China and America: Order and chaos
Here's how 2021 is beginning: On one side of the Pacific, a show of strength that has shocked the world. On the other side, a show of weakness that has shocked the world.
Why it matters: The chaos that unfolded on Capitol Hill Wednesday afternoon is a sign that the U.S. can't even run an orderly transition of power, let alone project its soft power internationally.
- The Trump administration is attempting to crack down on Chinese companies as a way of punishing the Chinese Communist Party. But it has done so in such an incompetent manner that it has hurt itself more than the Chinese.
The big picture: China has decisively rejected its obligation under international law to allow democracy in Hong Kong until 2047. It has cracked down on powerful domestic billionaires, foremost among them Alibaba's Jack Ma. And it has done all of this with near impunity, blithely signing a major investment treaty with the EU against the clear objections of both the outgoing and incoming U.S. administrations.
The other side: U.S. attempts to constrain China look like "a driverless clown car careening into a ditch," per Sinocism's Bill Bishop.
- Remember when Trump banned TikTok, forcing the Chinese-owned app to be deleted from app stores as of Sept. 20 of last year? Well, it's still Chinese-owned, and it's still in app stores. A new executive order targeting apps including Alipay is likely to be similarly ineffective.
- The listing fiasco is a national embarrassment: The government was so unclear in what it wanted that the New York Stock Exchange first announced the delisting of three major Chinese companies, then changed its mind and said they could remain listed after all, and then changed its mind again and said no, they were going to be delisted.
- More chaos is likely: More companies, including Alibaba and Tencent, could be added to the list, even as Alibaba plans a multi-billion-dollar bond sale in the U.S. And don't be surprised if there's yet another volte-face after Jan. 21, when the Biden Administration starts to reverse Trump-era overreach.
Be smart: There’s chaos in China, too, though censorship and information control hide much of it. And the U.S. still boasts a robust civil society and a strong, if somewhat battered, economy.
The bottom line: Trump came into office four years ago proclaiming a new era of strength and authority. That has now arrived — in China. Meanwhile, Trump's own government has collapsed to the point of constitutional crisis.