In the Republican election program, US presidential candidate Donald Trump confirms the United States’ decline. He is actually just repeating what Beijing has been predicting for many years. This is interesting insofar as China has been persistently preaching beliefs to its opponents in the rest of the world that will eventually (or are supposed to) become convictions there.
Incidentally, Beijing does the same with Germany. They are being told that its technological demise is inevitable and that only Chinese help can lift it from rock bottom. Don’t you believe it.
But back to the States: Trump’s election program also clearly states that he will not hand over the role of global power to the Chinese without a fight. His opponent Joe Biden does the same. But Trump is taking things up a notch everywhere. Tariffs, weapons, military – now that’s a bazooka.
Unlike Biden, Trump clearly does not have strong alliances in mind, writes Michael Radunski. Instead, he emphasizes the greatness of the US nation and its people. Perhaps this belief simply needs more conviction in the US for this strategy to save the country from decline.
In China, optimism is an integral part of government policy. Poor economic figures have been downplayed for years with positive speeches. The next opportunity will come at the Third Plenum, where the economic direction for the coming years is being decided since yesterday. The latest economic data practically cry out for optimism.
Joern Petring has broken down the reasons for the country’s disappointing growth. And it seems as if China is going round in circles. Domestic consumption has been the Achilles heel of the Chinese economy for decades. There is no improvement in sight. So, the motto of the Third Plenum will undoubtedly be: spreading optimism around the country. Faith can move mountains.
Two important things will be decided at the Republican National Convention this week in Milwaukee:
Trump has had the Republicans write down on 16 pages what their new program should look like. The tenor: The USA is in domestic political decline. In foreign policy, there is one opponent in particular: China.
This escalation is striking -and should also alert the Europeans. This program knows neither partners nor allies. In general, there is talk of foreign nations, unfair trade, invasion, and chaos. Only one country is mentioned by name: China.
To make America “great again” and assert its role as the dominant superpower in the world against China, Trump has set out two approaches in his program:
Added to this are two characteristics that Trump sees as particularly pronounced in himself: His ability to always get the best deal – even with China’s party and state leader Xi Jinping – and more optimism, coupled with grand pathos.
It is not a classic election program featuring detailed plans. Instead, the pages are already peppered with plenty of pathos, pithy words and simple slogans. In true Trump style, words and sentences are sometimes only written in capital letters, for example, when it says: “We are a Nation in SERIOUS DECLINE.”
The first step to stopping this decline is supposed to be a complete overhaul of US trade and elimination of the US trade deficit. To this end, basic tariffs on foreign goods will be raised, the Trump Reciprocal Trade Act will be passed, and unfair trade practices will be addressed.
Trump has already made it clear several times what this means in practice. “Universal base tariffs” of 10 percent on all foreign imports. Chinese goods, on the other hand, are to be subject to a 60 percent tariff.
The possibility that such steps could result in Chinese countermeasures or that the global trade policy environment as a whole is likely to change is simply ignored by the Republicans under Trump. The election platform simply states: “As Tariffs on Foreign Producers go up, Taxes on American Workers, Families, and Businesses can come down.”
Instead, things will be even simpler with Trump – and even more aimed at China.
In classic foreign policy, Trump sets out the goal: peace through strength. “The Biden administration’s weak foreign policy has made us less safe and a laughingstock all over the world.” That is why he intends to strengthen the US military, rebuild alliances, confront China, defeat terrorism and promote American values.
Here, too, only China is mentioned by name. The foreign policy of Trump and his Republicans seems to be completely geared towards confrontation with the People’s Republic. The solution would require a missile defense shield with an iron dome structure or a significantly stronger defense industry. “We will build a Military bigger, better, and stronger than ever before.”
In order to grasp the consequences of this policy, it is necessary to read between the lines and realize what this program does not include: no partners, no allies, no joint action. This is a fundamental difference to President Joe Biden’s policy, which also drives a hard line against China.
