Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
The USA is dealing with huge problems and cannot afford to challenge China directly, but decided to stabilize the relations between both countries, says Shanghai-based business analyst Shaun Rein to CNBC-TV18. But the USA is for sure keeping economic pressure going, he adds.
China expert Victor Shih, Director of the 21st Century China Center at the University of California San Diego School of Global Policy and Strategy, discusses the current state of US-China relations with Bill Gertz of the Washington Post, covering questions like, “Is China an existential threat or a competitor?” and “Is China trying to replace the US as hegemon?” at PNYX.
Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
President Xi Jinping has touched down in the US for talks with US President Joe Biden in an effort to get the relations on track between both countries. China’s economy needs US investments, says Shanghai-based business analyst Shaun Rein at CNBC, but US firms fear Biden might announce more restrictions on trade with China. While the economy is doing bad, China is still the world’s largest retail market and the US cannot afford to stay away, he adds.
History called the communist party to save China, that is the way history is used by the party, says author Ian Johnson in a speech about his newly published book Sparks: China’s Underground Historians and their Battle for the Future in WorldOregon. But the official history doesn’t remain unchallenged. “Ian Johnson explores how some of China’s best-known writers, filmmakers, and artists have overcome crackdowns and censorship to forge a nationwide movement that challenges the Communist Party on its most hallowed ground: its control of history,” says the website.
“Based on years of first-hand research in Xi Jinping’s China, Sparks challenges stereotypes of a China where the state has quashed all free thought, revealing instead a country engaged in one of humanity’s great struggles of memory against forgetting—a battle that will shape the China that emerges in the mid-21st century.”
In short, don’t expect huge breakthroughs. Gone are the days when presidents and premiers met Chinese leaders and came back with a briefcase full of business deals or other “deliverables.” And that’s not a bad thing. Those meetings were often empty, and many of the deals didn’t pan out—letters of intent to invest often languished, and China sometimes promised market access without delivering. Even though it’s easy to reject “empty talk,” it’s important that top leaders keep the channels of communication open.
Isn’t that true for all countries?
No, it matters more in dealing with China. The reason is that Beijing makes it hard for U.S. officials to understand who is advising Xi or what the decision-making channels are. Last year, Xi was appointed to an unprecedented third term as general secretary of the Chinese Communist Party, a position that essentially allows him to run China indefinitely. (Earlier this year, he got a third term as president, but this is an honorific title in the Chinese political system.) Now that he’s ended term limits and has this new third term, Xi is surrounded by people who owe their allegiance to him almost exclusively. Meanwhile, people of Xi’s age—he turned seventy earlier this year— have all retired. Also worrying is that China’s foreign and defense ministers both appear to have been sacked, and the heads of the military’s prestigious Rocket Force were also purged earlier this year, two rare examples of trouble at the top. The changes make it even harder to fathom who is running the show beyond Xi and his immediate circle of loyalists.
So there’s a real possibility that Xi is surrounded by yes-men, who might not want to tell him bad news. In this context, it matters that the president of the United States can talk to him directly to explain why American perceptions of China are so negative and what the direct risks this could bring.
It’s not clear, for example, if Xi is directly aware of risky maneuvers by the Chinese military in recent weeks—notably, the buzzing of a U.S. bomber flying in international airspace. Decisions about such exercises are probably made by commanders on the ground, but they are based on guidelines issued by Beijing. Letting Xi know directly that these events are dangerous and potentially catastrophic could be useful.
During his life, former Prime Minister Li Keqiang was mainly remembered for being side-lined by Xi Jinping. But after his sudden death he might become a problem for his former boss, writes author Ian Johnson at the Council on Foreign Relations, as it might be used as a way for the hidden criticizing of Xi.
Ian Johnson:
The sudden death of former Chinese premier Li Keqiang is the latest in a steady series of crises, mishaps, and blunders to afflict top leader Xi Jinping over the past two years.
