As if the relationship between the EU and China was not already critical enough: It was now revealed that a minor, albeit symbolic, incident at the opening of a trade fair in Shanghai caused a stir: A pre-recorded videotaped speech by EU Council President Charles Michel was not broadcasted at the opening of the Shanghai Import Expo on Friday. China apparently felt snubbed, since Michel is said to have called on Beijing in relatively direct terms to lobby Putin to end his campaign of the war in Ukraine.
Conversely, it is almost astonishing that Brussels believed that current China would allow such a critical speech to be broadcast publicly. Whether the whole thing will have any repercussions is still uncertain. Diplomatically and trade-politically it seethes in Brussels anyway, as Amelie Richter reports. Next week, Charles Michel is expected to meet Xi Jinping in person at the G20 summit in Bali.
Meanwhile, the final spurt of the annual Singles’ Day shopping festival, which is no longer limited to just one day, is moving closer. Our team of authors in China explains why online department stores are having a more challenging time this year – and why it seems nevertheless possible to cross a symbolically important sales threshold.
We wish you an exciting read,
Chinese authorities have not shown a pre-recorded critical opening speech by EU Council President Charles Michel at the major Shanghai trade fair. Michel’s spokesman, Barend Leyts, confirmed the incident, saying the EU Council President had been invited to speak at the 5th Hongqiao Forum (CIIE) in Shanghai. So, the video was scheduled for the opening of the CIIE on Friday. But it wasn’t broadcasted. “As requested by the Chinese authorities, we had indeed provided a pre-recorded message which was ultimately not shown.” The issue is now being raised with the Chinese side through “normal diplomatic channels,” Leyts explained.
In his speech, Michel had sharply criticized “Russia’s illegal war on Ukraine”, according to a Reuters report. China must use the influence it has through its “unlimited partnership” with Russia to stop Moscow’s brutal war, the EU Council President is reported to have said in the video message, according to diplomats. He was referring to a pact announced by China’s leader Xi Jinping and Russia’s President Vladimir Putin in early February, shortly before the war began.
Michel also reportedly appealed directly to the Chinese leadership to stop the bloodshed in Ukraine. “You, China, can help put an end to this,” Michel is quoted as saying in the video message. He also stressed that Europe would learn “important lessons” from the conflict. He said, Europe has been too dependent on Russia for fossil fuels, leading to a trade imbalance.
The EU wants to “avoid over-dependencies” in trade relations in the future, an EU diplomat with knowledge of the speech told Reuters. “This is also true of our trade relations with China.” That was the wording in Michel’s video speech, he said. Who was responsible for the cancellation of Michel’s video was not publicly explained at first. At a press conference Tuesday in Beijing, Chinese Foreign Ministry spokesman Zhao Lijian said he was “not aware of the relevant situation” and therefore could not comment. Speaking to the South China Morning Post, an EU diplomat said the cancellation of Michel’s speech was done by the expo organizer.
Other high-ranking officials who spoke at the ceremony after Chinese President Xi Jinping included the Head of the International Monetary Fund, the Director General of the World Trade Organization (WTO), and the presidents of Indonesia, Sri Lanka, and Belarus, according to the fair’s official website.
The incident occurred shortly before a personal meeting between the EU Council head and China’s president: They are to speak next week on the sidelines of the G20 summit in Bali, as EU circles confirmed. It will be the first face-to-face meeting of an EU representative with Xi in just over three years. Since the Covid pandemic began in early 2020, all EU-China talks at this range level have taken place online. It was initially unknown how long the meeting in Indonesia will last and what is on the agenda.
In any case, there are enough crucial issues. The EU is increasingly critical of the high dependence on the People’s Republic. Just this week, according to the Dortmund chip manufacturer Elmos, the German government prohibited the sale of wafer production to the Swedish subsidiary of a Chinese company (China.Table reported). Previously, Berlin’s permission for the Chinese state shipping company Cosco to enter into an operating company at a terminal in the Port of Hamburg and Chancellor Olaf Scholz’s trip to Beijing had caused discussion.
