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Following the 20th Party Congress, not only the German business wonders: Is the China boom nearing its end with Xi Jinping’s third term? Joerg Wuttke, President of the EU Chamber of Commerce in China, sees Xi’s priorities as maintaining power and stability at the cost of innovation and market economy. Speaking with Frank Sieren, Wuttke explains the complex situation we find ourselves in. True, companies can continue to do good business, especially in the manufacturing sector. But growing rivalry with China is making life difficult for them – especially as the leadership punishes them for the actions of their governments. That is why Wuttke believes the upcoming trip to China of Germany’s Olaf Scholz is “sensible and extremely important.” As Merkel once demonstrated, many things can be discussed much better in private than at a large gathering – “especially the unpleasant topics.”
Volker Stanzel, on the other hand, is less optimistic about Scholz’s visit to China and Germany’s economic opportunities in the People’s Republic. In a guest article for China.Table, the former German ambassador to Beijing explains that “the lottery called change through trade” is over. Scholz could “if not to save change, then to save the best from trade.” But that is far from being a sustainable China strategy.
Numerous politicians and even business representatives are therefore calling for a clear stance toward China during the visit. But China’s state media welcome the trip, as you will find in our analysis. The port deal, they say, is Scholz’s present for the host. However, this is precisely the perception the chancellor wanted to avoid.
The incident around Hu Jintao in the Great Hall of the People still remains a mystery: Was it a case of public humiliation or, after all, the health emergency of an ex-statesman who might be suffering from dementia? Numerous arguments and counter-arguments are circulating for both theories – practically all of them are somehow plausible, but none of them are believable, writes Christiane Kuehl. She dove deep into the online rumor mill for her analysis.
To what extent is the 20th Party Congress a turning point in the history of modern China?
President Xi Jinping now gathered all the yes-men around him, cementing a power that has not existed for at least 30 years. None of the members of the Politburo Standing Committee belong to any other faction anymore. He cleared them all out. He no longer has to compromise in that body. So now we have to get used to the fact that Xi Jinping will stay in power for a very long time. This was not just the start of his third term in office, but probably the fourth or even the fifth.
At least two of the newcomers, Li Qiang and Li Xi, served as party leaders in the progressive boom provinces of Shanghai and Guangdong.
This should not be overrated. Xi himself was party leader in economically progressive provinces like Fujian or Shanghai. But now he is head of the Communist Party. And he made it perfectly clear what that means: Xi wants private companies to follow the rules of the game proclaimed by the Party. That, after all, already caused a great deal of unrest. Hong Kong’s Hang Seng Index plunged by almost seven percent the day after the Standing Committee’s presentation. The markets know: Xi will now follow through with his communist program.
So is this the end of the China boom?
The end of an unchecked boom, at least. Xi will now prop up the real economy more, and the IT sector less. He is skeptical here. It has far too much power for his taste. That was already apparent with Alibaba and Tencent. Innovation, yes, but on a tight rein.
But surely Xi needs growth to maintain social stability?
He will simultaneously try to relax the gap between rich and poor. This will certainly be of great benefit to the lower class and part of the middle class. It will also make the hinterland more stable. However, the innovative private sector fears this will happen on its back.
So far, however, the impression was that Chinese policymakers understood the importance of innovation and technology for a prosperous economy better than European policymakers.
That is still true to some extent. But Xi and his Politburo also have other priorities that are in doubt more important than innovation: stability and control. Everyone he gathered around him has a very strong control background. He also said quite clearly in his speech. First stability, then a market economy. He is convinced that this is the more stable path than that of the West.
Xi said at the same time at the end of his speech introducing the Standing Committee: China will open its doors further. And: China needs the world. How does that fit together?
This is just lip service. The 72-page report talks about security. It talks about fights. The fight with foreign countries is mentioned 15 times.
…which, however, is not meant in a military sense…
…no, not that. It talks about the systemic conflict with the West. As foreign investors, we now have to ask ourselves to what extent we are becoming even more of a pawn in this system struggle. In the past, we have often been held responsible for the political decisions of our governments. This has little to do with a market economy and can become very unpleasant.
What will change?
For the real economy, that is, the manufacturing sector, probably not so much will change. China needs us in this area, including our know-how. We are still in a really good position here and will be part of the Chinese upswing for years to come. I’m more worried about the service sector, especially in the financial sector, which only opens up by the millimeter. And even more so in information technology, where they are already pushing us back because they are very good in that area themselves. There is a danger that they will push us out completely and even take their Chinese companies by the scruff of the neck.
Why?
It’s not just about information, but also about control. And when it comes to control, they no longer make any compromises. Regardless of whether or not it’s market-based. This is an incalculable risk for private companies. This will not do China any favors as a location for innovation. But the Party wants it that way, so it gets it.
What role does “buy Chinese” play, in other words, meaning that as nationalism rises, it becomes more and more fashionable to buy Chinese products.
In areas where they are well positioned, they try to push us foreigners out for good. But that’s what we’re seeing in the US, too: buy American. It’s happening almost like a mirror image.
How must Europe position itself now with a USA that is possibly already toying with the idea of electing Trump again and a China that is focused on one person?
We have to do our homework, refocus more on research and science, break down our own barriers and represent our values and interests convincingly. But we can de facto say goodbye to the idea that we can still exert great pressure on the US or China. Not even in China’s case with sanctions. That is an illusion. We now have to be convincing.
Or look for alternatives to China?
Unfortunately, there aren’t any in many areas. Not in cars, not in mechanical engineering, not in chemicals. China is China, and that will not change in the long term. China is unique in the world in terms of its mix of market size, low costs, new infrastructure and good quality. If our companies look to China’s neighbors, it will be as a supplement rather than a substitute. We have to be realistic about that. European companies will have to continue to invest a lot in China. Especially the big companies.
What do you think of the decision to sell parts of the port of Hamburg to China? Are we not recklessly increasing our dangerous dependence?