The official Xinhua news agency said in a terse report that Mr. Li, 68, died of a heart attack early Friday morning in Shanghai. The death clearly caught Chinese officialdom off guard because an obituary had not been prepared, with the agency saying one would be issued later.
Mr. Li’s death is unlikely to alter the power dynamic at the top of China’s leadership. He had already retired from all posts and was not part of Xi’s inner circle. Although often seen as a pro-reformist moderate in contrast to the more authoritarian-minded Mr. Xi–he held a PhD in economics, and was seen as quick-witted–he never appeared to challenge his boss’s hardline policies. Compared to his more dynamic predecessors, especially the hard-charging Zhu Rongji in the 1990s and the reform-oriented (if tainted by family corruption) Wen Jiabao in the 2000s, Mr. Li was easily one of the most colorless premiers in the nearly 75-year history of the People’s Republic.
Xi Jinping has been building up a new government structure and the just-installed Central Financial Commission will be key in making financial decisions for the central government, says political analyst Victor Shih in the Financial Times. The “de facto watchdog, planner, and decision maker for China’s US$61tn financial sector, weakening the power of state institutions such as the People’s Bank of China and China Securities Regulatory Commission.”
The Financial Times:
Wang Jiang, a veteran state banker, has been appointed executive deputy director of the office of the commission, reporting to He Lifeng, a vice-premier and Xi’s new economic tsar, the people familiar with the new body said.
Victor Shih, professor of Chinese political economy at the University of California, San Diego, said businesses should expect to be affected by the commission, which will have the final say on important deals including major mergers and joint ventures.
Shih said the commission would also control mid-level state financial sector personnel appointments and the regulations applied by government agencies. State institutions such as the central bank have already suffered a decline.
Since August, the chairs of some state banks have in effect outranked the PBoC governor in the Communist party hierarchy.
China has entered a new era, where the communist party has changed its contract with the people, says economist Arthur Kroeber, according to Bloomberg. The new iteration? It’s called values-based legitimacy.
Bloomberg:
China’s recent economic performance and policymaking have prompted a slew of economists—Bloomberg’s included—to lower their estimates of the country’s trend growth rate for coming years. But don’t count on this to undermine the Chinese Communist Party’s grip.For decades, the CCP encouraged the idea that its legitimacy flowed in large part from stoking rapid growth. Deng Xiaoping, the Chinese leader famous for his “reform and opening up” mantra, declared that development is the “hard principle” driving policy. Year after year, China’s leaders have touted GDP figures showing how the party was delivering on this mandate.
Go back further than Deng and you’ll find a different contract between Beijing and its people. Mao Zedong’s initial version was ensuring the common people won the “class struggle” against land-owners and businesspeople (in part through mass killings).
These days, Xi is writing up another contract, says Arthur Kroeber, a China economist and founding partner at Gavekal Dragonomics. In a recent lecture, he said “there’s a fairly extensive propaganda effort going on to shift away from that old social contract,” in part to avert mass criticism of a slowdown in Chinese growth.
The new iteration? It’s called values-based legitimacy.
What are the components of this new contract? They include culture, history, nationalism and an anti-corruption drive aimed at easing concerns about rising inequality.
One of the first things Xi Jinping did after being named general secretary of China’s ruling Communist Party was tour an exhibition at the National Museum on the eastern edge of Tiananmen Square.
It was called “the Road to Rejuvenation.” News photos showed Xi and other top leaders standing reverently before photos and artifacts that traced the long arc of China’s modern history. The symbolism was hard to miss.
In his new book Sparks: China’s Underground Historians and their Battle for the Future, Pulitzer prize-winning journalist Ian Johnson says Xi unveiled the concept of the “China Dream” at the museum on that fall day in 2012. “That goal was closer at hand than at any time in recent history, Xi said, because the nation had learned from its history,” Johnson writes.
In the following years, Xi would put on display a dogged obsession with controlling the historical narrative — shuttering independent journals, muzzling outspoken scholars, jailing critics he accused of “historical nihilism,” and re-drawing the boundaries around school curricula.
