The Year of the Golden Pig is around the corner, but no Eldorado is in sight for Xi Jinping’s China. According to Chinese astrology, the upcoming Lunar New Year, starting on February 5, traditionally brings wealth and economic prowess.
A sudden birth rate surge is usually observed during that rare zodiacal alignment in the world’s most populous nation, with parents eager to take advantage of this good omen, which promises a golden future for their newborn babies.
Yet this time Chinese middle classes are fretting with anxiety ahead of 2019, amid growing economic uncertainty due to a slowing GDP growth, and an unprecedented trade war with the United States.
In 2018, US President Donald Trump took Beijing’s leadership by surprise, slapping massive tariffs on the world’s second-largest economy, which sent shockwaves through the Politburo.
Impact on the ground has been limited so far, but the psychological damage is done, with markets, investors and consumers questioning China’s ability to weather the storm.
Next year will raise the stakes for President Xi as the world’s two leading powers will be engaged in tense trade talks and the daunting task of bridging their widening difference during a short window of less than three months.
The year to come might herald the official start of a long Sino-US cold war with global ramifications, even if an elusive trade breakthrough can be achieved.
After decades of economic growth and a “peaceful rise,” a new chapter of open strategic competition between Washington and Beijing has begun. This new environment will hang over all the key issues China’s leadership will face in 2019, from domestic politics to economic strategy, or diplomacy, making the next 12 months a potential watershed.
Assertive nationalism
The scene is already set.
“No one is in a position to dictate to the Chinese people what should or should not be done,” Xi said this month when he set the tone by defying Trump without naming him.
His comments came in a speech on December 18 to celebrate the 40th anniversary of the “opening up” of the country by late paramount leader Deng Xiaoping.
Assertive nationalism and an iron fist will continue to be Xi’s trademark despite mounting international and economic headwinds.
China’s most powerful leader since Mao Zedong gave his own interpretation of four decades of opening up, dashing hopes that he would reverse his state-centric policies, which he has rolled out since taking office in 2013.
“The leadership of the Communist Party of China is the most essential feature of socialism with Chinese characteristics,” he said in a clear message to pro-market supporters, calling for a new round of reforms, or liberals hoping for breathing space.
In 2019, we can expect the ongoing crackdown on any political dissent to continue ahead of the 30th anniversary of the Tiananmen Square repression on June 4, 1989. Severe online censorship, coupled with forceful arrests, will ensure the date will remain taboo and possibly forgotten by younger generations.
As for the economy, Xi faces a strategic dilemma when it comes to trade. He also has to deal with slowing growth at home.
Amid increased anxiety among investors, he needs to prevent any hard landing that could compromise social stability. Yet the champion of China’s renaissance cannot afford to look weak by caving in publicly to Washington’s demands.
His assertive nationalist agenda sets the country on a collision course with his largest trading partner, the US, putting in jeopardy the Asian giant’s ascent, pro-market forces within the CPC argue.
Taking advantage of US requests for further market access, some economists and senior officials are pushing for a new round of domestic reforms, with the aim of reducing the key role of state-owned enterprises. This would breath new life into the private sector.
Pinning their hopes on Xi’s close economic confidant, Vice-Premier Liu He, they are pushing for a grand bargain with Washington that would both de-escalate trade tensions and foster a new round of economic modernization at home.
This strategic debate might linger until March, or the end of the negotiation window agreed by Trump, and maybe beyond as the deadline could be extended as many experts expect.
But Xi’s recent speeches have dampened hopes for a radical overhaul of the Chinese economy, putting the emphasis instead on “self-reliance,” a slogan from the Mao era.
Beijing is already easing credit to support its slowing growth, which is expected to dip below 6.5% in 2019, according to the Chinese Academy of Social Sciences, a government-funded think-tank.
Investors are hoping Beijing will unleash an ambitious stimulus package next year to prop up markets, following a challenging 2018, which saw stock exchanges nosedive in Shanghai and Shenzhen.
Walking a tightrope
Reassuring investors will be a key priority as manufacturers are already looking at alternative manufacturing bases and markets, especially in Southeast Asia, to reduce their China exposure.
Meanwhile, the People’s Bank of China will walk a tightrope when it comes to managing the yuan, which faces market downward pressure. While a lower currency would support China’s exports, the government is keen to support the currency to assert the country’s alleged economic strength on the world stage.
Finally, we come to strategy and diplomacy. The trade war has raised the stakes in the Asia-Pacific region with the risk of it spilling over to security and diplomatic issues.
Both Washington and Beijing could be tempted to flex their muscles in areas like the South China Sea, Taiwan or even North Korea in order to increase their leverage at the negotiating table.
While US Vice-President Mike Pence’s recent speeches have signaled a tougher line against China’s rise, Beijing has responded with stern determination. This was illustrated by the arrest of three Canadian citizens in apparent retaliation for the arrest of the daughter of the founder of tech giant Huawei and the group’s chief financial officer Meng Wanzhou in Vancouver.
In such a volatile environment, an incident at sea during a US Navy “freedom of navigation” exercise off one of the contested artificial islands built by China in the Spratly or Paracels could escalate a fraught situation.
Xi’s assertive foreign policy will not allow him to back down publicly on those sensitive issues, especially if he offers trade concession to the Trump administration.
Yet for all his nationalist rhetoric, the general secretary of China’s Communist Party has no interest in triggering a major conflict that could backfire on the economy. Rather, Beijing would prefer to reap the benefits of the Year of the Golden Pig.
