Good Riddance to 2018


December 23, 2018

Good Riddance to 2018

Those who oppose democracy, the rule of law, and multilateralism have had a good year. But there have also been signs suggesting that those who uphold these principles have not lost the will to fight back.

MADRID – Sadly, 2018 will not be remembered as a year of political and diplomatic success. Though the international order had already begun to erode in 2017, the global political environment became downright chaotic, combustible, and hostile this year. That is no coincidence, as these are perhaps the three adjectives that best describe the United States under President Donald Trump.

Since January 2018, when the Trump administration announced tariffs on imported solar panels and washing machines, the year has been marked by an escalating “trade war,” waged primarily – but not exclusively – by the US against China. The ongoing tariff disputes have seriously undermined the World Trade Organization and deepened mutual distrust in Sino-American relations.

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For its part, China this year eliminated presidential term limits, raising fears that President Xi Jinping’s so-called new era will end the period of collective leadership ushered in by Deng Xiaoping’s reforms, which were themselves a corrective to Mao’s cult of personality. This move could also herald a further deviation from Deng’s trademark foreign-policy restraint.

Similarly, Russian President Vladimir Putin was reelected in March, to no one’s surprise. Under Putin, Russia has been re-emerging as a geopolitical force. And yet, its economy is essentially stagnant, owing in part to its excessive dependence on hydrocarbons. In the absence of growth, Putin has relied on foreign policy to shore up his domestic popularity.

For example, Putin’s campaign press secretary welcomed the British government’s response to the nerve-agent attack on Sergei and Yulia Skripal, because it may have mobilized Putin’s supporters in the run-up to the presidential election. And the Kremlin’s recent decision to blockade Ukrainian ports in the Sea of Azov may also have been designed to boost Putin’s domestic approval rating, among other goals. The danger now is that both the US and Russia will cease to implement the 1987 Intermediate-Range Nuclear Forces Treaty, posing a new and acute threat to Europe in particular.

 

Meanwhile, the Middle East has continued to serve as a battlefield for some of the world’s most violent conflicts. Though the Islamic State (ISIS) has continued to lose ground, it is far from defeated – contrary to what Trump has claimed – and the death toll in Syria’s civil war continues to climb. Likewise, the humanitarian calamity in Yemen has deepened, though negotiations that ran aground in 2016 have at least resumed and made some progress. In Afghanistan, what is widely regarded as the longest-running war in US history continues, and it is estimated that the Taliban now controls more territory than at any time since their government was overthrown in 2001.

Despite some recent developments in the aforementioned conflicts, the underpinnings of the Trump administration’s general strategy in the Middle East remained intact in 2018. The US has reaffirmed its support for the axis of Israel, Saudi Arabia, and the United Arab Emirates, which it regards as a bulwark against Iran. In May, the Trump administration moved the US embassy in Israel to Jerusalem. That same month, it abandoned the 2015 Iran nuclear deal and announced an abusive re-imposition of extraterritorial sanctions, which reflects the increasing .

Moreover, by siding with the Saudi government over his own intelligence agencies in the of journalist Jamal Khashoggi in October, Trump has made clear that opposing Iran and purchasing US arms is one of the quickest ways to his heart. The result of his broad approach to the Middle East has been to empower military hardliners throughout the region. In fact, Israel and Iran this year engaged in their first-ever direct military encounter.

 

Trump has also contributed, in one way or another, to the advance of populism around the world in 2018. In Latin America, Mexican President Andrés Manuel López Obrador (AMLO) and Brazilian President-elect Jair Bolsonaro have shown that “populism” can encompass diverse ideologies. While both claim to speak for “the people” against “the elites,” the leftist AMLO was elected partly as a rebuke to Trump, whereas Bolsonaro embraces a Trump-like brand of right-wing nationalism, and enjoys the support of many Brazilian elites.

