Signal: Xi’s Tough Summer – Germany’s Praktisch Foreign Policy – A Test of Meddle

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XI’S NO GOOD, VERY BAD SUMMER

Back in March, Xi Jinping was riding high. Wielding more power than any Chinese leader since Mao, he was feeling good about China’s handle on North Korea and ready to stand toe to toe with Donald Trump on trade. One long, hot summer later, and Xi faces a reality check, with growing pressures on three fronts:

First, there’s the US-China trade fight. On Thursday, the Trump administration plans to slap tariffs on $16 billion worth of Chinese goods, the latest twist in the trade spat between the world’s two biggest economies. Beijing has promised to respond in kind, but the weakness of its tit-for-tat approach is starting to show. China only imported about $130 billion worth of goods from the US last year, so it will struggle to match the US dollar for dollar if Trump follows through on a threat to impose tariffs on an additional $200 billion of its goods. A mid-level Chinese trade delegation due in Washington this week is unlikely to come away with a deal – Trump believes his confrontational strategy is working and is unlikely to back down. It’s clear that this conflict isn’t playing out as Xi had hoped.

The second problem is Xi’s emboldened domestic critics. This summer the Chinese leader faced unusually public grumbling about his leadership style, including concerns about the return of a Mao-like personality cult. Some critics also fear that Xi misstepped by openly stating the country’s ambitions for global leadership, inviting a backlash that could ultimately hurt China. 

Finally, there’s growing pushback against China’s aggressive plans for overseas investment, including Xi’s signature Belt and Road infrastructure initiative. During a state visit to Beijing this week, Malaysian Prime Minister Mahathir Mohammed said he would cancel over $20 billion of Chinese infrastructure deals struck by his predecessor amid fears they would saddle his country with too much debt. Belt and Road projects may also face fresh scrutiny in Pakistan, where borrowing to fund a massive Chinese road and rail buildout has contributed to the substantial economic woes facing newly installed Prime Minister Imran Khan.

None of this will threaten Xi’s grip on power, but his no good, very bad summer has exposed a gap between the Chinese leader’s seemingly all-powerful public persona and the messy reality of managing a would-be superpower. In a top-down system like China’s, a leader’s perceived weakness can make it easier for rivals to obstruct his plans or ignore orders that threaten their interests. Heading into the autumn, Xi needs some wins to shore up and justify all the power he’s taken so much time and trouble to amass.

GERMANY’S PRAKTISCH FOREIGN POLICY  

The Trump administration’s transactional, shoot-from-the-hip foreign policy has put many of America’s allies on edge and forced them to reconsider long-held assumptions about who they call friend and foe. In Europe, it’s encouraging Germany to diversify its foreign policy relationships and act more boldly on the global stage.

Consider the latest developments:

• Last weekend, Vladimir Putin arrived in Berlin for his first visit to Germany since Russia’s 2014 annexation of Crimea. Putin and Chancellor Merkel discussed Syria, Ukraine, and the controversial Nord Stream 2 gas pipeline.
• Turkey’s President Recep Tayyip Erdogan – who not long ago accusedthe German government of “Nazi practices” – has been invited for an official state visit in the fall. Merkel has expressed an eagerness to help Turkey, which is highly reliant on Germany economically, as it contends with mounting domestic economic trouble.
• Berlin has also been actively making overtures to Beijing in an effort to shore up the support of its largest trading partner.

But this pragmatic approach to foreign policy has its limits. Berlin’s new single-issue “friends” – Russia on energy, Turkey as a hub for Syrian migrants, China with its massive domestic market – are hardly a substitute for a wayward United States. Germany wants to become less reliant on Russian gas, not more. And while Merkel favors continued trade with China, her government has also enacted restrictions on foreign investment aimed at addressing concerns about China’s growing influence over German businesses. Who knows how long Erdogan will play nice.

For countries in a deeply interconnected world, it’s always good to have a wide assortment of friends. But relationships sustained by interests as opposed to values can fall apart quickly. Interests can change overnight; values tend to be more durable. So while Germany and others eagerly seek out new partners, they will struggle to permanently fill the void left by the US.