China’s cadres were surprised to see that Biden largely retained the Trump-era tariffs after his election. In fact, Biden even went further: Above all, the strict export controls in the high-tech sector have significantly harmed China’s semiconductor ecosystem and its development. Whether Democrat or Republican, there is now a bipartisan consensus in the US to crack down on China.
And yet, the Biden administration has repeatedly sought to close ranks, reaching out to partners in Europe and the Pacific. This has resulted in historic summits with Japan and South Korea or security partnerships such as AUKUS with the UK and Australia. The future of such alliances is uncertain under Trump.
More than that. Instead of common ground, Trump emphasizes borders. He recently warned NATO partners that if they did not pay their dues, he would encourage Russia to do whatever it wanted with these countries. And it’s not always just about money. Trump announced that “America must have the cheapest energy and electricity in the world.” The election platform states here: DRILL, BABY, DRILL. He also wants to withdraw from the “horribly unfair” Paris climate agreement. All of this will enormously strain relations with the strategically important Pacific island states and other countries facing the effects of climate change.
Europeans should not allow themselves to simply shake their heads at Trump or even make fun of him. After all, Trump has certainly recognized some points and mistakes of the past. What Trump overlooks, however, is that America’s global leadership role is also grounded on its many allies, just as China’s international “weakness” is primarily the lack of close partners sharing the same vision.
The Third Plenum has kicked off with a bang. The National Bureau of Statistics presented disappointing economic data at the start of the eagerly anticipated Third Plenum: The world’s second-largest economy only grew by 4.7 percent year-on-year in the second quarter.
4.7 percent – this figure is likely to have caused bitter disappointment-not only for the members of the Third Plenum but also for the German economy, which tends to hope for better times on the back of strong Chinese economic data. 4.7 percent is not only significantly less than most analysts had expected, but it also reflects the economic downturn of recent months. At 5.2 and 5.3 percent, the last two quarters were considerably stronger. Now, there is disillusionment.
“It’s hard to find anything good in today’s data release,” Beijing-based economist Michael Pettis commented on the X. In particular, the continued weak domestic consumption in the second-largest economy gives the economist a headache. According to Pettis, it is clear that China continues to focus primarily on promoting the supply side of the economy, while weak demand becomes an economic burden.
Or to put it another way: While industry continues to expand production, consumption falls by the wayside.
This is because retail sales, in particular, fell well short of expectations and dragged down GDP. In June, sales only rose by around two percent compared to the previous year. This is the lowest growth in 17 months.
The new data shows that the CCP urgently needs to send a clear signal to the economy at the Third Plenum. Analysts believe a major economic stimulus package is necessary to improve the economic sentiment. In addition, the problems in the real estate market would have to be addressed more strongly than in the past. If people were not so unsettled by the declining property values, they would be more willing to spend money on other things.
Monday’s plenary session did not yet provide any answers and, as expected, failed to make any relevant announcements. The Party will only publish a communiqué at the end of the four-day meeting, which only takes place every five years. The outlines of countermeasures will then become visible. However, it is unlikely that too much concrete information will be formulated, as the CCP’s coded wording usually offers plenty of room for interpretation and not clear answers. It is doubtful whether this will be enough to spark a turnaround. Especially as the current figures are hard to stomach.
Meanwhile, it is becoming increasingly clear that President Xi Jinping’s plan is not working. Xi is willing to accept short-term prosperity losses to change the economy’s structure. He wants to reduce the real estate market’s contribution to growth and replace it with growth in new high-tech industries. However, this restructuring leaves the everyday concerns of many Chinese people by the wayside.
That is why economists have long been calling on the government to focus on boosting consumption in order to ensure lasting growth. As this has not been successful for years, it attracted corresponding criticism. “The root of the growth slowdown is that the property sector as a pillar of the economy is still rapidly shrinking, and home prices are slumping,” Lu Ting, economist at the Japanese financial company Nomura, told Bloomberg. “To change the fast slowdown in consumption growth China needs to stabilize the property industry, which accounts for about 70 percent of household wealth,” the economist added.