No, the decision is good and right. It strengthens our economy. We saw that in Piraeus in Greece. The Chinese even hold a 67 percent majority in the port. At first, everyone was skeptical. Then China catapulted the port from 82nd to 28th place worldwide and made it one of the most important ports in the Mediterranean. Greece’s economy is thus less susceptible to crisis. That’s good for Europe, too. And in the meantime, even the strong Greek trade unions are satisfied. A success story.
However, dependence on China has increased.
The EU, especially Germany, forced Greece to privatize back then, and only the Chinese wanted to take the risk. Nobody in the EU. That is not the fault of the Chinese.
However, things are different in Hamburg. No one has forced Hamburg.
Yes, but where is the dependency? Products that we buy anyway will now be handled more efficiently and for the benefit of our economy via Hamburg and not via another port. Cosco cannot decide that no more ships from the USA or Taiwan can be unloaded in the port or at the terminal. Ghosts have been painted on the wall. Moreover, it is not smart to close our own market when, on the other hand, we are demanding more market access and more reciprocity from China.
German Chancellor Olaf Scholz will be traveling to China on November 4. Does this trip even make sense at this stage? Isn’t it kowtowing?
No. It makes absolute sense and is extremely important. Scholz is the first Western politician to meet Xi after the 20th Party Congress and probably the last before the important G20 summit in Bali. Scholz has never met Xi in office. Many things can be discussed much better in private than in the big room. This is especially true of unpleasant topics: Ukraine, Taiwan, Xinjiang. But it is also easier to find common ground, for example in the fight against climate change.
But do they even listen to us anymore?
Precisely because the president has now built his echo chamber, foreign politicians should now talk to Xi even more often. We cannot simply wish China away; we have to cope with China, whoever governs it.
However, Germany still does not have an official China strategy. Wouldn’t it make sense to agree on a China strategy first, even at the European level?
A common European strategy is indispensable. But we cannot adopt a strategy for such an important country until we have spoken personally and intensively with its top politicians. Otherwise, the risk is too great that we will be guided more by our wishful thinking and domestic politics than by the reality in China and our requirements as the world’s export champion. That cannot happen.
Is China now more rival than partner?
No. It continues to be all three: partner, competitor and rival. And we need a strategy for each of the three areas without lying to ourselves. If you simplify this to just one of the terms, the discussion will become as lopsided as it was with the Port of Hamburg. Three keywords are really not too complex for a country with 1.4 billion people. Any politician who believes that only one of these three perspectives is sufficient should be viewed with caution. Those are usually populists who will not manage to talk to China on an equal footing. And that is now more important than ever.
China’s media are also currently focusing intensively on the upcoming trip of the German chancellor to Beijing – and have their own perspective. A “great gift to China” from Chancellor Olaf Scholz is what the online video channel HNR and other commentaries call the approval for the partial acquisition of a Hamburg port terminal. Scholz showed “sincerity” here. Although this is not how the Chancellor’s Office wanted to be seen directly before Scholz’s trip to Beijing. But that is how it looks, and that is apparently how observers in China perceive it.
In general, there is a lot of euphoria in China’s state media in the run-up to the trip. “German companies scramble to join China delegation” is another headline, for example on Hunan TV, the second-largest Chinese broadcaster. Particularly common in recent weeks has been the statement, “Scholz rejects decoupling from China.” The Global Times calls critics of the port approval and the travel with a business delegation “ideological snipers” who reflexively target Scholz. The idea that a small port stake could grow into “encirclement” is absurd, they say.
German Chancellor Olaf Scholz will travel with a large business delegation to Beijing on Thursday for a stopover visit to meet President Xi Jinping. The visit currently triggers considerable discussion and fuels the debate about economic ties with the autocracy in the Far East.
In the run-up to Scholz’s China visit, demands for a clear position from the chancellor are also mounting within the governing coalition. For example, Jessica Rosenthal, the leader of the Young Socialists and a member of the Bundestag, said on Friday that Scholz must “make it very clear where the limits are when doing business with a democracy”. The German government must be able, “to snub the dictator Xi Jinping. Because if you give in to the pressure, the dependency only deepens,” Rosenthal continued.
Over the weekend, liberal FDP leader Christian Lindner even called for a new law to curb China’s influence. The foreign policy spokesman for the FDP parliamentary group, Ulrich Lechte, said with regard to the sale of a stake in the Port of Hamburg to Cosco that Scholz must take a “much tougher stance toward China” in Beijing. “Making yourself dependent on an authoritarian system without any need, I find careless and short-sighted,” Lechte told the German news agency Redaktionsnetzwerk Deutschland (RND).
Green Party European politician Reinhard Bütikofer told RND that Scholz has given in to an “open Chinese blackmail attempt on the Cosco issue.” This hurts Germany’s reputation among its allies, he said. “The chancellor is acting as if nothing has changed in China under Xi Jinping, and is traveling to China with a huge business delegation like always,” conservative CDU foreign affairs expert Norbert Roettgen told RND newspapers. “This sends the wrong signal both internally and externally.”
The 12-member delegation that will be accompanying Scholz includes representatives from Biontech, Bayer, BMW, Adidas, Hipp, and the chemical company Wacker and heating technology company Geo Clima Design. Some of the most prominent names on the list include
According to information from the German business newspaper Handelsblatt, around 100 representatives from the German business community had applied to take part in the trip. BDI head Russwurm and Mercedes CEO Källenius are no longer part of the trip, unlike Angela Merkel’s last chancellor trip in 2019. According to Handelsblatt, it is still uncertain whether BMW boss Oliver Zipse will join the trip to China.
Scholz is the first Western head of government to meet Xi since the Party Congress. However, the president has already received visitors from Southeast Asia. The head of the Communist Party of Vietnam, Nguyen Phu Trong, arrived in Beijing on Sunday. He will stay until Wednesday. Pakistani Prime Minister Shehbaz Sharif will arrive on Tuesday, and the president of Tanzania has also announced his visit. So Scholz has to get in line behind the close Silk Road partners.
