In retrospect I sounded like the master of understatement. Truth is, I’m no China swami.  Indeed, the past five years have been as humbling for me as they have been fascinating. I did not anticipate five years later, after the 19^thParty Congress, that:

• I would join hundreds of millions of people in studying “Xi Jinping Thought.”
• The Party, with Xi Jinping as its nucleus, would work determinedly toward infusing key aspects of this Thought, not just conceptually but organizationally into every facet of state-society relations in China.
• Xi Jinping Thought would contain as a conceptual hub a “China Dream” formulated to counter the American Dream, complementing a “China Model” formulated to counter international neo-liberal models of development.
• A constitutional two-term limit to the presidency would be brushed aside, enabling Xi to rule until, well, whenever.

I would not have predicted the global ambitions of the Belt and Road Initiative. Closer to home, I would not have predicted Donald Trump’s candidacy, much less how his election would inflame U.S.-China relations, be it through a trade war or resurgent Cold War rhetoric in Washington.

In brief, my five-year plan would have failed.

To rectify that going forward, I have diligently studied the Chairman’s words at the 19^thParty Congress, words that set forth China’s goals not for the next five years, nor for the next 15 years, but all the way to the nation’s “great rejuvenation” by 2049, not coincidentally the centenary of the PRC’s founding.  (https://www.chinacenter.net/2018/china_currents/17-1/exe-xi-sis-making-china-great/)

Still, with such major domestic and international developments impacting governance, I feel somewhat like the proverbial blind man and the elephant – or rather, the blind man and the dragon.

Fortunately, six China Research Center members who contributed their expert insights five years ago were willing and able to come to my aid again, including a Center alumna. Many of the essays put recent policy developments in perspective relative to their previous analyses, thereby highlighting continuity and change in Party governance in a wide range of policy arenas, including administration, Party discipline, economics, media, the environment, and U.S.-China relations. The timeliness of the analysis encompasses developments through the first half of 2019.

Baogang Guo’s opening essay on administrative reform foreshadows governance trends apparent in many of the other essays. He examines a 2018 comprehensive institutional reform, one of unparalleled scope and scale in the post-Mao era, that aims to reassert unequivocally Party dominance over governance through creation, reorganization, and consolidation, creating a melded Party-state apparatus through which central organs can exert increased control.

Xuepeng Liu’s essay examining “Market vs. State” in the domestic economy finds an ongoing advance of the state with a commensurate retreat of the private while, on the international front outlines the force dynamics and flashpoints of the Sino-U.S. trade war as well as activity on the related battlefronts of investment and technology.

Andrew Wedeman’s update on the anti-corruption campaign shows it still to be a defining trait of Party control of the Party-state apparatus, suggesting that the removal of “tigers, wolves, and flies” serves not just to take out prospective challenges to Xi’s power but aims to ensure the regime’s long-term survival.

Hongmei Li’s essay on Party-state governance of media focuses on the increasingly comprehensive control over social media domestically through the examples of WhatsApp, WeChat, blogs, and a commensurate wide-ranging international initiative to exercise soft power through state-sponsored initiatives ranging from corporations and Confucius centers to state media blitzes promoting the global Belt and Road Initiative.

Eri Saikawa’s update on initiatives to reduce air pollution reveals that while prodigious policy measures taken in the past five years have measurably improved air quality, the question remains whether the government will be willing to temper growth and adequately address all factors impacting air quality.

Director of the Carter Center China Program Liu Yawei fittingly concludes this edition with an interview on U.S.-China relations under Xi and Trump in a range of areas, including North Korea, trade, as well as research and education.  He counters any facile “clash of civilizations” frame, arguing that both sides stand to benefit far more from cooperation than from conflict.

Overall, the essays highlight a Party-state intent on achieving an ever-firmer grasp domestically while nurturing an ever-greater influence internationally – all part of the Party’s self-proclaimed historic mission of making China great again.

An ambitious plan – but will it work?

Again, I’m no China swami, but I will hazard an educated guess that the Party’s recent abolition of term limits means there’s a good shot that, five years hence, I will have another opportunity to reach out to China Research Center colleagues for their fresh insights and expert evaluations of Xi’s dragon ride.

In the meantime, I’ll keep in mind the analysis proffered some 2,000 years ago by another scholar of Chinese governance, one with his own particular feel for dragons, Han Feizi:

The beast called the dragon can be tamed and trained to the point where you may ride on its back. But on the underside of its throat it has scales a foot in diameter that curl back from the body, and anyone who chances to brush against them is sure to die. The ruler of men too has his bristling scales. Only if a speak­er can avoid brushing against them will he have any hope for success.

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One assessment says the reform is based on “scientific design” and is no less than “an institutional revolution.”¹ State Councilor Wong Yong explained the reform plan at 3^rd Plenary Session of the 13^th National People’sCongress (NPC) in 2018. He said the reform will, among many other things, optimize the functions of the party and the state agencies, which includes consolidating existing government departments and agencies, and improving the efficiency and effectiveness of the overall state decision-making process.²

Prior to this round of reform, China tried many institutional reforms. But none was as comprehensive as this latest one. The reform plan not only includes a reorganization of the administrative governance system, but it also makes important changes in CCP’s central party organizations, the committee system of the NPC and the Chinese People’s Consultation Conference (CPCC), some CCP-controlled national interest groups and social organizations, and most significantly, the military. It appears the reform is intended mainly to revitalize the aging party-state system. Consequently, it has reversed the trends of political reform aimed at separating the party from the state.³

Several recent central and local pilot experiments, such as the “Fuyang Model” and “Shunde Model,” can help us understand the direction of the latest reform.⁴ The “Fuyang Model” started in Fuyang city in Zhejiang province in 2007. It focuses on establishing multi-departmental coordinating committees to make key decisions. The “Shunde Model,” originated in the Shunde District of Foshan city in Guangdong province in 2010.  It concentrates on consolidating party and government departments that have similar functions. The decade-long piecemeal changes in consolidating administrative responsibilities and forming “super-ministries” also paved the way for the latest institutional facelift.

As early as 2015, the CCP initiated a feasibility study on the new nationwide institutional reform. By July 2017, preparation was accelerated under a directive from Xi Jinping. A plan was quickly drafted and circulated among top CCP party and government leaders as well as leaders in other “democratic” parties.⁵ After making some important revisions based on feedback from these top political elites, the 19^thCCP Central Committee approved a plan on deepening reform of party and state institutions in its 3^rdPlenary Session held February 26-28, 2018.⁶ Unlike many previous experiments, which were mostly local and carried out piecemeal and bottom-up, this round of reform emphasized strong central leadership and top-down implementation. This recentralization of reform leadership is the key element of Xi’s institutional reform.

Strengthen the Party Leadership

According to the plan released by the CCP in March 2018, the CCP central leadership committee structure was overhauled. A Central Comprehensively Deepening Reforms Commission, Central Committee for Comprehensive Law-based Governance, Central Cyberspace Affairs Commission, Central Financial and Economic Committee, and Central Foreign Affairs Work Committee were established. These new commissions or committees were formerly central leading groups. The upgrade gives these institutions more prominence and power. The members of each committee usually consist of the heads of the related party and state organs. Therefore, the goal of these committees is to strengthen not only the party’s central coordinating role but also inter-department cooperation and policy consistency.  In addition, a central leading group for education and a working committee for central and state organs were established. Some existing leading groups such as the Central Leading Group for Maintaining Stability were abolished.

One of the highlights of the institutional reform is the creation of the new and powerful National Supervisory Commission (NSC). The NSC functions as the highest anti-corruption apparatus in China. It is tasked with working with CCP’s Central Discipline and Inspection Committee (CDIC) to monitor all government employees who exercise state powers. This includes not just high-ranking officials and civil servants but also managerial employees of the state-sponsored civic organizations, state-owned managerial employees, teachers, researchers, and doctors who work in public institutions. Its legal status is equivalent to the State Council, the Supreme Court, and the Supreme People’s Procuratorate. The former National Anti-Corruption Bureau, the Office Against Dereliction of Duty, and the anti-corruption department of the Procuratorate were merged into this new powerful institution. A new Supervision Law was quickly drafted and adopted by the NPC in 2018, which establishes the legal authority of this new body. The NSC was given a broad range of powers, including asset-freezing, searching, and detainment. Many were concerned about the lack of checks and balances against individuals who work for this new institution, which directly oversees all other public employees.⁷ In response, the NSC promised to create a set of internal monitoring systems. A quickly adopted amendment to the Constitution authorized the NPC as the supervisory body over the work of the NSC.

From Separation of the Party and State to Division of Labor

The consolidation of several major administrative agencies with CCP’s internal party organizations comes as the biggest surprise to many China observers. In previous decades, the CCP explored a way to separate the party from the state. This reform has apparently been abandoned under the Xi administration. The new approach seems to draw on experience with the “Shunde Model” and geared party-state relations toward a division of labor instead of a separation of powers. Its goal is to institutionalize the party’s leadership in elite recruitment, propaganda, united front, and military affairs.

The consolidation of several key state administrative entities with party organs strengthens the party-state rather than dismantling it. This move has led to widespread disappointment among liberal scholars and Western China watchers. Under this change, the Party Publicity Department acquired the State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT). In the past, the Publicity Department always played an important role in censoring media content. The consolidation gives this party organ absolute control over official propaganda, ideological work, speech, publication, films, and communication media. It also manages the content and screening of websites, social media, and publishing houses. The department is only subject to the guidance of the Central Guidance Commission on Building Spiritual Civilization.

Another major consolidation of party organs with state agencies involves the Department of United Front (DUF). The National Religious Affairs Administration (NRAA) andthe Overseas Chinese Affairs Office (OCAO) of the State Council now become a part of the DUF. The cabinet-level department of the State Ethnic Affairs Commission (SEAC) is also officially merged with the DUF.

Revamping the State Council

To continue the decade-long administrative reform undertaken during the Hu Jintao Era, the latest institutional reform plan also calls for the restructuring of many government departments and agencies within the State Council. The goal is to streamline administrative powers, simplify administrative review and approval processes, and rationalize administrative responsibilities.

Under the institutional reform plan of the State Council, which was approved by the NPC last year, the number of ministries is reduced by eight. The State Council now has 26 ministries or offices.  Several cabinet-level super-ministries are created, and a couple of more brand-new ministries are established. The new Ministry of Natural Resources (MNR) takes over eight new functions from other ministries or agencies. The MNR, which replaces the Ministry of Environmental Protection (MEP), takes over seven functions from other ministries or agencies and broadens its scope and power. The China National Tourism Administration (CNTA) is now a part of the Ministry of Culture and Tourism (MCT). Other new agencies created include China International Development Cooperation Agency (CIDCA), the National Health and Social Security Bureau (NHSSB), and State Immigration Administration (SIA).

Two new cabinet-level ministries are created. One is the Ministry of Veteran Affairs (MVA). The other is the Ministry of Emergency Management (MEM).  China has about 39 million registered veterans.⁸ Reports of veteran protests in recent years suggested some serious issues with the settlement, compensation, and preferential treatment these veterans received.  The creation of the new MVA is a timely response to these issues. The new “super ministry” MEM will take on disaster management powers and resources that were previously spread over 13 other ministerial departments, thus becoming the single government institution in charge of emergency response, similar to Federal Emergency Management Agency (FEMA) in the U.S. or the Ministry of Emergency Situations (MES) in Russia.⁹

New Economic Regulatory Institutions

Creating a system of market regulatory agencies has become a challenging task.  The new reform establishes several economic-related regulatory institutions. A State Market Regulatory Administration (SMRA) takes over responsibilities previously held by the State Administration for Industry and Commerce (SAIC), General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), Certification and Accreditation Administration (CAC), Standardization Administration of China (SAC), and China Food and Drug Administration (CFDA).¹⁰ Consequently, the SAIC, the AQSIQ, and the CFDA will cease to exist. The SMRA is given very broad responsibilities, including comprehensive market supervision and administration, unified registration of market entitles, organization and guidance of market-related law enforcement, including anti-monopoly enforcement, and product and food quality and safety.¹¹ A China Banking and Insurance Regulatory Commission (CBIRC) is created to consolidate two powerful yet inefficient banking and insurance regulators, namely, the China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC).

Several specialized teams will be created to strengthen China’s administrative law enforcement related to economic activities. The teams will specialize in market supervision, ecological and environmental protection, cultural markets, traffic and transportation, and agriculture.

Plan Implementation

Despite the magnitude and scope of these changes, central authorities required these unprecedented institutional reorganizations to be completed in 12 months.  All institutional changes and personnel reassignments at the central and provincial level of governments were completed by the end of 2018, and the restructuring and reform of local city and county governments were completed by the end of March 2019. Officials say the NPC revised more than 40 laws to keep up with these drastic institutional changes. At the national level, the reform has affected almost two million people and more than 80 institutions. It represents a total reduction of 18 ministerial-level department and agencies and 107 internal offices within 39 ministerial- level departments and agencies.  At the county and city level, institutional reduction in percentage terms comes to 5.26% and 7.23% respectively.¹² Although the refinement and readjustment of these institutions’ responsibilities, internal offices and departments, and staffing are ongoing, the new administrative system has become operational.

