CHINAwatch

Deciphering the Xi-Putin meet in Moscow

Exclusive live interview with RT on 21 March 2023

20th Party Congress - Common Prosperity

Backchat with RTHK (Radio Television Hong Kong) on 24 October 2022.

China's ruling party approves sweeping reshuffle at end of week-long gathering in Beijing

Exclusive live TV interview on 22 October with PressTV on the 20th Party Congress and its global implications 

Building China 3.0 - Final Sprint toward the China Dream

The above named is a full lecture for the Ljubljana Confucius Institute, Slovenia, including Q & A, open to worldwide participation. The lecture (free of charge) was  simultaneously promoted by the World Strategic Insights based in Rome.

The Zoom lecture took place on Thursday, 17 February, 2022 at 0900 hours European time (1600 hours Beijing/Hong Kong time). The lecture attracted 135 applicants with 76 physically present, pandemics and other obstacles notwithstanding. 

Full details of the lecture's contents are here. A copy of the PowerPoint presentation in PDF format is as follows. Download Building China 3.0. A voice-over video recording of the PowerPoint lecture is here. Also re-published on World Strategic Insights based in Rome. 

Owing to time constraints, one question not given time to answer was on China's hukou (household registration) problem, which created a massive underclass of rural migrants. A podcast Caste aside: The future of China's peasants captures the conundrum. 

The ongoing hukou reform remains a huge, moving challenge. You can't flood the big cities with migrant, poorly-educated villagers. You can't leave them in limbo. Covered in the PowerPoint presentation is China's massive high-speed rail network expansion (doubling to 70,000 km), to connect ALL cities with a population of over 500,000 people, with modern motorways connecting ALL towns with population over 200,000 inhabitants, however remote, by 2035. Many fourth-tier cities and towns are in a largely rural region, including millions of villages. A great many are formed into inter-connected "urban clusters".(Slide 109 of 114) Along with the vibrant digital economy, this hopefully will provide many opportunities for the "rural" population. 

China's Sixth Party Plenum, the New Cold War, and the Contest for new Global Order

PowerPoint presentation to the EGN Founding Chairmen’ Group on 9 December, 2021. 

Download Sixth Party Plenum New Cold War and Contest for new Global Order

 

 

To avert mutual destruction with China, President Biden should move from "maximum confrontation" to "constructive re-engagement"

Relations between the United States and China have undergone many twists and turns since the founding of the People's Republic of China (PRC).

At first, America did not recognize the communist regime of Chairman Mao, preferring the defeated, self-exiled Kuomintang (Chinese Nationalist Party) in Taiwan. At the height of the US-USSR Cold War, President Nixon took advantage of the Sino-Soviet split to woo China to the American camp by recognizing the PRC as the One China in the United Nations, ditching Taiwan.

As China had been opening up under Deng Xiaoping, the United States helped bring the PRC into the World Trade Organization (WTO), in the hope that in due course, China could become a "Responsible Stakeholder" of the US-led global liberal order. US-China relations during his period is commonly regarded as "Engagement". 

As China continued to grow much stronger and more confident as the "Factory of the World", threatening America's dominance in some quarters, President Obama's administration launched the "Pivot to Asia', vaulting to redeploy some 60% of US military assets to the Asia-Pacific, with a view to America's Pacific Century  This represented a period of doubling down on an earlier "anti-Communism" strategy of "Containment", which took the form of encircling China militarily with a "First Island Chain" anchored in Okinawa and a "Second Island Chain" anchored in Guam. 

China overtook the United States as the world's largest economy in "purchasing power parity" (PPP) terms in 2017. Since then, not only has China not become more liberal, it is perceived to have turned more authoritarian under President Xi. Moreover, no longer a Factory of the World for cheap consumer goods, China is perceived to be eating America's lunch in e-commerce and high technologies such as 5G and artificial intelligence. Its massive Belt and Road Initiative smacks of ambitions challenging America's global primacy. 

