The recent summit between Presidents Donald Trump and Xi Jinping was unprecedented in its fashion and noteworthy in several respects.
Trump’s Mar-a-Lago resort in Florida was an unusual venue for the first meeting between the two most powerful men on the planet. Barack Obama’s summits with the Chinese president were more formal.
The summit was expected to shed light on the policies of both leaders toward various smoldering issues: North Korea, Taiwan, territorial disputes in the South China Sea and Sino-American trade relations. Read more
World Upside Down: China Defends Globalization from America
Political dynasties have always been a big part of human civilization and today is no exception.
In the United States, of course, the rise of Donald Trump (and Bernie Sanders) was at least partially a reaction to the dynastic, Clinton-versus-Bush election that only last year most Americans were expecting to get.
Among other things, Jeb Bush’s candidacy split the non-evangelical portion of the Republican establishment in two, preventing it from coalescing around Marco Rubio early on and thus leaving an opening for Trump to force his way into. Hillary Clinton’s candidacy, meanwhile, may even leave the door open for Trump to become president, however unlikely and unappealing that may be. Read more
Visiting South Korea on Thursday, China’s president, Xi Jinping, appeared to distance himself from his country’s longtime communist ally North Korea, telling his South Korean counterpart, Park Geun-hye, that China took an “impartial” view to situation on the peninsula.
According to Chinese state media, Xi said, “All parties concerned should jointly and properly manage and control the situation, avoid causing tension, prevent the situation from losing control and creating no more stirs.”
He added that China believes “all sides should be treated in a balanced way,” suggesting a shift away from Chinese support for the North Korean regime which just a day before Xi’s visit launched two rockets off its east coast in a show of force.
Xi’s visit was in itself remarkable as no Chinese president previously visited South Korea before coming to Pyongyang. He had met Park four time earlier since the two presidents took office last year, underlining the growing commercial relationship between their countries.
Xi has yet to visit North Korea while its ruler, Kim Jong-un, has yet to visit Beijing.
Trade between China and South Korea totaled $275 billion last year, forty times China’s trade with North Korea which relies on China for 80 percent of its fuel and half its food. China is now South Korea’s biggest trading partner while South Korea is China’s third largest.
China appears to have taken a more dispassionate view toward its internationally isolated neighbor since Xi succeeded Hu Jintao as general secretary of the ruling Communist Party in November 2012 and as president in March 2013. In February that year, China said it was “strongly dissatisfied” by a North Korean nuclear test. Three months later, China’s biggest state bank closed the account of North Korea’s main foreign exchange bank.
North Korea is believed to possess several nuclear devices but lacks a reliable intercontinental missile capability to deliver them. Missile tests have repeatedly failed.
China effectively props up the North Korean dictatorship — whose population lives on the brink of starvation after years of gross economic mismanagement — because it provides a buffer against South Korea and the nearly 30,000 American troops that are permanently stationed there. However, its erratic and oftentimes provocative behavior appears to have baffled China more than usual since Kim Jong-un took over as the country’s leader after his father, Kim Jong-il, died in late 2011. Increasingly, it does more to raise tension on the Korean Peninsula than it keeps China secure.
In its propaganda, North Korea has justified its recent actions, which have included missile tests and threats to strike American army basis in the Pacific, as a response to the United States’ strategic “pivot” to East Asia.
China also regards the burgeoning American presence in the region warily, fearing that the aim is to encircle it and contain its rise.
But North Korea’s threats only give the Americans more reason to strengthen their alliances with Japan and South Korea and deploy forces to the area, moves that China’s leaders — many of whom do not share their predecessors’ emotional attachment to an alliance that was forged in a war against the United States over half a century ago — might rightly interpret as detrimental to their own interests.
All the same, China is unlikely to undermine North Korea. Regime change in Pyongyang could herald the reunification of the peninsula on South Korean terms which would raise Chinese fears of encirclement.
China’s Xi, American Secretary Discuss Currency, Korea
China’s new paramount leader Xi Jinping met with American treasury secretary Jack Lew in Beijing on Tuesday in what was his first meeting with a foreign official since being formally named president last week.
According to American officials, the two men discussed the major issues between their countries: the state of the global economy, China’s currency, cyber hacking, intellectual property rights and North Korea’s nuclear weapons program. It was the highest level meeting between American and Chinese officials since Secretary of Defense Leon Panetta visited Beijing in September.
Lew was reportedly “candid and direct” on North Korea. The United States want China to enforce tougher sanctions enacted by the United Nations Security Council after the country conducted a nuclear test in February. There is doubt about China’s commitment in following through. Because China is North Korea’s main ally, it has historically been reticent of pushing too hard on the regime for strategic reasons and a fear that should the government in Pyongyang collapse, a flow of refugees will seek shelter in China and destabilize the border region.
That Lew was candid and direct with Xi is in itself interesting since treasury secretary does not usually cover a security issue.
The meeting occurred as B-52 bombers were participating in training exercises between the American and South Korean militaries. The use of strategic long range bombers is used to convey larger diplomatic concerns from the United States. In this case to China over the North’s provocative statements in recent weeks, including its announcement that it was nullifying the 1953 Korean War armistice.
