Tag Archives: Xi Jinping

Even A Small Belt And Road Would Be Huge

Chinese President Xi Jinping delivers a keynote speech at the Belt and Road Forum in Beijing, May 14, 2017.

ONE BELT, ONE ROAD is ambitious. A network of roads, railways, ports, pipelines and other infrastructure that will crisscross China and Central Asia connecting to Europe and Africa via land routes (the Belt) and shipping lanes (the maritime Road).

It already covers two-thirds of the world’s population, one-third of global GDP and about a quarter of the world’s trade in goods and service.  China, President Xi Jinping announced at this weekend’s Belt and Road forum in Beijing (seen above), proposes to throw $124 billion at developing his vision of the next great engine of global trade.

Those monies would be a downpayment on what is estimated to be $900 billion of related investment, financed by a variety of Chinese or China-backed banks, funds and investing and development institutions. One Belt, One Road will, depending on your point of view, be 21st-century merchant hegemony writ large or the world’s largest platform for regional collaboration.

Leaders from 29 countries, the heads of the International Monetary Fund, World Bank, the UN, and a host of other dignitaries attended the forum this weekend, including most notably Russian President Vladimir Putin (absentees include the leaders of the United States, Japan and India). All the attendees, no doubt, will have had their private fears and hopes about the scale of this project to redraw over many decades the geoeconomic, and likely, the geopolitical map of Eurasia.

Whether China will hold the course, especially under Xi Jinping’s successors, is one question about the project. There are also legitimate concerns that some investment gets misallocated and ends up on being spent on ‘highways to nowhere’ and other projects that never should be built in the first place. Moreover, private and non-Chinese investment will be needed as well (and be a bellwether of global acceptance of the idea).

However, such is the scale of One Belt, One Road that even if only a fraction of it materialises, it will make Eurasia look a very different place.

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China-America First

US President Donald Trump and China's President Xi Jinping walk in the grounds of Trump's Mar-a-Lago resort in Florida, April 2017.

DONALD TRUMP MARKED his first meeting as US president with the visiting President Xi Jinping with a display of naked American power, Cruise missile strikes against an airfield in Syria in retaliation for the Assad regime’s chemical attack on a hospital. The timing was coincidental, if opportune, but it was an act of defining and defending national interest of which only one of the two superpowers is currently capable, let alone comfortable, in undertaking.

The signalling was palpable. Moreover, it was an action that also had many observers quickly connecting the dots to North Korea, a country Trump had threatened unilateral US action if China did not start to exert the control over its ally that Washington believes it can and should.

Xi’s visit was always going to be scrutinised for the subtle signs of a power play between the two men. The ‘optics’ would be as important as the outcomes. However, it also carried considerable domestic political risk for Xi, making the trip to the United States early in Trump’s presidency (and to a golf course resort, at that) with all the risk of Trump’s unpredictability providing a loss of face for no very certain reward. The deflection of much of the world’s attention elsewhere would not necessarily have been unwelcome.

It is hard, though, to imagine the trip was undertaken without assurances there would be some return. The pre-trip speculation was of an agreement, if longer on affirmation than detail, on a joint reset of tackling North Korea’s nuclear ambition and some public US affirmation to Beijing over arms sales to Taiwan and the ‘one China’ policy.

In the event, the publicly announced outcomes were more modest, though likely of Beijing’s design, a 100-day plan to discuss trade talks directed at boosting US exports and reducing Washington’s trade deficit with China, and an invitation to Trump to make a state visit to China, which the US president accepted for a date to be arranged.

Trade is the lowest-hanging fruit for restoring relations between the two countries to an even keel. The direction of travel favours more US exports to China, especially once the rebalancing of the economy to more domestic consumption takes hold, while the One Belt, One Road initiative, to which the United States has now been asked to join, offers the prospect for more business and investment than China can handle alone.

Difficult issues — North Korea, Taiwan, the South China Sea — offer scant prospect of early harvesting.

The agreement to trade talks is positive, in the sense that it shows Trump can be steered away from his fiery anti-China rhetoric of the campaign trail last year. Further evidence that the reality of office is taking hold over the rhetoric of candidacy is that the Trump administration has so far declined to carry through on pre-election threats to brand China a currency manipulator or impose punitive tariffs on Chinese exports to the United States.

