A spectre is haunting China. It is the spectre of, well, what exactly? A Leninist restauration? A Maoist revival? Participants at MERICS’ China Dispute on the “Xi Jinping challenge” offered multiple historic analogies, but all agreed with Roderick MacFarquhar’s summary that, with Xi as head of party and state: “This is a new ballgame.”
During its final hectic days, the British EU referendum debate has come to be dominated by party politics, public fears and soul-searching after the murder of Labour parliamentarian Jo Cox. As Britain is caught up in its domestic woes, interest in what the world thinks about the prospects of a Brexit has taken a back seat again.
The “middle income trap” has been a favorite buzzword in debates about China for some time now. In times of slower growth, the danger that China will fall into this trap seems more acute than ever before.
If higher wages lower the country’s competitiveness in exports of traditional unskilled labour-intensive manufacturing and if it does not move into higher value-added markets, it won’t be able to take the majority of its population beyond the “middle income threshold” of about 12,700 USD Gross National Income (GNI) per capita as defined by the World Bank.
2016 marks the beginning of a new era for prospective parents in China. For the first time in more than three decades, the government not only allows married couples to have more than one child, but it encourages them to do so. Local authorities have started offering prolonged parental leave and an expansion of childcare facilities, and the central government is reportedly debating tax incentives to help families bear the education costs for two children.
Over the past years, the European Union has been shaken by the Greek debt crisis, a massive influx of refugees, the rise of right-wing extremism, deadly terrorist attacks and just recently the Brexit vote in Great Britain. Researchers of Mercator Institute for China Studies (MERICS) analysed how these multiple crises are viewed in Chinese media.
European Commission president Jean-Claude Juncker has all but declared a trade war on China. “The EU will defend its steel industry,” he said after the EU-China summit in Beijing in mid-July 2016. “We will use all the means at our disposal.” China should stop dumping steel on European markets, he said, or else the EU would not grant China the status of a market economy under WTO rules, which Beijing hopes to secure this year.
China’s defiance of the arbitral award on the South China Sea presents a serious challenge not only to the United States and its Asian allies, but to the entire international community. The sweeping rejection of China’s claims by a tribunal at the Permanent Court of Arbitration in The Hague has increased the risk of an escalation of tensions in the contested region, especially if China chooses to reassert its own position on the ground.
There is no business as usual at today’s EU-China Summit in Beijing. The meeting is overshadowed by Beijing’s refusal to recognize the ruling of the international tribunal in The Hague that China does not have historic rights to justify its expansive claims to the South China Sea. The other elephant in the room is the UK’s vote to exit the EU. China’s leaders view the outcome of the British referendum as a sign of the EU’s dysfunction.