It is interesting to note that although provincial institution setups are supposed to match that of the central government, the provincial governments were given certain discretion.  The number of provincial institutions no longer must match that of the central government. Most provincial governments have only 60 or fewer institutions. Some even created specialized offices to suit their own needs. Shanghai’s reform plan eliminates 15 bureaus or offices. Guangdong province still has the stand-alone Bureau of Radio and Television; it has not been merged with the provincial Party’s Publicity Department. Hainan province has only 55 party and government institutions, of which only 43 correspond to the institutions at the central government level. The other 12 offices are offices unique to Hainan. ¹³

Many government-affiliated social institutions, such as research institutes, hospitals, etc., will be gradually detached from the government. In Liaoning province, the existing 27,514 public institutions have been consolidated into 2,366 units, a 90% reduction that affects more than 400,000 people. The other 1,174 for-profit public institutions have been converted into state-owned enterprise groups.¹⁴

Many offices and functions will be consolidated. According to the plan adopted by Sichuan provincial government, each county will establish an Administrative Examination and Approval Authority (or Center) and Bureau of County Management and Law Enforcement. The party and government departments with a similar function will be consolidated into one office.¹⁵ Many counties now only keep about 19 county-level administrative departments.

Conclusions

It is too early to assess the effectiveness of these comprehensive institutional reforms and their impact on the administrative governance system. But some trends can be observed clearly. First, as a result of institutional reform, the role of the CCP in government institutions has been strengthened. With the latest call for restoring CCP’s all-around leadership, all major decisions at all institutional levels will have to be approved by party committees in the related departments and agencies, even though the party committees will not be involved in day-to-day public administration and law enforcement. A more coherent leadership core may lead to an improvement of governance efficiency, but it may also hinder the implementation of a system of rule by law. A direct party rule is traditionally more prone to the influence of the rule of men, especially “strong men.”

Second, political centralization has given the national government more control over provincial and local governments. The central leadership core headed by Xi Jinping has acquired unprecedented political power through the new reforms. One possible negative impact will be a significant reduction in local governance and policy innovations. According to China’s own account, the prolonged anti-corruption campaign and the strengthening of the cadre of oversight have already had a chilling effect on the willingness of local officials to take risks in experimenting with new policy initiatives. Morale is low among many Chinese officials.¹⁶

Finally, despite the political recentralization, economic liberalization will continue. Administrative simplification, delegation, and deregulation will continue to be promoted. China vows to further improve the business environment.  According to Premier Li Keqiang, China “will cut the time it takes for opening a business in China by another half, and we will reduce the time required for reviewing a project application by another half.”¹⁷ The irony of the “China model” – namely, economic liberalization without political liberalization – will continue.

For the foreseeable future, the Chinese government will continue to focus on perfecting the new governance system and resolving many new issues associated with merger, acquisition, transfer, and reassignment of administrative authorities. The effort is likely to take years. Only time will tell whether this round of institutional reform will achieve its intended goals.

The post Revitalizing the Chinese Party-State: Institutional Reform in the Xi Era appeared first on China Research Center.

Rhetorical claims notwithstanding, key questions remain about Xi’s protracted assault on corruption. What triggered the crackdown? Was the crackdown actually a political witch hunt disguised as an anti-corruption crackdown? What has the crackdown achieved and has it actually reduced corruption?

Origins of the Crackdown

After the adoption of economic reforms in the 1980s and the beginning of the post-Mao economic boom, corruption also took off, with sums of money changing hands steadily expanding and mounting evidence that corruption was not a street/grassroots level problem but one that increasingly infected the middle levels of the party-state bureaucracy. Faced with rising corruption, the party responded with a series of drives against the rank-and-file “flies” in the 1980s and then a drive against corruption at the county and department levels in 1993. Over the next two decades, the party’s “war on corruption” ground on year-in and year-out. In the process, several major scandals, including the arrest of Beijing Party Secretary and Politburo member Chen Xitong in 1995 and Shanghai Party Secretary and Politburo members Chen Liangyu (no relation to Chen Xitong) in 2006, shook the party.

During 2011-2012, a series of new scandals likely revealed to the party leadership that corruption at the top was perhaps not a matter of “a few bad apples.” In March 2011, the CDIC announced that Liu Zhijun, the Minister for Railways, was under investigation. Liu was at the heart of a web of corruption that had been feeding off the massive investments being made in the construction of China’s rapidly expanding high-speed rail system. Liu, according to rumors, had gotten so brazen that he claimed he was going to buy a seat on the Politburo. Later that year, General Liu Yuan, the son of Liu Shaoqi, the former Chairman of the People’s Republic of China (PRC), accused Lieutenant General Gu Junshan, Deputy Director of the People’s Liberation Army’s General Logistics Department, of raking off huge sums from the sale of use rights to military-controlled property and using part of the money to pay off senior military officers.³

More dramatically, in February 2012, Wang Lijun, the former Director of the Chongqing Public Security Bureau, fled to Chengdu, the capital of neighboring Sichuan province, to seek political asylum in the U.S. consulate. According to news reports, Wang had fled Chongqing after he had clashed Bo Xilai, the city’s party secretary. After a falling out, Bo demoted Wang to head the city’s Environment Bureau. Wang countered by telling Bo that he had evidence that Bo’s wife, Gu Kailai, had murdered an English businessman named Neil Heywood after the two had a falling out over bribe money that Heywood had been helping Gu launder. Bo struck Wang who then fled the city fearing for his life. After the State Department declined his request for asylum, Wang called friends in Beijing to dispatch agents from the Ministry for State Security to guide Wang past Chongqing police, who had surrounded the consulate, and to escort him onto a flight to Beijing.

In combination, the Liu, Gu, and Bo cases likely suggested to Xi and other senior leaders that three decades of battling corruption at the middle and rank and file levels had not prevented corruption from spreading upward into the core of the party-state leadership. The Bo case must have been particularly disturbing because Bo was a member of China’s red aristocracy. Bo’s father, Bo Yibo, was a first generation revolutionary and one of the eight most senior members of Deng Xiaoping’s reformist coalition. Bo himself had been a high-profile proponent of a Maoist revival that include the “singing of red songs” and a populist social welfare program aimed at China’s lower classes.

It appears, therefore, that as he prepared to take over as paramount leader, Xi Jinping confronted evidence of extensive corruption at the very top of the party-state power hierarchy. Although such corruption posed an obvious threat to the party’s grip on power, it also presented Xi with a Janus-faced opportunity to strengthen his own grasp on the reins of power. On the one hand, a bold assault on corruption writ large gave him the chance to position himself as the new upright leader sweeping out rotten, self-serving, money-grubbing officials who had betrayed the people. At the same time, an attack on corruption also gave Xi a justification for going after powerful officials who might have wished to hem him in and render him a weak leader, one who would be little more than the nominal first among equals within the Politburo Standing Committee. Purging – cleansing – the party as a whole, in other words, served not only the goal of attacking corruption at all levels within the party-state, it also afforded Xi an avenue to consolidate his own political interests. As such, the issue is not whether Xi’s drive against corruption was a political witch hunt or an apolitical anti-corruption cleanup, because it sought to achieve multiple goals concurrently. Rather the key to understanding Xi’s crackdown is how it was targeted.

The Tiger Hunt

The 1982, 1986, and 1989 crackdowns had primarily targeted the so-called flies – the rank and file. In 1993, the leadership shifted the focus to the middle levels of the party-state hierarchy, focusing on leading officials and cadres at the county, departmental, prefectural, and bureau levels. The crackdown launched in 2012-2013, resulted in dramatic increases in the number of investigations by conjoined party Discipline Inspection Commission and the state Ministry for Supervision, with the number of disciplinary cases investigated rising from 155,000 in 2011 and 172,000 in 2012 to 226,000 in 2014 and 330,000 in 2015. In 2017, the number of cases increased to 527,000. In 2018, the Supervisory Commission conducted 638,000 investigations, a four-fold increase compared to 2011. The total number of criminal indictments filed by the Procuratorate increased much more modestly, rising from 44,000 in 2011 to a peak of 55,000 in 2014, a 25 percent increase. Thereafter, the number of individuals indicted on corruption-related charges fell, dropping to 46,000 in 2017, 1,000 fewer than in 2012. The number of corruption-related cases tried by the courts more than doubled from 27,000 in 2011 to 56,000 in 2017.

The modest overall increases in the number of criminal indictments and trials, almost all of which would result in convictions, masked dramatic increases in the attack on high-level corruption. Whereas the number of indictments for rank and file officials increased from 44,453 in 2012 to a peak of 50,444 in 2014, the number of indictments for senior officials at the county-department levels rose from 2,396 in 2012 to a peak of 4,568 in 2015, an 80 percent increase. The number of senior officials at the prefectural-bureau level increased more than four-fold from 179 in 2012 to a peak of 769 in 2015. The number of senior officials at the provincial-ministerial levels increased over eight-fold from just five in 2012 to 41 in 2015. As a result, whereas the crackdown may have led to a surge in disciplinary investigations but not criminal indictments of ordinary officials, it resulted in a surge in criminal prosecutions of senior officials.

The attack on high-level corruption was, in fact, what sets Xi’s crackdown apart from previous anti-corruption drives. Whereas press reports document a total of 30 cases involving officials at or above the vice-ministerial and vice-gubernatorial levels between 2000 and 2011, between 2012 and March 2019, 204 senior officials – which the Chinese press calls “tigers” – were charged with corruption-related offenses.⁴ During those same time periods, whereas one military officer (Admiral Wang Shouye) was convicted of corruption prior to 2012, since then 78 officers holding ranks of major general and above have either been charged with corruption or were reportedly sidelined after allegations of corruption were leveled against them. Although the number of civilian tigers “bagged” peaked at 41 in 2014, thereafter the number of senior civilian officials charged with corruption has remained considerably higher than compared to the period prior to the current crackdown. The announcement that nine senior officials have been charged with corruption during the first month of 2019 suggests that the tiger hunt is not over. The attack on corruption in the senior ranks of the military, by contrast, appears to have been limited to the period 2012-2015.

In sum, the available data suggest that the crackdown on violations of disciplinary regulations and official extravagance begun when Xi Jinping assumed power in the fall of 2012 continues unabated as of early 2019. Criminal prosecutions of state officials and party cadres, however, peaked in 2015 and as of the end of 2017, the last year for which data on indictments by the Procuratorate and trials by the People’s Courts were available. At the time of this writing, it appeared that the overall intensity of the crackdown was beginning to wind down, with the exception of the attack on corruption within the most senior ranks of the party-state apparatus, where investigators and prosecutors continue to “bag” new “tigers.”

Over the past several years, Xi’s investigators have in fact taken down a considerable number of big tigers. Between January 2018 and June 2019, 38 senior officials including 13 holding the rank of vice-governor, 10 vice chairs of either a provincial people’s congress or provincial people’s political consultative conference, five vice ministers, five managers of major state-owned companies, two mayor of major cities, one provincial party secretary, the former chair of the Xinjiang regional government, and one deputy provincial party secretary have been charged with corruption. Most notable among those charged were Zhao Zhengyong, Party Secretary of Shaanxi; Lai Xiaomin, Chair of China Huarong Asset Management; Meng Hongwei, a former Vice Minister for Public Security and the President of Interpol. Zhao was at the center of a new “Shaanxi Earthquake” that cut a wide swath through the Shaanxi provincial apparatus. Lai is suspected of having improperly loaned major sums to many of the high-flying tycoons who have been cut down during the crackdown. Meng, finally, was recalled from his post as the first Chinese to head Interpol and charged with accepting Y14,000,000 in bribes. Meng pleaded guilty. The tiger hunt thus shows few signs of coming to an end.

A Crushing Tide?

As a drive against corruption, it seems likely that Xi’s crackdown has yielded positive results. At a minimum, it has culled large numbers of corrupt officials and has likely cowed other corrupt officials, leading them to stop accepting bribes and stealing public monies, at least so long as the “heat is on” and they fear getting caught and punished. If these officials begin to sense that the crackdown has run its course and the things are “getting back to normal,” they may begin to once again discount the risk of getting caught and revert to their corrupt ways. By the same token, amid the sound and fury of the crackdown other officials who have not resorted to corruption may be scared off and keep their hands clean. But they too could turn corrupt if they sense they can get away with taking bribes and stealing public monies because “everybody else is doing the same thing.” Thus, if the crackdown has in fact reduced corruption, it is hard to determine whether the reduction will prove permanent or whether future upsurges in corruption will necessitate future crackdowns.

