On October 7, 2023, Hamas launched a brutal attack on Israel. The U.S. has been providing military support to Tel Aviv for decades and is an unwavering supporter for Israel’s current war to uproot Hamas in Gaza Strip. The U.S. has deployed aircraft carrier groups in the Gulf and bombed a few targets in Syria that are supported by Iran. 

While American leaders are busy dealing with wars that may engulf regional peace and prosperity, they have a bigger concern over the likelihood of another war: a war with China over Taiwan in the coming years. If China decides to use force to stop Taiwan from becoming independent, in the words of President Biden, the U.S. will intervene militarily. And if this is the case, the world will see destruction of lives and property, ruin of the economy and disintegration of the international institutions on an unprecedented scale.

For China, Taiwan is the final missing piece of its glorious rise

Taiwan was ceded to Japan by the Qing Court after it was defeated by the Japanese in 1895. It was returned to the Republic of China (ROC) at the end of World War II. However, Chiang Kai-shek quickly lost his control of the mainland and the ROC moved to Taiwan in 1949. At the time, Mao Zedong and his lieutenants thought seizing Taiwan was going to be easy. Shortly after declaring the founding of the People’s Republic of China (PRC), Mao ordered his People’s Liberation Army (PLA) to cross the ocean and seize one of the offshore islands, Jinmen. To the shock of Mao, Chiang’s troops managed to annihilate the landing PLA forces. At the time, this seemed to be a temporary setback. The PLA nursed its wounds and trained for a bigger attack on Taiwan.

The outbreak of the Korean War on June 25, 1950, led to the deployment of the U.S. 7^th Fleet in the Taiwan Strait and the timetable of “liberating” Taiwan had to change. Mao tried in 1955 to seize the offshore islands to test U.S. resolve in defending Taiwan. Not only did President Eisenhower secure a Taiwan Resolution from Congress, but the U.S. eventually signed a Mutual Defense Treaty with ROC. After a massive bombardment of Jinmen in 1958, Mao never again attempted to seize Taiwan. China had to deal with more pressing domestic and international challenges.

When the U.S. was bogged down in the quagmire of the Vietnam War, President Nixon came up with the idea of using China to facilitate the American withdrawal and countering Moscow at the same time. China was happy to play along but had one demand. The U.S. had to acknowledge Taiwan was part of China. Americans reluctantly met this demand:

The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves.        

This position was repeated in the following Normalization Communiqué and the August 17 Communiqué. The U.S. abolished its defense treaty with the ROC and withdrew all its forces but continued to sell arms to Taiwan. The American obligation to the ROC was also codified in The Taiwan Relations Act.

Since Mao died in 1976, his successors, from Hua Guofeng to Hu Jintao, all vowed to resolve the Taiwan issue while in office, but none was able to. Xi Jinping came to power in 2012 and like all his predecessors, he declared that the resolution of the Taiwan issue cannot be dragged on forever. He might have won support for extending his leadership beyond two terms by promising to resolve the Taiwan issue during his tenure. On August 22, 2022, the PRC issued a white paper entitled “The Taiwan Question and China’s Reunification in the New Era.” It declares:  

Over its 5,000-year history, China has created a splendid culture that has shone throughout the world from past times to present, and has made an enormous contribution to human society. After a century of suffering and hardship, the nation has overcome humiliation, emerged from backwardness, and embraced boundless development opportunities. Now, it is striding towards the goal of national rejuvenation. The journey ahead cannot be all smooth sailing. However, as long as we Chinese on both sides of the Taiwan Straits devote our ingenuity and energy to the same goal, let there be no doubt — we will tolerate no foreign interference in Taiwan, we will thwart any attempt to divide our country, and we will combine as a mighty force for national reunification and rejuvenation. The historic goal of reuniting our motherland must be realized and will be realized.

For the U.S., Taiwan is a killer weapon to contain China

U.S. policy toward Taiwan has evolved over the years. In the years of the Chinese civil war, Washington decided not to intervene but had provided large quantities of weaponry to the Nationalist (KMT) forces. Seeing the CCP was poised to win, President Truman opted for the “dust to settle” approach. The Korean War militarized the American position in Asia and Taiwan eventually became an ally just like Japan. The 1955 and 1958 offshore island crises hardened the U.S. will to defend Taiwan until President Nixon’s trip to China in 1972.

While both the Shanghai and Normalization Communiqués highlighted American “interest in a peaceful settlement of the Taiwan question by the Chinese themselves,” President Reagan circulated a six assurances memo that was recently declassified. These six assurances are:

1. The United States would not set a date for termination of arms sales to Taiwan.
2. The United States would not alter the terms of the Taiwan Relations Act.
3. The United States would not consult with China in advance before making decisions about United States arms sales to Taiwan.
4. The United States would not mediate between Taiwan and China.
5. The United States would not alter its position about the sovereignty of Taiwan which was, that the question was one to be decided peacefully by the Chinese themselves, and would not pressure Taiwan to enter into negotiations with China.
6. The United States would not formally recognize Chinese sovereignty over Taiwan.     

President Bill Clinton sent two aircraft carrier groups into the Taiwan Strait during the Third Taiwan Strait Crisis in 1996 when China launched missiles into waters very close to Taiwan after Lee Teng-hui visited Cornell University. However, during his visit to China in 1998, Clinton issued the so-called “three no’s” policy on Taiwan, i.e. the U.S. would not support Taiwan independence; it would not support one China, one Taiwan; and it would not support Taiwan representation in international organizations where statehood is a requirement. 

President George W. Bush began his tenure by violating the taboo of strategic ambiguity on how the U.S. would react if China used force against Taiwan. In an interview at the Rose Garden, he said the United States would do “whatever it took” to defend the island if it were ever attacked by China.  When he was asked if the United States has an obligation to defend Taiwan, he replied, “Yes, we do, and the Chinese must understand that.” This ominous change was interrupted by the U.S. anti-terrorist campaign after the 9/11 attacks. 

Despite regular complaints over U.S. sales of arms to Taiwan, the U.S. largely stayed within the boundary of the one-China policy until Donald Trump came along. Even before he was inaugurated, Trump took a call from ROC President Tsai Ing-wen. From 2017 through 2021, Congress and the executive branch of the U.S. government worked separately to erode the essence of the one-China policy. 

The Biden administration has not stemmed the erosion of the one-China policy. He sent a high-level delegation of former senior government officials and former members of Congress to Taipei to commemorate the 43rd anniversary of the Taiwan Relations Act. He publicly declared that the U.S. would intervene militarily if China used force against Taiwan. He did not try to stop House Speaker Nancy Pelosi from visiting Taipei. His top military commanders keep testifying and saying that China would launch a war against Taiwan as early as 2025. The Russian invasion of Ukraine and China’s refusal to condemn it have created pressure on the administration to officially drop the strategy of ambiguity and to provide more support to Taiwan to deter Beijing from going to war to absorb Taiwan. U.S. naval ships have resumed crossing the Taiwan Strait. President Tsai Ing-wen was allowed to visit multiple U.S. cities and met with then-House Speaker Kevin McCarthy at the Ronald Reagan Presidential Library in Simi Valley, California. While this is yet to be Washington’s official policy, more and more American elites are pushing for the U.S. to recognize Taiwan as an independent nation. A new consensus seems to be emerging in the American decision-making circles: Taiwan is a democracy, a high-tech hub, and a military asset and it has to be defended at all costs. Its loss to China would enable China to edge the U.S. out of the Western Pacific.

How to maintain peace in the Taiwan Strait and stop a war between the U.S. and China

At the summit outside San Francisco on November 15, 2023, President Xi told President Biden that the Taiwan issue is the most vital and sensitive issue in U.S.-China relations. Washington should turn its non-support of Taiwan independence into concrete actions by not arming Taiwan and being supportive of China’s quest for peaceful unification.

In response, President Biden said America’s “one China policy has not changed.”  He reiterated that the United States opposes any unilateral changes to the status quo from either side, that U.S. expects cross-Strait differences to be resolved by peaceful means, and that the world has an interest in peace and stability in the Taiwan Strait.  

Maintaining peace and stability in the Taiwan Strait is a tall task because each of the three sides defines the status quo differently and does different things to maintain it. Furthermore, each side believes in its own righteousness and blames others for any mishaps. Nonetheless, all sides should do everything politically possible to prevent the Taiwan issue from dragging them into a war that will end decades of economic growth and prosperity and plunge all sides into an abyss of destruction.

There is no doubt that Xi Jinping wants to resolve the Taiwan issue during his tenure, with no foreseeable end. It could be 2035, which is 12 years from now. But he also knows the following: 

1. The Chinese military is not ready, and there is no certainty it can win such a war in a very short time. 
2. The Chinese people may not support a long and costly war on Taiwan. 
3. The U.S. and its allies will not remain idle when China decides to use force. 
4. All economic gains of the past 45 years would evaporate as soon as he orders the PLA to seize Taiwan. 
5. The best way to resolve the Taiwan issue is for Taiwan and its proud people to voluntarily submit to one China, and it will take time to accomplish this.

But Xi Jinping will not tolerate Taiwan becoming independent under his watch. He will risk war if that happens, and he may be able to rally the nation at least for a short period of time. He can afford severe losses in both lives and property on the mainland, but Taiwan will become a ruin, and the U.S. and some of its allies may also suffer tremendous losses. Therefore, neither Taiwan nor the U.S. should give Xi Jinping an excuse to go war.

It is easy for Taiwan not to give Xi such an excuse. Taiwan has managed to do that for more than four decades by exchanging national sovereignty for peace, prosperity, and global respect.

It is much harder for the U.S. to do this. First, the U.S. will never stop selling arms to Taiwan. In the wake of the Russian invasion of Ukraine, American leaders feel that it is even more urgent to continue arming Taiwan. Second, the U.S. has promised not to mediate between Taipei and Beijing. Third, given the current fierce rivalry between the U.S. and China, it is almost unthinkable for the U.S. to encourage Taiwan to negotiate with the mainland. Fourth, there are growing numbers of American elites who believe provoking China to go to war on Taiwan serves American national interests for obvious reasons. 

Taiwan is a trump card that Washington can play effectively in its effort to win the race against China, but is it worth going to war with China over an island so far away? At the time of confronting two regional wars that require tremendous American moral and material investment, is the U.S. ready to provoke China into opening a much larger and dangerous front? If the answer is no, what could the U.S. do?

Easy and simple: President Biden and his successors can emphasize to President Xi Jinping and his successors that Washington does not support Taiwan independence and that the Taiwan issue requires Chinese people on both sides of the Taiwan Strait to resolve it peacefully. What the U.S. opposes is unilateral and violent change of status quo in the Taiwan Strait.  Furthermore, the U.S. will not abandon strategic ambiguity nor endorse the idea that Taiwan is an unsinkable aircraft carrier. In other words, Taiwan is not Ukraine. The American messaging before the crucial 2024 Taiwan election should be: the U.S. does not have a favorite candidate, but it supports a candidate who is best equipped to maintain peace and stability in the Taiwan Strait.

Xi Jinping told Biden during the San Francisco summit that China will be unified, and unification of China is inevitable (中国终将统一，也必然统一). Well, the American response to this inevitability claim should be: Washington supports the glorious goal of eventual unification but it will and must police the process. 

Chinese people on both sides of the Strait would be forever grateful for the U.S. to take this firm stand. 

The post Taiwan Symposium: The Road to Peacefully Resolving the Taiwan Issue appeared first on China Research Center.

The first pillar is the missionary impulse to change an atheist China into a Christian nation. The second is that China is such a huge market it will be central to consume all the commodities grown or manufactured by the most productive country in the world. When the missionaries and merchants ran into resistance, they called on the diplomats and military to reduce the stubborn Chinese resistance. If one examines China’s relationship with the U.S., a similar pattern could also be detected. And this pattern revolves around a central question of the role of the U.S. in China’s quest for modernization. 

When Chinese elites believe the U.S. obstructs China’s quest, the policy response is hostile. But once elites are convinced the U.S. is central in facilitating China’s quest for national respect and strength, decision-makers can make swift changes to accommodate American arrogance and condescension. 

Currently, it seems the U.S. is devoured by fear of a rising China and disgust that an ungrateful nation has taken advantage of generous and unsuspecting Americans. Washington is not in the mood to forge a special relationship with China. It does not believe it can easily or ever change China. It has also dawned on American decision-makers that doing business with China has only contributed to making China stronger and more powerful. Therefore, it is better to contain China, even if the cost is not having a robust commercial relationship with China. The thinking on the China side is quite different from the American mentality. Chinese leaders, elites and ordinary people are understandably upset, frustrated, and angry since the U.S. began to apply maximum pressure to stop China’s economic growth in the name of making America great and safe again, but they have not made up their minds on giving up on the U.S. as a facilitator for its modernization. Beijing seems to be giving Washington another chance to reconsider disengaging with China. At the same time, it is also doing everything to convince the U.S. that China can make America pay a price if it does not change its ugly policy of making China lose in an epic U.S.-China rivalry.

Leaning to one side

The Chinese Communist Party (CCP) celebrated its centennial last year. In merely 100 years, it has grown from an illegal political organization with about 50 members in 1921 to the largest political party in the world with close to 100 million dues-paying members. Looking back at its founding, it was, in fact, a strong reaction by the aspiring Chinese nationalists to President Wilson’s unfortunate betrayal of the Chinese cause at the Paris Peace Conference at the end of World War I. Their deep disillusionment with Western liberalism led to a pivot to Moscow and a growing adoption of the revolutionary doctrines of Marxism to bail China out of miserable humiliation at the hands of Western powers and their domestic collaborators. 

The Japanese invasion of China temporarily restored the relationship between the CCP and the U.S. Members of the Dixie Mission found Mao Zedong and his CCP comrades leading a movement that was more admirable than that of the Nationalist Party. However, this brief period of mutual fascination was dashed by the new hostility between Moscow and Washington. Again Mao and his party were forced to choose sides in building his country up. CCP decided to lean to the side of the Soviets. The outbreak of the Korean War settled the dust in terms of U.S. policy toward Asia — all efforts had to be made to contain the spread of Communist agitation and to prevent a domino effect. This new policy led to the U.S. involvement in Vietnam after the Viet Minh drove the French forces out with support from China.

A year after President Richard Nixon made his historic trip to China, the U.S. finally ceased combat operations in Vietnam. The Shanghai Communique was not implemented because of domestic difficulties in both the U.S. and China. The Chinese government had not decided what it would take to make China a modern country. Future leaders in both countries were waiting to seize the decision-making power to seal the normalization deal. 

Engagement

A new breed of leaders with moral authority and political courage finally came to power in Beijing and Washington. It was Jimmy Carter in the U.S. and Deng Xiaoping in China. To modernize and become a member of the global community, Deng made the decision to shelve crucial differences with the U.S. on the Taiwan issue. Deng famously commented that countries that chose to follow the lead of the U.S. had all become rich. In other words, China desired to be rich and would follow suit. 

Deng made a triumphant visit to the U.S. during the lunar new year period in 1979 and a new page in U.S.-China relations was forged. China needed everything at the time, from military support to protect itself from any possible invasion from the USSR to capital to relaunch China’s economic growth, from good education and research opportunities for its students and scholars to markets for Chinese products. The U.S. had all of that and began to offer it with the hope Nixon best expressed in his 1967 article in Foreign Affairs: an engaged China would be a more peaceful China.     

