Understanding China Under Xi Jinping
Foreign Policy Experts
K. Rudd, W, Overholt       
Compiled by W. Antoniotti 3/20/19


Prelude
 

China's Emerging Political System
 

China’s World View Determines Strategic Policies
 

China's Aggressive Strategic International Plan
 

Responding to China: U.S. Strategic Plan
 

Future Scenarios
 

China's Korean Peninsula Goals
 

China's Trade Position
 

History of China
 

Editor's Choice

Creation of a New International Order and Trump's New Political Era?

Return to Russia, China: Rivals, Adversaries, Enemies? 

Source Video: Understanding China Under Xi Jinping from Kevin Rudd, 4/18 Video

See Latest from Kevin Rudd 12/5/18 Video

 

Prelude

1. Tiger Development Model:
South, Korea Taiwan,  Singapore, and finally China
All extremely poor and feared economic collapse
 Lenin's Authoritarian Approach worked as fear
allowed draconian measures and Big Risk Taking
 

2. Like earlier Tigers, China's Vanguard Communist Party also took Big risks and Big Economic Gains

Peasant farmers began taking Communal land, production increase dramatically, so Communist Party
let this dangerous activity spread giving up complete control of peasant lives in hopes of creating party loyalty.

The the  Party gave up control of urban industry  by directing sales revenue to flow first to companies
with a tax system instituted to share revenue with government. Implementation required moving 45
million inefficient industrial workers to service industries over ten years.

Cut inefficient government in half
 

Like earlier Tigers, Crisis of success made a simple economy complex requiring change
See Rise-China-Economic-Creating-Superpower


3. Similar problems to those of earlier Tigers surfaced
1. Over leveraging created debt bubbles, inflation and bankruptcies.
2. Many big, often party owed companies inefficient, were  closed.
3. Political unrest developed.
4. Strong power groups, often with Party connections developed.

4. Tiger's Managing Change

Taiwan got the economy moving again and enhance Party political controls
by orchestrating a slow liberalization of policy.

South Korea's intransient strongman refused changes so reformers shot him .

China

Market reforms caused much stress.
Leader reacted with a harmonious
atmosphere but growth slowed.
Government had become sluggish.

1. The Plan
Subdue opposition
Implement reforms
Protect from repudiation/retaliation

2. The Goals
Better allocation of economic resources
Create a consensus with centralize power in a strong leader
Smaller Politburo Standing Committees, more military controls, create a NSC, smaller influence groups

3. Political control always wins
With Mayo, politics were in command
With Ping, economic reform most important
With Xi politics is in command

4. Analysis
Xi not willing to make difficult decisions because of conflicting goals.
Difficult to balance economic and political decisions.
Examples:
SOE still a poor use of economic resources as final control is the party


Strengthen rule of law but legal decisions determined by Party

5. Result Success is getting more difficult.
1. Resource allocation is poor
2. Faces much pushback, especially from local governments
3. Military most improved


Editor's Note: Xi is the creation of the Party, Putin is the creation of Putin
from China Crisis of Success video Dr. William Overholt  

 


China's Emerging Political System from Kevin Rudd
Compiled by W. Antoniotti

 

1) Communist Party's prerogatives, power, and presage are paramount

 

To maintain its legitimacy it must take back day-to day control
of daily activity from the administrative apparatus.

2) Xi Jinping is a Marxist with a strong believes in the Hegel dialectics
as it relates to contradictions among the people and the resulting instability.

a. He ordered studies of Historical and Dialectical  materialism to counter China's move toward Neoliberalism.

 

b. Xi knows that economic growth must continue but
not beyond the point where history indicated income/capita
was high enough to trigger Neoliberalism.
c. Foreign Relations Specialist George Friedman
1. China's success improving from a low wage subsistence economy
slowed dramatically in 2008 when world growth slowed.
2. Xi must deal with slower growth and lower expectations
3. Poor economic performance could cause the country to fracture
into distinctive regional powers as it did mid 19th century.
4. Local Communist parties wanted to keep tax collections.
5. Purging is part of an attempt to hold the country together
a. It will provide needed Xi's government with needed tax revenue,
b. It limits those against his centralization drive.
c. It ends protesting and end s "China's Opening Up"
6. Issue has gone from liberalizing or not liberalizing
to staying centralized or braking up

3) Educating toward nationalism
using modern propaganda technique would delay
the Neoliberalism income activation point.
a. China’s historical greatness has always be base upon a
strong, authoritarian hierarchical states grounded in Confucian ideology
.
b. He is building a modern Confucian, Communist State. from Kevin Rudd

 
China’s World View Guides Strategic Policy
 

 