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Trump has also contributed, in one way or another, to the advance of populism around the world in 2018. In Latin America, Mexican President Andrés Manuel López Obrador (AMLO) and Brazilian President-elect Jair Bolsonaro have shown that “populism” can encompass diverse ideologies. While both claim to speak for “the people” against “the elites,” the leftist AMLO was elected partly as a rebuke to Trump, whereas Bolsonaro embraces a Trump-like brand of right-wing nationalism, and enjoys the support of many Brazilian elites.

The Russian philosopher Aleksandr Dugin, often regarded as one of the Kremlin’s main ideologues, argues that “populism should unite right-wing values with socialism, social justice, and anti-capitalism.” This “integral populism,” he believes, is perfectly illustrated by Italy’s current governing coalition, which comprises the anti-establishment Five Star Movement and the nationalist League party.

In October, Italy’s government instigated a conflict with the European Union (which has fortunately subsided) by proposing a budget that defied EU fiscal rules. Italy’s leaders justified their policies in the name of an outdated interpretation of “sovereignty,” one similar to that of the United Kingdom’s Brexiteers, whose haphazardness has left the UK’s future shrouded in uncertainty.

There were a few positive developments in 2018. Certainly, the easing of tensions between the US and North Korea, and the even deeper rapprochement between North and South Korea, should be welcomed. Much credit belongs to South Korean President Moon Jae-in, who used the occasion of the Winter Olympics in Pyeongchang to reach out to North Korean leader Kim Jong-un. Trump’s subsequent turn toward diplomacy – which led to his historic summit with Kim – should also be applauded, though his administration has yet to achieve anything more than symbolic progress toward denuclearization of the Korean Peninsula.

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The result of the US midterm elections was also good news. Democratic control of the House of Representatives means that, from January 2019, there will be more checks on Trump’s policies. And there have been welcome developments in the Republican-controlled Senate, where a recent resolution condemning Saudi Crown Prince Mohammed bin Salman for the murder of Khashoggi, and another to end US support for the Saudi campaign in Yemen, passed with bipartisan support.

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In Europe, the prospects for 2019 will depend primarily on three factors: Brexit, German Chancellor Angela Merkel and French President Emmanuel Macron’s push for EU reform, and the European Parliament election in May. In each case, one hopes that the supporters of democracy, the rule of law, European integration, and multilateralism will prevail.

Those who oppose these principles have had a rather good year. But they would be mistaken to think that those who uphold them have lost the will – and the ability – to cultivate a spirit of cooperation and harmony.

*Javier Solana was EU High Representative for Foreign and Security Policy, Secretary-General of NATO, and Foreign Minister of Spain. He is currently President of the ESADE Center for Global Economy and Geopolitics, Distinguished Fellow at the Brookings Institution, and a member of the World Economic Forum’s Global Agenda Council on Europe.

 

 

Navigating the new international economic policy landscape


December 22, 2018

Navigating the new international economic policy landscape

by Shiro Armstrong and Peter Drysdale, ANU
http://www.eastasiaforum.org/2018/12/19/navigating-the-new-international-economic-policy-landscape/

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The United States under President Donald Trump is on a mission to add economic policy to the armoury of national security policy to deal with a rising China. The approach holds the global economic order hostage to the attempt to put China back in its box. The stakes are as high as they get. But how should middle powers like Australia and its neighbours like Japan or Indonesia respond to the hard choices they now confront?

Using economic instruments for geopolitical objectives is nothing new. Between the two world wars the practice ended in wholesale military conflict. But the US inspired post war rules-based international regime extended US political influence through the spread of open markets at the same time as it constrained the use of trade sanctions for political security objectives (although not completely as United Nations-based economic sanctions became a feature of the geopolitical action).

‘Geoeconomics’ — conventionally defined as the use of restrictions on international commercial transactions to achieve political objectives — is now being touted as a new force in international and security relations that should be brought into active play.

Without understanding the economic implications of international economic policies, alongside their political and security implications, however, the ill-considered use of economic policy for geopolitical objectives will produce misguided policies that damage both economic and national security.

That’s exactly what the United States is doing with tariffs on Chinese imports, increased barriers to investment and bilateral economic coercion in the name of national security. China is the main target but other countries, the WTO system and multilateral institutions are also under threat. These policies will make the United States poorer and weaker, and damage its status as a global leader. If other countries follow suit, they will make themselves and the world poorer, weaker, and less secure.

