Klaus Mühlhahn is one of the most respected sinologists in Germany. Usually, he teaches at the FU Berlin but currently, he has been the head of the private Zeppelin University on the shores of Lake Constance for five years. In China.Table, Mühlhahn explains why a Communist Party that seems to sit tall in the saddle nevertheless acts nervously and pettily. The reason lies in its history: Tension within the party and society has only been glossed over but not overcome. Nor is Xi Jinping’s position as unassailable as propaganda suggests. The interview by Michael Radunski is part of our series on the party’s centenary.
“Chinese wine“, this word combination still sounds unfamiliar. Indeed, dedicated vintners have been developing soils and vines since the 1980s. But it is only now that they are producing excellent wine that is winning international awards. Frank Sieren gives a lead on which locations to look out for. The development has a more wide-ranging meaning, though. Wine is an important export good for Europe. And the more Chinese vintners press their own wine, the less the trade has to buy from abroad.
I wish you a pleasant week!
100 years of the Communist Party of China. What is your evaluation of this anniversary?
The Chinese Communist Party has become the most powerful and efficient political organization in the world in its 100 years – and this was not to be expected. Only after many decades of bitter struggle did the Party achieve victory. Moreover, even after 1949, it stood on the precipice of the abyss several times. Often great victory was much more distant, while defeat was very close. Therefore an absolutely unexpected development.
What does that mean internationally?
Worldwide, there is no political organization or Party that can even compete with the Chinese Communist Party. It has 92 million members and is strictly organized with a clear set of values. The Party is a marvel of organization.
What fractures are fundamental to understanding today’s CCP and its current leadership?
Between 2010 and 2012, there was a radical break that led to the current phase. Here begins the turn towards an authoritarian, repressive form of government that revives the old Maoist patterns. The rupture was basically a conservative coup d’état, with which the Party abandoned its “reform and opening” formula.
In your new book, “The Chinese Communist Party: A Century in Ten Lives”, you describe the 1980s as a time of new beginnings, of freshness, as an opportunity for new commitment and ideas. Where did this momentum of reformation go?
To understand this significant difference, 1989 must also be added as another major rupture. Before the Tiananmen Square crackdown in June ’89, there were intense discussions in China about democracy and liberalization. It is hard to imagine today, but the vocabulary word minzhu (democracy) was exceedingly popular then; there was widespread admiration for liberalism. A time of great awakening. However, these political discussions ended in 1989, while only economic liberalism continued. After 2010/12, however, economic and social liberalism is also being increasingly rolled back with the Social Credit Systems and the renaissance of large state-owned enterprises.
The anniversary of the suppression of the Tiananmen Square protests was a few weeks ago. In retrospect, the protests at the time made political reform in China impossible for the foreseeable future. Were the protesters back then simply too radical?
No, I don’t see it that way. The demands at the time seem radical from today’s perspective, but it was more mainstream at the time. It was like it often is with protests. When a protest movement meets resistance, two options remain: March through the institutions or radicalization. The students at Tiananmen then chose radicalization of the struggle. But the original demands were not radical. Zhao Ziyang himself, the Prime Minister at that time, was convinced that there was no way around political reform.
In 1989 the Party felt politically challenged. What tipped the scales in 2010?
Around 2010, the CCP felt more and more that they were losing control, that society was slipping away from them. Entrepreneurs were becoming more powerful, corporations were successful, social pluralism was spreading so that the Party as a center of power was in danger. There emerged a materialistic, consumerist society and continued to be Western-oriented, even if it was no longer allowed to talk about political reform.
But China is doing well; the economy is booming, people are becoming wealthier, and the country is gaining influence internationally.
Yes, all true. But the Party is not concerned about China. The Party is about itself first, the country second. Despite all the success, people took their money abroad and sent their children to schools and universities overseas. There was a feeling within the CCP that it was losing control of society. This frightened the Party and led to the installation of Xi Jinping.
The new strong man. Does he do everything by himself?
We don’t know for sure, but he will have a faction behind him, backers and supporters to help him. Because Xi is turning everything upside down: Bo Xilai, a Politburo member, lost his high offices on corruption charges that would likely apply to everyone else. Security czar Zhou Yongkang was also arrested. All opponents of Xi. What follows is a gigantic purge of the Party, the likes of which have never been seen before. Eighty percent of all generals were replaced. They are being replaced by henchmen who adhere to this new authoritarian reading and are loyal to Xi.
So it’s fear that’s rallying the CCP behind Xi?