Meanwhile, criticism grows among German China experts that Scholz failed to understand the magnitude of the 20th Party Congress. If moderate cadres from different party wings, such as Hu Chunhua and Li Keqiang, had continued to play a role in the top leadership, a new orientation of policy might not be so urgent. But the shock of the purely pro-Xi makeup of all key bodies changes the situation. China is no longer the one-party state that people have come to accept for the past 50 years. It is a dictatorship with similar potential dangers like Russia’s Putin, is a frequently made argument. The watershed that was the outcome of the Party Congress requires a reassessment of relations. Fabian Peltsch/Finn Mayer-Kuckuk
A week after the incident involving former CP leader Hu Jintao, the world is still puzzled: Why was the 79-year-old suddenly led out of the hall in front of the lenses of international camera crews at the start of the final session of the Party Congress? Was it a planned show of force by Xi, a public symbol of the end he brought for Hu’s Youth League? Or was there a risk of a health emergency, or even embarrassment from the allegedly demented Hu? So far, there is no answer.
The longtime China correspondent for Japan’s Nikkei Asia newspaper claims to have come relatively close to the matter: All the top cadres present had feared that Hu would publicly voice his opinion of the new leadership, Katsuji Nakazawa wrote in the paper’s Thursday edition. He referred to a source with political connections who told him what was leaked from the Party’s core. That is why all top Party officials took pains not to make eye contact with Hu, Nakazawa said, “being seen caught in conversation with Hu, and giving the wrong response, could pose a significant political risk.” What was on Hu’s mind was clear to everyone: pent-up frustration with Xi.
Indeed, the unfazed-to-blank expressions of the Politburo members present around Xi Jinping – including Hu-friendly politicians such as Li Keqiang, Wang Yang and Hu Chunhua – were among the most disturbing aspects of the incident. Is respect and care for the elderly and sick not a matter of honor in China? For it was obvious at the Party Congress that Hu was in poor health. He has reportedly been suffering from Parkinson’s disease for many years. But it is still unclear whether Hu also has dementia.
So is it really the case that Hu posed a threat – to Xi Jinping’s performance, to politicians worried about their loyalty status with Xi? Because he was confused and might just have said anything? Or perhaps because, on the contrary, he was very much in full possession of his faculties and planned a deliberate provocation now that everything was over politically for him and his supporters anyway? Serious opinions and confused rumors on this issue are circulating on the net. Most China experts admit that they do not have any answers. Both scenarios, plot and illness, are plausible and implausible at the same time.
Proponents of the theory of a set-up planned by Xi stress the thoroughness with which he got rid of his predecessor’s Youth League faction at the Party Congress. Japanese photos show Hu Chunhua, who had previously even been considered a possible premier (China.Table reported), whose body language clearly expressed frustration: elbows propped up on the table, a blank stare. Premier Li Keqiang also had to go, despite being two years younger than Xi. But why would Xi need such a public display then?
Those who would rather believe in a spontaneous process cite both Hu’s obvious frailty and the facial expressions of the politicians sitting next to him. Videos show Li Zhanshu talking to Hu. He took a folder from his hand, but did not appear unfriendly. Or the fact that the CCP never has engaged in a power struggle on the open stage. But can Xi not be trusted to break this taboo as well?
Or did the two, health and politics, perhaps coincide? Did Xi use the opportunity to publicly humiliate his disliked predecessor? Hu may have been ill, but he was also angry. The incident gave the world an unintended glimpse into China’s political drama, which usually takes place behind the scenes, wrote Nakazawa.
Since the end of the Party Congress, more and more photos and videos of the incident, which lasted about three minutes, have been circulating. In the end, they do not clear up the mystery. Xi sat on the stage, proud of his political victory not yet revealed to the public. Hu, who sat next to him, must have been unhappy that he had failed to keep his protégés in power.
The cameras were already rolling when Hu picked up the red folder in front of him shortly before the meeting began and probably wanted to open it. The man who was sitting next to him, Li Zhanshu – until that point chairman of the National People’s Congress, but at 72 also on his way to retirement – spoke with Hu, and eventually took the folder from him, but seemed friendly. Wang Huning, one seat away, also joins in briefly. What they all said is unknown.
Xi noticed the process and beckoned a man over, to whom he whispered something.
He was then joined by another man, apparently Hu’s longtime bodyguard. A Wall Street Journal breakdown shows Xi and Hu exchanging a few more words in the man’s presence. The bodyguard took Hu’s glasses and Li Zhanshu’s red folder. He helped Hu out of his chair. Hu seemed to resist and tried to return to his seat. Then a second man, by now identified as a deputy director of the Communist Party General Office, came and asked Hu to leave. However, he still refused. Finally, the two managed to lead the 79-year-old away.
On the way, Hu spoke a few more words to Xi, who nodded with the hint of an inscrutable smile and said something brief. He then tapped Li Keqiang on the shoulder, who also said a few words but only half turned his head toward Hu. Then Hu strode out with the two men, according to the Wall Street Journal, past at least 37 high-ranking party officials who stared straight ahead. “It appeared as if an era had ended,” Joerg Wuttke, president of the EU Chamber of Commerce in China, told Reuters. “It looked, frankly, very strange”.
The state media did not report the incident with a word; the incident was completely edited out on TV. On Sunday, the state broadcaster CCTV also showed Hu Jintao casting his vote in the footage of the CC election from the night before. The official news agency Xinhua posted only two English tweets, because it was clear that the world knew about it.
“Xinhuanet reporter Liu Jiawen has learned that Hu Jintao insisted on attending the closing session of the Party’s 20th National Congress, even though he has been taking time to recuperate recently,” the first tweet said. “When he was not feeling well during the session, his staff, for his health, accompanied him to a room next to the meeting venue for a rest. Now, he is much better,” the second one said.
This raised new questions. Does this mean that someone had advised Hu not to appear on the final day? Did he even show up against Xi’s will? What did Hu say to Xi and Li? Why did Li Zhanshu try to take the red folder from Hu? Zooming in, the list of candidates for the new Central Committee can be made out on the top paper. But Hu, if he is not demented, must have known it anyway.
We will probably never know exactly what happened that day and where Hu is now. But it may well be that the global public has seen him for the last time.