Zhi Xiaojia, economist at Credit Agricole in Hong Kong, even sees the government’s growth target for this year at risk after the presentation of the latest data. In order to achieve the target of five percent, the government will have to “consider greater political support.” Growth of 5.3 percent in the first quarter and 4.7 percent in the second quarter means that the Chinese economy grew by exactly five percent in the first half of the year. If the economic slowdown continues, Beijing will indeed struggle to reach the five percent target by December.
Raymond Yeung, chief economist for China at ANZ Bank, expects little improvement in the short term. “Household consumption remains very weak. […] With employers slashing salary and high youth unemployment, households will still be cautious going forward,” says Yeung.
The National Bureau of Statistics has itself highlighted these problems. Although the statisticians did not hold a press conference on Monday, probably because of the Third Plenum, there was a separate statement. “The ability and confidence for households to consume still need to be improved,” Zhang Yi, an official from the National Bureau of Statistics, was quoted as saying. According to the statement, it is necessary to “strengthen measures to increase residents’ income.” The message was aimed at the Central Committee, which is called upon more than ever at the Third Plenum.
In the so-called Third Plenum to be held on July 15-18, China’s senior leadership will have an opportunity to establish the broad outlines of a policy framework that could reshape the country’s course for the next several years. Don’t count on it. There is good reason to think that China watchers in the West have unrealistic expectations of what is to come.
Such was the case in late 2013 when the 18th Central Committee gathered for a Third Plenum of its own. That policy conclave was widely heralded as a historic opportunity for a new leader – Xi Jinping – to put China on a different path after the unfinished reforms of the Hu Jintao era. There was a palpable sense of excitement in the air, and at first blush, the plenum appeared to deliver. A final communiqué listed more than 300 reform proposals covering a broad range of areas – from state-owned enterprises, land policy, and foreign trade to investment reforms and environmental and social-welfare policies.
In the end, however, the Third Plenum of 2013 didn’t meet Westerners’ lofty expectations. The implementation of reforms was disappointing and that plenum came up short on its biggest promise: to give the market a decisive role in guiding China’s economic development. Instead, Xi has presided over an increasingly state-dominated system. The intervening years have been shaped less by the successful execution of plenum-driven reforms, and more by the evolution of a leader-centric system of governance that quickly came to be known as Xi Jinping Thought.
This focus on governance followed a pattern established in earlier third plenums. The gathering in late 1978, for example, became a platform for the ascendancy of Deng Xiaoping and China’s pivotal moment of “reforms and opening up.” Similarly, the Third Plenum of 1993, under the leadership of Jiang Zemin, underscored the principles of the “socialist market economy.” Judging by these earlier outcomes, there is good reason to think the upcoming Third Plenum will produce statements that bear more on ideology and governance than on a detailed set of problem-specific actions.
Thus, many hints by Chinese officials ahead of the 2024 gathering could well be misleading. There is considerable hope and hype for new reforms to address some of China’s most serious problems, especially the property crisis and local-government indebtedness. At the same time, Xi and his leadership team have drawn attention to “new productive forces” and the imperative to drive progress in frontier technologies and advanced manufacturing.
But these important challenges are unlikely to be resolved at the upcoming policy conclave. As before, the emphasis will likely be on governance, consistent with pre-announced goals, such as “building a high-level socialist market system” and “deepening the comprehensive reforms to advance Chinese modernization.”
Rather than dismiss such statements as slogans, we should take them at face value. Governance has been Xi’s primary focus ever since late 2012. What began in 2013 as a sweeping anti-corruption campaign quickly morphed into a comprehensive reworking of a leader-centric power structure. Not only has Xi published a four-volume series on Chinese governance; he has also effectively taken over all aspects of the Communist Party of China’s decision-making process.
Nor should Xi’s signature governance campaign be thought of in purely domestic terms. It is also being used to shape China’s great-power aspirations. Gone is the low-profile modesty of the Deng era, when China would supposedly “hide its strength and bide its time.” Instead, Xi is openly attempting to remake the international order through a three-pillar approach to global governance – framed around the Global Security Initiative, the Global Development Initiative, and the Global Civilization Initiative. In effect, he is doubling down on the aspirational commitments he announced when he first espoused the Chinese Dream in late 2012. Xi believes that without further governance advances, China’s emergence as a great socialist power will be stymied.