Yes, the biggest worry is the loss of power. It seems like a contradiction to us: China is becoming more powerful, but the CCP is going through more and more nightmares. But that explains the country’s behavior: Only a government that believes its own rule rests on feet of clay begins such an escalation. The CCP is an organization in fear, and that’s what makes it so unpredictable.
After all, it’s always about the sovereignty of interpretation. In what important ways has the CCP’s interpretation of Chinese history changed?
This is another point that has recently become more acute. After 1989, the great line of march was patriotism, which was how the Party responded to the crisis of ’89. Today the CCP calls for a fight against historical nihilism. Any nuanced portrayal of recent Chinese history is banned. At the very beginning of his term, Xi proclaims seven unmentionable topics not to report about: the Party’s historical mistakes, constitutionalism, value pluralism, and so on. A whitewashing of party history is happening.
A lot of things are disappearing or being banned. Are new things also being added?
Yes, for example, Confucianism. This is to show that China has its own culture and traditions. With regards to Confucius, this is particularly ironic because Mao called for the exact opposite: Everything old, like Confucius, must be destroyed. But today, Confucianism serves to create a Chinese identity in clear demarcation from the West. Then it quickly becomes politically charged. With it, one tries to justify why one does not need free elections, freedom of opinion, or the right to protest in the streets. All of this is going to be increasingly culturally justified.
The CCP side likes to claim that the Chinese have different values than the West. Is that true at all?
No. This is by design. The values are not that different. You don’t even have to look back to 1989 to see it, and it’s the same today: There is a desire for participation in China. Not necessarily for parliamentary democracy, but the Chinese also want to have a say in essential matters of their own lives. This is no different in China than anywhere else in the world. The only difference is that here the CCP under Xi gives the people no room at all.
In the West, people like to talk about the CCP, but the CCP is by no means a monolithic bloc, as you nicely show in your book. Where do you see different currents under the leadership of Xi Jinping today? What other currents and factions are there?
Xi’s systematic purge of the CCP has placed his people in many important positions. Nevertheless, there are still other currents. This is shown by incidents such as the recent one involving Cai Xia. The retired law lecturer at the Central Party University said the Party had degenerated into a political zombie and an instrument in the hands of a mafia boss. An audio file on that subject circulated on the Chinese Internet in June. I myself have received documents that clearly show discussions and struggles for direction within the CCP. However, there are no fixed factions; they are united above all by the criticism of Xi Jinping’s course.
What’s happening to China’s CCP under Xi right now?
Clearly, a re-ideologization and a re-centralization with Xi as the self-proclaimed core. Yet beneath the surface, there is a great struggle over the future of the Party. The opposition to Xi is probably bigger than we think. I keep hearing this from my contacts in the Party.
So are we in the West under the illusion of Xi as the most powerful leader since Mao?
In part, yes. Our problem is simply that we know far too little. That’s why people automatically follow the official picture – which says: Xi is powerful and has everything under control. But this image is a designed and top-down message to the Chinese as well as to other countries.
What does this mean for us in the West?
It is dangerous. That’s because we run the risk of overlooking other currents, of forgetting them. However, we urgently need contact with these groups, and thereby we lose a great opportunity.
Let’s stay with Xi Jinping for a moment because, powerful or not, he is deciding the direction of China right now. What experiences have shaped Xi and made him what he is and wants to be today?
Definitely his time in the Cultural Revolution. His father was actually a high party official, but fell from grace, and was humiliated. Xi was sent to the countryside as a result. He suffered a lot from that.
It’s a paradox. The family was humiliated and he himself is banished to the country. The logical reactions would be anger and the desire to take revenge. But Xi wants to strengthen the CCP more and more instead.
You have to understand Xi was a princeling. His time in the countryside won’t have been all that bad. But most importantly, Xi did not conclude that the Cultural Revolution was a big mistake because it was brutal and inhumane, but Xi was convinced it was a failure because Mao, in his old age, could not take drastic measures and had lost control of the Cultural Revolution.
And what can be deduced from this concerning today’s president?
Xi has a great belief that power must be concentrated in the hands of one person. Only in this way, the government can succeed in China. He doesn’t see the risks of that kind of government. Otherwise, he would never have lifted term limits. Surely this is a major step backward, which has also come as a great shock in China.
Is that megalomania?
This is the firm belief that China needs a strong man. Xi is convinced that China’s glory days were always when it had a strong leader. And it must be said that in today’s world he is not the only one.
The so-called Document No. 9 sets out Xi’s goals and values. It is a paper full of contempt for Western values. Is Xi really so fundamentally opposed to our values?
