Posts Tagged ‘Chinese Dream’

China Is America’s Biggest Rival, And Russia Isn’t Even Close

December 29, 2018

While the media fawns over Russia’s failing authoritarianism, they ignore China’s much more successful brand of authoritarian nationalism.

By Kenny Xu

President Trump’s decision to move the remaining American troops out of Syria came under heavy criticism from the mainstream media the day it was announced. Trump’s Syria blunder marks “a win for Putin,” reports The Washington Post. The New York Times labels Russia “a winner” in the Syria decision.

Everything Trump does seems to be giving leverage to a more powerful and hungry Russia, says the media, so much so that Washington Post columnist Dana Milbank is now claiming that Trump singlehandedly “lost [America] the Cold War.”

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It is no surprise that the media exaggerates the scale of Russia’s threatening nature whenever given the chance. Many American journalists, relishing the way Trump’s foreign policy dovetails into the media’s narrative of his collusion with Russia over the 2016 election, have an interest in doing so. But all this talk of Russia over the past two years has diminished attention towards the far bigger, more poised, and more capable geopolitical threat America faces today: China.

China easily economically dominates Russia. The gross domestic products of the United States, China, and Russia are mapped in the Google public data graph below. The United States still has the world’s highest GDP, but China’s economic growth in the past ten years has doubled that of the United States and put it on track to compete directly for the world’s economic supremacy. Russia, meanwhile, has a GDP lower than that of Italy.

China’s military adventurism, too, outpaces Russian expansionism. In contrast, China’s moves into the South China Sea have made its control over an extremely large portion of East Asian waters practically “a done deal.” Who cares about ocean waters, one might ask? How about maritime traders and aircraft carriers, for a start? It is true that Russia annexed Crimea in a show of force. But while Russia gained access to one strategic port, China’s recent exploits have cemented legions of ports and bases across East Asia for years to come.

China’s militarism goes far beyond simple skirmishes and into displays of technological superiority.  Concerned about Russian interference with U.S. elections? China has shown they are capable of electoral interference and more. Consider China’s mischief in the recent elections in Taiwan, which ousted a strong China critic in favor of one more malleable to the Chinese government. New data shows China targeted millions of Taiwanese accounts for bombardment with pro-China propaganda, overwhelming voters to the point of electoral dysfunction.

China has more than mischief in mind. It is seeking technological supremacy on the world stage. China’s top-rate 5G telecom network, now faster than the West’s, shows that China has the infrastructure to directly compete with the United States in cyberspace. Its recent announcement that it had successfully created the world’s first gene-edited baby, if true, displays China’s bioengineering capacity as well. China’s science and technology radius is currently far more extensive than Russia’s could even hope to be.

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But the biggest claim towards China’s cementation of its status as America’s chief geopolitical rival is the strength of its national cohesion. Russian authoritarianism is failing, with President Vladimir Putin’s propaganda machine unable to stifle massive protests against his government and his bureaucracy mired in corruption.

However, China’s authoritarianism is relatively smoothly run and represents a significant ideological challenge to the West’s democratic governance. China’s one-party state is highly centralized, and President Xi Jinping’s current brand of nationalism is systematically manufacturing a China in lockstep with the Communist Party’s orders (including a vast purge of dissenters and critics). The West underestimates the repressive strength of China’s authoritarian state at its own peril.

Some might make the case that nuclear capacity is one place Russia beats China. It is true: Russia owns 6,800 warheads to China’s 270, mostly leftovers from the Cold War. But how far can an arsenal of nukes take you? Can it solve a stagnant economy, a laughable long-term infrastructure, and a corrupt government? Cold War symbols of power no longer dictate today’s geopolitical climate. At least, they cannot make up for the twin factors of economic competitiveness and technological domination, criteria in which Russia is hopelessly outmatched.

On the other hand, China checks both these boxes, and our ignorance of their ambition and growth is quickly becoming self-destructive. When China was nigh one-twentieth the size of our economy (merely 15 years ago!), we allowed them to illicitly capture our critical trade secrets and defense technologies and run an unchecked trade surplus with us. We ignored them when they weren’t a threat, and now that they are, we can’t afford to ignore them again.

So perhaps the American media should re-evaluate its coverage priorities. It’s time for us to tone down our gaggling over Putin’s newest military exercise, and tune up our attention to Xi’s curled smile and the 1.6 billion motivated Chinese workers behind him. While Russia is hanging onto the vestiges of a bygone era, China is forging a new era—one it intends to lead.

Kenny Xu is a senior Mathematics Major at Davidson College. He has also written for The Daily Signal and The American Conservative. You can follow his writing on race and culture on Twitter at @kennymxu and on Facebook at @thekennethxu.

Inside Xi Jinping’s Plan to Dominate the World

December 28, 2018

Elizabeth Economy’s “The Third Revolution” makes the case that China is most dangerous in the realm of ideas.

Man with a plan.  Photographer:  Ikegami Madoka/Getty Images

Who is the most important and disruptive leader in the world today? Most Americans would probably answer, Donald Trump — with Russia’s Vladimir Putin running a close second. But my choice for the must-read book of 2018, Elizabeth C. Economy’s “The Third Revolution,” makes a strong case that China’s Xi Jinping may deserve the title.

Under Xi’s leadership since 2012, an increasingly powerful China has begun throwing its weight around in ways that have led international observers to fear the emergence of a new Cold War — or perhaps even a new hot war — with the U.S. Xi has more candidly announced China’s ambitions to take center stage in world affairs than any leader since Mao Zedong; he has also amassed greater personal power than any Chinese leader since Mao. Economy’s book traces Xi’s influence and ambitions through an exhaustive reading of his speeches as well as an astute knowledge of Chinese politics and policy. It should be required reading not just for China-watchers but for anyone interested in U.S.-China relations and the future of world order.

Economy, a senior fellow at the Council on Foreign Relations, catalogs the changes China has experienced under Xi: The replacement of collective leadership with personalized rule, the constriction of the political system, the efforts to tightly restrict the flow of ideas into China while expanding the stream of ideas and influence rushing out of it. Economy is also a reliable guide to Xi’s seemingly contradictory efforts to stimulate game-changing, high-tech innovation while also steadily increasing the role of the Communist Party in China’s economy and society.