While dynamic over the last 100 years, the underlying philosophical foundation
has always been Marxian Historical Dialectical Materials

Plan Requirements

1) International Relation Theoretical Alternatives

 
a. Despair
of Realism: all super powers want to maximize share of world power and dominate the international system

b. Hope of Liberal Internationalist: corporation in sustaining world order with an international rule-based systems

c. Control of Structural Marxism

d. Constructivism Understanding: cultural understanding and rationality used to design and manage international systems.

e. Amalgamation of alternatives: different theories for each unique relationship

 

2) Legitimacy and Survival Requirements of China's International Policy

 
a. Communist Party Control is at the center of their policy determination.

b. Political Stability requires Territorial Integrity over Shenyang, Tibet, Taiwan, and South Chins Sea.
c) Party legitimacy requires Improved living standards and a powerful international Chinese state.

d) Sustainable Environmental Economic Development with clean air, water, and soil is important.

e) Eastern Territorial Integrity free of U.S. influence and eliminating threats similar to those of 20th century Japanese militarism.

f) Western Territory Integrity eliminating the long history of Western and Northern invaders.

g) Revised/new International Rule Based Order resulting from China's meaningful economic and military development.
    End to existing U.S. post WW 2 hard power resulting from her Russia and
    China aided WW 2 success  with a China led soft power system.

 

3) Chinese International Policy: An Amalgamation of Alternative Theories

 

a) Marxian world view

b) Realist view of military power

c) Liberalist Internationalist economic view
 

d) Establishment view of banking and private corporations
 

e) Constructiveness view of their role in managing world order

 

4) Sundry Thoughts

 

a) Trump is also challenging the status quo of the current Global Rules Based Order
but Xi can be more patient, especially now that he has a lifetime political position.

 

b) Communist Party is respected but not loved because it negated the negative effects of post WW 2 issues and the Cultural Revolution

c) Love requires replaces Capitalistic Materialism with Marxian Materialism

d) China will not dominate the world video

e) Robert Suttner: Can Democracy Survive Global Capitalism? 100 min video

 

China's Aggressive Strategic International Plan See On Grand Strategy

Plan History

Plan History

 

Plan 1 Hide Strengths, Bide Time

 a. Xi now has more centralized political power. 
 

 b. U.S. decline means means little reaction to Chinese militarism.

 c. China is now an indispensible global economic power for
 many nations who support/accept her increase power projection.

 d. Xi has grown impatient with slowness of Chinese bureaucracy and relaxed many of international governance "players."

 

2) New Plan: Confident, Independent, International Activism

 

 a. Expanded South China Seal Militarism

 

 b. Build a New Silk Road to
1) increase trade
2) provide foreign investment
3) provide infrastructure
 

c. Asian Infrastructure Development Bank launched and capitalized

d. Multilateral Diplomatic Activism for launching and participation in new world-wide initiatives

c. New Navel Bases in Sri Lanka, Pakistan, and Djiboutif Military exercises with Russia
Editor's Note: In a liberal Democracy, much of this is done by business expansion.
In 2017 U.S. Invested > $100 billion in China alone.

 

 

3) Well Conceived Grand Strategy

 

a) Based on a clearly defined policy purposes

 

b) Think a situation through, observe in detail in relation to historical trends

 

c) Set a new direction

 

 Editor's Note: Many China experts hold this well designed with the same
high esteem the first few Soviet Russian 5 year plans

 

 

4) Recent Changes

 

a) Enhanced role of Communist Party and Ideology to counter China's lethargic corrupt state bureaucracy

 

1. Enhanced CPC authority by replacing state control and Foreign Relations and Financial Reforms
with party control to stop to stop stonewalling reforms
which had been going on for years. Consolidating Xi’s Position and China’s Direction: A Readout of China’s Annual Legislative Session 3/18

 

2. Reasoning could be: Marxian, Nationalistic, Authoritarian model of world capitalism to compete with liberal democracy, 
Xi concept of a future world community, and a mechanistic attempt to invigorate diplomatic community to be more
creative with a more forceful  use of Theory over Policy       
 

 

3. New State Diplomacy enhances State Capitalism, pragmatism is gone, national interest enhanced by a national vision

 

 See Foreign Relations Power International PlanU.S. - China Relations, North Korea the Future of the Global Order


b) Ideological Confidence increased because history now favors Chinas according to Marxian dialectic analysis. 
Nothing random about what is unfolding, it is the result of the immutable laws of economic development.


Based on Marxian Dialectic Turning Point indicated by relative decline of US/West and China's rise


Current historical juncture represents a strategic opportunity for China.


