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Even under a more critical government in Islamabad, the China-Pakistan Economic Corridor is unlikely to be derailed. The stakes for both sides are too high. Pakistan needs Chinese funding for its economic revival, and a healthy Pakistani economy is in China’s regional security interest.

MERICS Guest Author Genia Kostka

Educated and wealthy urban Chinese have an overwhelmingly positive view of commercial and government-run systems that rate the “trustworthiness” of citizens, businesses and social organizations. Rather than perceiving them as instruments of surveillance, they see them as a way to protect consumers from food scandals or financial fraud – and to access benefits connected to a high social credit score.

Interview with Frank N. Pieke

For years, many China observers believed that the Chinese Communist Party (CCP) would eventually crumble under the contradictions between a Leninist political system and a dynamic society. “But we were all proved wrong,” says Frank N. Pieke, the new head of MERICS. The CCP is more modern, more powerful and confident than ever, he says. Yet, Xi Jinping, who likes to present himself as an all-powerful state and party leader, might find it more difficult than expected to secure a third term.

Beijing will use the China-Africa Cooperation Forum to present China as a global power. US disengagement from and European disunity and indecision towards Africa help Beijing’s self-promotion as a reliable partner for African countries. For Europe, China can be a partner or competitor in Africa, depending on the issue.  

China will have to sacrifice a portion of its growth if it wants to reduce its dangerous debt burden. Reducing credit growth will almost inevitably lead to an even higher reduction in GDP growth. This is a price the Chinese government is not yet prepared to pay, but it could be forced to act in the medium term if it wants to avoid a financial crisis.

Frank N. Pieke plans to build on MERICS' successful first five years as the institute's new director and CEO. The former head of the Leiden Asia Center and the Oxford China Center sees the Communist Party's transformation as the key to understanding China's global rise. At the helm of MERICS, Pieke and his deputy Mikko Huotari want to facilitate more coordinated information-sharing on China in Europe.

Interview with Rogier Creemers (via Young China Watchers)

The aim of China's social credit system, as Rogier Creemers of Leiden University sees it, is "to ensure that people who behave in a sincere and trustworthy way in society are incentivized to do so." In this interview, the postdoctoral scholar in the Law and Governance of China describes the current state of the social credit system and its intended uses for government oversight and moral education.

China used to be a strong proponent of a stable and unified Europe – as a market and as a pillar in a multipolar world. Yet its recent infrastructure foreign policy initiatives and political outreach to central and eastern European countries have raised the question if Beijing’s priorities have changed. This article is the sixth and final part of a MERICS blog series on China’s new foreign policy setup. 

The emphasis on regional expertise is a major asset of China’s diplomatic corps. Chinese diplomats frequently rotate within a geographic region. China’s top ambassadors, however, are often left in their positions for a long time. The preference for seniority and the lack of qualified potential successors could weaken the overall effectiveness of China’s diplomatic outreach. This article is part 5 of a MERICS blog series on China’s new foreign policy setup.

China’s foreign affairs expenditures may pale in comparison to the United States or Germany, but they grew at an unprecedented speed over the past 15 years. Even in the face of slower GDP growth and rising domestic obligations, China is likely to further scale up its spending to secure its influence in an increasingly multipolar world. This article is part 4 of a MERICS blog series on China’s new foreign policy setup.

China’s new development agency is designed to coordinate aid and prioritize strategic foreign policy goals over short time commercial interests. At the same time, the new agency institutionalizes a mercantilist model of development typified by the Belt and Road Initiative. This article is part 3 of a MERICS blog series on China’s new foreign policy setup. 

Xi Jinping has a global vision for China and has centralized foreign policy around himself and the CCP. In this blog series, MERICS researchers take a closer look at the (new) setup of China’s foreign policy leadership, institutions, budget and personnel – as well as on its policy approach to Europe. This article is part 1 of the series.

The establishment of the Central Foreign Affairs Commission appears to strengthen the role of the CCP in China’s foreign policymaking. The new body will likely have a higher standing than the former Leading Small Group on Foreign Affairs and further sideline the government agencies in charge of foreign policy. This article is part 2 of a MERICS blog series on China’s new foreign policy setup. Read part 1 here.