When German Chancellor Olaf Scholz will congratulate Xi Jinping on his re-election as General Secretary of the Chinese Communist Party in Beijing on November 4, he will face a man at the hard-earned pinnacle of his power whose worries have been anything but remedied by his unanimous election as Party General Secretary. The never-ending pandemic, which is shattering people’s trust in Xi’s ability to solve the crisis better than Western democracies; China’s economic downturn, caused by the pandemic; the techno-strategic clash with the United States; the new international support for Taiwan after China’s martial maneuvers in the waters around the island; and finally, the quandary of the Ukraine war, where Xi welcomes Putin’s vehement attack on the West, but is now visibly siding with a loser. These are the problems Xi faces. Compared to their dimensions, the German difficulties caused by the energy crisis or arms deliveries may seem trivial from Beijing’s perspective.
This portrayal certainly does not fit the usual image of a China that is only steps away from replacing the USA as a superpower. Yet these are the consequences of a ruthless defensive strategy. The days of the lottery that is now called “change through trade” are over. In the past, clever participants could hardly lose. China’s resourceful young entrepreneurs learned to navigate ever more skillfully and successfully through the labyrinth of the globalizing and later digitizing global economy; the Western economy found a gigantic workbench of willing and ambitious workers who made even more cost-effective production possible. And of course it worked, just as it had worked before in Japan, in South Korea, on Taiwan, Hong Kong, Singapore and elsewhere. Hundreds of thousands of Chinese students, professionals, scientists, entrepreneurs, today in the West, tomorrow back home, brought back knowledge and worldviews that had nothing whatsoever to do with the doctrines of Marxism. But they helped adapt the country to the most important requirements of international cooperation, and change society from within.
After all, “change through knowledge” is at least as powerful as trade. China’s civil society has already experienced for decades the level of creativity it is capable of unleashing (even far to the left or right of the party line). It was about social exchange in many different ways: about environmental protection, art and mutual encouragement, whether in the visual or performing arts, in film, music or literature, about science and social issues. Ultimately, it was about the emancipation of the individual through education. A patriotically tinged new social contract proved itself brilliantly: The people leave politics to the Party, in return are allowed to take care of its material and spiritual well-being. What cultural revolutionary Red Guard would manage to live in this China?
Admittedly, the Party’s claim to leadership would be at an end if it were only to remain lost on the fringes of social change. But when it comes to preserving its power, the Party knows exactly what to do. Thus, China’s integration into the global community must relax. Xi has drawn this conclusion – and just as we are concerned about our dependence on China, China, in turn, is already scaling back its dependence on the West. In the fall of 2019, the CP Central Committee decided China would adopt a “dual circulation”. This means that wherever the Chinese economy does not require foreign partners, contacts or investors, it will work only for China’s domestic market, and will stick to the global economic system only where foreign partners, contacts and supplies are essential. What this will mean for non-Chinese companies already invested in China is likely to be a topic for the German CEOs accompanying the Chancellor to Beijing.
In sociopolitical terms, Xi is intent on reviving the old hierarchy: The Party determines every aspect of a thoroughly ideologized everyday life for citizens. The pandemic provided an opportunity to test and demonstrate this revived leadership principle. Since China’s health care system would have never managed to treat the expected large number of people infected with Covid, the only option was to subject the daily lives of individuals to the imperative of protecting the lives of all: Through brutally enforced endless lockdowns for millions, a strategy whose continuation Xi now announced at the Party Congress. The end of reform and opening thus also means the end of change through trade or knowledge.
The fact that the CP sees the international order, which is based on liberal and democratic principles, as a threat to its grip on power leads to an active struggle for the “redistribution of power in the world.” In the UN and international organizations, the People’s Republic strives to cast its own values in new international agreements or resolutions. The increased aggression of the People’s Republic in the international stage – in the South China Sea, towards Taiwan, in territorial conflicts with Japan and India, or with its “wolf warrior diplomacy” – is not a contradiction to China’s multipolar understanding of the world order. It is an expression of the fact that China today has more international assertiveness and can more openly strive for Xi Jinping’s proclaimed “Chinese dream” of resurrecting the old China. China’s former foreign minister, Yang Jiechi, put it insightfully back in 2010 at the ASEAN Regional Forum in Hanoi when he said, “There are big states and there are small states, and that’s just the way it is.”
So what is left after Scholz’s congratulations? The attempt, of course, if there is no change, then to salvage the best from trade. The business representatives traveling along will hope for the conciliation of the now even more powerful Xi. The chancellor will likely try to dampen Beijing’s anger over the German discussion of Cosco’s involvement in Hamburg. The date of the establishment of diplomatic relations between the People’s Republic and the Federal Republic 50 years ago will be commemorated. But beyond that? The chancellor is traveling against the original plan without the French president, and also without an EU representative. Perhaps it is enough to come to Beijing as a representative of the strongest power in Europe. But not even the German government’s long-announced China strategy is ready yet. Yet the chancellor is not alone in this embarrassment. What initially seemed like a self-assured consolidation of China’s system of rule under Xi now again points to profound fractures in the country’s political, social and economic development. And instead of a strategy, Xi is now following Deng Xiaoping’s well-known dictum that one must cross the river by touching the stones. The way the relationship between China and Germany currently looks, Olaf Scholz has few other options.
Volker Stanzel (born 1948) is a retired German diplomat and former Political Director of the German Foreign Office as well as a former Ambassador to Beijing and Tokyo. Since retirement, he has been active as a journalist, taught at universities in California, Japan, and Germany, and served as Vice President of the German Council on Foreign Relations in 2018/2019. He now works at the Stiftung Wissenschaft und Politik in Berlin and teaches at the Hertie School of Governance in Berlin.
In daylight, the backdrop of the “Land Of Drama” looks as if someone moved the set of Stanley Kubrick’s science fiction classic “2001: A Space Odyssey” to a Chinese future. When darkness falls, the theater mega-complex located in the central Chinese city of Zhengzhou transforms into a light spectacle illuminated by colorful LEDs. On 21 stages and in 56 courtyards, the history of the province of Henan and the cultures along the Yellow River is told using all the means of modern multimedia art. The 400,000-square-meter event landscape is said to have cost around $930 million.