I think so, yes. That’s true for Xi, not for the entire CCP. For Xi, Western values threaten the Party’s rule. And that, in his opinion, must be prevented at all costs. There is another parallel here with his idol Mao. Whenever he senses danger, he doesn’t retreat but mobilizes all forces against it.
So deep conviction, no show?
Yes. The absolute, firm conviction that China needs a strong man and that democracy or even pluralism are absolutely unsuitable for China. Yet as I said, Xi does not speak for all Chinese here. This is his view and that of his loyal followers.
What does all of this mean for us? What kind of China will we have to prepare for in the future?
Predictions about China’s future have always had one thing in common: They’ve all been wrong. Yet I do believe we will see a China that is increasingly erratic. Xi and the party leadership are worried about staying in power. That drives them and leads them to cross borders to defend that claim to power and that model. It is alarming how often the Chinese leadership now speaks of red lines. As a historian, parallels with the period before the First and Second World Wars immediately come to mind. China is becoming increasingly unpredictable.
I’d rather spare you an even deeper look into the crystal ball. But currently, how should Germany deal with China?
I am an advocate of dialogue, including a dialogue of differences. This means that differences must be clearly identified and addressed. We must maintain this dialogue, not only with the government but also with the other currents within China and the Party. A self-confident dialogue with China in which issues are not left out. If we are certain of our values, there is no reason to shy away from dialogue with China.
A good point, but a troubling suspicion creeps up on me: Are we that certain of our values?
Yes, indeed. Even during the Cold War, the Western system was self-confident and was not afraid to enter into discussions and political competition with other systems. However, nowadays, we are rather insecure, not only in the United States with Trump but also in Germany. Due to our doubts, at the moment, we tend to curl up into a ball. And that is dangerous. If we travel to Beijing without confidence, we won’t be taken seriously.
Klaus Muehlhahn is a sinologist, social, and cultural scientist. He has been president of Zeppelin University in Friedrichshafen since June 2020. His latest books are:
The reaction is pragmatic and even surprisingly offensive. The Chinese ride service provider DiDi Chuxing currently suffers from attacks by China’s regulatory authorities. Now the company is planning an IPO – and is being emphatically open about its regulatory problems. DiDi bluntly lists all potential charges it could face from the State Administration for Market Regulation (SAMR) in Beijing. These include violations of the antitrust law and “unfair competition methods”.
DiDi’s planned IPO is getting a lot of attention. The company is the Chinese counterpart to Uber and is already very successful, at least in its home market. A valuation of up to $70 billion is being discussed, making it one of the most important initial listings of the year. The New York IPO also comes at a time when many Chinese companies are wary of the US capital market. They fear being caught in the crossfire of trade disputes there. However, DiDi shows that even well-known names are still interested in raising capital in the United States.
However, SAMR’s disruptive fire now shows that concerns about attracting political attention are not entirely unwarranted. The Chinese government is currently keeping the country’s tech companies on a short leash. After two decades of rapid growth, they have become too rich and independent in the eyes of the powerful. If anything, IPOs abroad are fuelling mistrust. Those having a foot abroad are in danger of escaping the influence of the Chinese state. Beijing is now making an example of such candidates more frequently, as the example of the trading platform Alibaba and its financial subsidiary Ant shows (China.Table reported).
The authorities ordered a “self-inspection” for DiDi and 30 other tech companies in April. A week after the company announced its plans to go public, another investigation against DiDi by the SAMR followed (China.Table reported). According to the report, the company is being investigated to see if it has used unfair competition practices to squeeze smaller competitors out of the ride-sharing market. In addition, the SAMR is investigating whether DiDi’s pricing mechanism for ride-share services is transparent enough.
That DiDi filed its IPO prospectus anyway, especially in the US, is seen as a sign that management is optimistic about avoiding Ant’s fate. The Alibaba subsidiary’s IPO had collapsed under the onslaught of new regulatory requirements. However, the signals from Beijing are mixed. In March, Li Shouzhen, a member of the Chinese government’s advisory committee, said that China was moving from “inclusive and prudent regulation”, under which its tech giants had been allowed to grow unhindered, to “science and innovation regulation”.
In the process, DiDi has spent all its energies in recent years to achieving a monopoly position among ride service providers in China. Its market share now is at 90 percent. The company was founded in 2012 by Will Weil Cheng and Jean Qing Liu in Beijing (China.Table reported). Once its biggest competitor, Kuaidi Dache, DiDi finished it off via acquisition in 2015. Only one year later, in August 2016, it took over the shares of Uber’s China business after the US company finally withdrew from the market after a five-year subsidy war with DiDi.