Fanned by such tomes as Michael Pillsbury's The Hundred Year Marathon - China's Secret Strategy to Replace America as The Global Superpower, a bipartisan consensus of a "China Threat" has festered, framing a rising China as "a dangerous juggernaut" of "illicit trade practices", bent on imposing its authoritarian ideology on the rest of the world and trying to usurp America's role as world leader. This has resulted in an era of Great Power competition without boundaries, a period of Maximum Confrontation and Maximum Competition, dramatized by President Trump but in some ways intensified under President Biden. 

The Biden-Xi virtual summit did not bridge the abyss between the two rivalling Great Powers. The vast chasm is calibrated in the U.S.-China Economic and Security Review Commission's 539-page Report to Congress on 17 November . See Executive Summary

The Chinese Communist Party (CCP) is depicted throughout as "deepening its embrace of aggression and coercion" in realizing its global ambitions. These include alleged "problematic" trade practices, "assertiveness" in the South China Sea, "military threats" over Taiwan, "human rights violations" in Xinjiang, "rolling back freedoms" in Hong Kong (a whole stand-alone chapter in the Report) , "state control" of private businesses, China's "military-industrial complex", and its growing nuclear arsenal. 

The Review flags up ten out of 32 recommendations, including prohibition or vigorous screening of China's Variable Interest Entities (VIEs) and affiliates, beefing up the Indo-Pacific Command (INDOPACOM), reinforcing anti-ship and ballistic missile deterrence over Taiwan, creating a Technology Transfer Review Group (TTRG) to screen out harmful Chinese investments or technology transfers, measures to better protect key supply chains, tightened reporting of US companies in China, and strengthening the whole panoply of anti-China sanctions, including on Xinjiang products. 

Imbued with the "China Threat, the Review seems reminiscent of the Clash of Civilizations, Samuel Huntington's 1996 grand thesis of post-Cold War conflict. The Review intones: "At stake in this clash of identities and sovereignty is the safety and security of the United States and its partners, friends, and allies. The CCP is a long-term, consequential, menacing adversary determined to end the economic and political freedoms that have served as the foundation for security and prosperity for billions of people."

The Review sees nothing less than a global combat between "democracy" and "authoritarianism". To "China hawks", the threat is more pressing as China would grow to become the world's largest economy by the early 2030s, according to the Economist Intelligence Unit. 

With mid-term Elections looming next year, Biden cannot afford being seen to be weak on China. Softer rhetoric and limited cooperation on Climate Change aside, he looked anxious to find out how a "mortal combat" against China on all fronts could carry on without spiraling into a hot war. The three-and-a-half-hour Washington late-night team meeting, the room setting, and Biden's body language were tale-telling.

Meanwhile, a US-led virtual Summit for Democracy taking place in December signals a thinly-disguised US-led global anti-China coalition, as 100 democratic leaders and other "democratic wannabes" are being invited, excluding some democracies deemed friendly towards China.  Along with the United Kingdom and Canada, a diplomatic boycott of the upcoming Beijing Winter Olympics appears on the cards. To counter China's Belt and Road Initiative, on 1st December, a politically-regrouped European Union announced a 300-billion-Euro Global Gateway package of infrastructural projects for the developing world (quickly dismissed as "bullshit" in The Economist ).  

Amidst the West's heated contest with China, the obvious flash point is Taiwan, Beijing's top-most "redline". 

At the just-concluded Sixth Plenum of the CCP's Central Committee, President Xi reiterated the national goal of becoming a "strong, democratic, civilized, harmonious, and modern socialist country" by 2049, the centenary of the founding of the PRC. He made it plain that the China Dream would not be complete without Taiwan's unification, by peaceful means if at all possible. 

Taking note of China's expanded nuclear arsenal and hypersonic missile capabilities, the Review is apprehensive of Beijing's possible precipitous actions to recover Taiwan, notwithstanding Joint Chiefs of Staff General Mark Milley's recent Congressional testimony that China lacks full capability (or absolute confidence) to prevail over Taiwan by force before 2027. 