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Turning from the domestic to the foreign, Economy provides a concise discussion of China’s expanding military footprint, push to create new international institutions such as the Asian Infrastructure Investment Bank, launching of the Belt and Road Initiative and other major geo-economic projects, increasing use of coercive diplomacy toward its neighbors, and other efforts to project influence not just in the Asia-Pacific but globally. All of these undertakings seem impressive at first glance, and Xi’s vision seems to be carrying the day in Chinese politics for now. But as Economy reminds us, all the elements of his agenda — from his grab for unchallenged individual authority to his drive for greater power and prestige overseas — carry the danger of provoking a backlash, whether from dissatisfied rivals at home or wary competitors abroad, that could ultimately waylay Xi’s “Chinese Dream.”

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Perhaps the most valuable part of the book takes us from the realm of hard power to the realm of ideas. As Economy points out, Xi is advancing an ambitious ideological vision: “A uniquely Chinese model” that will “perhaps become a standard bearer for other countries disenchanted with the American and European models of liberal democracy.” That model may seem to cut against the flow of the post-World War II era, in which the world has become progressively more democratic. Yet it actually fits quite well with the more recent propensity of things, as democracy has receded, the allure of the American liberal-capitalist model has faded, China’s economic performance has wowed developing countries around the world, and authoritarian ideas make a resurgence. Economy’s book is thus a useful reminder that of all the ways China is testing American leadership, this ideological challenge may ultimately be the most important, and the hardest, for the U.S. to handle.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Hal Brands at

IMF team in Pakistan as China pledges economic aid

November 7, 2018

An International Monetary Fund team arrived in Islamabad Wednesday for talks on a possible IMF bailout, even as Pakistan insisted it had solved its immediate balance of payments crisis.

Speaking shortly after Prime Minister Imran Khan returned from Beijing, Pakistan’s finance minister said Tuesday that assurances from China — combined with a pledge made by Saudi Arabia last month — meant that Pakistan’s immediate fiscal woes were “over”.

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“We had a gap of $12 billion and in that $12 billion, six billion came from Saudi Arabia and the rest came from China,” Asad Umar told reporters, without specifying the nature of the Chinese assistance.

The finance secretary and the governor of the state bank will attend a meeting in Beijing on Friday to finalise the terms of the assistance, he added.

Pakistan secured $6 billion in funding from Saudi Arabia and struck a 12-month deal for a balance of payments lifeline during Khan’s visit in October.

Despite the pledges, the ministry of finance said the Pakistan would still seek broader IMF support for the government’s long term economic planning.

Since taking power in August, former cricketer Khan has been searching for ways to rally a struggling economy hit by inflation and shore up the country’s dwindling foreign currency reserves.

As well as a highly-publicised austerity drive, including auctioning off government-owned luxury automobiles and buffaloes, the new prime minister has also made overtures to the IMF — which has bailed Pakistan out repeatedly since the 1980s.

However, Islamabad received billions of dollars in Chinese loans to finance ambitious infrastructure projects, and the US — one of the IMF’s biggest donors — has raised fears that Pakistan could use any bailout money to repay its debts to Beijing.

Islamabad — which last received an IMF bailout in 2013 to the tune of $6.6 billion — has refuted these claims.


Was Imran Khan’s visit to China a failure for Pakistan? — Yes. Here’s why

November 7, 2018

Prime Minister Imran Khan and China's Premier Li Keqiang attend a signing ceremony at the Great Hall of the People in Beijing. — AFP

As Prime Minister Imran Khan returns from his trip to China, one thing is becoming glaringly clear: the Pakistani state is completely clueless regarding the larger objectives of the Belt and Road Initiative (BRI).

To say that the prime minister’s trip was successful would be a flat out lie at this stage. What happened in Beijing is a learning moment for the government of Pakistan that I fear will be forgotten.

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The purpose of this article is not to simply point out the ineptness of our government but to analyse exactly what happened, what the problems are, the harsh realities and then detailing what needs to be done to address them.

EditorialPM’s China visit

Prime Minister Imran Khan and China's Premier Li Keqiang attend a welcome ceremony at the Great Hall of the People in Beijing on Saturday.—AFP
Prime Minister Imran Khan and China’s Premier Li Keqiang attend a welcome ceremony at the Great Hall of the People in Beijing on Saturday.—AFP

Since it took office, the Pakistan Tehreek-i-Insaf (PTI) has repeated that it will try to renegotiate existing China-Pakistan Economic Corridor (CPEC) contracts, as well as its terms and conditions.

It has also declared that it will demand that China realign CPEC to the government’s own goals and agenda. These claims have been popular with the educated support base of the PTI and even seemingly sensible people have bought into it.

Mere tributary

But the problem with this is that, first and foremost, those in power fundamentally do not understand the conceptual framework of BRI, of which CPEC is a small portion.

BRI spans about 60 countries over multiple continents and covers about 70 per cent of the world’s population in its design.

CPEC is a mere tributary within that large network. BRI consists of three overland and three maritime routes.

So, in the larger scheme of things, Pakistan is just one of 60 countries China is working with to create potential for sustaining what President Xi Jinping refers to as the Chinese Dream.

Most BRI contracts are not between governments but instead between Chinese companies and state-owned enterprises (SOEs) to facilitate projects for the larger BRI initiative.

Read next: Pakistan’s debt policy has brought us to the brink. Another five years of the same is unsustainable

In that context, when the new government claims it will renegotiate contracts, as well as terms and conditions, it is forgetting to mention that it will have to do them with Chinese companies and SOEs, not with the Chinese government.

Secondly, because CPEC is an overland project, any arbitration that happens i.e. if the government were to try to renegotiate any contract in place, they will have to refer to the BRI court in Xi’an, which falls under Chinese law.

That means either the government must engage a law firm to represent it on each contract it wants to renegotiate or try to contest cases itself.

Worse still is the fact that the government has practically no idea what it wants to renegotiate in the first place.

That is the crux of the problem Pakistan faces: the state simply does not understand the conceptual basis of BRI or CPEC and, hence, cannot even define what it means.

What is BRI?

That raises questions no one seems to have addressed in discussions on this subject in Pakistan: what is the conceptual basis of BRI, and what is CPEC?

To understand BRI, one must go back to President Xi’s speech in 2013 where he laid out the idea of Community of Shared Destiny.

That is the basis of BRI.

