China caused twice an uproar at the Munich Security Conference. First, with the offer by top Chinese diplomat Wang Yi to mediate in the Ukraine war. And then with the US accusation that China wants to expand its support for Russia to include weapons.
Michael Radunski was in the Bavarian capital for China.Table to find out how these contradictory statements fit together.
On the one hand, the supposed advance for peace does not mean any policy change at all. Our analysis thus comes as a disappointment to all those who have been yearning for Chinese mediation in the war. Wang indicates that a Chinese peace plan would result in harsh territorial losses for Ukraine. He wants to consider the interests of both sides equally. Russia, however, has defined its interests completely unilaterally and ruthlessly, which is why this proposal will unlikely be considered by Ukraine.
On the other hand, the US remained vague about its “evidence” on possible Chinese arms deliveries to Russia. “Providing lethal support” can mean many things. At the conference, it came down to a China-US clash that allows for at least one clear insight: China is getting more involved again. And pretending to be a bit more authoritative in the process. Even if Wang calls the USA “hysterical” because of its reaction to the balloon flight.
Background information on the balloon was provided to us at the conference by renowned political scientist Ian Bremmer. He believes “Xi Jinping was aware of the balloon surveillance program.” But according to Bremmer findings, the fact that the balloon ended up over Montana was not intentional. China’s balloon program simply was “sloppy executed” here, he says. Bremmer thus does not believe there will be an escalation in the long term. He also hopes that Xi would think twice about an invasion of Taiwan by now because he sees that the “West’s response to the Russian invasion has strengthened the West.”
Things must have gotten pretty rough between US Secretary of State Antony Blinken and China’s top foreign policy official Wang Yi. On late Saturday, they retreated to the back rooms of the Bayerischer Hof Hotel for a confidential discussion. The exchange was very direct and controversial, the US delegation said afterward. Blinken himself said that he admonished China about the Chinese spy balloon: Something like this “must never happen again.”
Throughout the weekend, both world powers attacked each other sharply. And yet, the 59th Munich Security Conference (MSC) was a good meeting for international diplomacy, with China announcing its own peace plan for Ukraine. Meanwhile, the US used the opportunities provided by the MSC to resume direct communication with China after the balloon incident. However, neither side could – or wanted to – gloss over the fact that relations between the two world powers are not too good at the moment.
Thus, also in Munich, the Chinese stuck to their version of the balloon incident of it merely being a flying object used for civilian purposes that had accidentally veered off course. The US had reacted “absurdly and hysterically.” It was an “abuse of force” and a “violation of international practices,” Wang complained in Munich. He said it was up to the US to repair the damage it had done.
A few days before his backroom meeting with Blinken, China’s top foreign policy official announced on the big stage at the Bayerischer Hof that they would soon present China’s position on a political settlement of the Ukraine crisis – unfortunately without giving the exact details.
Wang expressed the following thoughts on the peace plan:
The wording reveals that Wang has a very different peace deal in mind than Ukraine’s supporters. Even almost a year after the outbreak of the war, China speaks only of a crisis. And Wang’s reference to “legitimate security concerns of all parties” also suggests that China is unlikely to be too forceful in reclaiming Russia’s territorial gains in eastern Ukraine. After all, this is the same wording as the Russian justification for the attack on Ukraine.
If Wang is serious about the criteria, it is a matter of squaring the circle: Bringing together the UN principles of sovereignty and territorial integrity for Ukraine with Russia’s supposed security interests, which Moscow apparently sees threatened by Ukraine’s very existence.
Eberhard Sandschneider believes to have found other reasons behind the Chinese proposal. “China is on an offensive of charm in Munich,” the political scientist told China.Table. “The People’s Republic is desperate to get back on the big stage of world politics after three years of the Covid pandemic.”
German Foreign Minister Annalena Baerbock, on the other hand, welcomed the Chinese move in Munich: “Every opportunity should be seized,” the German Foreign Minister said. “It is good when China sees its responsibility to stand up for world peace.” She said she had also told Wang in direct talks. However, Baerbock stressed that Ukraine’s territorial integrity must be preserved in all of this.
Her US counterpart was far more skeptical: “Who doesn’t want guns to stop firing?” said Blinken. “But we have to be very careful with the type of traps that can be set.” Putin will certainly not want to negotiate over the occupied territories in Ukraine, he said, but rather use the time to regroup and re-equip his troops.