If the focus of Xi’s crackdown was high-level corruption, was the primary purpose of the campaign actually a political purge of his rivals, as has been frequently asserted? Absent hard evidence of Xi’s intent, the only way to determine whether the real goal was to curb corruption or gain political advantage would be to focus on whom the crackdown targeted.

Network analysis of the tigers and those linked to them reveals two central figures: former Politburo Standing Committee member Zhou Yongkang and former Director of the Central Committee’s General Office Ling Jihua. Zhou had served in a variety of senior posts, including Vice Minister for Petroleum, General Manager of the China National Petroleum Corporation, Secretary of the Sichuan Provincial Party Committee, Minister for State Land and Resources, Minister for Public Security, and Secretary of the Central Committee’s Politics and Law Commission. Ling was widely considered former General Secretary Hu Jintao’s right-hand man. Zhou was due to retire from his official posts at the 17^thParty Congress. Ling, on the other hand, was expected to be elected to the Politburo at the congress and become Hu’s eyes and ears after Hu retired.

In theory, Zhou and Ling might have been the leaders of factions opposed to Xi Jinping. Ling had the backing, it was argued, of the powerful “Youth League” faction which had risen to prominence under Hu, who had been secretary of the league in the 1980s. Zhou was said to be a protégé of former General Secretary Jiang Zemin. Zhou was also said to have backed Bo Xilai in his bid for a seat on the Politburo Standing Committee. The assumption that Hu and Jiang opposed Xi seems questionable, however, because Xi must have received their endorsements when he was selected to become general secretary.

If Zhou and Ling were potential rivals, by the time of the 17^thParty Congress both had been weakened. The arrest of Bo robbed Zhou of his entrée into the inner circle of power. Ling, on the other hand was politically crippled when his son Ling Gu plowed a $700,000 Ferrari into a Beijing bridge abutment during the early hours of March 8, 2012, killing himself and serious injuring two women passengers. An attempt to cover up the accident failed and reports about the crash and Ling Gu’s death spread rapidly on the internet. Ling was quietly moved aside. At the 17^thParty Congress he was not elected to the Politburo and was named to Director of the Central Committee’s United Front Department.

Zhou was removed from his post as Secretary of the Politics and Law Committee in May 2012 and was put under investigation in July 2013 after extensive discussions among the current leadership in consultation with former general secretaries Jiang and Hu. While Zhou remained in limbo, party investigators began rounding up his former subordinates and colleagues. Ling was put under investigation in December 2014, after his brother Ling Zhengce, a senior official in Shanxi province, had been arrested and charged with corruption in June 2014. Zhou, his wife Jia Xiaoye, and his son Zhou Bin were convicted of accepting bribes. Zhou received a life sentence. Other members of Zhou’s family were also charged with corruption. Ling and his wife Gu Liping were convicted of accepting bribes. Ling received a 12-year prison sentence.

Whether Zhou and Ling were political threats to Xi is not clear. For the most part, Zhou’s “faction” consisted of his former secretaries and subordinates. Ling, on the other hand, was charged with accepting bribes from a variety of provincial leaders in return for arranging their promotions. It is thus not clear if either Zhou or Ling headed political factions or were simply tied into networks of self-serving officials bound together in pursuit of illicit plunder. Regardless of whether Zhou or Ling were true political enemies, their arrests certainly afforded Xi the opportunity to take down a wide range of central and provincial leaders and replace them with his allies and loyalists.

The attack on corruption in the military was equally ambiguous. It appears that the arrest of Lieutenant General Gu Junshan exposed General Guo Boxiong and General Xu Caihou, both of whom were vice chairs of the Central Military Commission, the party-cum-state body that controls China military. Guo and Xu had been collecting large bribes from officers seeking promotions and transfers. Both retired in November 2012. Xu was terminally ill at the time of his arrest and died before his court martial. Guo was sentenced to life in prison. Although Guo had held field commands in the past, he had been a headquarters staff officer since 1999. Xu had spent most of his career as a political commissar and as part of the General Political Department staff. It thus is not clear that Guo and Xu were part of an anti-Xi bloc in the army or even possibly part of a coup plot.

The fall of Politburo member and Party Secretary of Chongqing Sun Zhengcai also does not appear to have stemmed from fears that Sun had become a political threat to Xi. Sun has been described as a protégé of former Premier Wen Jiabao and had been a subordinate of former Politburo member Jia Qingling. His membership in the Politburo was not necessarily evidence of that he was a “force” with the party. Sun likely got a seat on the Politburo because he was party secretary of Chongqing, a provincial-level city that appears to command a seat on the Politburo because of economic importance. Some had suggested that Sun might get elected to the Politburo Standing Committee at the 19^thParty Congress and that because of his age (54 in 2017) he might be a potential successor to Xi at the 20^thParty Congress in 2022. But aside from his age, there seems to have been little evidence that Sun was a major political player.⁵

Ultimately, the main purpose of Xi’s crackdown seems to have been to attack serious corruption among the party, state, and military leadership. As argued earlier, by the time Xi assumed the office of general secretary, there was strong evidence of serious high-level corruption. Moreover, there was public pressure for action against corruption. Public opinion polls conducted by Pew Research between, for example, showed that whereas 78 percent of those surveyed said corrupt officials were a moderately big or very big problem in 2008, fully 90 percent of those surveyed in 2014 held those views.

Conclusion

As of mid-2019, it is not clear that Xi’s attack on corruption has produced a “crushing tide” or a “sweeping victory.” The crackdown certainly produced a surge in the number of party members and state officials investigated by the Discipline Inspection Commission and later the Supervisory Commission. In total between 2013 and 2018, the Supervisory Commission investigated 2.3 million party members, about three percent of the total membership. Upward of 300,000 individuals have been indicted for corruption-related offenses.⁶ Most of those indicted were convicted and sentenced to prison. Almost 280 individuals holding ranks at or above the level of vice-minister and general had been investigated for corruption.

Despite these numbers, it is unclear whether Xi’s crackdown will make a difference in the long-term. In the immediate term the crackdown has likely taken out enough corrupt officials to make a difference. It is also likely that the crackdown has scared off some and driven others to stop taking bribes. But the crackdown has also reportedly led to a degree of bureaucratic paralysis because officials fear being accused of corruption. The popularity of the crackdown is also difficult to gauge. In its early days, the crackdown was clearly very popular. Citizens who sought to expose official corruption using social media, however, quickly found out themselves facing restrictions and penalties. The party thus made clear that the crackdown was a party affair and the public’s role would be strictly limited to that of a passive audience. Many ordinary citizens have also grown cynical about corruption. They see officialdom has inherently corrupt and believe that those who get caught and punished as merely the “unlucky” and “unloved,” the poor saps who lacked the friends in high enough places to protect them.

The lack of decisive victory is perhaps not surprising. The party has been fighting corruption for decades and its war on corruption is by necessity a protracted war. Corruption, moreover, is ultimately not controlled by crackdowns and arrests. Real victory comes from changing official ethics and codes of conduct. Anti-corruption crackdowns are thus actually a response to the prior failure of a regime’s anti-corruption program. Although further analysis is needed, the evidence produced by Xi’s 2012-2019 anti-corruption crackdown suggests that corruption worsened significantly in the years before he was named general secretary. Xi, in other words, has been fighting against the failure of his predecessors to take effective action to control corruption.

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Overall, the trend of changes under Xi seems troubling both domestically and internationally. At home, Xi is now president for life after a constitutional change approved by the Communist Party. On the economy, the government has intentionally and unintentionally been pursuing policies that strengthened the state-owned sectors. In the following, I will discuss primarily the following two issues: (1) state versus market in the Chinese economy under Xi with a special focus on China’s industrial policies; and (2) the ongoing trade war between the U.S. and China.

State versus Market in the Economy under Xi and China’s Industrial Policies

Over the last several decades, the relative role of state-owned sectors has been declining. Based on the data from the National Bureau of Statistics of China, Lardy (2014) shows that the share of state-owned sectors in industrial output dropped from 78 percent in 1978 to only 26 percent in 2011.  He also shows that, between 1995 and 2014, the export share of state-owned companies dropped from 67 percent to 11 percent. However, many critical and strategic sectors such as banking, infrastructure, and some upstream sectors are still largely controlled by state-owned companies. Some people attribute China’s economic success to the strong role of government in managing the economy, and name this path of economic development the “China model.” Because the state-owned sectors are the major participants implementing the government’s strategies, many economists and policymakers in China begin to emphasize the importance of state-owned sectors in national development and international expansion. The emphasis on state-owned enterprises in China is not a surprise given what was stated in the above-mentionedDecisions of 2013, but it raises a renewed concern of the retreat of private sectors, which have been the true engine of the economic growth in China over the last several decades.

Although Xi probably has no intention to reverse the course of China’s market reforms, he doesn’t seem to emphasize the importance of continued economic reforms and the development of private sectors, not to say political reforms. Due to the close relationship between government and state-owned sectors, a natural consequence is a system favoring state-controlled firms. In recent years, the “advancement of state-owned sectors and the retreat of private sectors” (guo jin min tui) are particularly worrisome. The retreat of private sectors may not be the intention of the government, but rather a side effect of the over-emphasis on the importance of state-owned sectors. This problem can be driven by a few factors. One of them is the 2008 world financial crisis. Against this backdrop, countries including China implemented the against-wind macroeconomic policies through rescue plans, quantitative easing, stimulus programs, etc. In China, state-owned companies have played an important role in implementing the stimulus policies while private sectors were reluctant to invest. In addition, to switch from the original development strategy built on low wages and labor-intensive industries, the Chinese government has been trying to redirect resources toward more high-tech sectors. Due to externalities, the lack of resources, and less favorable economic prospects since the 2008 financial crisis, private firms – except a small number of large ones – have little incentive to invest in high technologies. State-owned companies naturally become “better” candidates in fulfilling the goal of climbing the technology ladder and industrial upgrading. Accordingly, state-owned companies backed by the government also receive preferential treatment in the areas such as financing. On the contrary, private sectors find it increasingly difficult to compete against state-owned companies to secure loans, especially those with good terms. As documented by Lardy (2019), 57 percent of loans went to private firms and 35 percent to state-controlled firms in 2013 when Xi just assumed office. By 2016, state-controlled firms received 83 percent of loans, compared with 11 percent for private firms. This is also shown by Harrison et al. (2019): currently state-owned firms receive more subsidies and lower interest rates than formerly state-owned firms, which in turn, are favored relative to always-private firms. This happened despite the fact that the profitability of private-sector firms is more than double that of state-controlled companies. Much of this lending came from state-owned banks. The induced inefficiency can be huge. This is why many entrepreneurs and economists in China called for “competitive neutrality” to make sure that private and state-owned sectors receive similar treatment and are on a level playing field. Finally, some market-oriented reforms have unintended consequences. For example, the sudden crackdown of shadow banking seems to be a move in the right direction, but could block the only access of small private firms to credit, and indirectly provide state-owned sectors even more favorable conditions relative to private sectors in the credit market.

The government can intervene in the economy in many ways. Besides regulations, monetary and fiscal policies used in typical market economies, a government can lay a heavy hand on the economy through other means such as state-owned or sponsored enterprises, industrial policies, and government procurement. Industrial policy is the major channel through which the Chinese government implements its development strategies, which culminates with the recent Made in China 2025 Initiative. MIC2025 first appears in the 2015 Report on the Work of the Government and again in the reports of 2016 through 2018. The Report (2015) states, “We will implement the ‘Made in China 2025’ strategy; seek innovation-driven development; apply smart technologies; strengthen foundations; pursue green development; and redouble our efforts to upgrade China from a manufacturer of quantity to one of quality.” The Report (2016) states, “We launched the ‘Made in China 2025’ initiative to upgrade manufacturing, set up government funds to encourage investment in emerging industries, and to develop small and medium-sized enterprises, and establish more national innovation demonstration zones.” The Report (2017) states, “We developed and launched a plan for completing major science and technology programs by 2030…. We will intensify efforts to implement the ‘Made in China 2025’ initiative… we will adopt a variety of supportive measures for technological upgrading and re-energize traditional industries.” The Report (2018) states, “Implementation of the ‘Made in China 2025’ initiative has brought progress in major projects like the building of robust industrial foundations, smart manufacturing, and green manufacturing, and has accelerated the development of advanced manufacturing.” As an ambitious plan to upgrade the Chinese economy by climbing the technology ladder, the “Made in China 2025” initiative lays out the strong state-directed industrial policies.

Industrial policies have been used by most of the countries in the world at certain stages of development. We have seen more failures than successes.  These policies often create tension among countries in the era of globalization, especially when a country is large, because firms in different countries and sectors may no longer be on a level playing field. Depending on how domestic firms acquire their technologies, the protection of intellectual property rights also becomes a concern of many western companies that are strongly against forced technology transfers and infringement of intellectual property rights. This is why MIC2025 has attracted so much attention and is one of the major reasons behind the 2018 U.S.-China trade war. This is probably why a similar statement on MIC2025 disappears from the 2019 Report on the Work of the Government to avoid further escalation of such disputes. The Chinese government seems flexible enough to accommodate the requests and concerns from other nations. However, this by no means implies that China has abandoned its MIC2025 Initiative. It is unrealistic to stop the practice of industrial policies in China (or any other major economy), so the best we could do is probably to develop an approach for open discussions. To ensure effective negotiations, countries should at least have a mutual understanding of information sharing and fairness.

