With friends like these…
China’s leader Xi Jinping spoke at the annual Boao Forum on Wednesday where he called out American talks of decoupling and spoke proudly of being a roadblock to American hegemony in Asia. In attendance were American CEOs Tim Cook and Elon Musk, who listened in at what is essentially the Davos event of mainland China.
“The COVID-19 pandemic has made it all the more clear to people around the world that we must reject the cold-war and zero-sum mentality and oppose a new ‘Cold War’ and ideological confrontation in whatever forms,” Xi said without naming the U.S.
“We must not let the rules set by one or a few countries be imposed on others, or allow unilateralism pursued by certain countries to set the pace for the whole world,” Xi continued. “Big countries should behave in a manner befitting their status and with a greater sense of responsibility.”
Shi Yinhong, director of the Center on American Studies at Renmin University in Beijing, told the Financial Times that there was no doubt that the U.S. was the target of Xi’s remarks. “In the eyes of China, the U.S. is still hegemonic,” he said.
We put new sanctions on Russia for election interference this month, but none on China for allegedly doing the same thing. Sanctions against Russia include banning the purchase of government bonds that could end up taking them out of investing indexes. It’s effective immediately. The Pentagon and the Trump administration compiled a list of China companies tied to the People’s Liberation Army and fund managers were given over a year to divest of these bad actors.
While companies headquartered in foreign nations must follow U.S. securities laws, China is treated differently because the depth of the interest from Wall Street and multinational companies like Apple is greater than it is in Russia. Increasingly, our enmeshed systems make it hard to go after China for anything without a backlash from American companies who happily bend a public knee to the CPP in order to gain access to China’s markets.
“It is also important that we take comprehensive measures to improve global governance on public health security and work together for a global community of health for all,” Xi said.
Much of Xi’s speech centered around China’s growing “soft power” in Asia through its One Belt One Road initiatives. The conference was titled, “A World in Change: Join Hands to Strengthen Global Governance and Advance Belt and Road Cooperation.”
Xi touted making the “global governance system more fair and equitable” and said we need to preserve the international order…and uphold the multilateral trading system with the World Trade Organization at its core. CPA believes the WTO has failed in its mission to bring China in line with Western government economic principles. Instead, China is becoming more state-driven. Oversupply in numerous manufacturing sectors of China has depressed prices and hurt manufacturing not only in the U.S. but around the world.
Xi is adept at using America’s own language against it, potentially scoring some ideological points among allies. On lessons of diversity and justice, Xi gets an F.
“What we need in today’s world is justice, not hegemony,” he said. “In this age of economic globalization, openness and integration is an unstoppable historical trend. Attempts to ‘erect walls’ or ‘decouple’ run counter to the law of economics and market principles,” he said.
CPA thinks that Xi Jinping is the last person one should hold up as an example of sticking to market principles. “Diversity is what defines our world and makes human civilization fascinating,” he said. This is obviously placating a Western crowd. The fact is, Xi Jinping is not casting actors and models for Apple TV commercials. The CCP is not concerned with diversity of any sort; not ethnic diversity, not religious diversity, not ideological diversity. That type of diversity would be considered an enemy of the state.
Congress discussed at least three new bills on China today, including a Senate bill to establish the China Censorship Monitor and Action Group and a House bill ensuring that goods made with forced labor in the Xinjiang Uyghur Autonomous Region of China do not enter the U.S. market. The Senate is also debating the Strategic Competition Act of 2021, a broad bipartisan package announced this month designed to confront China’s economic and geopolitical power. The measure seeks infrastructure investment and technology developments to compete with China on global supply chains, something that we believe needs action immediately.
Lastly, Xi also brought up fighting climate change just days after Washington climate envoy John Kerry left China.
“We need to follow the philosophy of green development, advance international cooperation on climate change, and do more to implement the Paris Agreement on climate change,” Xi said.
From where we sit, Xi is thinking more about climate-related job creation than he is lowering his country’s emissions. That’s because he knows that in lowering his country’s emissions, he will deploy more solar panels, more wind turbines, and will increasingly export those to the United States and Europe as well as installing them at home.
Cutting carbon to nationally determined levels in China is a jobs program for them. Unless we get wise to that idea, then cutting CO2 here will also be a jobs program for Xi Jinping.
Chinese solar manufacturers in mainland China and Southeast Asia account for roughly 80% of the solar panels installed in the U.S. Last year, the U.S. installed 48 units of wind turbines made by China’s Goldwind. In 2019, we installed just four, according to the Global Wind Energy Council.
“It will be increasingly harder for the Biden administration to work on any significant, structural changes to the China relationship if America’s biggest companies insist on kowtowing to China in pursuit of markets,” said Michael Stumo, CEO of CPA. “Xi talks a good game, striking all the right chords and buzzwords. Corporate lobbyists can portray China as the poster child of global business and free-market capitalism, but they’re going to have a harder time doing that with Congress.”