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China Peace Initiative

CPI Newsletter 2023-8-6

Deeper Question

What if a senior leader in China decides their system is not better?

The argument that China’s system of government is better for China has been repeated for decades.  Recently President Xi Jinping has been proposing it as an alternative around the world to chaotic and ineffective democratic governments.  People are listening. 

There is a long process of career development to get to the top in China’s government.  It requires pedigree, connections, and a slew of other things to fall into place before rising to the highest levels.  By “top” here, let’s say we are talking about the 25-person Politburo.  Or even more top, and we are speaking about the 6-7 member Standing Committee of the Politburo.    

China’s politics are a black box and we do not know much about how things work when these groups meet to discuss and decide.  The world would like to know more, and the stakes are high.  US President Joe Biden called China’s President Xi Jinping a dictator, but is he?  Is he the sole decider?  The policy process in China is so formulaic and sequential, and there are so many limits and guardrails, that many outsiders have the impression that perhaps there is not much to decide at the top.  Was it really President Xi Jinping’s decision to pursue COVID lockdowns the way that China did them?  We can only guess. 

We presume that it is an intimate group in the Standing Committee (6-7 people, out of thousands), that they are comfortable with one another to speak freely, and there is discussion and debate.  So, what if—given all of that—an already senior leader decides that bad decisions are being made and it is because of the system?  That the system China has really is not better, for China or any other nation?  Then what? 

The situation of Qin Gang has us all pondering these and related things (note: look for more about Qin Gang in previous CPI newsletters).  He was such a rising star, everywhere at once.  Although many around the world fundamentally disagreed with what he said, he did present China’s message passionately and forcefully.  Was whatever happened to Qin Gang related to the possible narrative, “there was a debate, he disagreed, he went too far”?  Or perhaps even more fantastic, “he stopped believing the system was better and pushed the limits?”  

The root topic of this line of thinking is Power Politics.   Power Politics here refers to the methods and processes whereby a group (or groups) of very smart and ambitious people who are already in very senior positions need to work together, not betray one another or their nation, and make decisions upon which millions of lives depend.  In other nations, Power Politics is well understood and even though it is ugly, it is out in the open.  Not in China.     By the way…China Peace Initiative offers a free online seminar about the basic structure and organization of the Communist Party of China (CPC) and the Chinese government.  It covers the process from joining the CPC all the way to the top spot!

Stories to Read

Historic downgrade to US credit rating—

The credit rating agency Fitch this week downgraded the credit worthiness of the United States of America.  The reasons given are political deadlock, brinksmanship, and the poor state of the nation’s balance sheet.  None of this is likely to change the behavior of American’s politicians very much.  In fact, a Chinese credit rating agency already downgraded the US back in May.  The China Chengxin International Credit Rating agency downgraded the US for high inflation, high debt and creating unnecessary uncertainty. 

The state of China’s economy—

Everybody now acknowledges that China’s economy is not performing well, and the remaining divide is just about how badly.  Private enterprises and big tech are perhaps now assuaged after feeling targeted by crackdowns and side-lined in the last NPC Work Report.  Many—particularly in the West—want to see China unleash large amounts of stimulus.  China is holding steady.  Official announcements make clear that China’s government believes the fundamentals are right.  Current headlines speak of only better enforcement and vigorous policy to bolster the economy and improve confidence.  Various government ministries continue to speak of new measures for improvement.  We’ll see.   

China’s Ministry of State Security enlists citizen’s help catching spies—

The Ministry of State Security (MSS) has responsibility for counter-intelligence work in China.  Perhaps it was already long planned or perhaps it was in response to recent comments from CIA Director William Burns about how the CIA is re-establishing their networks of intelligence gathering assets in China, but this week the MSS–via their own channel on WeChat–announced the launching of several mechanisms whereby ordinary citizens are encouraged to report suspected spying. 

Italy and the Belt and Road Initiative—

The Belt and Road Initiative (BRI) is China’s development program for lending money to other nations to build fundamental infrastructure like roads, ports, railways, etc.  China loans funds and the recipient agrees to hire only Chinese companies to come in and do the construction.  There are several master ideas behind the BRI, and some of them are quite interesting, for example a high-speed land route to move sea containers by rail from China to London in 20 days, cutting ocean shipping time in half. 

