He is the most powerful leader in modern Chinese history since Mao Zedong. Last October, President Xi Jinping’s Thought on the Socialist Economy with Chinese Characteristics for a New Era was enshrined in Communist Party dogma at the 19th National Congress in the fabled Great Hall of the People.
Only Chairman Mao had been honored in this way while he was still alive. Deng Xiaoping, the architect of China’s economic miracle, joined the Great Helmsman after his death in 1997 with his “Socialism with Chinese characteristics” Theory.
These fundamental doctrines are now at the heart of the CCP constitution and are taught at universities across the country. The cult of Xi was firmly in the ascendancy.
Fast forward 10 months, and this has turned into a summer of protest instead of a summer of love for the president.
There are questions already being asked about his policy decisions as the trade war with the United States drags on, the economy cools, and ‘crown jewel’ programs, such as “Made in China 2025” and the Belt and Road Initiative, become controversial topics.
Critics have even branded these ‘New Silk Road’ superhighways as “debt traps.”
“Recent evidence provides plenty of data to justify US disappointment and rising concern over Xi Jinping’s policies and practices,” Robert Sutter, a professor of international affairs at the George Washington University, wrote in a commentary for the Center for Strategic and International Studies, a think tank based in Washington.
“There are [also] gaps and shortcomings in China’s international economic policies, [while] there has been pervasive hedging among independent-minded Asian governments that makes Chinese dominance difficult,” added Sutter, the author of Foreign Relations of The PRC: The Legacies and Constraints of China’s International Politics.
On the domestic front, Xi has tightened Party-control, especially in academia, and refined the Great Firewall to stifle debate.
An essay entitled Imminent Fears, Immediate Hopes by Xu Zhangrun, a professor of constitutional law at the influential Tsinghua University, which is the president’s alma mater, highlighted the feeling of “anxiety” spreading across society.
“People nationwide, including the entire bureaucratic elite, feel once more lost in uncertainty about the direction of the country and about their own personal security, and this rising anxiety has spread into a degree of panic throughout society,” he wrote on the website of the Unirule Institute of Economics, a rare independent think tank in Beijing.
‘Patriotic spirit’
Since then, the Communist Party has launched a crackdown, or a “campaign,” to promote a “patriotic striving spirit” among the country’s intellectuals,” Xinhua reported early this month.
At the same time, Beijing has come under pressure from the vaccine scandal, which has seen dozens of officials sacked or disciplined, after triggering protests from angry parents. Many anxious families even traveled to Hong Kong to inoculate their children after the crisis erupted.
Xi was out of the country on a tour of Middle East and African countries when the affair broke, but he still came in for flak in oblique comments on social media. Yet, it is the economy and the trade conflict with the US that is causing consternation.
For more than two decades, China was the poster child of economic development and during the past 10 years a major driver of global growth during the Great Recession in the West after the financial crisis in 2008.
But as Europe and the US gradually recovered, cracks in Beijing’s progressive image started to appear. The program of reforms, which had turned the country into the world’s second-largest economy, started to slow, and government subsidies for key industries and state-owned enterprises gathered pace.
Intellectual property violations continued along with the practice of “forced technology transfer” for foreign companies doing business in the country. “Promise fatigue” also set in as Xi constantly talked about further opening up the economy to overseas competition without producing a detailed timetable of when the changes would be implemented.
Concerns started to emerge that China was simply manipulating, and at times shredding, the Word Trade Organization rulebook.
“[There is] a sense of disappointment that China’s WTO accession didn’t do more to transform the rules of the game inside China’s own market,” Brad W. Setser, a senior fellow for international economics at the Council on Foreign Relations, wrote in a blog post.
“Expectations that China would have to change, politically and economically, to succeed in the global economy haven’t been born out, as Ely Ratner and Kurt Campbell argued in Foreign Affairs,” he added. “[In fact,] China’s Communist Party hasn’t been tamed by commerce. The Party-State still has firm control over the commanding heights of China’s economy – both directly, and indirectly.”
Massive subsidies for the “Made in China 2025” program, which aims to turn the world’s second largest economy into a technology superpower, is another area of contention and intrinsically linked to US President Donald Trump’s trade assault on Beijing.
Despite low-level talks in Washington this week, it will continue to rumble on after a third round of tit-for-tat tariffs, worth a combined US$34 billion, came into effect on Aug. 23.
Trump has even threatened to impose added duties on all Chinese imports worth $500 billion.
Naturally, Chinese markets have reacted and wobbled, with the benchmark Shanghai Composite Index down nearly 25% at one point from its January high. Technology stocks have born the brunt of the sell-off. Bricks and mortar companies and financial shares have fared slightly better.
But then, with 100 million retail investors, the SSE has always been prone to turbulence, as many of them regard the market as little more than an online casino.
“Regulators have been making massive efforts to help retail investors change their investment strategies,” Ma Hongman, a director of the corporate studies institute at the Antai College of Economics and Management, said. “Unfortunately, those efforts [have] yet to pay off.”
