What Next for Trump and Xi?

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David Shambaugh, China’s Future (Polity, 2016)
Minxin Pei, China’s Crony Capitalism: The Dynamics of Regime Decay (Harvard University Press, 2016)
Frank Pieke, Knowing China: A Twenty-First Century Guide (Cambridge University Press, 2016)
Jonathan Fenby, Will China Dominate the 21st Century? (new ed. Polity, 2016)
John Pomfret, The Beautiful Country and the Middle Kingdom: America and China, 1776 to the Present (Henry Holt, 2016)
Julian Gewirtz, Unlikely Partners: Chinese Reformers, Western Economists, and the Making of Global China (Harvard University Press, 2017)
Jeffrey Wasserstrom, Eight Juxtapositions: China through Imperfect Analogies from Mark Twain to Manchukuo (Penguin, 2016)

OXFORD – Donald Trump and Xi Jinping’s summit at Mar-a-Lago, the US president’s gilded Florida home, is the latest chapter in a long, often turbulent, but increasingly vital history of Sino-American engagement. In the World War II era, veterans of the Chinese Nationalist government, such as the financier T.V. Soong and the wife of the Nationalist leader, Madame Chiang Kai-shek, variously paraded and padded around Washington’s corridors of power. When President Richard Nixon and Chairman Mao Zedong met in Beijing in 1972, there was a palpable sense that they were reorienting the world. When Deng Xiaoping became the first senior Chinese Communist leader to visit the United States, in 1979, he famously donned a cowboy hat during a trip to Houston.

The Year Ahead 2017 Cover Image

In the four decades since, the US and China have developed the world’s most important bilateral relationship, owing largely to the thickening cords of trade and investment that now bind the two countries in a web of interdependence. But there is a sense that the Florida summit represents another turning point. Trump’s protectionist inclinations are a source of growing tension, as is his implied ultimatum regarding North Korea: unless China helps to “solve” the problem of North Korea’s burgeoning nuclear weapons program, the US may act on its own. All of this gives new urgency to a spate of recent books that seek to explain China to the outside world and parse its relations with the US.

China’s Long March to Decay?

A new tone characterizes many of these books. For much of the 2000s, there was a tendency to view China as a rising hegemon whose economic and military strength would inevitably give it pole position in Asia, and possibly a major role in global leadership. The stark contrast between China’s double-digit economic growth and the West’s malaise after the 2008 financial crisis seemed to give weight to this interpretation.

China's FutureBut, over the past year or so, several studies have argued that China’s current socioeconomic model is running out of road. The political scientists David Shambaugh of George Washington University and Minxin Pei of Claremont McKenna College have written two such books. Pei has for some years been among the best informed and most pessimistic of analysts (a decade ago, he published a book called China’s Trapped Transition). Shambaugh, who has analyzed China for some three decades, was once more confident that China’s system could adapt, rather than atrophy (to borrow from the title of one of his own previous books). But, in China’s Future, he, too, has become more convinced that the Chinese model simply cannot be sustained.

Shambaugh’s book has a question mark printed on its cover, and he is at pains to stress that he does not regard the downfall of China’s system as inevitable. Under Xi, he argues, China has chosen to pursue what he calls “hard authoritarianism”: a system that is increasingly repressive and economically exploitative. And Shambaugh rules out a fully democratic system anytime soon: a “semi-democracy” is the best that can be hoped for in the next few years, and even that is a relatively unlikely outcome.

Instead, “soft authoritarianism” – something akin to the small but real advances made in China in the 1990s and 2000s under presidents Jiang Zemin and Hu Jintao – will probably be the key to avoiding an ever more inward-looking future. For now, however, he sees little prospect that Xi will embrace a lighter touch.

China’s Future, based on a long career spent observing Chinese politics, provides a sobering, if not pessimistic, assessment of the country’s current direction. And recent events support Shambaugh’s qualms. In the months since his book was published, reports of government crackdowns on lawyers, academics, and the media have continued to multiply. And signs reading Ting dang de hua (“Obey the Party”) have become a frequent sight around Beijing and other major Chinese cities.

The Triumph of Corruption

Whereas Shambaugh focuses on high politics, Pei devotes more attention to China’s political economy. But his message is no more optimistic. China, like many other countries experiencing rapid economic development, has suffered endemic corruption, even as the country has prospered. But Pei’s argument is that corruption did not emerge as an unwelcome side effect of economic growth. Rather, the very form of economic change implemented since the 1980s has made corruption a central feature of the system. China’s Crony Capitalismprovides a detailed, meticulously documented account of a system being eaten away from within.

China's Crony CapitalismPei focuses on privatization – in particular, its implementation in the absence of a strengthened property-rights regime (in some ways, rather like Russia in the 1990s). He pulls no punches: “the defining feature of crony capitalism,” he argues, “is the looting of nominally state-owned assets by colluding elites.” Instead of separating political power from property ownership, rising stars in the Chinese bureaucracy became entangled in corrupt practices early on in their careers, and ever more deeply over the years. Land sales, in particular, enabled local governments to accumulate vast sums of money, at least some of which ended up in the pockets of officials overseeing the transactions.