DiDi now operates in around 4,000 cities, provinces, and counties and has set up international shops in 15 countries. Last year, the company generated sales of ¥142 billion – more than 93 percent of it came from China. The service provider says it arranges 30 million rides a day for more than 500 million active users.
In order to participate in the global car-sharing market, DiDi has announced that it intends to invest 30 percent of the capital raised from the IPO in its expansion abroad. Most recently, the financial services provider Bloomberg reported that DiDi wants to expand into Western Europe and look for employees in Germany, Great Britain, and France before the end of the year.
So far, however, the company has not been in the black in any year yet. Most recently, it made a loss of $1.7 billion last year, which was also related to the COVID-19 pandemic.
But against all odds, analysts expect the ride-hailing market to top $93 billion in revenue this year. Over the next four years, a sales growth of $129 billion is predicted.
DiDi plans to use another 30 percent of the money from the IPO to build an EV and invest in autonomous vehicle research. In Shanghai, the company already offers self-driving taxis. And DiDi is cooperating with Volvo to develop its XC90 model into a robot taxi. DiDi also plans to develop autonomous electric cars with the Chinese e-battery supplier GAC Aion.
The ride service provider is primarily banking on the increasing mobility of big-city dwellers in China. After all, the forecast for metropolitan areas is that people will spend around 36 percent of their mobility expenses on car-sharing services by 2040. DiDi should be able to relax about the forecasts. After all, the SAMR’s penalties are likely to be small compared to the growth prospects.
While most clubs and concert halls in the West remain closed and the music world fears for its existence, it has long been possible to perform again in China. Philipp Grefer sees this as an opportunity but also a challenge: “On the one hand, the Chinese music and creative scene is currently experiencing a boom, which mainly benefits the local scene, but on the other hand, there is a lack of exchange with the rest of the world.” The music manager observes that few take on a three-week quarantine to come to the country. “So it’s more about building digital bridges at the moment.”
The native Rhinelander, who discovered his interest in Asia while studying economics and politics in San Diego, California, of all places, believes that creativity will merge even more with technology in the future – and that China will play a key role in it. With the label “FakeMusicMedia”, Philipp Grefer has been promoting cultural exchange between East and West for ten years. He has brought over 300 well-known musicians on tour to China, including big names like Die Toten Hosen.
Since 2018, the 40-year-old has also been organizing the “WISE” festival, a meeting on the topic of digitalization that brings together players from the fields of technology, AI, and the creative industries from all over the world. Last year, the WISE events, which also include many concerts, took place in the booming metropolises of Beijing, Shanghai, Chengdu, and Chongqing, among others. “What appeals to me most is the breakneck pace at which history is being made here,” says Philipp Grefer. “The country has risen to become the largest film market in the world in 2020. As far as the music business is concerned, China has fought its way up from 25th to seventh place in recent years and will certainly take first or second place in a few years,” he believes.
Together with Helen Feng, a former host of MTV China and singer of the well-known Chinese rock band Nova Heart, he commutes between Beijing and Berlin, which has sharpened his eye for differences. “The Chinese, unlike the Germans, are not technology pessimists. They are basically open-minded about new technology. I don’t even want to say which is better. New technology always harbors opportunities and risks. Yet the Chinese first create facts, only then are questions asked.” During the Covid lockdown, he said, he was fascinated by how flexibly many artists responded to the curfews by turning extensively to the online world.
Real-time musical broadcasting from quarantine has gained an even stronger foothold in China than it has here, thanks to the highly developed digital infrastructure. Chinese live-streaming sites like “Bilibili” have an intuitive payment or “gift” function. And since consumers in China now pay for everything online anyway, thanks to the highly advanced digitalization of payment methods, the threshold for spontaneous donation is much lower. “A small part of the financial losses could be absorbed in this way,” says Philipp Grefer, who has also shifted his WISE Festival even more strongly into the online world this year.