It was the U.S. turn to become deeply disillusioned and upset in the wake of the June 4 crackdown on student protest. For almost three years, the bilateral relationship was in a precarious situation. The U.S. imposed sanctions, and the new Chinese leadership turned sharply left in both political and economic terms. To salvage the reform and opening up policy, Deng launched his Southern Tour in early 1992 and with support from the military forced Jiang Zemin to change course. U.S. attempts to link China’s human rights record with its most favored nation trade status eventually was blunted by the business community and its supporters in Congress and the administration. Deng’s determination in pursuit of China’s modernization and Americans’ reluctant suppression of their frustration with the CCP paved way for China’s eventual ascension to WTO at the beginning of the 21^st century. By 2010, China soared to become the second-largest economy in the world. Both countries benefited enormously from two decades of intimate economic engagement. There were constant frictions over many bilateral and multilateral issues, but Americans leaders were still embracing the hope a modernized China would be a friendly China.

The Pivot

The American policy community began to rethink its conventional engagement approach to China in 2012. It coincided with Xi Jinping taking over the CCP helmsmanship. When the Council on Foreign Relations and the Carnegie Endowment for International Peace jointly published a report entitled “Revising the Grand Strategy Toward China” in 2015, the Obama administration had already put the “Rebalance to Asia” policy in place. But China was still feeling good after it hosted President Obama at the APEC summit in 2014 and the G20 in 2015. It also began to prepare for the post-Obama years.

China was surprised by the election of Donald Trump and shocked when he took a call from Taiwan President Tsai Ying-wen. However, Chinese leaders seemed to believe President Trump, as the arch dealmaker, could be handled with sweet “deals.” The first deal was the visit by Xi Jinping to Mar-A-Lago in April 2017. Later in the year, the Chinese deal became even sweeter — a royal welcome of visiting Trump at the Forbidden City and signing of purchase agreements worth more than $240 billion. But President Trump and his lieutenants felt the Chinese government had failed to honor its pledges and launched the unprecedented trade war. COVID-19 had worsened the bilateral relationship, with the U.S. government embarking upon a whole of society and whole of government offensive against China. Under the U.S. assault, Beijing appeared to be reactive and tit-for-tat in nature. It even signed the first phase of the trade agreement, agreeing to buy $250 billion in American goods over two years. CCP leaders ate the bullets from Washington largely because of two convictions: first, that China’s economic growth could not be sustained if the two nations decoupled; and second, that it could afford to wait for a more sensible president to move into the White House.

That wait seemed to have paid off in 2020 when Joe Biden was elected president. President Biden has more knowledge about China than any previous American leader and even declared during his presidential campaign that he did not believe China was capable of having America for lunch. The Chinese hope that President Biden would de-escalate bilateral tensions and stabilize the relationship was quickly dashed shortly after President Biden took over the reins of American leadership and announced he would not allow China to realize its strategy of edging out the U.S. and become the world’s most powerful nation. Out of frustration, China’s top diplomat Yang Jiechi launched a fierce attack on the U.S. policy toward China in Alaska in March 2021. 

Re-engagement, the Chinese way

President Biden and his China policy team has only made the life of Chinese leaders more miserable since coming to office. It has not only adopted Trump’s China policy wholesale but also made it more effective through domestic investment, alliance-building, and consistency in applying maximum pressure in the technological sector. China is more isolated than ever from the community of developed nations. Many began to fear if China, out of anger and frustration, was going to give up its effort to engage the U.S. and form a new coalition of the willing. The joint Russo-Chinese statement in February 2022 appeared to confirm this worst scenario. U.S. Secretary of State Antony Blinken’s China policy speech in May 2022, House Speaker Nancy Pelosi’s visit to Taiwan in early August, the U.S. National Security Strategy released on October 12, the U.S. National Defense Strategy that came out two weeks later, a series of China-related laws enacted by Congress, and executive orders from the Biden administration designed to accelerate high-tech decoupling have all made it clear to the top leadership in Beijing that the U.S. sees China as the only power in the world that has the intention and capability to threaten and displace the U.S.

In this climate, with the U.S. bent on containing China for more than five years and ignoring almost completely the Chinese demand to stabilize and repair the relationship, it would be no surprise if the CCP and its paramount leader Xi Jinping identify the U.S. as China’s No. 1 enemy and adopt a policy of disengagement before and during their historic 20^th Party Congress. What is surprising is that China seems to have decided to give the U.S. another chance to stay in the framework of engagement initially advocated by Mao Zedong and Richard Nixon and implemented by Deng Xiaoping and Jimmy Carter. China’s Foreign Minister Wang Yi came to America in late September and told the American audience, “China’s course of modernization and journey to common prosperity for more than 1.4 billion people will provide more market and development opportunities for the United States and other countries in the world.” He went on to say, “China’s resolve to further advance reform and opening-up is certain.” Wang declared that China sees “three certainties” in the bilateral relationship: China’s engagement with the U.S. is certain if the U.S. does not seek to change China or use Taiwan to thwart China’s quest for modernization; China’s effort to strengthen economic cooperation with the U.S. is certain; and China’s readiness to cooperate with the U.S. to confront global challenges is certain. 

This iteration of Chinese policy toward the U.S. was confirmed by Xi Jinping’s political report at CCP’s 20^th National Congress. In Xi’s scheme, CCP’s central mission is to build “a great modern socialist country in all respects and to advance the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization.” In the foreign policy section of the report, Xi described China’s goal as adhering “to the right course of economic globalization” and playing “an active part in the reform and development of the global governance system.” He called upon all countries “to hold dear humanity’s shared values of peace, development, fairness, justice, democracy, and freedom.” It is clear, at least for now, that the CCP does not want to say good-bye to the bilateral engagement policy because China’s pursuit of modernization and its plan to make it happen by mid-century will be significantly disrupted if the U.S. decides to change its status from a friendly fellow traveler to a hostile interrupter or even a lethal sniper. 

This may reflect a tactical decision rather than a strong conviction. Many Chinese decision-makers inside the CCP are probably convinced of the U.S. desire to contain China at all costs but believe that there are no other good alternatives for China. The CCP’s decisions to follow the Leninist flag at its founding in 1921 and to rely on Moscow in 1949 brought about catastrophes for China and its people. The decision to board the globalization train driven and maintained by the U.S. has resulted in transforming China into a wealthy and powerful country whose voice is now heard and respected in many parts of the world.

The road to becoming responsible stakeholders

In September 2005, U.S. Deputy Secretary of State Robert Zoellick delivered an important speech urging China to become a responsible stakeholder. He said, “China has been more open than many developing countries, but there are increasing signs of mercantilism, with policies that seek to direct markets rather than opening them. The United States will not be able to sustain an open international economic system – or domestic U.S. support for such a system – without greater cooperation from China, as a stakeholder that shares responsibility on international economic issues.” 

America’s current complaints about China run far deeper than what was listed by Zoellick, but the central issue remains the same: the U.S. can play an indispensable role in shaping China’s future. It has played a crucial role in changing China beyond recognition in the past 50 years. China has not changed in ways desired or preferred by the American leaders and the people who elected them. But they need to be aware that giving up on engaging China is not just a dereliction of a noble duty but also risks making China turn to stifling isolationism, ugly xenophobia, and decapitating totalitarianism. In addition, handling this relationship irresponsibly may even drive the two countries into a conflict that would put China and many other nations’ quests for modernization on hold and drag the U.S. into yet another quagmire.

China obviously wants to be a responsible stakeholder in the global community. However, CCP will not get the pass if it refuses to change some of its beliefs and behavior. First, Xi Jinping and his lieutenants must be keenly aware of the fact that Americans are sincere in their concerns about what China is doing to its own people and to other countries, that they are upset by China’s economic statecraft that is defying international rules and norms, and that Americans may be bewildered by their own arrogance and strong clinging to racial superiority but harbor no evil plan to make China disintegrate and become a vassal state of the U.S. Second, Chinese leaders can believe as much as they want that their system of governance is far more superior and efficient in lifting people out of abject poverty and growing the economy, but every government needs to defend and guarantee certain universal values for its citizens, or it will eventually lose popular support. Last, ignoring the element of choice and accountability in exercising authority will only lead to unchecked and unbalanced power abuse that make a repeat of China’s long embrace of a feudal political system easy to envision.

For Washington and Beijing to peacefully coexist and become responsible stakeholders, the first step is for American elites to stop perceiving China as an evil power doing everything possible to undermine America as an idea, system of government, and economic superpower. The first step for Chinese decision-makers is to give up the idea that the U.S. is in irreversible decline and the notion that China is destined to represent the future. Both sides should be humbled by their seemingly intractable domestic problems and daunting global challenges. Only by becoming responsible stakeholders can the governments of the U.S. and China fulfill the mission of making the world peaceful and prosperous and allowing their people to pursue happiness freely and lawfully. 

The post The Centrality of the U.S. in China’s Quest for Modernization — Assessing China’s U.S. Policy After the 20th Party Congress appeared first on China Research Center.

Unexpected developments, however, changed expectations and raised the prospect of greater uncertainly or even potential conflict.

Three Surprises

The first surprise in 2022 was Russian President Vladmir Putin’s visit to China before the Winter Games. The two countries agreed to form a partnership of “no limits.” On February 24, four days after the Olympic flame was extinguished in Beijing, Putin’s military began its brutal invasion of Ukraine. Despite a history of being invaded by foreign powers and a sensitivity to the issue of territorial integrity and political sovereignty, China is one of a small number of nations that has refused to condemn Russia’s invasion. Beijing believes NATO’s eastward expansion pressured Moscow to act, and that Putin was justified in launching the war. Although China has been careful not to provide material support to Russia’s war effort, its position has gravely alienated the U.S. and other developed nations.

The second unexpected development has been China’s adherence to the draconian “zero COVID” approach that has led to lockdowns of many major cities or urban districts, even as most other countries are slowly but firmly coming out of the pandemic. The government has used the pandemic to deploy the strictest mechanisms of surveillance. Many people under lockdown have been getting upset, and the economy has been a victim of collateral damage. The pace of China’s economic growth last year and this year is the slowest since the beginning of the opening and reform in the late 1970s. In late May, Premier Li Keqiang convened an emergency meeting, asking more than 100,000 officials at all levels who attended the meeting virtually to do their utmost to stabilize the economy. What China used to be proud of — its quickness in mobilizing resources and its efficiency in getting the public to cooperate with government policies — has now been turned into an effective tool to control people’s movement and has become fertile ground for rent-seeking corruption.

The third event that jolted China was the visit to Taiwan by U.S. House Speaker Nancy Pelosi. After the Financial Times leaked word of the possible visit, China orchestrated a rare popular and official campaign to stop Pelosi from going to Taiwan. Chinese Foreign Ministry spokespeople used the strongest language to warn the U.S. government not to cross a red line regarding Taiwan. The PLA declared it would not remain idle when the nation’s sovereignty was at stake. Hu Xijin, former editor-in-chief of Global Times, a tabloid affiliated with the People’s Daily, publicly called the Chinese military to escort Pelosi’s plane to the Taipei airport. When there was no sign of Pelosi backing down, Hu declared Chinese fighter jets could shoot down her plane. However, it was all quiet in China on the evening of August 2, when Pelosi landed in Taipei to a hero’s welcome. For those Chinese who were hoping to see a strong reaction from their government, it was a long and painful night. China’s retaliation was late but massive.

Diplomatic Isolation from Developed Nations

The Russian invasion prompted the U.S. government to put on hold its decision to abolish some of the tariffs imposed by the Trump administration. President Biden sent a high-level delegation to Taiwan to reassure Taipei of the American commitment to Taiwan. The Pentagon released its National Defense Strategy, labeling China as the biggest threat to American national security. In May, President Biden made a trip to East Asia, introduced the Indo-Pacific Economic Framework, and attended the QUAD summit in Tokyo. Many suggest QUAD eventually will evolve into a NATO in Asia.

In their isolation, Chinese leaders are getting to the point of believing a new normalization of U.S.-China relationship is hopeless. If they reach that conclusion, they may do the following: 1) Move more aggressively to implement the dual circulation strategy, which involves shifting exports to the domestic market; 2) Sell off Chinese holdings of U.S. Treasury bills and transfer Chinese assets in the U.S. elsewhere; 3) De-list its companies from American stock exchanges as soon as possible; 4) Discourage Chinese people from studying in or even traveling to the U.S.; 5) Deepen its relationships with countries that are on America’s sanctions list.

China’s best chance to drag Europe away from the U.S. bandwagon was in January 2020 when Beijing and Brussels signed the EU-China Comprehensive Agreement on Investment. This opportunity was doomed after China reacted strongly and overbearingly to EU sanctions on Chinese government officials believed to be responsible for China’s policies toward ethnic minorities in Xinjiang. China’s refusal to condemn Russia’s invasion of Ukraine has alienated European countries further. The last EU-China summit was characterized by EU leaders as tone deaf. Latvia and Estonia’s decision to withdraw from the 16+1 bloc, a regular forum for China to discuss issues of common concerns with Eastern European nation, is a strong indication that China-Europe relations have entered a cold winter.

Economic Recession and Popular Anger

Regardless of what the official media says about the CCP, its only claim to legitimacy comes from its ability to deliver on economic growth in the past four decades. However, China’s spectacular economic growth has now come to an abrupt stop. It has been caused by a series of domestic policy reversals and unprecedented pressures from abroad. Domestically, the reversals have brought a pivot to the state-owned enterprises, an attempt to control capital and get rich Chinese people to give up their wealth under the banner of common prosperity, heavy dependence on the real estate sector that cannot sustain itself, and a banking crisis. Internationally, the U.S. has been leading the campaign to contain China through a large-scale trade war, stifling sanctions, strenuous efforts to freeze investment flows, and economic coalition-building. At the national economic conference in December 2021, the top Chinese leadership indicated that the people should be prepared to tighten their belts as the economic situation looked increasingly bleak. The last straw may be self-inflicted — COVID lockdowns. Since this policy is so intimately associated with China’s top leader, it will not be reversed at least until after the Communist Party’s National Congress in late October.

The economic recession and the subsequent popular discontent, which was on display during the Shanghai lockdown, will pose a serious threat to the leadership in 2023. Currently, the unemployment rate of China’s more than 10 million college graduates is hovering above 20%. The Chinese leaders are keenly aware that this is the group that has a historical track record of wreaking havoc on the nation. They were marchers in 1919, 1976, and 1989 in Tiananmen Square. Each of these movements led to drastic political change.

Taiwan, the Damocles Sword

Jiang Zemin stepped down in 2002 as China’s top leader. During his reign, he famously declared that there must be a timetable on liberating Taiwan. Almost 20 years after Jiang stepped down, China has yet to make its final move against the self-governing island.

Xi Jinping came to power in 2012 and he has since made the return of Taiwan to the motherland more urgent because unification is now one of the most important benchmarks of China’s final national rejuvenation. There is speculation that China’s constitution was amended so that the Taiwan issue could be resolved while the China’s current leader is still in power.

