Politics

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Aug 2, 2018 Minxin Pei

КЛЕРМОНТ (КАЛИФОРНИЯ) – У политики есть скверная привычка удивлять нас, особенно в таких странах, как Китай, где прозрачности мало, а интриг много. Пять месяцев назад председатель Си Цзиньпин потряс своих соотечественников, отменив ограничения срока президентской власти и сигнализировав о намерении оставаться на своём посту всю жизнь. Впрочем, реальный сюрприз поджидал нас дальше.

Когда Си делал своё заявление, общепринято считалось, что его господство внутри китайского однопартийного государства фактически абсолютно, а значит, его власть ни при каких обстоятельствах не будет подвергаться нападкам. Но теперь у Си настало худшее лето с момента прихода к власти в ноябре 2012 года: непрерывный поток плохих новостей вызывает у многих китайцев, а особенно у китайской элиты, чувства разочарования, беспокойства, гнева, беспомощности и неудовлетворённости в отношении своего всё более могущественного лидера.

Последним в этой череде плохих новостей стало появившееся в конце июля известие о разоблачении государственными следователями фармацевтической компании, производившей не соответствующие стандартам вакцины от дифтерии, столбняка и коклюша, а также фальсифицировавшей информацию о своей вакцине от бешенства. Сотни тысяч китайских детей по всей стране были привиты дефектными вакцинами.

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0 Comments on this paragraph, 30 Comments on this article

Tim Morgan Aug 5, 2018

Perhaps the two biggest challenges facing China are not mentioned here.

The first is to sustain growth without further massive escalation in debt. Plans to rein-in debt growth have been an early victim of trade confrontation.

The second is to find enough energy to keep growth going at all.
- Jose Antonio Vanderhorst Silverio Aug 5, 2018
  
  Perhaps those two challenges and others black swans unknown today might get dissolved. The might as we become aware of the myopic over-expansion mindset of the industrial civilization under The Wealth of Nations that’s leading humanity into collapse. That’s mainly on tangible goods on a win-lose road map on its low growth saturated stage.
  
  Once we do that, we will be ready to become aware of a new effective mindset that a few leaders have been warning us for about five decades. That corresponds to what I coined as the Systemic Civilization under what I also coined as The Wealth of Globalization. That mindset will help emerge win-win or no deal opportunities on the entrepreneurial stage without roadmaps yet, whose growth stage is mainly on intangible goods that maybe will help us reverse the over-expansion and avoid collapse.
  
  For more, please continue on my August 4, 2018, comment to KIEN CHOONG that starts with “Please consider the partial Medium story "Might China’s 'new game plan' come first than the European Union or the USA?”
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Jerome Barry Aug 4, 2018

Emperor Xi is a rational and realistic gentleman. In poker terms, Emp. Xi knows the cards in his hand, as well as the cards in Mr. Trump's hand. What Emp. Xi does not know is the identity of the card to be dealt in November by the U.S. elections. If that reveals Trump's impeachment, Emp. Xi wins. If that reveals Trump's electoral strengthening, Emp. Xi will rationally, and quite realistically, fold, much to the eventual acclaim of all.

And, yes, the player must know when to hold, and when to fold.
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Michael Mason Aug 4, 2018

I sense a palpable discontent among the educated Chinese regarding the issues mentioned above by Mr. Pei. From the recent immunization scandal to the economy and housing prices, as well as the growing tensions over U.S./China trade policies there seems to be a very real disconnect between the optimism reflected by the CCP and the Chinese people. I agree with his thesis that President Xi is facing an avalanche of problems that will surely test his abilities as well as his mandate with the Chinese people. Solving (compromising with the U.S. on) the trade issues with the U.S. will be a major challenge for the Chinese because they've propped themselves up to be stronger than they really are, again restating the thoughts of Mr. Pei. It's no wonder so many wealthy Chinese are investing in overseas real estate and educating their children in Western universities. Many of them want out.
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williamrepke Aug 4, 2018

I heard a speech by a very famous religious leader back in 1977. He explained that the Satanic ideology of communism can only last 70 years. This was at the height of the cold war and the Soviet Union was a super power. It was impossible for me to imagine the demise of the Soviet Union in the next 10 years. Yet that is exactly what happened. China became communist in 1949. That means next year is the beginning of the end. China will be liberated. Thank God.
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j. von Hettlingen Aug 3, 2018