Against this background, Xi’s uncompromising anti-corruption campaigns have been rather popular with the Chinese public. Most Chinese understand that Xi’s broad crackdown has served as a pretext for removing his opponents from positions of power; but they still want to see officials with Rolexes and Rolls-Royces get their comeuppance. Pei, however, knows better: precisely because Xi’s campaigns are politically motivated, they will not root out corruption’s structural causes.

Resilient China?

But Shambaugh and Pei are not the only voices in the debate. After all, the Chinese Communist Party has a long record of renewal, reflecting its ability to adapt to ensure its survival. Frank Pieke’s Knowing China takes this capacity as its starting point, which leads to a much more upbeat appraisal of the CCP’s ability to take China forward.

Knowing ChinaWhereas Shambaugh and Pei are political scientists, Pieke is an anthropologist, and his understanding of the CCP is shaped by that discipline’s categories of analysis. He views the CCP not as a distorted version of an ideal type of political party from the liberal world, but as an entity that has grown up over decades as part of an organic set of developments defining the relationship between the Chinese people and their political rulers.

Thus, for Pieke, the period since 1978 has not been one of “reform” (with the implication of neoliberalism), but of “neosocialism.” To meet future challenges, he argues, “the continued rule of the Communist Party is not the main obstacle, but instead the main condition,” because “CCP rule keeps China united and ensures stability and peace.” He emphasizes that this claim does not imply “denial” that the Party must do better; it does imply, however, that claims about the system’s imminent collapse may be misplaced.

Pieke’s argument draws on an understanding of China’s premodern culture, with the “mandate of heaven” – a kind of legitimacy gained by virtue of rulers’ ability to create prosperity – now in the hands of the CCP. He paints a fascinating, counterintuitive picture of the CCP as a quasi-theological institution, and certainly one that has no intention of using the tactics familiar to liberal societies to reform. But he has more faith than Shambaugh or Pei in the system’s capacity to use mechanisms such as consultative democracy, petitioning, and the rapidly developing, albeit much constricted, legal system to encourage profound change.

Will China Dominate the 21st Century?For those more interested in the geopolitical bottom line, Jonathan Fenby’s brief, insightful book Will China Dominate the 21st Century?puts the matter bluntly and argues – rightly – that the answer is no. Fenby, a former editor of the South China Morning Post, points out that China will always be a “dependent” power, importing vast amounts of minerals, fossil fuels, and even food in years of bad harvests. Equally important, despite genuine resentment at being forced to operate in an international system not of China’s making, there is no such thing as a “Chinese model” that could be put into operation in a consistent way elsewhere.

It is one thing to argue that China has a unique polity that makes liberal democracy impossible; it is quite another to argue that others must exchange political rights for economic benefits. Fenby does not go as far as Pei and Shambaugh. But “if reform is not undertaken in a far-reaching manner,” he warns, China “will lurch from problem to problem, limiting its future development.”

We will know more about the likely path China takes this autumn, after the 19th National Congress of the CCP. Once Xi has secured his second five-year presidential term, and packed the Politburo Standing Committee, China’s highest political authority, with his allies, he is likely to turn to China’s gravest short-term problems: the need to reform the last of the major state-owned industries and tame ballooning debt.

Solving both problems is crucial to long-term reform. But tackling them may well be a messy process of constricted growth and more political repression, as Xi uses all the weapons at his disposal to neutralize his opponents and rebalance the economy. If he manages that, cautious political liberalization in the early 2020s will be possible, particularly as China becomes more dependent on higher-value economic sectors that rely on a more open economy and society. That, of course, assumes that the volatile Trump and the secretive CCP don’t get caught up in a fundamental crisis in the next few years.

The Sino-American Dialectic

Whether such an outcome can be avoided will depend on how Xi and Trump address the US-China relationship’s current problems and future prospects. Two impressive new historical studies that examine the bilateral relationship from a longer-term perspective help readers understand the dynamics underlying policies on both sides.

The Beautiful Country and the Middle KingdomPerhaps surprisingly, John Pomfret’s The Beautiful Country and the Middle Kingdom is one of a rather small number of books to survey US-China relations over the past three centuries. A classic of an earlier era, John King Fairbank’s The United States and China, helped shape much of the Cold War conversation about China in the American academy. Pomfret, an experienced American journalist who has reported from China for over three decades, has produced a worthy successor: a clearly written, vivid account of the most important encounters between China and the US.

