Axios

For the past several decades, China has been governed by a dual system: political authoritarianism combined with economic entrepreneurship. Private-owned and foreign firms have helped drive economic growth, while accommodating, and even resisting, political influence. Formerly limited by the central government, they later flourished with the support of local bureaucrats.

Amid the current economic slowdown, the central government has used tax incentives and other benefits to co-opt private entrepreneurs into the Communist party. They have also aimed to attract foreign investment to development zones and free trade zones, especially in high-value sectors like information technology, clean energy and machinery.

Instead of relying on local initiatives, these measures are mostly top-down. Local bureaucrats now exercise more caution in promoting economic activities, in part to avoid becoming targets of anti-corruption campaigns.

What's next: Centralization would upset the fragile balance and sustainability of China's economic model. Compared to local bureaucrats, Beijing is less likely to make policies that suit the millions of varied non-public firms across the country and risks undermining valuable entrepreneurship.

Ling Chen is an assistant professor at John Hopkins School of Advanced International Studies and the author of "Manipulating Globalization: The Influence of Bureaucrats on Business in China."

President Trump will meet Israeli Prime Minister Benjamin Netanyahu on Thursday at the World Economic Forum in Davos. National security adviser H.R. McMaster said at the White House press briefing that Trump and Netanyahu will discuss the Iranian threat and the effort to promote the peace process between Israel and the Palestinians.

Why it matters: The meeting will come at a time when on both issues — Iran and the Middle East peace process — there is a current or looming crisis. Trump and Netanayhu are in agreement about the need to fundamentally "fix" the Iranian nuclear deal or even to "nix" it. Trump and Netanyahu are the only Western leaders holding this position.

Secretary of State Rex Tillerson said on Tuesday that Russia is ultimately to blame for Monday's suspected chemical attack by the Assad regime in Syria, Politico reports.

"Whoever conducted the attacks, Russia ultimately bears responsibility for the victims in East Ghouta and countless other Syrians targeted with chemical weapons since Russia became involved in Syria."

Why it matters: This follows President Trump's rebuke of Russia in a Reuters interview last week, for "not helping us at all with North Korea." That's a change of tune — Trump repeatedly said during the campaign that he thought having a positive relationship with Russia would be beneficial.

China and India have a long history of border disputes, most of them reasonably managed until last year’s standoff over Chinese road construction in the disputed territory of Doklam, which prompted an Indian military response.

Both states surprisingly asserted readiness for open conflict, and Beijing told Western ambassadors that its patience "was not indefinite” in refraining from the use of force. While this episode was mutually de-escalated, it has triggered more aggressive stances in subsequent interactions.

Turkey’s incursion into Afrin, in northwestern Syria, marks a significant move in its campaign against the Kurdish People’s Protection Units (YPG). It was authorized by Russia, with the likely aim of returning local control to the Assad regime, and signals displeasure with the U.S.’s recent announcement of a 30,000-strong border protection force. Rex Tillerson called news of such a force “misportrayed,” but amid conspiracy theories and anti-American sentiment, his clarification came too late.

At this point, there’s little the U.S. and EU can do apart from pressing Turkey to seek moderation and avoid civilian casualties. The EU might also offer cross-border humanitarian assistance on Syrian soil.

The stakes will be raised if and when President Erdogan launches a promised ground operation against the town of Manbij, located at the Western edge of a vast region controlled by the Syrian Democratic Forces (SDF), themselves under the command of the YPG. Because the SDF are backed by U.S. Special Forces, the risk of a U.S.–Turkish confrontation is real.

What's next: Given restrictions on free speech within Turkey, the media is expected to produce a unanimously positive image of the operation. By playing up this limited operation as a major success, Erdogan is attempting to burnish his image as the providential leader best able to steer the country through difficult times.

Marc Pierini is a visiting scholar at Carnegie Europe and a former EU ambassador and head of delegation to Turkey.

The Special Counsel’s team interviewed Attorney General Jeff Sessions last week for several hours, the NYT’s Michael Schmidt reports. A DOJ spokeswoman confirmed the interview to the Times.

Why it matters: The interest in Sessions relates to whether Trump obstructed justice while in office. It’s the first known time Bob Mueller and his team has interviewed a member of Trump’s cabinet.

Warfare, severe food shortages and disease are devastating Yemen, already one of the world's poorest countries. The U.N. has called the situation the "largest humanitarian crisis in the world," and U.N. Ambassador Nikki Haley said recently that "no one should ever have to live the way the people of Yemen are living."

Why it matters: The U.N. estimates that more than 22 million Yemenis are in need of humanitarian assistance. The population of Yemen is 27 million.

Russian Foreign Minister Sergei Lavrov said Monday the U.S. has been "discouraging the Kurds from dialogue" with the Syrian government and sowing “separatist sentiment” among them, per the AP. Lavrov said this shows a “lack of understanding of the situation or a deliberate provocation” and urged all involved parties to recognize Syria’s sovereignty.

Why it matters: This comes as Turkey is launching an offensive to boot out Kurdish forces with links to the U.S. in Syria over the weekend, and Turkey's president, Recep Tayyip Erdogan, has said Turkey has an agreement with Russia over the assault. The U.S. detailed plans last week to continue backing Kurdish forces in the region to ensure that ISIS or other rogue elements don’t regain control of the territory, setting up fuel for the showdown to continue.

In his first network interview as CIA director, Mike Pompeo discussed the escalating threat from North Korea, stating that leader Kim Jong-un is only "a handful of months" away from delivering an attack on the territorial U.S.

"We'll never know the exact nature of what's taking place. We'll never know the exact moment that they're going to continue [to detonate another nuclear bomb]... But the core risk ... [is that] North Korea's nuclear weapons program is continuing to expand, advance, become more powerful, more capable, more reliable."

In a speech rife with references to the founders of the United States and their reverence for Jews, Pence reminded Israel’s Knesset, “America stands with Israel! … your cause is our cause, your values are our values, and your fight is our fight.” Pence said Trump “righted a 70-year wrong” when he announced the U.S. recognition of Jerusalem as the capital of Israel.

One big thing: Pence said moving the U.S. Embassy from Tel Aviv to Jerusalem will take place next year. That lags behind Israel’s timeline; last week PM Netanyahu said the move would take place this year.

The United States is facing the worst collapse in the trust of institutions — businesses, media, NGOs, government — ever recorded in the history of the Edelman Trust Barometer, an annual survey. Chinese were atop the rankings for growing trust in institutions.

There's a sharp divide between Americans and Chinese when asked which institutions are "most broken," according to the latest annual Edelman Trust Barometer.