This means that it is a framework under which willing partners enter the fold to help create a community that shares its destiny with China’s.

Therein lies what President Xi refers to as the Chinese Dream, which is essentially sustained growth for China through trade.

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Thus, BRI is a framework to achieve the Chinese Dream via creating a community of countries that have tied their economic destiny to that of China. If China keeps doing well, so will everyone else in that community.

CPEC 2018 Summit: A policy for success

Through BRI, Beijing is attempting to sign up partners who are willing to hitch their futures with its own.

Through market access, trade relationships and adopting Chinese cultural as well as business norms, China is hoping to create a community where everyone wins.

And as China is doing the heavy lifting, it’s the senior partner and the countries that sign up for BRI are junior partners.

At no point are the Chinese taking over and running the show. They expect junior partners in this relationship to do their bit to get their rewards.

And what is CPEC?

In this structure, CPEC is a mere cog in a giant wheel.

CPEC consists of a series of bilateral agreements on projects. CPEC itself is nothing but an umbrella term used for projects that have the potential to feed into the larger BRI structure.

The problem is the government seems incapable of comprehending this. The way it has so far approached CPEC — and this includes the last government — is as if it is a credit line or a bailout package.

As if Pakistan will walk over to China and demand money, China will hand over cash and Pakistan can get back to wasting it.

That is not how CPEC works and that is what has happened now that PM Khan has gone to China.

Cold shoulder

Reporting from Chinese media has painted a completely different picture to the one presented by Pakistani media and the government mouthpieces.

The prime minister arrived in Beijing assuming he was there to talk tough, get a better deal and more money, but was taken aback when the Chinese firmly told him off by demanding Pakistan to fix its own problems and provide governance to its people instead of asking China to do so.

And while PM Khan oversaw the signing of 15 Memorandums of Understanding in different sectors, no specifics were presented in the joint communique at the end of the five-day visit where the prime minister essentially was dealing with his Chinese counterpart, Premier Li Keqiang, and his staff.

Expert view: Trading in the yuan

This is essentially a cold shoulder for Pakistan that should worry the country. The closest ally has cooled off on Pakistan and is asking it to get its house in order first before making tall claims.

This visit was not helped by current Adviser to the Prime Minister on Commerce, Industry and Investment Razzak Dawood decrying CPEC projects on multiple occasions.

To sum up, because the government did not comprehend the conceptual framework of BRI and CPEC, Pakistan is in a mess where even its closest ally has politely told them off.

Becoming partners

As I described earlier, the government needs to sit and absorb the the idea behind BRI and CPEC. Once the government understands this, then comes the hard part of facing the harsh realities we are dealing with.

The first harsh reality is the nonsense myth that BRI is nothing without CPEC. That is false.

BRI is a massive initiative and CPEC, at best, is about 20 projects in different stages of completion among hundreds of projects.

Pakistan is not as important as it thinks. It has a convenient geographical location for China, but nothing more than that. There is nothing unique beyond its location that Pakistan can offer, and for that location, Chinese firms are willing to invest over $40 billion.

Chinese companies raise that money in their own country from institutions like the Silk Road Fund, Asian Infrastructure Investment Bank and the Export Import Bank based on guarantees provided with regards to project completion through contracts signed by the Pakistani government.

Pakistan owes that money to Chinese financial institutions and not the government — let’s be crystal clear about that. The Chinese government will also not waive that borrowing away because it is project-based debt financing.

Up next: After the Khashoggi murder, is Imran’s visit to Saudi Arabia in Pakistan’s best interest?

Secondly, as the prime minister has been clearly told, China is not looking to adopt a country to run as its own.

Beijing is not running a charity service for countries being run badly. It is looking for partners to create a Community of Shared Destiny.

As explained above, China does play the role of senior partner who does the heavy lifting, but it clearly expects that junior partners will do their bit.

That means it expects them to create the right policy, facilitate Chinese business needs as well as provide guarantees for Chinese investment.

At no time does BRI become a charity fund for a delusional leader’s misguided electoral promises.

So far, the Pakistani government is failing to understand and fulfill its role as a junior partner.

There is no policy discussion, or even preparation, on how to use BRI framework for Pakistan’s benefit because the whole focus is on how much money is being debt-financed.

That is not how a junior partner needs to operate. Where Pakistan is falling short, then, is its responsibilities as a junior partner.

CPECMoving into agriculture

Since there seems to be practically no understanding of BRI and CPEC, Pakistan is unable to benefit from this exercise.

To counter this, the government needs to know that there will be no renegotiating existing CPEC projects. This myth needs to end now.

Additionally, China has no incentive to align its vision and goals for CPEC to those of Pakistan.

This is a delusional idea thought up as a political rhetoric device that is hurting Pakistan. People start believing delusions if you repeat them enough — and that is where we are at this stage.

Open road

More importantly, Pakistan needs to understand that BRI is a two-way street. It is not just things coming into Pakistan; it also means things can be sent out.

Through BRI, Pakistan can get market access to other countries — 59 in total — that are partners for BRI. That is a huge opportunity for Pakistani exporters and investors that is being ignored so far.

The land and maritime routes being developed can also be used by Pakistani companies to export their products and services to those within BRI.

For that to happen, Pakistan needs to discuss the visa facility granted to Pakistani tourists and businesses by the Chinese.

A topic like this would normally be top of the list in any discussions on a bilateral agreement, but for some reason, this is lacking so far.

Pakistani businesses and tourists have serious issues getting access to China, while Chinese tourists and businesses get visa on arrival in Pakistan.

This is basic, common sense stuff that is so far nowhere in any discussion.

Explore: Who pays the price for mega projects in Pakistan?

Lastly, the government has to think beyond CPEC and understand how it can utilise BRI.

They must learn to look beyond their immediate surroundings and understand the potential of this grand project to truly benefit from it. For that, committees will not do.

The government should recruit people to specifically work on this and create a focused body that only deals with this.

Until that is done, no real policy can be developed, let alone implemented. This is where the leadership seems completely dumbfounded at this stage.

The points I have made throughout this article are essential for Pakistan to benefit from BRI and CPEC.

Starting from the conceptual understanding and then utilisation of the framework, those within the state machinery need to be informed before making statements about it.

Unless that happens, the prime minister can expect to get a cold shoulder and even straining ties with the one ally Pakistan has that has helped us through thick and thin.