I end this section with a discussion of the so-called “China model” or “Socialism with Chinese Characteristics” with strong government involvement. This strategy has its advantage in certain countries at particular states of economic development. Besides addressing market failures such as public goods and externalities, the government can help gather limited resources and make concerted nationwide efforts to target specific development goals so that a developing country can catch up with advanced countries more quickly. The more centralized system and state-owned companies have played important roles in the economic development in China, especially in certain areas like infrastructure. Tighter regulations and the gradual opening of financial markets help to contain risks and avoid large-scale financial crises. China’s economic success has offered valuable insight to both developing and developed countries around the world. However, placing too much confidence in government- and state-owned sectors is dangerous. As stated in my original essay five years ago, this ignores the basic fact that China’s economic miracle has been driven by market reforms rather than government control. It is important to realize that the so-called the market economy with Chinese characteristics is a transition period from a destined-to-fail socialist regime to a more efficient market regime.  Its outstanding performance during the last several decades in China should not be over-emphasized. On the contrary, China’s success demonstrates how severely the economic capacity of China was depressed under the socialist policy before the reform.  The Chinese economy took off and prospered when the government gradually released its control. The past success can be a poor guide for the future. To ensure continued economic prosperity, China needs deeper market reforms, not a reversal of this policy with a stronger hand of government on the economy.

Trade War between the U.S. and China

Global free trade is a natural extension of a free market economy within a country. The benefits from trade are now well understood. China’s economic size (GDP) has grown 10 times larger from about $1.4 trillion since its 2001 entry into the World Trade Organization to about $14 trillion in 2019 (predicted). When China grows into a global power, its domestic policies have important international implications. The “China model” featured with state capitalism can clash with western market economies. In state capitalism, the government owns and provides preferential treatment to businesses in critical sectors in the name of industrial policies. Although many countries in the west also implement certain industrial policies – such as the support to high-tech or green technologies – their polices are relatively more transparent than in developing countries like China. The combination of state capitalism and the lack of transparency in China, as well as the influence of interest groups through lobbying in many western economies, pose tremendous challenges when the international community seeks to promote an open, competitive and fair system through multilateral talks under the WTO framework. Large countries like the U.S. may abandon multilateral trade talks and initiate a trade war. I believe that this is a fundamental reason behind the trade wars initiated unilaterally by the Trump administration.

To make things worse, in the international sphere, Xi has abandoned the policies under previous leadership since Deng Xiaoping by keeping a low profile and focusing on domestic economic reform and development. Instead, Xi seems to be more interested in advocating the “China model” for other developing countries to emulate as an alternative to western market capitalism. Xi has spelled out openly his ambitious plans to exert a greater influence on the rest of the world through strategies like “One Belt One Road” and MIC2025 initiatives. Although these initiatives are considered strategic plans for the future in China, the goals are more or less incompatible with other statements, e.g., the claimed developing country status that makes China qualified for preferential treatment under various international agreements, such as the WTO. As a result, China has paid the price: the 2018 trade and economic war between the U.S. and China, among other international disputes and conflicts. As Reuters reported (Miles, 2019), the U.S. is drafting WTO reform to halt handouts for big and rich states that claim to be developing nations, including China, India, etc. Special and Differential treatment (S&D) under the WTO entitles developing countries to longer time periods for implementing commitments, measures to increase trading opportunities, provisions requiring all WTO members to safeguard the trade interests of developing countries, support to help developing countries build the capacity to carry out WTO work, handle disputes, and implement technical standards, and provisions related to least-developed country (LDC) members. The WTO currently allows countries to self-designate as developing countries. The U.S. draft reform posted on the WTO website said current and future trade negotiations should withhold such special treatment from countries classified as “high income” by the World Bank, OECD members or acceding members, G20 nations and any state accounting for 0.5 percent or more of world trade.

The U.S.-China trade war has gone far beyond trade into many other areas including investment and technology. In 2018, the U.S. Congress passed the Foreign Investment Risk Review Modernization Act (FIRRMA), expanding the authority of the Committee on Foreign Investment in the United States (CFIUS) to include mandatory filings. FIRRMA is a legal hurdle to stop foreign firms from investing in the U.S. and acquiring American businesses in key sectors: filing fees,approval process, and expanded scope of coverage. In addition to the FIRRMA legislation, the Export Controls Act of 2018 was also passed to mitigate technology transfer activity from the U.S. to China. The U.S. had proposed sanctions against the Chinese state-owned company ZTE, but defused after agreement, and then placed sanctions against other Chinese firms including Huawei. Recent accusations of forced technology transfers, discriminatory licensing of American firms in exchange for market access in China, unfair ruling of IP disputes, government-facilitated acquisition overseas, cyber-attacks, stealing of technology and trade secrets (e.g., the investigations of the scholars in the 1000 Talents Program and even proposed restrictions on the exchanges of students and scholars), and violations of Iran sanctions by Chinese companies such as ZTE and Huawei. Under the pressure, China has agreed to revise IPR rules and step up IP protection and grant more market access. ¹

In the following part of this essay, I will focus on the 2018-2019 trade war between the U.S. and China. We know that China has been running a huge trade surplus with the U.S. The main concerns of the U.S. are China’s exchange rate manipulation, industrial subsidies, and slow delivery of WTO commitments in the areas of market access, government procurement, and subsidy notifications. I don’t think the Trump administration has any intention to change the U.S.’s open trade policy. Tariffs are just a means for the U.S. to demand a level playing field from other countries including China, India and allies such as the EU, Japan, and Canada, although different countries may have different interpretations of fairness in trade. The U.S., of course, could bring the case to the WTO as has been done numerous times in the form of anti-dumping or countervailing charges. But the process can be long, especially given the lack of transparency in China’s economic policies. As the U.S. claimed, China hasn’t made much progress on delivering subsidy notifications to the WTO. Without sufficient information and a formal channel to obtain the required information, it is hard to resolve the conflicts through appropriate channels recommended by the WTO. Together with the pressure to get reelected, this is probably why the Trump administration sets aside the WTO and approaches China directly through bilateral trade wars and talks. Note that, in this essay, I focus on issues that require international cooperation, keeping in mind that the U.S. domestic policies are also responsible for its large trade deficit.²

Given the obvious costs of the trade war, the right solution is still multilateral (WTO) or bilateral negotiations. After many rounds of high-level talks, several threats and setbacks, the U.S.-China trade negotiations have been going through a scary roller coaster ride. Although the two parties agreed at the G20 meeting in late June 2019 to sit down again to negotiate, the prospect is still unclear. Just recently, Donald Trump announced a new round of tariffs on imports from China that would go into effect September 1, 2019. Although this leaves a short window for the two parties to try to work out their differences, it is a tough task. Progress could be made if China starts to buy more American products, strengthens IPR protection, speeds up financial market liberalization, grants more market access to American firms, and refrains from manipulating currency, and the U.S. removes tariffs on Chinese products over time. Resolving some other issues such as transparency on subsidies, information-censoring, and the modification of China’s laws, however, may require drastic economic and even political reforms, which the Chinese government is reluctant to do, at least in the short run. Despite the differences in opinions, the intertwined economic interests make the trade war too costly for both countries to afford. But the process to achieve free trade can be a long one.

One insight we gain from the U.S.-Japan trade negotiation in 1980s is that it can take a long time for two economic powers to settle trade disputes. China has learned the lesson from Japan and will likely refuse to make drastic changes such as currency appreciation, so this can make the U.S.-China negotiation even more prolonged. Therefore, both the U.S. and China should be patient throughout this process. In recent years, we have seen an increasing divide between the U.S. and China on the timing for a resolution to address these issues. At an international symposium to commemorate the 40^thAnniversary of Normalization of U.S.-China Diplomatic Relations at the Carter Center in Atlanta in early 2019, I raised the concern about the possible escalation of the U.S.-China trade war and suggested a gradual approach for the bilateral negotiation.  Mr. Craig Allen (President of the U.S.-China Business Council) pointed out that the time for U.S.-China trade talk is running out. He said that China prefers to follow a gradual approach and needs another 10 or 20 years to implement deeper reform and open policies, while the U.S. has lost patience saying that China has delayed fulfilling its commitments at the entry of the WTO for a long time and these should have been done yesterday. Facing this stalemate, the two countries were dragged into a trade war in 2018.

Initially, as stated in a draft framework for negotiation by the U.S. Delegation (2018), the U.S. demands “China immediately remove market-distorting subsidies and other types of government support that can contribute to the creation or maintenance of excess capacity in the industries targeted by the Made in China 2025 industrial plan.” The U.S. demands that China eliminate specified policies and practices with respect to technology transfer within a few months and must concede to the U.S.’s enforcement mechanisms without retaliation. In addition, China must abandon its state-led economic development model, which would be politically difficult to swallow in China because a large part of the economic success of China is based on this type of policy. Indeed, accepting U.S. demands likely would require not just a policy paradigm shift, but also a regime change, which is impossible to accomplish in the short run. The U.S. cannot expect that China will scrap its economic model overnight. With the intertwined interests and complicated relations, we have to be patient with U.S.-China negotiations. On the other hand, if the U.S. condones China’s state capitalism, this would legitimize a system that puts U.S. firms at a permanent disadvantage. To be realistic, the U.S. needs to continue to press China to speed up its economic reforms through bilateral and multilateral talks, but at the same time have patience to work things out with China, probably following the approach of the U.S.-Japan negotiations in 1980s.

China should take U.S. demands seriously and make meaningful changes as quickly as possible. To address its large trade imbalance, China should adopt a more market-determined exchange rate policy, continue with structural reform by transforming an investment- and export-driven economy to a domestic consumption-driven economy, and contain the risk from excessive borrowing and underperforming state-owned sectors.

It is important to understand China before pressing the government for a deeper reform and drastic changes. The last part of this essay will address this issue in a broader context, not just the trade war. China has been following a gradual approach in its economic reform and opening. It has proved to be very successful during the past several decades, not only helping China to reap the benefits from having an increasingly market-oriented system, but also avoiding the sudden shocks from drastic reforms. Despite being authoritarian politically, China has managed to transfer powers peacefully and maintain a very stable economic and political environment. But whether China should continue with this approach is controversial. The potential dividend from this approach has largely been redeemed. To revive the economy, China now needs a new approach that encourages innovation in a competitive economic and political environment, without relying heavily on cheap excess labor and distortive government policies. This new development model requires deeper institutional reforms. Although most people believe China should eventually embrace a fuller market economy, the timing is hard to judge. A drastic reform will create a series of new problems and hence may face opposition in both business and political circles. For example, as mentioned earlier, a drastic change in regulation in the credit markets by prohibiting shadow banking seems to be a sign of progress in China, but it can do more harm to small private businesses if other accompanying policies are not in place.

Since the 1980s, the Chinese government has claimed to continue to pursue an open and reform policy. Even under the current administration, the 2017 Report of Work of Government states, “We will make big moves to improve the environment for foreign investors. We will revise the catalog of industries open to foreign investment, and make service industries, manufacturing, and mining more open to foreign investment. We will encourage foreign-invested firms to be listed and issue bonds in China and allow them to take part in national science and technology projects. Foreign firms will be treated the same as domestic firms when it comes to license applications, standards-setting, and government procurement, and will enjoy the same preferential policies under the Made in China 2025 initiative. Local governments can, within the scope of the powers granted them by law, adopt preferential policies to attract foreign investment. We will build 11 high-standard pilot free-trade zones, and widespread practices developed in these zones that are proven to work… China’s door is going to keep on opening wider, and China will keep working to be the most attractive destination for foreign investment.”

Concluding Thoughts

Despite the claims or promises by the Chinese government, other countries have been concerned about the actual implementation and the political constraint, even though China’s continued economic success has disappointed many people who predicted China’s collapse. China has actually done pretty well in keeping promises and carrying out the open and reform policies, but it becomes increasingly difficult to implement deeper reforms. This problem has become more evident during the past decade. In the case of the trade war, even if the U.S. and China successfully sign an agreement later this year, the implementation will certainly be a central issue for discussion. The U.S. and some other countries have accused China of not implementing promised changes that were part of its commitments for entry into the WTO. As another example, in the original essay (Liu, 2014), I mentioned particularly the Shanghai Pilot Free Trade Zone. Adopting a negative list approach, this is demonstration of the decentralization of power in areas including trade, investment, financial reforms, and regulations. It is useful to look at what has been achieved during the past five years, but it turns out not much has been done. On banking services liberalization, for example, due to many regulations and slow opening of Chinese market, the presence of foreign banks and their services are still very limited in China as compared to domestic state-owned banks. The essence of these free trade zones is minimal government intervention, which is hard to achieve in China. The implementation of the free zone polices requires deeper economic and even political reform and changes in related laws and regulations on foreign companies and joint ventures. This explains why it has not been as successful as the first round of special economic zone experiments under Deng Xiaoping in the 1980s.