At the end of the month, on Nov. 22, the EU Parliament plans to discuss these issues in a debate on EU-China relations. A plenary discussion with EU High Representative for Foreign Affairs Josep Borrell is on the agenda. Today on Wednesday, the October EU summit will be the subject of a plenary debate. On Thursday, the EU Parliament is also expected to give the green light for a new trade policy instrument to investigate and combat market-distorting foreign subsidies (China.Table reported).
The EU Commission wants to prevent highly subsidized foreign companies from taking over European firms – which will primarily affect China. At last month’s European Council meeting in Brussels, the heads of state and government already discussed ways to reduce dependence on China for critical raw materials.
In addition to the trade disagreements, things are simmering at other diplomatic levels: Brussels diplomats have begun discussing the renewal of sanctions against Chinese officials for alleged human rights abuses in Xinjiang, according to EU sources. The EU introduced these punitive measures in March 2020 and must reaffirm them every year. Beijing had responded to the EU sanctions against four officials and one organization with sanctions of its own against members of the EU Parliament, European think tanks, and researchers. This, in turn, resulted in the EU Parliament putting ratification of the CAI investment agreement on hold.
Chinese diplomats who have toured Europe in recent months had held out the prospect of lifting Chinese sanctions – but only if Brussels first withdraws its punitive measures. After the UN report on the situation in Xinjiang, however, a withdrawal from the European side seems unlikely at present. Instead, the sanctions could be confirmed this month.
When Alibaba invented Singles’ Day in 2009, it was the start of a great success story. The idea of an online bargain shopping day, modeled on Black Friday or Cyber Monday in the USA, simply fitted the zeitgeist. China’s economy was booming. The rapidly growing Chinese middle class had plenty of money to spend. Year after year, Alibaba and other online retailers like JD.com – who also jumped on the bandwagon – set new sales records. Manufacturers, mail-order companies and logistics providers prepare for this peak virtually all year. Inventories are gradually filling up – until they are plundered by customers in one fell swoop in November.
Two figures illustrate the colossus that Alibaba alone has grown into in just over a decade: While the value of all products sold by the group on the first Singles’ Day on Nov. 11, 2009, was only $8.7 million, it was already $84.5 billion at the 13th edition last year (China.Table reported). All Chinese companies put together managed sales of $136 billion – or ¥952 billion – at what is now the world’s biggest shopping festival.
Will traders now succeed in cracking the symbolic mark of ¥1 trillion at the 14th edition of Singles’ Day this Friday? Actually, it wouldn’t take much of a leap to do so. However, this symbolic success is by no means a foregone conclusion. To artificially boost sales, the one-day shopping event was turned into a two-week bargain festival for the first time in 2020. The actual Singles’ Day on Nov. 11 now only forms the finale of the already ongoing campaign. The days before Nov. 11 are included In the number of total sales.
But even this sleight of hand could not prevent Alibaba and the other groups from recording their slowest sales growth to date last year. If forecasts are to be believed, sales will increase only slightly this year – if at all. They may even decline for the first time.
In any case, the results of a survey by management consultants Bain and Company do not bode well. 34 percent of respondents said they planned to spend less on Singles’ Day this year. Only 24 percent plan to buy more than in 2021. It also seems to be increasingly difficult to find new buyer groups in less developed cities. In last year’s survey, 12 percent of respondents from the so-called “Tier 3” to “Tier 5” provincial cities said they were taking part in Singles’ Day for the first time. But this year, the figure was only eight percent. One reason for this is that more and more people already have experience with the shopping festival – but that’s not the only reason.
The expected restraint is due to the weakening Chinese economy and the continuing strict zero-Covid policy, say the Bain analysts. They speak of a “significantly darker outlook than 2021.” Consumer confidence has been damaged by the recent Covid outbreaks and global macroeconomic turmoil, they said.
A weak Singles’ Day result would be another sign for international investors that the problems of the Chinese Internet giants have still not been overcome. Shares in tech companies have already been under heavy pressure for two years because of the major government crackdown on the industry. Now China’s real economic problems also seem to have an impact on balance sheets. Jörn Petring
Sinolytics is a European consulting and analysis company specializing in China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.