Instead, Blinken warned that China is currently considering supplying its own weapons and equipment to Russia. He announced to soon provide evidence. According to experts, China could provide satellite imagery that would allow Russia’s mercenary force Wagner Group to strike with greater precision or high-value electronic parts that the Russian military desperately needs. The warning was based on US “intelligence,” he said.
The remaining issue was the growing tensions around Taiwan. It was former MSC Chairman Wolfgang Ischinger who asked Wang Yi after his speech to reassure the world that no military escalation was imminent around Taiwan. But China refuses to back down on the matter.
Accordingly, Wang replied curtly, “Taiwan is part of Chinese territory. It has never been an independent country, and it will not be in the future.” Everyone should abide by the one-China policy, Wang urged, adding, “We firmly advocate respecting and safeguarding the sovereignty and territorial integrity of all countries. That’s good. But that must also be true with regard to China.”
The crucial question is how China will implement those very principles in its peace plan for Ukraine. The answer may follow soon. In the corridors of the security conference, it was heard that China intends to present its plan next week on the anniversary of the outbreak of war in Ukraine.
The controversy surrounding the presumed Chinese spy balloon has recently caused a lot of commotion. How great is the damage to China-US relations?
Marginal.
Marginal, despite all the furor? US President Biden even ordered fighter jets to shoot the thing down. So why all the fuss?
It is indeed important to understand the background. It reflects that the political and public environment in the United States is deeply divided but is also very combative in orientation towards China.
Not a good foundation for rational policy.
No. That’s not Biden administration policy, but that’s a reality. However, President Biden cannot be seen this weak publicly. As he did when Nancy Pelosi visited Taiwan.
And now again.
Biden knew about the balloon days before it became public. The US had been observing it since its launch in Hainan. Secretary of State Blinken was still making the trip to Beijing. He was still going to meet Xi Jinping. They were not going to shoot it down. But then it became public.
To reiterate, this is not good for a far-sighted policy. And that is what is urgently needed.
But there are certain things that you have to say because of the media and the political environment. Which is not so good for real politics, but also which ultimately doesn’t change policy. And that’s what’s important to recognize. The overall policy direction. Like,Blinken hasn’t met with Wang Yi yet, but I assume he’s going to today.
Let’s look at China. Did Xi Jinping willfully harm relations with the United States? Or did he not know what the Chinese military was doing? Both would be troubling.
Xi Jinping was aware of the balloon surveillance program. My understanding of what happened is: Yes, a few of these balloons had been dipping into US territory briefly and left. And that that was likely the intention here, but it got blown off course and ended up over the continental United States
A moment when intervention would have been possible.
Nobody called the Americans. At that moment, someone in the Chinese military took advantage of the fact and said, let’s use this to our advantage and gather a bunch of information. I think that it’s fairly clear from Xi Jinping’s reaction that he was angry about it.
So has China’s military gone too far here?
No. I think that the execution was sloppy. Gone too far implies intention as opposed to poor organization, sloppiness and incompetence. The Chinese have better surveillance than a balloon
It raises the question, how powerful is Xi Jinping?
I think he’s the most powerful man in the world.
Such words from an American?
Yes. China is the world’s second most powerful economy, and Xi is president for life. He has managed to consolidate an enormous amount of power in his hands and in the hands of people that have worked for him and that are loyal to him.
And Joe Biden?
The United States is much more powerful than China, but no American president and no individual wields the kind of authority that Xi Jinping does in an authoritarian state with a controlled state capital system and extensive technological surveillance. And quite honestly, we wouldn’t want an American president with that much power.
Speaking of power. How powerful is China’s military?
I think it’s a threat regionally. I think that one thing that we should learn from the Munich Security Conference is that in terms of security, the world is still led by the US. The US is the only country that can project global power. Without the Americans, there would be no significant response to the Russian attack on Ukraine. The US has military bases around the world and also has the highest military spending.
Is there any area where China’s military can compete?
Not yet. But I think that in the technology space, there are many areas where the Chinese are increasingly at parity with the United States.
Already at parity?
Yes. In facial recognition, for example. Or in digital data mining, which Beijing also knows how to use. That’s a national security issue. That’s why the US is responding with technology sanctions.
You said China’s military is a regional threat. Taiwan immediately comes to mind. The security experts I’ve talked to, here at the conference, say: What’s happening in Ukraine is bad. But if it were to happen to Taiwan, it would be infinitely worse.
