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China Update 18/2017

METRIX

 

29 tweets with reference to China were posted by Donald Trump since taking office as US President (by this newsletter’s deadline). In his latest remarks on Twitter he thanked China’s President Xi Jinping for an “incredible welcome ceremony.” Compared to his time as a candidate, Trump has become more sparing with his tweets on China. According to the Trump Twitter Archive, he posted more than 400 China-related tweets since 2011.  ​

TOPIC OF THE WEEK: TRUMP VISITS CHINA

A Chinese paramilitary policeman stands guard near Chinese and American national flags fluttering on a lamppost in front of the Great Hall of the People during the visit of U.S. President Donald Trump in Beijing. Source: Imagine China

China wows Trump with red carpet treatment

China rolled out the red carpet for US President Donald Trump. His visit on November 8 and 9, which was overshadowed by bilateral tensions over North Korea and trade, started on a glamorous note. Trump and his wife Melania joined Chinese President Xi Jinping and his wife Peng Liyuan for a tour of the Forbidden City with an ensuing dinner. He became the first foreign leader to dine inside the former imperial palace since 1949.

Beyond the symbolism, the trip is expected to yield few tangible results. Coming from Tokyo and Seoul, Trump tried to cajole Xi into putting more pressure on North Korea. Given China’s concern with this issue, Xi committed to working with the United States to fully implement UN sanctions and to reach peace on the peninsula. An agreement on concrete action remained elusive.

The picture is similarly mixed on the economic front. Both sides announced business deals amounting to 250 billion USD, among them Chinese investments in shale gas development in West Virginia and natural gas exploration in Alaska, as well as 37 billion USD for Boeing in unspecified commercial deals. Most of these deals, however, came in the form of non-binding agreements with little to no details, and it is unclear how many of them are just repackaged past deals. These deals still cannot reconcile the US business community, which is worried about losing out due to the Trump administration’s withdrawal from international trade deals, and which has a host of outstanding concerns in China, including free access to the market and cybersecurity.

China also does not seem willing to make structural changes to its own economic system that would improve access for foreign investors. China’s promises resembled those during Xi’s visit to Mar-a-Lago this April, when Xi agreed to a 100-day plan for assessing the bilateral trade relationship, which yielded few results. This time, Xi promised “healthy and balanced” economic and trade relations with the United States, adding that, “cooperation is the only right choice.”

Trump’s visit pits the leaders of the world’s two most powerful nations against each other, and many commentators had placed their bets on Xi to come out of the meeting as a winner. Xi consolidated his power at the 19th Party Congress and is riding a popularity wave in China. Trump, on the other hand, is battling domestic political issues and is looking to boost low public approval ratings.

It was the two leaders’ third private meeting after Xi’s visit to Trump’s Mar-a-Lago resort and their meeting on the sidelines of the G20 in July. On November 10, Trump will leave China for Vietnam, where he is expected to present his administration’s Asia strategy at the APEC summit in Da Nang. He will conclude his 11-day tour of Asia with a visit to the ASEAN summit in the Philippines.

MERICS analysis: Trump goes to China as a tourist while U.S. is sidelined in Asia, blogpost by Sabine Muscat​

CHINA AND THE WORLD

China and South Korea end stand-off over missile defense

Amid ongoing tensions over North Korea’s missile tests, China and South Korea have ended their year-long dispute over the stationing of the US missile defensive system THAAD in South Korea. Both sides’ foreign ministries declared that they wanted to return to “normal” diplomatic relations on October 31. South Korea’s president Moon Jae-in and China’s state and party leader Xi Jinping plan to meet on the sidelines of the APEC meeting this Friday (November 10) in Vietnam.

South Korean foreign minister Kang Kyung-wha told the South Korean parliament on November 6 that Seoul no longer planned to add further THAAD installations beyond the existing six launchers and one radar system. South Korea also assured China that it would not join a planned networked regional missile defense shield under US leadership.

The installation of the US Terminal High Altitude Area Defense system had angered China, as the system’s radar could reach deep into Chinese territory. South Korea’s decision to install it had triggered harsh economic retaliation against South Korean businesses in China and curbs of Chinese tourism to South Korea. 

The rapprochement shortly before US President Donald Trump’s visit to South Korea and China can be interpreted as a signal that China attempts to change the balance of power between China and the United States in the region by drawing its regional neighbors on its side.