Nonetheless, the BRI has received a lot of bad press in the West.  Complaints are (1) it is simply a tool for China to control the developing nations which take the money, (2) the details are always kept secret so it promotes corruption, (3) lately the program has fallen on hard times as some recipients are having difficulty paying back, and (4) it creates another area of conflict between China and other nations because recipients often have loans from many sources so when they fail to pay, there is competition about who gets paid back.  The program has existed for more than 10 years but slowed during COVID.  In the first half of 2023, it signed more new deals which are shifting to higher level projects such as the mining of precious metals.  BRI is here to stay!

Italy is the only Group of Seven (G7) nation to sign up for the BRI.  The G7 is an informal grouping of seven of the world’s advanced economies—all liberal democracies–and includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, and the EU.  It was seen as a scandal when Italy took some of China’s BRI money.  Now Italy is in serious discussion about getting out of the BRI. 

Even “forever friends” have rough spots—

China continues to be criticized for being friends with Russia.  President Xi Jinping has stated that Russia and China will be friends forever.  Details are sketchy, but this week a group of Chinese social media influencers traveling into Russia were stopped at the Russian border and denied entry.  The dispute has grown, and the Chinese government has officially petitioned the Russian government over the matter. 

People to Know

Mr. Xie Haihua—

Xie Haihua is the chairman of Darbond Technology company, a manufacturer in the chip industry and recipient of funds from the very large China national fund promoting the development of home-grown chips.  The fund’s official name is the National Integrated Circuit Industry Investment Fund, but even officials just call it the “Big Fund”.  The Big Fund is China’s hope against the export controls that the US, Japan, Netherlands, and others are putting in place to restrict the flow of the best chips to China. 

Mr. Xie had been taken away by authorities eight months ago to look into irregularities related to the Big Fund, but he suddenly reappeared this week.  Darbond publicly stated at the time that a replacement had been named and that the company was continuing operations normally.  Then, out of the blue, Mr. Xie is back.  Darbond is a publicly listed company on the Shanghai stock exchange and in a recent filing the company informed shareholders that Mr. Xie is back in charge.  Nothing more is known, but one possible explanation is that China—desperate to push forward self-sufficiency in chips—is being more forgiving of people in the industry it really needs.    

Mr. Wang Houbin—

Wang Houbin is the new commander of the PLA Rocket Force, responsible for managing China’s nuclear arsenal.  Mr. Li Yuchao, his predecessor, and other commanders of the Rocket Force have been placed under investigation.  Wang Houbin is a former deputy navy chief.  The Party Commissar of the force has been replaced as well, at the same time, which is very rare.  The new Party chief is Mr. Xu Xisheng.   Mr. Xu is actually senior to Mr. Wang in the government hierarchy and holds a post very close to President Xi Jinping, as one would hope when it comes to managing nuclear weapons.  While all these changes are blamed on corruption, some think it may have been influenced by the Wagner revolt in Russia.  There are other theories as well.

Mike Gallagher—

Congressman Mike Gallagher (Republican, Wisconsin 8th District) is the chairman of the “China Committee” of the US House of Representatives.  He repeats frequently to whoever will listen that China is taking actions that will harm the US.  The official name for the China Committee is the “Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party.”   Congressman Gallagher seems well prepared for the work he is doing.  He served for seven years on active duty in the United States Marine Corps, including two deployments to Iraq.  He holds a Master’s degree in Security Studies from Georgetown University, a second Master’s degree in Strategic Intelligence from National Intelligence University, and a PhD in International Relations, also from Georgetown.

Terms to Ponder

Daoism—

Daoism (also spelled Taoism) represents a vast array of thoughts and beliefs that are completely native to China.  On one end of the Daoist spectrum is philosophical Daoism, expressed in writings like the Dao De Jing and Zhuangzi.  On the other end of the spectrum are Chinese folk religions, with things like various gods and magic.  In between these two poles are multitudes of other elements, beliefs and practices including meditation, alchemy, feng shui, astrology, qigong, and many links to martial arts.  It is all “Daoism.”  At its purest, philosophical Daoism sees a world in which all living creatures should be in a state of harmony with the universe and allow themselves to be guided by the supreme force of nature, called The Dao.  Daoism is one of China’s five legal religions, and there are Daoist temples and monasteries scattered around the country.

