Xi Jinping and the Pursuit of World Power

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Buried at the bottom of the second page of the March 1st edition of The People’s Daily was the announcement that Chinese Parliament will abolish Presidential term limits while approving a new administrative branch that merges elements of the party, police and judiciary into a powerful organization known as the National Supervisory Commission. Said organization will be able to interrogate, search, detain and punish any official from both the Communist Party and Government bureaucracy in cases involving corruption, ethics and even ideological deviation. Such a development is the latest of many signs that America has lost its wager that economic growth would propel China toward Western values and confirms that Secretary General Xi Jinping is interested not in ruling from behind the scenes, but with his power and authority on full display.

 

In February of 1972, President Nixon landed in Beijing to kick off a State-led tour of the country and ended 25 years of nonexistent diplomacy between China and the United States in what he designated as “the week that changed the world.” The visit marked a major shift in the balance of the Cold War as it drove a wedge between Sino-Russian relations while spurring the former to begin the process of opening itself to the world after decades of Maoist isolation. Four years after Mao’s death in 1976, Central Advisory Committee Chairman Deng Xiaoping made the Presidential succession system more orderly and predictable by installing 10-year term limits with the belief that the overconcentration of power is liable to give rise to arbitrary rule. Organized succession was also intended to create a clearer separation between Party and State, a divide that China still lacks as it uses both as ladders of authority with the former inherently outranking the latter as it possesses the loyalty of the People’s Liberation Army. Even in the best of times, with cheap goods proving to be a boon for Western consumers and retailers and financial services firms raking in billions, America has attempted to pair engagement with the need for balancing China’s rise, strengthening forces in the Pacific Rim and expanding security and trading alliances with other Asian nations.

 

In the midst of the Soviet Union’s collapse, the west eagerly welcomed China into the global economic system with the hope that giving it a seat at the table would bind it into the rules-based world order established after World War II. In theory, economic integration should have encouraged China to evolve into a market economy like its Western counterparts as its citizens became wealthier and yearned for Democratic freedoms, rights and rule of law. Western hope has not been entirely misplaced as China has enthusiastically embraced consumerism, become the world’s biggest exporter, is home of 12 of the world’s 100 most valuable companies and has been extraordinarily prosperous for both itself and those who have done business with it. That said, the country is still not a market economy and, on its present course, likely never will be. Not only does the State control business as an arm of its own power, the “Made in China 2025” plan will use subsidies and protectionism to create world leaders in ten industries including robotics, biomedicine, electric vehicles and more. Nationalists in the Trump administration have expressed desire for these goods’ supply chains to be rerouted back to America but appear to lack a firm plan of action. Not long ago, corporate executives would have been in an uproar, worried that this could shut them out of Chinese markets, though big business is no longer such a reliable cheerleader for the Orient’s superpower due to China’s swelling animosity toward foreign commerce. Morning raids by Chinese regulators who confiscate global client lists and computers filled with priceless intellectual property have the potential to wreak havoc upon firms’ reputations and future earnings. During a 2012 research trip to Beijing, Canadian equity analyst Huang Kun was detained and imprisoned for two years after writing a report claiming that a Chinese-focused mining company, Silvercorp, had overstated its production and the volume of precious metals contained in its mines. China has recently taken even more drastic measures against foreign businesses including shutting down every Lotte supermarket as a “fire-hazard” because it owns land southeast of Seoul on which the United States has placed anti-missile batteries. It also stopped buying bananas from the Philippines for “health reasons” shortly after the archipelagic nation contested China’s claim to Scarborough Shoal in the South China Sea. Such bold actions, especially when unchecked, will only serve to strengthen Mr. Xi’s grip around East Asia while Chinese businesses continue to penetrate foreign markets in what is becoming a grand display of economic imperialism.

 

The General Secretary looks to continue capitalizing upon China’s transition from autocracy to dictatorship by expanding his influence within the party and on a diplomatic stage. While the country has become wealthy beyond its wildest dreams, Xi has used his power to reassert the dominance of the Communist Party and his own position within it. He has purged potential rivals as part of his anti-corruption campaign, reorganized the People’s Liberation Army to ensure loyalty to himself, imprisoned free-thinking lawyers and stamped out criticism of the party and government online. His China is under strict Communist Party control and is more than willing to use the power of its vast markets to cow and co-opt its rivals. As it bends and breaks rules-based order to push America to the periphery of the Asia-Pac region, it is confident in both its economic and military strength, having touted State-guided capitalism as superior to free-markets since the Great Recession and more recently deploying its Navy to re-draw maps in the South China Sea by seizing reefs and islets on which it has built military installations. The rapid pace of China’s military investment and modernization has raised doubts about the United States’ long-term commitment to dominance in the region. Although the PLA could not defeat America in a conventional war, power is about resolve as well as strength and the great Western superpower has been both unwilling and unable to match China’s challenge as it becomes increasingly overt. Having previously claimed no interest in how other countries ran themselves so long as it was left alone, China has begun to grow into its role as a regional superpower. The Belt & Road Initiative, a development strategy focused upon connectivity and cooperation between Eurasian and African countries, calls for $1tn in foreign investments, including roads, railways and fibre-optic cables, dwarfing the $140bn (in 2017 dollars) Marshall Plan. This will create a Chinese-funded web of influence that includes every country willing to join so long as they accept “Chinese-based dispute resolution.” Party leadership has begun to hold its authoritarian system up as a rival to Western democracy while the Chairman offers “a new option for other countries” that involves “Chinese wisdom and a Chinese approach to solving the problems facing mankind.” Interestingly, much of the money is going to developing nations and Mr. Xi has embraced the tactics of dictators such as Ahmed Sekou Toure, of Guinea, and Robert Mugabe, of Zimbabwe, in cementing his power. His most prominent rival, Bo Xilai, was arrested and jailed following a scandal of the corruption and murder of a British businessman. He also used his anti-graft campaign to rid himself of other rivals, most notably Sun Zhengcai, a regional party chief who was once considered one of his greatest competitors for General Secretary.

 

To put it plainly, the window for confronting and challenging Chinese aggression is closing quickly. Although the rivalry between reigning and rising superpowers may not necessarily need to lead to war, Mr. Xi’s thirst for power has raised the potential for major instability not only in the country, but in the East in general. It is without question that Western politicians underestimated how tirelessly Chinese leaders would work to defend their authority, just as its own leaders are suffering a crisis of confidence in the wake of unprecedented partisan polarization. President Trump saw the Chinese threat early but mainly views it in terms of the trade deficit while Make America Great Again smacks of a retreat into unilateralism that can only strengthen China’s hand. Putting up with Chinese misbehavior today in the hope that continued economic growth will make them better tomorrow no longer makes sense – tolerance of abuses now will make it tougher to challenge them later. Beginning immediately, the West needs to think seriously about how to balance China more effectively. It is imperative to maintain a united front without losing sight of the strengths of a democratic, accountable government, free press and independent courts. Ultimately, the goal of both the West and the East’s lesser powers must be to mitigate the “Bad Emperor Risk”, or that Mr. Xi could be on a course that would prove a huge mistake – nobody will be able to stop him.