POLITICS, SOCIETY AND MEDIA

CCP launches campaign to disseminate Xi Jinping ideology

The Central Committee of China’s Communist Party (CCP) has launched a high-level propaganda campaign to disseminate Xi Jinping’s ideology. The “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” had been enshrined in the Party constitution during the 19th Party Congress in October.

A “central publicity team” (中央宣讲团) composed of 36 high-ranking Party cadres will travel across the country to spread Xi’s vision for China’s future. The team includes three new Politburo members such as Chen Min’er, one of Xi’s closest allies.

The move is another indication of the power concentration around Xi, which is unprecedented in the reform era. The CCP propaganda apparatus is traditionally tasked with spreading the leadership’s main messages after the Party Congress. But the so-called “publicity teams” did not normally include members of the Politburo.

The focus on one outstanding leader in the propaganda effort is a break with the ideal of collective leadership promoted by Deng Xiaoping. The Central Committee decision of November 1 that launched the campaign refers to Xi as “The Leader” of the Party, who is “beloved by the whole country.” Within one week after the Party Congress, nearly 40 Chinese universities established research centers on Xi Jinping’s ideas.

China’s gender gap in politics and society is widening

The position of Chinese women has deteriorated in a number of important areas, including political empowerment. This is the result of the 2017 Global Gender Gap Report, released on November 2 by the World Economic Forum (WEF). The CCP’s 19th Congress in October was a powerful reminder of this trend. The number of women in the newly elected Central Committee dropped from 6.4 to 4.9 percent and the number of women in the Politburo dropped from 2 to 1. Only about a quarter of the Party Congress’ 2,300 delegates were female.

In the Global Gender Gap report, China slipped from place 99 to 100 among 144 surveyed countries from 2016 to 2017. In line with global developments, it is the first time the report observed a downward trend in China after a decade of improvements.

In line with its socialist heritage, China continues to do well in areas such as women’s access to education and participation in the workforce. But it scores below the global average in areas like political empowerment and general health.

Observers have noted a return to more traditional role models in Chinese families. A report earlier this year concluded that the introduction of the two-child policy last year has led to a widening gender gap in the percentage of the day spent doing unpaid housework.

The global outrage over the Harvey Weinstein scandal has also triggered a debate about widespread misogyny in Chinese society. A China Daily article that claimed that sexual harassment was a Western problem, was ridiculed and debunked within and outside Chinese film industry circles. China Daily eventually took down the article. Sexual harassment and discrimination is also an ongoing problem for female factory workers.

The Chinese government has promised to improve gender equality through means such as offering equal social security insurance for women and slightly increasing maternity leave days (from 90 to 98) or by offering micro credit for female start-up entrepreneurs.

ECONOMY, FINANCE AND TECHNOLOGY

Housing market slows down amid measures to curb speculation

Residential property transactions in Chinese cities have dropped to a record low as a result of government efforts to curb speculation. China’s total transaction floor space has fallen by 30.3 percent (from 65.13 to 45.42 million square meters) in September and October compared to the same period last year. The two months are traditionally the peak buying period. Top-tier cities like Beijing, Shanghai and Guangzhou all saw year-on-year declines by 40 percent. The total number of new home transactions in Beijing dropped by over 50 percent in October, to only 20,550.

The slowdown appears to be a direct result of government efforts to discourage speculative house purchases over the past two years. In his speech before the 19th Communist Party Congress, President Xi Jinping had said that houses should be “for living in, not for speculating.”

This October alone, 25 municipal governments around China issued a total of 34 property control policies. Authorities have also tightened regulations for consumer lending, for example by making it more difficult to cover down payments on property with new online loans.

The market correction is necessary to prevent a speculative bubble. But it does not solve the problem that Chinese middle-class families lack other investment vehicles to save for their children or for old age.

House prices, which grew at record speeds in 2016, continued to grow in 2017, but at lower levels. The house price to income ratio in major Chinese cities is a larger than in cities like London and New York.

China goes after fraud in e-commerce

China is targeting abuse and fraud in the e-commerce industry. The National People’s Congress (NPC) passed changes to a competition law, making it illegal to fake sales numbers and to artificially generate positive product reviews via so-called “click farms.” China’s legislative organ approved the changes in the Anti-Unfair Competition Law (中华人民共和国反不正当竞争法), which will enter into force on January 1.