China’s 20th Party Congress has come and gone. Despite all the fanfare and media hype, it was a hollow event. It revealed little we didn’t already know about China – an autocracy that maintains grandiose ambitions and ideological bluster to match but is woefully unprepared for an uncertain future filled with risks largely of its own making. That much is evident when the results of the Congress are examined from three perspectives: leadership, strategy, and conflict.
The leadership reveal of the so-called First Plenum – the formal meeting of the Party’s newly “elected” 205-member Central Committee that immediately follows the conclusion of the National Congress – was completely in line with the power consolidation that has been underway since Xi Jinping was first appointed general secretary ten years ago. Confirmation of Xi’s third five-year term as leader of the Communist Party of China (CPC) was never in doubt, nor was his selection of loyalists to surround him at the top in the seven-member Standing Committee of the Politburo.
There will undoubtedly be some jockeying for positions such as premier and the chairs of the two legislative bodies – the National People’s Congress and the Chinese People’s Political Consultative Congress. But the outcomes matter little. In Xi’s China, these positions, once central to the model of consensus leadership that Deng Xiaoping wisely put in place following the death of Mao Zedong, have been marginalized.
Curiously, Xi seems to have a preference for premiers with the surname of Li. Li Qiang, currently the Shanghai party chief and the very public face of China’s draconian zero-COVID lockdowns, is the strong favorite to replace the retiring incumbent, Li Keqiang.
Wang Huning is worth mentioning as the only other noteworthy leadership appointment. Apart from Xi, he is one of two holdovers from the previous Standing Committee and appears to be in line for one of the ceremonial legislative chairs.
But Wang’s role is far more important than that. He is not only Xi’s ideological alter ego, responsible for crafting Xi’s signature “Chinese Dream” as well as “Xi Jinping Thought”; he also has been a prominent proponent of the view that America is in decline. Wang’s 1991 book, America Against America, written after a three-month visit to the United States, paints a grim picture of a country beset by mounting social and political turmoil, ripe for crisis.
When that crisis occurred – the 2008-09 made-in-America global financial crisis – Wang’s view became ascendant within CPC leadership circles, leading Xi to conclude that a rising China was well positioned to challenge a waning America. Wang’s promotion adds worrisome fuel to the US-China conflict, a point I hint at in my new book, Accidental Conflict.
In terms of strategy, the main message of the 20th Party Congress is that China will stay the course of the past five years. This means one thing: national security takes precedence over economic growth.
While the Congress stressed that modernization remains “the central task of the Party,” this statement is all but meaningless. The CPC has lost itself in endless praise of Xi as China’s core leader, the ideological virtues of Xi Jinping Thought, and the all-encompassing need to “pursue a holistic approach to national security and promote national security in all areas and stages of the work of the Party and the country.” In other words, modernization and growth are fine, but only on Xi’s terms.
So, what do those terms look like? An important hint is provided by the Congress’s emphasis on another of Xi’s signature initiatives, the Common Prosperity campaign, which features a variety of efforts aimed at tempering wealth and income disparities. Common Prosperity was also associated with the 2021 regulatory assault on the private sector, especially the once-dynamic internet-platform companies that have since been all but decimated by the purging of “bad habits” associated with online gaming, live-streaming, music, and private tutoring.
While Beijing’s subsequent spin has attempted to soften this regulatory clampdown, the targeted companies have been crushed in the equity market, as have the animal spirits and potential for indigenous innovation their spectacular growth once promised. The outcome of the 20th Party Congress underscores an important distinction between economic growth “with Chinese characteristics,” as it has long been described, and a very different strain of development with Xi Jinping characteristics. The latter unfortunately throws cold water on the Chinese dynamism that many, including me, have long emphasized.
Perhaps the most noteworthy implications of the Congress pertain to conflict. The Congress emphasized the “unparalleled complexity,” “graveness,” and “difficulty” that China faces at home and abroad. While hardly an Earth-shattering admission, it exposes Xi’s willingness to accept the growth sacrifice as a steep price to pay for national security.