In one key respect, this is a disappointing conclusion. Westerners have long had a hard time understanding and accepting China’s emphasis on governance. That is because we tend to be more solutions-oriented in tackling specific problems. We see the upcoming Third Plenum as an opportunity for China’s leaders to embrace a new strategy to fix a struggling economy. Governance, especially an approach steeped in the interplay between socialist ideology and a consolidation of power featuring “Xi Jinping at the core,” is not the answer we are looking for. But as the late historian Jonathan Spence always emphasized, our answer is often not China’s answer.
Yes, China has plenty of issues on its plate. In addition to the property crisis and local-government debt problems, it also must cope with containment pressures from the United States and its allies. And then there is my personal favorite: the imperative for a consumer-led structural rebalancing of the Chinese economy. This can happen only with long overdue social safety-net reforms of health care, retirement, and the hukou system of household registration (which undermines internal migration). All are essential if China is going to redirect the excesses of fear-driven precautionary saving toward fueling a more robust consumer society.
But that’s my Third Plenum agenda, not China’s. Most China watchers are fixating on the problem-specific detail of what is likely to be included in another lengthy concluding communiqué. But don’t be fooled. Experience shows that the Chinese leadership tends to overpromise. China’s third plenums have long been about governance, and this one is unlikely to be different. For Xi, consolidating power through a revolution in Chinese governance remains the highest priority, and it is still very much a work in progress.
Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of Unbalanced: The Codependency of America and China (Yale University Press, 2014) and Accidental Conflict: America, China, and the Clash of False Narratives (Yale University Press, 2022).
Copyright: Project Syndicate, 2024.
www.project-syndicate.org
Just a quick snap of this unknown company. Google is blocked in China. Nevertheless, the US company has a booth at the World Artificial Intelligence Conference (WAIC) in Shanghai.
In the Republican election program, US presidential candidate Donald Trump confirms the United States’ decline. He is actually just repeating what Beijing has been predicting for many years. This is interesting insofar as China has been persistently preaching beliefs to its opponents in the rest of the world that will eventually (or are supposed to) become convictions there.
Incidentally, Beijing does the same with Germany. They are being told that its technological demise is inevitable and that only Chinese help can lift it from rock bottom. Don’t you believe it.
But back to the States: Trump’s election program also clearly states that he will not hand over the role of global power to the Chinese without a fight. His opponent Joe Biden does the same. But Trump is taking things up a notch everywhere. Tariffs, weapons, military – now that’s a bazooka.
Unlike Biden, Trump clearly does not have strong alliances in mind, writes Michael Radunski. Instead, he emphasizes the greatness of the US nation and its people. Perhaps this belief simply needs more conviction in the US for this strategy to save the country from decline.
In China, optimism is an integral part of government policy. Poor economic figures have been downplayed for years with positive speeches. The next opportunity will come at the Third Plenum, where the economic direction for the coming years is being decided since yesterday. The latest economic data practically cry out for optimism.
Joern Petring has broken down the reasons for the country’s disappointing growth. And it seems as if China is going round in circles. Domestic consumption has been the Achilles heel of the Chinese economy for decades. There is no improvement in sight. So, the motto of the Third Plenum will undoubtedly be: spreading optimism around the country. Faith can move mountains.
Two important things will be decided at the Republican National Convention this week in Milwaukee:
Trump has had the Republicans write down on 16 pages what their new program should look like. The tenor: The USA is in domestic political decline. In foreign policy, there is one opponent in particular: China.
This escalation is striking -and should also alert the Europeans. This program knows neither partners nor allies. In general, there is talk of foreign nations, unfair trade, invasion, and chaos. Only one country is mentioned by name: China.
To make America “great again” and assert its role as the dominant superpower in the world against China, Trump has set out two approaches in his program:
Added to this are two characteristics that Trump sees as particularly pronounced in himself: His ability to always get the best deal – even with China’s party and state leader Xi Jinping – and more optimism, coupled with grand pathos.