In the wake of the Russo-Ukraine war, the Party cannot and will not make this final move until they know answers to the following questions: 1) How hard will Taiwanese fight to defend their freedoms and country? 2) How should it deal with U.S. military intervention (the Biden Administration has repeatedly indicated that U.S. WILL intervene militarily)? 3) How united will the West be in confronting a Chinese invasion? 4) Can the Chinese economy survive drastic sanctions and stifling boycotts? 5) Can China pacify Taiwan after the war is over?

But the visit by Speaker Nancy Pelosi may have changed the thinking on Taiwan among China’s top leadership. First, the high-profile welcome Pelosi received in Taiwan made it clear that the emotional distance between mainland and Taiwan is probably too vast for the two sides to come close again. Furthermore, more lawmakers from the U.S. and leaders from other developed countries will swarm to Taiwan in the coming months. Taiwan is inching toward de facto independence. Second, China not only failed to stop Pelosi from going to Taiwan but did not take any military action when she landed. Chinese people tend to interpret this as the top leadership being too timid and not as decisive as previous leaders like Mao Zedong, who decided to intervene in Korea, and Deng Xiaoping who invaded Vietnam. Third, the Russian war in Ukraine is a live classroom for Taiwan to learn how to defend themselves successfully against a stronger enemy. Finally, it appears that despite President Biden’s rhetoric, the U.S. has not made up its mind on whether to intervene militarily in the wake of its withdrawal from Afghanistan and in the context of China’s expanding military capabilities.

Conclusion

What happened in 2022 has upset China in a significant way. Its support for Moscow after Russia’s invasion of Ukraine has turned it into a pariah in the international community. U.S. policies toward China before and after the invasion have made it impossible for Beijing to revise its moral support for Moscow. Pelosi’s visit may prompt China to consider offering material support. This would further alienate China from the club of developed countries whose markets are vital to China’s economic growth. The already troubled situation of the Chinese economy has been aggravated by its own stubborn and unscientific approach to COVID. Pelosi’s visit has made the resolution of the Taiwan question more urgent. Radical nationalism, deliberately nurtured by the Chinese government, has reared its ugly head and it will make pursuit of patience in dealing with Taiwan impossible.

In their recent writings, Michael Beckley, a professor at Tufts University, and Ryan Hass, a senior fellow at the Brookings Institution, suggest pessimistic powers are more prone to use force to achieve national objectives. From 1992 through 2012, China was rising and confident of its future. The leadership sought to convince Taiwan to come back through peaceful means. In the last 10 years, China’s rare luck seems to have run out. And 2022 hit China hard.

After the Party’s 20^th National Congress in late 2022, the leadership will enter 2023 with more concerns about its faltering economy, growing social discontent and increasing resentment against the Western bloc’s collective effort to contain China. It will have less patience on the Taiwan issue. In this volatile domestic and international environment, it is not unthinkable for top Chinese leadership to make rash decisions that will plunge the world into an uncertain dark era of great power rivalry and rob China of its historic dividends since the opening to the world in the late 1970s.

The post 2022, the Year That Has Upset China appeared first on China Research Center.

Where the bilateral relationship is now?

The relationship between the U.S. and China was at a historic low due to trade, high tech, and other issues when COVID-19 broke out in Wuhan, China, in late 2019 and early 2020. It might have been a great opportunity for Beijing and Washington to switch gears and find new ground to cooperate.

Unfortunately, leaders in both nations failed to seize the moment. The notorious “decouplers” close to the White House – represented by Peter Navarro, a trade adviser to Trump, and Michael Pillsbury, a China watcher favored by Trump – saw the outbreak as a golden opportunity to increase the pace of disconnecting with China. Other administration officials chimed in. Secretary of Commerce Wilbur Ross declared it would create momentum for the U.S. manufacturing sector to bring jobs from China back to the U.S.  Secretary of State Mike Pompeo used a domestic and international lecture tour to castigate China for attacking American democracy, stealing American intellectual property, using debt to entrap developing countries, and applying coercive diplomacy to its neighbors. The State Department began to treat Chinese media outlets in the U.S. as hostile entities and later sharply reduced the number of their employees in the country.

When Wuhan locked down, the U.S. offered no official moral or material support. On the contrary, it sent a high-caliber delegation to Germany to lobby allies and others at the Munich Security Conference against using Huawei technologies or products.  The U.S. Navy continued to conduct freedom of navigation patrols in the South China Sea. The USS McCampbell (DDG 85), a guided-missile destroyer, passed through the Taiwan Strait on March 25, something an American ship has not done since the Cross-Strait crisis in 1996 before Taiwan’s first direct presidential election. A Wall Street Journal op-ed entitled “China, the Real Sick Man of Asia” seemed to crystalize the American reaction to China’s suffering and touched a raw nerve in China’s national psyche. Even worse, on March 26 President Trump signed the TAIPEI Act into law, the third act passed by Congress since 2017 that was designed to change the status quo in the Cross-Strait relations.

China has responded tit for tat to the perceived American slight and humiliation. It lashed out at the U.S. for being one of the first nations to ban Chinese citizens from entering the country. It expelled several Wall Street Journal reporters after the aforementioned op-ed was published. It then sent other American reporters packing. It refused a proposed shipment of personal protective equipment organized by the USAID in early March when the COVID-19 situation came under control in Wuhan. The Chinese ambassador to the U.S. began to complain that the political virus was as destructive as the coronavirus. In mid-March, when the outbreak began to spread in the U.S. and the American death toll began rising, Zhao Lijian, China’s newly appointed Foreign Ministry spokesman, declared an information war on the U.S. via Twitter. He wondered whether the U.S. military brought the virus to Wuhan during the World Military Games in October 2019 and demanded that the U.S. identify its own patient zero.

In response to Zhao’s provocative tweets, U.S. leaders began to use either “Chinese virus” or “Wuhan virus” when referring to COVID-19. Secretary Pompeo’s insistence on using the term made it impossible for the G-7 Summit to issue a communique after an online consultation. Bilateral insults escalated until President Donald Trump and President Xi Jinping talked over the phone on March 26. A temporary truce was violated toward the end of April when President Trump decided to withhold payment to the World Health Organization (WHO) because of its alleged China-centric behavior. Soon after, the administration began to talk about holding China accountable for the disastrous spread of COVID-19 in America and elsewhere. U.S. intelligence agencies were ordered to seek evidence about whether the virus came out of a lab in Wuhan. Members of Congress accused China of concealing the outbreak and hoarding PPE. American allies have joined the chorus. Lawsuits against China were filed in the U.S. and ways to punish China became a daily discussion point during the White House coronavirus task force briefings. A GOP campaign strategy paper was leaked, revealing advice to all GOP candidates to blame China for America’s lack of effective response to COVID-19. More recently, Kevin McCarthy, Republican leader in the House of Representatives, formed a China task force with a mission to investigate China’s malign global activities. The Democrats in the House backed out of the task force because, in the words of Speaker Nancy Pelosi, the GOP’s fanatic effort to tie China to the failure of the administration to contain the virus effectively was an “interesting diversion.” Pelosi said Democrats would not provide justification for such scapegoating.

Then, a second truce appeared to be on the horizon. On May 4, Deputy National Security Adviser Matthew Pottinger told participants at a forum on U.S.-China relations held virtually at the University of Virginia that the U.S. would not seek punitive measures against China during the COVID-19 crisis. Interestingly his wife, Yen Pottinger, a virologist who used to work at the CDC on AIDS and TB, spoke at the same conference on the prospect of U.S.-China cooperation during the pandemic. Three days later, China’s top trade negotiator, Vice Premier Liu He, had a conference call with U.S. Trade Representative Robert Ligthizer and Treasury Secretary Steven Mnuchin. Both sides pledged to honor the first phase trade agreement hammered out earlier and emphasized the importance of U.S.-China cooperation during the pandemic. The positive turn in early May seemed to have collapsed by the middle of the month when China signaled that Beijing could scrap the trade deal due to America’s senseless pursuit of reparations from China for COVID-19 deaths and when Trump threatened to cut off all relations with China.

Forty-one years after the normalization of relations between the U.S. and China, one of the most consequential anchors for global peace and prosperity is now facing the prospect of a grand decoupling. If allowed to continue unchecked, the world will likely face a grave period of political uncertainty, economic disruption, and security vulnerability unseen in recent history. Although Chinese leaders have never openly challenged American supremacy and have always called for a win-win relationship with the U.S., Chinese media’s narrow focus on American failures in responding to the pandemic and sharp attacks on the American attempts to hold China accountable for the global spread of the coronavirus have presented a dastardly picture of the U.S. At the same time, ordinary Americans, who usually do not pay much attention to Chinese affairs, have been exposed to the vicious criticism of China. This mutual antagonism can only serve to drive the two nations further apart.

Could the U.S. and China still cooperate during the pandemic?

It is never too late for the two most consequential powers on earth to cooperate during the pandemic. In fact, the epic endeavor to contain the virus will face much more difficult prospects if the U.S. and China refuse to work together. Leaders in both countries during their phone calls have expressed their willingness to cooperate in fighting COVID-19. But what happens daily seems to indicate that mutual distrust is so deep that neither side is ready to enter into an effective partnership.

According to the Chinese Foreign Ministry, from March 1 to May 5, China supplied the U.S. with 6.6 billion masks, 344 million surgical gloves, 44 million protective garments, 6.75 million goggles, and 7,500 ventilators. Yet, the U.S. keeps talking about reducing the American dependence on China for pharmaceutical products and PPE, and allege PPE made in China are shoddy in quality. American officials constantly accuse the Chinese government of concealing the outbreak, but no one has publicly acknowledged that, as the New York Times reported, Dr. George Gao, director of the Chinese CDC called Dr. Robert Redfield, his counterpart in the U.S. CDC, during the New Year break and alerted him to the outbreak in Wuhan. In fact, by late February, according to the Chinese Foreign Ministry, there were more than 30 such communications from China to the U.S.  But months into the crisis, it seems that no one in either capital is focusing on a crucial need: that the U.S. and China must work together during this pandemic to return to any semblance of normalcy. How could the U.S and China coordinate, cooperate and collaborate in containing the virus?

First, official communication could be ramped up. China was ahead of every country in dealing with this brutal and pernicious virus. It has a lot of experience to share with the U.S. in treatment, methodology, drug application, and reopening. Professional staff from U.S. CDC and Chinese CDC are believed to be holding regular meetings on the outbreak and containment. NGOs, university entities, and research institutions in both countries have been conducting regular, small-scale online information sharing sessions. But there is no official organization of any of these activities. During the Obama Administration, there were close to 100 mechanisms of dialogue between agencies of the two governments. At this critical time when bilateral cooperation is most needed, communication at the top level of the country and central government agencies is reduced to a couple of phone calls.  There is almost zero inter-governmental consultation between the U.S. and China. This is a shame and should be corrected.

Second, considering where African, Latin American, and other developing regions are in their fight against COVID-19, it is crucial for the U.S. and China to work together to provide leadership, expertise, and assistance. No country will be safe if any other country has failed to contain the virus. As Ethiopian Prime Minister Abiy Ahmed noted in an op-ed in the Financial Times on March 25, “Momentary victory by a rich country in controlling the virus at a national level, coupled with travel bans and border closures, may give a semblance of accomplishment. But we all know this is a stopgap. Only global victory can bring this pandemic to an end.” No global victory could be declared if the U.S. and China refuse to enter into a partnership to work with developing countries to stop the virus. The two countries cooperated closely in stopping Ebola in West Africa in 2014-2016 and they need to do this again. In Africa exiting models for coordinating assistance around disease prevention show promise as models for U.S.-China coordination around COVID-19.  U.S. PEPFAR (President Emergency Plan for AIDS Relief) was instrumental in building African health capacity and infrastructure to fight against HIV/AIDS and other diseases, while Chinese medical teams have provided medical assistance and support in almost all African nations. The ongoing efforts of the African CDC—through support by the U.S, China, and other countries—has allowed member states to continue preparing for this new threat. Closer U.S.-China cooperation in Africa could turn the possible weakest link in the global defense against COVID-19 into a much stronger line of containment.

Third, both countries should and must work together in testing, producing, and eventually distributing a coronavirus vaccine. The virus will stop mankind from working and living normally absent an effective vaccine that is available to everyone in the world. The U.S., China, and other developed countries have engaged in a race to produce a viable vaccine, but as of now, there is no active cooperation between China and the West. China must be criticized for not providing a live virus sample to the U.S in the early stages of the outbreak, but blaming China for trying to steal Western secrets related to the vaccine without any hard evidence will simply prevent indispensable multilateral cooperation. Vaccines are not computer chips, and all involved need to pool their knowledge and share information. The U.S and China must take the lead in coordinating this scientific race against the constantly mutating virus.

Where will the Sino-American relationship be after the pandemic?

U.S.-China decoupling is not a matter of if but a question of how serious it is and where it is happening. According to the U.S.-China Investment Report released by the National Committee on U.S.-China Relations and the Rhodium group on May 9, Chinese FDI to the U.S. in 2019 was almost zero. An order from U.S. Department of Commerce on May 15 bars any company in the world that uses American machinery and software from supplying Huawei. Four U.S. senators wrote to President Trump and asked him to suspend a program that enables international students to stay in the U.S. for up to two years after graduation. The largest body of international students in the U.S. comes from China. The U.S. has stipulated that visas for Chinese media workers will be restricted to 90 days. Measures aimed at decoupling are taken daily by the Trump Administration.

This may be why Chinese Foreign Ministry spokesman Zhao Lijian expressed no surprise and showed no sign of nervousness when asked to comment on President Trump’s May14 declaration that he is considering cutting off the relationship with China. Zhao’s response was: “A steady and growing China-U.S. relationship serves the fundamental interests of the two peoples and is conducive to world peace and stability. At present, China and the U.S. should strengthen cooperation to prevail over the pandemic at an early date, and focus on saving lives, and resuming economic development and production. This, of course, calls for the U.S. and China working together towards the same goal.”

Compared to what official Chinese media outlets have heaped on Secretary of State Mike Pompeo and adviser Matthew Pottinger, this response is shockingly tame but also utterly terrifying. The China Institutes of Contemporary International Relations, a think tank affiliated with China’s Ministry of State Security, recently issued a report indicating that the U.S.-China relationship is at its lowest point since 1989 and that armed confrontation is not inconceivable. Hu Xijin, the outspoken editor in chief of the Global Times, has called the Chinese government to expand its nuclear arsenal arguing, “We are facing an increasingly irrational U.S., which only believes in strength.” Wang Haiyun, a retired major general, demanded the Chinese government dig out and punish “those traitors who have been bought out by the United States and do its bidding.” Others argue there is no need to react to the lunacy of the American administration. China simply needs to prepare for the worst. According to this line of thinking, the U.S. is deciding to decouple when it has the least in its toolbox. Time will be on China’s side. Cui Tiankai, the longest serving Chinese ambassador to the U.S., recently told a reporter that he does not care if the bilateral relationship does not return to where it was before the pandemic. He only cares about looking forward to a better and brighter framework of U.S.-China interaction. One Peking University professor told this author, “Not too long from now, there will be a raging debate in the U.S. on who has lost China, similar to the same debate that was launched in 1949.”