Following the 20th Party Congress, not only the German business wonders: Is the China boom nearing its end with Xi Jinping’s third term? Joerg Wuttke, President of the EU Chamber of Commerce in China, sees Xi’s priorities as maintaining power and stability at the cost of innovation and market economy. Speaking with Frank Sieren, Wuttke explains the complex situation we find ourselves in. True, companies can continue to do good business, especially in the manufacturing sector. But growing rivalry with China is making life difficult for them – especially as the leadership punishes them for the actions of their governments. That is why Wuttke believes the upcoming trip to China of Germany’s Olaf Scholz is “sensible and extremely important.” As Merkel once demonstrated, many things can be discussed much better in private than at a large gathering – “especially the unpleasant topics.”
Volker Stanzel, on the other hand, is less optimistic about Scholz’s visit to China and Germany’s economic opportunities in the People’s Republic. In a guest article for China.Table, the former German ambassador to Beijing explains that “the lottery called change through trade” is over. Scholz could “if not to save change, then to save the best from trade.” But that is far from being a sustainable China strategy.
Numerous politicians and even business representatives are therefore calling for a clear stance toward China during the visit. But China’s state media welcome the trip, as you will find in our analysis. The port deal, they say, is Scholz’s present for the host. However, this is precisely the perception the chancellor wanted to avoid.
The incident around Hu Jintao in the Great Hall of the People still remains a mystery: Was it a case of public humiliation or, after all, the health emergency of an ex-statesman who might be suffering from dementia? Numerous arguments and counter-arguments are circulating for both theories – practically all of them are somehow plausible, but none of them are believable, writes Christiane Kuehl. She dove deep into the online rumor mill for her analysis.
To what extent is the 20th Party Congress a turning point in the history of modern China?
President Xi Jinping now gathered all the yes-men around him, cementing a power that has not existed for at least 30 years. None of the members of the Politburo Standing Committee belong to any other faction anymore. He cleared them all out. He no longer has to compromise in that body. So now we have to get used to the fact that Xi Jinping will stay in power for a very long time. This was not just the start of his third term in office, but probably the fourth or even the fifth.
At least two of the newcomers, Li Qiang and Li Xi, served as party leaders in the progressive boom provinces of Shanghai and Guangdong.
This should not be overrated. Xi himself was party leader in economically progressive provinces like Fujian or Shanghai. But now he is head of the Communist Party. And he made it perfectly clear what that means: Xi wants private companies to follow the rules of the game proclaimed by the Party. That, after all, already caused a great deal of unrest. Hong Kong’s Hang Seng Index plunged by almost seven percent the day after the Standing Committee’s presentation. The markets know: Xi will now follow through with his communist program.
So is this the end of the China boom?
The end of an unchecked boom, at least. Xi will now prop up the real economy more, and the IT sector less. He is skeptical here. It has far too much power for his taste. That was already apparent with Alibaba and Tencent. Innovation, yes, but on a tight rein.
But surely Xi needs growth to maintain social stability?
He will simultaneously try to relax the gap between rich and poor. This will certainly be of great benefit to the lower class and part of the middle class. It will also make the hinterland more stable. However, the innovative private sector fears this will happen on its back.
So far, however, the impression was that Chinese policymakers understood the importance of innovation and technology for a prosperous economy better than European policymakers.
That is still true to some extent. But Xi and his Politburo also have other priorities that are in doubt more important than innovation: stability and control. Everyone he gathered around him has a very strong control background. He also said quite clearly in his speech. First stability, then a market economy. He is convinced that this is the more stable path than that of the West.
Xi said at the same time at the end of his speech introducing the Standing Committee: China will open its doors further. And: China needs the world. How does that fit together?
This is just lip service. The 72-page report talks about security. It talks about fights. The fight with foreign countries is mentioned 15 times.
…which, however, is not meant in a military sense…
…no, not that. It talks about the systemic conflict with the West. As foreign investors, we now have to ask ourselves to what extent we are becoming even more of a pawn in this system struggle. In the past, we have often been held responsible for the political decisions of our governments. This has little to do with a market economy and can become very unpleasant.
What will change?
For the real economy, that is, the manufacturing sector, probably not so much will change. China needs us in this area, including our know-how. We are still in a really good position here and will be part of the Chinese upswing for years to come. I’m more worried about the service sector, especially in the financial sector, which only opens up by the millimeter. And even more so in information technology, where they are already pushing us back because they are very good in that area themselves. There is a danger that they will push us out completely and even take their Chinese companies by the scruff of the neck.
Why?
It’s not just about information, but also about control. And when it comes to control, they no longer make any compromises. Regardless of whether or not it’s market-based. This is an incalculable risk for private companies. This will not do China any favors as a location for innovation. But the Party wants it that way, so it gets it.
What role does “buy Chinese” play, in other words, meaning that as nationalism rises, it becomes more and more fashionable to buy Chinese products.
In areas where they are well positioned, they try to push us foreigners out for good. But that’s what we’re seeing in the US, too: buy American. It’s happening almost like a mirror image.
How must Europe position itself now with a USA that is possibly already toying with the idea of electing Trump again and a China that is focused on one person?
We have to do our homework, refocus more on research and science, break down our own barriers and represent our values and interests convincingly. But we can de facto say goodbye to the idea that we can still exert great pressure on the US or China. Not even in China’s case with sanctions. That is an illusion. We now have to be convincing.
Or look for alternatives to China?
Unfortunately, there aren’t any in many areas. Not in cars, not in mechanical engineering, not in chemicals. China is China, and that will not change in the long term. China is unique in the world in terms of its mix of market size, low costs, new infrastructure and good quality. If our companies look to China’s neighbors, it will be as a supplement rather than a substitute. We have to be realistic about that. European companies will have to continue to invest a lot in China. Especially the big companies.
What do you think of the decision to sell parts of the port of Hamburg to China? Are we not recklessly increasing our dangerous dependence?