As a final note, China should have already realized that it needs to make significant and meaningful changes in its policies, but it is unlikely that it will make drastic economic and political reform to satisfy all of the demands from the U.S. and other western countries. Given the size and importance of China’s economy, however, western countries cannot afford an economic decoupling with China.  Therefore, a practical approach in multilateral and bilateral negotiations is needed. This can be a long process and may become the new norm. A minimum requirement for successful negotiations is transparency in policies. For example, all nations including China and other developing countries should disclose their industrial policies and notify other WTO members regarding their subsidies as required by the WTO. This is easier to say than to do. Transparency is actually a tough issue to address in China because it will eventually involve political reforms. Instead of relying on censorship and firewalls to block citizens’ access to information, Chinese leaders should be more confident to embrace an open society. This will benefit China’s long-run growth, and also help China to integrate better with other countries in today’s globalized economy.

References

Harrison, Ann, Marshall Meyer, Peichun Wang, Linda Zhao, and Minyuan Zhao, 2019. “Can a Tiger Change Its Stripes? Reform of Chinese State-Owned Enterprises in the Penumbra of the State.” NBER Working Paper No. 25475

Lardy, Nicholas, 2014. Markets over Mao: The Rise of Private Business in China. Peterson Institute for International Economics, Washington D.C.

Lardy, Nicholas, 2019. The State Strikes Back: The End of Economic Reform in China?Peterson Institute for International Economics, Washington D.C.

Liu, Xuepeng, 2014. “Market vs. Government in Managing the Chinese Economy.” China Currents 13(2)

Source: https://www.chinacenter.net/2014/china_currents/13-2/market-vs-government-in-managing-the-chinese-economy/

Miles, Tom, 2019. “U.S. drafts WTO reform to halt handouts for big and rich states.” Source:https://www.reuters.com/article/us-usa-trade-wto/u-s-drafts-wto-reform-to-halt-handouts-for-big-and-rich-states-idU.S.KCN1Q426T

The Report on the Work of the Government of People’s Republic of China (2015)
Source:http://english.gov.cn/archive/publications/2015/03/05/content_281475066179954.htm

The Report on the Work of the Government of People’s Republic of China (2016)
Source:http://english.gov.cn/premier/news/2016/03/17/content_281475309417987.htm

The Report on the Work of the Government of People’s Republic of China (2017)
Source:http://www.xinhuanet.com/english/china/2017-03/16/c_136134017.htm

The Report on the Work of the Government of People’s Republic of China (2018)
Source:http://en.people.cn/n3/2018/0403/c90000-9445262.html

U.S. Delegation, 2018. “Balancing the Trade Relationship between the United States of American and People’s Republic of China.”

Source:https://xqdoc.imedao.com/16329fa0c8b2da913fc9058b.pdf

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Media Control

As I argued in my 2014 essay, media control has been gaining ground despite “potential seeds for at least a partial reordering of the dynamic tension between impulses demanding control.” Indeed, since Xi Jinping came to power in 2013, media censorship in China has been tightened not only in traditional media but also more apparently in new media sectors.

In traditional media, the two-pronged control system (the state and the party) continues to censor content ranging from news to entertainment through the unified organization State Administration of Press, Publication, Radio, TV and Television of China (SAPPRFT) and the local and national branches of the Central Propaganda Department. Content considered vulgar and conducive to the promotion of blatant materialism is forbidden (Li, 2016), and new lists of forbidden programming are constantly added to a long list of already censored topics. For example, SAPPRFT issued an order in 2018 that forbids video dramas of power fights at royal courts (宫斗剧). Recently it issued a new order that further forbids a wide range of costume dramas, including those dealing with martial arts, fantasy, history, mythology, time travel, and other topics (“Zhongguo Zuijin,” 2019, March 24). As a result, several dozen costume dramas may be unable to be aired over TV or the internet.

The most stringent control occurs in the new media arena, especially on Weibo and WeChat. While the Chinese authorities found it challenging to control the internet in the early 2000s, and internet users employed parodies and spoofs to criticize and poke fun at the Chinese government (Li, 2011), information control online and over mobile phones has gained momentum. Such control aims not only to censor information but also to shape public opinion (引导舆论) through flooding these spaces with officially sanctioned and “desirable” information. In this way, the Chinese state and party hope to set the agenda and guide the formation of public opinion.

Chinese authorities are especially worried about social instability and disruptions before and during large national events and anniversaries of sensitive events. For example, China hosts the National People’s Congress and the Chinese People’s Political Consultative Conference each year, and the Chinese authorities spare no effort in making sure that these meetings are held without any problems. The anniversary of the Tiananmen Square movement (also called the June 4^thmovement) always attracts increasing police scrutiny and media censorship. Information about the movement is purged from history books, traditional media, and the internet. Terms associated with this event such as “64,”“89,” and “Tiananmen” are filtered by China’s great firewall. This year – 2019 – is the 30^thanniversary and Chinese authorities and media operators took more stringent measures to ban public discussion. Not only did traditional media mention nothing about this movement that mobilized millions of protesters who demanded free press and democracy, but social media platforms were also compliant in tightening information. Many WeChat groups—capped at 500 each—were banned because members posted information—such as videos, articles, and comments—about the movement.

For such banned groups (often called half-ban, 半封), users of accounts registered within China cannot view or post any new content, but users of overseas accounts can continue to view and post new information. This method creates two separate spaces within the same group, thus separating users overseas and those in China. However, if all users are registered in China, the group will be completely dissolved, resulting in a complete ban. Another way is to ban accounts registered overseas and users of such accounts can only view others’ posts, but cannot post content. This method is called mouth-ban (封口). The third way is to ban an account completely (called account-ban, 全封) and the account cannot be revived in the future.

Online video programming is also tightly censored. In January 2019, China Netcasting Services Association issued an order that regulates online video, including title, commentary, dubbing, emoji, background, and other information. It includes 100 articles, specifying content that will be banned such as information attacking China’s political and legal systems, opposing the “one-China” policy, damaging the national image, damaging the image of revolutionary leaders and heroes, leaking national secrets, disrupting social instability, damaging ethnic and regional unity, opposing national religious policies, and other information (China Netcasting Services Association, 2019, January 9).

Even online emojis and pictures are subject to censorship. For example, following Xi Jinping’s and U.S. President Barack Obama’s two-day summit in California in June 2013, a Chinese artist noticed the resemblance between a picture of Xi and Obama strolling together and the cartoon characters of Winnie the Pooh and Tigger the Tiger walking together. The artist put these images together to show the similarities. Chinese censors immediately deleted the cartoon image from the Chinese internet. Various versions of Winnie the Pooh have since been blacklisted, suggesting that even harmless fun can be viewed as a challenge to Xi Jinping’s authority (Lee, 2017, July 16; Luedi, 2016, March 29). Gradually, the fictional bear has become a meme and a symbol of resistance against Xi Jinping. Because of this, Shanghai Disneyland reportedly removed Winnie the Pooh at the request of Chinese authorities (Stolworthy, 2018, November 30).

The ban is part of a broader campaign that supports the government and Xi Jinping’s consolidation of power (Luedi, 2016, March 29). In February 2018, China announced it would drop the term limit on the presidency, suggesting that Xi has absolute power to rule the country indefinitely. While this shocking move motivated many Chinese to search for opportunities to immigrate to other countries, state-owned Chinese media gave supportive coverage. What’s more, various measures were taken to make sure that resistance was suppressed. For example, many journalists were imprisoned and overseas dissidents were silenced by targeting their families at home.

In addition to China’s continuing block of foreign sites such as The New York Times, Facebook, YouTube, Twitter, and many others, China’s control over virtual private network (VPN) services has also become more stringent. While visitors and dissidents could use VPN to bypass China’s great firewall in the past to access foreign sites, the Chinese government has cracked down on VPN, culminating in Apple’s deletion of all VPN appsfrom its App Store in 2017. Chinese internet service providers such as China Mobile, China Unicom,and China Telecom were all ordered to block access to VPNs.

Furthermore, new laws are implemented to punish the “wrong” use of social media. For example, the Amendment (IX) to the Criminal Law of the People’s Republic of China was adopted at the 16th Session of the Standing Committee of the 12th National People’s Congress of the People’s Republic of China on August 29, 2015, and became effective on November 1, 2015. A paragraph added in Article 219A states:

Whoever makes up any false information on the situation of any risk, epidemic disease, disaster or emergency and spreads such information on the information network or any other media, or knowingly spreads the aforesaid false information on the information network or any other media, which seriously disrupts the public order, shall be sentenced to imprisonment of not more than three years, criminal detention or surveillance; and if serious consequences have resulted, shall be sentenced to imprisonment of not less than three years but not more than seven years.

Criminalizing online information dissemination can further force people to censor themselves. Any WeChat group founders are legally responsible for information disseminated in the group. Anyone who spreads rumors to 500 people (the upper limit of a WeChat group)or more could face legal consequences. Several people were reportedly detained for spreading false information. As a result, WeChat group founders reportedly transferred the group administration right to members in other countries to avoid the risks.  An overseas Chinese person reportedly became the administrator of more than 70 WeChat groups overnight in 2017 after the new rule was publicized (Qiao, 2017, September 13).

Freedom House’s report in 2018 gave China 14 out of 100 in Freedom in the World Scores (0 = least free, 100 = most free). Among them, China’s political rights score is the least free, 7 out of 7 (1 = most free, 7 = least free); civil liberties score is 6 out of 7; and overall freedom rating is 6.5 out of 7. The reports states (Freedom House, 2018):

China’s authoritarian regime has become increasingly repressive in recent years. The ruling Chinese Communist Party (CCP) is tightening its control over the media, online speech, religious groups, and civil society associations while undermining already modest rule-of-law reforms. The CCP leader and state president, Xi Jinping, is consolidating personal power to a degree not seen in China for decades. The country’s budding civil society and human rights movements have struggled amid a multiyear crackdown, but continue to seek avenues for protecting basic rights and sharing uncensored information, at times scoring minor victories.

In addition to the tightening of media control,the Chinese leadership has also developed new technology-driven instruments of control called the Social Credit System. While this system is not completely new, its recent development aims to utilize big data and collect any information of individuals and organizations, ranging from financial information to activities that cover economic, social, and political conduct of individuals and organizations. Specifically, the National Development and Reform Commission has already built a national credit system through sharing data and blacklisting businesses and individuals who break laws and social expectations. Other private credit entities have also been established, such as Alibaba’s Sesame Credit, Tencent Credit, and Kaola Credit, suggesting that both state and commercial agencies collaborate with each other to increase surveillance in Chinese society.

The control system involves a wide range of government agencies, commercial entities, and partnerships with private organizations. It aims to establish a comprehensive surveillance system that facilitates the development of a moral society supported by a legal and administrative monitoring system. While the primary purpose of the social credit system is to modernize China’s legal and administrative governance, it can be used to further suppress the voices of dissidents and freedom of expression. In this way, organizations’ and individuals’ political, social, and economic activities are under constant monitoring by the state through data aggregation and automation. While the credit system in the United States only collects financial data, the social credit system in China collects all kinds of data, thus making it a more powerful and dangerous surveillance instrument. Such a system has caused a lot of concern among scholars over China’s capacity to finally realize its total control over society (Creemers, 2018; Liang, Das, Kostyuk & Hussain, 2018).

China’s Soft Power, Public Diplomacy, and Challenges

China has been paying increasing attention to its soft power since 2000 (Li, 2012). As I stated in my previous essay, China has attempted to increase its soft power through foreign aid, cultural programs, and various other global programs in order to gain more attraction among foreign publics. China has also allocated huge resources to increase the international influence of Chinese media such as Xinghua News Agency, China Central TV, and Shanghai Media Group. However, China’s global outreach and projection of soft power have encountered many challenges. Specifically, I will discuss the Confucius Institute, China’s corporate globalization, and the One Belt and One Road Initiative.

Recently, China’s Confucius Institute has been under great scrutiny, especially in the United States. Launched in 2004 by the Office of Chinese Language Council International(called Hanban), the Confucius Institute has been increasingly criticized for its relationship to the Chinese Communist Party, ranging from concerns over academic freedom, institutional autonomy, control over curriculum, China’s use of it as a propaganda instrument, and the quality of the teaching faculty. As U.S.-China tensions intensify, Washington has called for American higher education institutions to close the institutes down. At least 10 have closed or announced plans to close the Confucius Institutes since 2018 (Redden, 2019, January 9). While some American educators still believe the Confucius Institute offers valuable resources for cultural exchange and that the politically motivated criticisms are unsubstantiated, such scrutiny means that China’s soft power strategy has experienced a huge backlash.

