Some links from last week…
Michael Korvig on Beijing’s new warm and cuddly approach to convince Canadians to have a ‘correct perception’ of China…
[Ambassador Wang Di’s] other catchphrases include “mutual respect,” “win-win cooperation,” and “positive energy.”
After enduring several years of China’s abusive “wolf warrior” diplomacy, Canadians … may be tempted to look for comfort in this syrupy language. But they should be wary, because while the Chinese Communist Party (CCP) and its envoys have altered their tone, their hostile intentions and harmful policies remain unchanged. Their goals are to enhance economic ties selectively to create dependence and offload overproduction, while sowing political divisions, both among Canadians and between Canada and its allies.
…When Ambassador Wang complains of “smearing and attacking on China” about its treatment of Hong Kongers, Uyghurs, Tibetans and Taiwanese, and “attacking and hyping up” its political interference, espionage, and transnational repression … he’s gaslighting people for objecting to injustice, bullying and massive abuses of human rights.
…Negotiating tip: when Chinese officials declare that two sides “need each other,” it usually signals that the CCP needs something. This year, it’s market access to dump its overproduction of electric vehicles, aluminum and steel.
A Chatham House paper on Chinese influence operations in the UK.
And a Spectator column on the same subject…
…why does the [UK] government still refuse to call China a threat? The first reason is economic delusion. Ministers still cling to the idea that China represents a vast commercial opportunity. In truth, it doesn’t. Very few foreign companies make durable profits there; intellectual property is extracted, markets are manipulated, and contracts are enforced only when convenient to China. Britain’s exports to the People’s Republic account for just 3 to 4 per cent of the total – less than we sell to Ireland or the Netherlands. Yet the myth of Chinese indispensability endures.
The same wishful thinking infects investment policy. Successive governments have courted Chinese capital for nuclear plants, energy grids and real estate, mistaking scale for virtue. But the question is not whether China can invest in Britain, but why we would want it to. There is no shortage of allies –Japan, South Korea, the United States, Europe – eager to invest in a stable, law-abiding market. The argument for Chinese money has always been a mirage.
The second reason is fear. Ministers are paralysed by the thought of Beijing’s anger. They have seen what happens to countries that cross China: Australia hit with tariffs on wine and barley; Japan cut off from rare earths; Norway punished for awarding a Nobel Prize to a dissident. So they whisper the word ‘threat’ in private but never say it in public, hoping to avoid retaliation.
Yet this logic is precisely backwards. If China is willing to use coercion against middle powers – who, we should remember, are in the main our allies – that is the strongest reason to harden our economic defences. This means building resilience and stockpiling critical minerals. Instead, the UK has chosen inaction. It neither confronts China nor prepares for coercion. The result is paralysis: a policy that offends our allies and reassures no one.
A couple of pieces on China’s economic situation…
China Media Project on Beijing’s official line on China’s economy…
When it comes to China’s economy, the future has never been brighter. That is the point forcefully made this month by a series of eight commentaries published in the official People’s Daily, which repeatedly stress that “to believe in China is to believe in tomorrow.” The articles were written by Zhong Caiwen (钟才文), a very prominent economic expert that no one on earth has ever heard of — because, of course, he does not exist.
…Such homophonous pen names are common in Party-state media, allowing powerful departments to voice official positions while signaling their authority to other Party insiders.
…this bold declaration of confidence, republished by multiple media outlets within China, suffers from a fatal flaw hardwired into how China’s ruling Party continues to communicate even well into the 21st century — a kind of repetition complex. If someone reassures you that everything is just fine, you relax: Good, that’s good to hear. If they say it again, there is a frisson of doubt. And when the reassurance comes a third time, it begins to sound like something other than confidence. You are sure there is much more they are not saying.
Foreign Policy looks at the apparent contradiction between China’s technological prowess and its underlying economic stagnation…
The split screen of techno-wizardry on one side and empty apartment complexes and struggling villages on the other conveys valuable yet only partially accurate pictures of a complex country.
…In many cases, both the upward signs and the worrying ones may seem unconnected but are really two sides of the same coin…
…the high-tech push has not translated into maintaining rapid growth and a stronger macroeconomy. After the boom-boom years of 1980 to 2010, China has seen an uninterrupted 15 years of slowing growth and rising debt—and the tech push is part of the problem.
…China’s sweet spot is moderately difficult technologies that can be tweaked and improved incrementally and then sold in massive amounts at low margins. China has had more difficulty in the most complex, advanced technologies where economies of scale are less valuable. [Such as commercial aircraft, complex fine chemicals, quantum computing, and high-end precision machining.]
…As capital has been drawn to priority sectors, investment in areas that might produce greater employment or income growth has been crowded out … China lags far behind in many high-value-added service sectors. Among the most prominent are healthcare and education, labor-intensive sectors that would soak up urban employment and provide services that would strengthen human capital.
…China has one of the most poorly educated labor forces in the upper-middle-income world … it will still take decades to achieve the levels that South Korea and Ireland had when they were middle income and striving to move up to high-income status. No country in the world has successfully moved from middle- to high-income status with the low levels of aggregate human capital that China has today.