No, the decision is good and right. It strengthens our economy. We saw that in Piraeus in Greece. The Chinese even hold a 67 percent majority in the port. At first, everyone was skeptical. Then China catapulted the port from 82nd to 28th place worldwide and made it one of the most important ports in the Mediterranean. Greece’s economy is thus less susceptible to crisis. That’s good for Europe, too. And in the meantime, even the strong Greek trade unions are satisfied. A success story.
However, dependence on China has increased.
The EU, especially Germany, forced Greece to privatize back then, and only the Chinese wanted to take the risk. Nobody in the EU. That is not the fault of the Chinese.
However, things are different in Hamburg. No one has forced Hamburg.
Yes, but where is the dependency? Products that we buy anyway will now be handled more efficiently and for the benefit of our economy via Hamburg and not via another port. Cosco cannot decide that no more ships from the USA or Taiwan can be unloaded in the port or at the terminal. Ghosts have been painted on the wall. Moreover, it is not smart to close our own market when, on the other hand, we are demanding more market access and more reciprocity from China.
German Chancellor Olaf Scholz will be traveling to China on November 4. Does this trip even make sense at this stage? Isn’t it kowtowing?
No. It makes absolute sense and is extremely important. Scholz is the first Western politician to meet Xi after the 20th Party Congress and probably the last before the important G20 summit in Bali. Scholz has never met Xi in office. Many things can be discussed much better in private than in the big room. This is especially true of unpleasant topics: Ukraine, Taiwan, Xinjiang. But it is also easier to find common ground, for example in the fight against climate change.
But do they even listen to us anymore?
Precisely because the president has now built his echo chamber, foreign politicians should now talk to Xi even more often. We cannot simply wish China away; we have to cope with China, whoever governs it.
However, Germany still does not have an official China strategy. Wouldn’t it make sense to agree on a China strategy first, even at the European level?
A common European strategy is indispensable. But we cannot adopt a strategy for such an important country until we have spoken personally and intensively with its top politicians. Otherwise, the risk is too great that we will be guided more by our wishful thinking and domestic politics than by the reality in China and our requirements as the world’s export champion. That cannot happen.
Is China now more rival than partner?
No. It continues to be all three: partner, competitor and rival. And we need a strategy for each of the three areas without lying to ourselves. If you simplify this to just one of the terms, the discussion will become as lopsided as it was with the Port of Hamburg. Three keywords are really not too complex for a country with 1.4 billion people. Any politician who believes that only one of these three perspectives is sufficient should be viewed with caution. Those are usually populists who will not manage to talk to China on an equal footing. And that is now more important than ever.
China’s media are also currently focusing intensively on the upcoming trip of the German chancellor to Beijing – and have their own perspective. A “great gift to China” from Chancellor Olaf Scholz is what the online video channel HNR and other commentaries call the approval for the partial acquisition of a Hamburg port terminal. Scholz showed “sincerity” here. Although this is not how the Chancellor’s Office wanted to be seen directly before Scholz’s trip to Beijing. But that is how it looks, and that is apparently how observers in China perceive it.
In general, there is a lot of euphoria in China’s state media in the run-up to the trip. “German companies scramble to join China delegation” is another headline, for example on Hunan TV, the second-largest Chinese broadcaster. Particularly common in recent weeks has been the statement, “Scholz rejects decoupling from China.” The Global Times calls critics of the port approval and the travel with a business delegation “ideological snipers” who reflexively target Scholz. The idea that a small port stake could grow into “encirclement” is absurd, they say.
German Chancellor Olaf Scholz will travel with a large business delegation to Beijing on Thursday for a stopover visit to meet President Xi Jinping. The visit currently triggers considerable discussion and fuels the debate about economic ties with the autocracy in the Far East.
In the run-up to Scholz’s China visit, demands for a clear position from the chancellor are also mounting within the governing coalition. For example, Jessica Rosenthal, the leader of the Young Socialists and a member of the Bundestag, said on Friday that Scholz must “make it very clear where the limits are when doing business with a democracy”. The German government must be able, “to snub the dictator Xi Jinping. Because if you give in to the pressure, the dependency only deepens,” Rosenthal continued.
Over the weekend, liberal FDP leader Christian Lindner even called for a new law to curb China’s influence. The foreign policy spokesman for the FDP parliamentary group, Ulrich Lechte, said with regard to the sale of a stake in the Port of Hamburg to Cosco that Scholz must take a “much tougher stance toward China” in Beijing. “Making yourself dependent on an authoritarian system without any need, I find careless and short-sighted,” Lechte told the German news agency Redaktionsnetzwerk Deutschland (RND).
Green Party European politician Reinhard Bütikofer told RND that Scholz has given in to an “open Chinese blackmail attempt on the Cosco issue.” This hurts Germany’s reputation among its allies, he said. “The chancellor is acting as if nothing has changed in China under Xi Jinping, and is traveling to China with a huge business delegation like always,” conservative CDU foreign affairs expert Norbert Roettgen told RND newspapers. “This sends the wrong signal both internally and externally.”
The 12-member delegation that will be accompanying Scholz includes representatives from Biontech, Bayer, BMW, Adidas, Hipp, and the chemical company Wacker and heating technology company Geo Clima Design. Some of the most prominent names on the list include
According to information from the German business newspaper Handelsblatt, around 100 representatives from the German business community had applied to take part in the trip. BDI head Russwurm and Mercedes CEO Källenius are no longer part of the trip, unlike Angela Merkel’s last chancellor trip in 2019. According to Handelsblatt, it is still uncertain whether BMW boss Oliver Zipse will join the trip to China.
Scholz is the first Western head of government to meet Xi since the Party Congress. However, the president has already received visitors from Southeast Asia. The head of the Communist Party of Vietnam, Nguyen Phu Trong, arrived in Beijing on Sunday. He will stay until Wednesday. Pakistani Prime Minister Shehbaz Sharif will arrive on Tuesday, and the president of Tanzania has also announced his visit. So Scholz has to get in line behind the close Silk Road partners.