The global expansion of Chinese companies has also proved to be challenging. Since around the 2000s, the Chinese government has supported Chinese companies in going global (Li, 2016). Many companies such as Lenovo, Huawei, and Haier have established their global presences. However, the way business is conducted in China has proved to be an inherent obstacle for these companies’ global expansion, especially in the West. One example is Huawei. While Huawei is a leading global provider of information and communication technology and smartphones, its entry into the U.S. market has been constantly blocked mainly based on the alleged security risk because of Huawei’s perceived close relation with the Chinese state and party. Huawei’s 5G network has also been banned in Australia.

However, the difficulty facing Huawei is not unique. Any Chinese telecommunication and technology companies planning to enter the American and Western markets may encounter similar challenges. After all, the boundary between a government agency and a commercial entity in China is not as clearly marked as in the United States and European countries. With the Chinese government’s tight control, no company can become completely independent. Even foreign companies doing business in China are required to obey Chinese laws regarding media control and censorship. In this sense, the government practices at home actually become a hindrance when a Chinese company goes global.

Another high-profile project that China has launched recently is the Silk Road Economic Belt and the 21^stCentury Maritime Silk Road, called the One Belt and One Road Initiative (OBORI). The OBORI is the most ambitious global project launched by China since the country started to open itself to capitalism in 1978. The area covers 65 percent of the world population and one-third of global GDP. Since 2013, various measures have been implemented to support this initiative, including the founding of Asian Infrastructure Investment Bank and the New Development Bank.

However, views toward this initiative are mixed. For example, while some countries in Europe are receptive to China’s investment, other European countries are more cautious and insist that China must “follow international standards and not exclusively pursue its geostrategic interests” (Le Corre, 2017). This initiative also marks China’s divergence from its old foreign policy cultivated by Deng Xiaoping asking China to bide time for development and to keep a low profile. The initiative is generally viewed as having not only economic importance, but also geopolitical significance in shaping global trade policies. While it is hard to tell whether OBORI will be successful, China will definitely face tremendous political, cultural, and economic challenges to implementing the plan both at home and abroad.

Interestingly, there is a sharp contrast between China’s domestic policies and foreign policies. While China’s foreign policies often advocate for a multipolar global order that enables smaller countries to have voices so that China can increase its influence and benefit from broader global political participation, China’s domestic policies are characterized by tight control and nontransparency. The inconsistency often causes the international community to be concerned about China’s promotional rhetoric of global political participation. In order to gain credibility internationally, China has to seriously transform its own domestic policies and make them more transparent and democratic.

Conclusion

I argue that China’s control over traditional and new media has tightened tremendously since I first examined this in 2014, making China one of the least free countries in the world. China’s data-driven social credit system has the capacity to even further intensify the monitor and surveillance mechanism, thus allowing the Chinese government to have a total control over citizens and corporations. While China has actively encouraged the companies to go global, the very nature of the domestic business environment makes Chinese companies the target of suspicion because of the lack of separation between the government and the corporate world. As a consequence, China’s efforts to increase its global soft power through economic means and corporate diplomacy will encounter tremendous challenges.

References

 China Netcasting Services Association (2019, January 9). Review Guidelines and Criteria of Online Short Video (网络短视频内容审核标准细则). Accessed June 21, 2019. http://www.cnsa.cn/index.php/infomation/dynamic_details/id/69/type/2.html

Creemers, R. ( 2018, May 9 ). China’s Social Credit System: An Evolving Practice of Control. Available at SSRN: https://ssrn.com/abstract=3175792or http://dx.doi.org/10.2139/ssrn.3175792

Freedom House (2018). Freedom in the World 2018: China Profile. https://freedomhouse.org/report/freedom-world/2018/china

Le Corre, P. (2017, May 23). Europe’s mixed views on China’s One Road, One Belt Initiative. https://www.brookings.edu/blog/order-from-chaos/2017/05/23/europes-mixed-views-on-chinas-one-belt-one-road-initiative/

Li，H. (2006). Advertising and Consumption in Post-Mao China: Between the Local and the Global. Dissertation, University of Southern California.

Li, H. (2011). Parody and resistance on the Chinese internet. In D. Herold & P. W. Marolt (Eds.),Online society in China (pp. 71-88). Routledge.

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Li, H. (2014). Chinese media and culture: Dancing with chains. China Currents, 13(2).

Available: https://www.chinacenter.net/2014/china_currents/13-2/chinese-media-and-culture-dancing-with-chains/

Li, H. (2016). Advertising and consumer culture in China. Cambridge, UK: Polity.

Liang, F. Das, V. Kostyuk, N. & Hussain, M. M. (2018) Constructing a Data-Driven Society: China’s Social Credit System as a State Surveillance Infrastructure. Policy & Internet, 10 (4): 415-453

Luedi, J. (2016, March 29). Why China banned Winnie the Pooh and why it matters

https://globalriskinsights.com/2016/03/china-blacklists-winnie-pooh/

McDonell, S. (2017, Oct. 16). “中国政府如何审查你的思想？” (https://www.bbc.com/zhongwen/simp/chinese-news-41634026)

Qiao, L. (2017, September 13). 微信群主“移民”海外避险. https://www.rfa.org/mandarin/yataibaodao/meiti/ql1-09132017112957.html

Redden, E. (2019, January 9). Closing Confucius Institute. https://www.insidehighered.com/news/2019/01/09/colleges-move-close-chinese-government-funded-confucius-institutes-amid-increasing

Stolworthy, J. (2018, November 30). Winnie the Pooh ‘banned from Disneyland in China’ due to Xi Jinping meme.  https://www.independent.co.uk/arts-entertainment/books/news/winnie-the-pooh-disneyland-china-ban-xi-jinping-meme-shanghai-president-a8660461.html

Zhonguo Zuijin Gongbu “Xian Gu Ling”: Guzhuang Ju Quanmian Jin Bo (2019, March 24). Reprinted from Ziyou Shibao. https://www.wenxuecity.com/news/2019/03/24/8183297.html

Appendix

Image 1:  Xi Jinping and Barack Obama at the Sunnyvale Summit in 2013 and the image of Winnie the Pooh and Tigger strolling together

The post New Trends in China’s Media Control at Home and Public Diplomacy Abroad appeared first on China Research Center.

Since Prime Minister Li Keqiang declared war against air pollution in March 2014, five years have passed. Last year, reports were coming out spreading good news. For example, concentrations of fine particulate matter with an aerodynamic diameter of 2.5 microns or less, known as PM_2.5,were down, on average, by 32 percent from 2014 to 2018(Greenstone, 2018). Awareness about air pollution has also skyrocketed, so much so that no Chinese would likely tell me that the air pollution we see in the sky is just fog, as they used to in 2006 when I first visited Beijing. Some were going so far as to state that China was winning in the war on air pollution based on the significant progress it has made on improving air quality at the beginning of 2018.

As clearly seen in Figure 1(BeijingAirNow), the number of days with heavy or extremely heavy pollution in Beijing have reduced substantially since 2013, and days with excellent air quality have increased over the five years. In Beijing, the annual average PM_2.5concentrations dropped to 58 micrograms per cubic meter (μg/m³) in 2017, meeting the 2013 action plan to improve air quality in the region around the capital(Xu and Stanway, 2018). Of course, the data need to be taken with a grain of salt as the standard used here for PM_2.5in Beijing is an annual average concentration of 75 μg/m³ or less, which is substantially higher than the official national standard of 35 μg/m³, as well as the standard of the World Health Organization (10 μg/m³), the U.S. (12 μg/m³), or EU (10 μg/m³), as I discussed in 2014 (Saikawa, 2014). Still, Beijing’s PM_2.5 was 35 percent lower in early 2018 compared to 2013, and such a decrease is significant; some argue that it is equivalent to the change that took 12 years in the U.S. (Greenstone, 2018).

Figure 1. Difference in air quality in five years in Beijing

Air Pollution Policies

What has been done to combat air pollution in China? One of the major changes was probably the replacement of the main household energy source from coal to natural gas. Since 2017, the Chinese government says around four million homes in the North have seen the change(Yu, 2018). This energy transition is important because it impacts not only ambient air pollution but also household air pollution (HAP). After all, we are interested in reducing air pollution mainly because of the large health problems it creates. Exposure to air pollution leads to substantial adverse health impacts, such as cardiovascular and respiratory diseases. The latest Global Burden of Disease (GBD) study estimated that in 2017, more than 1.6 million deaths were attributable to HAP exposure from solid fuels, and 3.4 million deaths were attributable to ambient air pollution (Stanaway et al., 2018).

For the past five years, my research group has worked on measuring HAP in three different parts of Tibet. We have been interested in assessing residents’ exposure to HAP, their awareness of HAP, and the link between the two. Until the late 1990s, most Tibetan nomads lived in black woven yak hair tents. Today, these yak hair tents are scarce in all nomadic villages we visited, as most nomads have transitioned to store-bought plastic tarp tents, which are lighter, better waterproofed, and easier to set up, or to temporary houses that are more spacious and comfortable. This transition is important because of the type of stove used in each household. In yak hair tents, residents have an open fire using an iron ring or a homemade adobe mud stove with an opening in the ceiling of the tent for ventilation (Sclar and Saikawa, 2019). Tarp tents or temporary houses, on the other hand, utilize improved cast iron cookstoves with stovepipes that vent the smoke through the ceiling. In Nam Co in the Tibetan Autonomous Region, we found that four households out of 23 used natural gas instead of yak dung (Xiao et al., 2015). Those households had the lowest six-hour mean PM_2.5concentrations (43 μg/m³) compared to others varying from 178 – 1530 μg/m³, and those were also the only houses meeting the national 24-hour standard of 75 μg/m³. In some households in Tibet, the instantaneous PM_2.5concentrations went as high as 157,000 μg/m³(Sclar and Saikawa, 2019). It clearly showed that the fuel type was an important factor for HAP, and the transition to natural gas was reducing both HAP and ambient air pollution at the same time.

While the residential sector clearly plays an important role for PM_2.5, industry is also equally or more important, especially for those areas close to it. Steel, aluminum and cement producers were told to cut output by as much as 50 percent in the winter of 2016-2017 (October-March) in the region surrounding Beijing to avoid smog (Lelyveld, 2018). This was a part of the “Airborne Prevention and Control Action Plan (2013-17),” which targeted Beijing, Tianjin, and Hebei to reduce emissions by implementing strict policies (Greenstone, 2018). A similar action plan was issued for the Fenwei Plain and also in the Yangtze River Delta region as well.

In 2013, $277 billion was pledged by China’s Academy for Environmental Planning to mitigate urban air pollution (Yu, 2018). In addition to closing down industry, China prohibited new coal-fired power plants, restricted the number of cars on the road, banned high-emission vehicles, and shut down coal mines (Greenstone, 2018, Xu and Stanway, 2018). These strategies make sense, as two other important sectors for air pollution are power and transport (Saikawa et al., 2017).

Air Quality Trends in Cities

Unfortunately, the air quality trend has not continued to improve from 2018 onward. Although the clear sky was visible at the start of 2018, by the end of November, smog was thick again in the sky, with pollution levels 10 percent higher than in 2017(Stanway, 2018). In the 2018-2019 winter period, for example, air pollution levels increased by 10 percent from the previous year(Hu, 2019).

It is not fair, however, to blame a lack of policies or enforcement because air quality does not solely depend on emissions. Terrain and meteorological conditions are also important. Researchers have found that atmospheric transport of pollution to downwind areas and stagnant meteorological conditions are equally important factors linked to the severe air pollution episodes in northern China (Zhang and Cao, 2015, Sun et al., 2016, Wang et al., 2017). It is also important to note that this past winter was one of the coldest years on record in China, with snow in Shanghai, which most likely also increased the heating demand across the country (Leister and Richards, 2018). Henan province government officials had a point when they explained their 27 percent increase in PM_2.5concentrations, which was the highest across China, as a result of “unfavorable weather conditions(Stanway, 2019).”

Despite the closures of coal-fired power plants across China in 2017, there was a report of satellite imagery showing pre-construction and/or construction phases of new coal-fired power plants again. It appeared that the quick and stringent regulations backfired and led to the national government loosening restrictions on these plants in five provinces in early 2018(Hao, 2018). The 13^thFive-Year Plan limits the total coal power capacity to 1,100 gigawatts.  The current capacity is 993 gigawatts. Adding 46 gigawatts found in pre-construction and construction mode and 57 gigawatts of shelved projects would bring the total to 1,096 gigawatts, allowing China to stay just below the plan ceiling by 2020 (Hao, 2018).