It is not a classic election program featuring detailed plans. Instead, the pages are already peppered with plenty of pathos, pithy words and simple slogans. In true Trump style, words and sentences are sometimes only written in capital letters, for example, when it says: “We are a Nation in SERIOUS DECLINE.”
The first step to stopping this decline is supposed to be a complete overhaul of US trade and elimination of the US trade deficit. To this end, basic tariffs on foreign goods will be raised, the Trump Reciprocal Trade Act will be passed, and unfair trade practices will be addressed.
Trump has already made it clear several times what this means in practice. “Universal base tariffs” of 10 percent on all foreign imports. Chinese goods, on the other hand, are to be subject to a 60 percent tariff.
The possibility that such steps could result in Chinese countermeasures or that the global trade policy environment as a whole is likely to change is simply ignored by the Republicans under Trump. The election platform simply states: “As Tariffs on Foreign Producers go up, Taxes on American Workers, Families, and Businesses can come down.”
Instead, things will be even simpler with Trump – and even more aimed at China.
In classic foreign policy, Trump sets out the goal: peace through strength. “The Biden administration’s weak foreign policy has made us less safe and a laughingstock all over the world.” That is why he intends to strengthen the US military, rebuild alliances, confront China, defeat terrorism and promote American values.
Here, too, only China is mentioned by name. The foreign policy of Trump and his Republicans seems to be completely geared towards confrontation with the People’s Republic. The solution would require a missile defense shield with an iron dome structure or a significantly stronger defense industry. “We will build a Military bigger, better, and stronger than ever before.”
In order to grasp the consequences of this policy, it is necessary to read between the lines and realize what this program does not include: no partners, no allies, no joint action. This is a fundamental difference to President Joe Biden’s policy, which also drives a hard line against China.
China’s cadres were surprised to see that Biden largely retained the Trump-era tariffs after his election. In fact, Biden even went further: Above all, the strict export controls in the high-tech sector have significantly harmed China’s semiconductor ecosystem and its development. Whether Democrat or Republican, there is now a bipartisan consensus in the US to crack down on China.
And yet, the Biden administration has repeatedly sought to close ranks, reaching out to partners in Europe and the Pacific. This has resulted in historic summits with Japan and South Korea or security partnerships such as AUKUS with the UK and Australia. The future of such alliances is uncertain under Trump.
More than that. Instead of common ground, Trump emphasizes borders. He recently warned NATO partners that if they did not pay their dues, he would encourage Russia to do whatever it wanted with these countries. And it’s not always just about money. Trump announced that “America must have the cheapest energy and electricity in the world.” The election platform states here: DRILL, BABY, DRILL. He also wants to withdraw from the “horribly unfair” Paris climate agreement. All of this will enormously strain relations with the strategically important Pacific island states and other countries facing the effects of climate change.
Europeans should not allow themselves to simply shake their heads at Trump or even make fun of him. After all, Trump has certainly recognized some points and mistakes of the past. What Trump overlooks, however, is that America’s global leadership role is also grounded on its many allies, just as China’s international “weakness” is primarily the lack of close partners sharing the same vision.
The Third Plenum has kicked off with a bang. The National Bureau of Statistics presented disappointing economic data at the start of the eagerly anticipated Third Plenum: The world’s second-largest economy only grew by 4.7 percent year-on-year in the second quarter.
4.7 percent – this figure is likely to have caused bitter disappointment-not only for the members of the Third Plenum but also for the German economy, which tends to hope for better times on the back of strong Chinese economic data. 4.7 percent is not only significantly less than most analysts had expected, but it also reflects the economic downturn of recent months. At 5.2 and 5.3 percent, the last two quarters were considerably stronger. Now, there is disillusionment.
“It’s hard to find anything good in today’s data release,” Beijing-based economist Michael Pettis commented on the X. In particular, the continued weak domestic consumption in the second-largest economy gives the economist a headache. According to Pettis, it is clear that China continues to focus primarily on promoting the supply side of the economy, while weak demand becomes an economic burden.
