Commentary on Political Economy

Saturday 31 August 2019


Friends who have been with us for a while will know that the arguments presented below by Mr. Cohen today at The New York Times are ones we have advanced for the last seven years, since the inception of this Blog and certainly since the arrival of the Rat-in-Chief, Xi, on the scene. An interesting facet of Cohen's analysis here is how (to paraphrase) "the US [and the capitalist West] got cheap goods from exploited Chinese workers to keep our own workers happy and our bourgeoisie rich and stable". Again, these arguments we have expounded along much more politico-economic theoretical lines than Mr. Cohen can or does offer here. What matters is that our conclusions are the same - though we got there a long, long time ago!

Opinion Columnist

For President Xi Jinping of China, Deng Xiaoping’s advice on how China should rise — “keeping a low profile” — was yesterday’s story. Discretion is not his thing.

Since Xi became president in 2013, he has made China’s ambitions abundantly clear, upping the ante on the strategic, military, technological and economic fronts. The United States is now in a direct ideological war with China over the shape of the world in the 21st century.

The trade war between the United States and China, and the brave protesters in Hong Kong fighting for the preservation of the rule of law against the threat of absorption into lawless Chinese authoritarianism, are facets of this overarching confrontation. If you focus on the signal and not the wildly gyrating noise, President Trump has gotten China policy about right. Even a stopped clock is right twice a day. It was time to draw a line in the sand against Xi and his overreach.

A victim of Mao’s ruthlessness during the Cultural Revolution, Xi absorbed the lesson that ruthlessness is the sine qua non of authoritarian one-party rule. He has abolished the very term limits designed by Deng to prevent the emergence of another Mao-like figure, installing himself as quasi-emperor for life.

He has rounded up protesters and human rights lawyers, deployed technology (stolen or not) to build his Surveillance State, hounded the Uighurs through a system of concentration camps devoted to Orwellian “re-education,” and cultivated a climate of fear — all for his “Chinese dream.” The image of Hong Kong protesters tearing down facial-recognition towers is an iconic one for an age in which Xi wants to make the world safe for dictators.

Xi’s domestic crackdown has been accompanied by an aggressive international agenda. The Belt and Road Initiative to lock Eurasia into dependence on China, the construction of military outposts on islets in the South China Sea, the announcement in 2017 that the Chinese model was now ready for export to nations that “want to speed up their development while preserving their independence,” the “Made in China 2025” technological thrust through acquisition, theft and growing domestic know-how — all of these were gauntlets thrown down to the West.

Trump was right to recognize the threat and respond, however erratically. Xi is not the god of some new rules-based order, as he was anointed at Davos in 2017. He is a threat to liberty, as helmeted Hong Kongers facing down tear gas and growing repression have recognized.

Xi believes in the sacredness of the Chinese Communist Party, not the sacredness of the individual. He also believes, on the evidence, that Chinese money can buy 21st-century international acquiescence to a new order.

American engagement with China over decades has worked up to a point. It involved a useful symbiosis. China developed at a pace; hundreds of millions of people overcame poverty and joined the middle class. Americans got cheap goods made in China. Global stability was enhanced as China joined the world without major disruption. Given the violent history of rising powers, these are

There was a flaw, however. The bet that this engagement, by producing a Chinese middle class, would in turn spur greater liberties as more affluent people sought more freedom has proved wrong — at least for now. Xi’s message is clear: We’ll take your engagement, eat it, double down on repression and one day run the world.

Another flaw, one that helped Trump ride an America-first wave to the White House, was that China gobbled up American heartland manufacturing jobs. Steve Bannon’s comment to me is provocative hyperbole — “Every capitalist would choose slave labor if he could, and in China capitalists got a totalitarian mercantilist manufacturing base based on slave labor” — but not without a kernel of truth. Globalization and the free movement of capital were not fine and dandy for everyone, as the great nationalist and nativist lurch of recent years demonstrates.

Trump flails, but he’s right that China can’t join all the right international clubs and go on playing by its own rules. It can’t make some trade “deal” and then not be held fully accountable, relying on the infinite global capacity to turn a blind eye to its predations.

Ordering American companies out of China one day — a trademark Trump grotesquerie — and praising Xi the next is no way to negotiate, but China has had a pass for too long. The president’s statement linking a trade deal and the Hong Kong demonstrations — “It would be very hard to deal if they do violence. I mean, if it’s another Tiananmen Square, it’s — I think it’s a very hard thing to do if there’s violence” — was perhaps his finest hour. I just hope he meant it, despite the contempt he has otherwise shown for human rights.

A lot is at stake in Hong Kong, the world’s third-largest capital market. It’s a pivotal moment of the American-Chinese ideological war. A second Tiananmen could turn Xi’s overreach into cataclysm. He’s more vulnerable than he looks — as Trump intuits. Right now, of the Democratic presidential candidates, only Elizabeth Warren appears to get the China threat, one reason she’s surging. China will be big in 2020.

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