Yet through it all, a handful of people chronicling China’s “grassroots history” has been fighting back. Johnson calls it a movement, and his book tells their stories.
They are people like the filmmaker Ai Xiaoming, who made a documentary about an all but forgotten forced labor camp in the desert. And the journalist Jiang Xue, who has protected the history of an underground journal from the late 1950s that attempted to record the privations, and desperation, experienced during the famine resulting from the Great Leap Forward.
China veteran Ian Johnson published earlier this month China’s Underground Historians and their Battle for the Future, “Based on years of first-hand research in Xi Jinping’s China, Sparks challenges stereotypes of a China where the state has quashed all free thought, revealing instead a country engaged in one of humanity’s great struggles of memory against forgetting―a battle that will shape the China that emerges in the mid-21st century.”
In the China Project, Ian Johnson discusses his book with Kaiser Kuo.
The China Project:
Ian: Well, I think that we have to realize that this state, currently under Xi Jinping, as powerful as it is, it has not crushed all free thought. That there’s still people in China today who are availing themselves of basic digital technologies and just person-to-person contact to keep alive a different vision of China. I will be giving a talk in New York with my interlocutor Gal Beckerman who wrote a book called The Quiet Before. It basically talks about the slow burn process of how social movements take off. They don’t take off all right away. They take off with slow person-to-person contacts. I think this is something that you can see from this book, that there is this group, tens of thousands of people, this small collective memory of a different kind of China that could be, and that they’re still at it and they’re still active.
If we’re looking for interlocutors in China, and people are always like, “Who do we talk to? We can’t talk with the Communist Party.” These are the kind of people we could be talking to more. We could be inviting them. It stuns me that there’s not been a major retrospective at a big film festival of Hu Jie, of his films. I mean, he’d made three classic documentary films. He’s made it more, but three of them are just outstanding. These kinds of things, I think we should be more aware of them. This would also give people a different view of China. There are so many people in the West who see China as this monolith with just bad commies running the show. And while there may be some truth to that, it’s important to realize that there are other people out there too, and that they’re significant in number.
They’re not all just beleaguered victims about to be arrested right away. They have agency and they’re doing interesting stuff, and we should try to engage with them. Go over, visit them, bring our university, start up university exchanges more. Especially us going there. All those things are takeaways that I put in the conclusion. And because I am working at the Council on Foreign Relations, I have to have a little bit of a policy wonk takeaway thing. That’s in the conclusion of my book as some things that we could consider as implications of these stories.
China’s rules are building a divide with the rest of the world, similar to the Berlin wall Russia started to build last century, says China veteran Ian Johnson in news.com.au. “Speech is more restricted than ever. Community activities and social groups are strictly regulated and monitored by the authorities,” he explained.
News.com.au:
“China’s rulers seem to be building and perfecting their own 21st-century version of the Berlin Wall,” said Council on Foreign Relations senior fellow Ian Johnson.
“Using the tools of the digital age, Xi transformed China’s wall from an ad hoc assembly of rules and regulations into a sleek, powerful apparatus.
“In doing so, however, it may instead be repeating the mistakes of its Eastern bloc predecessors in the middle decades of the Cold War.”…
The CFR’s Johnson argues China’s “economic problems are part of a broader process of political ossification and ideological hardening”.
“Speech is more restricted than ever. Community activities and social groups are strictly regulated and monitored by the authorities,” he explained.
“And for foreigners, the arbitrary detention of businesspeople and raids on foreign consulting firms have – for the first time in decades – added a sense of risk to doing business in the country.”…
The end result, added Johnson, is Xi’s own version of Nikita Khruschev’s Berlin Wall, which was put up in 1961 to isolate the Soviet Union from the West.
“Even though he had recently won an unprecedented third term as party general secretary and president and seemed set to rule for life, public mistrust was higher than at any previous point in his decade in power,” said Council on Foreign Relations senior fellow Ian Johnson.
“But none of that happened … Beijing has clung to a strategy of accelerating government intervention in Chinese life.”
“The deeper effects of this walling-off are unlikely to be felt overnight,” said Johnson.