Minxin Pei maintains that President Xi Jinping may be facing the toughest summer of his tenure. Since assuming power in 2012, Xi has ushered in an era of assertiveness and authoritarianism. In October 2017 a proposal was made during the 19th Congress of the Communist Party to remove a clause in the constitution that limits the presidency to two terms, with Xi’s loyalists fostering a cult of personality around him.
No doubt this will allow Xi to pursue his “China Dream,” which is a "great rejuvenation of the Chinese nation." He cracks down on corruption and dissent to consolidate power, and seeks to enact economic reform to combat slowing growth, such as cutting down the bloated state-owned enterprises and reducing pollution etc. He also looks forward to reaping the fruits of his One Belt One Road trade project.
Earlier this year – given Xi’s new status as China’s most powerful leader since Mao Zedong – it was utterly unimaginable that his authority could “possibly come under attack.” Yet in recent months “a steady stream of bad news... has left many Chinese – and especially Chinese elites – feeling disappointed, anxious, angry, helpless, and dissatisfied with their increasingly powerful leader.”
Last week angry parents and activists gathered in Beijing to protest a recent scandal, after revelations that hundreds of thousands of children nationwide may have received defective vaccines under a state-sponsored vaccine programme. This rare display of public outrage in the tightly-policed capital is comprehensible, because most Chinese have only one child. The incident sparked one of China’s largest public outcries in years.
Over a decade the country has been facing a crisis of consumer confidence as scandals grew over the quality of many of its goods – “from tainted baby formula to the contamination of the blood-thinning drug heparin – with greedy businessmen and corrupt officials held to account.” This is hugely embarrassing, given Xi’s zealous effort to eradicate corruption and assert control.
On the economic front China faces a difficult dilemma — sacrifice some growth in the short term, or risk a debt-induced financial crisis further along. In June Beijing posted its first current account deficit since early 2010. Rising external liabilities – US interest rates –and a weaker trade environment will stem growth. Ehe renminbi has fallen sharply not only against the US dollar but also against the major currencies. While GDP growth is “ostensibly on track to meet the 6.5% target for 2018, the economy is showing signs of weakness” – economic activities are slowing.
The latest flare up in global trade tension has taken a toll on stock markets after Trump has threatened to step up his trade war with China. But Xi might not repeat the same mistake made in 2015 when he “ordered state-owned companies to buy shares to prop up the market.” The intervention did not work, “as soon as the forced purchases stopped, another market decline followed, this time against a background of depleted foreign-exchange reserves.”
The author says Trump is “likely to be the toughest challenge Xi has faced so far, for reasons that extend far beyond the economy.” Apart from the many grievances Trump harbours against Beijing, China has alienated the US in its territorial claims in the South China Sea. Despite Xi’s ambition to cement China’s position as America’s equal or more in the coming decades, the country “remains deeply dependent on US markets and technology.”
Although China had achieved phenomenal growth since Deng Xiaoping’s economic reform, the author claims “that progress would have been impossible – or, at least, much slower – were it not for China’s policy of maintaining a cooperative relationship with the US. Xi has upended that policy during his tenure,” due to his aggressive foreign policy, and his desire to change the current global governance system to accommodate China’s interests.
For the moment China seems “headed in the wrong direction. This is not lost on China’s elites, whose frustration is palpable – and rising.” Even if there are rumours of palace intrigue, a coup to overthrow Xi is unlikely, as he controls the security apparatus and the military. There are “no rivals with the courage or influence genuinely to challenge his authority.” But the longer the trade war rages on and the economy stalls, he will soon be a “giant with feet of clay.”
The author says, Xi finds himself in a dilemma, because the road ahead “remains treacherous.” If he sticks to the current course, it would be disastrous for the country. But he changed course, it could hurt his “repurtation” as it “would amount to an admission of flawed judgment – a problem for any leader, but especially for a strongman like Xi.” It remains to be seen how Xi is navigating through troubled waters ahead of him.
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Michael Public Aug 3, 2018

Are you saying the Great Leap Forward had no adverse effects in causing the famine? It was surely compounded by the things you mention but melting down your plowshares is a sure way to trigger disaster.
- Michael Public Aug 3, 2018
  
  Was meant as a question to Godfree Roberts post below.
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Kien Choong Aug 3, 2018

Hi, I wonder what "new game plan" Professor Pei thinks China ought to pursue.

It is one thing to criticise the current course (perhaps with good reason), another to propose a better course, preferably giving reasons why it will deliver better long-term outcomes.