How should a country like Australia navigate a world in which its primary security ally and its largest economic partner are descending into destructive rivalry while still themselves being deeply economically integrated?

For some, the answer is to follow the United States further down this track and reframe foreign policy in security terms. In this conception, the only option is total alignment with US decoupling strategy, and every economic exposure to China is cast as an all-or-nothing risk to national security. No understanding of the economic costs or the security options enters this calculus. Nor are third countries assumed to be an effective object of policy engagement on an alternative, multilateral course with or without the United States.

For others, the answer is to add a geoeconomic approach to foreign policy. That might sound like a good idea but what exactly does that entail?

The intellectual origins of ideas about geoeconomics are twofold. The first is simply about the analysis of spatial, temporal, and political aspects of economies and resources. The second is a branch of geopolitics that interrogates international politics, security and economics and commonly insists that the same logic that underlies military conflict also applies to international commerce. The first idea is of interest, though marginal, to the big issues today. The second is the way of thinking about international commerce, that prominently undergirds that of Peter Narravo, US President Trump’s trade advisor, as an instrument of warfare. That idea has been hijacked by those focussed on security issues, absent hard economic calculation and comprehensive consideration of economic as well as political security that is ostensibly its purpose. Especially for small and middle powers such as Australia it’s a strategy that will sap both economic strength and national security.

The securitisation of all national interests reduces the policy space and instruments that can be deployed to enhance both economic and national security. Soundly framed international economic policies are central to reducing the costs of broader economic and political engagement, both in dollar and in policy terms.

Economic policy and engagement reinforce and habituate a rules-based international order and, significantly, they create a bigger, broader plurality of interests in countries that reduces the costs of national security.

If geoeconomics is the answer, it had better be informed by the agencies of hard economic analysis, not left to the agencies of diplomacy or security, else it too will be a security strategy bereft of judgment about national economic interest.

Take the large economic relationship that Australia has with China. A third of Australia’s exports go to China, led by education, natural resources and tourism. No economist would sensibly advocate deliberately reducing trade dependence on China, even if they consistently argue for broadening Australia’s range of economic relationships. Many in the political and security community do. It may be doable, but the question is at what cost and whether there are better options?

It’s not a matter of just the profits of businesses at the high end of town but people’s livelihoods that are put at risk. If Australia made the choice to cut back dependence on China, it would be withdrawing from trade with the world’s largest trading nation, a country that’s playing by rules to which we’ve all agreed. We certainly need more rules in some areas. But only Mr Navarro (and perhaps Mr Trump) would suggest that that’s a reason for tearing down the rules we have and that have worked quite well.

The right strategy is to manage economic interdependence within the multilateral trade regime and continue to build rules and markets that reinforce the global plurality of interests on which security within the global economic system is more soundly built. That system protects Australia effectively. It’s Australia’s primary national economic and security priority. It would be most unwise to acquiesce in tearing it down.

Shiro Armstrong is Director of the Australia-Japan Research Centre and Director of the Asian Bureau of Economic Research, The Australian National University.

Peter Drysdale is Professor of Economics and head of the Asian Bureau of Economic Research, The Australian ,The Australian National University.

The War on Huawei


December 20, 2018,Image result for huawei meng wanzhou

The War on Huawei

The Trump administration’s conflict with China has little to do with US external imbalances, closed Chinese markets, or even China’s alleged theft of intellectual property. It has everything to do with containing China by limiting its access to foreign markets, advanced technologies, global banking services, and perhaps even US universities.

 

NEW YORK – The arrest of Huawei CFO Meng Wanzhou is a dangerous move by US President Donald Trump’s administration in its intensifying conflict with China. If, as Mark Twain reputedly said, history often rhymes, our era increasingly recalls the period preceding 1914. As with Europe’s great powers back then, the United States, led by an administration intent on asserting America’s dominance over China, is pushing the world toward disaster.