The overarching "China Threat", while understandable, needs more balanced assessment. . 

First, as the Review recaptures, China faces "a set of structural problems, including growing debt, income inequality, demographic decline, and technological dependence on the United States and other advanced democracies" as well as an increasingly hostile international environment. China's eventual advancement is by no means assured. 

Second, Beijing would be up against almost impossible odds if it tries to recover Taiwan by force. In a 2018 Cornell University book, "Unrivalled, Why America Will Remain the World's Sole Superpower", Michael Beckley, Fellow in the International Security Program at Harvard University, points out that only 10% of Taiwan's coastline is suitable for an amphibious invasion, which, of itself, remains the most difficult mission type in warfare history. Thanks to separation of waters, Taiwan's armies with missile and air defenses could easily degrade, outnumber, and overcome landing invaders, let alone US superior naval, submarine, air, and ballistic missile interventions.

This assessment may have emboldened both the Trump and Biden administrations to continue pushing the envelop, using "salami-slicing" tactics, to push Taiwan towards de facto full independence, while paying lip service to the "One China Policy". In this calculation, Taiwan is an unsinkable anti-Beijing aircraft carrier. 

However, now with the world's largest navy, much-enhanced "anti-access, area-denial" (A2/AD) capabilities, and state-of-the-art hypersonic weaponry, China's current military capabilities are a far cry from 2018. Moreover, the People's Liberation Army (PLA) won battles before against overwhelming odds, as in the case of its Anti-American Korean War. So the Review's apprehension is in order. Nevertheless, President Xi has repeatedly emphasized that China has strategic patience. Beijing is unlikely to invade unprovoked, let alone risking a nuclear conflict derailing the China Dream. 

Third, as Beckley argues, America has unsurpassed wealth, including high GDP per capita, unique geography, abundance of natural resources, positive demographics, advanced productivity, global military supremacy and the privileged dollar.  Albeit no longer able to call all the shots, the United States would remain pre-eminent and much richer than China for the next 50 years or more. Click here 

Fourth, the CCP's pervasive role is part and parcel of China's state-led model. It may be anathema to the West's "democratic" DNA, but it has proven its legitimacy by miraculously transforming the lives of the Chinese people, a fifth of humanity. Its support by the people is over 95%, amongst the world's highest, according to a July 2020 Harvard Kennedy School Study. As a regime, it deserves to be treated at least on an equal footing. 

Fifth, in many ways, China's perceived assertiveness in the South China Sea is to protect sea lanes of communication against US encirclement by the First and Second Island Chains. Perceived transgressions over Xinjiang are compelled responses to rampant ethnic terrorism and separatism; recent measures over Hong Kong were to avert rising subversive separatism; and those over Taiwan against deliberate attempts to test Beijing's "red lines". The Review Commission chair Carolyn Bartholomew seems not entirely fair in blaming China for putting the onus of improving relationships on the other side. Click here

The recent CCP's Sixth Plenum unveiled the blueprint for a new PRC 3.0. with President Xi as its architect. A "modern socialist nation" is being realized by 2035, a nation that is more innovative, self-reliant, fairer, greener, and more open to the world, supported by the New Development Concept, the Dual Circulation Strategy, Common Prosperity and the 14th Five Year Plan.

To find the right way for both countries to get along, President Xi suggested to President Biden a three-pronged approach: mutual respect, co-existence, and seeking a win-win outcome. 

With diametrically-opposed ideologies, the deep chasm between a rising China and the West implies a grave lack of mutual understanding and mutual trust. Each side seems unable to put itself in the other's shoes before resorting to precipitous action or rhetoric. To cross the divide, more bridges need to be built rather than destroyed by a maximalist confrontational mindset. After all, at the cost of moving both sides closer to the brink, maximum confrontation hasn't yielded any meaningful outcome. 