How a one-party state ideates using political topic/lingua franca is important.

 

 

c) More Sharply Focused Chinese Diplomacy

 

 

d) China to Lead Improve Global Government Reform

1. In 2014, Xi saw an impending struggle for the future of
International Global Order
        

 2. China must now control the reform of international order
 a. organization like UN, WTO ...


 b. U.S. system of global alliance ensures only her own
 definition international security.  


3. Change U.S. Controlled Global Governess based on a
complex web of world organizations using international
based treaty, law and shared sovereignty.


4. Global Governance Improvement


5. Reasons for success
 a. Diplomacy based on Chinese Socialism increase fairness and justice
 b. U.S. Ignores World Order i.e. Climate Accord, UN Refuge System, WTO.
        

6. Controlling international institutions is first step

 

e) Is China Backing off a Bit as Worlds/US reacts to strong foreign policy?
 

 

5) China's Big Fear
a) China is a trading nation with a
 
b) Land military used mainly an internal policy force.

c) Must control the China Sea with a Navy that is many years behind US navy.
d) U.S. uses sanctions, then blockades, to enforce her will.
 Source
 
See Adjusting to the China Shock
Bremmer Interviews Dan Rather
China's Growing Clout in Latin America

 

 

 

Editor's Note: After a record $46 billion of completed 2016 Chinese foreign direct investment (FDI) in the US,
Chinese investment dropped sharply to just $29 billion in 2017 due to greater scrutiny in Beijing
over outbound flows as well as tougher US regulatory reviews of inbound acquisitions. 

See Responsible competition and the future of U.S.-China relations
Seven critical questions for strategy

 

 

 

Responding to China: A Strategic Plan   Source  Kevin Rudd


See On Grand Strategy

1. Preface

U.S. Government not designed for Governmental Grand Strategies
a. Separation of powers requires compromise
b. Many want limited government
c. Private Sector Renewals solve problems

Recent exception was after WW 2
a. After WW2, the Long Telegram from US Moscow embassy
described a very aggressive Soviet Union.

b. 40-year multi-administration coordinated containment resulted.

c. It worked-The Cold War ended peacefully.

Soviet Containment Worked
a. Fragility of the Soviet Economy and Society caused implosion from within.

b. China is very different

Trump Would Say We Have a Strategic Policy

1. National Security Strategy 12/2017
2. National Defense Strategy 1/2018
3. Future of US Defense Manufacturing Industry issued mid 2018

2. US Strategic Plan

Era of Strategic Engagement Replaced by Strategic Competition

a. Engagement- you engage and one side backs down.

b. Competition is more adversarial but no guidelines given.

c. Rules to be determined

d. Editor's Example?
 

U.S. threatening Germany over Chinese 5G – The Trump administration is willing to cut intelligence-sharing with Germany unless Berlin bans Chinese equipment maker Huawei from its 5G networks. Washington is pressuring Europe more broadly to drop Chinese 5G suppliers over concerns they could give Beijing backdoor access to sensitive communications, data, and networks. Germany is crafting new regulations meant to address these concerns, but it won't impose a blanket ban that could anger China and push up the cost of building the new network. We're watching two things here: first, are those new German rules enough for the Trump administration? Second, will Trump's own (somewhat fickle) approach towards Chinese 5G suppliers (like Huawei) turn out to be as harsh as what he's asking of Europe? Source

3. Washington's latest attitude toward China is not positive.

a. Makes any kind of convergence of societies difficult

b. Movement toward McCarthyism in both .US. and Australia is not a good for International Relations.

4. Geopolitical Factors for Next Four Years

a. China under Xi Jinping "will resist any forces: economic, social, political, or foreign
which in any way challenge the long-term survival of the Communist Party.

b. Strong-man, long-time party member, assistant Vice Premier Li_Keqiang
wants to move toward markets which rankle conservative fellow politburo bureau members.

Source Video

Responding to China: A Strategic Plan  Source Admiral Scott_H._Swift

Editor's Note:
Bill Clinton's 1994 National Security Strategy for Engagement and Enlargement centered on Democratic Peace Theory designed to expand US efforts using force
to increase stability and spread Democracy around the world.
Small Scale Contingency Military Operations increased dramatically.

Bush 2 campaigned to end such operations against an enemy was willing to kill themselves to obtain nuclear weapons.

9/11 ended this idea. Some Bush neoconservative members felt the way to control nuclear weapons was  the use of power and create an "island of democracy ."