“In 2021, we have also continued this idea of a decentralized festival that takes place simultaneously online, offline, and in virtual reality in different countries,” Philipp Grefer tells us. He definitely has an educational approach: The festival not only wants to give the participating entrepreneurs a platform but also give Europeans, in particular, a little more China expertise. “For solutions to global problems such as the climate crisis or the regulation of AI, it is important to understand the country at least to some extent,” says Philipp Grefer. This also includes saying goodbye to the stereotype that Chinese people cannot be creative, he added. Fabian Peltsch
Klaus Mühlhahn is one of the most respected sinologists in Germany. Usually, he teaches at the FU Berlin but currently, he has been the head of the private Zeppelin University on the shores of Lake Constance for five years. In China.Table, Mühlhahn explains why a Communist Party that seems to sit tall in the saddle nevertheless acts nervously and pettily. The reason lies in its history: Tension within the party and society has only been glossed over but not overcome. Nor is Xi Jinping’s position as unassailable as propaganda suggests. The interview by Michael Radunski is part of our series on the party’s centenary.
“Chinese wine“, this word combination still sounds unfamiliar. Indeed, dedicated vintners have been developing soils and vines since the 1980s. But it is only now that they are producing excellent wine that is winning international awards. Frank Sieren gives a lead on which locations to look out for. The development has a more wide-ranging meaning, though. Wine is an important export good for Europe. And the more Chinese vintners press their own wine, the less the trade has to buy from abroad.
I wish you a pleasant week!
100 years of the Communist Party of China. What is your evaluation of this anniversary?
The Chinese Communist Party has become the most powerful and efficient political organization in the world in its 100 years – and this was not to be expected. Only after many decades of bitter struggle did the Party achieve victory. Moreover, even after 1949, it stood on the precipice of the abyss several times. Often great victory was much more distant, while defeat was very close. Therefore an absolutely unexpected development.
What does that mean internationally?
Worldwide, there is no political organization or Party that can even compete with the Chinese Communist Party. It has 92 million members and is strictly organized with a clear set of values. The Party is a marvel of organization.
What fractures are fundamental to understanding today’s CCP and its current leadership?
Between 2010 and 2012, there was a radical break that led to the current phase. Here begins the turn towards an authoritarian, repressive form of government that revives the old Maoist patterns. The rupture was basically a conservative coup d’état, with which the Party abandoned its “reform and opening” formula.
In your new book, “The Chinese Communist Party: A Century in Ten Lives”, you describe the 1980s as a time of new beginnings, of freshness, as an opportunity for new commitment and ideas. Where did this momentum of reformation go?
To understand this significant difference, 1989 must also be added as another major rupture. Before the Tiananmen Square crackdown in June ’89, there were intense discussions in China about democracy and liberalization. It is hard to imagine today, but the vocabulary word minzhu (democracy) was exceedingly popular then; there was widespread admiration for liberalism. A time of great awakening. However, these political discussions ended in 1989, while only economic liberalism continued. After 2010/12, however, economic and social liberalism is also being increasingly rolled back with the Social Credit Systems and the renaissance of large state-owned enterprises.
The anniversary of the suppression of the Tiananmen Square protests was a few weeks ago. In retrospect, the protests at the time made political reform in China impossible for the foreseeable future. Were the protesters back then simply too radical?
No, I don’t see it that way. The demands at the time seem radical from today’s perspective, but it was more mainstream at the time. It was like it often is with protests. When a protest movement meets resistance, two options remain: March through the institutions or radicalization. The students at Tiananmen then chose radicalization of the struggle. But the original demands were not radical. Zhao Ziyang himself, the Prime Minister at that time, was convinced that there was no way around political reform.
In 1989 the Party felt politically challenged. What tipped the scales in 2010?
Around 2010, the CCP felt more and more that they were losing control, that society was slipping away from them. Entrepreneurs were becoming more powerful, corporations were successful, social pluralism was spreading so that the Party as a center of power was in danger. There emerged a materialistic, consumerist society and continued to be Western-oriented, even if it was no longer allowed to talk about political reform.
But China is doing well; the economy is booming, people are becoming wealthier, and the country is gaining influence internationally.
Yes, all true. But the Party is not concerned about China. The Party is about itself first, the country second. Despite all the success, people took their money abroad and sent their children to schools and universities overseas. There was a feeling within the CCP that it was losing control of society. This frightened the Party and led to the installation of Xi Jinping.
The new strong man. Does he do everything by himself?
We don’t know for sure, but he will have a faction behind him, backers and supporters to help him. Because Xi is turning everything upside down: Bo Xilai, a Politburo member, lost his high offices on corruption charges that would likely apply to everyone else. Security czar Zhou Yongkang was also arrested. All opponents of Xi. What follows is a gigantic purge of the Party, the likes of which have never been seen before. Eighty percent of all generals were replaced. They are being replaced by henchmen who adhere to this new authoritarian reading and are loyal to Xi.
So it’s fear that’s rallying the CCP behind Xi?