That the US president said that he was willing to further strengthen cooperation with China in economy, military affairs and people-to-people exchanges and support China’s efforts in pursuing corrupt officials who had fled China with ill-gotten gains will all be taken as evidence of success by Xi’s team, whose overarching goal was to restore stability and order to the relationship so they can manage it. Trump’s description of his personal relationship with Xi as “outstanding” will have been a bonus, though Trump will likely find eventually that that friendship will come with trappings.

State media have been quick to present the Florida summit as continuation of policy between the world’s two leading nations. “Expanding win-win cooperation” and “managing differences” and developing “dialogue and cooperation between China and the United States in such areas as diplomacy and security, economy, law enforcement and cyber security, as well as social and people-to-people exchanges” represents a good outcome for Xi, even if it is not the language of concrete gains for American manufacturing workers that reverse trade deficits and job losses that Trump had previously told his blue-collar economic nationalist supporters he laid squarely at China’s door.

The harsh truth is that it is not that group that stands to benefit from growing US trade with China. The winners will be the same ones that were the winners from globalisation.

The longer-term win for Xi is that summit has steered one of the world’s most important relationships, that between China and the United States, further in the direction of an arrangement of international affairs that is based on bilateral relationships between great powers than the post-World War Two system of international rules — something Xi has previously described as “a new model of great power relations” and which aligns with China’s efforts to construct a parallel architecture for global governance with itself in the centre.

The US president, who seems to prefer to focus on winning battles rather than wars, may well not realise what his guest has walked away with.

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The Core Of The Matter

CPC General Secretary Xi Jinping (centre) and other Politburo Standing Committee members seen at the Sixth Plenum held in Beijing, October 24 to 27.THE SIXTH PARTY plenum just concluded puts General Secretary Xi Jinping (above, centre) at the core of the leadership.

All party members should ‘closely unite around the Central Committee with Comrade Xi Jinping as the core’, said the the communique issued after the four-day behind-closed-doors meeting of the Party’s 400 top officials. Thereby, Xi enters a leadership pantheon comprising Deng Xiaoping, Jiang Zemin and the benchmark for all such Party leaders, Mao Zedong — though it was Deng who first articulated the term when designating Jiang as his successor in 1989.

Thus elevated, Xi has reinforced his authority over the party, potentially allowing him to extend his dominance for years to come. Another five years as General Secretary, along with his other two jobs as President and head of the People’s Liberation, now seems a given.

The Sixth Plenum decided that a Party Congress  — the quinquennial meeting of the Party’s top 2,000 members — would be held in the second half of next year. That is the forum for appointing the new top leadership for the next five years. Under current Party rules, all but Xi and Prime Minister Li Keqiang among the seven-strong Politburo Standing Committee, the apex of power, will have to retire on the grounds of age, opening the way for Xi to pack it with his proteges.

From the new appointees will come the leadership through which Xi will exert his power after his retirement, assuming he does not flout the convention of stepping aside after two five-year terms to stay in office as well as power.

Xi’s authority is far from absolute, which gives the plenum’s other important decisions — the adoption of strict rules of Party discipline that apply at all levels and revised codes of intra-party political life — their significance.

Xi has been steadily consolidating his power through his anti-corruption campaign and by centring the leadership’s decision making in areas such as military reform, security and the economy on central committees that he controls. This in part is because systemic corruption at the local level has frustrated his plans for ‘rebalancing’ the economy that he sees as essential for maintaining the Party’s ability to retain its monopoly grasp on political power.

However much power at the top concentrates in the general secretary, Xi cannot avoid the fact that China’s social stability depends on maintaining a delicate balance between the top-down authority of the central leadership and the bottom-up legitimacy of local governance.

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Xi’s Jiang Dilemma

Jiang Zemin (L) and Xi Jinping seen at an undated National Day reception

LAST AUGUST, RUMOURS circulated that former but still-powerful President Jiang Zemin, then just turning 89, had been placed ‘under control’ — a measure to restrict his freedom of movement for a while.

Jiang (seen left above) slipped from public view and it was being said that this was a prelude to President Xi Jinping moving against the man who had been instrumental in elevating him to the top leadership positions, but whose desire to rule from retirement remains the greatest constraint on Xi’s political supremacy.