Meanwhile, criticism grows among German China experts that Scholz failed to understand the magnitude of the 20th Party Congress. If moderate cadres from different party wings, such as Hu Chunhua and Li Keqiang, had continued to play a role in the top leadership, a new orientation of policy might not be so urgent. But the shock of the purely pro-Xi makeup of all key bodies changes the situation. China is no longer the one-party state that people have come to accept for the past 50 years. It is a dictatorship with similar potential dangers like Russia’s Putin, is a frequently made argument. The watershed that was the outcome of the Party Congress requires a reassessment of relations. Fabian Peltsch/Finn Mayer-Kuckuk
A week after the incident involving former CP leader Hu Jintao, the world is still puzzled: Why was the 79-year-old suddenly led out of the hall in front of the lenses of international camera crews at the start of the final session of the Party Congress? Was it a planned show of force by Xi, a public symbol of the end he brought for Hu’s Youth League? Or was there a risk of a health emergency, or even embarrassment from the allegedly demented Hu? So far, there is no answer.
The longtime China correspondent for Japan’s Nikkei Asia newspaper claims to have come relatively close to the matter: All the top cadres present had feared that Hu would publicly voice his opinion of the new leadership, Katsuji Nakazawa wrote in the paper’s Thursday edition. He referred to a source with political connections who told him what was leaked from the Party’s core. That is why all top Party officials took pains not to make eye contact with Hu, Nakazawa said, “being seen caught in conversation with Hu, and giving the wrong response, could pose a significant political risk.” What was on Hu’s mind was clear to everyone: pent-up frustration with Xi.
Indeed, the unfazed-to-blank expressions of the Politburo members present around Xi Jinping – including Hu-friendly politicians such as Li Keqiang, Wang Yang and Hu Chunhua – were among the most disturbing aspects of the incident. Is respect and care for the elderly and sick not a matter of honor in China? For it was obvious at the Party Congress that Hu was in poor health. He has reportedly been suffering from Parkinson’s disease for many years. But it is still unclear whether Hu also has dementia.
So is it really the case that Hu posed a threat – to Xi Jinping’s performance, to politicians worried about their loyalty status with Xi? Because he was confused and might just have said anything? Or perhaps because, on the contrary, he was very much in full possession of his faculties and planned a deliberate provocation now that everything was over politically for him and his supporters anyway? Serious opinions and confused rumors on this issue are circulating on the net. Most China experts admit that they do not have any answers. Both scenarios, plot and illness, are plausible and implausible at the same time.
Proponents of the theory of a set-up planned by Xi stress the thoroughness with which he got rid of his predecessor’s Youth League faction at the Party Congress. Japanese photos show Hu Chunhua, who had previously even been considered a possible premier (China.Table reported), whose body language clearly expressed frustration: elbows propped up on the table, a blank stare. Premier Li Keqiang also had to go, despite being two years younger than Xi. But why would Xi need such a public display then?
Those who would rather believe in a spontaneous process cite both Hu’s obvious frailty and the facial expressions of the politicians sitting next to him. Videos show Li Zhanshu talking to Hu. He took a folder from his hand, but did not appear unfriendly. Or the fact that the CCP never has engaged in a power struggle on the open stage. But can Xi not be trusted to break this taboo as well?
Or did the two, health and politics, perhaps coincide? Did Xi use the opportunity to publicly humiliate his disliked predecessor? Hu may have been ill, but he was also angry. The incident gave the world an unintended glimpse into China’s political drama, which usually takes place behind the scenes, wrote Nakazawa.
Since the end of the Party Congress, more and more photos and videos of the incident, which lasted about three minutes, have been circulating. In the end, they do not clear up the mystery. Xi sat on the stage, proud of his political victory not yet revealed to the public. Hu, who sat next to him, must have been unhappy that he had failed to keep his protégés in power.
The cameras were already rolling when Hu picked up the red folder in front of him shortly before the meeting began and probably wanted to open it. The man who was sitting next to him, Li Zhanshu – until that point chairman of the National People’s Congress, but at 72 also on his way to retirement – spoke with Hu, and eventually took the folder from him, but seemed friendly. Wang Huning, one seat away, also joins in briefly. What they all said is unknown.
Xi noticed the process and beckoned a man over, to whom he whispered something.
He was then joined by another man, apparently Hu’s longtime bodyguard. A Wall Street Journal breakdown shows Xi and Hu exchanging a few more words in the man’s presence. The bodyguard took Hu’s glasses and Li Zhanshu’s red folder. He helped Hu out of his chair. Hu seemed to resist and tried to return to his seat. Then a second man, by now identified as a deputy director of the Communist Party General Office, came and asked Hu to leave. However, he still refused. Finally, the two managed to lead the 79-year-old away.
On the way, Hu spoke a few more words to Xi, who nodded with the hint of an inscrutable smile and said something brief. He then tapped Li Keqiang on the shoulder, who also said a few words but only half turned his head toward Hu. Then Hu strode out with the two men, according to the Wall Street Journal, past at least 37 high-ranking party officials who stared straight ahead. “It appeared as if an era had ended,” Joerg Wuttke, president of the EU Chamber of Commerce in China, told Reuters. “It looked, frankly, very strange”.
The state media did not report the incident with a word; the incident was completely edited out on TV. On Sunday, the state broadcaster CCTV also showed Hu Jintao casting his vote in the footage of the CC election from the night before. The official news agency Xinhua posted only two English tweets, because it was clear that the world knew about it.
“Xinhuanet reporter Liu Jiawen has learned that Hu Jintao insisted on attending the closing session of the Party’s 20th National Congress, even though he has been taking time to recuperate recently,” the first tweet said. “When he was not feeling well during the session, his staff, for his health, accompanied him to a room next to the meeting venue for a rest. Now, he is much better,” the second one said.
This raised new questions. Does this mean that someone had advised Hu not to appear on the final day? Did he even show up against Xi’s will? What did Hu say to Xi and Li? Why did Li Zhanshu try to take the red folder from Hu? Zooming in, the list of candidates for the new Central Committee can be made out on the top paper. But Hu, if he is not demented, must have known it anyway.
We will probably never know exactly what happened that day and where Hu is now. But it may well be that the global public has seen him for the last time.
