Newsletter 65 - April 24, 2021
Welcome to this week’s edition of Trade War, the 65th.
Xi Jinping scolds the U.S. and touts globalization at the Boao Forum while former premier Wen Jiabao gets censored for an essay about his mother.
Washington prepares to pass bills reining in China while Beijing is ready to appoint a skilled diplomat as its next ambassador to the U.S.
Meanwhile, as births and marriages fall, Chinese leaders push women to promote what Xi has called “the family virtues of the Chinese nation,” while social media sites censor feminists and encourage troll attacks.
Xi at Boao: decoupling bad; stop ‘bossing others around’
In a speech at the Boao Forum on Asia, the confab held annually on Hainan Island that is China’s answer to Davos, Xi Jinping called for “greater global economic integration and warned against decoupling while calling on the U.S. and its allies to avoid ‘bossing others around,’” reports Bloomberg News.
“International affairs should be conducted by way of negotiations and discussions, and the future destiny of the world should be decided by all countries,” Xi said without naming the U.S. “One or a few countries shouldn’t impose their rules on others, and the world shouldn’t be led on by the unilateralism of a few countries.” (full transcript of his speech from Xinhua here.)
In what appeared to be comments aimed directly at the U.S., Xi said “any effort to build barriers and decouple works against economic and market principles, and would only harm others without benefiting oneself.”
(Readers of Trade War may remember how, in a speech last May not intended for external consumption, Xi specifically called for China to strive to become a critical part of global supply chains, then consider “artificially cutting off supply to foreigners.”)
Usual suspects: Apple, Tesla, Blackstone and Bridgewater
Speaking via video link Xi addressed an audience attending what is China’s top official business forum that included more than 2,000 officials and business executives notable among them Apple’s Tim Cook, Tesla’s Elon Musk, Blackstone’s Stephen Schwarzman, and Bridgewater’s Ray Dalio, reports the South China Morning Post. You can watch the video of his speech here.
Former premier Wen gets censored in China
A column purportedly written by former premier Wen Jiabao and published in an obscure Macau publication appears to be a veiled criticism of China’s present day leaders and so has now been censored within China, reports Vice News.
The column, titled “My Mother,” describes Wen’s family’s experience “in China’s tumultuous years, including during the Sino-Japanese War and the Cultural Revolution, and looks back at his work as a Chinese leader.”
“The article makes a daring appeal for a more just China,” writes Vice News. “I sympathize with the poor and the weak, and I’m against bullying and oppression,” Wen writes. “China in my heart should be a country with fairness and justice. There will always be respect for people’s inner self, humanity, and the essence of people; and always have spirits of youthfulness, freedom, and fighting.”
“For many Chinese, including many officials, who harbor secret grudges or disagreement with Xi, this message will assure them that they potentially have high-level allies in the government,” University of California, San Diego China politics expert Victor Shih said to Vice News. “This is why the Chinese government ordered the censoring of this seemingly innocent letter.”
A very, ahem, acquisitive, family
“Now seems a good time to remind people that former Chinese premier Wen Jiabao was patriarch over a very, ahem, acquisitive, family. Even his mother was part of the financial empire,” tweets the New York Times’ Mike Forsythe, citing the classic investigative story by David Barboza.
Bipartisan bills aim at China
In an interview with Axios’ Bethany Allen-Ebrahimian, Senator Chris Coons (D-Del.) calls the Jan. 6 insurrection a “shock to the system,” which in part is driving U.S. Congressional members towards strengthening the country’s ability to compete with China.
“The harrowing experience of Jan. 6, the sharp divisions we saw in our election last year, and the rise of a more aggressive and assertive China and Russia, has really helped focus our country in the urgency in coming together and working to make a difference," Coons said.
There are now three bipartisan bills, all expected to pass, that aim at “targeting China's influence and strengthening America's response,” writes Allen-Ebrahimian.