China may be running out of cash to splash — Enters “post-spending spree reality,” starting in the Philippines

August 13, 2018

The “Chinese dream” of buying up the whole world could turn into a massive pile of unpaid IOUs….

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By Shih Ya-hsuan 施雅軒

On Aug. 6, US Senator Marco Rubio urged China to immediately and unconditionally release Sun Wenguang (孫文廣), a professor at Shandong University, who was arrested after commenting on Chinese President Xi Jinping’s (習近平) spending spree in Africa in an interview with Voice of America.

This is yet another example of free speech being suppressed, but what is it about this spending spree that cannot be talked about?

During a visit to South Africa late last month, Xi committed China to invest US$14.7 billion in the country, which shows how his “Chinese dream” means buying up the whole world.

This should be compared to the revelation in late June by Li Xiao (李曉), a professor of finance at the School of Economics at Jilin University in China’s Jilin Province, that 80 percent of China’s US$1.9 trillion net foreign exchange reserves — according to Li’s definition, total foreign exchange reserves minus foreign currency-denominated debt — is held by foreign-invested companies.

If this number is correct, China can only make immediate use of about US$380 billion of its more than US$3 trillion in foreign-exchange reserves.

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With China spending about 4 percent of that amount in South Africa, it is perhaps not such a mystery that Sun called for an end to the spending spree, saying: “There are so many poor people in China, having problems attending school, making a living in their old age and getting medical care, issues that must be urgently resolved.”

Sun’s disappearance is a sign that the spending spree is unlikely to come to an end, because it is the foundation of China’s global geopolitical strategy. This is the source of China’s interest in suppressing Taiwan and no one will ever know if there are other interests involved.

However, in view of this trend, the only way that the spending spree will come to an end is if there is no more money to spend.

Perhaps it is not so strange, then, that Ernesto Pernia, director-general of the Philippines’ National Economic and Development Authority, last month announced that although the country’s president brought back an earmarked US$24 billion of Chinese foreign direct investment and overseas development aid from his 2016 visit to China, the Philippines has only managed to strike a loan agreement with China over an irrigation project of US$73 million and inaugurated two bridges in Manila funded by China worth US$75 million — less than 1 percent of the earmarked amount.

This is a sign that money is running out and that China has entered a “post-spending spree” period; that is why this issue cannot be talked about.

Why has China entered this post-spending spree period? There are domestic, as well as international reasons, but in the end it is a matter of weakening economic momentum: Capital is no longer accumulating; it is even shrinking.

In 2015, JPMorgan Chase & Co estimated that exports to China made up about 40 percent of Taiwan’s total exports. Is Taiwan prepared for the arrival of the post-spending spree period? This is a question that Taiwan needs to tackle head-on.

Shih Ya-hsuan is an associate professor of geography at National Kaohsiung Normal University.

Translated by Perry Svensson

The China-U.S. Power Struggle Is Just Beginning

July 5, 2018
Xi’s ‘Chinese Dream’ envisions a nation less beholden to West — China economic rivalry destined to strain relations with U.S.
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Chinese President Xi Jinping has an ambitious master plan for his country’s transformation into a wealthy, technology-driven global economic power. And U.S. companies need not apply.

That’s why the current trade rumble between the U.S. and China, in which the Trump administration is threatening to slap tariffs on $34 billion of Chinese imports and Beijing promises to respond in kind, is far more than just a spat over market restrictions, intellectual property rights and the epic U.S. deficit.

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Xi Jinping Photographer: Fred Dufour-Pool/Getty Images

On a deeper level, the standoff reflects an escalating economic and military rivalry between a status quo power and one of the most remarkable growth miracles in history. It’s a clash between two divergent systems, (one state-directed, the other market-driven) with markedly divergent world views and national aspirations. That strategic tension seems likely to intensify, regardless of how the current brinkmanship over tariffs plays out.

It’s also a battle for global influence. Whereas the U.S. has long sought to spread democracy and free markets to other nations, China’s ruling Communist Party is just starting to pitch its heavy-handed growth model as an alternative for developing nations. And Xi is backing it up with hundreds of billions of dollars in loans for infrastructure projects from Asia to Europe and beyond.

In the U.S., a bipartisan consensus has begun to emerge that now is the time to stand up to China, even if many oppose President Donald Trump’s tactics. Senate Minority Leader Chuck Schumer, a Democrat, has attacked Trump for not being tougher on China, saying last week that failure to change Beijing’s behavior now could hurt the U.S. economy “for generations to come.”

With a roughly $13 trillion economy and expanding wealth, China is now going head-to-head with the U.S. in advanced manufacturing and digital technologies. It also has the wherewithal to make rapid technological progress in defense, particularly with air-to-air missile systems that pose a strategic challenge in Asia for the U.S. and its allies.

Xi is playing a long game, pursuing what he calls the “Chinese Dream,” or “the great rejuvenation of the Chinese nation.” To get there, he has set targets to double his country’s per capita gross domestic product (from 2010 levels) to $10,000 by 2021 and refashion China into a tech powerhouse, competitive in robotics, new energy-vehicles, chips, software and other bleeding-edge industries under his Made in China 2025 program. A separate development strategy envisions China ruling in artificial intelligence by 2030.

The aim is to produce global champions — not just national ones — and Xi’s government is ready to use the commanding heights of its one-party state to steer subsidies and use preferential policies and ambitious local content rules favoring Chinese companies to get there. At stake are industries that make up about 40 percent of China’s value-added industrial manufacturing sector, according to an analysis by the U.S. Chamber of Commerce, citing data by the Rhodium Group, a research firm.

Predatory Economics

China’s push for more self-reliance may reverse the trend toward deeper economic integration with the U.S. that came following China’s accession into the World Trade Organization in 2001. China is the single largest foreign purchaser of U.S.-manufactured goods — led by transportation, chemical, computer and electronics — outside of North America, according to the National Association of Manufacturers. Chinese goods have also flooded across American shores, pushing up the U.S. trade deficit with China more than fourfold to $375 billion last year.

James Mattis

Photographer: Tomohiro Ohsumi/Bloomberg

The Trump administration views such deficits as alarming and Chinese trade practices as brash mercantilism, even a national security threat. U.S. Defense Secretary Jim Mattis labeled China a “strategic competitor using predatory economics” in January as he unveiled the Pentagon’s National Defense Strategy.