Yes, I agree. The most important company strategically in the world is in Taiwan, the semiconductor manufacturer TSMC. The economic impact would be much more dramatic globally than what we are currently experiencing in the food and fertilizer sector because of the Ukraine war. And those problems are already dramatic for many countries. In addition, a fight between the world’s two largest economies would cause major disruptions in supply chains, economic relations, and so on.
What impact would aggression against Taiwan have on the world’s democracies?
It would likely have broad alliance implications. Imagine a situation where Taiwan falls. US allies in Asia would probably move much closer to the US, just as the war in Ukraine is driving Finland and Sweden into NATO. Japan, South Korea, New Zealand, and Australia might conclude that they should become an integral part of a US-led global alignment. Not to mention the consequences for the countries of the global South.
Is Xi Jinping aware of all these possible consequences?
I think that Xi Jinping is certainly aware that the West’s response to the Russian invasion has strengthened the West. Last year, the theme of the security conference was “Westlessness.” This year it looks very different, it’s “Westfullness.” And that is not useful for China.
Ian Bremmer is a political scientist. He is the president and founder of Eurasia Group, a political risk research and consulting firm. Bremmer has written several books, including the NYT bestseller Us vs Them: The Failure of Globalism. He teaches at Columbia University’s School of International and Public Affairs.
In March 2022, the Chinese government set a target of 5-5.5% GDP growth for the year. At the time, such growth levels appeared perfectly attainable. But within a month, the Omicron variant had arrived, triggering strict lockdowns that, while stemming the spread of the Covid virus, caused serious damage to the supply and demand sides of the economy. China’s growth rate for 2022 was just 3 percent.
Today, however, things are looking up for China’s economy. Following the government’s rapid shift away from its Zero-Covid policy in December – and especially since the middle of last month – the economy has sprung back to life. This renewed vitality was on display during the Spring Festival holiday in late January, when more than 300 million Chinese hit the road, up 23 percent from last year.
There are good reasons to expect significantly higher growth in 2023. For starters, the headline rate will reflect the low base in 2022. Given 4.8 percent average GDP growth in 2019-22, a back-of-the-envelope calculation suggests that China should be able to achieve GDP growth of around 6 percent in 2023.
Moreover, China still has ample room for expansionary monetary and fiscal policy. In the monetary realm, there is space to lower both the reserve requirement for banks and policy interest rates, such as the seven-day reverse repo rate and the medium-term lending facility.
As for fiscal policy, there are widespread – and legitimate – concerns about China’s high leverage ratio. But the government’s debt-to-GDP ratio remains significantly lower than in most advanced economies. Add to that China’s faster GDP growth and high savings rate, and it is clear that China’s fiscal position is much stronger than in most developed countries.
The question is how to direct the available policy support. Given the grim global outlook, exports cannot be expected to be a major driver of growth this year, despite making an important contribution to growth in 2022. Consumer demand can support growth, if it recovers strongly: in 2022, final consumption in China contributed just 32.8 percent to GDP growth, despite accounting for some 55 percent of GDP. But the likely impact of direct measures to stimulate consumer demand remains unclear.
Where expansionary fiscal policy would be useful is in supporting investment. While investment’s contribution to GDP growth has decreased significantly since 2010, it was the main engine of it in 2022. Yes, real-estate investment declined by 10 percent. But investment in manufacturing and infrastructure rose by 9.1 percent and 9.4 percent, respectively.
China’s best hope for the real-estate sector in 2023 is that investment stabilizes while manufacturing investment will be decided mainly by market forces related to industrial and technological development. But infrastructure investment merits fiscal support.
Some economists have argued that China already suffers from excessive infrastructure investment, citing massive waste and white elephants. But while they are right that China has made inefficient investments, the country’s infrastructure needs have not been met. For example, the pandemic highlighted weaknesses in China’s public-health infrastructure. More broadly, compared to developed countries, China’s (per capita) infrastructure gap is huge. So, infrastructure investment is still badly needed; it simply must be better targeted.
Of course, another black swan event like the pandemic could thwart China’s aspirations for growth in 2023. A more likely impediment is an increase in inflation, as has occurred in much of the rest of the world.
Over the last decade, China’s inflation rate has been very low, with the consumer price index averaging less than 2 percent. But the pandemic has dealt a major blow to China’s production capacity, and repairing supply chains and eliminating production bottlenecks may take time. As a result, supply may not be able to keep up with the surge in demand that accompanies reopening. The resulting imbalance will cause inflation to rise this year, at least for a while.