Yes, the biggest worry is the loss of power. It seems like a contradiction to us: China is becoming more powerful, but the CCP is going through more and more nightmares. But that explains the country’s behavior: Only a government that believes its own rule rests on feet of clay begins such an escalation. The CCP is an organization in fear, and that’s what makes it so unpredictable.
After all, it’s always about the sovereignty of interpretation. In what important ways has the CCP’s interpretation of Chinese history changed?
This is another point that has recently become more acute. After 1989, the great line of march was patriotism, which was how the Party responded to the crisis of ’89. Today the CCP calls for a fight against historical nihilism. Any nuanced portrayal of recent Chinese history is banned. At the very beginning of his term, Xi proclaims seven unmentionable topics not to report about: the Party’s historical mistakes, constitutionalism, value pluralism, and so on. A whitewashing of party history is happening.
A lot of things are disappearing or being banned. Are new things also being added?
Yes, for example, Confucianism. This is to show that China has its own culture and traditions. With regards to Confucius, this is particularly ironic because Mao called for the exact opposite: Everything old, like Confucius, must be destroyed. But today, Confucianism serves to create a Chinese identity in clear demarcation from the West. Then it quickly becomes politically charged. With it, one tries to justify why one does not need free elections, freedom of opinion, or the right to protest in the streets. All of this is going to be increasingly culturally justified.
The CCP side likes to claim that the Chinese have different values than the West. Is that true at all?
No. This is by design. The values are not that different. You don’t even have to look back to 1989 to see it, and it’s the same today: There is a desire for participation in China. Not necessarily for parliamentary democracy, but the Chinese also want to have a say in essential matters of their own lives. This is no different in China than anywhere else in the world. The only difference is that here the CCP under Xi gives the people no room at all.
In the West, people like to talk about the CCP, but the CCP is by no means a monolithic bloc, as you nicely show in your book. Where do you see different currents under the leadership of Xi Jinping today? What other currents and factions are there?
Xi’s systematic purge of the CCP has placed his people in many important positions. Nevertheless, there are still other currents. This is shown by incidents such as the recent one involving Cai Xia. The retired law lecturer at the Central Party University said the Party had degenerated into a political zombie and an instrument in the hands of a mafia boss. An audio file on that subject circulated on the Chinese Internet in June. I myself have received documents that clearly show discussions and struggles for direction within the CCP. However, there are no fixed factions; they are united above all by the criticism of Xi Jinping’s course.
What’s happening to China’s CCP under Xi right now?
Clearly, a re-ideologization and a re-centralization with Xi as the self-proclaimed core. Yet beneath the surface, there is a great struggle over the future of the Party. The opposition to Xi is probably bigger than we think. I keep hearing this from my contacts in the Party.
So are we in the West under the illusion of Xi as the most powerful leader since Mao?
In part, yes. Our problem is simply that we know far too little. That’s why people automatically follow the official picture – which says: Xi is powerful and has everything under control. But this image is a designed and top-down message to the Chinese as well as to other countries.
What does this mean for us in the West?
It is dangerous. That’s because we run the risk of overlooking other currents, of forgetting them. However, we urgently need contact with these groups, and thereby we lose a great opportunity.
Let’s stay with Xi Jinping for a moment because, powerful or not, he is deciding the direction of China right now. What experiences have shaped Xi and made him what he is and wants to be today?
Definitely his time in the Cultural Revolution. His father was actually a high party official, but fell from grace, and was humiliated. Xi was sent to the countryside as a result. He suffered a lot from that.
It’s a paradox. The family was humiliated and he himself is banished to the country. The logical reactions would be anger and the desire to take revenge. But Xi wants to strengthen the CCP more and more instead.
You have to understand Xi was a princeling. His time in the countryside won’t have been all that bad. But most importantly, Xi did not conclude that the Cultural Revolution was a big mistake because it was brutal and inhumane, but Xi was convinced it was a failure because Mao, in his old age, could not take drastic measures and had lost control of the Cultural Revolution.
And what can be deduced from this concerning today’s president?
Xi has a great belief that power must be concentrated in the hands of one person. Only in this way, the government can succeed in China. He doesn’t see the risks of that kind of government. Otherwise, he would never have lifted term limits. Surely this is a major step backward, which has also come as a great shock in China.
Is that megalomania?
This is the firm belief that China needs a strong man. Xi is convinced that China’s glory days were always when it had a strong leader. And it must be said that in today’s world he is not the only one.
The so-called Document No. 9 sets out Xi’s goals and values. It is a paper full of contempt for Western values. Is Xi really so fundamentally opposed to our values?