Examples of trust-building could include pandemic vaccine development, research, testing, production and distribution; renewal-energy smart grids, embracing The Future of Hydrogen, deployment of American technologies to exploit China's vast but geologically-challenged shale gas reserves; joint naval patrols in uncontested waters of the South China Sea; partnership in selected Belt and Road Initiative projects with US inputs in technologies, financing and corporate social responsibility; cooperative space missions with the nascent Tiangong Space Station, similar to space cooperation with the former USSR; academic, scientific, cultural and archeological exchanges; and more joint China-Hollywood film co-productions and distribution. 

I call these cooperative overtures "Constructive Re-engagement", as they could subtly help shape China's behavior for the better, while maintaining America's maximum competition in key areas. 

At the Bloomberg New Economy Forum in Singapore on 17 November, in a video conversation Dr. Henry Kissinger warned that while the Biden -Xi virtual summit was a good start, US-China relations have moved from "foothills of a Cold War"" to "a precipice from which it depends which direction is chosen." Both sides need to seek coexistence, which is not only desirable, but essential.

It is instructive that during the Cold War, the Johnson administration embraced Khrushchev's post-Stalin plan of peaceful coexistence in a joint campaign to successfully eradicate small pox, as Fareed Zakaria highlights in his 2021 book Ten Lessons for a Post-Pandemic World (p.241) 

Right after the 1989 Tiananmen Square upheaval, I was invited to visit the United States in the summer of 1990 to share my thoughts about China's future as a US State Department sponsored "International Visitor". I was privileged to talk to Fortune 50 top corporate leaders including a one-on-one with Steve Forbes. I was reasonably optimistic about China's future then. I am much more optimistic about China's future now, including its ability to manage its Great Power rivalry with the United States. I am, however, conscious of a provoked traumatic transition with potentially-disastrous black swans.

A more benign outcome is possible if the United States is able to shift from "Maximum Confrontation" to "Constructive Re-engagement". 

China warns U.S. against having any illusion about Taiwan

Live TV discussion with Press TVon 25 November, 2021

"China Is a Declining Power—and That’s the Problem" - A rebuttal

While the prevailing "China Threat" rhetoric is China's rapid ascendancy as a global power, a provocative piece in Foreign Policy dated 24 September, 2021 by Hal Brands and Michael Beckley, two distinguished scholars of the American  Enterprise Institute, posits that China may soon reach its peak potential, and like Imperial Germany and Japan, could turn aggressive to seize its diminishing chances for dominance before it's too late. 

Their arguments about China's coming "decline" are familiar: "China would get old before getting rich" with worsening demographics, in addition to water and food insecurity, dropping productivity, mounting debt, ethnic unrest, plummeting global image, and across-the-board US pushback, including decoupling.

However, the argument suffers from a measure of denialism or blind spots:

(a) As China's population is four times larger, all it takes is reaching a quarter of America's per capita productivity to displace the United States as the world's largest economy. With much earlier economic recovery from the pandemics, China could become the largest economy as early as 2028, according to the UK-based Centre for Economics and Business Research (CEBR). Why should China become more aggressive now or after it has become the world's largest economy? 

(b) All these obstacles mentioned are real but not insurmountable. A host of new initiatives have been introduced, including "common prosperity", doubling the consumer middle class of 800 million by 2035, lowering the retirement age, digitization, robotics, innovation, and a nation-wide modern rail system connecting all towns, however remote, of 200,000 people and above. This includes doubling the world’s most extensive high-speed rail system to 70,000km over the next 15 years to link all cities of over half a million people. China has pledged reaching carbon emission peak by 2030 and carbon neutrality by 2060. It is also holding party secretaries to account for ecology under their watch. 

(c) China is evidently energized to realize the China Dream of becoming a “strong, democratic, civilized, harmonious and modern socialist country” by 2049, the 100th anniversary of the founding of the People’s Republic of China. It doesn't include world dominance. Why should China become more aggressive before or after it realizes the China Dream? 

