face.
This is also a man who had the audacity to completely ignore a text he read in the Rose Garden with Obama in 2015 on refraining from militarizing the SCS islands. This is the most obvious clue that he regards the liberal West as a joke.
Maybe Liu He is Gorbachev-in-waiting but I see no indication of the hawks in China losing the upper hand. In summary, I think Xi will only leave in a body bag and that he intends to "fight and win wars" as he has said.
Do you interpret POTUS's comments on decoupling yesterday, contradicting Lighthizer, as a reaction to the Bolton book assertions that POTUS offered extraordinary concessions to Xi (like overlooking the building of concentration camps) if China would buy more ag?
Think it’s just him trying to hog the limelight
Wondering what people think about the potential effects if Trump restricts skilled immigration to the US even more? Will companies that need this type of talent (programmers, engineers, etc...) increasingly look to set up teams on the mainland (e.g., exactly what Zoom does?).
After reading the NYT piece about the stunning number of AI researchers coming to the US from China, I became even more convinced of the damage Trump's move will do to American companies (https://www.nytimes.com/2020/06/09/technology/china-ai-research-education.html)
I feel like that's a much easier option for smaller companies who fly under the radar. For big companies, wouldn't that just put their China team at risk in China any time a US employee spoke out on something that's common sense in the US for young, liberal employees at tech companies (for instance, nobody is pro concentration camp at those places, or pro secret police/torture), but causes the CCP to become apoplectic?
Interesting point. I don't think that they will see China as an alternative for skilled workers from all over the globe, there, Canada would probably be a better alternative. However for purely Chinese engineering teams that may be an option. However, even with rising economic trouble in China, engineering talent is still scarce and if good, expensive.
Agreed. To that point, I wonder how Vancouver may effectively become extensions of Seattle/Bay Area tech companies and their need for talent in the same time zone.
Re the new COVID cases in Beijing, is there science behind claims that this is “from Europe” or “from imported salmon” (now debunked). Or is this just a political claim to redirect new outbreaks from abroad? Hit on Salmon imports should affect Europe as well. Retaliation for something?
Well it’s a bit of an unknown. But meat plants in Europe, US, and Brazil have been hotspots of Covid and then that meat is packed in frozen containers and sent to China for processing.
Even if the strain is from Europe, all virus strains of this COVID global pandemic originated from China so Beijing's claim here is curious. But it's hard to tell what's fact vs. fiction as Beijing can write up any scientific conclusion it wants to suit the narrative.
Are there generally no newsletters on Fridays?
Generally no. Discussion threads on Fridays but occasionally if something extraordinary happens he will do a quick report.
When is it no longer conscionable for Pottinger to stand by Trump, given — in light of the Bolton revelations — that he is clearly having little influence on issues of fundamental concern?
Things move pretty fast in Trumpland, it seems to me that Pottinger’s influence has only grown since the events described in Bolton’s book (which we will take for granted are true though I certainly don’t feel that is likely). Most of the stuff they have done recently that has any nuance seems to come from him. So I don’t see any reason he would step down from that perspective. As far as “conscionable”, I think for people who care about such things the damage is done when you start working for Trump, not when you quit or get fired.
James, I’ve been to the White House many times, and we don’t have an administration in history that has been is tough on China as has trump. As for Pottinger, I don’t think there’s been someone in the Nsc as powerful as Matt in terms of guiding and directing policy.
As for Trump, surprise, surprise… Donald Trump is not a promoter of human rights. Now is there anyone whoever thought he was?
I also don’t understand your standards. Hillary Clinton, and it’s very well documented, ran an entire operation to cover up her husbands issues with women. Did women throw Hillary under the bus?
Hi, any views on how the NSL will move in China and how the US will respond? Seems to be moving quickly despite US / G7 protestations. Thanks.
I think the original thinking was August, but considering the meeting in Hawaii went so poorly, I suspect it could be accelerated to June.
In terms of US retaliation, the president remarked on a few actions that, in the grand scheme of things, are not terribly onerous.
(1) Suspend entry of certain foreign nationals from china (students from nat’l defense related universities)
(2) De-listing of non-compliant Chinese companies in US (likely waiting for legislation to pass, any delisting unlikely to happen for three years)
Eliminating policy exemptions for HK’s special treatment:
- End extradition treaty
- Adjust export controls jurisdiction to match Mainland (this is moving more quickly than the others, we understand)
- Issue State dept travel advisory for HK to elevated risk levels
- Take action to adjust HK’s treatment as travel territory separate from Mainland
- Sanction individuals directly and indirectly involved with eroding hk freedoms
- Take action to revoke Hong Kong's preferential treatment as a separate customs territory, e.g. potentially equivalent tariff levels as Mainland (this is the big one, but we understand that the administration is only in the early stages of evaluating this option and unwinding the special status is more complicated than the stroke of a pen. Go figure).