Despite last year’s early celebration that China was winning in the war on air pollution, the war does not seem to be ending just yet. In the summer of 2018, China published a new three-year action plan on air pollution that added no new targets to the existing policies (Ma, 2018). The question now is whether China can maintain its commitment to improving air quality. With the signs of renewed construction of coal-fired power plants, what we should be prepared for may be higher PM_2.5concentrations again this coming winter.

Complicated Problems

China’s war on air pollution is also not just about PM_2.5. Some researchers are finding that even when PM_2.5 concentrations were going down, another important air pollutant, tropospheric ozone (O₃), was going up. Stratospheric ozone, higher up in the atmosphere, is a good ozone, protecting us from the harmful ultraviolet radiation. Tropospheric ozone, on the other hand, is a bad ozone and is an air pollutant, having harmful health impacts. O₃is not directly emitted but is produced in the atmosphere through a chemical reaction under sunlight. Li et al. (2018), for example, have shown that O₃increased since 2013 after the decrease in PM_2.5concentrations, especially in megacities such as Beijing and Shanghai. The researchers explain that this increase may be due to the decrease in PM_2.5concentrations reducing the sink of hydroperoxyl radicals and enhancing O₃production.

In our work, we also found a similar trend of increased O₃concentrations in future simulations (Zhong et al., 2019). We assessed the sensitivity of health estimates due to PM_2.5and O₃exposure in China in 2050 to various uncertainties, including emissions, concentration-response function linking the relationship between air pollution exposure and health impacts, and population projections. We found that concentration-response function is the largest source of uncertainty for PM_2.5-related health estimates, while future emissions are the greatest source of uncertainty for estimated O₃-related health outcomes in China. Other parameters are much less influential compared with emissions. Our results highlight the importance of constraining emissions to better assess PM_2.5– and O₃-related human health impacts. It is important to mention that the projected changes in future O₃ are much more variable. Eight out of 12 cases show that at least 50 percent of future population will be exposed to higher O₃, while in all cases, more than 80 percent of the future population would be subjected to reduced PM_2.5exposure.

The Chinese government also recognizes the increase in O₃concentrations and made a statement that in 74 cities, they increased by 10.8 percent from 2013 to 2016(Ministry of Ecology and Environment, 2017). Among 338 areas, 59 cities observed O₃levels above the second national standard. In 2017, based on the increasing trend, the Chinese government emphasized the importance of volatile organic compounds (VOCs) emission reduction. Nitrogen oxides (NO_x) and VOCs are the major sources of O₃production. The chemical reaction to produce O₃is non-linear and thus the effective control depends on the existing mix of chemicals. China’s case illustrates an example of where the efficient O₃reduction results from a reduction in VOCs, and not in NO_x(Saikawa et al., 2017).

It is important to realize that both PM_2.5and O₃also affect climate and so we are not just dealing with air pollution. Reducing O₃concentrations can improve air quality and climate at the same time. However, to make the matter more complicated, PM_2.5can both cool and warm the atmosphere, depending on its chemical composition. So, reducing PM_2.5concentrations does not necessarily translate to a win-win situation of improving air quality and mitigating climate change at the same time. Considering the health impacts associated with PM_2.5exposure, reducing their concentrations is important for human welfare, but more efforts are also essential to reduce greenhouse gas emissions and to mitigate climate change.

Air pollution is complicated and is also linked to other problems, such as food production. Crop yields can be significantly reduced by being exposed to air pollution, especially O₃(Van Dingenen et al., 2009, Avnery et al., 2011). In China, because of the change to natural gas in residential homes, domestic fertilizer production was also directly affected in 2017. China is the largest nitrogen fertilizer consumer in the world (International Fertilizer Association, 2019) and it has relied on its domestic fertilizer production. However, because of the shortage of natural gas this winter, fertilizer production was cut in half. This decline led to a spike in agricultural production costs and a sharp increase in prices for urea, synthetic ammonia, and compound fertilizers(Gu and Mason, 2018).

Looking Ahead in the War on Air Pollution

Many of the studies give us more reason to look at the inter-related issues of pollution holistically rather than to focus on one specific problem. It is probably time to start linking multiple problems. These can include air pollution, climate change, and water pollution, but we might also start linking ecosystem conservation and sustainable production, and other social issues. Multiple improvements in diverse fields would be possible; it is important to look at our environment as a complex system, with multiple components. One such mechanism might be to find food production methods that do not emit so much greenhouse gas and air pollutants. China’s large fertilizer consumption is leading to large nitrous oxide emissions from farms (Saikawa et al., 2014). It is a great beginning to switch household fuel from coal to natural gas, but it is also time to emphasize the need for reduced fertilizer use in China’s agricultural fields. We forget how agriculture is linked to air pollution and soil pollution sometimes and yet, it is significant. Individuals can also do things to make our planet more sustainable. Instead of relying on the governments, maybe it is also time to consider what different ways are available for us to be closer to more blue-sky days in the coming years.

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The post China’s Continued War on Air Pollution appeared first on China Research Center.

Liu Yawei is the director of the China Program at The Carter Center in the United States and member of the China Research Center’s Board of Directors. Sun Lu is an associate professor at the Institute of International Relations of the Communication University of China. The interview was conducted in Chinese earlier this year and translated by Baker Lu, Cindy Cheng and Caroline Wang.

Q: President Carter not only built the diplomatic relationship between the U.S. and China, but he also kept promoting U.S.-China relations even after he left the White House. In particular, President Carter wrote a letter to President Trump about the importance of U.S.-China relations and offered suggestions about how to repair this relationship under the current circumstances. What are the implications for the bilateral relations between U.S. and China after reviewing the history of President Carter and Vice Premier Deng Xiaoping’s decision to establish diplomatic relations and President Carter’s continuous efforts to promote U.S.-China relations after he left the office?

A: I think there are three things we can learn from history — from the Nixon 1972 ice-breaking trip to the 1978 establishment of diplomatic relations.

First of all, the normalization of diplomatic relations with China was actually easier for Nixon. He became involved in politics by embracing the anti-communist doctrine. Nixon would not have begun his political career, served as the vice president under the Eisenhower administration, or been elected as the president in 1968 if he had not shown his anti-communism sentiment. Therefore, when Nixon said that he was in contact with China, nobody suspected that he was colluding with the Chinese Communists. People believed that he did this to protect the national security.

For Carter, it was much more difficult to negotiate with China. Soon after the Chinese Communist Party (CCP) won the civil war in 1949, the Republicans immediately initiated a big discussion about “Who lost China,” accusing the Democrats of being pro-communist. This atmosphere led directly to the proliferation of McCarthyism. All U.S. State Department diplomats who had contact with the CCP during World War II and the Chinese Civil War were were cast aside or even fired. As a result, the Democratic Party was blamed for allowing the CCP to take power because of its softness toward the CCP. This is also the reason neither President Kennedy nor Johnson improved diplomatic relations with Beijing.

Therefore, when President Carter began secret negotiations with Deng Xiaoping, some of Carter’s assistants informed him that building diplomatic relations with China would definitely cause him to lose the 1980 election. However, Carter still established relations with China for the sake of the national interest. As for Deng Xiaoping, the pressure he faced was no less than Carter.

Based on this historical background, President Carter and Vice Premier Deng showed us that politicians must have vision and courage. Also, politicians and leaders need to grasp the necessity of compromise. Sometimes a temporary compromise can lead to a broader consensus, and this consensus can promote a win-win situation. For instance, on how to solve Taiwan issue, both Carter and Deng showed great vision and courage.

Second, mutual interests are the engine of U.S.-China relations. When the leaders of China and the United States established diplomatic relations, they faced a common enemy: the Soviet Union. Back then, Moscow’s threats to the well-being of the U.S. and China brought these two countries, which had completely different histories, cultures and political systems, together. Today, although the Soviet Union no longer exists, we face far more dangerous and uncontrollable common enemies. For instance, climate change, terrorism, Iran and other chaos in the Middle East will put the whole world in turmoil and bring disaster to the global economy.

Decades ago, China and the United States had common interests. Today, there are even more common interests between China and the United States. These common interests do not allow Washington and Beijing to part ways, and if China and the United States do not work together to face these challenges, the world might become less secure than it was during the Cold War. Back then we had certainty and predictability under a superpower duopoly, but now the world has become unpredictable and less stable because of nationalism and various other factors. Therefore, under the current circumstances, China and the United States cannot let domestic factors, especially on the U.S. side, break the ties between them.

Third, President Carter has said in his books and on the recent phone call with President Trump that many of the problems faced by the United States come from its own belligerent and failed foreign policies. On the other hand, the rise of China is precisely due to the fact that China has taken a peaceful approach to development. The shortage of money for U.S. domestic development, therefore, is caused by the vast fiscal investments in war and conflicts. The U.S. should mind its own business if it wants to become stronger and to make its politics rational again.

On the Chinese side, although it has made tremendous achievements in the past four decades and the total size of its economy is approaching the United States, its economy still faces the problem of sustainable development, which is mainly caused by challenges in deepening and expanding its economic reform and opening up. As a result, despite the fact that some of the current difficulties in Sino-U.S. relations have an international dimension, the main reasons for these difficulties are the political and economic challenges within these two countries.

Donald Trump vows to make the United States great again, to revitalize U.S. manufacturing, to boost the U.S. economy, and to make blue-collar workers proud. Xi Jinping keeps talking, from last year’s Boao Forum to this year’s One Belt One Road Summit, about how to deepen reform and expand openness, how to enhance the role of the market in the Chinese economy, and how to meet the interests and ensure fair competition with foreign companies in China. Therefore, Americans should understand that if China achieves all reform goals proposed by President Xi, the trade war will end. The truce and renegotiations achieved in the Osaka meeting between President Trump and Xi Jinping further demonstrate that in order to develop, these two leaders need to stop confronting each other and solve the problem through dialogue.

In other words, the current low point in Sino-U.S. relations actually isn’t a diplomatic problem; it stems from the externalization of domestic issues.

In the United States politicians shift domestic problems and find scapegoats by accusing China. In China domestic special interest groups caused China to miss the window for a second opportunity of reform. Therefore, as President Trump said at the press conference in Osaka, as long as China improves the environment for investment, China and the United States will be strategic partners, not opponents or enemies.

Q: During the Osaka Summit, although there was no agreement between the U.S. and China on trade, the two countries decided to resume negotiations. How do you analyze the results of this summit?

A: I think the result of this summit is like an old saying from a Chinese poem: “Find the silver lining at the end of our tethers.” After the breakdown of Sino-U.S. trade negotiations in early May, both sides actually thought about the worst outcome. The rhetoric that China and the United States will completely break their ties is rampant in both countries. However, after looking at media reports of the summit, it is possible that both China and the U.S. have gotten what they want, so both sides can find ways out. The following specific questions to be negotiated should then be dealt with by experts in the relevant fields.

Based on the comments from the American Chamber of Commerce, the two sides had reached consensus on more than 90% of the issues before the sudden breakdown of negotiations in May. The last 5%-6% are only about the details of how to implement, advance and verify the agreement. However, China and the United States have different views on these final parts. For example, there are reports that the United States has asked China to change its law to ensure its commitments to the agreements. Unsurprisingly, since this is about China’s sovereignty and dignity, China did not accept the U.S. request on this matter. Some Chinese even argue that if the government had signed this agreement, it would have been the second version of the Treaty of Shimonoseki.

After the pause of negotiations, anti-American propaganda films “Shang Ganling” and “Heroes and Children” were broadcasted on Chinese TV channels. In addition, the People’s Daily also issued scores of comments criticizing and attacking the United States. However, prior to the Osaka Summit, CCTV started to show films depicting U.S.-China friendship, like “Yellow River Love.” During the summit, we observed that Xi Jinping talked about ping-pong diplomacy and Trump praised Xi Jinping as one of most outstanding leaders in China and claimed that a trade deal could be “historic.” From all of these changing signals, we can say that the two leaders once again stopped the Sino-U.S. relationship from deteriorating and diverted it from possible confrontations to serious and equal dialogue.

When Xi Jinping met with Trump, he mentioned ping-pong diplomacy from 48 years ago and the establishment of diplomatic relations between China and the United States 40 years ago. His words implicitly suggest that the reason why Mao Zedong, Zhou Enlai, Deng Xiaoping, Nixon, Kissinger and Carter could build the new era of the U.S.-China relations was that they had mutual respect, found common ground while putting aside differences, compromised and had fine negotiations. Today, like the mentioned great leaders, President Trump and Xi must have similar courage, vision and skills to bring Sino-U.S. relations to another new era. As an observer, I greatly admire them for their untraditional, responsible and unconventional actions.