American aggressiveness and recklessness in decoupling and China’s response, characterized by a sense of resignation, seemingly well-planned preparedness and determination at playing the long game, all point to a bleaker prospect for the bilateral relationship. Businesses, academic and research institutions, NGOs, and ordinary people on both sides of the ocean should fasten their seat belts and be ready for a bumpy ride in the coming months, if not years. The bilateral breakup may be as disruptive as COVID-19.

How will U.S.-China rivalry change the landscape of global well-being?

Neither China nor the U.S. has fared well in its response to the pandemic. China’s initial effort to stifle the doctors and conceal the outbreak has proven costly and counterproductive. It is wrong and misleading to assume China will replace the U.S. and become dominant in world affairs. The U.S., after being alerted by China at least three weeks before the virus invaded the homeland, was ill-prepared and has been ineffective in containment, even months after declaring a national emergency. The mediocre, if not incompetent, performance of the U.S. government has disappointed and will continue to disillusion people from all over the world – people who used to believe in America’s supreme national will to respond to crises big and small, enviable resources, and dominating advances in biomedical research. As a result, the debate on which system of governance is more effective in alleviating national suffering and protecting people’s lives will continue inside and outside the two countries. But whatever edge China has gained in effectively containing the virus in a relatively short period of time has been compromised by its refusal to acknowledge initial deficiencies and to allow international experts to investigate the origins of the virus in Wuhan.

The ramifications for the U.S. and China are serious. Countries around the world will be asking two essential questions: First, can China be trusted, given how it mishandled the outbreak initially?  Second, can the U.S. be relied upon, considering how it has bungled the fight to contain the virus? China’s reluctance to make all information related to the virus available to the world and its own people makes it difficult for other countries to have confidence in it. The lackluster American response and its unilateralism in making decisions that will impact the world make other countries doubt its commitment to international responsibility in addressing future challenges. These uncertainties could lead to an era of shaky alliances and new partnerships. It is possible that the EU or another existing or newly created power bloc could seize global leadership.

The international system will face unprecedented challenges as long as the U.S. and China engage in zero-sum rivalry. The U.S. and other Western countries are determined to investigate whether WHO was involved in any “wrongdoing” in alerting the world about the outbreak in China in a timely and unbiased manner. If hard evidence emerges that points to China exercising undue influence on WHO for self-serving purposes, one potential consequence could be an exodus of the U.S. and its followers from the organization. Would a parallel but competitive WHO be created? Would WHO’s parent organization, the U.N., face the same challenge? Secretary Pompeo recently said that the U.S. may never return to the WHO. The U.S. has already withdrawn from UNESCO and the U.N. Human Rights Commission.

The possibility of China setting up a new international order bent on serving its own interests is remote. It will either leave the international system or stay put and call for reforms. The unity of the U.S.-led international system, if it still exists after the pandemic, may lead to two possible outcomes. First, as a new kid on the block, China could become a more mature and responsible stakeholder in the international community. But if China is again infected by the victimization mentality, it could decide to shut down its long-running reform and opening up. The second outcome, which is not impossible, would be bad for China, for the U.S., and for the world.  It would make the international system more vulnerable and responses to global challenges chaotic, sporadic, and ineffectual.

In conclusion, the post-pandemic world likely will be an era of deep uncertainty characterized by an escalating rivalry between the U.S. and China. A Sino-U.S. economic and financial disconnection could lead to another arms race and a disastrous global economic downturn.  Challenges to the international order and institutions would be more severe as both Beijing and Washington ramp up pressure.  Countries, particularly developing ones, would be forced to choose sides, leading to possible realignment of the international community unseen since the end of the Cold War. Finally, as U.S. and China both attempt to restore reputations tainted by their responses to the pandemic, numerous new power centers could emerge to either stabilize the situation and restore sanity to the management of international affairs or create even more uncertainty and disruption.

The post Decoupling between the U.S. and China May be as Disruptive as COVID-19 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.

The post There Is and Must Be Common Ground between the United States and China appeared first on China Research Center.

But the questions and potential pitfalls to the Belt and Road initiative are easily as large as its ambitions.

The overriding question is this: does the Chinese government have the will, willingness, and wherewithal to overcome all difficulties and accomplish the mission? To succeed, China must negotiate with governments of scores of host countries and international institutions to design, build, and maintain projects. The Belt and Road initiative envisions mammoth Chinese government loans to Chinese companies and foreign governments to finance projects. Will projects become financially viable? Will loans be repaid, or will the initiative devolve into a massive boondoggle? Lack of transparency on the sources of project design and funding means these crucial questions cannot be answered fully.[1] In fact, available evidence suggests there is reason for major concern.

The Origins of the Initiative

The “One Belt, One Road” initiative was first announced by President Xi in September and October in 2013 in Kazakhstan and Indonesia respectively.[2] At the time, it was simply a concept and an idea. In March 2015, the Chinese government issued a paper that began to turn the concept into a plan.[3]

On April 20, 2017, the spokesperson of the Chinese Ministry of Transportation said during a press conference that China has signed more than 130 bilateral and regional transport agreements with countries involved in the Belt and Road. He said that China had opened 356 international road routes for both passengers and goods, while maritime transportation services now cover all countries along the Belt and Road. Every week, some 4,200 direct flights connect China with 43 Belt and Road countries, and 39 China-Europe freight train routes operate.[4]

Before the Beijing Belt and Road Forum for International Cooperation was held on May 14-15, 2017, the Chinese government issued another paper entitled “Building ‘One Belt, One Road’: Concept, Practice, and China’s Contribution.”[5] The paper mentioned six corridors and six means of communication: a New Eurasian Land Bridge Economic Corridor, a China-Mongolia-Russia Economic Corridor, a China-Central Asia-West Asia Economic Corridor, a China-Indochina Peninsula Economic Corridor, a China-Pakistan Economic Corridor, and a Bangladesh-China-India-Myanmar Economic Corridor. The means of communication are rail, highways, seagoing transport, aviation, pipelines, and aerospace.[6]

Xi himself touted the progress already made at the May forum, saying building had accelerated on a number of projects: a Jakarta-Bandung high-speed railway, a China-Laos railway, an Addis Ababa-Djibouti railway and a Hungary-Serbia railway. Ports at Gwadar and Piraeus had been upgraded, and other projects were “in the pipeline.[7] Xi pledged to avoid “outdated geopolitical manoeuvering” and said China hoped for “win-win” relationships. “We have no intention to form a small group detrimental to stability. What we hope to create is a big family of harmonious co-existence.”[8]

International think tanks and news organization have taken note. The Center for International and Strategic Studies published a research paper saying the Belt and Road project could span 65 countries, comprising roughly 70 percent of the world’s population. Economically, it could include Chinese investments approaching $4 trillion.[9]

The New York Times reported that the initiative was designed to open new markets and export China’s state-led development model “in a quest to create deep economic connections and strong diplomatic relationships.” The Times highlighted some of the projects:

• Africa’s first transnational electric railway, which opened this year and runs 466 miles from Djibouti to Addis Ababa, the capital of Ethiopia. China financed most of the $4 billion price tag. Chinese companies designed the systems, supplied train cars and engineers who built the line over a six-year period.
• A 260-mile rail line from northern Laos to the capital, Vientiane. China is leading the $6 billion investment. Mountainous terrain means bridges and tunnels will account for more than 60 percent of the line, and construction is further complicated by the need to clear unexploded land mines left from American bombing of the country during the Vietnam War.
• The deep-water port at Gwadar, Pakistan. The facility, on the Arabian Sea, will be linked by new roads and rail to western China’s Xinjiang region, creating a shortcut for trade with Europe. The port is part of the $46 billion China says it is spending on infrastructure and power plants in the China-Pakistan Economic Corridor.[10]

Geopolitical Risks Will Not Go Away

For all the hoopla about the Belt and Road initiative, there are signs that all is not well when it comes to international cooperation needed to make the initiative work. The Belt and Road “summit” in May was attended by only 29 heads of state. Germany, Great Britain, the United States, and Japan sent only government ministers or lower ranking officials to the meeting. India, one of the most important countries for the initiative, chose not to send any representative to the summit because its government believes that China harbors an ulterior motive in establishing the China-Pakistan Economic Corridor, a signature component of the Belt and Road program. “No country can accept a project that ignores its core concerns on sovereignty and territorial integrity,” said Gopal Baglay, spokesperson of India’s External Affairs Ministry.[11]

Other countries, including the United States, also expressed concerns about Chinese motives. To them, “new international order,” “new security framework,” “new economic model,” “new civilization exchange,” and “new ecological order” are synonymous with China’s domination first in Asia and eventually in the whole world.[12]

Western press reports reflected the skepticism. “Neighbors Japan and India have stayed away from the summit, suspicious that China’s development agenda masks a bid for strategic assets and geopolitical ambitions,” wrote Carrie Gracie of the BBC.[13] CNN’s James Griffiths reflected similar sentiment in his reporting on the Beijing meeting. “Its boosters tout its massive economic promise and claim it could benefit the entire world and lift millions out of poverty. But no one can say for sure what exactly the plan encompasses, and detractors warn it could be an expensive boondoggle at best or a massive expansion of Chinese imperial power at worst.”[14]

Russia appears to be increasingly wary of the Belt and Road initiative. President Vladimir Putin attended the summit, but proposed linking the program to the Eurasian Economic Union, Moscow’s own regional economic project. It is common knowledge that Moscow has reservations because Russia is loath to cede influence over Central Asian countries, a main focus of the Belt and Road initiative.[15] A New York Times report quoted a senior associate of Carnegie Center in Moscow saying, “Russia’s elites’ high expectations regarding Belt and Road have gone through a severe reality check, and now oligarchs and officials are skeptical about practical results.”[16]

The Belt and Road initiative faces serious geopolitical risks. Many countries involved in the initiative are situated in the most complicated geopolitical regions pressured by political, religious, and ethnic conflicts. Some are proxies of rival major powers. Pakistan and Afghanistan, key countries for Belt and Road, confront tribal political power that refuses to yield to central control, radicalism, terrorism, and secessionism.[17]

Countries like these can easily derail any connectivity projects in place. The China-Pakistan Economic Corridor is a case in point. The corridor is home to an unprecedented estimated Chinese investment of $48-$57 billion dollars, and the expansion of Pakistan’s Gwadar port would provide China with a much-needed access to the Indian Ocean. But this corridor goes through the province of Baluchistan, where “separatist militants have waged a campaign against the central government for decades, demanding a greater share of the gas-rich region’s resources.” Since 2014, militants trying to disrupt construction on the “economic corridor” have killed 44 Pakistani workers.[18]

Financing Can Be a Challenge

The initiative faces challenges attracting Chinese capital in both the state and private sectors. To be sure, the Chinese state is marshaling significant investment resources: a $40 billion Silk Road Fund was created in 2014; the Asian Infrastructure Investment Bank was launched in 2015 with $100 billion of initial capital that is expected to be spent chiefly in Belt and Road countries; three Chinese state-owned banks received $82 billion in state funds in 2015 for Belt and Road projects.[19]

Yet only a small portion of available investment funds appears to be going toward Belt and Road projects. Capital leaving China is largely going to markets that are safer, richer, and better-developed than those under the Belt and Road framework, according to David Dollar, an economist at the Brookings Institution in Washington. Aside from Hong Kong, the top destinations for Chinese overseas direct investment at the end of 2016 were: the Cayman Islands, the Virgin Islands, the United States, Singapore, Australia, the Netherlands, the United Kingdom, Russia, Canada, and Indonesia. “Of these, only Russia and Indonesia are along the Belt and Road,” Dollar writes.[20] China’s two policy banks, the China Development Bank and the China Export & Import Bank report Belt and Road-related lending totaled $101.8 billion at the end of 2016, or 15 percent of their total overseas lending.[21] Data cited in the Wall Street Journal says Chinese companies have invested more in the United States since 2014 than the 60-plus countries touched by the initiative combined. In other words, Xi’s regional investment priorities have not translated into a shift in private investors’ decision-making.[22]

Jonathan E. Hillman of the Center for International and Strategic Studies, writes that OBOR could include Chinese investments approaching $4 trillion.[23] But Nicholas R. Lardy, a China specialist at the Peterson Institute for International Economics, told New York Times reporter Jane Perlez, “China’s outlays for the plan so far have been modest: only $50 billion has been spent, an ‘extremely small’ amount relative to China’s domestic investment program.”[24] The funding gap is obvious, and the lack of market appeal to capital will certainly become a huge obstacle.

Lending Perilous for Borrowers

Countries involved in Belt and Road projects often take on crushing debt burdens.

Laos, a country with a total output of $12 billion annually, has borrowed $800 million from China’s EXIM Bank, in part to finance a rail line from the northern part of the nation to the capital, Vientiane. According to the New York Times, Laos still faces a huge debt burden. The International Monetary Fund warned this year that the country’s reserves stood at two months of prospective imports of goods and services. It also expressed concerns that public debt could rise to around 70 percent of the economy.[25]

It is reported that Sri Lanka is already overburdened by debt resulting from accepting Chinese concessional loans. As a result of Sri Lanka being unable to keep up with its payments, the Sri Lankan government has converted some of this debt into equity, allowing Chinese firms to control 80 percent of the Hambantota port for a period of 99 years.[26]

The Pakistan corridor is projected to result in $50 billion of debt that will take Pakistan 40 years to pay off. Just like in Sri Lanka, Pakistan’s debt contract could ultimately result in a transfer of local assets to Chinese ownership. Some Pakistani critics refer to the corridor as “the new East India Company.”[27] Jane Golley of the Australian National University told a Financial Times reporter: “The lack of commercial imperatives behind OBOR projects means that it is highly uncertain whether future project returns will be sufficient to fully cover repayments to Chinese creditors.”[28]

Many projects are in Central Asian countries. It is clear some of these countries are suffering from “from weak and unstable economies, poor public governance, political stability, and corruption.” Chinese lenders are not always blind to risks but many “are being pressed to lend to projects that they find less than desirable.[29] An Economist article indicates that Chinese government sources expect “to lose 80 percent of the money they invest in Pakistan, 50 percent in Myanmar, and 30 percent in Central Asia.” This is not just speculation. China has recently lost $60 billion in Venezuela as it descended into chaos.[30]

In addition to this, the Chinese foreign currency reserve is rapidly declining as many companies and individuals are moving their money out of China due to an unprecedented anticorruption campaign and political uncertainty. Thus, Beijing has erected new barriers designed to stem the exodus of capital outflow. In this context, there are two channels through which capital is fleeting from China: first, state-driven, politically motivated, and commercially dubious deals that have backfired on Beijing in the past; second, capital that is going to safer places in the name of the OBOR initiative.[31] One result of the state driven overseas investment will add to China’s fast-growing debt burden, “now standing at more than 250 percent of GDP.”[32]

Not All Roads Will Make Economic Sense

Building major railway lines, one of the primary goals of the initiative, may not make economic sense, even though rail transport is faster and greener than shipping by sea. Turloch Mooney, senior editor of Global Ports writes, “The cost of shipping a 20 foot-equivalent unit by rail to Europe still averages around five times more than by ocean, and the capacity constraints of trains and rail infrastructure compared with ocean-going vessels mean that, while rail services have the potential to create a significant dent in air cargo volumes, they will most likely never account for more than one to two percent of ocean volumes.” To ship cargo from Suzhou to Warsaw, ocean freight takes 40 days and creates 2.1t of carbon emissions.[33] Now, more and more Chinese companies are shipping goods to Europe via rail but for every five containers going to Europe, only one comes back filled with goods. The other four, unfortunately, come back via ships.[34]

Tom Holland published an article on April 24, 2017 in the South China Morning Post declaring, “The idea of a ‘Belt and Road’ rail cargo route between Europe and China remains nothing more than a fanciful curiosity.”[35] The online magazine Quartz elaborates:

“There is really no need to use trains to increase commerce between Europe and China. Sea cargo transportation is much cheaper, and companies already rely on it. More than 19,000 containers can be placed on a single cargo ship, and they only take 30 days from Europe to reach China. The railway is faster than a shipping container, but is also riskier because it goes through a few unstable countries and can be interrupted by extreme weather, terrorist attacks, and politics. China is trying to justify its domestic overproduction by creating the One Belt, One Road, and framing it as a business strategy that is also beneficial for other nations, but the actual benefit for some trading partners and the long-term global economy is still to be seen.[36]

There Are More Important Things than Roads

In the name of investing overseas, state-owned Chinese companies have experienced spectacular failures, costing the Chinese government an astronomic amount of money. The unexpected decision by the Myanmar government to suspend the Myitsone Project may have cost the Chinese government $3 billion.[37] The Chinese company involved in the deal firmly believed its agreement with the military-controlled government of Myanmar was ironclad.