As for the broader economy, Xi is in a tight spot. The State Council, the de facto cabinet, has rolled out new plans to boost infrastructure spending in the second half of the year to maintain GDP growth at around 6.5%, the official target.
The decision was made despite a warning from the International Monetary Fund that this could exacerbate already excessive debt levels at a time when Beijing is realigning from low-cost manufacturing to technology-fueled growth through the “Made in China 2025” policy.
But any suggestion these trails and tribulations will force Xi to step down, after being handed the presidency for life in March at the National People’s Congress, are premature.
He controls all the levers of power along with the more important titles of General Secretary of the Communist Party and Chairman of the CPC Central Military Commission.
Moreover, most of his rivals, such as Bo Xilai, Zhou Yongkang, Sun Zhengcai, are now languishing in prison after falling foul of the president’s anti-corruption drive.
Choppy waters
It was a sharp reminder to other senior CCP officials that there was only one captain of the SS China. Of course, navigating choppy international waters with a Trump ‘trade war’ iceberg bobbing around will test Xi’s skills.
“Although a trade war would hurt both countries, the country with the trade surplus is usually hit harder and thus is more likely to be driven to compromise,” Cheng Li, the director of the John L. Thornton China Center, and Diana Liang, a research assistant and communications coordinator, at the Brookings Institute, pointed out.
“This was true of Japan in the 1980s, for instance. China’s ability to inflict pain through tariffs alone is limited,” they added on the Brookings Institute website, a think tank based in Washington.
Pain has become a reoccurring theme in China’s state-run media during the past month.
Zhao Changmao, the former deputy head of the Central Party School, which is the leading academy of the Communist Party of China, laid out the options that appear to be on the table.
Speaking to the Study Times, a weekly newspaper affiliated with the Party School of the Central Committee of the CCP, Zhao said:
“China only has two options: Give in to America’s bullying … or let the other side know that Chinese people are not easily pushed around. This trade war is different. It’s a strategic game concerning the country’s fate.
“[We] have no reason to compromise. [We have to] take the moral high ground, further open the economy and make more friends internationally. [We should also] take targeted measures to hurt the US, [but we] need … to be prepared to accept a heavy cost for fighting with the world’s number one country.”
So far, Xi is showing no signs of buckling. This week he strengthened his hold on the People’s Liberation Army by demanding “absolute loyalty” to the CCP. After all, what is at stake is his vision of the future, embossed with Chinese characteristics for a new era.
Tim Wolford , Let me quote what you wrote, "…Please do a little research about which country is already guilty of stealing intellectual property, currency manipulation, imposing unfair tariffs on imports, bullying its neighbors, requiring foreign companies to give up their trade secrets in order to do business, not allowing foreign investors to own a majority of their own companies based within their borders, unfair trade practices, etc, etc, etc…." Assume your statement was true and if it was the case, then why are US companies still doing business and invest in China???? If you are intelligent enough, you need to understand that in the corporate world, the CEOs, board of directors would layoff the employees fist before they take a fall. The same in business in international setting, if US corporations do not gain any benefits, they would not been too stupid to invest or open business in China. Nikes pays the worker in Asia for 25 cent in US dollar to make a pair of sneakers from scratch to finish, and on the average the worker can onlu make 8 pairs of shoes in a day. Go figuer, Tim, BTW, when you talk about China bullying the neighboring countries, what about the US? US does not just bully every countries in the world including Mexico, Canada, its neighbors, US has also killed the leaders or staged a coup de’tat in several countries over the years, Look at what has happened in Iraq, Syria, Lybia, and South America in recent history. So I also would like you to do the research about our American history as well.
You can take a man out of the West, but you can not take the West out of a man. Mr. Watts. Spare us your wisdom.
The Westerners, having had sway over the globe for a good 200 years 1750-1950, have begun to consider themselves a bit wiser than us rest.
Little they realize that the source of their wealth was not their knowledge. Says so factually the West’s Prophet of Doom Samuel Huntington:
” .. The West won the world not by the superiority of its ideas or values or religion, but rather by its superiority in applying organized violence. Westerners often forget this fact, non-Westerners never do ”
—— The Clash of Civilizations and the Remaking of World Order, p. 51…
After 1914-45 suicide where the West killed 120,000,000 of its own (1 in 4), Westerners still reserve the right to pontificate on Human Rights, Economy, Polity. Did you wonder why they do not apply their knowledge to their own below replenishment societies that are on a banana peel?
Do Westerners realize that we Asians simply laugh at them? Even when they say something valuable we have come to suspect their motives.
By ignoring your model Asia has done well, and will keep on doing so. Only those who still listen to you (like your ex-colonials India, Pakistan, et al) are biting dust. Sooner or later they will too abandon your ways and join ther rest of Asia and prosper.