The opaque ideological dogma of the Congress only hinted at what to expect from China in meeting those challenges. That was more evident in Xi’s July 2021 speech commemorating the 100th anniversary of the CPC’s founding. “We will never allow any foreign force to bully, oppress, or subjugate us,” he said then. “Anyone who would attempt to do so will find themselves on a collision course with a great wall of steel forged by over 1.4 billion Chinese people.”
In view of this warning and the challenges that Xi stressed at the 20th Party Congress, the collision with the US championed by Wang takes on new meaning. The clash concerns not only Taiwan, frictions in the South China Sea, and Western pressure concerning human-rights abuses in Xinjiang. At its root, it’s about the containment strategy that the US has pursued toward China – a strategy President Joe Biden’s administration recently turbocharged with new export sanctions aimed at China’s advanced technologies. It’s also about China’s “unlimited partnership” with Russia and the risk of guilt by association with Vladimir Putin’s unconscionable war on Ukraine.
As Xi stressed at the Congress, these are obviously complex challenges. But in celebrating the CPC centennial, he left little doubt of what those challenges might portend: “Having the courage to fight and the fortitude to win is what has made our party invincible.” A modernized and expanded military puts teeth into that threat and underscores the risks posed by Xi’s conflict-prone China.
Stephen S. Roach was Chairman of Morgan Stanley Asia. He is a professor at Yale University and the author of the forthcoming book Accidental Conflict: America, China, and the Clash of False Narratives (Yale University Press, November 2022).
Copyright: Project Syndicate, 2022.
www.project-syndicate.org
A caravan of chrysanthemum pickers makes its way through the hilly landscape of Youyang, outside the mega-city of Chongqing in the southwest. In China, the golden yellow flower has been cultivated for 1600 years, and chrysanthemum tea is very popular. Because of its blooming in autumn and its winter hardiness, the plant is considered a symbol of courage and longevity.
As if the relationship between the EU and China was not already critical enough: It was now revealed that a minor, albeit symbolic, incident at the opening of a trade fair in Shanghai caused a stir: A pre-recorded videotaped speech by EU Council President Charles Michel was not broadcasted at the opening of the Shanghai Import Expo on Friday. China apparently felt snubbed, since Michel is said to have called on Beijing in relatively direct terms to lobby Putin to end his campaign of the war in Ukraine.
Conversely, it is almost astonishing that Brussels believed that current China would allow such a critical speech to be broadcast publicly. Whether the whole thing will have any repercussions is still uncertain. Diplomatically and trade-politically it seethes in Brussels anyway, as Amelie Richter reports. Next week, Charles Michel is expected to meet Xi Jinping in person at the G20 summit in Bali.
Meanwhile, the final spurt of the annual Singles’ Day shopping festival, which is no longer limited to just one day, is moving closer. Our team of authors in China explains why online department stores are having a more challenging time this year – and why it seems nevertheless possible to cross a symbolically important sales threshold.
We wish you an exciting read,
Chinese authorities have not shown a pre-recorded critical opening speech by EU Council President Charles Michel at the major Shanghai trade fair. Michel’s spokesman, Barend Leyts, confirmed the incident, saying the EU Council President had been invited to speak at the 5th Hongqiao Forum (CIIE) in Shanghai. So, the video was scheduled for the opening of the CIIE on Friday. But it wasn’t broadcasted. “As requested by the Chinese authorities, we had indeed provided a pre-recorded message which was ultimately not shown.” The issue is now being raised with the Chinese side through “normal diplomatic channels,” Leyts explained.
In his speech, Michel had sharply criticized “Russia’s illegal war on Ukraine”, according to a Reuters report. China must use the influence it has through its “unlimited partnership” with Russia to stop Moscow’s brutal war, the EU Council President is reported to have said in the video message, according to diplomats. He was referring to a pact announced by China’s leader Xi Jinping and Russia’s President Vladimir Putin in early February, shortly before the war began.