The context of the arrest matters enormously. The US requested that Canada arrest Meng in the Vancouver airport en route to Mexico from Hong Kong, and then extradite her to the US. Such a move is almost a US declaration of war on China’s business community. Nearly unprecedented, it puts American businesspeople traveling abroad at much greater risk of such actions by other countries.

The US rarely arrests senior business people, US or foreign, for alleged crimes committed by their companies. Corporate managers are usually arrested for their alleged personal crimes (such as embezzlement, bribery, or violence) rather than their company’s alleged malfeasance. Yes, corporate managers should be held to account for their company’s malfeasance, up to and including criminal charges; but to start this practice with a leading Chinese businessperson, rather than the dozens of culpable US CEOs and CFOs, is a stunning provocation to the Chinese government, business community, and public.

Meng is charged with violating US sanctions on Iran. Yet consider her arrest in the context of the large number of companies, US and non-US, that have violated US sanctions against Iran and other countries. In 2011, for example, JP Morgan Chase paid $88.3 million in fines in 2011 for violating US sanctions against Cuba, Iran, and Sudan. Yet Jamie Dimon wasn’t grabbed off a plane and whisked into custody.

And JP Morgan Chase was hardly alone in violating US sanctions. Since 2010, the following major financial institutions paid fines for violating US sanctions: Banco do Brasil, Bank of America, Bank of Guam, Bank of Moscow, Bank of Tokyo-Mitsubishi, Barclays, BNP Paribas, Clearstream Banking, Commerzbank, Compass, Crédit Agricole, Deutsche Bank, HSBC, ING, Intesa Sanpaolo, JP Morgan Chase, National Bank of Abu Dhabi, National Bank of Pakistan, PayPal, RBS (ABN Amro), Société Générale, Toronto-Dominion Bank, Trans-Pacific National Bank (now known as Beacon Business Bank), Standard Chartered, and Wells Fargo.

None of the CEOs or CFOs of these sanction-busting banks was arrested and taken into custody for these violations. In all of these cases, the corporation – rather than an individual manager – was held accountable. Nor were they held accountable for the pervasive lawbreaking in the lead-up to or aftermath of the 2008 financial crisis, for which the banks paid a staggering $243 billion in fines, according to a recent tally. In light of this record, Meng’s arrest is a shocking break with practice. Yes, hold CEOs and CFOs accountable, but start at home in order to avoid hypocrisy, self-interest disguised as high principle, and the risk of inciting a new global conflict.

Quite transparently, the US action against Meng is really part of the Trump administration’s broader attempt to undermine China’s economy by imposing tariffs, closing Western markets to Chinese high-technology exports, and blocking Chinese purchases of US and European technology companies. One can say, without exaggeration, that this is part of an economic war on China, and a reckless one at that.

Huawei is one of China’s most important technology companies, and therefore a prime target in Trump administration’s effort to slow or stop China’s advance into several high-technology sectors. America’s motivations in this economic war are partly commercial – to protect and favor laggard US companies – and partly geopolitical. They certainly have nothing to do with upholding the international rule of law.

The US is trying to targeting Huawei especially because of the company’s success in marketing cutting-edge 5G technologies globally. The US claims the company poses a specific security risk through hidden surveillance capabilities in its hardware and software. Yet the US government has provided no evidence for this claim.

recent diatribe against Huawei in the Financial Times is revealing in this regard. After conceding that “you cannot have concrete proof of interference in ICT, unless you are lucky enough to find the needle in the haystack,” the author simply asserts that “you don’t take the risk of putting your security in the hands of a potential adversary.” In other words, while we can’t really point to misbehavior by Huawei, we should blacklist the company nonetheless.

When global trade rules obstruct Trump’s gangster tactics, then the rules have to go, according to him. US Secretary of State Mike Pompeo admitted as much last week in Brussels. “Our administration,” he said, is “lawfully exiting or renegotiating outdated or harmful treaties, trade agreements, and other international arrangements that don’t serve our sovereign interests, or the interests of our allies.” Yet before it exits these agreements, the administration is trashing them through reckless and unilateral actions.