Lew’s visit came as the United States’ economy is showing signs of growth, even though its unemployment rate remains at extraordinary high levels, with shale gas technology causing many to predict the nation can be energy self-sufficient in the foreseeable future. Lew reportedly told Xi that the United States were in the midst of an energy revolution.
The Treasury Secretary also reminded Xi that the United States want China to reduce its trade barriers and allow the yuan to float more freely. American officials have long pressured the Chinese to devaluate their currency faster even if its value has increased some 30 percent against the dollar since 2005.
Xi, scheduled to leave for Moscow this week on his first trip overseas as president and then on to Africa, said that “in the US-China relationship, we have enormous shared interests but of course unavoidably we have some differences.” It will take more such meetings as occurred between the president and Lew on Tuesday to resolve them.
China’s new leader, Xi Jinping, warned on Sunday that abuse of power and corruption within the ruling Communist Party undermines public trust in the government and could ultimately imperil its single party rule. If he is to seriously reduce graft, however, Xi may end up eroding the party’s grip on power by himself.
Xi, who is expected to take over the reins of state power from outgoing president Hu Jintao at this month’s annual full session of parliament, said in a speech, “Only if the capabilities of all party members unceasingly continue to strengthen can the goal of ‘two one hundred years’ and the dream of the great rejuvenation of the Chinese people be realized.”
“Two one hundred years” refers to both the party’s and the People’s Republic of China’s centennial in 2021.
A scandal rocked China last year ahead of the leadership transition when Chongqing party chief Bo Xilai was ousted. Bo’s top lieutenant and police chief had reportedly revealed details of a British businessman’s death and subsequent cover-up to the United States Consulate in Chengdu, an incident that somehow involved Bo’s wife.
The details of Bo’s purge and the events that preceded it remain unclear but may have been politically motivated as he championed a more leftist and populist economic and social policy that defied the liberal consensus in Beijing.
The majority of Chinese leaders who were elevated to the Politburo Standing Committee, the country’s highest decisionmaking body, in November, including Xi, were seen as protégés of former president Jiang Zemin’s who oversaw gradual economic reforms as paramount leader in the 1990s.
The World Bank warned China last year that it should enact even deeper reforms if it is to avoid falling into a “middle income trap” after decades of rapid economic expansion. While China’s growth rate still far exceeds those of industrialized nations, it slowed to a thirteen year low in 2012.
China pumped $635 billion in its economy at the height of the international financial crisis in 2008 in an attempt to sustain growth, a stimulus package thrice the size of the United States’ relative to its gross domestic product. Late last year, it announced another $150 billion worth of infrastructure spending.
Such stimulus measures may inflate growth in the short term but also encourage nepotism. Money is poured into politically favored industries that therefore have little incentive to improve their competitiveness relative to foreign competitors.
Nor have they significantly lifted internal demand which China’s leaders recognize must increase as it threatens to lose its cheap labor advantage to other Asian nations and won’t be able to rely on exports alone for growth in the near future.
A further slowdown in economic expansion could undermine the Communist Party’s monopoly on power. China’s burgeoning middle class has largely accepted the lack of political freedoms while the economy was booming. Yet for China’s leaders to maintain high growth rates, they may have to relax their grip on power.
The main impediment to economic development in years to come is the state’s heavy hand in industry. Behemoth state-owned enterprises, central planning, a weak judiciary, insufficient protection of private property and intellectual copyrights stand in the way of a freer market economy which the party seems unable to decide if it really wants.
The most efficient way for Xi to simultaneously improve the accountability of Chinese politicians and the country’s long-term economic growth prospects is further liberalization, including privatizations, but that is a political, not to mention ideological, challenge that could take him years to mount.
China’s Hu Ensures Smooth Transition, Resigns Army Post
President Hu Jintao broke with precedent on Wednesday when he simultaneously relinquished the leadership of the Central Military Commission and Chinese Communist Party in favor of his successor, Xi Jinping.
While Xi was widely expected to be named general secretary of the ruling party during its Eighteenth National Congress in Beijing, it was unclear whether he would also immediately take Hu’s place on the Central Military Commission, the body that controls the army. Hu could have waited until March of next year to hand over the post, when Xi is set to become president and will then be head of army, party and state, or even longer, as his own predecessor, Jiang Zemin, did.
Jiang, whose behind the scenes influence was apparent in the Politburo appointments that were revealed on Wednesday, kept the military post for two years after stepping down as president in 2003. Deng Xiaoping, the architect of China’s market reforms, similarly retained control of the army when he relinquished his other titles in 1987.
Hu’s decision to simultaneously step down from the party and military leadership sets a new precedent in what is only the second bloodless shift in generational leadership in modern Chinese history. It will give his successor greater leeway in setting both domestic and foreign policy, even if it is arrived at it by consensus among the seven members that form the Politburo’s Standing Committee.
Five of the Standing Committee’s members, including Xi, are considered allies of former president Jiang Zemin’s. Premier Li Keqiang, who replaces Wen Jiabao, is the highest profile Hu protégé. As one diplomat told The New York Times, “the Shanghai crowd has won a decisive victory,” referring to Jiang’s former power base.
Because the Central Military Commission is both a party and a state body, Hu will remain chairman in the eyes of the parliament until March when the legislature is expected to confirm the party’s decision. In the meantime, the military technically has two chiefs: Xi as chosen by the party and Hu as the government’s lame-duck version.