China is way ahead of you. China sets their sight on Africa!!! South America, the Middle East, and finally, Europe!!! China’s BRI is bridging continents together as one!!!! The USA will be the one being left out.
China is way ahead of you. China sets their sight on Africa!!! South America, the Middle East, and finally, Europe!!! China’s BRI is bridging continents together as one!!!! The USA will be the one being left out.
Trump did not start this, China did with the launch of the New Silk Road in 2013, a program that was great for China and Eurasia but as a side product attacked the United States by excluding us including excluding the dollar from any trade, setting up an alternative set of institutions to the institutions of the west such as the IMF in direct competition and forcing reliance on the yuan as the world’s reserve currency. China has the riight to seek domination of the world, but we have the right to defend our way of life.
Trump did not start this, China did with the launch of the New Silk Road in 2013, a program that was great for China and Eurasia but as a side product attacked the United States by excluding us including excluding the dollar from any trade, setting up an alternative set of institutions to the institutions of the west such as the IMF in direct competition and forcing reliance on the yuan as the world’s reserve currency. China has the riight to seek domination of the world, but we have the right to defend our way of life.
"The Right to a Fair Jury Trial"
95% of people in prison in the US are sent there without trial. It is called "plea bargainging". It works like this. You are charged with a crime which calls for life in prison if convicted. You are offered a "chance" to plead to a lesser charge and accept 20 years in prison. No trial. To my knowledge, this happens nowhere else in the world.
"The Right to a Fair Jury Trial"
95% of people in prison in the US are sent there without trial. It is called "plea bargainging". It works like this. You are charged with a crime which calls for life in prison if convicted. You are offered a "chance" to plead to a lesser charge and accept 20 years in prison. No trial. To my knowledge, this happens nowhere else in the world.
"Beijing is already easing credit to support its fledgling growth, which is expected to dip below 6.5% in 2019,"
How is this a crisis? Numbers like this in the West would convince people that they had died and gone to heaven.
"Beijing is already easing credit to support its fledgling growth, which is expected to dip below 6.5% in 2019,"
How is this a crisis? Numbers like this in the West would convince people that they had died and gone to heaven.
Lies and hypocrisy will not save you from your coming recession. Enjoy!
Lies and hypocrisy will not save you from your coming recession. Enjoy!
Winston Medved where is your mother?
Winston Medved where is your mother?
Mainland communist Red China is a nation that maintains control over the poor people by force and intimidation. Mainland Red China is a communist nation that does not respect the Human Rights that the civilized world has come to understand as the normal thing to have in a nation.
Mainland Red China denies the most Basic Human Rights such as the Right to Free Speech, the Right to Freedom of Religion, The Right to a Fair Jury Trial, The Right to Assembly, The Right to Freedom of The Press…etc. etc.
Mainland Red China is like a controlling insecure father and mother who are dictators with their young adult children and all their children.
Mainland Red China has openly abused the Tibetan People for over half a century. Mainland Red China has openly abused the Uighur People in Western Red Mainland China and they are making them live in concentration camps of propagandizing them and forcing them to believe the way Mainland Red China demands.
Mainland Red China has abused the citizens of Mainland Red China for hundreds of years.
Mainland communist Red China is a nation that maintains control over the poor people by force and intimidation. Mainland Red China is a communist nation that does not respect the Human Rights that the civilized world has come to understand as the normal thing to have in a nation.
Mainland Red China denies the most Basic Human Rights such as the Right to Free Speech, the Right to Freedom of Religion, The Right to a Fair Jury Trial, The Right to Assembly, The Right to Freedom of The Press…etc. etc.
Mainland Red China is like a controlling insecure father and mother who are dictators with their young adult children and all their children.
Mainland Red China has openly abused the Tibetan People for over half a century. Mainland Red China has openly abused the Uighur People in Western Red Mainland China and they are making them live in concentration camps of propagandizing them and forcing them to believe the way Mainland Red China demands.
Mainland Red China has abused the citizens of Mainland Red China for hundreds of years.
The biggest problem China faces is th lack of domestic demand to prop up its domestic economy.Should people save more than spend owing to economic uncertainties China will face economic headwinds.Not to mention the huge domestic debt it faces which is estimated to be around USD 6 trillion
The biggest problem China faces is th lack of domestic demand to prop up its domestic economy.Should people save more than spend owing to economic uncertainties China will face economic headwinds.Not to mention the huge domestic debt it faces which is estimated to be around USD 6 trillion
And where will we import dogs from comrade?
And where will we import dogs from comrade?
China has said that the right to development cannot be traded away nor can anyone dictate to China what should or should not be done.
Appeasement of USA will only result in more unreasonable demands.
China has already started buying US soya beans in limited quantities as it has fulfilled most of its demand from other suppliers, Auto tariffs are on hold until March. If USA ignore these goodwill gestures and escalates the trade war, China will respond accordingly. Economists have estimated the total effects of all threatened sanctions will only reduce China GP by 0.7% which is quite small.
It is really up to USA to stop the trade war which will cause a deepm long recession in USA..
China has said that the right to development cannot be traded away nor can anyone dictate to China what should or should not be done.
Appeasement of USA will only result in more unreasonable demands.
China has already started buying US soya beans in limited quantities as it has fulfilled most of its demand from other suppliers, Auto tariffs are on hold until March. If USA ignore these goodwill gestures and escalates the trade war, China will respond accordingly. Economists have estimated the total effects of all threatened sanctions will only reduce China GP by 0.7% which is quite small.
It is really up to USA to stop the trade war which will cause a deepm long recession in USA..