The unprecedented arrest of Meng is even more provocative because it is based on US extra-territorial sanctions, that is, the claim by the US that it can order other countries to stop trading with third parties such as Cuba or Iran. The US would certainly not tolerate China or any other country telling American companies with whom they can or cannot trade.

Sanctions regarding non-national parties (such as US sanctions on a Chinese business) should not be enforced by one country alone, but according to agreements reached within the United Nations Security Council. In that regard, UN Security Council Resolution 2231 calls on all countries to drop sanctions on Iran as part of the 2015 Iran nuclear agreement. Yet the US – and only the US – now rejects the Security Council’s role in such matters. The Trump administration, not Huawei or China, is today’s greatest threat to the international rule of law, and therefore to global peace.

Jeffrey D. Sachs, Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, is Director of Columbia’s Center for Sustainable Development and of the UN Sustainable Development Solutions Network. His books include The End of Poverty, Common Wealth, The Age of Sustainable Development, Building the New American Economy, and most recently, A New Foreign Policy: Beyond American Exceptionalism.

Are we at ‘peak America’?


December 5,2018

Are we at ‘peak America’?

by Dr. Fareed Zakaria

https://fareedzakaria.com/columns/2018/11/29/are-we-at-peak-america

The Group of 20 summit in Argentina is taking place at a moment when the United States still stands at the center of the world. The U.S. economy is booming, the dollar is almighty, American technology companies continue to dominate the new digital economy, and the U.S. military remains the unrivaled master of land, sky and sea. But there are forces, both short-term and long-term, that are working to erode this hegemony.

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As Morgan Stanley’s Ruchir Sharma has pointed out, the global economy looks as if it’s at “peak America.” U.S. stocks have outperformed the rest of the world this decade, and that sort of trend rarely lasts. The current recovery is now the second-longest in history, and it is due for a downturn. Interest rates are rising, corporate profit growth is slowing, and budget deficits are surging. Even President Trump seems aware of the likelihood of a dip, which is why he has been preparing the ground for it, blaming the Federal Reserve for raising interest rates.

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But there are broader structural realities at work as well. While the United States continues to outperform other advanced economies, the “rise of the rest” also continues, with China, the world’s second-largest economy, growing at three times the pace of the United States. A quarter-century ago, China accounted for less than 2 percent of the global economy. Today, it is 15 percent and rising. China boasts nine of the world’s 20 most valuable tech companies.

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This economic reality is having a geopolitical effect. China is the largest trading partner of major economies in Latin America, Africa and Asia. That gives it clout. Its “Belt and Road Initiative” is designed to extend Beijing’s influence across Asia and beyond, creating not just a market but also a string of allies and dependencies. It has expanded its control over the South China Sea in ways that neither the Obama administration nor the Trump administration has been able to block or counter.

Anywhere one goes in the world these days, leaders talk about the United States’ retreat from the world stage. They note that it began before Trump. Most date it to the aftermath of the Iraq War, spanning the administrations of George W. Bush, Barack Obama and now Trump. And while the Trump administration is bellicose in its policies, especially on trade, they are all in service of a Fortress America mentality that seeks less engagement with the world, politically and economically.

Foreign leaders also note that the United States is likely to be increasingly constrained by its mounting budget woes. The Financial Times’s Gillian Tett points out that the U.S. government now spends $1.4 billion a day on its debt, 10 times more than the next major industrialized country does. As interest rates rise and more Americans reach the age of collecting Social Security and Medicare, the federal government will be unable to fund much else. Ezra Klein has quipped that the American government is “an insurance conglomerate protected by a large, standing army,” and that is becoming truer every day.

American retreat will not produce a better world. It will be messier and uglier. To get a glimpse of it, look at the Middle East today. As the United States has withdrawn from its traditional role as the region’s power-broker — maintaining relations with all sides and striving to achieve some degree of stability — Iran, Turkey and Saudi Arabia are all jockeying for influence. The United States has simply subcontracted its policy to Riyadh, encouraging the Saudis’ reckless behavior and resulting in the world’s gravest humanitarian crisis, the war in Yemen, where 12 million people are on the verge of famine.