Creative, well-educated and dynamic people still fill China’s universities, corporations and bureaucracy. But they’ve lost the incentive to be such.
“To visit China today is to enter a parallel universe of apps and websites that control access to daily life,” Johnson added.
“For outsiders, ordering a cab, buying a train ticket, and purchasing almost any goods requires a Chinese mobile phone, Chinese apps, and often a Chinese credit card.
“On one level, these hindrances are trivial, but they are also symptomatic of a government that seems almost unaware of the extent to which its ever more expansive centralisation is closing the country off from the outside world.”
Former China correspondent and author Ian Johnson was forced to leave the country in 2020 and revisited China earlier in 2023 for Foreign Affairs. He found a country in stagnation, that was used to double-digit growth, but lost its economic glamor, the former power base of the Communist Party. Strict government regulations changed China he knew. Also, information on his latest book Sparks: China’s Underground Historians and their Battle for the Future.
Ian Johnson:
In the early months of 2023, some Chinese thinkers were expecting that Chinese President Xi Jinping would be forced to pause or even abandon significant parts of his decadelong march toward centralization. Over the previous year, they had watched the government lurch from crisis to crisis. First, the Chinese Communist Party had stubbornly stuck to its “zero COVID’’ strategy with vast lockdowns of some of China’s biggest cities, even as most other countries had long since ended ineffective hard controls in favor of cutting-edge vaccines. The government’s inflexibility eventually triggered a backlash: in November 2022, antigovernment protests broke out in Chengdu, Guangzhou, Shanghai, and Beijing, an astounding development in Xi’s China. Then, in early December, the government suddenly abandoned zero COVID without vaccinating more of the elderly or stockpiling medicine. Within a few weeks, the virus had run rampant through the population, and although the government has not provided reliable data, many independent experts have concluded that it caused more than one million deaths. Meanwhile, the country had lost much of the dynamic growth that for decades has sustained the party’s hold on power.
Given the multiplying pressures, many Chinese intellectuals assumed that Xi would be forced to loosen his iron grip over the economy and society. Even though he had recently won an unprecedented third term as party general secretary and president and seemed set to rule for life, public mistrust was higher than at any previous point in his decade in power. China’s dominant twentieth-century leaders, Mao Zedong and Deng Xiaoping, had adjusted their approach when they encountered setbacks; surely Xi and his closest advisers would, too. “I was thinking that they would have to change course,” the editor of one of China’s most influential business journals told me in Beijing in May. “Not just the COVID policy but a lot of things, like the policy against private enterprise and [the] harsh treatment of social groups.”
But none of that happened. Although the zero-COVID measures are gone, Beijing has clung to a strategy of accelerating government intervention in Chinese life. Dozens of the young people who protested last fall have been detained and given lengthy prison sentences. Speech is more restricted than ever. Community activities and social groups are strictly regulated and monitored by the authorities. And for foreigners, the arbitrary detention of businesspeople and raids on foreign consulting firms have—for the first time in decades—added a sense of risk to doing business in the country.
Former China bull Shaun Rein explains to Ian Bremmer how he changed into a bear during the corona crisis last year. In a wide-ranging exchange of thoughts, he points to the lack of trust and communication between China and the US. And is China moving in the direction of socialism?
The disappearance of former foreign minister Qin Gang has triggered off a spate of rumors. China veteran Ian Johnson looks into what this means for the position of China’s top leader Xi Jin Ping.
China business veteran Shaun Rein discusses with Cyrus Janssen how China has faced challenges since it opened up post-Corona. Outbound travel has not resumed, expected revenge spending did not happen and consumer confidence is at the lowest rate ever. No, he says, China is not yet back to normal, because consumers sit on their corona savings, unwilling to spend. And foreign investors, while CEOs are going to China, are hesitant to resume investing in China, at least till the end of 2023. But support for Xi Jinping is still he, he sees. Though, expect a tough 10-20 years.
The disappearance of former foreign minister Qin Gang has triggered off a spate of rumors. 