Those include the Strategic Competition Act, which would “allocate hundreds of millions of dollars to a raft of new initiatives aimed at helping the U.S. succeed in long-term ideological, military, economic and technological competition with China,” the Endless Frontier Act, providing $100 billion for technology research towards U.S. innovation, and a reintroduced bill that would study American "overreliance on foreign countries and the impact of foreign direct investment on the U.S. pharmaceutical industry and DNA analysis industries.”
An adept Chinese diplomat for U.S. ambassador
Beijing will appoint Qin Gang, “an adept diplomat who has acted as President Xi Jinping’s chief protocol officer” to be ambassador to Washington, report the Wall Street Journal’s Lingling Wei and Bob Davis.
“By dispatching Mr. Qin to Washington, China’s leadership is indicating its desire to have a skillful diplomat to help restore regular, high-level meetings between the two sides.” the Journal reports.
55-year-old Qin Gang, who entered China’s foreign ministry in 1988, has served as everything from a junior aide, foreign ministry spokesman, to vice minister in charge of European affairs. He is believed to have a good relationship with Xi and in recent years has accompanied China’s leader on many overseas trips.
“A big challenge for Mr. Qin is to be able to represent Beijing’s stance but still build bridges with a Washington that is exhibiting rare unity across the two major parties in its hard-line stance toward China,” write Wei and Davis.
China’s digital currency a game-changer? Not so fast
As talk of China’s digital currency being a game-changer that will finally begin to unseat the dollar grows, Mark Sobel of the Official Monetary and Financial Institutions Forum, presents a persuasive counterargument.
“Those arguing for a surge in the digital renminbi’s global role seem to view digitalisation as a revolution in the international currency landscape. But large global trade and capital flows already predominantly take place in digital form. Digitalising a central bank currency is not a game changer,” Sobel writes.
“China’s financial system is extremely weak. Banks are stuffed with non-performing loans. Capital market development is in train but has a long way to go. The renminbi isn’t convertible and copious capital account restrictions limit openness,” he writes, adding, “the People’s Bank of China, despite an extremely talented staff, is not independent.”
Foxconn in Wisconsin no ‘8th wonder of the world'
Taiwan’s Foxconn has confirmed it is abandoning its once lofty plans for a massive manufacturing facility in Wisconsin reports Reuters.
The electronics manufacturer and Apple supplier is “drastically scaling back a planned $10 billion factory in Wisconsin, confirming its retreat from a project that former U.S. President Donald Trump once called “the eighth wonder of the world.””
When the Foxconn-Wisconsin deal was first announced in July 2017, Trump boasted that it was an example of “how his “America first” agenda could revive U.S. tech manufacturing,” reports the news service.
“Under a deal with the state of Wisconsin announced on Tuesday, Foxconn will reduce its planned investment to $672 million from $10 billion and cut the number of new jobs to 1,454 from 13,000,” Reuters reports.
Tricking rubes into vast subsidies
Here is an interesting tweet thread by author and journalist Cory Doctorow with lots of good links on the Foxconn investment fiasco touted by former Wisconsin governor Scott Walker and Trump.
“This was an obviously bad deal right from the start. For literally decades, Foxconn had been tricking rubes like Walker into handing over vast public subsidies for electronics plants that were then drastically scaled down, or canceled altogether,“ writes Doctorow.
Xi and ‘the family virtues of the Chinese nation’
Faced with declining birth and marriage rates and rising divorces, China’s leaders and in particular Xi Jinping, have started to encourage women to choose traditional family-maker roles, “messages that many women say are out of step with their thinking on when—or even whether—to marry,” report the Wall Street Journal’s Chao Deng and Liyan Qi.
"Mr. Xi has built Confucian values, including conservative views of women’s role in the family, into his China Dream of nationalist revival,” Lancaster University’s Derek Hird told the Journal. “If you’ve got these highly educated women who don’t want to get married, that then becomes part of the demographic worries and concerns that play into this larger discourse on family values.”