Thanks...very helpful!
Trump, looking like a one-term president, seemed to revert to his old China approach of trade deal = $ with the Pompeo meeting in Hawaii. The subsequent Bloomberg story seems to confirm this was the central Trump ask in the meeting, likely in addition to virus transparency.
https://www.bloomberg.com/news/articles/2020-06-19/china-plans-to-accelerate-u-s-farm-purchases-after-hawaii-talks?sref=zQw09mId
Considering that it's impossible for China to meet its Phase 1 $ commitment (see chart in article) - what is Trump positioning for?
Does he declare the Phase 1 deal dead at some point nearer to the election?
Am thinking about this too. It seems clear his main motivation for either staying with deal or leaving it, is how it impacts his re-election chance. If China steps up and buys a lot of agriculture I guess he would stick with it. If China doesn't he could be in catch-22. If he leaves deal, he risks China reducing purchases even more, which would hurt him in key swing states like Iowa and Ohio. He promised them a great deal and they've paid a high price already for his trade war. If he doesn't leave deal Biden could easily attack him for making a 'great deal' that didn't lead to anything… Am interested to hear other views as well
Pre-Covid, I’d really like to know the high price the United States paid for the trade war? Was it the record low unemployment, the increased income of farmers, based in large part lower oil prices?
—
I think Trump doesn’t win, but there’s a lot of self-serving, let’s re-engage with China logic, but I’m just not seeing In actual happenings
Also interested in Phase One fate... It would have been pretty inflammatory if the Chinese hadn't committed to accelerating purchases after the Hawaii meeting.... since they're very far behind target already! Anything other than re-commitment is tantamount to saying it's dead in the water. Good site here which tracks trade deal progress:
https://www.piie.com/research/piie-charts/us-china-phase-one-tracker-chinas-purchases-us-goods
Seems to me that Trump retains 'option value' on the deal at the moment running into the election. Either it 'works', in which case he can tout it as an achievement/getting tough on China, or else it doesn't and he pulls the plug with: "too bad, it was a great deal but they didn't live up to it".
Wonder whether the Bolton book - and more importantly the political capital the Dems will make out of it - alters the landscape materially on Phase One? I.e. Trump has to do something to show that he's really 'tough' and not depending on Xi's good offices for re-election via agricultural purchases.
Hypothetically, if China was warming to the idea of a Trump re-election (on the basis that he's a bigger threat to US alliances/power structure/credibility than Xi ever could be) then they might work harder to prop up the deal. But then the Dems can say 'look, Xi's supporting his friend Trump for re-election'!
Any thoughts gratefully received.
Thanks guys.
My view is that Trump's actions on China in 2020 are basically hollow and designed to preserve the Phase 1 deal and prop up the stock market.
The only reaction to the Bolton book seems to have been his signing the Xiuger act which happened the same day. The uniform condemnation of Bolton from other people in the room buries this I believe. Lighthizer was asked a "gotcha" question by Menendez and did seem candid and honest.
As to Trump's political calculations on Phase 1 and how they could change, the key overarching determinant is whether he is willing to crush the stock market. Any movement toward increased tariffs or restricting market access would be very negative for stock prices. He still talks about the market almost every day and thinks that it helps him politically.
I don't know the answer on that question (based on voter data) but I tend to believe that people voting for Trump based on China, immigration, and other non-establishment core beliefs he brought to the Republican mainstream don't own stocks and don't care about the market.
My view is that if Trump focuses on the S&P he will lose the election. If he refocuses on China's failings on the virus and general bad behavior he will win.
Thanks Ned. Interesting on the Bolton feedback.
Agreed on the market angle and given the disconnect between SPX and the real economy a stock market focus is unlikely to pay big dividends (pun not intended) electorally! Deal collapse would be a big general risk-off trigger. Not least because the Phase One deal feels like a bit of a dam, holding back a more aggressive showdown - once it goes, all the other things which the national security apparatus want to apply follow quickly. Ironically it is the person who has set themselves up as the China hawk (ie Trump) that is - for the time being - holding back... the China hawks.
If the deal and market performance are intertwined on the way up, the danger is then presumably that if the market were to fall for some other reason - the rationale for keeping the deal intact is correspondingly weaker. Ie reflexive.