Criticism is welcomed, especially when it is useful criticism! I hope to read a follow up piece from Professor Pei on China's "new game plan".
- Jose Antonio Vanderhorst Silverio Aug 3, 2018
  
  I am jumping to your proactive challenge. Can I give you a first draft outline of China's "new game plan."?
  
  But first a few preliminaries. Is it fair to say that China missed the opportunity to adopt a "new game plan" related to The Wealth of Nations? Was that the reason China became a late comer to the industrial civilization? After Identifying a Future Shock in what I learned from Peter Drucker had a 500 years old precedent, Alvin Toffler suggested that China needed tracks for the industrial civilization statu quo and for a new civilization. Toffler also foresaw that the left and right statu quo had the same architecture which I discovered was unsustainable would unite against the new civilization, as we are seen today in a highly interdependent world. Had the statu quo already over-expanded the industrial civilization when it allowed China access to the WTO? Are the mechanistic rules of economics that has many unsustainable “wicked” problems overdue for change to help enable the new civilization opportunities for the whole world?
  
  In my first comment, I addressed those two kinds of game plans which China was supposed to be playing. One old plan with the road map of the mechanistic industrial civilization which have been saturated for two or three decades and a new one without a road map to a new organismic civilization to be driven towards the "fact of life" of a new course that's the result of my self taught practice on the heuristic methodology of systems architecting. That methodology aims to discover not the parts of a mechanism, but the "bones" of an organism with fast social media feedback, that then enables its growth and development for decades or centuries to come.
  
  In what follows, the terms preceded by the pound sign are Twitter's hashtags that are "bones" of the emerging architecture that I have been coining as knowledge flows in my thought experiments. For example, the new civilization I coined as the #SystemicCivilization. The new course is for the democratic #BrightGlobalization north star narrative, which I thought was best for the European Union which is under the non democratic #DarkGlobalization narrative which is a degeneration of Margaret Thatcher's TINA (There Is No Alternative) to Neolberalism narrative, as a result of the #ComputingBigShift that replaces the 500 years old #PrintingBigShift.
  
  As you can see, I am providing useful criticism about the game plan of the "Belt and Road Initiative" which is of the old kind. Do you or anyone else see China is a better position that Europe or the USA as the Path Creator of the #SystemicCivilization?
  - Kien Choong Aug 3, 2018
    
    Hi, I found it hard to follow your argument, but thank you for your unique perspective. Perhaps one day I shall better understand your insights.
    - Jose Antonio Vanderhorst Silverio Aug 3, 2018
      
      You are most welcome! Thank you for asking a great question.
      
      Many of my recent thought experiment are available in my Medium blog at https://medium.com/@gmh_upsa for those who one to go beyond knowledge into creative ignorance. Next is what the header of the blog says:
      
      Hashtags on what I stand for: 1 “There is nothing so powerful as #TheWealthOfGlobalization whose time has come;” 2 #BrightGlobalization; 3 #SystemicCivilization
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- Michael Public Aug 3, 2018
  
  I think China's previous approach of progressing quietly and not provoking international conflict was the right one. Being heavy handed with foreigners about Taiwan, the islands, civil rights, intellectual property, access for foreign companies and trade has brought them here. Looking back at Ancient Rome, Nazi Germany or the USSR - no matter how powerful you are you cannot simultaneously fight the whole rest of the World and win. In the history of the World, the progress China has made since Mao is arguably the greatest - but rather than use it for tangible gain and build a middle class it seems bent on walking in the past footsteps of the USSR - chasing a dream of nationalistic pride that is ostensibly unreachable, and even if achieved, would not give what it really wants, or worst of all, lead to war.
  - Kien Choong Aug 3, 2018
    
    Hi, thank you for your perspective. I think you may have misread China's intentions. My own reading is that China has a developmental agenda, and the latest pronouncements by Xi Jinping (as best I understand them) is to move away from GDP growth per se, towards "better quality" growth, which I understand to mean: (i) inclusive growth (with less inequality over time), and (ii) sustainable growth (e.g., environmentally sustainable, socially sustainable, etc).
    
    China also imagines (rightly or wrongly) that other emerging and less developed countries could learn something from its developmental experience, and adapt those learnings to each of their local contexts. Whatever the merits of the Belt & Road Initiative, I understand it is widely accepted (e.g., by the World Bank and the IMF) that the emerging economies need more infrastructure investment.
    
