With little room for tightening, Beijing lacks good options to prevent a return of capital flight. China cannot afford to match the US policy changes as lower tax rates and higher interest rates would further drive up budget deficits and debt.
Helping ensure the survival of the Iran nuclear deal presents China with the opportunity to raise its profile in international affairs and to set the tone in the nuclear non-proliferation debate.
China is undergoing an “imperial turn” – domestically as well as in foreign politics. At home, Xi Jinping has reached the status of an “imperial chairman” at the apex of the CCP power pyramid. Internationally, China uses the space opened by the Trump administration to fill the void in effective global governance, but also to assert its dominance in East Asia and beyond.
China's holistic approach to state security does not differentiate between policies to respond to external versus internal threats. The CCP mobilizes the entire society - with a mix of persuasion and coercion - to preempt threats from both inside and outside China’s borders and from both inside and outside the CCP.
China works full steam on institutionalizing its cooperation with Eastern Europe, building the 16+1 initiative into a platform for its Belt and Road Initiative. The economic reality lags far behind the announcements, but the promise of Chinese investment and the symbolism of the high-level cooperation between China and Eastern Europe are turning into a stress test for EU cohesion.
The CCP reasserts its control over the private sector by extending its reach far inside foreign and Chinese companies. For foreign investors, such close and often involuntary cooperation with the party-state can bring lucrative opportunities but also lead to questionable business decisions.
China’s leader Xi Jinping rolled out the red carpet for the US President in Beijing. At the same time, he works on reducing the United States' influence in Asia on regional security, trade and economic cooperation, leaving Washington with fewer options to counter China's expansion.
Interview with Willy Lam
The 19th Congress of the Communist Party is an opportunity to take stock of five years of Xi Jinping rule. “Xi has benefitted tremendously from the world leadership vacuum left by US President Donald Trump”, says Willy Lam of the Chinese University of Hong Kong. But, he warns, China’s power projection won’t go very far unless Beijing addresses its “soft power deficit” and starts to respect international rules and laws.
The international community’s trade and financial sanctions against North Korea have few chances of improving the dismal historic record of such instruments. Chinese reluctance to enforce them and US reluctance to irritate China always leave a way out for Pyongyang.
(via The Diplomat)
Sigmar Gabriel’s demand that China follow a “One Europe” created an unusual analogy to the “One China” policy, which accepts China’s dictum that foreign nations should not entertain diplomatic relations with Taiwan. Beijing’s comments on European unity also show that it struggles to understand the European idea of subordinating sovereignty in certain areas to a community of nations.
China’s outbound M&A volume has contracted significantly since the beginning of the year. The Chinese government’s attempt to curtail acquisitions outside the core business areas of Chinese companies and the resulting breathing spell could have a favourable effect on M&A success probabilities.
Interview with Shen Dingli (via Young China Watchers)
As China positions itself as a major country, it is confronted with a host of global security issues. Young China Watchers discussed China's positions on these issues, from the South China Sea to North Korea as well as its relations with the United States, India and Africa, with Dr. Shen Dingli, Professor and Associate Dean at Fudan University’s Institute of International Studies.
North Korea’s triumph in the standoff with the United States may be short-lived. The strategic value of its nuclear deterrent is questionable, as it has profoundly alienated China, North Korea’s long-time ally. At the same time, the regime in Pyongyang continues to dig its own grave with its failed economic policies.
Fleur Huijskens, Richard Tucsanyi and Balazs Ujvari
EU member states can use the China-initiated organization to promote their standards for development financing and perhaps even to pursue geopolitical interests in Asia. This blogpost is a product of the MERICS European China Talent Program in April 2017.
Turkey’s flirt with the China-dominated Shanghai Cooperation Organization casts doubt on Ankara’s commitment to Euro-Atlantic integration. So far, Beijing has remained cautious, but it may decide that closer cooperation with Turkey is in its long-term interest. This is a joint blog post with the German Marshall Fund of the United States.
The expansion of the Shanghai Cooperation Organization aligns with Beijing’s geostrategic ambitions. Drawing India closer into China’s orbit serves as a check against US influence, while Pakistan’s inclusion could help fight security threats. China’s Belt and Road Initiative, which aims to connect Eurasia and South Asia, could also benefit from the new members.
The Trump administration is committing a grave mistake by using Taiwan and the South China Sea as bargaining chips to secure China’s help with North Korea. Trump’s transactional approach to security policy risks damaging Sino-US relations at a time of high strategic uncertainty.
The global fight against climate change will continue after the US withdrawal from the Paris Agreement. Participants at a MERICS conference agree that Germany and China can play a decisive role in keeping the topic on the G20 agenda.
France’s new president will need China’s cooperation on issues like climate change to balance the US and Russia. But while Macron might open up new channels for Sino-European cooperation, he could also push Europe towards a tougher stance on trade and security issues.
Their concern over an increasingly erratic US foreign policy is bringing the EU and China closer together. Yet last weeks’ EU-China Summit also illustrated that this partnership remains limited to selected issues.
Economic sanctions are the foreign policy instrument of choice against many of the world’s dictators. But the resilience of the Kim regime and China’s unwillingness to support a complete economic boycott have made them ineffective in North Korea.
China has invited international leaders to weigh in on shaping the future design of its Belt and Road Initiative at a summit in Beijing. European governments are curious to find out if China is truly willing to multilateralize and institutionalize its flagship foreign policy Project.
Charlotte Roehren (via The Diplomat)
With its growing international integration, China is becoming a major actor in global health issues. Beijing has valuable experience in fighting pandemics and in providing health and medical support to Africa. The G20 Summit in Hamburg will be an opportunity for China to step up its multilateral health engagement.
Washington and Beijing have to accept that there can be no more business as usual in dealing with the Kim regime. The two principal actors in this crisis have to work towards political change in North Korea through a new regional order in East Asia.
Punitive levies on Chinese imports would hurt American consumers and U.S. companies that are part of the global supply chain. At the same time, they would strengthen Beijing's resolve to speed up its quest for independence from foreign technology.