Society must “give full play to the unique role of women in promoting the family virtues of the Chinese nation,” Xi said, reports the business paper.
Online attacks on China’s feminists aided by media sites
Online attacks against Chinese feminists are growing even as social media sites like Weibo respond “by removing the women — not the abusers — from their platforms,” reports the New York Times’ Sui-Lee Wee.
“Several prominent Chinese feminists have had their accounts deleted from Weibo in the last two weeks following public complaints. According to the women, at least 15 accounts have been removed,” reports the New York Times. “The women say it is part of a growing online campaign to stamp out feminist voices in a country where the government controls the internet and social movements are swiftly cut down.”
“While online misogyny is common everywhere, in China, it is often abetted by the tech platforms,” writes Sui-Lee Wee in an accompanying tweet thread.
China’s vast reams of data
While the ongoing crackdown on technology companies in part is motivated by politics, possibly an even more important motivation is China’s desire to tap their information for economic growth, reports Bloomberg News.
“As President Xi Jinping targets China’s massive tech giants, the big question now is how he’ll get them to share key data as part of a sweeping plan to transform the world’s second-biggest economy,” the business paper writes.
“Beijing is pouring money into digital infrastructure, drafting new laws on data usage and building new data centers around the country with the goal of positioning China as a leader in transforming the world economy over the next few decades.”
“China’s digital economy grew much faster than national gross domestic product in 2019, underscoring its significance to future growth, according to the Chinese Academy of Information and Communications Technology,” reports Bloomberg.
“Market research firm IDC projected that China would hold around a third of the world’s data by 2025, or roughly 48.6 zettabytes -- about 60% more than the U.S., or equivalent to more than 10 trillion DVDs.”
Government isn’t nationalizing Alibaba…
While the dramatic change in fortune for Jack Ma is striking, China’s regulators are unlikely to take steps that could badly damage Alibaba’s business such as nationalizing the company, write the New York Times’ Raymond Zhong and Alexandra Stevenson.
“It is hard to imagine Western regulators bringing about a change in fortunes as significant as the one that has befallen Mr. Ma. Mr. Xi has asserted broad control over China’s private sector, demanding commitment to the party and to social stability above profits,” write Zhong and Stevenson. Still, “Alibaba and other internet titans have a status in China that could protect them from the most heavy-handed treatment. Officials have praised the titans’ economic contributions even as they tighten supervision.”
“His company is much more important to the success and functioning of the Chinese economy than any of the other entrepreneurs’, Richard McGregor, senior fellow at the Lowy Institute and author of “The Party: The Secret World of China’s Communist Rulers,” told the Times. “The government wants to continue to reap the benefits of his company — but on their terms. The government isn’t nationalizing Alibaba. It isn’t confiscating its assets. It’s simply narrowing the field in which it operates.”
How China and Russia ally in the global space competition is discussed in this video by the Financial Times James Kynge and Henry Foy.
Digging into what a post-Xi leadership might look like for China is the subject of this interesting report by CSIS’ Richard McGregor and Jude Blanchette.
Should the tense relationship between China and the U.S. be described as a new cold war asks the Atlantic Council’s Nonresident Senior Fellow Hung Tran.
Following the earlier report on Chinese overseas lending (mentioned in an earlier Trade War), Radio Free Europe interviews its author to better understand the world’s largest official creditor.
Book events, English and Chinese
Tune in next Thursday for my upcoming book talk on The Myth of Chinese Capitalism with University of Chicago’s Zhiguo He, hosted by the U.S. Heartland China Association. Details in this link.
And for Chinese speakers, Launch event in Taipei, Taiwan for the Chinese edition of my book 《低端中國：黨，土地，農民工，與即將到來的經濟危機》 on May 1st - int’l workers day, appropriately. Details below and in the link.
And the bears are back (not in the market sense)
With winter finally over, the bears are back, including some young ones.