    I don't see China as wanting to fight the West, which after all, has been (and is likely to remain) an important market for China. I understand that during the Great Financial Crisis of 2008-09, Russia's Putin had encouraged China to coordinate with Russia in selling US treasury bonds, which would have exacerbated the Great Recession. However, China chose to support the US government by continuing to buy US treasury bonds which the then Treasury Secretary (Paul Hankson) had lobbied China to do.
    
    China also worked with the Obama administration to address climate change, and unfortunately it is the US that has chosen to strike out on its own and pull out of the Paris Climate Accord.
    
    Finally, China's consistent view is that all military action ought to be authorised by the United Nations, and China has been a strong supporter of the UN peacekeeping force. The US on the other hand, has frequently taken military action unilaterally, without United Nations authority. In fact, the Western nations (US, UK and France) recently attacked Syria on the basis that punishing or deterring the use of chemical weapons. However, later investigation by the relevant UN agency found that there had been no credible evidence of the alleged chemical attack.
    - Jose Antonio Vanderhorst Silverio Aug 3, 2018
      
      Readings by Michael Public and yourself belong to the statu quo of the industrial civilization. One misreading difference between the two of you seems to be that Michael is biased on the assumption that the West is democratic. But, the perception to the people hard hit is that the win-lose independence mindset of the West statu quo has increasingly become less and less democratic than even China, which of course is hardly democratic.
      
      That’s not an attack to obsolete second wave institutions, like the IMF and the World Bank, as evidence of restructuring to protect unsustainable business models is available upon request. Hard everyday evidence on the ineffectiveness of the Paris Climate Accord is due to industrial civilization roapmaps, like that of the United Nations 2030 [un]sustainable development goals, based on Wicked problem solving consensus illusons, instead of enable the opportunities from institutional innovations that dissolve those Wicked problems.
      
      That means China’s development agenda under unsustainable institutions is at most about incremental innovation on the wrong roadmap infrastructure around mainly tangible goods (on the above mentioned business models), when developing countries need to leapfrog on the basis of win-win or no deal in(ter)dependence, after a new roadmaps emerge on the #SystemicCivilization around the internet infrastructure, mainly on intangible goods on radical business model ecosystems innovations.
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    - Michael Public Aug 3, 2018
      
      I don't disagree with anything you say but it all relates to facts about the past, and the position china finds itself in has everything to do with impressions created about the future. The west does not want to trade with a country that will grow into a rival akin to the USSR during the Cold War.
      - Kien Choong Aug 3, 2018
        
        Hi, I would argue it is a mistake to think of China as a rival. China is first and foremost a strategic partner, not a rival.
        
        There are 3 key challenges that humanity faces today: (i) climate change; (ii) fostering inclusive growth, both within countries and across countries; and (iii) overcoming the refugee crisis. All 3 challenges need cooperation between nations. And in fact, China has cooperated with the West on climate change. Further, trade between the West and China have undoubtedly led to global growth.
        
        Perhaps there are areas of rivalry between the West and China. Even so, it would be a mistake to focus only on the rivalry and lose sight of the partnership between China, the West and indeed between all nations of the world.
        
        If we continue on the path of cooperation, I am sure one day all countries of the world (including Africa) will be equally prosperous. I look forward to the day when each one of us, regardless of our national identities, are equally free to live lives and pursue goals that we each have reason to value.
        
        Jose Antonio Vanderhorst Silverio Aug 4, 2018
        
        Thank you for your patience. Let´s see if we can get on the same page without a face to face meeting. The way you framed the three challenges is not about humanity to be addressed with industrial civilization roadmaps. It is a hierarchy of developed, emerging, and developing.
        
        Hell is full of good intentions, means that good intentions are not enough. We need a new global order for an interdependent world.
        
        Lets take one example. Donald Trump left the Paris Climate Accord low carbon transition for the opposite reasons of what must be done, which is to lead to a near zero carbon transformation for society. It is about a transformation to a distributed "demand-side" platform electric power sector without a road map, as opposed to a transition, like that of the centralized Smart Grid (which I used to say the Smart Grid that’s being pushed).
        
        Can you confirm that “The Chinese government dominates smart grid development through centralized planning and a “supply-side policy” used to stimulate aggregate demand in the smart grid industry, and 11 state-owned power companies are viewed as allies in the execution of the smart grid policy for China and are responsible for smart grid…”?
        
        Kien Choong Aug 4, 2018
        
        Hi, I'm afraid this line of discussion is going beyond my area of competence.
        