The toppling of Gadhafi in Libya led to at least $6 billion in losses as Chinese companies all had to abandon their projects.[38] One of the leading investors in Libya, the Sinohydro Group, said it had never imagined a strong leader like Gadhafi could be overthrown.

The China Railroad Group signed a high-speed train deal with the Venezuelan government worth $7.5 billion although it was clear that country did not have money, electric power, and density of population to sustain such a project. It launched a project even after the Venezuelan government defaulted on repaying a loan of $18 billion from China. The project is now worth nothing.[39] The Belt and Road initiative is only about three years old and there have already been failures and losses of immense proportions. More will certainly come.

Failures are bound recur in the coming years and the Belt and Road initiative surely will be littered with projects that are costly and unsustainable white elephants. In fact, this is already happening. A Chinese scholar recently came back from Ethiopia and said the electric railroad built by the Chinese from Addis Ababa to Djibouti – hailed as one of the first landmark accomplishments – in fact made only one run with a diesel locomotive, and has been idle since completion. When asked why, the scholar said, “Well, there is no electricity to power the trains. The hydraulic power plant is yet to be built.”[40]

Conclusion

Any of the factors discussed above could prevent the Belt and Road initiative from achieving its lofty goals and lead China into a financial abyss. It cannot be China’s exclusive endeavor and needs to enlist support from all countries in the world to make it a success. To do that, China needs to be transparent about its geopolitical considerations, decision-making processes, and financial arrangements.

Market forces and not just state investment must be employed. Social dynamics and political uncertainties in each country where a project is launched must be carefully scrutinized. The Chinese government cannot blindly force state enterprises to delve into projects and by the same token, state enterprises must not obediently do what they are asked without due diligence on projects.

Signs are emerging that silent resistance against reckless and mindless Belt and Road projects may be shaping up. China’s overall investment in such projects has dipped despite the central government’s recent demand for more and larger investments in related projects. China’s decision to be part of a globalized market and to follow rules and laws required by this market has enabled China to launch the Belt and Road initiative in the first place. To ignore global market rules is short-sighted and suicidal in the long term.

The initiative is not just about development and prosperity. It is also about China transforming itself from a mere player and benefactor of globalization to a reformer and leader of the international order. Beijing must be aware that before all roads lead to Beijing, it must study past development failures and avoid strategic arrogance and national selfishness; it has to learn that the new roads will go nowhere if they are paved with national glory and supremacy and not common destiny and co-prosperity. Without a broad view, few roads will lead to Beijing.

[1] Lack of transparency will be a significant hurdle for many European countries to fully participate in the OBOR. A Guardian report dated May 15, 2017 said, “The EU has dealt a blow to Chinese president Xi Jinping’s bid to lead a global infrastructure revolution, after its members refused to endorse part of the multibillion-dollar plan because it did not include commitments to social and environmental sustainability and transparency.” See Tom Philipps, “EU backs away from trade statement in blow to China’s ‘modern Silk Road’ plan”, Guardian, May 15, 2017, at https://www.theguardian.com/world/2017/may/15/eu-china-summit-bejing-xi-jinping-belt-and-road.

[2] Xi Jinping, “Work Together to Build the Silk Road Economic Belt and The 21st Century Maritime Silk Road”, May 14, 2017, at http://news.xinhuanet.com/english/2017-05/14/c_136282982.htm and  “Building ‘One Belt, One Road’: Concept, Practice and China’s Contribution,” May 10, 2017, at https://eng.yidaiyilu.gov.cn/zchj/qwfb/12731.htm.

[3] “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road,” at https://eng.yidaiyilu.gov.cn/qwyw/qwfb/1084.htm.

[4] “China signs over 130 transport pacts with Belt and Road countries,” Xinhua, April 21, 2017, at http://news.xinhuanet.com/english/2017-04/20/c_136224127.htm

[5] “Building ‘One Belt, One Road’: Concept, Practice, and China’s Contribution,” May 10, 2017.

[6] Ibid.

[7] Xi Jinping, “Work Together to Build the Silk Road Economic Belt and The 21st Century Maritime Silk Road”

[8] Ibid.

[9] Jonathan E. Hillman, “OBOR on the Ground: Evaluating China’s ‘One Belt, One Road’ Initiative at the Project Level,” at https://www.csis.org/analysis/obor-ground-evaluating-chinas-one-belt-one-road-initiative-project-level.

[10] Jan Perlez and Yufan Huang, “Behind China’s $1 Trillion Plan to Shake Up the Economic Order,” May 13, 2017, at https://www.nytimes.com/2017/05/13/business/china-railway-one-belt-one-road-1-trillion-plan.html?_r=0.

[11] “India refuses to be part of China’s Belt-Road initiative,” at http://www.business-standard.com/article/news-ians/india-refuses-to-be-part-of-china-s-belt-road-initiative-117051300941_1.html

[12] For the five “new’s”, check out the Center for China and Globalization, “Paths to Win-Win Cooperation Along the B&R: A Proposal to Enlist Global Partners”, at http://www.ccg.org.cn/Research/View.aspx?Id=6593.

[13] BBC, “China invests $124bn in Belt and Road global trade project,” May 14, 2017, at http://www.bbc.com/news/world-asia-39912671.

[14] James Griffiths, “Just What Is This One Belt, One Road Thing Anyway?,” May 11, 2017, at http://www.cnn.com/2017/05/11/asia/china-one-belt-one-road-explainer/.

[15] Nikkei Asian Review, “Asian neighbors still leery of China’s Belt and Road initiative,” May 16, 2017, at http://asia.nikkei.com/Spotlight/New-Silk-Road-summit-in-Beijing/Asian-neighbors-still-leery-of-China-s-Belt-and-Road-initiative.

[16] Perlez and Huang, “Behind China’s $1 Trillion Plan to Shake Up the Economic Order”

[17] Ibid.

[18] REUTERS/Asahi, “Ten gunned down near China “Belt and Road” projects in Pakistan,” May 13, 2017, at http://www.asahi.com/ajw/articles/AJ201705130043.html.

[19] Tom Hancock, “China encircles the world with One Belt, One Road strategy,” May 3, 2017, FT, at https://www.ft.com/content/0714074a-0334-11e7-aa5b-6bb07f5c8e12.

[20] David Dollar, “Yes, China is investing globally–but not so much in its belt and road initiative,” May 8, 2017, at https://www.brookings.edu/blog/order-from-chaos/2017/05/08/yes-china-is-investing-globally-but-not-so-much-in-its-belt-and-road-initiative/.

[21] Ibid.

[22] The American Interest, “One Belt, One Road, One Boondoggle?,” May 11, 2017, at https://www.the-american-interest.com/2017/05/11/one-belt-one-road-one-boondoggle/.

[23] Hillman, “OBOR on the Ground: Evaluating China’s ‘One Belt, One Road’ Initiative at the Project Level”

[24] Perlez and Huang, “Behind China’s $1 Trillion Plan to Shake Up the Economic Order”

[25] Ibid.

[26] Dipanjan Roy Chaudhury, “China may put South Asia on road to debt trap,” The Times of India, May 2, 2017, at

http://timesofindia.indiatimes.com/world/south-asia/china-may-put-south-asia-on-road-to-debt-trap/articleshow/58470014.cms.

[27] Syed Irfan Raza, “CPEC could become another East India Company,” October 18, 2016, at https://www.dawn.com/news/1290677.

[28] Hancock, “China encircles the world with One Belt, One Road strategy”

[29] Ibid.

[30] Douglas Bulloch, “As China’s Belt & Road Forum Approaches, the Initiative Itself Remains a Distant Dream,” Forbes, May 12, 2017, at https://www.forbes.com/sites/douglasbulloch/2017/05/12/chinas-belt-and-road-initiative-remains-a-distant-dream/#607489c32d8a.

[31] Hancock, “China encircles the world with One Belt, One Road strategy.” According to Jörg Wuttke, president of the European Chamber of Commerce in China, In the face of downward pressure on the renminbi, the initiative has been hijacked by Chinese companies, which have used it as an excuse to evade capital controls, smuggling money out of the country by disguising it as international investments and partnerships. OBOR has also “provided cover for the acquisition of less productive and often trophy assets, such as European football clubs. Chinese tycoons have acquired about 100 of these to date.” See Jörg Wuttke, “Xi Jinping’s Silk Road is under threat from one-way traffic,” May 11, 2017, at https://www.ft.com/content/61c08c22-3403-11e7-99bd-13beb0903fa3.

[32] Perlez and Huang, “Behind China’s $1 Trillion Plan to Shake Up the Economic Order.” According to Oxford University scholars, “For over three decades, China has experienced a staggering public investment boom. In 2014, China spent US$4.6 trillion on fixed assets, accounting for 24.8 percent of total worldwide investments and more than double the entire GDP of India. But China’s investment boom has coincided with a rapid buildup of debt. Between 2000 and 2014, China’s total debt grew from US$2.1 trillion to US$28.2 trillion, an increase of US$26.1 trillion — greater than the GDP of the United States, Japan, and Germany combined.” See Atif Ansar and Bent Flyvbjerg: “China’s Great Wall of Debt,” November 28, 2016, at

http://www.eastasiaforum.org/2016/11/28/chinas-great-wall-of-debt/.

[33] “East Wind: a new era of freight between the UK and China,” February 20, 2017, at http://www.railway-technology.com/features/featureeast-wind-a-new-era-of-freight-between-the-uk-and-china-5740643/. The author of this article writes, “For that niche section of import-exporters who cannot afford to wait months for product delivery, but are also concerned about their carbon footprint, the rail service is bound to be a great new alternative.”

[34] “Empty Containers on Sino-Euro Trains Signifies the Tragic Future of OBOR,” May 17, 2017,at http://mp.weixin.qq.com/s/pqhq8SykbjoTRP80bln3Cg..

[35] Tom Holland, “Puffing across the One Belt, One Road rail route to nowhere,” This Week In Asia, South China Morning Post, April 24, 2017.

[36] “It costs twice as much to export olive oil from Spain using China’s ‘One Belt, One Road’ railway,” at https://qz.com/686816/the-view-from-spain-chinas-one-belt-one-road-railway-is-an-unnecessary-folly/.

[37]Mike Ivesmarch, “A Chinese-Backed Dam Project Leaves Myanmar in a Bind,” New York Times, March 31, 2017, at https://www.nytimes.com/2017/03/31/world/asia/myanmar-china-myitsone-dam-project.html

[38] Asianew.it, “Heavy losses for Chinese companies operating in Libya,” February 26, 2011, at http://www.asianews.it/news-en/Heavy-losses-for-Chinese-companies-operating-in-Libya-20887.html.

[39] “High Speed Train Project in Ruins and 7.5 Billion USD Wasted,” December 25, 2016, at http://cj.sina.com.cn/article/detail/1680937367/132128.

[40] Interview with a scholar from the Chinese Academy of Social Science, Beijing Conference Center, May 24, 2017.

The post Will All Roads Lead to Beijing? Risks and Challenges in China’s “Belt” and “Road” Plan appeared first on China Research Center.

Shortly after he was anointed CCP’s general secretary in November 2012, Xi Jinping went to Shenzhen to pay tribute to Deng Xiaoping. Xi said that reform had entered into the zone of deep waters and that it was necessary to muster political courage and wisdom to seize the opportunity to deepen reform measures in important areas. Xi declared that in order to remain focused on the correct direction for reform, both ideological shackles and obstruction by special interest groups should be removed. Political commentators were euphoric, and all eyes were fixed on the upcoming Third Plenum. Some were optimistic that there would be significant measures in the political reform arena.

But many were disappointed by the series of remarks made by Xi since he replaced Hu Jintao as CCP’s leader. He talked about national rejuvenation and the rise of China and asked all Chinese people to dream the Chinese dream. He lamented that when the Soviet Union collapsed there was not a good man around to stop the fall. He called on the military to be ready to fight and to win wars. There was a glaring absence of the kind of thinking that Xi had presented in 2010. That year, during a speech at the Central Party School in Beijing, Xi said all CCP members should pay attention to the issue of power authorization and the fact that CCP’s power was bestowed by the people. The five-character term that “power comes from the people” (权为民所赋) sent a cheerful breeze to the political reform community in China because popular bestowing of power to the CCP would certainly involve a set of procedures that has always been missing from CCP’s action, despite the common chant that people are the “masters” of the state. Nonetheless, hope lingered that Xi was an open-minded Communist leader who believed political power derives from the people and a fixed process to bestow that power must be introduced. If such a proposal were to be discussed and written into the Plenum resolution, meaningful political reform would soon unfold in China.

Crushing Disappointment

Those who placed high hopes on Xi Jinping and expected the Third Plenum to engage in icebreaking measures in the arena of political reform were very much disappointed when they read the language on political reform in the Resolution that was adopted. Chapter Eight of the Resolution is entitled “Strengthen the Construction of Socialist Democratic Political System” and it contains three sections detailing how the CCP wants to expand and deepen democratization. The first section focuses on improving China’s People’s Congress system with high-sounding language, declaring that the congresses at all levels adopt laws and make the most important decisions. It emphasizes that “people’s government, people’s court and people’s procuratorate are elected by, responsible to and supervised by the people’s congresses.” China has people’s congresses at five levels: township/town, country/district, municipal, provincial and national. There are about three million directly (at township/town and county/district levels) and indirectly elected people’s congress deputies. This means Chinese people, at least on paper, have no less representation than their counterparts in democratic nations.