Higher inflation will hamper the government’s ability to implement expansionary fiscal and monetary policy. But the policy priority must be to stabilize growth, so China may well need to tolerate an inflation rate higher than 2-3 percent. Striking the right balance between growth and price stability may well prove to be a key challenge for China’s government this year.
Fiscal and monetary expansion cannot fix China’s structural problems. What it can do is create space for China to implement the comprehensive reform program set forth at the 18th National Congress of the Communist Party of China in 2012. That program called on the government to,
The government must act fast, given the possibility that its space for macroeconomic expansion will shrink as CPI inflation rises and other potential constraints take hold. If China’s leaders make optimal use of fiscal and monetary policy, and unswervingly pursue reform and opening up, they can ensure that 2023 is a very good year.
Yu Yongding, a former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, served on the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006.
Copyright: Project Syndicate, 2023.
www.project-syndicate.org
Did you know that Poseidon was quite the playboy? Yes, that’s right, we are talking about the king of the sea from Greek mythology. The Romans also knew him as the water deity Neptune. Actually, the brother of Zeus was married to beautiful Amphitrite, the queen of the seas. But that was apparently not enough for the trident-wielding and narcissistically inclined water scoundrel. And so, according to legend, he frequently had fun with water nymphs and sea nymphs on the side.
Perhaps that was the reason why the Chinese brought the ancient Olympian water god back from oblivion and recently gave him a linguistic makeover. And so “Poseidon” – literally “king of the sea” in Chinese 海王 hǎiwáng – is now a synonym for self-absorbed playboys who like to gallivant with the opposite sex and enjoy the company of beautiful women.
A “hǎiwáng” casts his nets in all four directions (四处撒网 sìchù sāwǎng), but without bringing any of his catches back home to his aquarium. Instead, he lets the baited beauties wriggle in his net, leaving all his options open. The harem of admirers that the Neptune-ladykiller amasses over time is consequently called 鱼塘 (yútáng) in Internet slang, meaning “fishpond” or “fish tank”. And the sea king is always “growing” new specimens for his pond (养鱼 yángyú – “raising new admirers” – or literally “breeding fish”). But of course, it also works the other way around, and it is not always the gentlemen who hold the trident in their hands. Narcissistically inclined playgirls are called 海后 hǎihòu – “sea queens” – in new Chinese.
By the way, these sea kings and ocean queens should not be confused with the crumb men (渣男 zhānán) and crumb women (渣女 zhānǚ), which I have already discussed in an earlier column. Crumbs people are usually in a relationship, but do not shy away from a casual adventure when the opportunity presents itself. So what do “human crumbs” do? Well, the colorful expression in Mandarin is: they “steal chickens and grab dogs” (偷鸡摸狗 tōu jī mō gǒu), they “steal scent and pilfer jade” (偷香窃玉 tōu xiāng qiè yù), they even “wet the flowers and trample the grass” (沾花惹草 zhān huā rě cǎo) – all these are ancient euphemisms to describe a wild love life in which one (extramarital) affair follows the next.
Quite different, however, are the sea majesties. As the blue bloods among playboys, these self-absorbed gentlemen and ladies enjoy basking in the admiration of potential partners, wallowing in the endless magic of possibilities, without any intention of settling down. In other words, they are marine narcissists (自恋狂 zìliànkuáng, narcissist).
In Chinese, lascivious love affairs are often described in many other colorful word combinations. Would you have thought, for example, that if you cheat in China, you are traveling “two-boated”? Because “to stand with one’s feet in two boats” (脚踏两只船 jiǎo tà liǎng zhī chuán) is a metaphor for “having an affair” in Mandarin. Of course, in the fitness and yoga age, the old boat metaphor has gone a bit out of fashion. And so the net community now prefers to speak of 劈腿 pǐtuǐ – a “balancing act”. (Although the boat metaphor can also turn into one, depending on the current).
And the expression for one-night-stand sounds far more romantic in Chinese: the “love for one night” (一夜情 yīyèqíng). And even the money-for-love variety gets an innocent spin in Chinese: “buying the spring” (买春 mǎichūn) is one of the code words for a visit to a prostitute. And she, in turn, “sells spring” (卖春 màichūn). Perhaps our “spring fever” or “second spring” are suitable mnemonic devices. At any rate, it is best to forget these words quickly, because sex work is still banned in China.
Verena Menzel runs the online language school New Chinese in Beijing.