Lists

Why Young Chinese are Not Having Babies

Recently China’s population declined for the first time…ever (?) which is the obvious result of sharply dropping rates of marriage and birth.  This set off discussion about what is termed “The Demographic Crisis.”  Some elements of this crisis are (1) birth decline accelerates an aging population and aging populations are more expensive and less productive, (2) labor shortages, and (3) slowing or shrinking economy.  The phrase in use is “China may get old before it gets rich.” The Chinese government is taking the issue seriously and has launched a variety of measures to encourage marriage and births, but most believe these will ultimately fail.  Some reasons:   

     

      • First, to be fair, this trend is in line with many other nations and cultures in the modern world.  China is not alone.  Next door neighbor South Korea has the world’s lowest birth rate. 

      • Life is hard in China.  Housing is expensive and cramped.  Useful things like cars, mobile phones, and computers eat up disposable income.  Wealth inequalities are wide.  Pollution weighs heavily on perceptions of health and quality of life.  

      • Taking care of children is a lot of work.  People already work long hours.  Everything takes a lot of time in China.  Urban Chinese spend a lot of time waiting in lines and traffic jams.

      • Rural Chinese feel discriminated against because of the Hukou system (note: covered in previous CPI newsletter).  They can’t imagine taking on any additional burden by choice. 

      • Social and cultural expectations make children very expensive.  Basic services (education, health care, etc) that should be high quality, convenient, and in theory low-cost or free, are not.      

      • Marriages and births are where generations intersect.  In China there is a wide divide between generations, lots of tension, and not many aids in navigating these relationships.  The thought of a dominating mother-in-law frightens many.    

      • There exists a great weight of no joy, no confidence, and no freedoms among the young in China.  COVID lockdowns were enforced by a sort of local, social vigilantes and made clear to young people just how little control they have over even their own lives, let alone new ones.  –And finally, 40 years of heavy-handed enforcement and propaganda of the one-child policy.  Extreme methods do not just fade (or reverse) instantly.  There are no longer any examples of large, joyous families in China.

    Unhelpful

    A headline from Global Times: “US’ military aid to Taiwan island further endangers peace in the straits; youth will become cannon fodder if DPP continues down wrong path: official” (July 30, 2023).

    “Cannon fodder” is a strong term, especially when speaking about some of your own young people.  While Global Times in China is described as a daily tabloid and is a bit like Fox News in the US, even more staid, official state publications such as the People’s Daily, China Daily, and even Xinhua News Agency use strong language that one would not see in respected, authentic, journalistic news sources in the West.  It is not uncommon to see words like “hysterical,” “ludicrous,” or “so-called” to describe things that irritate China.

    Glorious

    Hundred Schools of Thought—

    China may or may not be struggling with its economy.  The West may or may not be struggling with making democracy work.  Given all this angst, the entire world can take some comfort in the fact that China has been there before.  More than 2,000 years ago, China’s philosophers grappled with fundamental questions about the nature of persons and how to govern humanity.  The Hundred Schools of Thought period, which included Confucius, meandered along for about 400 years until the establishment of the Qin Dynasty put an end to discussion in 221 BC. 

    In some ways, the Hundred Schools was a nostalgic look back at better times during the peace and prosperity of the early Zhou and then asked the question, “how did we lose that?”  The view of Confucius, which would later become fundamental to Chinese thinking, was that (1) relationships bind society, (2) within each relationship there are obligations, and (3) if people simply fulfil these then there would again be peace and prosperity.  There were other views, hence the term “hundred.”  There was Mo Di (Mozi) who taught that if people properly balanced their love and care for others, it would all work out.  There was Han Fei (Han Feizi), representing the Legalists (a precursor to the authoritarian Qin Dynasty), who advocated strict rules and harsh punishments.   

    The point of the Hundred Schools is that there was desire for the best system, perhaps that is what was most glorious!     

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    CPI Newsletter 2023-7-30

    When Henry Kissinger met with President Xi Jinping in Beijing recently, Mr. Xi is quoted as saying “Looking ahead, China and the United States can help each other succeed and prosper together, and the key is to follow the three principles of mutual respect, peaceful coexistence and win-win cooperation.”

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