At a time when these forces of entropy are intensifying, when the United States does face real constraints on what it can do internationally, the wisest strategy would be to bolster the international institutions and norms that the United States built after World War II, both to maintain some degree of stability and order and to preserve and extend American interests and values. The smartest path to constraining China comes not from a head-on policy of containment but rather from a subtle one that forces Beijing to remain enmeshed and interdependent with the international community. China recognizes this and tries hard to free itself from multilateral groups, preferring to deal one-on-one with countries where it will always tower over its negotiating partner.

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And yet, nothing animates the Trump administration more than its opposition to multilateralism of any kind. And so, as the world gets more chaotic, the forces that could provide order are being eroded. And as is so often the case, China simply watches quietly and pockets the gains.

(c) 2018, Washington Post Writers Group

Washington  Post

 

“Decoupling the US from Asia”


My Friends,
I am baffled why my good friend Larry Moy’s commentary titled “Decoupling the US from Asia” has been blocked.  I find nothing nothing wrong with it.  I am  now posting it, as an act of defiance as I resent anyone who attempts to deny me of my right promote freedom of  expression. Let me find out find out the problem, fix it and come back to you, Larry.—Din Merican

“Decoupling the US from Asia”

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<
<I’ve tried to post this in your blog column “Decoupling the US from Asia”. Looks like I’m completely blocked from your blog. Good living and good luck, my friend. It has been a great pleasure knowing you. If you would like to do one last of my post to your blogt the recent summits of the ASEAN and APEC forum, Mike Pence played the role of “teleprompter Trump”, gave up America’s Asia game plan for 2019. And it won’t be pretty for policymakers, markets or investors in the most dynamic Asia-Pacific economic region. Expect Trump to double down on the trade war with China.

There will be NO BREAKTHROUGH with the Trump-Xi meeting in Argentina at the end of this month, if there would be a meeting at all. For the “trade war” is not about trade. Trump wants a total submission of China. He wants total dominance over China. He wants China to be an obedient lapdog.

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N

o one with any understanding of trade will believe that the $505 billion of goods China sent to the US in 2017 means Beijing ripped off American workers by that same amount. Pence’s October 4 “we-will-not-stand-down” China speech suggested 2019 could get even worse for Beijing and Asia. His November 17 comments – “The US will not change course until China changes its ways” – came with fresh warnings of new taxes on Chinese goods. In other words, “we want your total surrender first” . Pence’s assurance that “we’re here to stay” could mean a brutal 2019 for Asian stocks, export growth and epic volatility in currency markets.

Trump’s biggest misstep was believing Xi Jinping, a nationalist strongman, would buckle. The delusional idiot didn’t realize that the current group of Chinese leaders were all Red Guards during the Cultural Revolution era, toughened with nationalism. Just as Trump maintaining his deplorable base requires him looking resolute, Xi’s legitimacy in Communist Party circles relies on projecting Chinese strength. The Chinese leaders have decided to dig in for a protracted trade war, determined to go back to the poor days, rather than surrender to Trump.

 

Bowing to the hate-tweeter-in-chief isn’t an option for a Chinese president aiming to be in office long after the Trump era. China is prepared to go down in ruin with the US (兩敗俱傷). Xi believes that time is on his side. He doesn’t have to stand for reelection. He can wait out Trump.Trump may be thinking he is winning the “trade war” so far, but he is not. Besides tariffs on Chinese goods, which is actually taxes on American businesses, what other major weapons does he has?

So far, Xi’s team has pulled punches in its responses but the retaliations were pretty restrained. And Beijing has a rich selection of weapons, such as start dumping its $1.3 trillion of Treasury debt holdings, slamming the dollar and sending US interest rates skyrocketing. Sure, it would be a Pyrrhic victory. Any step that reduces the spending power of US consumers is bad for China’s ability to grow at 6.5%, but it would surely get Trump’s attention.

