What to expect of Xi Jinping?

Most likely, so much China expertise has never been assembled in the EU Parliament in Brussels before. Sinologists, economists, political scientists, diplomats, journalists, parliamentarians, and civil society experts from various European countries, the US, Australia, and India, met in the spacious auditorium of the Green-EFA for an international conference on the topic?“Xi Jinping’s China: What should we expect?”

Bringing together an impressive lineup of China experts

MEP Reinhard Bütikofer and his team brought together an impressive lineup of keynote speakers and panelists, including Fran?ois Godement ( Institut Montaigne ), Ambassador Michael Clauss (German Permanent Representative to the EU), David Shambaugh (George Washington U), Lucy Hornby (@far eastern Harvard), Johnny Erling ( Mercator Institute for China Studies (MERICS) ), Janka Oertel (ECFR), Richard McGregor ( Lowy Institute ), Alicia García-Herrero (Bruegel), and Jude Blanchette ( Center for Strategic and International Studies (CSIS) ).

The one-day symposium covered two keynote speeches and three panels on the results of Xi Jinping’s decade in power, China’s socioeconomic development, and its foreign policy on the global stage.

The core questions were:?What challenges does Xi Jinping’s China represent for Western values? How can Europe improve its coordination to meet these challenges? Can Europe continue to deal with non-liberal economic partners, or should it concentrate on like-minded partners?

In the following, I collected some key takeaways from the over seven hours of intensive discussions:

Panel 1: China and the CCP after a decade under Xi Jinping

Characterization of Xi Jinping

• Position 1: Kevin Rudd: Xi Jinping is an “ideologue in chief, much less focussed on the economy but on the supremacy of party rule
• Position 2: Henry Kissinger: Xi aims for centralized power, not neo-Marxism
• Xi as “Chairman of Everything” wants to control all aspects of Chinese society (ethnic groups, business circles, youth, etc.)?
• “Securitization of everything” as a means to exert control inside and beyond China’s borders
• Xi seems to follow a zero-sum logic and therefore supports a hegemonic approach.
• Xi as “control freak”: insistence on Zero-Covid, Closing China’s doors.
• The personality cult with Xi as the "core leader" will culminate in the title "Great helmsman" as Mao’s heir.
• Xi is an insecure leader obsessed with the decline of the Soviet Union and therefore reasserted CPC control permeating all walks of life.
• The retrogression to a repressive Orwellian System (civil society clamp down, xenophobia) may solve short-term problems of the CPC, but might weaken the party in the long run when there is no inner-party life, and it is run like a military machine.
• Xi’s speeches from 2013 onward already show a worry that the party is not “too big to fail” and needs regime stability.
• Xi took over roles in all leading groups and formed new commissions to have the party dominate state institutions?in?a role back of the leadership norms installed by Deng Xiaoping

Successes?

• Performance criteria seen from inside: stop capitalists at home, foster industrial upgrading, promote global influence, and reassert party control?were all delivered.?
• While under Deng the economy was in command, since 2012, politics again rule.?
• Xi?reigned in rampant capitalists and party corruption.

Failures

• The pandemic outbreak was botched, and the rigid Zero Covid focus scared away investors and undermined domestic confidence.
• A shift to a consumer-driven economy failed, and the economy is slowing down.
• Massive loss of prestige in the developed world, with ?“partner, competitor and systemic rival” (2019) now consensus.
• The leadership?succession issue is still open and a lifetime appointment is possible.
• Xi seems afraid of young people in China, foreign influences, private business, and “centrifugal forces”.
• The continued confrontation with the US is counterproductive to China‘s image.?

Goals

• China wants to be acknowledged as the only other Super Power next to the US.
• The Shanghai Security Organization (SCO) advertises itself as an alternative platform for disenfranchised countries, that reject the Western imposition of their values and merely aim for their respective national interests. It is a new form of multilateralism!

Panel 2: Trajectory of China's socioeconomic development

China’s economy and society

• China now has a “smart totalitarian” system.
• The?WTO accession in 2001 was not the beginning of a convergence process but the maximum of China’s concessions to the established order.
• Decoupling is a very difficult process but was started from the Chinese side, decoupling from G7, not the Global South.
• Challenge for Europe: China calls defensive measures that reciprocate her own actions “protectionism”.
• China’s economic decline started before Xi but was accelerated: demographic issues, the decline in productivity, massive investment with low returns, etc.
• China aims for strategic dependence embedded in its exports, for instance in solar and wind power, battery tech, etc.?
• China’s youth comprises three groups: urbanites used to affluence, aspiring migrants, and poor rural people with no prospects. The urbanites only want one child, support environmental positions, are not impressed by the West, reject unfair criticism of China and want respect for their country. The expectations of the urbanite group are very hard to meet for the party without strong enough economic development.

