1. The Party’s in charge, and nobody’s going to boss us around
The U.S. State Department’s 2010 Country Reports on Human Rights Practices seems to have been the inspiration for a page on Baidu’s online encyclopedia coining a new word: 人权教师爷 rénquán jiàoshīyé. Renquan means “human rights,” jiaoshi means “teacher,” and ye literally means “grandfather,” so the sense is that the U.S. is arrogantly and condescendingly “teaching” the rest of the world about human rights.
Jiaoshiye is not a common word: The reason I looked it up is because General Secretary Xí Jìnpíng 习近平 used it in his speech (in Chinese) today celebrating the 40th anniversary of the Third Plenary Session of the Eleventh Central Committee of the Communist Party. That was the meeting — according to the Party’s simplified narrative — that launched the reform and opening-up policy.
In the speech, Xi says, per the translation of the Associated Press and other media, “that no one can ‘dictate’ China’s economic development path.” The Chinese phrase is:
méiyǒu kěyǐ duì zhōngguó rénmín yízhǐqìshǐ de jiàoshī yé
“Nobody can be the teacher master of the Chinese people.” Although the U.S. is not explicitly mentioned even once, the word jiaoshiye sends a very clear message to a domestic audience: Xi is going to stand up for China against America.
But that was not the focus of the speech — Chris Buckley and Steven Lee Myers of the New York Times characterized it as “an unabashed defense of his policies” in this story titled China’s leader says Party must control ‘all tasks,’ and Asian markets slump.
- “Some analysts and investors” had hoped that Xi would indicate “clearer priorities to counter economic headwinds and trade tensions that have flared with the United States,” says the Times, but they were disappointed: “Instead, he used the meeting, broadcast live on Chinese television, to stress that only the party’s dominance would allow China to continue its stunning transformation into the decades ahead.”
- That the Party is large and in charge is the only clear message running throughout the speech. Aside from that, Xi made many “rhetorical swerves,” such as “promising both greater openness and assertiveness, both strong state companies and prospering private businesses.”
- Stock markets dropped in Asia “even as Mr. Xi spoke,” says the Times, and the speech is likely to dampen investors’ hopes for trade tensions to ease: Ryan L. Hass, a former director for China at the National Security Council, told the Times that his Chinese contacts had “described the speech as the place where Xi would send a signal to Trump on his own terms about the market openings and other reforms on the horizon.” However, he added: “If those messages were embedded in the speech, they appear to have been well concealed.”
Here are some other highlights of the speech (the translations are my own):
- Xi says that China is “the only civilization in human history that has not been interrupted for more than 5,000 years, which means that change and openness are generally the historical norm.” Elsewhere, he says reform and opening up have “a long history and profound cultural roots in China.”
- “Reform and opening up is not easy,” says Xi, so China must be prepared for “all kinds of obstacles, risks, and even perilous storms that are difficult to imagine” (难以想象的惊涛骇浪 nányǐ xiǎngxiàng de jīngtāohàilàng).
- “We must dare to be number one in the world; dare to forge ahead; dare to try, but we must also be dependable; charging ahead at a steady pace; uniting reform with development and stability.”
- “We’re a huge country. Comrade Máo Zédōng 毛泽东 said: ‘This is only the first step of the Long March. If we’re proud of this step, it is completely insignificant compared to what is coming in the future… We are not only good at destroying the old world, we also will be good at building a new world.’”
More coverage of Xi’s speech
The speech was something of a Rorschach test for news editors:
- China’s Xi urges implementation of reform but offers no new measures / Reuters
- China’s leader seeks to assuage concerns over its growing influence / NBC
- Xi Jinping: China to stick to Communist rule and its own path to cope with ‘unimaginable’ perils / SCMP
- Highlights of Xi’s speech at a conference celebrating 40 years of reform, opening-up / China Daily
- Four takeaways from Xi Jinping’s speech / NYT (porous paywall)
- Xi Jinping’s story of reform / China Media Project
2. China lays out its political demands to the EU
The South China Morning Post reports that “China has called on the European Union to stick with Beijing to weather trade protectionism and reduce hurdles to Chinese investment” in a policy paper issued today.
Much of the paper is “win-win” blather about strengthening cooperation, but there are a few clear demands (reproduced verbatim):
- The EU should not endorse Taiwan’s membership in any international organization where statehood is required, not sell Taiwan any weapons or any equipment, materials or technologies that can be used for military purposes, and not carry out military exchanges or cooperation in any form.
- Given that Hong Kong and Macao are China’s special administrative regions, their affairs are part of China’s internal affairs and should not be interfered in by the EU side.
- The EU should not allow leaders of the Dalai group to visit the EU or its member states in any capacity or under any name to carry out separatist activities, not arrange any form of contact with officials from the EU and its member states, and not support or facilitate any anti-China separatist activities for “Tibet independence”. It is also imperative that the EU side not support or facilitate the East Turkestan Islamic Movement and any other activity of anti-China separatism, violent terrorism and religious extremism.
- The EU and its member states should lift its arms embargo on China at an early date.
- China will expand the import of high quality goods from the EU through existing channels and new platforms such as the China International Import Expo. The EU should ease its high-tech export control on China.
3. Trade war, day 166: China admits it has Canadian hostages
The SCMP notes that “any direct mention of the specific challenges China faced, above all a slowing economy and a tit-for-tat trade war with the US” was “missing” from Xi Jinping’s big speech marking 40 years of reform and opening up. If anything, however, the insistence on Party-led guidance of the economy (and “all tasks”) has slightly dimmed the outlook for the 90 days of trade negotiations.