As for those who say Trump is a “player” who just does loose talk, claim Xi Jinping’s domestic structural reforms will face great obstacles, argue that it is easy for these two leaders to say things in Osaka but it will be difficult for their assistants to do anything in Beijing and Washington D.C., my answer is that it took eight years from the ice-breaking to the establishment of diplomatic relations between the U.S. and China. In the following forty years after the establishment of diplomatic relations, the U.S. and China have written the most brilliant page of shared peace and prosperity in human history. The relationship between the two countries is intertwined and critical for the stable development of the world. Therefore, unlike some people’s rhetoric, the bilateral relationship’s importance prevents it from being broken too easily. This requires the most capable and courageous leaders to do their best to keep continuous development of this bilateral relationship, and both Trump and Xi have done this.

Q: Both the face-to-face talk between Trump and Kim Jong-Un in the Korean Demilitarized Zone and the Kim-Xi meeting in North Korea have been given lots of attention recently. What role do you think that China could still play in solving the North Korea nuclear crisis?

A: Even though I am not an expert on the Korean Peninsula, I do believe that China is willing to play a role, and its influence will be decisive.

As we look to the past, the reason why North Korea could navigate its path under the intense pressure of international sanctions was the Chinese irresolute attitude towards the situation on the Korean peninsula. Some decision makers argue that the enemy’s enemy is a friend. In other words, North Korea’s nuclear weapons threat is recognized as China’s trump card that could be used to exercise restraint over the United States at any time. If the U.S. really needs to involve China in the process of denuclearization of the Korean peninsula, it should be prepared to make some concessions, such as the abolishment of Taiwan Relation Act. If China is determined enough, it has the power to wreck the economic system of North Korea, even though there are the concerns about the refugee influx crossing the Yalu River into the northeast of China.

Until 2017, the Chinese government still categorized the Korean peninsula crisis as a “none of my business” issue. As a Chinese adage suggests, “untying a bell needs the one who ties the knot in the beginning.” The North Korea nuclear crisis should remain a problem between North Korea and the United States. It is the potential threat that the U.S. has imposed upon North Korea that causes the problem. As a result, as long as the two countries build mutual trust, this issue will be solved naturally without too much help that China could offer. However, the situation has started to change since the surprise visit of Kim to China last year. Kim-Xi meetings have happened four times. Two took place before Donald Trump met Kim. From my perspective, even though the “shake hands and say hello” between Trump and Kim after the G20 Summit seemed largely unplanned, this decision must have been related to the recent Xi-Kim meeting. For China, the only way to maximize its gains is to actively participate in the Korean peninsula issue. A separate peace between the U.S. and North Korea is the worst thing for the country’s political interest. Akin to what China did 66 years ago — signing the Korean Armistice Agreement — there is no denying that the country plays a critical role in carrying out a new peace treaty in North Korea. Even though China cannot guarantee the same protection that the U.S. promises for Seoul, the situation could still be greatly altered if China could convince Kim to give up military plans and start to rejuvenate the domestic economy.

After all, we should never forget the blood-cemented historical relationship between China and North Korea. Today, China serves as the essential provider and passage of goods for North Korea. Passing Beijing is a must for North Korean officials who travel abroad for foreign affairs. Moreover, China is also the test field that proves the huge success of economic reforms. For me, it’s unwise to simply hold these advantages. In fact, under the gathering cloud of Sino-America tension, China should be more actively involved in Washington’s effort to denuclearize the Korean Peninsula through a combination of sanctions and diplomatic activities. Only by doing so can China reduce the perception held by the American elite that it is not a responsible great power. China needs to convince Washington that it is doing its best to share the burden of denuclearization and peaceful development on the Korean Peninsula.

Q: One female officer in the United States State Department pointed out that the conflict between China and the United States is a clash of civilizations. This is an unprecedented viewpoint for the discussion of Sino-America relationship. How do you interpret this perspective?

A: “Clash of civilizations” first appeared in the famous argument of Samuel P. Huntington. Before the publication of his book in 1996, the mainstream argument was rooted in Francis Fukuyama’s book, The End of History and the Last Man, in which he argues that the end of the Cold War and the end of the history is symbolized by the triumph of western democracy represented by the United States over the socialism represented by the Soviet Union. However, Huntington holds different opinions, advocating that the world faces more deeply-rooted conflicts than the battle between different ideologies: the clash of civilizations. After the 9/11 attack, the Fukuyama’s argument was gradually replaced by Huntington’s. In the 21st century, the global village is more turbulent. There is not only the western culture dominated by America but also Chinese civilization, Islamic civilization, and others. It’s reasonable to predict that the clash of civilizations will be more uncertain, the contradictions will be more irreconcilable, and the corresponding fissures will be more intensive.

Kiron Skinner, the Director of Policy Planning at the U.S. Department of State, once grandiloquently described the great power competition during the Cold War as a “fight within the western family.” Today, the competition with China is completely different, since China is the first competitor for the U.S. that is “not Caucasian” and not predominately white. This is the real clash of races, ideologies, and civilizations. With a Ph.D. earned from Harvard University and as a political science professor at Carnegie Mellon University, Skinner makes herself a mockery by advocating such a hilarious argument. It’s even more ironic that, as an African American, she criticizes the cultural collision between white and black people. Prejudice is farther away from truth than ignorance. Skinner boasts herself as the follower of Condoleezza Rice, the former U.S. secretary of state, who has claimed numerous times that she is the direct beneficiary of the Civil Rights Movement. According to her, if there had been no magnificent movement led by Martin Luther King, there would not have been possible for her to achieve the outstanding academic outcomes and brilliant political career (the first black secretary of state in the U.S.). I have no idea how she will comment on her student and whether she will call the severe contradiction between the American white and black people that still exists after the abolishment of slavery 165 years ago, as the “clash of civilizations” as well.

By no means should we deny that China and the United States have great differences in history, civilization and political systems and incompatibilities caused by the characteristics of distinctive civilizations. This cannot be avoided. However, this does not mean that the two countries will end up with a civilization clash. I am convinced that leaders, scholars and ordinary citizens of China and the U.S. could through exploration find ways to combine the advantages of the two civilizations and overcome the respective deficiencies.

As China has always suggested, the two countries should seek agreement and peaceful coexistence while shelving differences. Once standing at the same position of Skinner, George Kennan was in charge of planning U.S. long-term foreign policy. If Skinner regards current Sino-American friction as the clash of civilizations, this preconceived prejudice will definitely thwart the possible reconciliation of the two countries.

Different civilizations have coexisted in the world for centuries. Even though there have been contradictions and wars, the general progress of human civilization continues to develop in an inclusive and eclectic era. After not formally recognizing China for 30 years, the United States eventually discovered the possible foundation of collaboration with China. In the following 40 years, the two countries together have built the East Asia and Pacific area into the brightest spot of peace and prosperity. I believe that these two civilizations will create more brilliant moments in the future, exploring unprecedented paths for the establishment of the community of shared future for mankind.

Q: I would like to ask about a new trend in the field of American colleges and universities. Emory University, which is cooperating with The Carter Center, recently dismissed several Chinese professors. Yesterday, the U.S. National Public Radio reported that the FBI recommended that American universities should supervise Chinese scholars and students on campus. What do you think about this trend?

A: First of all, let’s look back at what has happened: the U.S. FBI director said in testimony before Congress last February that China’s threat to the United States is a threat to the entire society and that a U.S. counterattack should also target the entire society. On October 4, Vice President Pence delivered a speech saying that China’s threat to the United States is government-wide, so the U.S. counterattack against China’s threat should also be government-wide. On November 28, the Hoover Institution and Asia Society, both famous think tanks, co-sponsored and co-authored “The American Interests, China’s Influence,” which argued that China is engaging in large-scale, fruitful penetration and erosion of the United States, including universities. Subsequently, the National Institutes of Health (NIH) issued a document requesting that research institutions receiving funding from China should review whether they were violating regulations. Following the dismissal of several Chinese-American and Chinese scholars at the Anderson Center, a famous cancer research institution in Houston, Emory University also ordered a Chinese-American couple to leave.

All these subsequent statements and actions remind people of the 1882 Chinese Exclusion Act and the McCarthyism of the 1950s. The discrimination against the Chinese in the past seems to have reemerged. In the United States, Chinese communities, other minority organizations, and many prestigious universities have expressed concern that they will not allow such a policy discriminating against a race to continue to expand.

Second, since the establishment of diplomatic relations between China and the United States 40 years ago, the greatest cooperation has actually been in education and scientific research, as well as cooperation in economy, trade, culture, politics, security and other fields. Chinese students have been the largest group of international students on American campuses for many years. Chinese scholars, especially those who have blended into American society after receiving a degree in the United States, are located at almost all the American universities and research centers. Chinese students have made great contributions to the prosperity of American universities. The research carried out by Chinese-American and Chinese scholars certainly helps put the United States at the forefront of innovation and invention.

Have Chinese scholars in the United States violated relevant laws and regulations and transferred their research results without disclosing them to their institutions or without the approval of their institutions? This surely has happened, but only involving a very small number of people. The United States should not just look at the trees and disregard the forest. I believe that American universities and scientific research institutions will not pursue the dead end of “Science with Borders” and will not give up the key that allows them to dominate the world’s scientific research, which is valuable because all talented people can realize their dreams in the United States.

Finally, Americans should not just calculate their own trade deficits. Instead, they should also calculate their own education and research dividends. Tuition paid by Chinese students to American universities each year are a huge bonus in the United States. The research dividends created by Chinese scholars for the United States should be astronomical.

At present, anti-China and anti-Chinese voices are constantly rising, but I believe that the United States will neither make the same mistake made in 1882 again nor allow McCarthyism to reemerge. All Chinese who have been educated and have done research in the United States, whether they will be in the United States or China in the future, are bridges between China and the United States, bind two different civilizations together, and are the engines of theChinese and Americanefforts to create a new civilization for mankind.

Q: Beijing held the second Belt and Road summit in April. You have recently visited Africa several times. How do local people respond to the Belt and Road, and what do you think of this initiative?

A: The first thing to say is that the role of the Belt and Road has been infinitely magnified in China. The Belt and Road has become a basket, and everything can be put into it. Fundamentally, the Belt and Road is actually using China’s own production capacity and capital advantages to add to the development of China and improve China’s infrastructure. Beyond that, it can increase trade, lower tariffs, reduce non-tariff barriers, deepen mutual understanding between China and the countries along the Belt and Road, and finally form a situation in which the tide lifts all boats, and all countries embrace sufficiency. If we follow this way of thinking to implement the Belt and Road initiative, it will not only benefit China but also benefit all developing countries and increase trade and other associations between developing and developed countries. President Xi Jinping has repeatedly pointed out that China is the biggest beneficiary of economic globalization, and the Belt and Road allows countries that have not yet fully integrated to the economic globalization to check in and board the train.

If the story of the Belt and Road is like this, many countries that maliciously attack the initiative, especially the leaders of the United States, may become speechless. Countries along the route must also be consistent with China in the ultimate goal of the Belt and Road initiative and tell the story of the initiative together with Beijing. If they do not recognize the view that the Belt and Road initiative is a so-called debt trap and conspiracy to plunder resources and invade the sovereignty of small countries, China will win more friends and partners.

Last week, the World Bank released an evaluation report on the Belt and Road. The report concludes that “One Belt, One Road” is a project that benefits the world but not without risks and challenges. The four major risks mentioned by the World Bank are debt, environment, management, and social unrest. If the sponsor nations of the Belt and Road initiative design the top-level well, increase the transparency of project loans and fair bidding on projects, understand, digest and implement projects and provide relevant information for the domestic people, the final success of the project will be more guaranteed. The Chinese Ministry of Foreign Affairs is very positive about this report, indicating that the Chinese government has become more mature and pragmatic regarding the Belt and Road initiative.

In fact, the second Belt and Road summit hosted by Beijing shows that Chinese leaders have realized the challenges that the initiative has encountered and will face in the process of promotion. They have become more objective and practical in its promotion. At the same time, China has also begun to expand the circle of friends and partner groups of the Belt and Road.

The United States is not a country involved in the Belt and Road, and the United States has gradually transitioned from ignorance to misunderstanding and hostility. We cannot underestimate the ability of the United States to use its own strength and power to interfere with and undermine the Belt and Road initiative. In the past two years, the chief leaders of the U.S. State Department have warned the leaders of participant countries during their visits to those developing and developed countries that they should not board Beijing’s train because the train only leads to one station – the debt station. To break through the U.S. blockade of the Belt and Road initiative, China must, as mentioned earlier, break the U.S. decision-making and media portraits that demonize the initiative. Second, China should actively provide the U.S. government, think tanks, and NGOs with information about and conditions of development. Third, China should actively invite American companies to participate in bidding for projects and discuss with the U.S. government and non-governmental organizations about engaging in trilateral cooperation in the countries that join the Belt and Road. The United States asserts that China is doling out stories in the African countries and Latin America to set debt traps there. For example, East Africa is an important node on the maritime silk rinioad. China should cooperate with the United States in Kenya, Ethiopia, and Djibouti to increase mutual trust and cultivate the habit of cooperation in various forms. In this way, China and the U.S. can make good contributions to building Africa as a new continent with sustainable development in the world economy.

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