(d) The likely flashpoint of possible China's aggression is Taiwan, according to the two authors. The island is very much locked into Mainland China's supply and value chain. About a million Taiwanese live and work on the Mainland. While safeguarding their separate identity, many Taiwanese are wary of rocking, let alone  sinking the boat. Barring Taiwan's formal declaration of independence, time is on Beijing's side. Why should Beijing jeopardize its chances of realizing the China Dream by starting a war of uncertain consequences in the meantime?  

On the impact of decoupling from China, a Capital Economics report of 17 September 2021 by eminent economists Julian Evans-Pritchard and Mark Williams suggests that if the world is gradually bifurcated into a "US bloc" and a "China bloc", with supply chains rearranged rather than completely severed, China would stand to fare a lot worse than the US. According to the report, out of  217 global economies including Taiwan, a total of 114 are in the US bloc, while only 90 are in the China bloc.

This somehow contradicts with findings in many quarters that far more countries have China as the largest trading partner, compared with the United States.

As reported in India's Economic Times of 3 September, 2021, "According to Lowy Institute data, before 2000, the US was at the helm of global trade, as over 80 per cent of countries traded with the US more than they did with China. However, by 2018, the number had seen a steep decline to mere 30 per cent, as China had become the largest trading partner for 128 of 190 countries."

According to data released on 24 March, 2021 by China's International Import Expo Bureau hosted by the Ministry of Commerce, China has become a top trading partner of over 120 countries and regions including the United States, the European Union, as well as Japan, US robust decoupling measures notwithstanding. 

Moreover, the argument that the world's trading system could be artificially categorized into two separate blocs appears dubious at best. It ignores the huge complexity of global supply and value chains, of which China has become a central hub. That's why seven of the world's top ten container ports are in China, including Hong Kong. Click here.  

According to a piece in Foreign Affairs of 3 June, 2020 by Henry Farrell and Abraham Newman, distinguished scholars of Georgetown University, The Folly of Decoupling From China:  It Isn’t Just Perilous—It’s Impossible 

If anything, China is likely to become even more locked into the global and regional supply and value chain as a central hub of the recently launched Regional and Comprehensive Economic Partnership (RCEP), the world's largest trading bloc consisting of all ASEAN member countries and their main trading partners, representing a third of the world's population and GDP.

It therefore appears that the "bifurcated blocs" theory of decoupling is theoretical at best, if not downright unrealistic. 

New Concert of Powers: How to Prevent Catastrophe and Promote Stability in a Multipolar World

My PowerPoint presentation via Zoom on 22 September, 2021 at the 8th Annual Conference on Eurasian Politics and Society (IEPAS) 2021, Lisbon, Portugal 

Download New Concert of Powers for a more stable World Order Revised 2 September 2021 

Download IEPAS2021-Final Conference Programme 

Would a US-led Carbon Tax, instead of partnership, spur China's progress under the Paris Agreement?

A think-piece by Andrew S. Erickson and Gabriel Collins in Foreign Affairs of May/June 2021 argues that only pressure, not partnership, will spur China's progress on Climate Change.

The argument is that despite advances in renewable energy capacity, China's coal reliance in recent years has markedly increased, due to concerns with energy security, local vested interests, employment imperatives, and projects along the Belt and Road. The authors suggest that only coercion by way of a US-led carbon tax, along with Western allies, would do the trick, on grounds that China has under-performed with its Paris Agreement targets and is unlikely to be able to fulfill more promises. 

Not unexpected is the now-fashionable China bashing and demonization. What seems lacking is appreciation that as "factory to the world", China's economy is fundamentally different from that of the United States. It is much more dependent on energy input, of which coal is likely to remain a comparatively large contributor, due to insufficient endowment of more readily available natural gas.