The “Made in China 2025” strategy is supposed to align the global ambitions of the government and Chinese state-owned and private companies. If innovation is driven by strategic national targets rather than by profit expectations, it represents an export of China’s state-led economic system and a challenge to the affected industries and economies of industrialized countries. 

Aymeric Mariette

Hong Kong and Singapore are the models for China's planned Free Trade Ports in Hainan and Shenzhen. But if the Pilot Free Trade Zones launched over the past few years are any indication, the new ports are unlikely to provide genuine economic freedom with free capital flows and legal certainty.

The reality of Beijing’s investment in Central and Eastern European countries falls short of the rhetoric at the 16+1 summits. Numbers on Chinese investment connected to the Belt and Road Initiative tend to be inflated and misleading. Only a fraction of the reported sums is connected to actual infrastructure projects on the ground. And most of the projects that are underway are financed by Chinese loans, exposing debt-ridden governments to additional risks.

Interview with Martha Bayles

For Hollywood China is a huge market it cannot afford to ignore. But closer co-operation with the Chinese movie industry has not always gone well: Expensive co-productions like “The Great Wall” flopped at box offices worldwide in 2016. Yet Hollywood is still keen on China and willing to go a long way to please Chinese censors by tweaking scripts or replacing Chinese villains with baddies from North Korea. “Hollywood is compromising freedom of expression to stay in China,” warns film critic and Boston College lecturer Martha Bayles.

Caroline Meinhardt, Michael Laha, Rebecca Arcesati, Václav Kopecký 

Europe’s cautious approach to developing emerging technologies is hampering its global competitiveness. The European Commission’s AI strategy falls far behind China’s ambitious blueprint in several key aspects, including funding, sector-specific policies, startup incentives, and talent attraction. This article is part 2 of a mini-series to present the outcomes of the MERICS European China Talent Program 2018.

Viking Bohman, Jacob Mardell and Tatjana Romig

The Belt and Road Initiative (BRI) promises to advance global development but also carries daunting risks. If left unchecked, the project could both challenge EU cohesion and undermine European standards. The EU needs the institutional capacity to assess these risks and a coherent narrative to compete with China's. This article is part 1 of a mini-series to present the outcomes of the MERICS European China Talent Program 2018.

Frances Kitt

As political elites In Berlin and Canberra have woken up to the challenge of Chinese Communist Party (CCP) influence, they should work together to address it. The next edition of the biannual meeting of their foreign and defence ministers later this year should put the issue of CCP influence on top of the agenda.

Interview with: Fu King-wa

Internet censorship in China has evolved from just blocking websites into an elaborate system of information control, says Fu King-wa, Associate Professor at the Journalism and Media Studies Centre of the University of Hong Kong. Fu has developed projects that track what has been deleted on the Chinese web. His assessment of the current situation is bleak: The space for public expression is depressingly small, he says. Yet the #MeToo debate in China also demonstrates that that not all discussion can be suppressed – even in China. 

Interview with Didi Kirsten Tatlow

Chinese schools are notorious for their rote learning and endless tests and exams. But the Chinese government wants to change that – at least, the authorities want to introduce more creativity into the classrooms. That’s no easy undertaking, says MERICS Visiting Academic Fellow Didi Kirsten Tatlow. For children to become truly creative adults, Tatlow argues, they need time to play and the freedom to think their own way.

Chinese citizens are increasingly concerned about invasive data collection practices of private companies such as Alibaba's Ant Financial. But those hoping that state regulators will rein in these practices should not forget that the government relies on the tech giants to build its social credit system with the goal to monitor and restrict citizens’ behavior.

There are many indications that China could suffer a second round of capital flight. Interest rates in Western economies are up, and Chinese savers don't have access to favorable rates at home. Fears of tax increases or currency devaluation are other factors that might drive wealthy Chinese to try to move their capital abroad and circumvent the government's strict capital controls.

At a time of rising protectionism, China is sending a signal of liberalization by lowering its import tariffs on cars. The unilateral move is only a first step if China wants to prove its commitment to the multilateral trading system. Sacrificing outdated protections can also help China’s transition towards a higher value-added economy.