 

China could also impose exit taxes on US goods; make it harder for Chinese tourists to visit America and slow the flow of students dropping hundreds of thousands of dollars a year at US universities. China could clamp down on work visas for American executives and corporate licenses; doing surprise tax audits, inspections of US airlines, hotels, restaurants and adding new logistics bottlenecks that halt the flow of vital supplies; Trademarks could be revoked, or new taxes imposed. Capital controls could be imposed to impede the operations of US investment banks on the mainland. China could restrict export of rare-earth to completely disrupt the high tech industry in the US.. .But China has not done any of these. As Xi put it on November 17, “confrontation, whether in the form of a hot war, cold war or trade war, will produce no winners.”

Singapore’s Prime Minister Lee Hsien Loong asked the question on the mind of every Asian leader at last week’s ASEAN summit: What to do when they’re forced to choose between Trump’s America and Xi’s China? I believe this is a when and not an if question, and 2019 is the year decisions are due. Good luck with any balancing act.

China in the Xi Era


November 20, 2018

China in the Xi Era

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by: David Shambaugh, George Washington University

Xi Jinping is widely viewed as the strongest leader China has had since Deng Xiaoping or Mao Zedong. But six years into his perhaps indefinite tenure, what has Xi actually accomplished? And where might China be headed under his rule?

 

Like all Chinese leaders since the 1870s, when Qing dynasty rulers launched the Self-Strengthening Movement, Xi also seeks ‘the great rejuvenation of the Chinese nation’. The quest has been consistent for 150 years: for China to acquire the material attributes of a major international power and the commensurate respect from others. The legacy of the country’s former weakness and humiliation continues to haunt Xi and his generation.

So too does the collapse of Communist Party rule in the former Soviet Union. Now having ruled almost as long as their Soviet counterparts, Xi and his peers in the Chinese Communist Party (CCP) live in regular trepidation of a similar meltdown. These two issues — augmenting China’s strengths while rectifying the Communist Party’s weaknesses — are intertwined in Xi’s thinking and dominate his agenda.

Xi believes in the absolute power of the Communist Party. As Xi told the 19th Congress of the CCP in October 2017: ‘The party controls all’. Unlike Deng Xiaoping, who launched China’s reforms four decades ago and sought to relatively reduce party power, Xi wants to bring the party-state back into all aspects of national life.

The CCP under Xi is also reaching back to the Maoist era by constructing a massive personality cult around Xi’s own persona. Maoist rhetorical throwbacks such as zhuxi (chairman), lingxiu (leader), hexin (core), even da duoshou (great helmsman) are again commonly used to refer to Xi. The official ideological canon of ‘Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era’ has now been enshrined in the party constitution too. Xi personally chairs all central Leading Groups and party and military organs. He has also emasculated the authority of Premier Li Keqiang.

Xi is systematically rolling back many of the core elements of Deng’s reforms that guided China’s leaders for the past four decades: no personality cult around the leader, collective leadership and consensual decision-making, bottom-up ‘inner-party democracy’ rather than top-down diktat, active feedback mechanisms from society to the party-state, relative tolerance of intellectual and other freedoms, limited dissent, some de facto checks and balances on unconstrained party power, fixed term limits and enforced retirement rules for leaders and cadres, a society and economy open to the world, and a cautious foreign policy. These and other norms were all central elements of Deng’s post-1978 reform program and they were all accepted and continued under Jiang Zemin and Hu Jintao — but all are being systematically dismantled and rolled back by Xi Jinping.

So dominant is Xi that Chinese politics have become a sycophantic echo chamber. Xi is trying to run the party like a military, with orders given and to be followed — rather than as an organisation with feedback mechanisms and procedures to curtail dictatorial practices. Xi is very much a mid-20th century Leninist leader ruling a huge country in the globalised, early-21st century era. There is thus a contradiction between Xi’s modality of rule and the realities of the modern world and China’s developmental needs.

Since coming to power in 2012, Xi has sought to relatively close China’s doors rather than further open them. There has been a significant tightening of the foreign investment and corporate operating environment, a sweeping suppression of civil society and foreign NGOs, stepped-up study of Marxism and an assertion of ideological controls over the entire educational sphere, and xenophobic campaigns against ‘hostile foreign forces’.