Trajectory

• Collective leadership has been supplanted by one-man rule, meritocracy by loyalty, the private sector by the state sector, wealth orientation by “common prosperity”, globalization by technological independence, and coexistence with the West by confrontation with it.
• China today is a “slow China”, a "China under stress”, but Europe should not be arrogant, since the Chinese system may outperform Western pessimism.
• Since 2018, Western CEO’s perception of China changed to more negative with complaints even brought forward with Premier Li Keqiang present.
• "Wulf warrior diplomacy" was very counterproductive.
• China aims for strategic dependence embedded in its exports, for instance in solar and wind power, battery tech, etc.?
• China maintains a strategy of bottlenecks to control resources in the Global South.

Lessons for Europe

• Recommendation: Europe should not worry about the Chinese market, but the role of China in its domestic market and in third markets!?
• Recommendation: European companies, while still making money in China, should prepare for a scenario of overnight decoupling (i.e. military action over Taiwan).
• A Block-logic re-emerged in Beijing, but China is still very interested in Germany.
• The indecision of Germany in its relationship with China is criticized by some Western partners (“indecisive Germany the best pray”)??
• The lack of a "level playing field" in China prompted Europe to react with a comprehensive toolset: International Procurement Instrument (IPI), Anti-Coercion Instrument, Due Diligence Directive (DDD), European Chips Act, European Resources Act, European Sovereignty Act. All these tools do not mention China but are connected to this country.
• Recommendation: Bring your own house in order!

Panel 3: China's foreign policy moving towards global center?stage?

Ukraine-War

• Position 1: Beijing adopts Moscow talking points as proof that China fully endorses Putin’s war, therefor China needs to be seen as part of Team Russia. Recommendation: Apply more pressure on Beijing to distance herself from warmongering Russia!
• Position 2: China did not choose sides, but is merely Moscow-leaning. China aims for a middle position since it very much needs Ukraine (i.e. for its superior military engineers who very invaluable for its aircraft carrier program) and does want to avoid the full wrath of Western sanctions since China is much more integrated with global trade than Russia. Recommendation: ?Do not push Beijing further towards Moscow!
• Recommendation: China’s red lines (i.e. diplomatic recognition of a potential independent Taiwan) are not to be overstepped.
• China aims to bring wedges between US, Europe, Japan and Oceania, but its support for Russia undermined this effort.

Taiwan-Issue

• Geostrategic competition between US and China: Escalation from trade, to tech to potentially military confrontation as a great danger.
• Xi has already decided to reunite.?There is a growing danger of misjudgment if the Chinese side believes its own propaganda of a Western decline.
• There is no immediate radical change likely!
• Taiwan is at the center of the US-Chinese relationship.
• China's predictable reaction to the Pelosi visit gave the US a chance to study the deployment of Chinese forces in detail.
• Recommendation: EU (Taiwan) and China (Russia/Ukraine) should both be mediators in the current and potential conflicts.

Global South

• China is isolated in the developed world but looks for support in the Global South (like at the Bandung Conference in 1955).
• The Global Development Initiative (GDI) and Global Security Initiative (GSI) are promoted by China as “genuine productive contributions” aimed at the Global South not the G7. Policy recommendation: These initiatives are vague, but should not be underestimated.
• The military build-up in the South-China Sea (Nine Dash Line), East-Chinese Sea (Senkaku/Diaoyu), and Himalayan borders (clashes with India, Butan) worry China’s regional neighbors.
• Establishing marine bases or potential dual-use harbors in the Indic ocean (Djibouti, Sri Lanka, Pakistan) may directly affect Europe’s main trade routes.
• India joined the "Quad" after a series of border clashes the last in 2020 including fatalities. India-China relations changed from “competitive engagement” to “armed coexistence”.
• The SCO is not a non-Western, but anti-Western platform and India joined to counter China's influence in this group.
• Recommendation: The EU should engage the Indo-Pacific region through the Global Gateway.?
• Recommendation: The EU and US should not only react to China’s moves but act independently in the region.
• Recommendation: The US needs a grand strategy, and the EU needs more leadership.

Future Relationship with Europe

• Recommendation: In competition with China’s BRI, Europe has to actively promote the Global Gateway!
• Germany can shape China’s view of Europe. Recommendation: Focus on supply-chain resilience and diversification!
• But there is still a consensus of denial in business circles and a lack of planning steps.
• Points of contention with the West: China’s rejection of the Western rule-based system Recommendation: This system needs to be recreated, and cannot merely be maintained!
• Recommendation: Europe needs to be SMART (sustainable, multilateral, alliance-oriented, rule-based and tactical thinking).
• Recommendation: Europe has to bring its house in order
• China is still a partner and competitor, not only a rival!

You can watch a full recording of this highly interesting conference here:

#xijingping #geopolitics #engagement #diversification #supplychainresilience #decoupling. #China