Platt Perspective on Business and Technology

China and its transition imperatives 46: thinking through Xi Jinping’s current realities in a larger context 4

Posted in macroeconomics by Timothy Platt on June 20, 2017

This is my 54th installment, counting supplemental additions, to this ongoing and even open-ended series on China. Basically, what I am doing here is to trace how China has changed under the rule of Xi Jinping, with this series narrative starting approximately one year after he first took leadership of their Politburo Standing Committee, and through that of their entire Communist Party of China and of China as a whole (see Part 1, as written to first go live on this blog on February 8, 2014.)

I initially planned on writing this posting to go live on May 29, 2017 but have delayed doing so until now. It is not that I have not seen any recent news worth reporting on or analyzing here, as coming out of China. It is more because so much of that has simply fit into an ongoing pattern that I have been writing about for years now. And I have to add, I wanted to see at least something of how Xi Jinping would respond to Donald Trump and his chaotic bombast before writing this posting, and particularly as Trump has reached out towards China, and in what could arguably be seen as both positive and negative ways in Beijing.

On the negative side and certainly from a China perspective, Trump has presented himself as a source of destabilizing threat to China and in a number of significant ways and since his election. As an example of that, I have already made note of his direct dealings with Taiwan and of his privately held company seeking out massive business opportunity there – as the sitting president of the United States and regardless of any conflict of interest considerations that this might raise. It is fundamental to China that Taiwan is a part of one China, with Beijing as its true capital and the People’s Republic of China government the one true power that is supposed to be governing there: the so called One-China Policy.

Previous US presidents: Republican as well as Democratic have at least paid lip service to this understanding and have, for example, refrained from directly speaking with the president of Taiwan and even as the US and Taiwan governments have cooperated with each other in practice and on a variety of issues. Trump tore away that veil and in ways that made it look like he would completely repudiate the One-China Policy that has helped to stabilize the relationship between the Beijing and Washington governments overall, by formally recognizing Taiwan independence.

Trump has not actually taken that threatened step, but I pick this specific example here for a reason. Even without that move on Trump’s part, it represents a completely avoidable source of friction between Beijing and Washington: this unconsidered challenge to this accommodating fiction. And Trump’s action in this regard was carried out without any real thought as to its possible consequences, except perhaps for himself. He appears to have found it ego boosting to be called by yet another head of state. And he and his family business were and probably still are trying to land a massive infrastructure development project in Taiwan that would be expected to generate hundreds of millions of dollars in profit for himself.

On the positive side, Donald Trump has continued to do personal business with Mainland China and their state owned and at least de facto state controlled businesses, as well as with their government. I cite his and his family’s continued efforts to buy up Trump-related brand rights in China as well as his ongoing outsourcing of manufacturing of Trump branded merchandise to that country.

Trump and his election to the US presidency have been a mixed blessing to China. When I initially wrote of this in earlier installments to this series, I stressed the negative side-tipping value of his chaotic nature, and how even a seemingly stable positive for China can be made to disappear at an unconsidered whim and in an instant, as Donald Trump tweets and speaks off the cuff and at least seemingly without a thought in his head (see Part 39, Part 40 and Part 41.) But his instability and chaos, in and of themselves are probably the greatest positive that Trump could confer on China and it is one that he has given to the Russian government of Vladimir Putin and others too: and certainly for nations that directly compete with the United States. Trump has created a power vacuum from his diminishment of United States authority and influence in the world, as he repeatedly places American trustworthiness and reliability in doubt from how he repeatedly displays his own.

Is the government of the People’s Republic of China and the reign of their one allowed political party: their Communist Party now more stable and secure as a result of this seeming opportunity? They still face the same fundamental challenges of corruption and inefficiency and of authoritarian excess in their own systems as before, and they still see the same emerging consequences of them and in their air and water pollution and other environmental quality challenges that they cannot hide, and in their structurally unstable economy, among other fundamental challenges. But Donald Trump has, nevertheless, given Xi and his government and Party what amounts to a new lease on life. And as I will discuss in a few days in a concurrently running series, Donald Trump has made his influence self-limiting. It is now increasingly likely that he will face impeachment charges and that he will be removed from office, and by his own hand as he makes no effort to change either his behavior or that of his inner circle as they report to him and do his bidding (see my subseries: Donald Trump and the Stress Testing of the American System of Government, as can be found at Social Networking and Business 2, postings 256 and following.)

What will happen when and as Trump begins to really lose his support, and even in his own Republican Party in Congress, and in fact nationally in the United States? A great deal of evidence has been developed to the effect that Russia and their government led a systematic effort to throw the 2016 elections in the United States and help Trump win the presidency (see the above cited Trump-related series for references to that.) But the increasing sanctions imposed by the United States Congress on Russia and on Russian interests, in response to that and the re-imposition of cold war level opposition to Russia’s government in the United States and increasingly in the West as a whole, have made that a pyrrhic victory at best for them.

Will the American government and the American private sector take a new look at China and their expansionistic approaches to the East and South China Seas, among other ventures, if there is a Trump impeachment driven change in the American government’s executive leadership, and with effort made to reestablish America’s global position of authority that Trump has squandered?

I wrote in Parts 39-41 of this series and in other installments to it since then of the uncertainty that Xi and his government now face from president Trump and his presidency. And I find myself doing so again here, as I contemplate a possible early shift from a Trump presidency and most likely to a Pence presidency from a Trump impeachment. Will that happen? If it does, what would that mean to China specifically and to the world at large? And if Trump simply becomes more and more hobbled and isolated as president, but remains in office for at least one full term, what would that mean, as the United States Congress takes action, and even in complete defiance of Trump administration policy or directive?

I have a lot of specific in the news events and current events points of analysis that I have been accumulating for discussion in this series, and will probably delve into at least some of them in my next installment to it, but I decided to step back from these more-current news update details for this posting, to consider currently emerging and evolving events and their patterns from a wider perspective. And I end it by raising a point of assumption that I have been making here in this posting, that might or might not be true:

• Do a chaotic Trump presidency and the globally impactful power vacuum that he seems intent to create actually benefit China and Xi Jinping and their Communist Party, or any other powers or potential powers as they seek greater voice and authority in the world?
• And considering that strictly in terms of China and in terms of their longer-term prospects, does a Trump presidency actually confer any greater stability or resilience to them?

I leave these as open questions worth thinking about. As of now I expect to return to this series, with a next installment in approximately one month, and will undoubtedly at least briefly address those questions there. Meanwhile, you can find this entire series and all of its postings at Macroeconomics and Business as postings 154 and loosely following for Parts 1-12 and for a supplemental posting: Part 12.5. And see Page 2 to that directory for subsequent main sequence and supplemental installments to this. You can also find other, China-related postings and series at those directory pages, and at Ubiquitous Computing and Communications – everywhere all the time too. (And as a time stamp, I wrote this as a single draft on June 15, 2017.)

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