China caused twice an uproar at the Munich Security Conference. First, with the offer by top Chinese diplomat Wang Yi to mediate in the Ukraine war. And then with the US accusation that China wants to expand its support for Russia to include weapons.
Michael Radunski was in the Bavarian capital for China.Table to find out how these contradictory statements fit together.
On the one hand, the supposed advance for peace does not mean any policy change at all. Our analysis thus comes as a disappointment to all those who have been yearning for Chinese mediation in the war. Wang indicates that a Chinese peace plan would result in harsh territorial losses for Ukraine. He wants to consider the interests of both sides equally. Russia, however, has defined its interests completely unilaterally and ruthlessly, which is why this proposal will unlikely be considered by Ukraine.
On the other hand, the US remained vague about its “evidence” on possible Chinese arms deliveries to Russia. “Providing lethal support” can mean many things. At the conference, it came down to a China-US clash that allows for at least one clear insight: China is getting more involved again. And pretending to be a bit more authoritative in the process. Even if Wang calls the USA “hysterical” because of its reaction to the balloon flight.
Background information on the balloon was provided to us at the conference by renowned political scientist Ian Bremmer. He believes “Xi Jinping was aware of the balloon surveillance program.” But according to Bremmer findings, the fact that the balloon ended up over Montana was not intentional. China’s balloon program simply was “sloppy executed” here, he says. Bremmer thus does not believe there will be an escalation in the long term. He also hopes that Xi would think twice about an invasion of Taiwan by now because he sees that the “West’s response to the Russian invasion has strengthened the West.”
Things must have gotten pretty rough between US Secretary of State Antony Blinken and China’s top foreign policy official Wang Yi. On late Saturday, they retreated to the back rooms of the Bayerischer Hof Hotel for a confidential discussion. The exchange was very direct and controversial, the US delegation said afterward. Blinken himself said that he admonished China about the Chinese spy balloon: Something like this “must never happen again.”
Throughout the weekend, both world powers attacked each other sharply. And yet, the 59th Munich Security Conference (MSC) was a good meeting for international diplomacy, with China announcing its own peace plan for Ukraine. Meanwhile, the US used the opportunities provided by the MSC to resume direct communication with China after the balloon incident. However, neither side could – or wanted to – gloss over the fact that relations between the two world powers are not too good at the moment.
Thus, also in Munich, the Chinese stuck to their version of the balloon incident of it merely being a flying object used for civilian purposes that had accidentally veered off course. The US had reacted “absurdly and hysterically.” It was an “abuse of force” and a “violation of international practices,” Wang complained in Munich. He said it was up to the US to repair the damage it had done.
A few days before his backroom meeting with Blinken, China’s top foreign policy official announced on the big stage at the Bayerischer Hof that they would soon present China’s position on a political settlement of the Ukraine crisis – unfortunately without giving the exact details.
Wang expressed the following thoughts on the peace plan:
The wording reveals that Wang has a very different peace deal in mind than Ukraine’s supporters. Even almost a year after the outbreak of the war, China speaks only of a crisis. And Wang’s reference to “legitimate security concerns of all parties” also suggests that China is unlikely to be too forceful in reclaiming Russia’s territorial gains in eastern Ukraine. After all, this is the same wording as the Russian justification for the attack on Ukraine.
If Wang is serious about the criteria, it is a matter of squaring the circle: Bringing together the UN principles of sovereignty and territorial integrity for Ukraine with Russia’s supposed security interests, which Moscow apparently sees threatened by Ukraine’s very existence.
Eberhard Sandschneider believes to have found other reasons behind the Chinese proposal. “China is on an offensive of charm in Munich,” the political scientist told China.Table. “The People’s Republic is desperate to get back on the big stage of world politics after three years of the Covid pandemic.”
German Foreign Minister Annalena Baerbock, on the other hand, welcomed the Chinese move in Munich: “Every opportunity should be seized,” the German Foreign Minister said. “It is good when China sees its responsibility to stand up for world peace.” She said she had also told Wang in direct talks. However, Baerbock stressed that Ukraine’s territorial integrity must be preserved in all of this.
Her US counterpart was far more skeptical: “Who doesn’t want guns to stop firing?” said Blinken. “But we have to be very careful with the type of traps that can be set.” Putin will certainly not want to negotiate over the occupied territories in Ukraine, he said, but rather use the time to regroup and re-equip his troops.