Xi views his economy’s shift into higher-tech manufacturing not only as a crucial part of its development, what with surging labor costs, a rapidly aging population and high corporate debt levels — but also as a fulfillment of China’s destiny. That process is well underway: China is set to overtake the entire euro area this year, according to data compiled by Bloomberg.

Talks to avoid a trade war have stalled in part over U.S. demands that China reduce state support for high-tech industries. While China has signaled a willingness to buy more American goods to balance out the deficit, it has refused to trade away what it views as an essential part of its economic future.

How ZTE Ended Up in Middle of U.S.-China Trade War: QuickTake

Tech companies are on the front lines of this contest for global supremacy. Back in 2013, Chinese investigators started making life difficult for American tech “guardian warriors” like Google, Intel Corp., Apple Inc. and Microsoft Corp. after a magazine with ties to the Communist Party sounded the alarm about their dominant role in Chinese networks and business.

The U.S. has been just as inhospitable to Chinese tech concerns, with telecommunication makers like Huawei Technologies Co., ZTE Corp. and China Mobile Ltd. being viewed as national security risks. The Trump administration has also weighed restrictions on Chinese companies and start-ups in sectors ranging from aerospace to robotics.

This week’s tariffs, however, may show which side has the stronger hand. The first batch will take force Friday barring any last-minute deal. Trump has threatened duties on another $200 billion worth of Chinese goods if Beijing imposes countermeasures.

Xi is betting that Trump will back down as price increases in politically sensitive states make him worry about losing the next election in 2020. Xi enjoys something closer to life-time job security, thanks to the repeal of Chinese presidential term limits in February.

Donald Trump at a rally in South Carolina on June 25.

Photographer: Mandel Ngan/AFP via Getty Images

The sharp downturn in Chinese stock markets amid rising trade tensions is scarcely a threat to his rule. His party-led government has a big say over strategy and investments plans at giant state-owned enterprises, which control 40 percent of China’s industrial assets and some of the world’s biggest banks.

Still, anti-trade rhetoric underpinned Trump’s election win, and if anything the former New York real estate developer has doubled down on using tariffs in spats with both foes and allies. Although polls suggest Trump faces difficult mid-term elections in November, a fight to replace a U.S. Supreme Court justice may prompt his political base to overlook slightly higher monthly bills.

Economists and trade experts who testified in June before the U.S.-China Economic and Security Review Commission, set up by Congress to track the national security implications of trade with China, say tariffs are likely to inflict a lot of economic damage on both economies and depress global trade.

Great Unwinding

China will also return the favor — Beijing has announced plans to target U.S. auto, aircraft, plastics and chemicals sectors — and “the imposition of tariffs will not solve the underlying Chinese distortive behavior,” warned Linda Menghetti Dempsey, vice president of International Economic Affairs at the National Association of Manufacturers.

Instead of using tariffs, the U.S. could’ve sought to join with the European Union and Japan to bring a case against China at the World Trade Organization. But that’s unlikely after Trump slapped tariffs on EU nations and Japan, while also undermining the WTO. His withdrawal from the 11-nation Trans-Pacific Partnership trade deal removed another key device to alter China’s behavior.

Some prominent academics are calling for more drastic measures to undercut China’s practice of trading market access for technology transfers, such as unwinding Asian supply networks in high-end tech sectors.

Just Beginning

Harvard Business School Professor Willy C. Shih favors tax incentives, and even setting up import processing zones in the U.S. to repatriate offshore suppliers for the likes of Intel, Apple and Microsoft. “It would strengthen our ability to sustain the most advanced semiconductor fabs in the United Sates,” Shih said.

In the end, the U.S. and China economic rivalry probably won’t be decided by administrative law judges or trade negotiators, but in the global marketplace. Right now, the U.S. still enjoys a lead in many tech and manufacturing sectors, particularly aerospace and biotech.

Yet the days when China could be dismissed as merely a low-wage assembly center for Western manufacturers are long gone. This is a country on what it views as a historic mission to become a 21st century economic power, and the contest is just beginning.



The Chinese Dream

May 7, 2018

This DW series explores China’s rise as a global superpower. In this article we examine the “Chinese Dream,” which shapes the present and reaches far into the future, encapsulating President Xi’s vision for the country.

China Neujahrsansprache von Xi Jinping (picture-alliance/Xinhua)

The rest of the world rubs its eyes in astonishment. In just under three decades, China has transformed itself from being a bitter-poor developing country into a global economic power. Beijing now has set its eyes on becoming a world superpower. For now, at least, fears about China’s rising power and influence are mixed with admiration for the rapid pace of its growth and development.

The Chinese people, on the other hand, and especially the political class in Beijing, see the strengthening of their country as the correction of a historical anomaly. This view is promoted by Beijing’s propaganda departments and President Xi Jinping’s “Chinese Dream” is meant to address it.

Since Xi took over the reins of his country in 2012, China’s state and party leaders have promised to the Chinese people the return to the grandeur of past dynasties. By doing so, Xi has attempted to tap into the historical consciousness of the Chinese.

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Today’s Chinese see themselves as the heirs of a millennium-old civilization that was the world leader in culture, science, technology and administration right up to the 16th century. In this ideal conception, China — the “Middle Kingdom,” as it is still called in Chinese today — was at the center of the world, surrounded by barbarians, who were willing to pay tribute to the luminosity of Chinese civilization.

‘Century of humiliation’ — Resentment Drives Toward the Future

The so-called “century of humiliation” stands out all the more against this background. It began with China’s defeat in the First Opium War (1839-1842) by Great Britain. In the first of the so-called “unequal treaties,” China was forced to cede control of Hong Kong to the British. The Century has a formal end that suits official propaganda: the founding of the People’s Republic of China in 1949 by the Communist Party.

The Century of Humiliation forms the antithesis to the rise of China. Who knows that China’s share of world economic output in 1820 was over 30 percent? Following internal Chinese rebellions, colonial exploitation, state collapse, Japanese occupation and civil war, this share had fallen to just 5 percent in the early 1950s.

The phantom pain of losing imperial greatness is kept alive in the collective memory. History books, television series and newspaper articles repeatedly evoke the humiliation of the Chinese nation by foreign powers, the decline and misery. This culture of remembrance has paved the way for the mass appeal of Xi Jinping’s Chinese Dream. In doing so, as a collective vision proclaimed from above, it is the exact opposite of the “American Dream” of the realization of individual happiness.