Michel also reportedly appealed directly to the Chinese leadership to stop the bloodshed in Ukraine. “You, China, can help put an end to this,” Michel is quoted as saying in the video message. He also stressed that Europe would learn “important lessons” from the conflict. He said, Europe has been too dependent on Russia for fossil fuels, leading to a trade imbalance.
The EU wants to “avoid over-dependencies” in trade relations in the future, an EU diplomat with knowledge of the speech told Reuters. “This is also true of our trade relations with China.” That was the wording in Michel’s video speech, he said. Who was responsible for the cancellation of Michel’s video was not publicly explained at first. At a press conference Tuesday in Beijing, Chinese Foreign Ministry spokesman Zhao Lijian said he was “not aware of the relevant situation” and therefore could not comment. Speaking to the South China Morning Post, an EU diplomat said the cancellation of Michel’s speech was done by the expo organizer.
Other high-ranking officials who spoke at the ceremony after Chinese President Xi Jinping included the Head of the International Monetary Fund, the Director General of the World Trade Organization (WTO), and the presidents of Indonesia, Sri Lanka, and Belarus, according to the fair’s official website.
The incident occurred shortly before a personal meeting between the EU Council head and China’s president: They are to speak next week on the sidelines of the G20 summit in Bali, as EU circles confirmed. It will be the first face-to-face meeting of an EU representative with Xi in just over three years. Since the Covid pandemic began in early 2020, all EU-China talks at this range level have taken place online. It was initially unknown how long the meeting in Indonesia will last and what is on the agenda.
In any case, there are enough crucial issues. The EU is increasingly critical of the high dependence on the People’s Republic. Just this week, according to the Dortmund chip manufacturer Elmos, the German government prohibited the sale of wafer production to the Swedish subsidiary of a Chinese company (China.Table reported). Previously, Berlin’s permission for the Chinese state shipping company Cosco to enter into an operating company at a terminal in the Port of Hamburg and Chancellor Olaf Scholz’s trip to Beijing had caused discussion.
At the end of the month, on Nov. 22, the EU Parliament plans to discuss these issues in a debate on EU-China relations. A plenary discussion with EU High Representative for Foreign Affairs Josep Borrell is on the agenda. Today on Wednesday, the October EU summit will be the subject of a plenary debate. On Thursday, the EU Parliament is also expected to give the green light for a new trade policy instrument to investigate and combat market-distorting foreign subsidies (China.Table reported).
The EU Commission wants to prevent highly subsidized foreign companies from taking over European firms – which will primarily affect China. At last month’s European Council meeting in Brussels, the heads of state and government already discussed ways to reduce dependence on China for critical raw materials.
In addition to the trade disagreements, things are simmering at other diplomatic levels: Brussels diplomats have begun discussing the renewal of sanctions against Chinese officials for alleged human rights abuses in Xinjiang, according to EU sources. The EU introduced these punitive measures in March 2020 and must reaffirm them every year. Beijing had responded to the EU sanctions against four officials and one organization with sanctions of its own against members of the EU Parliament, European think tanks, and researchers. This, in turn, resulted in the EU Parliament putting ratification of the CAI investment agreement on hold.
Chinese diplomats who have toured Europe in recent months had held out the prospect of lifting Chinese sanctions – but only if Brussels first withdraws its punitive measures. After the UN report on the situation in Xinjiang, however, a withdrawal from the European side seems unlikely at present. Instead, the sanctions could be confirmed this month.
When Alibaba invented Singles’ Day in 2009, it was the start of a great success story. The idea of an online bargain shopping day, modeled on Black Friday or Cyber Monday in the USA, simply fitted the zeitgeist. China’s economy was booming. The rapidly growing Chinese middle class had plenty of money to spend. Year after year, Alibaba and other online retailers like JD.com – who also jumped on the bandwagon – set new sales records. Manufacturers, mail-order companies and logistics providers prepare for this peak virtually all year. Inventories are gradually filling up – until they are plundered by customers in one fell swoop in November.