Instead, Blinken warned that China is currently considering supplying its own weapons and equipment to Russia. He announced to soon provide evidence. According to experts, China could provide satellite imagery that would allow Russia’s mercenary force Wagner Group to strike with greater precision or high-value electronic parts that the Russian military desperately needs. The warning was based on US “intelligence,” he said.
The remaining issue was the growing tensions around Taiwan. It was former MSC Chairman Wolfgang Ischinger who asked Wang Yi after his speech to reassure the world that no military escalation was imminent around Taiwan. But China refuses to back down on the matter.
Accordingly, Wang replied curtly, “Taiwan is part of Chinese territory. It has never been an independent country, and it will not be in the future.” Everyone should abide by the one-China policy, Wang urged, adding, “We firmly advocate respecting and safeguarding the sovereignty and territorial integrity of all countries. That’s good. But that must also be true with regard to China.”
The crucial question is how China will implement those very principles in its peace plan for Ukraine. The answer may follow soon. In the corridors of the security conference, it was heard that China intends to present its plan next week on the anniversary of the outbreak of war in Ukraine.
The controversy surrounding the presumed Chinese spy balloon has recently caused a lot of commotion. How great is the damage to China-US relations?
Marginal.
Marginal, despite all the furor? US President Biden even ordered fighter jets to shoot the thing down. So why all the fuss?
It is indeed important to understand the background. It reflects that the political and public environment in the United States is deeply divided but is also very combative in orientation towards China.
Not a good foundation for rational policy.
No. That’s not Biden administration policy, but that’s a reality. However, President Biden cannot be seen this weak publicly. As he did when Nancy Pelosi visited Taiwan.
And now again.
Biden knew about the balloon days before it became public. The US had been observing it since its launch in Hainan. Secretary of State Blinken was still making the trip to Beijing. He was still going to meet Xi Jinping. They were not going to shoot it down. But then it became public.
To reiterate, this is not good for a far-sighted policy. And that is what is urgently needed.
But there are certain things that you have to say because of the media and the political environment. Which is not so good for real politics, but also which ultimately doesn’t change policy. And that’s what’s important to recognize. The overall policy direction. Like,Blinken hasn’t met with Wang Yi yet, but I assume he’s going to today.
Let’s look at China. Did Xi Jinping willfully harm relations with the United States? Or did he not know what the Chinese military was doing? Both would be troubling.
Xi Jinping was aware of the balloon surveillance program. My understanding of what happened is: Yes, a few of these balloons had been dipping into US territory briefly and left. And that that was likely the intention here, but it got blown off course and ended up over the continental United States
A moment when intervention would have been possible.
Nobody called the Americans. At that moment, someone in the Chinese military took advantage of the fact and said, let’s use this to our advantage and gather a bunch of information. I think that it’s fairly clear from Xi Jinping’s reaction that he was angry about it.
So has China’s military gone too far here?
No. I think that the execution was sloppy. Gone too far implies intention as opposed to poor organization, sloppiness and incompetence. The Chinese have better surveillance than a balloon
It raises the question, how powerful is Xi Jinping?
I think he’s the most powerful man in the world.
Such words from an American?
Yes. China is the world’s second most powerful economy, and Xi is president for life. He has managed to consolidate an enormous amount of power in his hands and in the hands of people that have worked for him and that are loyal to him.
And Joe Biden?
The United States is much more powerful than China, but no American president and no individual wields the kind of authority that Xi Jinping does in an authoritarian state with a controlled state capital system and extensive technological surveillance. And quite honestly, we wouldn’t want an American president with that much power.
Speaking of power. How powerful is China’s military?
I think it’s a threat regionally. I think that one thing that we should learn from the Munich Security Conference is that in terms of security, the world is still led by the US. The US is the only country that can project global power. Without the Americans, there would be no significant response to the Russian attack on Ukraine. The US has military bases around the world and also has the highest military spending.
Is there any area where China’s military can compete?
Not yet. But I think that in the technology space, there are many areas where the Chinese are increasingly at parity with the United States.
Already at parity?
Yes. In facial recognition, for example. Or in digital data mining, which Beijing also knows how to use. That’s a national security issue. That’s why the US is responding with technology sanctions.
You said China’s military is a regional threat. Taiwan immediately comes to mind. The security experts I’ve talked to, here at the conference, say: What’s happening in Ukraine is bad. But if it were to happen to Taiwan, it would be infinitely worse.