I think so, yes. That’s true for Xi, not for the entire CCP. For Xi, Western values threaten the Party’s rule. And that, in his opinion, must be prevented at all costs. There is another parallel here with his idol Mao. Whenever he senses danger, he doesn’t retreat but mobilizes all forces against it.
So deep conviction, no show?
Yes. The absolute, firm conviction that China needs a strong man and that democracy or even pluralism are absolutely unsuitable for China. Yet as I said, Xi does not speak for all Chinese here. This is his view and that of his loyal followers.
What does all of this mean for us? What kind of China will we have to prepare for in the future?
Predictions about China’s future have always had one thing in common: They’ve all been wrong. Yet I do believe we will see a China that is increasingly erratic. Xi and the party leadership are worried about staying in power. That drives them and leads them to cross borders to defend that claim to power and that model. It is alarming how often the Chinese leadership now speaks of red lines. As a historian, parallels with the period before the First and Second World Wars immediately come to mind. China is becoming increasingly unpredictable.
I’d rather spare you an even deeper look into the crystal ball. But currently, how should Germany deal with China?
I am an advocate of dialogue, including a dialogue of differences. This means that differences must be clearly identified and addressed. We must maintain this dialogue, not only with the government but also with the other currents within China and the Party. A self-confident dialogue with China in which issues are not left out. If we are certain of our values, there is no reason to shy away from dialogue with China.
A good point, but a troubling suspicion creeps up on me: Are we that certain of our values?
Yes, indeed. Even during the Cold War, the Western system was self-confident and was not afraid to enter into discussions and political competition with other systems. However, nowadays, we are rather insecure, not only in the United States with Trump but also in Germany. Due to our doubts, at the moment, we tend to curl up into a ball. And that is dangerous. If we travel to Beijing without confidence, we won’t be taken seriously.
Klaus Muehlhahn is a sinologist, social, and cultural scientist. He has been president of Zeppelin University in Friedrichshafen since June 2020. His latest books are:
The reaction is pragmatic and even surprisingly offensive. The Chinese ride service provider DiDi Chuxing currently suffers from attacks by China’s regulatory authorities. Now the company is planning an IPO – and is being emphatically open about its regulatory problems. DiDi bluntly lists all potential charges it could face from the State Administration for Market Regulation (SAMR) in Beijing. These include violations of the antitrust law and “unfair competition methods”.
DiDi’s planned IPO is getting a lot of attention. The company is the Chinese counterpart to Uber and is already very successful, at least in its home market. A valuation of up to $70 billion is being discussed, making it one of the most important initial listings of the year. The New York IPO also comes at a time when many Chinese companies are wary of the US capital market. They fear being caught in the crossfire of trade disputes there. However, DiDi shows that even well-known names are still interested in raising capital in the United States.
However, SAMR’s disruptive fire now shows that concerns about attracting political attention are not entirely unwarranted. The Chinese government is currently keeping the country’s tech companies on a short leash. After two decades of rapid growth, they have become too rich and independent in the eyes of the powerful. If anything, IPOs abroad are fuelling mistrust. Those having a foot abroad are in danger of escaping the influence of the Chinese state. Beijing is now making an example of such candidates more frequently, as the example of the trading platform Alibaba and its financial subsidiary Ant shows (China.Table reported).
The authorities ordered a “self-inspection” for DiDi and 30 other tech companies in April. A week after the company announced its plans to go public, another investigation against DiDi by the SAMR followed (China.Table reported). According to the report, the company is being investigated to see if it has used unfair competition practices to squeeze smaller competitors out of the ride-sharing market. In addition, the SAMR is investigating whether DiDi’s pricing mechanism for ride-share services is transparent enough.
That DiDi filed its IPO prospectus anyway, especially in the US, is seen as a sign that management is optimistic about avoiding Ant’s fate. The Alibaba subsidiary’s IPO had collapsed under the onslaught of new regulatory requirements. However, the signals from Beijing are mixed. In March, Li Shouzhen, a member of the Chinese government’s advisory committee, said that China was moving from “inclusive and prudent regulation”, under which its tech giants had been allowed to grow unhindered, to “science and innovation regulation”.
In the process, DiDi has spent all its energies in recent years to achieving a monopoly position among ride service providers in China. Its market share now is at 90 percent. The company was founded in 2012 by Will Weil Cheng and Jean Qing Liu in Beijing (China.Table reported). Once its biggest competitor, Kuaidi Dache, DiDi finished it off via acquisition in 2015. Only one year later, in August 2016, it took over the shares of Uber’s China business after the US company finally withdrew from the market after a five-year subsidy war with DiDi.