        Perhaps we can just agree that good intentions are not a sufficient (but perhaps necessary?) condition for just outcomes in the world. I wish you well in your endeavour to make the world better and more just.
        
        Jose Antonio Vanderhorst Silverio Aug 4, 2018
        
        Please consider the partial Medium story "Might China’s 'new game plan' come first than the European Union or the USA? ( https://medium.com/@gmh_upsa/might-chinas-new-game-plan-come-first-than-the-european-union-or-the-usa-a1c3998eeca6 )," whose last paragraphs without access here of mentioned posts say:
        
        This part of the story ends as soon as I tweet to RSA and give thanks to Kien for his kind wish, while inviting people interested in the future of the whole of humanity to help emerge the narrative guided on the Bright Globalization North Star in Europe, USA or China, or anywhere else, like my country the Dominican Republic, which has available the thought leadership necessary to create the new roadmap on the microeconomic electricity sector since the end 2013, as can be seen in the following post.
        
        ...
        
        As can be seen in that post, I conjectured the emergence of the Systemic Civilization, which led, for example, to this other post that tell us we are also have available the thought leadership necessary to create the new roadmap on the macroeconomic side of the Systemic Civilization even before 2017.
        
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Jose Antonio Vanderhorst Silverio Aug 2, 2018

This is related to a service proposal to which I added a tweet today in my account @gmh_upsa that benefits from Minxin Pei’s assertion that “These developments point to a straightforward conclusion: China is headed in the wrong direction.”

The underlying idea of my proposal is that China is not alone. The European Union (and for that matter all members of the G7) is also headed in the wrong direction, as can be seen in the previous tweets of that tweets conversation whose last tweet articulated my interpretation of the differences between strategy of terrain and a strategy of trajectory. here we have a second look at the differences.

Still with emphasis on my services to help the European Union to change to a strategy of trajectory, to lead to the right direction of the Bright Globalization North Star, China was supposed to be following a two track strategy based on Alvin Toffler's Second and Third Waves. Second Wave strategy is one of terrain, but the Third Wave strategy is of trajectory. I propose that "the road ahead for Xi remains treacherous" because his "Belt and Road Initiative" is of terrain.
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Godfree Roberts Aug 2, 2018

China, clearly, is doomed and there's no better guide to its fall than the author, who has been predicting it for at least 15 years. But enough quibbling, let's look at the specific charges the underlie the alarming headline:

1. "President Xi Jinping jolted his countrymen by abolishing the presidential term limit and signaling his intention to serve for life"? Hardly. There were no term limits on his main offices–Party Secretary and Military Commission Chairman–and the presidential title was comparatively ceremonial.

2. "a steady stream of bad news that has left many Chinese – and especially Chinese elites – feeling disappointed, anxious, angry, helpless, and dissatisfied with their increasingly powerful leader. The latest piece of bad news, which broke late last month, was the discovery by government investigators that a pharmaceutical company had been producing substandard vaccines". It's good to hear that Chinese consumers are becoming as whiny as their American cousins. Substandard vaccine batches are common in developing countries and not unheard-of in advanced countries, either. They do no harm, but don't do as much good as they should.

3. It was not "the quasi-divine status attributed to Mao Zedong which, during the “Great Leap Forward” and “Cultural Revolution” resulted in millions of deaths and nearly destroyed the Chinese economy". It was the combination of an American grain embargo and a horrific El Nino event that even wiped out half of Canada's Prairie wheat crop. Excess deaths were confined to people over 60, at a time when life expectancy was 58. Of a total of less than 11 million deaths, all had grown up with a nutrition deficit and heavy disease burden, carryovers from the century of our looting and pillaging China. And, BTW, nothing destroyed the Chinese economy: Mao grew it twice as fast as America's (during the 'boom years') for 25 years, under a full embargo on finance, technology, grain and farm equipment–without incurring a penny of debt.

4. "today’s economic news in China is grim, beginning with a 14% decline in stock prices this year"? That's financial, not economic news, and the gyrations of the Chinese market have no bearing upon the economy. None. Nada. Zip.
- Walter Gingery Aug 4, 2018
  
  So, contrariwise, when stock prices RISE 14%, that, too, will have no bearing? Interesting.
  - Pengcheng Zhang Aug 4, 2018
    
    Historically speaking, stock prices in China are not a good indicator of its economic health. In the past, stock prices were heavily influenced by government policy and do not accurately reflect investor sentiments.
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