Yes, I agree. The most important company strategically in the world is in Taiwan, the semiconductor manufacturer TSMC. The economic impact would be much more dramatic globally than what we are currently experiencing in the food and fertilizer sector because of the Ukraine war. And those problems are already dramatic for many countries. In addition, a fight between the world’s two largest economies would cause major disruptions in supply chains, economic relations, and so on.
What impact would aggression against Taiwan have on the world’s democracies?
It would likely have broad alliance implications. Imagine a situation where Taiwan falls. US allies in Asia would probably move much closer to the US, just as the war in Ukraine is driving Finland and Sweden into NATO. Japan, South Korea, New Zealand, and Australia might conclude that they should become an integral part of a US-led global alignment. Not to mention the consequences for the countries of the global South.
Is Xi Jinping aware of all these possible consequences?
I think that Xi Jinping is certainly aware that the West’s response to the Russian invasion has strengthened the West. Last year, the theme of the security conference was “Westlessness.” This year it looks very different, it’s “Westfullness.” And that is not useful for China.
Ian Bremmer is a political scientist. He is the president and founder of Eurasia Group, a political risk research and consulting firm. Bremmer has written several books, including the NYT bestseller Us vs Them: The Failure of Globalism. He teaches at Columbia University’s School of International and Public Affairs.
In March 2022, the Chinese government set a target of 5-5.5% GDP growth for the year. At the time, such growth levels appeared perfectly attainable. But within a month, the Omicron variant had arrived, triggering strict lockdowns that, while stemming the spread of the Covid virus, caused serious damage to the supply and demand sides of the economy. China’s growth rate for 2022 was just 3 percent.
Today, however, things are looking up for China’s economy. Following the government’s rapid shift away from its Zero-Covid policy in December – and especially since the middle of last month – the economy has sprung back to life. This renewed vitality was on display during the Spring Festival holiday in late January, when more than 300 million Chinese hit the road, up 23 percent from last year.
There are good reasons to expect significantly higher growth in 2023. For starters, the headline rate will reflect the low base in 2022. Given 4.8 percent average GDP growth in 2019-22, a back-of-the-envelope calculation suggests that China should be able to achieve GDP growth of around 6 percent in 2023.
Moreover, China still has ample room for expansionary monetary and fiscal policy. In the monetary realm, there is space to lower both the reserve requirement for banks and policy interest rates, such as the seven-day reverse repo rate and the medium-term lending facility.
As for fiscal policy, there are widespread – and legitimate – concerns about China’s high leverage ratio. But the government’s debt-to-GDP ratio remains significantly lower than in most advanced economies. Add to that China’s faster GDP growth and high savings rate, and it is clear that China’s fiscal position is much stronger than in most developed countries.
The question is how to direct the available policy support. Given the grim global outlook, exports cannot be expected to be a major driver of growth this year, despite making an important contribution to growth in 2022. Consumer demand can support growth, if it recovers strongly: in 2022, final consumption in China contributed just 32.8 percent to GDP growth, despite accounting for some 55 percent of GDP. But the likely impact of direct measures to stimulate consumer demand remains unclear.
Where expansionary fiscal policy would be useful is in supporting investment. While investment’s contribution to GDP growth has decreased significantly since 2010, it was the main engine of it in 2022. Yes, real-estate investment declined by 10 percent. But investment in manufacturing and infrastructure rose by 9.1 percent and 9.4 percent, respectively.
China’s best hope for the real-estate sector in 2023 is that investment stabilizes while manufacturing investment will be decided mainly by market forces related to industrial and technological development. But infrastructure investment merits fiscal support.
Some economists have argued that China already suffers from excessive infrastructure investment, citing massive waste and white elephants. But while they are right that China has made inefficient investments, the country’s infrastructure needs have not been met. For example, the pandemic highlighted weaknesses in China’s public-health infrastructure. More broadly, compared to developed countries, China’s (per capita) infrastructure gap is huge. So, infrastructure investment is still badly needed; it simply must be better targeted.
Of course, another black swan event like the pandemic could thwart China’s aspirations for growth in 2023. A more likely impediment is an increase in inflation, as has occurred in much of the rest of the world.
Over the last decade, China’s inflation rate has been very low, with the consumer price index averaging less than 2 percent. But the pandemic has dealt a major blow to China’s production capacity, and repairing supply chains and eliminating production bottlenecks may take time. As a result, supply may not be able to keep up with the surge in demand that accompanies reopening. The resulting imbalance will cause inflation to rise this year, at least for a while.