The NPC is also working on China’s first E-Commerce Law (中华人民共和国电子商务法). A second draft, which was presented on October 31, aims to further strengthen consumer rights and stipulates that online vendors have to register their business and pay taxes.

China now has the world’s largest market for online trading. So far, growth in the sector has been largely unregulated. Many vendors sell fake products or advertise based on manipulated sales figures. Many also use paid reviewers to generate positive reviews, while deleting negative ones. China’s tech giant Alibaba highlighted this problem in 2016, when it sued the operator of the platform shatui.com in late 2016 for allegedly linking vendors with people willing to falsify purchases and write positive reviews to improve those vendors’ rankings on Alibaba.

THE EUROPEAN VIEW

Macedonian president criticizes EU for driving Eastern Europe into China’s arms

Macedonia’s president has warned the EU that its alleged failure to invest and build infrastructure in the Balkans was an invitation to China to fill the gap. “Now we arrive at the situation where we are using Chinese money and credits to build a European corridor transiting the territory of Macedonia. This is the paradox. This is what I mean when I talk about Europe is withdrawing. It’s like a call to China,” Gjorge Ivanov said in an interview with The Telegraph on November 4.

Ivanov’s remarks reflect the widespread frustration with the EU in Balkan states and Central and Eastern European countries. These countries increasingly place their hopes on China to compensate for the perceived lack of support from Brussels.

Macedonia is a member of the 16+1 cooperation framework between China and 16 Central and Eastern European countries. The country is located on the planned Balkan corridor of the Belt and Road Initiative (BRI), which would connect the Greek ports of Piraeus and Thessaloniki to the Hungarian capital Budapest via Macedonia and Serbia. At a BRI conference on October 6 in Ohrid, Macedonia, Ivanov emphasized his support for the initiative. According to Macedonia’s Ministry of Finance, China is investing 600 million EUR in railway projects in the country.

It is not entirely clear whether Ivanov’s remarks actually reflect a strategic reorientation towards China or if Macedonia is using this rhetoric as a bargaining chip to speed up accession talks with Brussels. The former Yugoslav Republic of Macedonia has been a candidate for accession to the EU since 2005. However, Greece has been blocking Macedonia’s accession talks to both the EU and NATO because of a dispute surrounding the country’s name, which might look like a territorial claim to Greece’s northern province, also named Macedonia. This has caused frustration in Macedonia, which feels left in a geopolitical limbo.

Nevertheless, Macedonia has not been cut off from European aid, and Ivanov might be trying to push for more. Despite the difficulties in starting accession talks, the EU has provided financial support to the country under the IPA Regional Development Program since 2007. For the period from 2014 to 2020, the EU is spending 664.2 million EUR for projects ranging from democracy and rule of law, to environment, agriculture, innovation, transport and social development.

Yet Macedonia’s unease with its geopolitical position should be a warning sign to Brussels, especially after other countries in the region have already shown their willingness to support China’s interests by preventing a common EU position on denouncing China’s human rights situation, or its aggressive posture in territorial disputes in the South China Sea.

MAD MERIX

The Chinese Dream – not only for the Chinese

In China, no one would normally blink an eye at a 21-year old man singing the praise of China’s state and party leader Xi Jinping on television, especially not around the time of the Communist Party Congress. That changes when the singer is not Chinese, but an American exchange student.

Dylan Walker’s televised rendition of the song “China Dream and My Dream,“ which had first been released in 2013 in honor of Xi’s plans for national revitalization, has gone viral on social media, and not just because of the singer’s perfect Mandarin. 

Netizens seemed unsure of what to think of the American. While negative comments cannot be found on heavily censored Chinese social media, opinions among the overseas Chinese Twitter community (the service is blocked inside China) were divided. 

Some were convinced that the young man’s beliefs are genuine. Others called him a “foreign 50 center,“ referring to the “50 cent army” of Internet commentators hired by the Chinese government to manipulate public opinion.

Walker has described himself as a dedicated China and CCP lover who joined the Communist Party USA after being inspired by the “Quotations of Chairman Mao.“  In an interview released by the CCP mouthpiece Global Times, Walker praised communism as “the ideal social and political system.“

Walker might want to consider extending his stay in this ideal system. For his instant fame in China did not go over so well in his home country, the United States.

The  Mercator Institute for China Studies (MERICS)is a Stiftung Mercatorinitiative. Established in 2013, MERICS is a Berlin-based institute for contemporary and practical research into China.

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