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China’s leader Xi Jinping rolled out the red carpet for the US President in Beijing. At the same time, he works on reducing the United States' influence in Asia on regional security, trade and economic cooperation, leaving Washington with fewer options to counter China's expansion.

After his re-election as General Secretary of the CCP at the 19th Party Congress, Xi Jinping faces the challenging task of launching and speeding up numerous ambitious political programs that were adopted during his first term. To make that happen, China’s top leader counts on technocrats from high-tech industries.

Interview with Willy Lam

The 19th Congress of the Communist Party is an opportunity to take stock of five years of Xi Jinping rule. “Xi has benefitted tremendously from the world leadership vacuum left by US President Donald Trump”, says Willy Lam of the Chinese University of Hong Kong. But, he warns, China’s power projection won’t go very far unless Beijing addresses its “soft power deficit” and starts to respect international rules and laws.

The international community’s trade and financial sanctions against North Korea have few chances of improving the dismal historic record of such instruments. Chinese reluctance to enforce them and US reluctance to irritate China always leave a way out for Pyongyang.

(via The Diplomat)

Unlike any other Chinese leader since the reform era, Xi Jinping has worked on forging a Chinese national narrative with the aim to strengthen the ties between China’s citizens and the CCP. Chinese netizens challenge the official orthodoxy in online debates that are remarkably pluralistic despite increasing censorship and repression.

Economic planning and societal control: The digital transformation is changing the rules of the game in the global systemic competition. China's determined pursuit of a "digital Leninism" presents a major challenge to liberal market economies and democratic political systems. 

China's Internet economy is developing rapidly with the help of government funding and a protected domestic market. European governments have to rethink their digital policies to be prepared for the Chinese competition.

The state’s role in economic planning has increased under Xi Jinping, and national interests take precedence over market principles. Signs point to more government controls and intervention, rather than liberalisation, as a result of the 19th Party Congress.

With its recent promises of better market access for foreign companies, China tries to placate international criticism. But the steps are half-hearted at best, especially since the relaxations in some areas go hand in hand with new restrictions in others.

Interview with Shazeda Ahmed

In setting up the so called Social Credit System, China plans to monitor, rate and regulate the behavior of citizens and companies with the help of big data. What motivates the government? What are the major challenges? And what do people in China think about this system?

(via The Diplomat)

Sigmar Gabriel’s demand that China follow a “One Europe” created an unusual analogy to the “One China” policy, which accepts China’s dictum that foreign nations should not entertain diplomatic relations with Taiwan. Beijing’s comments on European unity also show that it struggles to understand the European idea of subordinating sovereignty in certain areas to a community of nations.

China’s outbound M&A volume has contracted significantly since the beginning of the year. The Chinese government’s attempt to curtail acquisitions outside the core business areas of Chinese companies and the resulting breathing spell could have a favourable effect on M&A success probabilities.

Interview with Shen Dingli (via Young China Watchers)

As China positions itself as a major country, it is confronted with a host of global security issues. Young China Watchers discussed China's positions on these issues, from the South China Sea to North Korea as well as its relations with the United States, India and Africa, with Dr. Shen Dingli, Professor and Associate Dean at Fudan University’s Institute of International Studies.

North Korea’s triumph in the standoff with the United States may be short-lived. The strategic value of its nuclear deterrent is questionable, as it has profoundly alienated China, North Korea’s long-time ally. At the same time, the regime in Pyongyang continues to dig its own grave with its failed economic policies.

(via The Diplomat

The increasing digitalization of life in China has increased the need for the security of personal data. To ensure effective data protection, the party-state would have to create a unified legal framework and to subject itself to supervision.

China’s GDP growth rate target wastes resources and prevents necessary structural adjustments. The target encourages the build-up of overcapacities and forces the government to stimulate demand even if this demand is not sustainable. China should replace growth targets with economic forecasting and assessments of China’s capacity growth potential.

Fleur Huijskens, Richard Tucsanyi and Balazs Ujvari

EU member states can use the China-initiated organization to promote their standards for development financing and perhaps even to pursue geopolitical interests in Asia. This blogpost is a product of the MERICS European China Talent Program in April 2017.

Interview with Carsten Holz

The Chinese government spends millions to develop the Tibetan areas of China. But what can investment achieve in these remote regions? Can it create sustainable jobs and change people’s lives? In this MERICS Experts Podcast, the economist Carsten Holz of Hongkong University of Science and Technology accounts his research trip on the Tibetan plateau in Western Sichuan.

China’s party-and-state leader tries to bring government officials under the reach of the legal system. But the purpose of this approach is less about ensuring compliance with the law than about ensuring the top leadership’s control over its bureaucracy.

After turbulences in the stock and real estate markets, China’s next speculative asset bubble might be building in the Fintech sector. Stricter regulation won’t solve the underlying problem: the lack of attractive investment options caused by low interest rates and capital controls will keep producing new bubbles. 

Turkey’s flirt with the China-dominated Shanghai Cooperation Organization casts doubt on Ankara’s commitment to Euro-Atlantic integration. So far, Beijing has remained cautious, but it may decide that closer cooperation with Turkey is in its long-term interest. This is a joint blog post with the German Marshall Fund of the United States.

The expansion of the Shanghai Cooperation Organization aligns with Beijing’s geostrategic ambitions. Drawing India closer into China’s orbit serves as a check against US influence, while Pakistan’s inclusion could help fight security threats. China’s Belt and Road Initiative, which aims to connect Eurasia and South Asia, could also benefit from the new members.

The Trump administration is committing a grave mistake by using Taiwan and the South China Sea as bargaining chips to secure China’s help with North Korea. Trump’s transactional approach to security policy risks damaging Sino-US relations at a time of high strategic uncertainty.

The global fight against climate change will continue after the US withdrawal from the Paris Agreement. Participants at a MERICS conference agree that Germany and China can play a decisive role in keeping the topic on the G20 agenda.

Tiffany G. Wong

On the 20th anniversary of Hong Kong’s return to the People’s Republic of China, the city is grappling with an identity question that threatens its relationship with the mainland. Chief Executive Carrie Lam’s political career will depend on how she deals with this challenge.