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China is trying to win over Westerners and private companies

largeiu he is A gray-haired 71-year-old is about to retire from China’s top economic decision-makers. He must have many regrets, not least the now-abandoned fight to crush covid-19 and the blow to his country’s economy from the disease’s recent rapid spread. But Liu smiled visibly proudly as he recalled how members of the global elite at the World Economic Forum in Davos had responded to his delegation’s upbeat remarks there a few days earlier. “All kinds of people are saying, ‘Hey, China is back!'” he told a TV reporter.

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Mr Liu, one of China’s four vice premiers and a trusted adviser to China’s leader Xi Jinping, has always been modest. It was he, not his entourage, who stole the show. Given the fragile state of the world economy, his Jan. 17 speech was a welcome voice among the business titans in attendance. “If we work hard enough,” he said, “China’s economy will see a significant improvement in 2023.” He pledged to “focus more” on supporting private enterprise — Mr. Xi’s campaign to tighten control over tech companies over the past two years and his increased use of The Marxist rhetoric deeply disturbs the private sector. For those who worry about China’s heavy barriers to foreign companies, Mr. Liu reassured: “China’s national conditions show that opening up is necessary, not an expedient measure. We must expand opening up and let it play a better role. ”

There is nothing startlingly new in Mr Liu’s remarks. But their dovish tone has fueled speculation among observers that, in addition to ditching his “zero coronavirus” policy, Xi has decided to temper some rhetoric that has unnerved businessmen at home and abroad, relieving pressure on entrepreneurs and preventing serious tensions between his country and the West relationship deteriorated further. China’s state media has encouraged such thinking. After attending the forum, Liu met US Treasury Secretary Janet Yellen in Zurich, her first face-to-face meeting since she took office two years ago. One Chinese news outlet called it “another sign of ice breaking between the world’s two largest economies”.

China is likely to feel the need to adjust its tactics on a range of issues, from economics to diplomacy. 3% per year gross domestic product Last year’s growth was the second slowest since Mao Zedong’s death in 1976. U.S. efforts to curb the flow of cutting-edge technology to China are thwarting Xi Jinping’s ambitions for tech supremacy. As geopolitical tensions mount and the coronavirus pandemic exposes the fragility of China-linked supply chains, Western companies have become more nervous about relying on China as the source of every widget. China’s close relationship with Russia, and its refusal to condemn its invasion of Ukraine, has poisoned relations with much of Europe, where it has long sought to win over the U.S. alliance.

China likes to think of Davos as a place to suck up. In 2017, nearly five years after he took power and began to sow ripples of unrest in the West, Xi Jinping himself emerged. He is the first Chinese top leader to attend the forum. The audience heard descriptions of the country as an advocate of globalization and a leader in efforts to combat climate change. America’s president-elect, Donald Trump, appeared determined to steer in the opposite direction. This made it easier for Xi Jinping to score.

But China’s recent actions also mark a shift. One of them was Xi Jinping’s decision to meet his American counterpart, Joe Biden, on the sidelines of a meeting. GG20 summit in Bali in November. China has had little contact with the US since August, thanks to a visit by then-US House Speaker Nancy Pelosi to Taiwan, an island China claims to claim and resents foreign official contact with. The State Department said it expected Secretary of State Antony Blinken to visit Beijing in February. It will be the first such visit by the top US diplomat since 2018. Movies from Hollywood company Marvel Studios will also be released in Chinese theaters next month, ending a four-year ban in China for unexplained reasons.

China is also testing other Western countries. While in Bali, Xi Jinping also met with Australian Prime Minister Anthony Albanese. It was the first one-on-one meeting between the two countries at this level since 2016 – and Australia has offended China on several fronts, including calling for an independent inquiry into the origins of covid. China appears to have eased a two-year ban on Australian coal imports. Xi Jinping has stepped up the pace of diplomacy with Europe. In November, he received a visit from German Chancellor Olaf Scholz. French President Emmanuel Macron is expected to follow early this year.

appease the private sector

On the economic front, too, the tone is changing. In the official account of the CCP’s annual closed-door meeting in December – the Central Economic Work Conference – Xi Jinping has much less ideological language and no criticism of the “disorderly expansion of capital” that fintech companies have previously opposed The accusations are accused of committing. It said China should “vigorously develop” the digital economy. The Asia Society Policy Institute, a New York-based think tank, said the wording was arguably “the most affirmative and authoritative statement of the political and ideological legitimacy of the private sector” since Xi Jinping came to power.

In recent weeks, the government has also backed away from a two-year effort to rein in the property market turmoil by severely curbing developer borrowing. The industry is still in dire need of an overhaul, but businesspeople are relieved to return to a more cautious approach. The campaign has been hitting sales.

But it is wrong to conclude that Xi Jinping himself has changed, or that he has become politically weaker. China’s chaotic exit from zero-coronavirus — a policy he is closely associated with — may have undermined his credibility with China’s elite and an unknown number of ordinary people who have lost loved ones to the virus and are now seeing their deaths was covered up. But the country’s political machinery has been functioning as it prepares for October’s party congress, in which Xi won an unprecedented third five-year term as general secretary and a Politburo packed with loyalists.

Across the country, officials’ speeches are still filled with adulation for Mr. Xi and his leadership. China is still flexing its muscles in Taiwan (see next story). Despite their attempts to mend ties with Western countries, Chinese envoys have continued to use the sharp language directed at the West that has become a hallmark of diplomacy under Xi Jinping. In Davos, Mr Liu may have said what his audience wanted to hear about the Chinese economy. But his call for an end to the “Cold War” mentality is an implicit attack on the United States. In China’s view, the United States is its main provider. He mentioned Xi Jinping’s concept of “a community with a shared future for mankind” twice. This effectively means a new world order in which criticizing China is taboo.

Xi will try to use two major political events this year to boost public and business confidence in the economy and his support for non-state firms. The first is the annual session of the country’s parliament, which is scheduled for March. Outgoing Premier Li Keqiang will deliver the main report. It will likely echo the language of the December working session. In autumn, the party’s 376 Central Committee members will meet. Traditionally, at this point in China’s political cycle, the economy should be the focus. Expect reform to be the buzzword.

But cynicism abounds, too. A year after taking power, Xi presided over a similar Central Committee meeting. His vaguely worded communiqués gushed about reforms that soon began to sound hollow as he focused on strengthening the party’s grip on business, especially state-owned enterprises.

Four years later, it was Xi Jinping’s turn to become a Davos figure. But in his ensuing years, there has been an increasing repression at home — especially in Xinjiang and Hong Kong — and a downward spiral in relations with the West, with private entrepreneurs and foreign investors alike becoming increasingly aggressive. frustrated. “There’s just a degree of wishful thinking about some of these things,” said Andrew Small of the German Marshall Fund Research Center in the US. “And I think on the Chinese side, they realize that wishful thinking is something they can exploit.”

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