If the people’s congresses can do what they are charged to do by law and by the Resolution, there would be more accountability and transparency at all levels of the government and the so-called letter and visitation channel through which ordinary people try to file complaints against corrupt, abusive or negligent officials would become obsolete immediately. Sadly, the Resolution has not addressed the actual weakness of the people’s congress system. It made no mention of measures to correct the deficiency. The most serious problems of the people’s congress system in China are that 1) the Party still runs roughshod over it, and most party secretaries at the provincial level also are chairs of the standing committee of the provincial people’s congress; and 2) elections of the deputies, both direct and indirect, are not fair and competitive. When the foundation is soft and the top subject to Party control and manipulation, the people’s congress system cannot play a meaningful role. In this sense, the Resolution has simply repeated what had been for the past three decades and broke no new ground.

The second section elaborates on deliberative democracy, which is different from the kind of deliberative democracy that is known in the West. While Western deliberative democracy is usually applied at the grassroots level with societal activists pushing the government to be more transparent and accountable, the Chinese deliberative democracy discussed in the Resolution refers to the united front and its platform, the political consultative conference system. The actors on this stage are retired government officials, members of the eight democratic parties, celebrities, famous people without party affiliations and model workers. They are noisy, sensitive to social and political developments and keen on making policy recommendations but there is very little evidence this high-flying platform is having policy impacts at any level.

The last section talks about grassroots democracy, which includes village self-government, urban resident self-government, and worker self-government. Direct village committee elections and village self-government used to be the beacon of China’s expanding democratization. Urban residential committee elections have never been very competitive. Employee committees have always been attached to unions, which have never been rights bargaining mechanisms. The drafters of the Resolution seemed unable to clear a path for real grassroots democracy.

All in all, Chapter Eight of the Resolution calls for expansion of orderly political participation by Chinese citizens but offers little detail in delineating the specific channels through which participation will be allowed and become meaningful. The old wine was poured into a new bottle. The subsequent disillusion and disappointment in the political reform community is palpable. The sense is that Xi Jinping is no longer a credible champion of political reform. Disappointed as they are, Chinese scholars have tried to see the best in a worst-case scenario. Sun Xiaoli, a professor at the National Academy of Public Administration, makes two points when asked by the media why there is little mention of political reform in the Resolution: 1) deepening and expanding economic reform is in itself political; and 2) there is enough space created by the Resolution to plot further political reform.

A New Space in the Making

If Chapter Eight of the Resolution offered disappointment about political reform, Chapter Twelve provides a rhetorical opening for the pursuit of social justice. This section lists a plethora of measures that call for deepening of social reform. The most important seems to be an effort to ensure a more equitable distribution of wealth through a more seriously graduated income tax, and creation of a larger and wider social security net. The following paragraph in the Resolution sounds like a page from President Franklin D. Roosevelt’s New Deal:

We will regulate income distribution procedures and improve the regulatory systems and mechanisms and policy system for income distribution, establish an individual income and property information system, protect legitimate incomes, regulate excessively high incomes, redefine and clear away hidden incomes, outlaw illegal incomes, increase the incomes of low-income groups, and increase the proportion of the middle-income group in society as a whole. 

The lack of a more equitable distribution of wealth no doubt stirs anger deep within Chinese society, but according to Harvard sociologist Martin Whyte, this has not led to an eruption of unrest. His surveys indicate that Chinese people are more upset by social discrimination that favors the large urban centers. For example, a Beijing high school graduate can enter Peking or Tsinghua University with a 500-point score on the national college entrance exam, but a similar person from Changsha in Hunan Province needs a score of 600 or more to get into these universities. The Resolution makes it clear that authorities will tackle this kind of regional discrimination through reforming the matriculation system and giving universities more authority in admitting students.

It is indeed shameful for CCP to call China a socialist country when it has a healthcare system that builds in the kind of injustice that characterized segregation in the U.S. South before the Civil Rights Movement. Whether one in China can get good and comprehensive healthcare depends on your rank, your income and your residency. Hundreds of millions of Chinese farmers did not have any kind of health insurance until a few years ago when a new rural cooperative healthcare system was introduced. But in comparison to the benefits extended to the urban dwellers, government employees and military personnel, Chinese farmers still have to travel very far to receive proper care. They also must bear a larger financial burden to pay their healthcare costs. Therefore, the CCP vows to “deepen the comprehensive reform of grass-roots medical and healthcare institutions, and improve the network of urban and rural basic medical and healthcare services.”

Civil servants, military personnel and Party officials in China have the best pension system and retirement benefits. Ordinary residents of China have inadequate pensions, and many older people are dependent on their children for senior care. The only social security anchor for the farmers used to be the family plot of land. The pension system introduced by the government two decades ago is not entirely portable and management of social security funds is not transparent, making it highly susceptible to misuse and illegal transfer. The primitive nature of this system is highlighted by the proposed measures to reform it:

We will adhere to the basic old-age insurance system that combines social pools with individual accounts, improve the individual accounts system, complete the incentive mechanism in which those who contribute more will get more, guarantee the rights and interests of the insured, place basic old-age pension under unified national planning, and uphold the principle of balance based on actuarial mathematics.

These social reform measures, if fully implemented, would change the nature of the Chinese government overnight, making it more concerned with providing services to its citizens than with regime survival and enforced obedience to its reign. But these reform measures must have popular input, open access to government information, transparency, and accountability to be successfully implemented. In other words, without institutionalizing popular participation in deciding and supervising which social services are going to be provided and how they are going to be provided, these reform measures will either fail or will become window dressing to hoodwink people. If the CCP is serious about implementing what it has proposed in the Resolution, it will need to adopt relevant political reform measures, even if that occurs through an indirect process.

Civil Society

While many praise the proposed economic reform measures, Chapter Thirteen of the Resolution contains language that is innovative and even revolutionary in the context of CCP leaders who see any call related to expanding civil society as subversive and an evil plan cooked in the hallways of the U.S. State Department and bunkers of the Pentagon. This part of the Resolution does begin by saying social governance reforms will be conducted under the leadership of CCP committees and government agencies at all levels. But this is followed by a few paragraphs that rarely appear in CCP’s societal governing circulars.

If its language were realized, Section 48 could help liberate society from crushing state domination and infuse a checking and balancing force that modern, progressive states possess. The section calls on authorities to “intensify efforts to separate government administration and social organizations, encourage social organizations to clarify their rights and obligations, and enforce self-management and play their role in accordance with the law.” The iron hand of the state is told emphatically to relax or even to move away because now the CCP wants “social organizations to provide public services that they are apt to supply and tackle matters that they are able to tackle.” According to the section, “These organizations can directly apply for registration in accordance with the law when they are established. We will strengthen the management of social organizations and foreign NGOs in China, and guide them to carry out their activities in accordance with the law.”

Liberating as it sounds, there are challenges to putting these reform measures in place. First, the law that is supposed to govern the registration and management of the NGOs has yet to be submitted to the National People’s Congress for review and adoption. At this point, only a few cities in the south allow the registration of NGOs under provincial or municipal regulations. Second, the CCP has made it clear that it wants only certain kinds of NGO: trade associations, chambers of commerce, scientific and technological associations, charity and philanthropic organizations, and urban and rural community service organizations. NGOs with political missions or the intention to hold government accountable are not encouraged to form and can be declared hostile and illegal forces threatening social and political order. It is not a good sign that NGOs whose mission is to conserve nature and protect the environment are not mentioned as preferred social organizations.

What is even more alarming is that seven months after the adoption of the Resolution, there appears to be a concerted effort to investigate which institutes of the Chinese Academy of Social Sciences have been penetrated by foreign NGOs or foundations. This revelation came from a speech made by a member of the Central Commission on Discipline Inspection when he spoke at the Institute of Modern History. The CCP evidently does not want to govern foreign NGOs according to law, as was indicated in the Resolution. It simply desires to see them disappear in China. It is possible that many Chinese universities, colleges and existing NGOs will be subject to the same kind of investigation. Small wonder that many partners of Westerns NGOs have backed out of joint projects since late last year.

Chapter Thirteen ends with a proposal to establish a public security apparatus that includes creating a national security council that will coordinate with all national agencies involved in safeguarding national interests in information-gathering and decision-making. Unlike the U.S. National Security Council, whose sole mission is to stop threats that originate from abroad, the Chinese NSC would also respond to domestic threats to political and social stability. In traditional CCP discourse, all NGOs, domestic or foreign, are seeds of domestic instability, sources of so called “color revolutions” that are funded by Western powers eager to undermine the rise of China or to lead China into the wilderness of disintegration. Wang Zhenyao, former Ministry of Civil Affairs official and current dean of the China Institute of Philanthropic Studies at the Beijing Normal University, told the media that half of the one million NGOs in China are underground because of fear. These NGOs cannot register, dare not register, and will certainly not be able to register because the government sees them as enemies of the state. The stability maintenance apparatus nurtured by Zhou Yongkong—who is currently the subject of a criminal investigation in China—has been more richly funded than the country’s defense establishment. Many reform-minded Chinese hope the ouster of Zhou, who has been seen by many as the single most daunting obstacle to the growth of China’s civil society, may create an opening to expand civil society. When the Resolution was made public there was initial euphoria and media hoopla about the potential of this reform measure. It is too early to say that social reform is dead but not too late to say political reform will never be real and meaningful when there is no vibrant civil society and NGOs are always met with iron fist of the state.

The final balance sheet

In an interview with a newspaper in 2012, Zhou Ruijin, a retired media professional who is a strong advocate of political reform in China, said China’s reform, although interconnected and interwoven to a large extent, will have to be divided into three phases, namely economic, social, and political. The first phase of economic reform began in 1978 and was somewhat completed by 2004. The social reform phase began in 2010 and shall be completed by 2025. The final and the most important phase of the reform may kick in by 2030.

No Chinese leader, from Mao Zedong to Xi Jinping, has ever set a timetable for political reform. When asked in 1945 how the CCP would avoid the notorious dynastic cycles of the previous emperors, Mao said to Huang Yanpei proudly but vaguely that the CCP had found a miraculous mechanism to ward them off: democracy. During his negotiation with British politicians on the transfer of sovereignty of Hong Kong to China in 1986, Deng Xiaoping predicted that China might adopt national presidential elections by 2050 after overcoming the wealth, educational, economic, and geographic gaps between urban dwellers and rural residents. A year later, at CCP’s Thirteenth National Congress, Zhao Ziyang submitted a seven-point political reform package. This is the first time the CCP had introduced a political reform action plan. It did not have a five-year-plan kind of timetable and was quickly shelved after the political turmoil in 1989. It was not until 2008 when another top Chinese leader, Wen Jiabao, brought up a political reform plan that had implementable specifics. In a meeting with John Thornton, former chairman of Goldman Sachs, Wen outlined a three-prong action proposal: 1) direct elections moving up from villages to towns and to counties; 2) restraining government power via independent judiciary oversight; and 3) enhancing government accountability through a freer and more autonomous media. It appeared this proposal was more of Wen’s own personal aspiration than a CCP institutional push. He made his ambitious statement only to foreigners and never conveyed it to his own people.

Almost six years passed between Wen’s lofty plan and the adoption of the Resolution of the Third Plenum. In between, Xi came to power, Bo Xilai, a Politburo member of CCP’s Seventeenth Congress, was sentenced to life in prison, and two former high CCP officials—General Xu Caihou, a vice chairman of the Central Military Commission, and Zhou Yongkang—were placed under Party investigation and will eventually go to jail. The legitimacy of the CCP is under unprecedented self-inflicted assault. Will serious political reform be entertained? Prospects may seem unlikely, but if Xi Jinping is serious about keeping the CCP in power by making it less corrupt, more responsive to the people and more easily accountable to the people, political reform cannot wait until 2030 as was suggested by Zhou Ruijin. After all, there is a timetable that Xi and his Party are racing to keep. The goal is that China will become a democratic, prosperous, and wealthy nation in 2049 at the People’s Republic’s centennial. China watchers can measure whether the Xi Administration is moving closer to the timetable by examining how the Party is implementing proposed measures to 1) redistribute wealth via a new tax scheme and cast a wider social security net that includes all people regardless of differences in employment, residency, race, or age and 2) allow NGOs and other societal forces to participate in building China into a fairer and more just state. If the CCP can achieve this goal without instituting any political reform measures such as free speech, free elections, free press, and a judicial system free from CCP manipulation, the world will need to take a second look at China’s development and governance model. There may indeed be such as thing called Chinese exceptionalism. But that prospect seems dubious. Chinese leaders likely will find that democracy cannot be ushered in without thorough and deep political reform.

The post Where Is Political Reform in Xi Jinping’s Reform Scheme? appeared first on China Research Center.

Read a Short History of the Party Congresses

The Congress clarified at least some things. First, in a year of the shockingly public airing of the Communist Party’s dirty laundry in the form of the Bo Xilai and other scandals, the top positions were handed to the men who were long touted to receive them: Xi Jinping and Li Keqiang. Beyond that, the conservative Jiang Zemin faction dominated, and Hu Jintao’s power was circumscribed. It is clear that the Xi-Li administration will not waver from the economic reform opened by Deng Xiaoping three decades ago. But there is no roadmap to political reform, despite a great deal of talk about the need to deal with corruption and bureaucracy.

Prelude to the Congress

To understand the political changes unveiled at the Congress, some background is necessary. In the years leading up to the event, China’s economy surpassed that of Japan to become the second largest in the world. Beijing awed the world with its successful 2008 Summer Olympic Games. The celebration of the 60th anniversary of the founding of the People’s Republic in 2009 also was a smash. The relationship with Taiwan, due to the KMT’s success at the polls and Hu Jintao’s open-mindedness, was calm and productive. At the same time, social disturbances continued to grow, escalating according to some scholars to about 180,000 in 2010. The expanding gap between the rich and the poor became a rallying cry for the new left, which openly praised Mao Zedong and tried to turn nostalgia into policies.

Hu Jintao signaled that the CCP would promote political reform, but there was no follow through. On July 23, Hu declared in a speech at the Central Party School that the CCP would introduce political reform. Hu said reform must be conducted within the framework of three pillars: the supremacy of the CCP leadership, people being masters of their own destinies, and rule of law. At the time, many observers indicated this speech would establish the tone of political reform in the upcoming political report to be delivered by Hu at the Congress. Judging from the speech, nothing new would be produced at the Congress. Indeed, there was no breakthrough announcement about how the CCP would introduce political reform or what shape it might take. Neither an action plan nor timetable was offered. Hu’s political swan song, like all his policy speeches, was boring, listless, and utterly devoid of an implementable plan.

Bo Xilai makes his move

Bo Xilai, a Politburo member who was sent to Chongqing as Party Secretary, executed populist programs in a masterful fashion, at least for a time. Playing on leftist sentiments, he unleashed a populist campaign that inspired many in China who were concerned about the growing gap between the rich and the poor. The campaign also planted fear among many who despised his overbearing leadership style, manipulation of the media, and neglect of the rule of law.

Bo deeply resented his assignment to the southwestern metropolis of more than 30 million people, and his populist initiatives were part of his strategy to get back to Beijing with the goal of being named to the Standing Committee of the Politburo at the 18th Congress. He believed he was qualified to be vice premier, and many top leaders, including Xi Jinping, went to Chongqing to praise his achievements. During a meeting with a few foreign NGO representatives, a top advisor for Bo Xilai boasted that his boss would move into the Standing Committee. The only uncertainties were when and which portfolio Bo would take. The possibilities were the premiership, the propaganda portfolio, or the job overseeing the Party’s law enforcement arm.

