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.
Weaning China off dependence on foreign knowledge is a long-standing goal of China’s leadership, embodied in successive policies to promote technology transfer, research output and patent filings. China’s president Xi Jinping recently declared that “the situation of our nation being under others' control in core technologies of key fields has not changed fundamentally, and the country's S&T foundation remains weak.”
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.”
We’ve tended to view Chinese policy and politics through the prism of guanxi (connections) and factions—somewhat specialized “China” categories that help us make sense of the black box of Chinese leadership politics. But are we relying too heavily on terms like “guanxi” and “factions,” preventing us from thinking about Chinese politics in a more cross-cutting, relevant way?
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.
A wave of investment from China is breaking across Europe. Chinese takeovers of technological leaders have raised fears of a sell-out of our economies’ competitive advantage. In Germany, the Chinese Midea group’s offer to buy a controlling stake in the Bavarian robotics manufacturer Kuka has triggered fierce resistance.
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.
In March 2016 China’s leadership set the goal to abolish poverty by 2020. This is an ambitious benchmark, considering that 56 million people still live below the domestic poverty line. In times of slowing economic growth it will be difficult for Beijing to keep its promise. The lagging progress in economic restructuring and a tense labour market even raise the risk that millions could fall back into poverty after having climbed out of it.