Vertrag von Nanking (picture-alliance/CPA Media Co. Ltd)The Treaty of Nanjing was signed in August 1842 to mark the end of the First Opium War. It was the first of the so-called ‘unequal treaties’

‘Global superpower by 2049’

The plans for the “great rejuvenation of the Chinese nation” extend to 2049, the year marking the 100th anniversary of the founding of the People’s Republic of China. By then, China should once again emerge as a global superpower. It seems as if the nobler the goals and the farther into the future their fulfilment, the greater the sacrifices one can demand from the people. When it comes to the “rejuvenation of the Chinese nation,” nothing like civil liberties or cumbersome constitutional processes should come in the way, according to Beijing’s view. Dissenters, human rights activists, even their lawyers end up in jail. The previously hard-won liberties, even in the media, are again being scaled back.

The vision of the Chinese Dream is so vague and at the same time so comprehensive that different messages can fit under its roof.

Anyone who has the authority to interpret the content of the vision can define almost anything as an element for the realization of the Chinese Dream. When Xi Jinping visited the Three Gorges Dam in April, for instance, the ability to independently develop technology was declared essential to realizing the dream. When Xi met with senior military officials in mid-March, it was the greater integration of the civilian and military spheres. Furthermore, there have been repeated exhortations for unity and the development of strength.

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In its ambiguity, the Chinese Dream is also suitable as a tool for fomenting Chinese nationalism, which has been gaining traction for the past two decades. It is important as a source of legitimacy for the rule of the Communist Party, as the party’s legitimacy, in ideological terms, has been eroded due to its role as the organizer of a highly effective form of state capitalism, with party workers and government officials as main beneficiaries despite Xi’s unprecedented anti-corruption campaign.

China’s robust maneuvering in the territorial spat with Japan in the East China Sea, and the building of artificial islands in the South China Sea to enforce its claims to the region, also serve the purpose of deliberately stirring the Chinese people’s nationalist fervor.

With the Silk Road to the middle of the world

Against this backdrop, Xi’s signature project — the Belt and Road Initiative — also fits under the umbrella of the Chinese Dream. China is deploying immense resources to build infrastructure that would connect it to parts of Asia, Africa and Europe and boost its trading links to these regions.

Infografik Chinas neue Seidenstraße Englisch

This ambitious project makes China the only country in the world currently pursuing a global vision. And it is certainly no coincidence that the Belt and Road Initiative, regarded as a modern-day version of the ancient Silk Road, also linguistically ties up with times of former splendor.

With its clever investment policy, China has been increasingly able to translate its economic strength into political influence. The new transport links and economic corridors will definitely play their part in the development of the Chinese Dream, by strengthening Beijing’s role as a Eurasian center of gravity and turning it once again into the “Middle Country.”

It goes without saying that this center should then radiate out into the world. At the Communist Party’s congress last fall, Xi called for “Socialism with Chinese Characteristics for a New Era” and recommended it as a development model for other countries. At the start of the year, The People’s Daily, an official newspaper of the Communist Party, went as far as to talk of a fusion of the “Chinese Dream” with the “Dream of the Whole World.”

China to reorganise propaganda efforts at home and abroad

March 21, 2018


© AFP/File | The CCTV tower in Beijing: the broadcaster is facing consolidation with other state media

BEIJING (AFP) – China Wednesday announced a series of changes aimed at strengthening its global influence, including the creation of a centralised news service to better communicate the ruling Communist Party’s message at home and abroad.The changes are part of a larger overhaul of government functions that will also see an increased role for the United Front Work Department, a shadowy organisation that has been accused of trying to manipulate politics abroad.

Under the new arrangement, the party’s Central Propaganda Department will take direct responsibility for print, news and movies away from the central government, according to an announcement published by the official Xinhua news agency.

The move to put these branches of the media directly under the party’s control comes as China has been tightening censorship and efforts to dictate the outlook and “positivity” of content.

Control of radio and television will be placed under a separate government-run organisation tasked with “carrying out the Party’s propaganda guidelines and policies”.

The change is aimed at ensuring that broadcast media “acts as the Party’s mouthpiece”, the announcement said.

As part of the change Chinese state media outlets CCTV, China Radio International and China National Radio will be consolidated into one super-broadcaster answering to the Central Propaganda Department.

Programmes targeted at foreign audiences will be rebranded as “the Voice of China”, the announcement said.

The reorganisation will also increase the prominence of the United Front Work , an agency which works to promote ties between the Communist Party and non-Communist elite — including other political parties, former government officials, religious groups and overseas Chinese.

Under the new arrangement it will have complete responsibility for work related to China’s ethnic minority groups, religious management and contact with overseas Chinese, which Beijing sees as an important constituency for its propaganda efforts.

President Xi Jinping has described the United Front Work Department as a “magic weapon” in the country’s soft power arsenal.

But it has come under increased criticism for what some say are covert efforts to influence politics in other countries.

Chinese donors tied to United Front-affiliated groups gave money to Australian politicians, providing impetus for Canberra to introduce new laws to limit foreign interference in its government.



The covert department behind China’s growing influence

March 21, 2018

‘Magic wand’ used to extend China’s reach abroad gets enhanced role at time of growing international concern over state’s covert influence

South China Morning Post

PUBLISHED : Wednesday, 21 March, 2018, 3:02pm
UPDATED : Wednesday, 21 March, 2018, 4:37pm

The controversial Chinese Communist Party department responsible for promoting its influence around the world will have its authority greatly strengthened, according to a document seen by the South China Morning Post.

The document was later published by the official Xinhua news agency on Wednesday afternoon.

The United Front Work Department, which has fallen under the scrutiny of Western governments in recent months, will now oversee the country’s ethnic and religious issues as well as overseas Chinese affairs.

This is part of a sweeping party restructuring that will see a further fusion between the party and the state.

It aims at increasing efficiency and strengthening the party’s control on all aspects of life in China.

The document also proposed upgrades to four party leading groups – responsible for reform, cybersecurity, finance and the economy, and foreign affairs.

The leading groups are the de facto decision-making bodies in Chinese politics and the upgrade is designed to further institutionalise the party’s political power.