Or to put it another way: While industry continues to expand production, consumption falls by the wayside.
This is because retail sales, in particular, fell well short of expectations and dragged down GDP. In June, sales only rose by around two percent compared to the previous year. This is the lowest growth in 17 months.
The new data shows that the CCP urgently needs to send a clear signal to the economy at the Third Plenum. Analysts believe a major economic stimulus package is necessary to improve the economic sentiment. In addition, the problems in the real estate market would have to be addressed more strongly than in the past. If people were not so unsettled by the declining property values, they would be more willing to spend money on other things.
Monday’s plenary session did not yet provide any answers and, as expected, failed to make any relevant announcements. The Party will only publish a communiqué at the end of the four-day meeting, which only takes place every five years. The outlines of countermeasures will then become visible. However, it is unlikely that too much concrete information will be formulated, as the CCP’s coded wording usually offers plenty of room for interpretation and not clear answers. It is doubtful whether this will be enough to spark a turnaround. Especially as the current figures are hard to stomach.
Meanwhile, it is becoming increasingly clear that President Xi Jinping’s plan is not working. Xi is willing to accept short-term prosperity losses to change the economy’s structure. He wants to reduce the real estate market’s contribution to growth and replace it with growth in new high-tech industries. However, this restructuring leaves the everyday concerns of many Chinese people by the wayside.
That is why economists have long been calling on the government to focus on boosting consumption in order to ensure lasting growth. As this has not been successful for years, it attracted corresponding criticism. “The root of the growth slowdown is that the property sector as a pillar of the economy is still rapidly shrinking, and home prices are slumping,” Lu Ting, economist at the Japanese financial company Nomura, told Bloomberg. “To change the fast slowdown in consumption growth China needs to stabilize the property industry, which accounts for about 70 percent of household wealth,” the economist added.
Zhi Xiaojia, economist at Credit Agricole in Hong Kong, even sees the government’s growth target for this year at risk after the presentation of the latest data. In order to achieve the target of five percent, the government will have to “consider greater political support.” Growth of 5.3 percent in the first quarter and 4.7 percent in the second quarter means that the Chinese economy grew by exactly five percent in the first half of the year. If the economic slowdown continues, Beijing will indeed struggle to reach the five percent target by December.
Raymond Yeung, chief economist for China at ANZ Bank, expects little improvement in the short term. “Household consumption remains very weak. […] With employers slashing salary and high youth unemployment, households will still be cautious going forward,” says Yeung.
The National Bureau of Statistics has itself highlighted these problems. Although the statisticians did not hold a press conference on Monday, probably because of the Third Plenum, there was a separate statement. “The ability and confidence for households to consume still need to be improved,” Zhang Yi, an official from the National Bureau of Statistics, was quoted as saying. According to the statement, it is necessary to “strengthen measures to increase residents’ income.” The message was aimed at the Central Committee, which is called upon more than ever at the Third Plenum.
In the so-called Third Plenum to be held on July 15-18, China’s senior leadership will have an opportunity to establish the broad outlines of a policy framework that could reshape the country’s course for the next several years. Don’t count on it. There is good reason to think that China watchers in the West have unrealistic expectations of what is to come.
Such was the case in late 2013 when the 18th Central Committee gathered for a Third Plenum of its own. That policy conclave was widely heralded as a historic opportunity for a new leader – Xi Jinping – to put China on a different path after the unfinished reforms of the Hu Jintao era. There was a palpable sense of excitement in the air, and at first blush, the plenum appeared to deliver. A final communiqué listed more than 300 reform proposals covering a broad range of areas – from state-owned enterprises, land policy, and foreign trade to investment reforms and environmental and social-welfare policies.
In the end, however, the Third Plenum of 2013 didn’t meet Westerners’ lofty expectations. The implementation of reforms was disappointing and that plenum came up short on its biggest promise: to give the market a decisive role in guiding China’s economic development. Instead, Xi has presided over an increasingly state-dominated system. The intervening years have been shaped less by the successful execution of plenum-driven reforms, and more by the evolution of a leader-centric system of governance that quickly came to be known as Xi Jinping Thought.