Bo was playing on neo-Maoism as a solution to corruption, which had become a cancer spreading wide and deep at a time when the leadership seemed stalled. Hu Jintao and Wen Jiabao continued to govern without vision, imagination, and bold measures despite popular sentiment in favor of political reform. At the top, a split seemed apparent. While Wen Jiabao kept talking about China needing political reform and embracing universal values, other top leaders ignored him. When Tunisia, Egypt and Libya were engulfed by the Arab Spring, the top leadership strengthened media controls and the gigantic stability maintenance apparatus was revved into high gear against any sign of a Color Revolution in China. In March 2011, Wu Bangguo, the number two man of the nine-member Standing Committee, declared in his opening speech to the annual session of the National People’s Congress that China would adhere to “Five Nos,” namely, 1) no multiple party system, 2) no diversity in ideology, 3) no checks and balances and bicameral parliament, 5) no federal system, and 6) no privatization. In July, at the celebration of the 90th anniversary of CCP’s founding, Jiang Zemin did not appear, leading to speculation that he had already died. When he did attend the October 10 meeting to commemorate the centennial of the Republican Revolution, Jiang appeared to be frail and weak, creating more uncertainty about behind-the-curtain power arrangements. Meanwhile, the economy was slowing down, the relationship with the United States was on a downward slide because of Washington’s pivot to Asia, and decision-making at all levels of the party-state began to slow down in anticipation of the power transition that would take place in the fall of 2012.

At this time of gathering challenges, the CCP needed a smooth 18th Congress to maintain its leadership, political stability, and unity. The usual controls on the official media were in place, and, as usual, the Chinese people themselves had no say in who would be named to leadership posts. But two other things had changed. The international press focus on the upcoming leadership changes would be more intense than ever, and social media inside China had become a new, more potent vehicle for politically helpless citizens to make comments and spread “secrets” about China’s byzantine politics. Still, at the beginning of 2012, there was no sign that the power transfer could suffer a meltdown that was unprecedented in the history of CCP.

A series of events changed all that:

• On February 6, Wang Lijun, the deputy mayor of Chongqing who had just lost his position as police chief of the city, walked into the U.S. Consulate General in Chengdu and requested political asylum. This shocking incident eventually led to Bo Xilai’s dismissal from all leadership positions, his expulsion from the CCP, and his wife’s conviction of murdering a British businessman.
• On March 18, a Ferrari crashed near the North Fourth Ring Road in Beijing with the driver killed on the spot and two half-naked women severely injured. The driver turned out to be the son of Ling Jihua, who was Hu Jintao’s chief of staff and widely expected to be elevated to the Politburo at the 18th Congress. Despite his efforts at cover-up, the facts were “leaked” and shocked Party officials. A few retired Party leaders led by Jiang Zemin intervened, and Ling was transferred to the United Front Work Department.
• On June 29, New York-based Bloomberg news service stepped into unchartered political waters in China by reporting on the family wealth of Xi Jinping. According to public documents compiled by Bloomberg, as Xi climbed the Communist Party ranks, his extended family expanded their business interests to include minerals, real estate and mobile phone equipment. Those interests involved investments in companies with total assets of $376 million. They included an 18% indirect stake in a rare earths company with $1.73 billion in assets and a $20.2 million holding in a publicly traded technology company. The report said, “The figures don’t account for liabilities, and thus don’t reflect the family’s net worth.”

All eyes were on Xi Jinping and there was speculation that this “foreign intervention” might derail his ascension to the top. But Xi continued to appear in public and behaved like a man ready to take the reins in October. Then in early September, Xi suddenly disappeared. His scheduled meeting with United States Secretary of State Hillary Clinton on September 3 was canceled, and a Chinese Foreign Ministry official told upset American officials that Xi had sustained shoulder injuries. Xi also missed the scheduled meeting with the Danish prime minister on September 10, and no official explanation was given. This set off furious speculation on the Internet that either the physical or political health of the 59-year-old Xi was failing. A Chinese language website hosted in North America even put out an unverified report that there was an assassination attempt on Xi, and that He Guoqiang, a fellow member of the Politburo Standing Committee, also was wounded in a separate incident. The Chinese government kept silent until Xi resurfaced without prior announcement on September 20 when he visited China Agricultural University.

Another bombshell dropped on October 30, 10 days before the 18th Congress was to open in Beijing. The New York Times reported that many relatives of Wen Jiabao, including his mother, son, daughter, younger brother, and brother-in-law, had become extraordinarily wealthy during his tenure in office. A review of corporate and regulatory records indicated that the prime minister’s relatives — some of whom, including his wife, had a knack for aggressive deal-making — controlled assets worth at least $2.7 billion. Both the English and Chinese versions of the Times website were shut down in China hours after the report came out. The Chinese Foreign Ministry spokesperson declared that the report was false. Two U.S.-trained lawyers threatened to sue the paper. Overseas Chinese websites began to publish accounts that Wen’s family was clean. However, there was no official rebuttal from Wen himself.

The CCP nevertheless muddled through, and the 18th Congress opened and closed without any glitches. On November 15, the new members of the 18th Central Committee met and “elected” the Politburo and Standing Committee. To the surprise of many, neither Li Yuanchao, former Minister of Organization, nor Wang Yang, Party Secretary of Guangdong Province, was placed in the Standing Committee. Both are known to be reform-oriented, and their failure to move into the top tier is indicative of the conservative nature of the new leadership. With the exception of Xi Jinping and Li Keqiang, the other five members of the Standing Committee — Zhang Dejiang (NPC), Yu Zhensheng (Chinese Political Consultative Conference), Liu Yunshan (Secretariat), Wang Qishan (Central Discipline Commission) and Zhang Gaoli (State Council) — all appeared to be handpicked by Jiang Zemin or his allies. A bigger surprise of the first plenary session of the 18th Congress was that Hu Jintao relinquished his chairmanship of the Central Military Commission, and then Xi was “elected” to succeed him. Both Hu Chunhua (who will replace Wang Yang in Guangdong) and Sun Zhengcai (who already became the Party secretary of Chongqing) moved to the Politburo. Barring any unforeseen developments, in a decade, Hu and Sun will become China’s top two leaders.

Political writings on the wall

Looking back at the rocky road to the 18th Party Congress, we offer some tentative observations on CCP politics in action. It is worth noting that this is just the second time in CCP history that a power transfer was peaceful and predictable. Despite fierce power struggle and factional rivalry, no attempt was made to challenge the pre-agreed setup that involved Xi becoming CCP general secretary and Li Keqiang being named premier. The next generation of the top leaders is also in the pipeline. It is unclear whether this so-called method of top leader chosen by the retiring leaders once removed (i.e. Hu Jintao chosen by Deng Xiaoping, Xi Jingping by Jiang Zemin, and Hu Chunhua by Hu Jintao) can be sustained. The best that can be said is that without real intra-Party competition for the top leadership, the current arrangement is a step-forward.

It also is worth nothing that the unseemly convention of geriatric politics continues inside the CCP. Jiang Zemin demonstrated great influence in determining who was elevated to the Standing Committee. Li Peng was probably instrumental in eliminating reformer Li Yuanchao from the race to the top. Other retired leaders might have played roles in removing Ling Jihua, whose son was killed in the Ferrari crash, from contention for the Politburo. Li Changchun could have been the crucial factor in getting Liu Yunshan into the Standing Committee.

That said, the era of political domination by elderly, retired leaders may slowly be coming to an end. Hu Jintao’s inability to hang onto the Military Commission chairmanship signaled a repudiation of Jiang Zemin’s ability to exercise power once the Congress had finished its work. Just a day after Xi Jinping replaced Jiang as the chairman of the military commission, he praised Hu Jintao as a person of high integrity and moral standards. This is tantamount to criticizing Jiang in a very serious manner because he insisted on retaining the military commission chairmanship when he stepped aside as president and Party general secretary. Despite Hu’s inactivity on the political reform front, many hailed his last act — stepping down from the military commission — as the most memorable of his entire political career.

The jockeying for power at the top in the months before the Congress highlights the reality that the CCP is rife with factional disputes and conflicts of interests. The fact that five of seven members of the Standing Committee will have to retire in 2017 is evidence that the final lineup was the result of compromise and concession. Just like any other political party, the CCP has to face the reality of political dissent and allow intra-party competition. Power-sharing and consensus-building through negotiation is the first step toward intra-Party democracy. It is safe to say that the day may come when factional fights within the CCP become a zero-sum game and can no longer be contained, resulting in a break into two or more political parties. Democracy could come to China, not through social movements but by by virtue of top-down politics.

The days of non-interference in Chinese politics by foreign countries are gone now. The size of China’s economy and its international influence do not permit non-intervention. Second, the increasing tendency by CCP factions to leak sensitive information to further their quests for power and to undercut their rivals has enabled both mainstream Western media outlets and online Chinese-language entities to publish reports that are not available inside China. As a result, Western media and think tanks have fully engaged the Chinese political process, despite the utter opacity and secrecy of the inner workings of the Party. Western reporting and analyses play a role in the final outcome of Chinese politics. I n addition, the growing popularity of weibo in China has magnified the impact of these information channels. On the one hand, the dynamics of Chinese politics has changed because of rapid and omnipotent distribution of information that has put secret holders on the defense. On the other hand, it has created new ways for Chinese citizens to engage in Party politics in a way that was never available to them before.

Popular indifference inside China to official propaganda about the Congress coupled with intense interest in elections abroad also could be impetuses for political change in China. Organized efforts by the CCP to promote the spirit of the 18th Party Congress through publicity tours nationwide have remained a Party affair outside the life of ordinary Chinese citizens. In contrast, many Chinese people, including media outlets, spent a good deal of time reading, watching and thinking about power transfer through elections in countries such as Mexico, France, and the United States. These elections were fascinating and reminded the Chinese people what was lacking in their homeland.

The future of political reform

The need for movement on political reform is clear. For the CCP not to chart a new course in the wake of the Arab Spring, the Bo Xilai and Ling Jihua scandals, and the revelations of obscene amounts of wealth accumulated by the families of the top leader would be shocking to many reform-oriented scholars and political observers. Hu Wei, dean of the School of International Affairs and Public Administration, Shanghai Jiaotong University said China is facing a “three-D” crisis: social decay, social disorder and social divide. Only one “D”— democracy — could overcome the three-D corrosion. Historian Zhang Lifan wrote, if we do not see reform in five years we will see collapse in ten years. Sun Liping, professor of sociology at the Tsinghua University, recently told a gathering of both Chinese and foreign financial workers, “A silent revolution is taking place in China. The biggest force against reform in China is those who do not want to go back nor desire to move forward but to maintain the status quo. Reform and China will be like Taiwan. Without reform, China will be like the Qing dynasty.” Li Weidong, former publisher of the China Reform Magazine, said in a “Tweet” that the entire nation is daydreaming now and one of the new dreams is the so-called “three self-confidences.” (In his political report, Hu Jintao talked of the CCP’s unswerving endeavor to build socialism with Chinese characteristics and urged the Party to have self-confidence in roads chosen, theories adopted, and institutions established.) Li declared, “Not only is this a pipe dream, it may soon engulf China in a nightmare.” The most popular weibo nowadays is this: “Introducing reform means seeking death and not introducing reform means waiting to die.”

Where does Xi Jinping stand amid hope and frustration, expectation and anger? During his November 15 press appearance, Xi delivered a powerful pledge. He focused his messages on the nation, the people, and the Party. He spoke of the collective but not the individual; he advocated responsibilities but not rights; he called the Party to serve the people and change its work style, but there was little about institutionalizing accountability and transparency. He identified four cardinal problems the Party is facing: corruption, condescending, formalism, and bureaucracy. He said that unless the Party overcomes these challenges, it will not be able to lead the nation in building socialism with Chinese characteristics.

In 2002, shortly after the 16th Party Congress, Hu Jintao took all members of the Standing Committee of the Politburo to Xibaipo in Hebei Province, where Mao and his comrades lived and worked before marching to Beijing and establishing the People’s Republic. Hu vowed that the new leadership would call on all Party members to overcome arrogance, maintain integrity, and serve the people well. On November 29, Xi took “the magnificent seven” to the National Museum to see “The Road to Rejuvenation,” a Party history exhibition. He repeated everything he mentioned or alluded to in his November 15 speech. He talked about the destiny of the nation and the China Dream. He used three lines from the poems of Mao Zedong and ancient poet Li Bai to highlight China’s humiliating past, its glorious opening up and reform, and its bright future. Again, the focus was on a mysterious and historical Chinese collective.

To follow up his two speeches, on December 4, Xi convened a Politburo meeting that adopted a resolution to improve the work style and deepen the ties between the CCP and broad masses. Included were measures to cut Party circulars; reduce domestic inspection trips and foreign visits; prevent the blocking of roads when top leaders travel; eliminate profuse media reports; cut national meetings to only those absolutely necessary; stop publication of speeches; end the practice of traveling the country and writing inscriptions that become memorialized; and stop unnecessary meetings, ceremonies, and groundbreakings. Also in December, Xi made a trip to Guangdong. In Shenzhen, he placed a wreath in front of Deng Xiaoping’s statue and vowed not to deviate from the road of reform and opening up, a policy that was put in place by Deng Xiaoping in late 1978.

Xi’s performance in the wake of the Congress is impressive, and has made it very clear to both the Chinese people and the outside world that he has no intention to deviate from the road chosen by Deng Xiaoping and his cohorts 34 years ago. What is a bit disappointing is that he has not delineated a clear vision on the issue of political reform. In his political report to the Congress, Hu Jintao solemnly declared that China will not take the old road of xenophobia and lack of innovation, nor will it take the deviant road of implementing any reform that weakens the Party’s supremacy. There is no sign at this point that Xi Jinping will break away from this pledge.

However, people still remember what Xi Jinping said in a speech at the Central Party School in 2010: “The Marxist view of power can be summarized in two sentences: ‘power comes from the people’ and ‘power has to be used for the people.’ The first sentence highlights the source and foundation of power, and the second informs us of the essence and destiny of the power. The sole mission of the CCP is to serve the people heart and soul. This is the difference between the Marxist view of power and capitalist view of power.” The interpretation of this statement is that Xi may move forward with political reform, installing procedures through which the governed will offer their consent to the governing party. Even though Xi has great power because he is fully in charge of the Party and the military, he has not made any reference to his earlier statement that has inspired many in China.

Some suggest waiting for the Third Plenary Session of the 18th Party Congress to see whether the Xi-Li Administration is serious about introducing meaningful political reform. It was during the Third Plenary Session of the 11th Party Congress in December 1978 when Deng Xiaoping finally was able to marshal his political capital and move the Party from the narrow road of rigid ideology to the highway of pragmatic economic growth.

China’s growth dividends will expire soon. When they do, the CCP’s legitimacy will face daunting challenges and fierce questioning. The extent of corruption, the loss of trust, the increasing unemployment of the young and educated, and the opacity of decision-making may all become the trigger of a Chinese Spring. Will China muddle through and sustain its economic growth without making significant social and political changes? If it does, the model touted in Beijing of sustained economic development and authoritarianism will get a boost and pose a serious challenge to the conventional wisdom that political accountability is necessary for long-term, economic prosperity and social harmony. If not, the entire world will watch as turmoil engulfs China and very possibly shakes up the global power balance and ushers in a period of instability.