Jiang led the Party from 1989 to 2002, but has remained one of the most politically powerful actors since. Before retiring, he appointed acolytes to key positions and let them establish varying degrees of autonomy from the formal leadership, particularly in the security apparatus.

With Zhou Yongkang, as head of the security services, and Guo Boxiong and Xu Caihou, in place as vice-chairmen of the Central Military Commission, the Party agency that controls the PLA, Jiang had more sway over the military and the security services than the man who succeeded him as Party boss and president, Hu Jintao. And he had enough power in within the Party to promote Xi over Hu’s favoured successor, Li Keqaing, who had to settle for being prime minister.

Once in the top positions, however, Xi showed more determination that Hu to shake free of Jiang’s controlling hand. Xi’s anti-corruption campaign was directed against many associated with Jiang’s Shanghai faction. Zhou, like Xu and Guo, three of the biggest ‘big tigers’ snared, were purged and expelled from the Party. One way to view that is as a rooting out of the parallel power network Jiang had established and restoring the leadership’s centralised control.

Rumours are circulating again that Xi may now feel political secure enough to move against the biggest tiger of them all, Jiang himself. This, the word is, would not be another round of control, but a prosecution for corruption.

Xi’s frustration with what he perceives as Jiang’s hinderance of his political control and economic reforms (which Xi sees as critical to the Party’s success in the existential struggle in which he believes it is engaged, but which would financially disadvantage many members of Jiang’s ‘Shanghai’ faction) is well known.

This, rarely, bubbled into public view when an editorial in the People’s Daily referred to former leaders who prevented their successors “rolling up their sleeves and doing bold work” and sniped at leaders who, “being unhappy to retire … do everything they can to extend their power”. Most readers would have quickly parsed the list of ‘former leaders’ to one.

Darker minds talk about conspiracies by Jiang’s supporters to overthrow Xi. Meanwhile, newly published writings by Xi carry a similarly coded warning that even ‘super-emperors’ should not be spared from the anti-corruption campaign.

Prosecuting Jiang would carry enormous risks for Xi. For one, it would sweep away the unwritten promise of immunity for former Party leaders that has allowed a leadership succession every decade.

Xi might then feel he would have to hold onto power beyond the customary ten years. That and the vacuum created by ripping up the old political rules that delivered a steady escalator of professional advancement and personal enrichment could trigger a revolt in a Party where morale at many levels is already fragile.

However, Xi is also time boxed. At the 19th Party Congress next year, the new generation of leaders — Xi’s heirs — could be expected to be nailing down their promotions for the top jobs which are due to rotate in 2022. If Xi is to move openly against Jiang, he will need to have done so — successfully — before then.

The calculation, though, is finely balanced.

The purges and Xi’s reorganisation of the PLA have diminished Jiang’ s influence in the military. That will have choked off some of the ‘pay for promotion’ that has enriched the Shanghai faction, just as the anti-graft probes into the state oil industry have closed off another honeypot. But it persists in the Party, including in the Politburo — which makes the promotions at the next Party Congress so critical. Taking Jiang down now would cement Xi’s absolute grip on power from the Congress on.

However, it would also risk splitting the Party and perhaps fatally damage it at a time when a slowing economy makes it especially vulnerable to social unrest, particularly if the newly affluent middle class starts to feel the effects.

Xi may also reckon that he need not take the risk; that he has taken down enough of Jiang’s inner circle to have undercut Jiang from below, and that Jiang will finally give up the game knowing Xi has the evidence to charge him whenever he chooses.  And there is always the alternative of hoping that age and infirmity do the job for him.

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Two Gentleman Of China

WHEN XI JINPING and Ma Ying-jeou meet in a hotel in Singapore for 20 minutes on Saturday, the diplomatic sensitivities require both men to address each other plainly.

Neither man will formally acknowledge the other’s official title at what will be the first meeting between the presidents of China and Taiwan ever and the first between the leader of the Communist Party and the Kuomintang (KMT) since Mao Zedong, at Washington’s prompting, reluctantly met Chiang Kai-shek in 1945  to try to resolve the civil war they had been fighting for 20 years.

Were they to be speaking in English, they would address each other as Mr Xi and Mr Ma.

Their encounter will be a landmark occasion, but its significance lies in the fact that it is taking place at all, not in what might be said or achieved, which is likely little. There will be no agreements signed and no joint statement afterwards. Indeed, the two men will hold separate press conferences.