Two figures illustrate the colossus that Alibaba alone has grown into in just over a decade: While the value of all products sold by the group on the first Singles’ Day on Nov. 11, 2009, was only $8.7 million, it was already $84.5 billion at the 13th edition last year (China.Table reported). All Chinese companies put together managed sales of $136 billion – or ¥952 billion – at what is now the world’s biggest shopping festival.
Will traders now succeed in cracking the symbolic mark of ¥1 trillion at the 14th edition of Singles’ Day this Friday? Actually, it wouldn’t take much of a leap to do so. However, this symbolic success is by no means a foregone conclusion. To artificially boost sales, the one-day shopping event was turned into a two-week bargain festival for the first time in 2020. The actual Singles’ Day on Nov. 11 now only forms the finale of the already ongoing campaign. The days before Nov. 11 are included In the number of total sales.
But even this sleight of hand could not prevent Alibaba and the other groups from recording their slowest sales growth to date last year. If forecasts are to be believed, sales will increase only slightly this year – if at all. They may even decline for the first time.
In any case, the results of a survey by management consultants Bain and Company do not bode well. 34 percent of respondents said they planned to spend less on Singles’ Day this year. Only 24 percent plan to buy more than in 2021. It also seems to be increasingly difficult to find new buyer groups in less developed cities. In last year’s survey, 12 percent of respondents from the so-called “Tier 3” to “Tier 5” provincial cities said they were taking part in Singles’ Day for the first time. But this year, the figure was only eight percent. One reason for this is that more and more people already have experience with the shopping festival – but that’s not the only reason.
The expected restraint is due to the weakening Chinese economy and the continuing strict zero-Covid policy, say the Bain analysts. They speak of a “significantly darker outlook than 2021.” Consumer confidence has been damaged by the recent Covid outbreaks and global macroeconomic turmoil, they said.
A weak Singles’ Day result would be another sign for international investors that the problems of the Chinese Internet giants have still not been overcome. Shares in tech companies have already been under heavy pressure for two years because of the major government crackdown on the industry. Now China’s real economic problems also seem to have an impact on balance sheets. Jörn Petring
Sinolytics is a European consulting and analysis company specializing in China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.
China’s 20th Party Congress has come and gone. Despite all the fanfare and media hype, it was a hollow event. It revealed little we didn’t already know about China – an autocracy that maintains grandiose ambitions and ideological bluster to match but is woefully unprepared for an uncertain future filled with risks largely of its own making. That much is evident when the results of the Congress are examined from three perspectives: leadership, strategy, and conflict.
The leadership reveal of the so-called First Plenum – the formal meeting of the Party’s newly “elected” 205-member Central Committee that immediately follows the conclusion of the National Congress – was completely in line with the power consolidation that has been underway since Xi Jinping was first appointed general secretary ten years ago. Confirmation of Xi’s third five-year term as leader of the Communist Party of China (CPC) was never in doubt, nor was his selection of loyalists to surround him at the top in the seven-member Standing Committee of the Politburo.
There will undoubtedly be some jockeying for positions such as premier and the chairs of the two legislative bodies – the National People’s Congress and the Chinese People’s Political Consultative Congress. But the outcomes matter little. In Xi’s China, these positions, once central to the model of consensus leadership that Deng Xiaoping wisely put in place following the death of Mao Zedong, have been marginalized.
Curiously, Xi seems to have a preference for premiers with the surname of Li. Li Qiang, currently the Shanghai party chief and the very public face of China’s draconian zero-COVID lockdowns, is the strong favorite to replace the retiring incumbent, Li Keqiang.
Wang Huning is worth mentioning as the only other noteworthy leadership appointment. Apart from Xi, he is one of two holdovers from the previous Standing Committee and appears to be in line for one of the ceremonial legislative chairs.
But Wang’s role is far more important than that. He is not only Xi’s ideological alter ego, responsible for crafting Xi’s signature “Chinese Dream” as well as “Xi Jinping Thought”; he also has been a prominent proponent of the view that America is in decline. Wang’s 1991 book, America Against America, written after a three-month visit to the United States, paints a grim picture of a country beset by mounting social and political turmoil, ripe for crisis.