Meanwhile, the party continues to enforce strict media controls, carry out pervasive public security surveillance, tighten control over Xinjiang and Tibet, and persecute Christians and other organised religions. Xi has also cracked down on corruption in the party (and government and military), and presided over the most draconian purges and political repression in China since the 1989–92 post-Tiananmen period.

These actions have more in common with Maoism than Dengism. To be certain, Xi has definitely succeeded in strengthening the party institutionally over the past five years — but it is fair to wonder whether he has not actually weakened it in the longer term? How long can such retrograde and repressive actions endure in an increasingly globalised, wealthy and sophisticated society?

Xi’s economic impact is mixed. GDP growth remains very respectable at 6.9 per cent. Xi has also launched programs to eliminate poverty by 2020, spur innovation and high-tech manufacturing under the Made in China 2025 program, increase urbanisation and build eco-cities, expand coverage of social services, attack pollution and transition to a green economy, decrease desertification and increase forestation, deleverage China’s ballooned debt while expanding domestic consumption and services as drivers of growth. These are all commendable goals and initiatives — but they are all just that. Time will tell whether they are achieved.

On the other hand, Xi’s administration has significantly failed to meet the benchmarks or implement the policies of the Third Plenum economic reform plan of November 2013. The significance of this shortfall is that the Chinese economy is not making the structural adjustments needed to navigate through the middle-income trap and up the value-added chain to become a developed economy over time. Structural maladies and overcapacity continue to plague economic efficiency, the stock market has plummeted, while dangerously high debt levels loom overhead.

If there is one policy area where Xi does deserve better marks, it is in foreign relations. China is now widely seen as a global power. Xi has taken a personal interest in global governance. As a result, China under Xi is contributing much more to the United Nations operating budget, global peacekeeping, overseas development assistance and the Millennium Development Goals. And it is more active in a range of areas from combatting public health pandemics to disaster relief, energy and sea lane security, counter-terrorism and anti-piracy operations.

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Xi’s signature Belt and Road Initiative (BRI) is also noteworthy. An infrastructure development initiative unparalleled in history, the BRI will build rail lines, pipelines, telecommunications networks, electric grids, deep-water ports, highways, cities and other needed infrastructure from Asia to Europe. While the BRI is encountering criticism of late, it is nonetheless illustrative of China’s new foreign policy activism under Xi.

To be certain, China’s international relationships are not all rosy — but they are, on balance, positive. Only with the United States — and perhaps Australia, Japan and India — are China’s bilateral ties strained. Everywhere else they are sound.

The same must also be said about China’s military and defense — probably Xi’s No. 2 priority (after strengthening the party) over the past five years. Under the new title of Commander-in-Chief of the armed forces, in January 2016 Xi launched a sweeping reorganisation — the most comprehensive ever — of China’s military and paramilitary forces. The restructuring is but one part of systematic efforts to build a world-class military and, in Xi’s repeated exhortations, to ‘prepare to fight and win wars’.

Like all leaders, Xi’s tenure has so far achieved mixed results. But this variegated verdict is at variance with the overwhelmingly positive portrayals proclaimed in China’s official media. In Beijing’s rendering, Xi can do no wrong. This in itself may prove to be his Achilles’ heel. No leader is infallible. The subterranean grousing about Xi’s ‘imperial’ leadership style now increasingly heard in China (and from Chinese when they go abroad and speak with foreigners), may be a harbinger of difficulties to come.

Having constructed a caricature of an infallible Xi Jinping, the regime will find it very difficult — if not impossible — to deconstruct this image of China’s new ‘great helmsman’. And there are many constituencies in China that are suffering from Xi’s policies — including the party and state cadres and military officers who have lost their positions and privileges as a result of Xi’s anti-corruption purges — all of whom lie in wait for him to trip up.

David Shambaugh is the Gaston Sigur Professor of Asian Studies, Political Science and International Affairs at The George Washington University, Washington, DC.This is an adapted version of an article originally published here in Global Asia.