That said, the meeting is a bigger gamble for Xi than Ma as he is injecting himself into Taiwanese domestic politics. Ma has to step down next year after completing two terms as president during which he has pushed for closer ties across the Straits of Taiwan. Eric Chu, the Kuomintang (KMT) candidate in January 16’s election of his successor, is trailing the pro-independence opposition Democratic Progressive Party’s candidate, Tsai Ing-wen, who is not trusted in Beijing.

The KMT dumped its original candidate, the unpopular Hung Hsiu-chu, barely three months ago in an effort to close the gap with Tsai and Xi will hope his meeting with Ma will boost Chu’s efforts.

The risk is that the opposite happens if Taiwanese voters, who handed the KMT a punishing defeat in last year’s local elections, perceive the meeting as an unwarranted meddling in domestic affairs.

Regardless of the electoral impacts, it looks to this Bystander’s eye that the closer integration of Taiwan and the mainland will slow whichever candidate wins the presidency. Tsai is campaigning to reverse Ma’s policy and Chu has said the even though he favours continuing to increase economic cooperation, he would pursue it incrementally and at a slower pace than Ma.

Every Chinese leader since Mao has wanted to reunify what Beijing regards as its renegade province with the mainland. With the hollowing of Taiwan’s economic base, its brain drain and ever diminishing diplomatic recognition around the world (although the crucial support and protection of the United States remains), doing nothing and saying less might be Xi’s better bet.

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Hu Next?

Guangdong party chief Hu Chunhua THE CRITICAL PROMOTIONS for China’s next generation of leaders are still a year away when five of the seven Politburo Standing Committee members reach mandatory retirement age, but the jockeying for position will be continuing at the party plenum now being held.

One of the front-runners to be the country’s next president, Hu Chunhua (left), is taking a leaf out of the incumbent Xi Jinping’s playbook for how to become China’s top leader. Hu has been talked of for several years as a likely successor to Xi, but the Guangdong Party boss is maintaining an ultra-low profile, just as Xi did as he eased ahead of the early front-runner to succeed President Hu Jintao, the now prime minister Li Keqiang.

In many ways, Guangdong is the bellwether for China’s economic reform. Hu’s success — or otherwise — in restructuring the provincial economy and sustaining the economic parity of its capital, Guangzhou, with Beijing and Shanghai will be a litmus test of whether he could do the same with whole economy — and whether he could do so while maintaining social stability in a rich, coastal and relatively liberal province that looks more like tomorrow’s China than the under-developed tough-to-govern inland provinces that Hu has previously run.

Hu has pursued cautious economic reform in Guangdong since taking over at the end of 2012 from the sloganeering Wang Yang. He has promoted unglamorous small and medium-sized businesses but also been careful to align with the edicts of central leadership. Hu’s policies for the province have echoed Xi’s line about the “quality and efficiency” of economic growth and in setting lower growth targets. He has promoted the move up the value chain by Guangdong’s manufacturers and into services while moving labour intensive businesses into poor inland districts.

His predecessor Wang’s setbacks — he failed to get promoted to the Politburo Standing Committee at the November 2012 party congress at around the same time as the high-flying Chongqing party boss Bo Xilai was being brought low — will not have been lost on Hu. He has already survived two incidents that could easily have finished a political career.

He was governor of Hebei when the tainted baby formula scandal started there. In his next job, party chief in Inner Mongolia, violent protests broke out against the destruction of traditional Mongol grazing lands by Han-controlled mining interests. Hu cracked down on these and tripled per capita income in his five years but established a dubious record on environmentalism, a factor that now weighs more heavily in political calculations for promotion.

There is no doubt that Hu’s rise has been rapid. A staff position with the Communist Youth League (CYL) in Tibet in 1983 led to governor of Hebei province in 2008, party boss of Inner Mongolia by 2010 and then the same role in a high-profile province, Guangdong, in 2012 along with promotion to the Politburo. In 1996-99, Hu studied for a master’s degree in economics at the Central Party School, where officials marked out for future high office get sent.

Still in his early 50s he is young even by the standards of the prospective sixth generation of leaders. A career in the CYL, where he became a protege of Hu Jintao (no relation), is the bureaucrat’s rather than a princeling’s to power.