DiDi now operates in around 4,000 cities, provinces, and counties and has set up international shops in 15 countries. Last year, the company generated sales of ¥142 billion – more than 93 percent of it came from China. The service provider says it arranges 30 million rides a day for more than 500 million active users.
In order to participate in the global car-sharing market, DiDi has announced that it intends to invest 30 percent of the capital raised from the IPO in its expansion abroad. Most recently, the financial services provider Bloomberg reported that DiDi wants to expand into Western Europe and look for employees in Germany, Great Britain, and France before the end of the year.
So far, however, the company has not been in the black in any year yet. Most recently, it made a loss of $1.7 billion last year, which was also related to the COVID-19 pandemic.
But against all odds, analysts expect the ride-hailing market to top $93 billion in revenue this year. Over the next four years, a sales growth of $129 billion is predicted.
DiDi plans to use another 30 percent of the money from the IPO to build an EV and invest in autonomous vehicle research. In Shanghai, the company already offers self-driving taxis. And DiDi is cooperating with Volvo to develop its XC90 model into a robot taxi. DiDi also plans to develop autonomous electric cars with the Chinese e-battery supplier GAC Aion.
The ride service provider is primarily banking on the increasing mobility of big-city dwellers in China. After all, the forecast for metropolitan areas is that people will spend around 36 percent of their mobility expenses on car-sharing services by 2040. DiDi should be able to relax about the forecasts. After all, the SAMR’s penalties are likely to be small compared to the growth prospects.
While most clubs and concert halls in the West remain closed and the music world fears for its existence, it has long been possible to perform again in China. Philipp Grefer sees this as an opportunity but also a challenge: “On the one hand, the Chinese music and creative scene is currently experiencing a boom, which mainly benefits the local scene, but on the other hand, there is a lack of exchange with the rest of the world.” The music manager observes that few take on a three-week quarantine to come to the country. “So it’s more about building digital bridges at the moment.”
The native Rhinelander, who discovered his interest in Asia while studying economics and politics in San Diego, California, of all places, believes that creativity will merge even more with technology in the future – and that China will play a key role in it. With the label “FakeMusicMedia”, Philipp Grefer has been promoting cultural exchange between East and West for ten years. He has brought over 300 well-known musicians on tour to China, including big names like Die Toten Hosen.
Since 2018, the 40-year-old has also been organizing the “WISE” festival, a meeting on the topic of digitalization that brings together players from the fields of technology, AI, and the creative industries from all over the world. Last year, the WISE events, which also include many concerts, took place in the booming metropolises of Beijing, Shanghai, Chengdu, and Chongqing, among others. “What appeals to me most is the breakneck pace at which history is being made here,” says Philipp Grefer. “The country has risen to become the largest film market in the world in 2020. As far as the music business is concerned, China has fought its way up from 25th to seventh place in recent years and will certainly take first or second place in a few years,” he believes.
Together with Helen Feng, a former host of MTV China and singer of the well-known Chinese rock band Nova Heart, he commutes between Beijing and Berlin, which has sharpened his eye for differences. “The Chinese, unlike the Germans, are not technology pessimists. They are basically open-minded about new technology. I don’t even want to say which is better. New technology always harbors opportunities and risks. Yet the Chinese first create facts, only then are questions asked.” During the Covid lockdown, he said, he was fascinated by how flexibly many artists responded to the curfews by turning extensively to the online world.
Real-time musical broadcasting from quarantine has gained an even stronger foothold in China than it has here, thanks to the highly developed digital infrastructure. Chinese live-streaming sites like “Bilibili” have an intuitive payment or “gift” function. And since consumers in China now pay for everything online anyway, thanks to the highly advanced digitalization of payment methods, the threshold for spontaneous donation is much lower. “A small part of the financial losses could be absorbed in this way,” says Philipp Grefer, who has also shifted his WISE Festival even more strongly into the online world this year.
“In 2021, we have also continued this idea of a decentralized festival that takes place simultaneously online, offline, and in virtual reality in different countries,” Philipp Grefer tells us. He definitely has an educational approach: The festival not only wants to give the participating entrepreneurs a platform but also give Europeans, in particular, a little more China expertise. “For solutions to global problems such as the climate crisis or the regulation of AI, it is important to understand the country at least to some extent,” says Philipp Grefer. This also includes saying goodbye to the stereotype that Chinese people cannot be creative, he added. Fabian Peltsch