Also missing was any mention of the ongoing Canada-China hostage situation (latest updates on Access yesterday), which Donald Trump connected to the trade war on December 11. Donald Clarke, an expert in Chinese law, writes in the Washington Post that China has been even more explicit in signaling that the Canadians it has arrested are effectively hostages, to be used as political bargaining chips in the U.S.-China trade and technology conflict:
To call this is a hostage-taking and not a regular criminal investigation is a serious charge. Here it is justified. The critical element of a hostage-taking is that the hostage-taker must tell you that it’s a hostage-taking and what his demands are, otherwise the whole point of taking hostages is defeated. In this case, official and quasi-official Chinese sources have been clear. The Chinese ambassador to Canada has not just admitted it; he has also proclaimed it in an op-ed in the Globe and Mail, saying that those who object to the Kovrig detention should reflect on Canada’s actions. Obviously, if there were no connection, those who object should no more reflect on Canada’s actions than they should reflect on the actions of, say, Saudi Arabia.
That op-ed, published on December 13, beyond politicizing the detentions of Canadians, also called the arrest of Meng “a premeditated political action in which the United States wields its regime power to witch-hunt a Chinese high-tech company out of political consideration.” The Chinese ambassador adds, “The Canadian side detained Ms. Meng in an unreasonable way given she has not received any charges according to Canadian laws.”
- The Canadian foreign ministry pushed back, saying that even though Meng didn’t break Canadian laws, it couldn’t disobey an extradition request from its treaty partner, the U.S.: “I think people need to be very careful when they start to suggest that corners be cut when it comes to the rule of law and when it comes to international treaty obligations,” Foreign Affairs Minister Chrystia Freeland said.
- The hostage crisis is making executives “skittish” about traveling to China from the U.S. or Canada, NPR reports.
While the charges against Huawei CFO Mèng Wǎnzhōu 孟晚舟 are purely about her alleged violations of American sanctions on Iran, her arrest does occur in the broader context of a push-and-pull between the U.S. government and Huawei. The latest news shows Huawei on the offensive:
- “If you have proof or evidence, it should be made known” is what Ken Hu, chairman of Huawei, had to say about allegations of security risk or spying from the company’s technology. “We have never accepted requests from any government to damage the networks or business of any of our customers,” Hu added.
- Huawei “is relying on a team of recently hired American lawyers, who have filed legal ripostes to U.S. agencies, to defend itself from an onslaught of accusations and restrictions emanating from Washington,” the Wall Street Journal reports (paywall).
- The company also “said it would spend $2 billion over the next 5 years to focus on cybersecurity by adding more people and upgrading lab facilities, as it battles global concerns about risks associated with its network gear,” according to Reuters.
- But the Czech government is the latest to air concerns about Huawei, for the exact same reason as cited by American officials: “China’s laws … require private companies residing in China to cooperate with intelligence services, therefore introducing them into the key state systems might present a threat,” said Dusan Navratil, director of the Czech National Cyber and Information Security Agency.
In China, citizens continue to rally to Huawei’s side. A recently-published essay translated on SupChina shows a common Chinese point of view defending Huawei. Other manifestations of support: In Beijing, a bar was seen by Caixin reporter Tanner Brown offering a 20 percent discount to patrons with Huawei phones, and in Henan Province, a park “said it would waive the $9.40 (65 yuan) ticket fee for anyone carrying a Huawei phone,” the BBC says.
Other news in the U.S.-China trade and tech conflict:
- China’s economic influence continues to increase
China signs oil deals with majors as Xi underscores open trade / Bloomberg via Yahoo News
“China signaled its openness for business with a raft of deals that’ll give oil majors including Royal Dutch Shell Plc new opportunities to develop fields in partnership with the nation’s biggest offshore explorer.”
Opinion: China as No. 1 economy to reap benefits that once flowed to U.S. / by Noah Smith in Bloomberg (porous paywall)
“If China were to abolish its capital controls and open its currency to foreign speculation, there’s a good chance the yuan would rise in value, bringing China’s GDP at market-exchange rates closer to its PPP numbers. In other words, the economies of China and the U.S. are now fairly evenly matched in size. But with four times the U.S. population, China has more room to grow.”
“The biggest effect will be that China becomes the leading beneficiary of what economists call agglomeration effects. Agglomeration refers to the tendency of businesses to cluster together in the same region, because one company’s workers are another’s customers.”
US decoupling can’t contain China’s tech rise / Global Times (state media)
Donald Trump follows through US$4.9 billion aid package for American farmers hurt by trade war with China / SCMP
Opinion: China opens doors to foreign companies again / by Andrew Polk in Bloomberg (porous paywall)
“Forty years after China began opening itself up to the outside world, the country increasingly seems to be closed for business. A large and growing contingent of the global business community is convinced that China will never allow foreign companies to compete fairly on the mainland; frustration with Chinese industrial policies and market restrictions is acute. Ironically, those same frustrated foreign firms are in danger of missing out on the best moment in years to invest in China.”
Q&A: Obama’s top Asia adviser explains where U.S. went wrong on China / Caixin (paywall)
An interview with Daniel Russel. Also listen to a Sinica Podcast with him: Danny Russel on the rebalancing and decoupling
- Shenzhen feels waves of Meng Wanzhou arrest
China’s billionaire factory Shenzhen faces new risks in Donald Trump era / SCMP
“Chinese stocks dropped earlier this month [since the Meng Wanzhou arrest]…The technology-heavy Shenzhen Composite Index is down about 30 per cent for the year, heading for its worst performance since 2011.”