The elevation of the UFW, once hailed by Xi Jinping as a “magic weapon” for the party to project its influence and wield its soft power, came at a time when democracies from Australia to the United States are increasingly suspicious of tacit Chinese state influences on their soil.

“The party used to lead the United Front behind a veil,” a government source, who declined to be named, told the Post.

“Under the new structure, it will no longer hide behind various government agencies.”

 The Communist Party is seeking to institutionalise its political power. Photo: Reuters

Under the new line-up, the State Ethnic Affairs Commission will report to the United Front Work Department, while the State Administration of Religious Affairs and the Overseas Chinese Affairs Office will be absorbed into the department as two internal bureaus, according to the document dated March 19.

At the same time, the Chinese Communist Party will also upgrade four “leading groups” headed by Xi into “commissions”.

The move will enhance the president’s control over the relevant fields.

The State Computer Network and Information Security Management Centre, the office in charge of China’s “Great Firewall”, will be moved under the central commission on internet security, from the control of the Ministry of Industry and Information Technology.

The central leading group responsible for protecting China’s maritime interests, meanwhile, will be merged into Central Commission of Foreign Affairs Works – a move that highlights the importance of maritime issues on the leadership’s agenda.

In addition, the Chinese Communist Party will set up a new “Rule-by-Law Commission” and an auditing commission. A new leading group on education will be set up as well.

The Publicity Department of the Central Committee, the propaganda arm of the party, will have a direct control over all publishing and movies, according to the document.

Will China’s new foreign policy dream team be the key to achieving its global ambitions?

February 25, 2018

Beijing’s top leadership is packed full of highly trained foreign affairs experts hand-picked to help deliver on President Xi Jinping’s global goals

By Shi Jiangtao
and South China Morning Post staff

PUBLISHED : Sunday, 25 February, 2018, 1:48pm
UPDATED : Sunday, 25 February, 2018, 2:11pm

After five years in office, President Xi Jinping has put together a team of top foreign-policy makers with substantial experience in handling the West, especially the US, to achieve China’s growing global ambitions.

Apart from Xi himself, the leading figure is Wang Qishan, the former Communist Party anti-graft tsar who is Xi’s most trusted ally.

According to several Beijing-based sources, Wang is highly likely to be named vice-president soon and take on a large foreign affairs portfolio in the midst of a major overhaul of the country’s diplomatic hierarchy.

“Wang will play a key role in foreign affairs work in the years to come, especially on thorny issues involving Sino-US relations,” a source close to the leadership told the South China Morning Post. He declined to be named because of the sensitivity of the matter.

Wang’s surprising comeback, just a few months after he retired from the party’s apex of power, is expected to give a boost to China’s diplomatic decision-making at a critical juncture, especially amid emerging strategic rivalry with the United States.

There have been signs hinting at Wang’s new role, with sources saying he recently met US and Japanese officials in Beijing.

 Wang Huning (left) and President Xi Jinping at the announcement of the new Politburo Standing Committee line-up at the Great Hall of the People in Beijing in October. Photo: Reuters

Unlike previous top leadership line-ups, the new Politburo Standing Committee announced after the party’s national congress in October is packed with foreign affairs experts, including outgoing Vice-Premier Wang Yang and Wang Huning, an international affairs scholar turned party theorist.

Wang Huning, known as the chief architect of Xi’s Chinese dream, has been a foreign policy adviser and often accompanied Xi on foreign trips.

Pang Zhongying, a Beijing-based foreign affairs expert, said Wang Huning was among the first Chinese experts to translate and introduce the concept of soft power to China in early 1990s. It had been coined by Harvard University professor Joseph Nye in the 1980s to encompass a country and an associated culture’s ability to attract and persuade.

Wang Huning, who became the first party theorist to be elevated to the Politburo Standing Committee since the end of the Cultural Revolution, is expected to play a big role in addressing the mismatch between Beijing’s outdated, China-centric propaganda apparatus and its grand foreign policy goals.

Another new Politburo Standing Committee member, Wang Yang, was China’s point man in economic talks with the US during Xi’s first five years as president.

Among career diplomats, State Councillor Yang Jiechi, a former foreign minister and ambassador to the US, is set to become China’s most powerful foreign affairs supremo since late vice-premier Qian Qichen. Also a former foreign minister, Qian was a vice-premier who served as a foreign policy guru in the party’s powerful Politburo under Jiang Zemin, and Yang looks to be on the same path after becoming a Politburo member in October.

 US Secretary of State Rex Tillerson (right) shakes hands with State Councillor Yang Jiechi at the State Department in Washington this month. Photo: AP

Wang Qishan’s appointment as vice-president will be formally confirmed at the annual session of the National People’s Congress (NPC), China’s legislature, next month, setting in motion a sweeping government reshuffle that will include vice-premiers, state councillors and prominent ministers.

Foreign Minister Wang Yi has been tipped to replace Yang as state councillor while retaining his current position as the country’s second-ranked diplomat, sources and party insiders said.

Pundits say the overhaul and strong line-up of foreign policy officials underlined Xi’s eagerness for China to emerge as a global power and project its political and economic clout far beyond the Asia-Pacific region at a time of US retreat from world leadership under his American counterpart Donald Trump.

Wang Qishan, 69, Yang, 67, and Wang Yi, 64, are above or approaching the traditional retirement age for senior officials, but the pundits say Xi appears to view them as irreplaceable for the moment in implementing his assertive foreign policy and overseeing China’s expanding global interests.

There are growing signs that Wang Qishan, once seen as China’s second most powerful leader after Xi, will not just take on ceremonial duties as vice-president but will continue to wield considerable influence in the country’s secretive and opaque elite politics.

As in most other countries, the vice-presidency in China has usually been a weak, ceremonial, titular position with little sway over real policy issues.

But Wang Qishan is likely to be different. In a sign of his close ties with party general secretary Xi, the former Politburo Standing Committee member had been continuing to attend meetings of the party’s innermost circle of power, albeit without voting power, sources said.

 Foreign Minister Wang Yi addresses a press conference in Beijing in December. Photo: Kyodo

In a further move defying political convention in China, which includes an unwritten rule that top leaders retire at the age of 68, he retained his NPC seat last month, paving the way for his vice-presidency.