Also lacking is appreciation that China has already become the world's leading country in electricity production from renewable energy sources, with over double the generation of the second-ranking country, the United States. By the end of 2019, China had a total capacity of 790GW of renewable power, mainly from hydroelectric, solar and wind power.

Furthermore, the authors seem to doubt China's genuine desire for renewable energies. Apart from pollution and quality of life considerations, renewables will lessen China's exposure to choke points like the US-controlled Malacca Strait and the Strait of Hormuz near Iran subject to uncertain geopolitical risks. 

Melanie Hart, Luke Bassett, and Blaine Johnson's earlier analysis of 15 May, 2017 for the Center on American Progress puts things in more balanced, quantitative perspectives. Entitled Everything You Think You Know About Coal in China Is Wrong, it highlights the following considerations -

"China’s Paris commitment includes a promise to install 800 gigawatts to 1,000 gigawatts of new renewable capacity by 2030, an amount equivalent to the capacity of the entire U.S. electricity system. While China and the United States have roughly the same land mass, however, China has 1.3 billion people to the United States’ 325 million. It needs an electricity system that is much larger, so adding the renewable equivalent of one entire U.S. electricity system is not enough to replace coal in the near to medium term."

" three things American observers need to understand about coal in China:

1. China’s new coal-fired power plants are cleaner than anything operating in the United States.
2. China’s emissions standards for conventional air pollutants from coal-fired power plants are stricter than the comparable U.S. standards.
3. Demand for coal-fired power is falling so quickly in China that the nation cannot support its existing fleet. Many of the coal-fired power plants that skeptics point to as evidence against a Chinese energy transformation are actually white elephants that Chinese leaders are already targeting in a wave of forced plant closures."

"The U.S. coal fleet is much older than China’s: The average age of operating U.S. coal plants is 39 years, with 88 percent built between 1950 and 1990.  Among the top 100 most efficient plants in the United States, the initial operating years range from 1967 to 2012. In China, the oldest plant on the top 100 list was commissioned in 2006, and the youngest was commissioned in 2015."

"The United States only has one ultra-supercritical power plant. Everything else is subcritical or, at best, supercritical. In contrast, China is retiring its older plants and replacing them with ultra-supercritical facilities that produce more energy with less coal and generate less emissions as well. Out of China’s top 100 units, 90 are ultra-supercritical plants". 

"In the United States, the total nameplate capacity of our top 100 most efficient coal-fired power units is 80.1 gigawatts, and their cumulative annual carbon emissions amount to 361,924,475 metric tons. Meanwhile, the total nameplate capacity of China’s top 100 units is 82.6 gigawatts, and their cumulative annual carbon emissions are an estimated 342,586,908 metric tons."

"Since China’s fleet uses more advanced technology, it also consumes less coal: an average of 286.42 grams of coal equivalent, or gce, consumed per kilowatt-hour of power produced in China versus 374.96 gce consumed per kilowatt-hour produced at lower heating value in the United States."

What is more, it is doubtful if a US-led carbon tax would be a silver bullet. If anything, it could massively backfire. First, considering most of the world's consumer products are now made in China, such a tax, like US trade sanctions, is likely to hurt consumers worldwide, not least in the United States.

Second, the developing world is unlikely to be supportive. To survive, the poor are heavily dependent on whatever energy sources are available to them locally. Such a tax is likely to be viewed as a ruse of the world's richer to tax the less fortunate. 

A better outlook would be for the United States to coordinate with China their respective national policies, targets, and actions under the Paris Agreement. They could do well to cooperate on joint efforts to accelerate attainments of Climate Change targets across the globe.

For a start, they could showcase each other's best technologies and practices to their own peoples. This would vastly enhance their mutual understanding and learning of each other's capacities and progress. What is more, as the world's great powers and largest polluters, they could set a dynamic example for the rest of the world to reach for the stars under the Paris Agreement. 

Separately, this would have the added, yet powerful, benefit of building mutual trust and understanding between the two great powers, now locking horns for mortal combat that is bound to engulf the whole world.