Hu has demonstrated both the caution and the orthodoxy of officialdom and his deeper policy beliefs remain somewhat obscure. Both in Tibet and Inner Mongolia, he took a hard line on security and in Guangdong, which has long had a more vibrant local press than most of the rest of China, he has been criticised for tightening censorship.

Hu has also cracked down on Guangdong’s drugs and sex industries and gone after officials who have done well enough out of their offices to be able to keep and support their families abroad. Hu has bought some 800 ‘luoguan’ to book, again moves in line with Xi’s anti-corruption drive.

Bo’s disgrace opened avenues for loyalists, down which Hu has advanced. Whether he completes the journey to the highest offices may turn on the influence that Hu Jintao can wield in the inevitable factional horse-trading. The corruption charges against another Hu Jintao protege, Wan Qingliang, the party boss of Guangzhou, may suggest Xi is constraining his predecessor, even if not as publicly as he is Hu Jintao’s predecessor, Jiang Zemin.

It will also depend on Hu’s own ability to keep his head down and out of trouble and Guangdong’s economy thriving.

A third factor, unknown at this point, is where Xi will come down. Will he consider Hu’s conservatism and reformist credentials suitable to carry on his policies? Will he back a fellow princeling or acknowledge that the presidency is due to return to Hu Jintao’s CYL faction?

Hu is regarded as a Hu Jintao version two and is familiarly known as ‘Little Hu’. Both men come from humble backgrounds. Hu was the son of a poor farmer in Hubei who made it to the elite Beijing University, where he took a bachelor’s degree in Chinese language and history, by dint of outstanding exam scores. Both were student leaders in their university days, rose through the CYL and cut their political teeth in troublesome provinces with ethnic minority populations, Gansu and Tibet, in the elder Hu’s case, Tibet and Inner Mongolia in the younger Hu’s case. Unusually for a senior Han official, he speaks fluent Tibetan. He also doesn’t die his hair.

Politically, they a both low-key, consensual leaders who advocate policies of social justice and economic equality. Both of those may be in tune with the party’s needs in 2022 when Xi’s successor starts to take over, and some rough edges to China’s economic rebalancing will be in need of smoothing.

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Win-Win Ways In Washington

China's President Xi Jinping addresses the United Nations General Assembly, September 2015

PRESIDENT XI JINPING’S visit to the United States delivered as little, in the eyes of the outside world, as had been expected. On that score, it did not disappoint.

The two headline outcomes, a cybersecurity dialogue and the announcement of a national cap-and-trade carbon market, were a fudge and a repackaging respectively. The two sides agreed not to support commercial cyber-espionage, although what one side sees as cybertheft the other regards as matters of national security. So we’ll see how far that goes. Meanwhile, China has long been running pilot cap-and-trade carbon projects in preparation for launching a national market.

Plenty of other areas of contention remain, from the impact of China’s recent stock market turmoil and currency devaluation on the U.S. Federal Reserve’s interest rate policy to questions of maritime sovereignty in the South and East China Seas.

Even the agreement to start a high-level dialogue on cybercrime, albeit narrowly defined, risks triggering another front in the simmering trade wars between the two, and especially with the U.S. going into a presidential election campaign that has already shown signs of inflammatory anti-China rhetoric before it has even got going.

The proposed cybercrime dialogue provides, though, another example, of how Xi is trying to define issues on Beijing’s own or parallel terms, not on Washington’s. The Asian Infrastructure Investment Bank initiative is another. The Beijing development model in Africa is a third.

Being seen at home to be writing new rules of the game not playing by the old ones and standing shoulder to shoulder with the U.S. as an equal was a significant purpose of Xi’s trip.

State media laid great emphasis for its domestic audience on Xi and Obama forging a new model for great power leadership, a theme echoed in the coverage of Xi’s address to the United Nations General Assembly where Xi was lauded for breathing “new life into the development of international relations, leaving a deep imprint in the history of China’s diplomacy.”

Win-win is the new watchword for China’s diplomacy. It is a portrayal of the country as an alternative to traditional great or colonial powers. China’s narrative is that it is a developing country that will be a partner to others not a master. This fits with a traditional commercial concept that negotiation is about building trust for long-term cooperation rather than resolving an immediate problem at hand.

The reality is that great powers have national interests and it is their power to impose those interests that makes them great powers.

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