The post The 18th Party Congress: A Turning Point in Chinese Politics? appeared first on China Research Center.

After Mao’s fighters dismounted from their horses in 1949, they took up positions behind desks in a corner of the Forbidden City called Zhongnanhai. But Mao saw himself as a new emperor, and failed to establish a regular pattern for Party congresses. The 8th Congress was not held until September 1955. By this time the Party had grown to more than 10 million in members. The 9th Congress was not held until 1969, a full 14 years after the previous gathering. Liu Shaoqi, one-time anointed successor to Mao, was expelled from the Party at the 12th Plenary Session of the 8th Congress, and died shortly before the 9th Party Congress was convened, which established Lin Biao as Mao’s successor.

The 10th Congress was held in August 1973 with 1,249 delegates representing 28 million members. Only four years elapsed between the 9th Congress and the 10th, but many tumultuous events happened in-between. Moscow and Beijing clashed along their countries’ border, and Soviet leader Leonid Brezhnev even considered using nuclear weapons against China. Lin Biao died in a fiery crash in Mongolia in 1971. President Nixon visited China in 1972. Mao’s health was deteriorating. The Gang of Four, led by Mao’s wife, Jiang Qing, was leading the nation into a ditch of economic stagnation, ideological rigidity, and revolutionary fervor. The country was inching toward collapse.

Mao died in September 1976. Barely a month later, the Gang of Four was arrested and the new leader, Hua Guofeng, selected by Mao shortly before he died, vowed to follow Mao’s policies and dismissed Deng Xiaoping, who was also brought back by Mao to restore order. Mao’s comrades did not like Hua and they maneuvered to bring Deng back. Hua continued as the nominal leader, but decision-making was now in the hands of Deng.

The 11th Congress was held in August 1977. A five-year interval between CCP congresses was finally institutionalized. But transitions of power were yet to be institutionalized. Between December 18 and December 22, the 3rd Plenary Session of 11th Congress met in Beijing. Momentous decisions were made to abandon Mao’s legacy. The policy of reform and opening up was introduced. Three days before the meeting, Beijing and Washington decided to normalize relations. China was finally able to climb out of anger and isolation.

Ten years later, in October 1987, the 13th Congress was held. With support from Deng Xiaoping, General Secretary Zhao Ziyang formally announced that the Party would move forward with political reform. On April 15, 1989, Hu Yaobang – Deng Xiaoping’s first choice of Party Secretary, who was forced resign by the old guard of the Party – died. Popular mourning for him led to the tragic crackdown on June 4, 1989. Zhao Ziyang was dismissed from the position of General Secretary of the Party and Jiang Zemin, an obscure Party secretary in Shanghai, was abruptly brought in to be the new leader. Zhao was never allowed to appear again publicly, and he died in 2005.

In 2002, Jiang Zemin, who served as the CCP’s General Secretary for 13 years, finally stepped down. Hu Jintao, who was chosen by Deng Xiaoping as the fourth general leader and became a member of the Standing Committee of the Politburo in 1992, finally became the General Secretary. He assumed the presidency of the republic in March 2003, but Jiang Zemin did not relinquish his chairmanship of the Central Military Commission. He wanted to “babysit” Hu for a while. Wen Jiabao -who was Zhao Ziyang’s chief of staff and accompanied Zhao to Tiananmen Square where he bid farewell to the world – was now in charge of the State Council. Initially, there was euphoria about the new leadership. The Hu-Wen administration’s response to the case of Sun Zhigang and its efforts to inject accountability in the wake of the SARS outbreak convinced many in China that they were witnessing a New Deal. Hu and Wen’s emphasis on the welfare of the people rather than GDP growth alone also caught the imagination of the reform community. However, the signs of a can-do administration quickly dissipated. Even after Hu assumed the chairmanship of the Central Military Commission in 2005, there was no significant attempt to introduce political reform, despite Wen Jiabao’s repeated statements to foreign visitors that the Hu-Wen administration planned to do so.

In October 2007, the 17th Congress was held. Before the meeting, there was a lot of speculation about who would be named to the Standing Committee of the Politburo, and more important, who would be groomed to become top leaders of the fifth CCP generation. It was quite a surprise when Xi Jinping, who was only a member of the Central Committee, catapulted into the Standing Committee and was slated to be the next Party leader. Li Keqiang, who was Hu’s protégé and favorite to succeed him as president, was chosen instead to replace Wen Jiabao as premier in 2013. While details of the back room dealings of the personnel arrangement of the 17th Congress are yet to emerge, it is clear that Jiang Zemin was the chief engineer of the sudden shakeup at the top.

The post A Short History of the Party Congresses appeared first on China Research Center.

It’s the economy, stupid!

For starters, there is the massive economic downturn that has laid off no fewer than 20 million Chinese migrant workers. There is also the concern that millions of past and current college graduates will not be able to find steady jobs. Urban Chinese residents who live below the poverty line or have no unemployment benefits are being pushed deeper into misery. Restless migrants teaming up with well educated students have been the source of dynastic changes throughout China’s history. Furthermore, the legitimacy of the Chinese Communist Party (CCP) has been built on the claim that under its strong leadership, living conditions of the Chinese people have been on a 30-year rise. Economic devastation always generates anger and protest, but under China’s circumstances, it also can pose serious political challenges for the Party.

Don’t you see Westerners are pulling the strings ?

Sensitive to China’s political fragility and mindful of precedents set by Eastern European counterparts like Václav Havel, two Chinese dissidents drafted Charter 08, calling for the CCP to launch political reform in a meaningful way, including conducting elections, expanding freedom of speech and association, institutionalizing judicial independence and introducing a system of checks and balances. To the surprise of the government, Charter 08 was signed by many ordinary Chinese citizens despite the government’s Herculean effort to cleanse the Internet of all traces of the document.

While chasing and talking to those who have signed Charter 08, the Chinese government is also busy identifying the instigators. Targets are easy. Evil Westerners who are jealous of China’s enormous economic achievements and frustrated by Beijing’s capacity to absorb social and political shocks are the culprit. Not only were they funding the Charter 08 endeavor, they were also behind the taxi drivers’ strike and were trying to penetrate China’s trade union groups. At the recent annual sessions of the National People’s Congress and Chinese People’s Political Consultative Conference, there were calls from the deputies to increase jamming of Western broadcasting into China.

His Holiness is not holy at all

In this volatile climate, there are many anniversaries falling in 2009 which are adding fuel to the gathering conflagration and making the CCP more nervous. The first date on the calendar is the 50th anniversary of His Holiness Dalai Lama’s failed uprising against the central government. While Tibetans in exile commemorate the date on March 10, the Chinese government has changed it to March 28 and labels it as Serf Emancipation Day. All measures seem to have been taken to prevent the protests and riots that happened last year. Frustrated by what he sees as indifference and complicity, and forced to pacify the more radical members of Tibetan Youth Congress, His Holiness accused the Chinese government of “transforming Tibet into hell on earth” and extinguishing Tibetan culture and heritage. This will only harden the CCP leadership, blocking all possible channels of communication and efforts to restart negotiations aimed at creating a more autonomous Tibet within the realm of mainland China.

April is no fool’s month

Ten years ago, tens of thousands of believers of a faith developed by an ex-policeman, Li Hongzhi, surrounded Zhongnanhai, where the central leadership lives and works, and demanded official recognition of their belief. Surprised and humiliated by the effective and secret organization of the demonstration, the CCP eventually labeled the group as a cult and launched a nationwide crackdown. Falungong believers can no longer practice openly in China but they are doing very well outside the country, using low-tech (cultural performances and newspapers), high-tech (satellite jamming and web sites) and polemic (self-immolation, organizing withdrawals from the CCP and accusing the Chinese government of selling organs of imprisoned Falungongers) means to interrupt the business of the Chinese government. Although the group has not created any problems for the government in recent years, the possibility of it pulling another “stunt” inside China is always a concern for the Chinese government.

May is indeed all “red”

Nationalistic Chinese see “red” in May, not the “red” of the unity of proletariat of the world (International Labor Day falls on May 1) but the blood of Chinese being killed during the accidental bombing by a U.S. B-1 of the Chinese Embassy in Belgrade on May 8th ten years ago. Although the Clintons are very popular in China (Chinese like Hillary Clinton even more after her refusal during her recent audiences with Chinese top leaders to openly criticize China for its questionable ways of treating its own citizens), and President Barack Obama has inspired the Chinese about what democracy can achieve, if domestic instability looms large in China, the government may play the card of nationalism and demonize the United States. If this is the case, May 8th might be a sensitive date. The recent confrontation between the USS Impeccable and five Chinese “fishing” ships in the South China Sea certainly is contributing to the possibility of serious U.S.-China friction that may test the new Obama Administration and top Chinese leaders. The question is whether China and the U.S. can be good stakeholders, if not exactly partners, in dealing with global recession and other thorny matters.

But May has another important anniversary, namely, the 90th anniversary of the May 4th Movement. May 4th has a special place in Chinese people’s collective memory, a double-edged sword that can be used by different groups of people to serve divergent purposes. To those Chinese who are demanding political liberalization, May 4th is a symbol of rejecting China’s corrupt government, defying authorities and forcing China to adopt an alternative development model. In the eyes of those Chinese who declare that no Western-style democracy suits China, as was emphasized on March 10th by Wu Bangguo, chairman of the Standing Committee of the National People’s Congress, May 4th represents the epitome of China’s frustration over the hypocrisy of Western liberal democracy. After all, the entire movement was triggered by President Woodrow Wilson, who allowed Japan to take over China’s Jiaodong Peninsula. The perceived sellout by President Wilson, who championed national self-determination, caused severe disillusionment among a small group of Chinese intellectuals. They rejected Western liberal democracy and accepted the Soviet model as the solution to China’s crisis. They formed the CCP in 1921, which rose to power 28 years later. Both sides can play the anniversary in accordance with their political needs. It is extremely important for the government to seize the initiative.

June 4th is a day of “infamy”

Exactly a month after May 4th, there is the sensitive 20th anniversary of the June 4th crackdown in and around Tiananmen Square, a day of infamy for the Chinese democracy movement. The incident actually began on April 15, 1989, when Chinese students began to mourn the passing of Hu Yaobang, who had been dismissed from the position of general secretary of the CCP due to his liberal ideas, and ended on June 4th when tanks rolled into Beijing. A popular movement that called for democratization and an end to corruption was abruptly crushed. It was and is still being labeled as a riot aimed at overthrowing the CCP and the government. Every June 4th since 1989 Tiananmen Square has been put under special watch and nothing has really happened. Entering into the 20th year, there are renewed calls for the Chinese government to form a truth commission to confront the brutal acts of the government. Parents who lost their children during the incident have even begun to hold meetings in order to seek compensation and apologies. It is hard to imagine anything can happen on this particular day given the heightened alert of the government. Nevertheless, it is a day that the people’s government would like to wish away, a memory it would like to see evaporate.

October 1 is the golden birthday of the republic

The next big anniversary is October 1. Sixty years ago, Mao Zedong stood on top of Tiananmen and declared that the Chinese people had finally stood up. It is a day that was born out of blood and tears, a day that came after millions were killed during the civil war from 1945 through 1949, a day on which all Chinese are constantly reminded to be grateful for the CCP and to feel proud. This year, the proud Chinese people may feel even prouder when President Hu Jintao reviews a military parade at Tiananmen Square. Mao did it, followed by Deng Xiaoping and Jiang Zemin respectively. However, for the first time, there are questions regarding the necessity of such a civil-education event. Is it wise to do so when the economy is floundering? Is it worth spending so much for such a spectacle when funds can be better spent on improving the social security network and healthcare coverage for the farmers? Will People’s Liberation Army veterans, yet another group of people who feel angry about unfair treatment after serving the nation, be included in the parade? What about migrant farmers? Could they be included in the parade in addition to showing off the PLA’s war-making/nation-defending equipment?

General Fang Fenghui, Grand Marshall of the parade, told deputies of the NPC recently that all efforts will be made to save funds in preparing and organizing the parade. After all, will ordinary citizens of the republic be allowed to walk around the Square and observe the parade on the National Day? If they are, they will certainly be awe-struck and proud. But will they continue to believe that because they were liberated by the CCP, they must always and forever believe that the Party will always serve the people and secure a government of them, by them and for them? Since no one can guarantee such an answer, this day is, alas, also deemed sensitive.

2009 is not 2008

For all Chinese, 2008 was initially meaningful for only one thing: China hosting the Summer Olympic Games, an event seen as a coming-out party for China. In the months leading up to the big event, there was a snow storm in January that saw hundreds of thousands of migrant workers stranded in train stations in Southern China and power lines out of operation for weeks. There were violent protests against the presence of ethnic Han Chinese in Tibet and other areas inhabited by Tibetans. There were interruptions of the Olympic torch relay in foreign capitals, including London, Paris and San Francisco. And there was the May earthquake that claimed 90,000 lives. The Chinese government managed to overcome all these interruptions and successfully host the Summer Olympic Games. Many Chinese scholars claim that the unprecedented efforts of disaster relief through national mobilization in the wake of the earthquake in Sichuan, and the best ever Summer Olympic Games, have shown the world not only that China has entered the club of powerful nations but that its development model can also be applied to all other developing countries. Arguably, hosting the Olympic Games has rallied the Chinese nation. The absence of such a rallying cause and the worsening of the economy may make it harder for the Chinese government to sail through the year without major interruptions.

The country is big and the Party has to be strong

It is more than a little ironic that a government whose leaders are ideologically focused on whole-hearted service to the people would have no trust in the people and actually fear things could careen out of control in a year that should be dedicated to celebration and post-Olympic Game relaxation. It is sad to think there are other things that may make 2010 and 2011 sensitive so that activities of the media, NGOs and conferences would need to be restricted. Shanghai will host the World Expo in 2010, and 2011 is the centennial of the overthrow of the Manchu dynasty and the beginning of the republican era in China.

China has changed in the past 30 years since the beginning of opening up and reform, but one thing has yet to change: the government seems to be always possessed by fear: fear of possible social chaos, of losing the mandate of heaven, and of the possibility that the legitimacy of the CCP will be questioned by ungrateful citizens. Wu Bangguo, the number-two man of the nine-person CCP Politburo, declared on March 10th that without the CCP controlling everything, “a nation as large as China will be torn by strife and incapable of accomplishing anything.” The Party has to be strong, and any effort that is designed to weaken the Party is criminal and has to be relentlessly crushed.

The herd of ox is unpredictable

While government fear is constant, the people are no longer the same: they are no longer a herd of ox, quiet, obedient, blindly loyal and aimlessly hardworking. The majority of them is upset but silent. A small like-minded group of them likes to complain and is becoming keener on questioning the legitimacy of the Party. With social and economic conditions deteriorating, this small group may be able to mobilize the silent majority. Anniversaries and other small events could become the trigger for massive protests.

We will see how 2009, the year of the ox, is to be lived by the Chinese people and their leaders. Is it going to be a year of national pride or a year of lost hope for more change? We are waiting for the final verdict.

The post International Relations 2009: A Year of Audacious Hope or a Year of Utter Hopelessness? appeared first on China Research Center.