Interesting thought on Trump's reflexivity. There are arguments for and against I think.
For: Trump reacts reflexively to almost everything...often to his detriment.
Against: Narrowly on China, Trump has tweeted impulsively but done very little else impulsively. His moves on tariffs, Huawei, Taiwan, etc seem highly calculated and carefully considered.
My feeling is that ala 2019, Trump is more likely to act on China when the market is high - so he has some breathing room. He has always folded his hand and come back to the table with China after the markets convulsed (4Q 2018, 3Q 2019).
So, I'm sticking to my view that so far this year he hasn't done anything substantive on China because of the proximity of the election and weak market. What has now changed is that the market is nearly at all time highs and his poll numbers look terrible.
Good morning! I’m still trying to wrap my brain around Beijing’s calculations vis a vis Ladakh and Sikkim. The timing seems odd...
this new article by Yun Sun is quite interesting. https://warontherocks.com/2020/06/chinas-strategic-assessment-of-the-ladakh-clash/ China’s Strategic Assessment of the Ladakh Clash
"The Ladakh clash should not have been a surprise. Similar events have been happening along the disputed border between China and India for years, but only the few most heated ones make the news. Beijing believes India is exploiting a temporary period of Chinese weakness, and is responding forcefully as a result. Strategically, it may not help China’s desired goal to keep India neutral. But since Beijing sees a neutral India as untenable to begin with, tactical gains that can bog India down along the disputed border, frustrate New Delhi’s regional and global ambitions, and remind India of the eventual need for compromise may not be the worst case in China’s cost-benefit analysis. Tactically, China appears to be aiming for what it achieved in the 1962 war. Despite what the outsiders might see as China’s mistake, China is unlikely to change its current strategic assessment. China and India will eventually find a face-saving mutual compromise to end the Ladakh standoff, as neither wants a war. However, the unsettled border will continue to destabilize, fester, and brew more clashes down the road."
"Beijing believes India is exploiting a temporary period of Chinese weakness, and is responding forcefully as a result."
To be honest when does Beijing NOT believe its enemies are exploiting its weaknesses? This is a pretty self-limiting foreign policy precept to hold
Yun Sun writes: " Neither side will easily abandon their tactical objectives. In that sense, the current standoff is unlikely to see a quick resolution. The 2013 Daulat Beg Oldi incident saw a 20-day standoff before the Indians agreed to dismantle bunkers in the Chumar sector and the Chinese withdrew. "
Yes but since then the Indians have built an airstrip at Daulat Beg Oldi . In stead of many helicopter flights, 1 C-130 can re-supply a battalion (an a C-17 could supply a brigade)
The logistic imbalance of the past has been reversed there & potentially elsewhere
"China and India will eventually find a face-saving mutual compromise to end the Ladakh standoff" I predict that if that happens, incidents will shift to Sikkim or Arunachal --unless there is trouble w the Philippines , Vietnam etc . XJP wants the Wolfish stance, on top of systemic expansionism
Thank you for posting the link to Yun Sun’s analysis.
I have one big concerns: Has it not been the case that both sides have sought to make tactical gains in various areas along their shared border? If my understanding in this point is correct (I’m open to a debate), does this not suggest that the culpability for this shared?
Yun Sun has done great service in bringing out the Chinese perspective here. I broadly agree with her perspective. There are no good options for India.
Spavor and Kovrig are now officially charged. What are the options for this trial to go now? Will it be synced to the Meng extradition trial? What if Meng is extradited, which means a lengthy process to follow, can the sentencing be delayed to wait for the result?
I am wondering whether it is part of a broader effort to force a political solution to the Huawei issue with the US. If Huawei is really cut off from fabbing chips at TSMC, which is the implication of the latest US export control rules, its future is bleak.
Re: India-China, have any India watchers heard anything of India retaliating against Pakistan, with particular regard to Kashmir, so as to indirectly threaten China's access to the Persian Gulf/CPEC?
I don't think CPEC meaningfully constitutes an access path for China to the Persian Gulf, mainly due to the limited scale of transport infrastructure between China and Pakistan (essentially it's just the Karakoram Highway). I also think China is, at least for now, likely to seek de-escalation of the situation. In that context, interesting to see the AIIB announce a $750 million loan to India, followed very shortly by $500 million for Pakistan.
Would President Xi Jinping ever corroborate Bolton’s claim President Trump asked him for election help? Even if it wasn’t true? Or would that damage President Xi’s image?
Don’t think it damages his image but what’s the upside for him to corroborate it?