A message from Microsoft:

Protecting Democracy from Broadening Cyberthreats

It’s clear that democracies around the world are under attack. Foreign entities are launching cyber strikes to disrupt elections and sow discord. Unfortunately, the internet has become an avenue for some governments to steal and leak information, spread disinformation and probe – and potentially attempt to tamper with – voting systems. We saw this during the United States general election in 2016 and last May during the French presidential election. Just last week, Microsoft’s Digital Crimes Unit successfully executed a court order to disrupt and transfer control of six internet domains created by a group widely associated with the Russian government.

We’re concerned that these and other attempts pose security threats to a broadening array of groups connected with both American political parties in the run-up to the 2018 elections. That’s why we’re expanding Microsoft’s Defending Democracy Program with a new initiative called Microsoft AccountGuard. Read more at → Microsoft on the Issues

THE WORLD IN 60 SECONDS

US-Turkey relations, Korean family reunions, and Greece completes its emergency bailout. Lots of good news stories in the World in 60 Seconds this week. Let’s get to it!

A TEST OF MEDDLE 

Fake news and election interference crashed back into the headlines this week. Early on Tuesday, Microsoft said it had found fake websites and other evidence suggesting that Russian hackers are expanding their list of potential political targets ahead of the 2018 US midterms. Later, Facebook revealed details of a suspected Iranian influence operation targeting people in the US, UK, Latin America, and Middle East. The social network also said it had removed hundreds of accounts linked to apparent Iranian and Russian misinformation efforts – showing that the private sector is casting a wide net in its search for potentially malicious activity.

We can expect more of this kind of thing as we head towards November. Unlike two years ago, when Russia’s attempts to swing the election through disinformation and hacking went unchallenged until it was too late, today the US government and private sector tech companies are on high alert, scanning the horizon for signs of underhanded foreign influence. With the US also signaling a more aggressive stance on broader cyber policy, this raises an important question: where do governments draw the line between mere “meddling” and “interference” that demands a response?

Way back in February, fellow Signalista Alex Kilment described three broad approaches to election interference: hacking the vote, by directly targeting voting machines and tallies; hacking the voters, by spreading false or inflammatory information to influence their choices on election day; or hacking democracy itself by raising doubts about the legitimacy of the entire process.

These are very different things, yet they tend to get lumped together in discussions about how to avoid a repeat of 2016. All three represent big problems for democracies around the world, but grappling effectively with the threat – and avoiding an over-reaction – may require distinguishing more carefully between them.*

* Disclosure: Microsoft is a sponsor of GZERO Media.

HARD NUMBERS

4 million: The total number of Venezuelans displaced by the country’s ongoing political and economic crisis may have already reached 4 million, according to The Economist. At the current rate, the exodus could surpass the 6 million who fled Syria during the entirety of its civil war.

71: Despite substantial evidence to the contrary, 71 percent of Russians don’t believe their government tried to influence the 2016 US presidential election, according to a new Pew Research Center survey. That’s a testament to the effectiveness of Vladimir Putin’s propaganda machine. 

60: While the global price of oil has increased by about 6 percent this year, the price tag for Turkey has risen by more than 60 percent because of the large depreciation in its currency. That adds insult to injury for a beleaguered economy that imports roughly 75 percent of its energy.

15: With around 15 percent of its imports coming from neighboring Iran, Iraq has started to feel the knock-on effect of America’s push to reimpose tough economic sanctions on Tehran. In an important turnaround, the government of Iraqi Prime Minister Haider al-Abadi signaled this week that it might ask the US for sanctions exemptions to help stem the pain.

5: Residents of Beijing can breathe easy—as the central government makes a push for clean energy, five of the seven months with the lowest air pollution in the capital city have been recorded since the beginning of last summer, according to data gathered by the US Embassy in Beijing.

This edition of Signal was written by Kevin Allison (@KevinAllison) and prepared with editorial support from Alex Kliment (@SaoSasha) and Gabe Lipton (@gflipton). Spiritual counsel from Willis Sparks.