Bill Bishop of Sinocism

Stories by Bill Bishop of Sinocism

How China misread Donald Trump

Donald Trump and Chinese President Xi next to each other. — President Trump and President Xi at a November 2017 state dinner in Beijing. Photo: Thomas Peter/Pool/Getty Images

The South China Morning Post examines Beijing's misreading of President Trump, where they look at "how Beijing got it wrong."

My thought bubble: I had many conversations with Chinese interlocutors who really did not understand how the attitude towards China in D.C. and the U.S. business community had hardened so much. An earlier realization may not have altered the outcome much given the structural problems in the relationship, but when the stakes are so high, ignorance and surprise can be very dangerous.

What they're saying: Interestingly SCMP cites the crackdown on corruption as one of the contributing factors:

[T]he problem is policies introduced by Beijing — driven by a need to consolidate the party’s power — that have discouraged policy advisers from having in-depth discussions with their US counterparts that would help them to understand the latest thinking in Washington, or from speaking their minds...Six years ago, as President Xi Jinping’s major crackdown on corruption began, Beijing introduced a series of rules to curb overspending, including limits on government officials, academics and policy advisers travelling abroad.Since then, many officials have had to hand in their personal passports and instead use special government duty passports when travelling – and in most cases they are barred from staying overseas for more than a week.

The ideological crackdown has also exacerbated things:

At the same time, Beijing is tightening ideological control in all aspects of life, including on university campuses, and demanding that the party line be strictly adhered to. Any unauthorised discussion of government policies can result in a reprimand for “improper discussion of a party directive”. That has left Chinese advisers and Western diplomats worried about whether their suggestions will be filtered before they reach top-level officials, to ensure they are politically correct.

Go deeper: Mark Leonard, director of the European Council on Foreign Relations, wrote an OpEd in the Financial Times earlier this week in which he says the Chinese are wary of Trump's "creative destruction":

My interlocutors say that Mr Trump is the US first president for more than 40 years to bash China on three fronts simultaneously: trade, military and ideology. They describe him as a master tactician, focusing on one issue at a time, and extracting as many concessions as he can. They speak of the skillful way Mr Trump has treated President Xi Jinping.“Look at how he handled North Korea,” one says. “He got Xi Jinping to agree to UN sanctions [half a dozen] times, creating an economic stranglehold on the country. China almost turned North Korea into a sworn enemy of the country.”But they also see him as a strategist, willing to declare a truce in each area when there are no more concessions to be had, and then start again with a new front.

China

Bill Bishop of SinocismJul 27

The big picture: China's reform and opening turns 40

Illustration of Mao and Xi photos merged in a collage together — Illustration: Rebecca Zisser/Axios

2018 is the 40th anniversary of the launch of China's reform and opening policy. Chinese President Xi Jinping and the Communist Party are making a very big deal of the anniversary.

What we're hearing: I spoke with Julian Gewirtz, an expert in modern Chinese history and author of a book on China called "Unlikely Partners," on the current state of China's market and Xi's plan for “the great rejuvenation of the Chinese nation.”

1. What is reform and opening and how is has it changed over the last 40 years?

Above all, “reform and opening” means the policies of market-oriented change and international trade and investment that facilitated China’s extraordinary growth. It conventionally marks the new path taken under Deng Xiaoping after Mao Zedong’s death, and the official anniversary celebrates the Third Plenum of 1978 as miraculously transformative. But the new economic policies were introduced gradually and were highly contested—witnessing dramatic ups and downs in how the leadership handled major tradeoffs between the market’s scope and the Party-state’s control, as well as questions such as political reform and intellectual openness. And new changes are underway today.

2. What is Xi's vision for China, and if he is successful what will China look like in the next 10-20 years?

Xi envisions China becoming a superpower with the Party firmly in control over all aspects of life. If he succeeds, China will be the world’s largest economy, a global leader in technological innovation with a modernized military, and the major force in Asia and beyond. He sees this as restoring its historic stature, “the great rejuvenation of the Chinese nation” that only the CCP can produce. Of course, we don’t know yet if he will succeed.

3. Some experts now say that [economic] reform is dead under Xi. He and the Party of course say both reform and opening are moving forward with urgency. Who is right?

The malleability of reform and opening explains some of this disconnect. Xi uses this term to mean not market-oriented liberalization prioritizing the private sector but rather strengthening China’s system on his terms: promoting more “balanced” growth with a powerful state sector enduring, and modernization led by the Party. That isn’t the direction that many analysts would wish for, nor does it fully reflect the factors that have enabled China to succeed thus far — but it’s the clear trend over the past several years.

4. What are the politics around planning celebrations in this anniversary year?

Xi will dominate this anniversary, and the backward-looking appearance of celebrating an anniversary will be used to glorify Xi’s “New Era” and the path forward. Domestically, it presents an opportunity to crystallize which elements of reform and opening Xi wants to keep — and which he is discarding, such as more open intellectual debate or greater limits on the Party’s authority. Internationally, amid serious trade conflict, the anniversary gives the Party an opportunity to remind countries that they’ve benefitted from China’s growth over the past 40 years and to advocate for a form of globalization with “Chinese characteristics.” So the anniversary will be deployed to serve the interests of Xi and the Party today. History will be used for present purposes.

China

Bill Bishop of SinocismJun 29

Between the lines: China and Trump are in a different place on the WTO

Trump, smiling on the cover a Chinese magazine — Photo: Johannes Eisele/AFP via Getty Images

President Trump has repeatedly told top White House officials that he wants to withdraw the United States from the World Trade Organization, Axios' Jonathan Swan reported earlier today.

My thought bubble: China has benefited enormously from its accession to the WTO and it does not want global trading disrupted by anyone else. It also sees massive propaganda value in portraying itself as a responsible actor in contrast to the U.S. under President Trump, and it is finding many supporters among nations that in a different time would be on the U.S.' side.

Between the lines: China on Thursday released a white paper "China and the World Trade Organization". As the foreword of the white paper explains:

"Since its accession to the WTO, China has been a strong advocate for free trade. China has comprehensively fulfilled its commitments to the WTO, substantially opened its market to the world, and delivered mutually beneficial and win-win outcomes on a wider scale. Through these efforts, China has lived up to its responsibility as a major countryThe Chinese government is publishing this white paper to give a full account of China’s fulfillment of its WTO commitments, to explain China’s principles, stances, policies, and propositions regarding the multilateral trading system, and to describe China’s vision and actions in advancing higher-level reform and opening-up."

Go deeper:

Read Axios' full report on Trump wanting to exit the WTO.
The EU agreed this week to work to shore up the global trading systems.
China announced Thursday the reduction of official curbs on foreign investment in a number of sectors.

China