When German Chancellor Olaf Scholz will congratulate Xi Jinping on his re-election as General Secretary of the Chinese Communist Party in Beijing on November 4, he will face a man at the hard-earned pinnacle of his power whose worries have been anything but remedied by his unanimous election as Party General Secretary. The never-ending pandemic, which is shattering people’s trust in Xi’s ability to solve the crisis better than Western democracies; China’s economic downturn, caused by the pandemic; the techno-strategic clash with the United States; the new international support for Taiwan after China’s martial maneuvers in the waters around the island; and finally, the quandary of the Ukraine war, where Xi welcomes Putin’s vehement attack on the West, but is now visibly siding with a loser. These are the problems Xi faces. Compared to their dimensions, the German difficulties caused by the energy crisis or arms deliveries may seem trivial from Beijing’s perspective.
This portrayal certainly does not fit the usual image of a China that is only steps away from replacing the USA as a superpower. Yet these are the consequences of a ruthless defensive strategy. The days of the lottery that is now called “change through trade” are over. In the past, clever participants could hardly lose. China’s resourceful young entrepreneurs learned to navigate ever more skillfully and successfully through the labyrinth of the globalizing and later digitizing global economy; the Western economy found a gigantic workbench of willing and ambitious workers who made even more cost-effective production possible. And of course it worked, just as it had worked before in Japan, in South Korea, on Taiwan, Hong Kong, Singapore and elsewhere. Hundreds of thousands of Chinese students, professionals, scientists, entrepreneurs, today in the West, tomorrow back home, brought back knowledge and worldviews that had nothing whatsoever to do with the doctrines of Marxism. But they helped adapt the country to the most important requirements of international cooperation, and change society from within.
After all, “change through knowledge” is at least as powerful as trade. China’s civil society has already experienced for decades the level of creativity it is capable of unleashing (even far to the left or right of the party line). It was about social exchange in many different ways: about environmental protection, art and mutual encouragement, whether in the visual or performing arts, in film, music or literature, about science and social issues. Ultimately, it was about the emancipation of the individual through education. A patriotically tinged new social contract proved itself brilliantly: The people leave politics to the Party, in return are allowed to take care of its material and spiritual well-being. What cultural revolutionary Red Guard would manage to live in this China?
Admittedly, the Party’s claim to leadership would be at an end if it were only to remain lost on the fringes of social change. But when it comes to preserving its power, the Party knows exactly what to do. Thus, China’s integration into the global community must relax. Xi has drawn this conclusion – and just as we are concerned about our dependence on China, China, in turn, is already scaling back its dependence on the West. In the fall of 2019, the CP Central Committee decided China would adopt a “dual circulation”. This means that wherever the Chinese economy does not require foreign partners, contacts or investors, it will work only for China’s domestic market, and will stick to the global economic system only where foreign partners, contacts and supplies are essential. What this will mean for non-Chinese companies already invested in China is likely to be a topic for the German CEOs accompanying the Chancellor to Beijing.
In sociopolitical terms, Xi is intent on reviving the old hierarchy: The Party determines every aspect of a thoroughly ideologized everyday life for citizens. The pandemic provided an opportunity to test and demonstrate this revived leadership principle. Since China’s health care system would have never managed to treat the expected large number of people infected with Covid, the only option was to subject the daily lives of individuals to the imperative of protecting the lives of all: Through brutally enforced endless lockdowns for millions, a strategy whose continuation Xi now announced at the Party Congress. The end of reform and opening thus also means the end of change through trade or knowledge.
The fact that the CP sees the international order, which is based on liberal and democratic principles, as a threat to its grip on power leads to an active struggle for the “redistribution of power in the world.” In the UN and international organizations, the People’s Republic strives to cast its own values in new international agreements or resolutions. The increased aggression of the People’s Republic in the international stage – in the South China Sea, towards Taiwan, in territorial conflicts with Japan and India, or with its “wolf warrior diplomacy” – is not a contradiction to China’s multipolar understanding of the world order. It is an expression of the fact that China today has more international assertiveness and can more openly strive for Xi Jinping’s proclaimed “Chinese dream” of resurrecting the old China. China’s former foreign minister, Yang Jiechi, put it insightfully back in 2010 at the ASEAN Regional Forum in Hanoi when he said, “There are big states and there are small states, and that’s just the way it is.”
So what is left after Scholz’s congratulations? The attempt, of course, if there is no change, then to salvage the best from trade. The business representatives traveling along will hope for the conciliation of the now even more powerful Xi. The chancellor will likely try to dampen Beijing’s anger over the German discussion of Cosco’s involvement in Hamburg. The date of the establishment of diplomatic relations between the People’s Republic and the Federal Republic 50 years ago will be commemorated. But beyond that? The chancellor is traveling against the original plan without the French president, and also without an EU representative. Perhaps it is enough to come to Beijing as a representative of the strongest power in Europe. But not even the German government’s long-announced China strategy is ready yet. Yet the chancellor is not alone in this embarrassment. What initially seemed like a self-assured consolidation of China’s system of rule under Xi now again points to profound fractures in the country’s political, social and economic development. And instead of a strategy, Xi is now following Deng Xiaoping’s well-known dictum that one must cross the river by touching the stones. The way the relationship between China and Germany currently looks, Olaf Scholz has few other options.
Volker Stanzel (born 1948) is a retired German diplomat and former Political Director of the German Foreign Office as well as a former Ambassador to Beijing and Tokyo. Since retirement, he has been active as a journalist, taught at universities in California, Japan, and Germany, and served as Vice President of the German Council on Foreign Relations in 2018/2019. He now works at the Stiftung Wissenschaft und Politik in Berlin and teaches at the Hertie School of Governance in Berlin.
In daylight, the backdrop of the “Land Of Drama” looks as if someone moved the set of Stanley Kubrick’s science fiction classic “2001: A Space Odyssey” to a Chinese future. When darkness falls, the theater mega-complex located in the central Chinese city of Zhengzhou transforms into a light spectacle illuminated by colorful LEDs. On 21 stages and in 56 courtyards, the history of the province of Henan and the cultures along the Yellow River is told using all the means of modern multimedia art. The 400,000-square-meter event landscape is said to have cost around $930 million.