When that crisis occurred – the 2008-09 made-in-America global financial crisis – Wang’s view became ascendant within CPC leadership circles, leading Xi to conclude that a rising China was well positioned to challenge a waning America. Wang’s promotion adds worrisome fuel to the US-China conflict, a point I hint at in my new book, Accidental Conflict.
In terms of strategy, the main message of the 20th Party Congress is that China will stay the course of the past five years. This means one thing: national security takes precedence over economic growth.
While the Congress stressed that modernization remains “the central task of the Party,” this statement is all but meaningless. The CPC has lost itself in endless praise of Xi as China’s core leader, the ideological virtues of Xi Jinping Thought, and the all-encompassing need to “pursue a holistic approach to national security and promote national security in all areas and stages of the work of the Party and the country.” In other words, modernization and growth are fine, but only on Xi’s terms.
So, what do those terms look like? An important hint is provided by the Congress’s emphasis on another of Xi’s signature initiatives, the Common Prosperity campaign, which features a variety of efforts aimed at tempering wealth and income disparities. Common Prosperity was also associated with the 2021 regulatory assault on the private sector, especially the once-dynamic internet-platform companies that have since been all but decimated by the purging of “bad habits” associated with online gaming, live-streaming, music, and private tutoring.
While Beijing’s subsequent spin has attempted to soften this regulatory clampdown, the targeted companies have been crushed in the equity market, as have the animal spirits and potential for indigenous innovation their spectacular growth once promised. The outcome of the 20th Party Congress underscores an important distinction between economic growth “with Chinese characteristics,” as it has long been described, and a very different strain of development with Xi Jinping characteristics. The latter unfortunately throws cold water on the Chinese dynamism that many, including me, have long emphasized.
Perhaps the most noteworthy implications of the Congress pertain to conflict. The Congress emphasized the “unparalleled complexity,” “graveness,” and “difficulty” that China faces at home and abroad. While hardly an Earth-shattering admission, it exposes Xi’s willingness to accept the growth sacrifice as a steep price to pay for national security.
The opaque ideological dogma of the Congress only hinted at what to expect from China in meeting those challenges. That was more evident in Xi’s July 2021 speech commemorating the 100th anniversary of the CPC’s founding. “We will never allow any foreign force to bully, oppress, or subjugate us,” he said then. “Anyone who would attempt to do so will find themselves on a collision course with a great wall of steel forged by over 1.4 billion Chinese people.”
In view of this warning and the challenges that Xi stressed at the 20th Party Congress, the collision with the US championed by Wang takes on new meaning. The clash concerns not only Taiwan, frictions in the South China Sea, and Western pressure concerning human-rights abuses in Xinjiang. At its root, it’s about the containment strategy that the US has pursued toward China – a strategy President Joe Biden’s administration recently turbocharged with new export sanctions aimed at China’s advanced technologies. It’s also about China’s “unlimited partnership” with Russia and the risk of guilt by association with Vladimir Putin’s unconscionable war on Ukraine.
As Xi stressed at the Congress, these are obviously complex challenges. But in celebrating the CPC centennial, he left little doubt of what those challenges might portend: “Having the courage to fight and the fortitude to win is what has made our party invincible.” A modernized and expanded military puts teeth into that threat and underscores the risks posed by Xi’s conflict-prone China.
Stephen S. Roach was Chairman of Morgan Stanley Asia. He is a professor at Yale University and the author of the forthcoming book Accidental Conflict: America, China, and the Clash of False Narratives (Yale University Press, November 2022).
Copyright: Project Syndicate, 2022.
www.project-syndicate.org
A caravan of chrysanthemum pickers makes its way through the hilly landscape of Youyang, outside the mega-city of Chongqing in the southwest. In China, the golden yellow flower has been cultivated for 1600 years, and chrysanthemum tea is very popular. Because of its blooming in autumn and its winter hardiness, the plant is considered a symbol of courage and longevity.