This focus on governance followed a pattern established in earlier third plenums. The gathering in late 1978, for example, became a platform for the ascendancy of Deng Xiaoping and China’s pivotal moment of “reforms and opening up.” Similarly, the Third Plenum of 1993, under the leadership of Jiang Zemin, underscored the principles of the “socialist market economy.” Judging by these earlier outcomes, there is good reason to think the upcoming Third Plenum will produce statements that bear more on ideology and governance than on a detailed set of problem-specific actions.
Thus, many hints by Chinese officials ahead of the 2024 gathering could well be misleading. There is considerable hope and hype for new reforms to address some of China’s most serious problems, especially the property crisis and local-government indebtedness. At the same time, Xi and his leadership team have drawn attention to “new productive forces” and the imperative to drive progress in frontier technologies and advanced manufacturing.
But these important challenges are unlikely to be resolved at the upcoming policy conclave. As before, the emphasis will likely be on governance, consistent with pre-announced goals, such as “building a high-level socialist market system” and “deepening the comprehensive reforms to advance Chinese modernization.”
Rather than dismiss such statements as slogans, we should take them at face value. Governance has been Xi’s primary focus ever since late 2012. What began in 2013 as a sweeping anti-corruption campaign quickly morphed into a comprehensive reworking of a leader-centric power structure. Not only has Xi published a four-volume series on Chinese governance; he has also effectively taken over all aspects of the Communist Party of China’s decision-making process.
Nor should Xi’s signature governance campaign be thought of in purely domestic terms. It is also being used to shape China’s great-power aspirations. Gone is the low-profile modesty of the Deng era, when China would supposedly “hide its strength and bide its time.” Instead, Xi is openly attempting to remake the international order through a three-pillar approach to global governance – framed around the Global Security Initiative, the Global Development Initiative, and the Global Civilization Initiative. In effect, he is doubling down on the aspirational commitments he announced when he first espoused the Chinese Dream in late 2012. Xi believes that without further governance advances, China’s emergence as a great socialist power will be stymied.
In one key respect, this is a disappointing conclusion. Westerners have long had a hard time understanding and accepting China’s emphasis on governance. That is because we tend to be more solutions-oriented in tackling specific problems. We see the upcoming Third Plenum as an opportunity for China’s leaders to embrace a new strategy to fix a struggling economy. Governance, especially an approach steeped in the interplay between socialist ideology and a consolidation of power featuring “Xi Jinping at the core,” is not the answer we are looking for. But as the late historian Jonathan Spence always emphasized, our answer is often not China’s answer.
Yes, China has plenty of issues on its plate. In addition to the property crisis and local-government debt problems, it also must cope with containment pressures from the United States and its allies. And then there is my personal favorite: the imperative for a consumer-led structural rebalancing of the Chinese economy. This can happen only with long overdue social safety-net reforms of health care, retirement, and the hukou system of household registration (which undermines internal migration). All are essential if China is going to redirect the excesses of fear-driven precautionary saving toward fueling a more robust consumer society.
But that’s my Third Plenum agenda, not China’s. Most China watchers are fixating on the problem-specific detail of what is likely to be included in another lengthy concluding communiqué. But don’t be fooled. Experience shows that the Chinese leadership tends to overpromise. China’s third plenums have long been about governance, and this one is unlikely to be different. For Xi, consolidating power through a revolution in Chinese governance remains the highest priority, and it is still very much a work in progress.
Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of Unbalanced: The Codependency of America and China (Yale University Press, 2014) and Accidental Conflict: America, China, and the Clash of False Narratives (Yale University Press, 2022).
Copyright: Project Syndicate, 2024.
www.project-syndicate.org
Just a quick snap of this unknown company. Google is blocked in China. Nevertheless, the US company has a booth at the World Artificial Intelligence Conference (WAIC) in Shanghai.