See Great Decisions 2018 - The Waning of Pax Americana - Dr. Conrad Crane

See 21st Century Foreign Policy

 

US and Chinese Grand Strategy and the Remaking of the Rules Based Global Order video

Preface: Admiral Swift left the Navy shortly after remarking he would
follow an order from the U.S. President to use nuclear weapons.
source

The National Defense Strategy is not a Grand Strategy.

Need an increased effort on developing a broad grand strategy.



Too dependent on military in decision making process.
Include all 15 federal agencies and use principles laid out in
the Constitution, Declaration of Independence and Bill if Rights as a guide.
International rules have worked well but
China divorced itself from the global rules based order and
only follows rules when it is a benefit.
 

Appendix 1 Korean Peninsula

1) China wants

a, Pro or Neutral border allies free of U.S. influence

b. No Nuclear Weapons

c .Unification should mean neutrality, no foreign troops

2) U.S. wants No Nuclear Weapons

3) Both China and US practicing containment

a. N. K knows this and does a lot of testing but little delivery system development.

b. View of George Friedman of Geo Political Futures

4) Status Quo
Source: Is China the biggest geopolitical risk to the US?

a) George Friedman believes status quo has been everyone policy

b) Needs Vary
China wants U.S. China dependency.

N. Korea, a very poor nation, needs nuclear program, not weapons, as a bargaining chip to get financial assistance

United States has a "phobia" against nuclear weapons causing N. Korean to be more and more bellicose.

S. Korea doesn't want unification because with it comes northern debt.

2 China's Trade Position
Trump's 90-day Tariff Deal 12/18

Part 1 

A.
Five Reasons China Isn't Backing  Down

1.       Trump’s trade war confirms that Barack Obama’s “pivot to Asia,” was an expansion into China’s sphere of influence.

2.       Recent actions means trade talks must be delayed at least until after US midterm elections.

3.       Xi Jinping ability to consolidated more power is partially based on  fulfilling a  “China Dream.” He can’t back down.

4.       China’s economy will suffer little, much less than 0.5 percent of GDP.

5.       China believes she has less near-term political vulnerability but greater long-term economic vulnerability as
China’s authoritarian state-dominated capitalism better absorbs economic shocks.

6.       see figure 2

The bottom line:
 Trump and Xi believe near-term fallout can be managed so this trade war will probably last longer and inflict damage.

Kevin thinks keeping Chinese students in America is very important to long-term political security.
Australia has relatively many more Chinese students.

Editor's Note: Historically not listening to our allies has not worked out well.

Think Vietnam and Iraq/Afghanistan/Syrian wars.

B. Kevin Rudd: China will not over react to Trump's trade policy
a. She will lower trade balance.
b. Her relatively low tariffs of about 9% will be lowered.
c. China could propose zero tariffs in both countries and could make same offer to others.

B. Relations With Russia Bremmer video

See 21st Century Free Trade Analysis

 

 

Part 2 Trade from China Crisis of Success video  by Dr. William Overholt

   Three areas of US Desires
     Necessary
     Exaggerated
     Crazy
 

 

Necessary
    1. Intellectual Property
    2. Forced Intellectual Property Transfer from US Companies to Chinese Companies
    3. Competition Requirements requires of US companies but not Chinese state owned Companies
Exaggerated: China's 5% tariffs on US auto imports is not a serious problem.
     General Motors profits from China sales saved stopped GM bankruptcy. Buicks are everywhere.
     Japan and South Korea buy few US car
Trade Deficit with China
     Because China is assembling parts from all over Asia, she receives the total US dollars then distributes it.
     We could move the assembly to other Asian countries to make it look better.
     Editor's Notes: Product profit ends up at Apple or some Taiwanese manufacturer.
     Years ago Japan and others moved mfgt to US w which provided good but not 1950's wages.
 

 

 

 

China's Attitude toward U.S. Trade War
Chinese Elite love pressure on Xi Jinping
Chinese Average citizen, because of nationalistic indoctrination, dislike US policy.
United States  Average citizen, because of nationalistic indoctrination, dislike US policy.
United States Elite love pressure on Trump
 


 

Affect of Trade War on Chinese Trade Policy
China will continue to liberalize trade and intellectual property and services policies
Major Structural changes will not happen
Larger problem: China fears a new Cold War which will take a long time to alleviate.

 

3 History of China

History of China: What is China, Anyway?

Modern Western Civilization Economic History

4 Future Scenarios

from

Fitch Solutions from

1. U.S. vs. China Risk-Four Scenarios to 2030

 

 

2. Will we see a "mini-deal" in the US-China trade dispute?

 

Source: Thomas Costerg, Pictet Wealth Management

 

#2 China was part of the Colonial Empire of Great Britain

Opium Trade was a Big Money Maker.