China has been violating intellectual property since Buddha
"There are questions already being asked about his policy decisions as the trade war with the United States drags on, the economy cools, and ‘crown jewel’ programs, such as “Made in China 2025” and the Belt and Road Initiative, become controversial topics."
You have so much wishful thinking, and mix up reality with western propganda.
That economy cools a little bit has nothing to do with the trade war with the US, it has everything to do with Chinese government’s deliberate policy of delveraging. I have yet to hear or read any Chinese – repeat, any Chinese – to question "Made in China 2025" program. If anything, the incident of ZTE has driven home the importance of the "Made in China 2025." More importantly, that the US is hell-bent against the "Made in China 2025" program has proved that it is the exact right program for China to move up the value chain and develop her high-tech industries. The Belt and Road Inititiative is a very good one, and some Chinese raise questions about the implementation of the initiative, which is very healthy for such a long-term and strategic initiative.
A lot of discussions and debates within China during the summer are about the wisdom of some of the more boastful and premature proclaims of China having arrived, etc., thus attracting unnecessary jealous, hysteric and hateful attention from some quarters of international forces.
To sum it up, you’re mixing up what the US is against China and what Chinese people are critical of certain polcies and/or implementation of such policies. They’re not the same and can the exactly the opposite.
That’s 0.5 RMB for you, comrade wumao
Fifty student activists have gone missing in southern China after police raided an apartment where they had been mobilising support for factory workers demanding union rights.
Fifty student activists have gone missing in southern China after police raided an apartment where they had been mobilising support for factory workers demanding union rights.
let him clean his dirty arse first
Martin Su,
If you were Pinnocchio you’d be tipping over.
https://www.bloomberg.com/news/articles/2018-03-22/what-s-intellectual-property-and-does-china-steal-it-quicktake
https://thediplomat.com/2018/03/stopping-chinas-intellectual-property-theft-what-trump-can-learn-from-his-predecessors/
https://www.cbsnews.com/news/60-minutes-great-brain-robbery-china-cyber-espionage/
Michael Chan,
You don’t know much about US politics and economics.
Trump will take that tyrant Winnie the Pooh to the cleaners – a long overdue beatdown.
This Gordon guy has been repeatedly filing fake articles and stories trying to give credibility to his CIA paid assignment.
Obviously you do not understand which country actually started this "so called" trade war. With that said, it would be pointless to even try to have an intellegent conversation with you on anything else. Please do a little research about which country is already guilty of stealing intellectual property, currency manipulation, imposing unfair tariffs on imports, bullying its neighbors, requiring foreign companies to give up their trade secrets in order to do business, not allowing foreign investors to own a majority of their own companies based within their borders, unfair trade practices, etc, etc, etc. We now finally have a president that will defend our country from these preditory practices. And you are crying about what? 🙂
The Chinese Market has spoken ———-the Middle Kingdom is in a BEAR MARKET thanks to the blunders of King Xi in this trade spat with Donald John Trump———Xi has played a terrible hand in dealing with the Americans. See what happens when you spoil someone——–30 years of weak, stupid American leadership has lead to this disaster——–the Chinese were spoliled BUT they could not believe that Trump would go this far———-the ball is in the Kings court———-and if he is smart he will cut his loses and make a FAIR deal with a real AMERICAN LEADER!!!
A lot of bullshit from Watts. The chnese people trust their Central Committee leaders and not only Mr Xi. They want a better future for their children and do not want to remain lowly paid workers to western multinationals.
China DOES NOT violate American intellectual property. China pays $28.6 billion each year to LICENSE American technology. For example, China pays billions of dollars to Qualcomm in licensing and royalty fees.
Citation ("No country wants to fight America’s trade war" | The Globe and Mail [July 18, 2018]): "The United States has further accused China of so-called ‘theft of intellectual property’ and ‘forced technology transfer,’ charges which are pointless and groundless. The Chinese government has already put in place a fully fledged legal system to protect intellectual property rights (IPR), allowed the judicial system to play a leading role in IPR protection, and promoted the establishment of IPR courts and dedicated IPR tribunals. In 2017, China paid US$28.6-billion worth of IPR royalty, a 15-fold increase from 2001, when it joined the WTO…."
I rather think that this trade war, which Trump started, will precipitate the impeachment of Trump.
The Chinese has rallied around the leadership of President Xi. They have concluded that this is not only a trade war but a strategy to contain China, China’s growth and of achieving the China dream. This spirit was on full display in recent events like what happen when South Korea allowed the US to station the THAAD. The writer does not know what is going on in China. Easier to write on Trump.
It must be Friday ….. another wishful article about China
Gordon Watts, everyone is losing in a trade war which you may know that this trade war was inintiated by Trump Administration to hinder the rise of China. But the question is who can bear or withstand the suferrings the most. Is the US or China? No doubt that the US does not have the stomach for a long sufferings as much as Chinese people can through out the history. Let’s see who is correct!