Higher inflation will hamper the government’s ability to implement expansionary fiscal and monetary policy. But the policy priority must be to stabilize growth, so China may well need to tolerate an inflation rate higher than 2-3 percent. Striking the right balance between growth and price stability may well prove to be a key challenge for China’s government this year.
Fiscal and monetary expansion cannot fix China’s structural problems. What it can do is create space for China to implement the comprehensive reform program set forth at the 18th National Congress of the Communist Party of China in 2012. That program called on the government to,
The government must act fast, given the possibility that its space for macroeconomic expansion will shrink as CPI inflation rises and other potential constraints take hold. If China’s leaders make optimal use of fiscal and monetary policy, and unswervingly pursue reform and opening up, they can ensure that 2023 is a very good year.
Yu Yongding, a former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, served on the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006.
Copyright: Project Syndicate, 2023.
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Did you know that Poseidon was quite the playboy? Yes, that’s right, we are talking about the king of the sea from Greek mythology. The Romans also knew him as the water deity Neptune. Actually, the brother of Zeus was married to beautiful Amphitrite, the queen of the seas. But that was apparently not enough for the trident-wielding and narcissistically inclined water scoundrel. And so, according to legend, he frequently had fun with water nymphs and sea nymphs on the side.
Perhaps that was the reason why the Chinese brought the ancient Olympian water god back from oblivion and recently gave him a linguistic makeover. And so “Poseidon” – literally “king of the sea” in Chinese 海王 hǎiwáng – is now a synonym for self-absorbed playboys who like to gallivant with the opposite sex and enjoy the company of beautiful women.
A “hǎiwáng” casts his nets in all four directions (四处撒网 sìchù sāwǎng), but without bringing any of his catches back home to his aquarium. Instead, he lets the baited beauties wriggle in his net, leaving all his options open. The harem of admirers that the Neptune-ladykiller amasses over time is consequently called 鱼塘 (yútáng) in Internet slang, meaning “fishpond” or “fish tank”. And the sea king is always “growing” new specimens for his pond (养鱼 yángyú – “raising new admirers” – or literally “breeding fish”). But of course, it also works the other way around, and it is not always the gentlemen who hold the trident in their hands. Narcissistically inclined playgirls are called 海后 hǎihòu – “sea queens” – in new Chinese.
By the way, these sea kings and ocean queens should not be confused with the crumb men (渣男 zhānán) and crumb women (渣女 zhānǚ), which I have already discussed in an earlier column. Crumbs people are usually in a relationship, but do not shy away from a casual adventure when the opportunity presents itself. So what do “human crumbs” do? Well, the colorful expression in Mandarin is: they “steal chickens and grab dogs” (偷鸡摸狗 tōu jī mō gǒu), they “steal scent and pilfer jade” (偷香窃玉 tōu xiāng qiè yù), they even “wet the flowers and trample the grass” (沾花惹草 zhān huā rě cǎo) – all these are ancient euphemisms to describe a wild love life in which one (extramarital) affair follows the next.
Quite different, however, are the sea majesties. As the blue bloods among playboys, these self-absorbed gentlemen and ladies enjoy basking in the admiration of potential partners, wallowing in the endless magic of possibilities, without any intention of settling down. In other words, they are marine narcissists (自恋狂 zìliànkuáng, narcissist).
In Chinese, lascivious love affairs are often described in many other colorful word combinations. Would you have thought, for example, that if you cheat in China, you are traveling “two-boated”? Because “to stand with one’s feet in two boats” (脚踏两只船 jiǎo tà liǎng zhī chuán) is a metaphor for “having an affair” in Mandarin. Of course, in the fitness and yoga age, the old boat metaphor has gone a bit out of fashion. And so the net community now prefers to speak of 劈腿 pǐtuǐ – a “balancing act”. (Although the boat metaphor can also turn into one, depending on the current).
And the expression for one-night-stand sounds far more romantic in Chinese: the “love for one night” (一夜情 yīyèqíng). And even the money-for-love variety gets an innocent spin in Chinese: “buying the spring” (买春 mǎichūn) is one of the code words for a visit to a prostitute. And she, in turn, “sells spring” (卖春 màichūn). Perhaps our “spring fever” or “second spring” are suitable mnemonic devices. At any rate, it is best to forget these words quickly, because sex work is still banned in China.
Verena Menzel runs the online language school New Chinese in Beijing.