Wang Qishan’s political future was the centre of intense speculation in China’s corridors of power over the past year. His continued roles basically confirmed widespread rumours that an increasingly strident Xi had decided to retain one of his most trusted allies.

Wang Qishan earned that trust by overseeing Xi’s ruthless crackdown on corruption over the past five years.

American officials and experts have generally welcomed Wang Qishan’s likely vice-presidency as he has been heavily involved in dealing with Washington in various jobs over the past two decades, especially on the economic and trade fronts.

As a vice-premier he was China’s point man and top negotiator in the now-defunct strategic and economic dialogue with the US between 2009 and 2012.

Senior US diplomats who know Wang personally describe him as a party veteran with a global vision, an advocate of economic reform and a seasoned troubleshooter who understands the importance of navigating often fraught US-China relations in an increasingly chaotic and uncertain world.

One foreign diplomat who has met Wang described him as articulate and said he appeared to be someone Xi trusted to solve problems.

But the scope of his power or his exact role in China’s largely centralised foreign-policy decision-making process remain unclear.

Even more intriguingly, it remains to be seen how he would coordinate and work with other party leaders and top diplomats, especially Yang, Wang Yi and Song Tao, the head of the party’s international liaison department, which is in charge of ties with foreign political parties.

 Communist Party international liaison department head Song Tao (left) is greeted by Ri Chang-gun, vice-director of the Korean Workers’ Party’s international department at Pyongyang International Airport in November. Photo: Kyodo

“While it is positive to have more people with diplomatic expertise and experience on board, it is too early to tell if they are able to work together efficiently as a lack of efficient coordination has long plagued the decision-making and implementation of China’s foreign policy,” Pang said.

It could pose new challenges and dilemmas for internal coordination, which would go beyond cooperation and collaboration between the military and civilian authorities, he said.

As vice-president, Wang Qishan would also be expected to replace incumbent Li Yuanchao as deputy head of the Central Leading Group on Foreign Affairs, a powerful supra-ministerial decision-making body.

The group, like more than a dozen other leading groups and other decision-making party institutions Xi chairs to drive policy on security, political, economic and diplomatic issues, consists of a dozen party and government agencies, including the foreign and commerce ministries as well as the military and security authorities,

Several Beijing-based European diplomats said there were growing signs Wang Yi, tipped to succeed Yang as state councillor, would also stay on as foreign minister in the government reshuffle next month.

Yang is director of the office of the Central Leading Group on Foreign Affairs, dealing with the daily routines of foreign policy coordination and implementation, while Wang Yi is also a member of the group. There had been speculation Yang might be promoted to become a second deputy head of the group, alongside the vice-president, with Wang Yi succeeding him as office head, but sources said Yang was likely to remain director. In either scenario, Wang Yi would continue to serve under Yang.

 Vice-premier Qian Qichen shakes hands with US president George W. Bush at the White House in Washington in March 2001. Photo: AP

But officials and experts said that if Wang Yi became a state councillor, Yang was unlikely to become the first vice-premier in charge of foreign affairs since Qian Qichen stepped down in 2003, as previously speculated because such an appointment was very rare.

The last time China officially had both a vice-premier, usually a Politburo post, and a state councillor, which ranks above cabinet ministers, overseeing foreign policy was soon after the bloody Tiananmen Square crackdown in 1989.

But then vice-premier Wu Xueqian was largely sidelined for political reasons, while Qian was promoted to state councillor in 1991 while still serving as foreign minister before replacing Wu as vice-premier two years later. He was both foreign minister and vice-premier for the next five years.

The rumoured moves are being widely read by Chinese diplomats and international affairs experts as signalling an end to the erosion of the foreign ministry’s role in China’s diplomatic decision-making hierarchy over the past decade.

However, it remains to be seen if the overhaul of the foreign policy structure will help tackle long-term problems such as wrangling and poor coordination among various party and government agencies and inconsistency between what officials say and what they do.

One area that requires coordination is the stances of the military and the civilian government.

There was an embarrassing moment in January 2011 when the Chinese military staged the maiden test flight of the J-20 stealth fighter jet during a visit by then US defence secretary Robert Gates aimed at defusing military tensions between the two big powers.

After raising the test flight during a meeting with then president Hu Jintao, Gates told reporters the Chinese leader was taken aback and appeared to have little idea the military had been planning such a muscle-flexing move.

 US defence secretary Robert Gates (left) shakes hands with president Hu Jintao at the Great Hall of the People in Beijing in January 2011. Photo: AFP

There may have been a similar incident last month, when a Chinese submarine was spotted by the Japanese navy near the disputed Diaoyu Islands, known as the Senkakus in Japan. While the Chinese authorities did not explain what had happened, military experts said the submarine could have been forced to leave the waters around the islands, which are claimed by both countries.

Foreign relations experts said the incident had overshadowed Japanese Foreign Minister Taro Kono’s first trip to Beijing just two weeks later.

Beijing-based security expert Zhang Tuosheng, director of the Centre for Foreign Policy Studies at the China Foundation for International and Strategic Studies, said it could be a sign the military and civilian authorities were still not communicating and coordinating effectively ahead of important diplomatic events.

He said Beijing had rolled out quite a few moves in the past decade aimed at streamlining the multi-layered decision-making process and smoothing out wrinkles in inter-agency coordination, including the establishment of the National Security Commission (NSC) in 2013.

“However, we have yet to see significant improvement as some of the existing bodies are repetitive and overlapping, with many yet to be clearly defined,” Zhang said.

The NSC, modelled on the similarly named US agency, was supposed to play a big role in decision-making and coordination on foreign policy issues at the top leadership level, but it has largely disappeared from view after its first meeting four years ago.

Zhang said there was a need for “an overarching agency like NSC and professionals and experts to help with decision-making”, but the NSC had, unfortunately, not operated as efficiently as expected.

Zhang and other observers also noted that like the NSC and the Central Leading Group on Foreign Affairs, most Chinese bodies tasked with coordinating foreign policy were secretive party organs instead of government ones, which made it hard for them to deal with their foreign counterparts.

“With China’s rise to global prominence, we will inevitably be facing more challenges, scepticism and pushbacks from other countries and it remains to be seen if the new leadership is up to task of turning the country into a responsible world power and securing a favourable international environment for domestic development,” Pang said.

Additional reporting by Choi Chi-yuk, Catherine Wong and Laura Zhou