The theme that runs through Pomfret’s account is that the Sino-American relationship has been defined by an ever-stronger sense of mutual dependence, mutual admiration, and mutual distrust. The Qing dynasty regarded the US with ambivalence: the American barbarians were in many ways as rapacious as those of Britain and France, but at least they were less enthusiastic about seizing Chinese territory. Chiang Kai-shek, China’s Nationalist leader during much of the mid-twentieth century, including World War II, filled his diaries with entries that swung between intense hatred of the US, which he feared was trying to undermine his rule, and the conviction that the US must shape postwar Asia. Mao, Chiang’s great rival, once referred to America as “the most respected enemy.”

A hundred years ago, it was fair to say that Britain was the most important foreign country for China; 80 years ago, it was Japan; and 60 years ago, it was the Soviet Union. But for the past half-century, and in particular after Nixon and Henry Kissinger’s visit to China in 1972, fascinatingly described by Pomfret, there is no doubt that it has been the US. The two countries’ elites reflect that change: Xi sent his daughter to Harvard, while the Trump family has significant business interests in China.

Cutthroat Communism

In Unlikely Partners, Julian Gewirtz details one of the most intriguing moments in the development of the Sino-American relationship. It has now become conventional wisdom that China’s ruling Communists oversee one of the most ruthlessly capitalist systems anywhere in the world. But the process by which that happened has often been rather obscure.

Unlikely PartnersAfter 1978, China drew on a variety of experiences, both internal and external, to repair the destruction wrought by the Cultural Revolution, reboot its economy, and eventually become a global powerhouse with the world’s second-largest GDP. Gewirtz’s book focuses on a remarkable, and little-known, sequence of change in the 1970s and 1980s, when a succession of Western economists visited China to advise Deng’s Politburo on how to reform the Chinese economy.

The story is not without its farcical elements. In September 1980, the Nobel laureate Milton Friedman, perhaps the most prominent free-market proponent in the 1970s, was invited to China, together with his wife, the economist Rose D. Friedman, to give lectures on the importance of “free private markets.” What the Friedmans said was uncompromising enough to ruffle official feathers – so much so that a delegation was sent to the Friedmans’ hotel room to educate them about the “triumphs of the Chinese Communist Party.”

Yet engagement with other economists – including those from the reformist part of the Communist world, such as the Hungarian Janos Kornai, and the British economist Alec Cairncross – shaped the “neosocialism” described by Pieke and gave rise to an economic miracle. Gewirtz also traces the intellectual genealogy of figures who have since gone on to prominence in reform-era China, including Zhou Xiaochuan (today the governor of the People’s Bank of China), and Wu Jinglian (a senior economist whose nickname, appropriately enough, is “Markets Wu”). The result is a remarkable book, written with poise and confidence, that shows how closely Chinese reform was tied to ideas from the capitalist and socialist blocs during the Cold War, and illuminates the beginnings of an economic idea that would transform China and change the world.

Historical Parallels

History is a source of analogy for the present, and those who seek such analogies will find the mother lode in Jeffrey Wasserstrom’s sharp squib of a book, Eight Juxtapositions. Wasserstrom is a distinguished historian of China, and in this thoughtful, provocative work, he uses his learning deftly to point out the similarities (imperfect but real) between China today and various historical precedents.

Wasserstrom teases China by speaking of the possibility of a Chinese “co-prosperity sphere,” with its echo of the prewar Japanese empire’s ambitions in East Asia. He also draws a parallel between Xi and Pope Francis – both, after all, are heads of secretive organizations that have global influence but urgently need reform. And, alive to US-China comparisons, Wasserstrom answers critics who ask why Chinese banknotes feature Mao, who was responsible for the death of millions: Andrew Jackson, he points out, oversaw the ethnic cleansing of Native Americans from the southeastern US, and yet his glowering visage remains on the 20-dollar bill to this day.

Wasserstrom’s analogies may seem provocative, but they are important. Xi and Trump are interacting in a world where the contrast between China and the US (and the liberal world more generally) has become fuzzier. Make no mistake: the US is still a vibrant liberal democracy (there are no “Saturday Night Live”-type skits parodying Xi on CCTV) with the world’s largest economy and most powerful military.

Eight JuxtapositionsBut the two leaders’ language has grown much closer in some respects. Xi bullies the Chinese media to behave as though its “surname” were “The Party,” while Trump lashes out at the “lies” and “fake news” of media outlets that do not reflect his point of view. In Japan, India, and the Philippines, democratically elected leaders behave ambivalently – or worse – when it comes to press freedom, civil rights, and diversity. As liberal values are eroded in the geopolitical West, it is becoming harder to stand on principle against the Chinese system.

Likewise, the key global powers have moved toward Realpolitik and away from the idea that universal values should underpin international affairs. Trump has made it clear that the only ideal guiding his policies will be “America first,” a concept based on gaining zero-sum economic advantages, not on the supposed superiority of the values claimed by the US as its own. (As he put it when prompted to criticize Russia, “You think we’re so innocent?”). With the European Union likely to be preoccupied with crises for years, and the EU-departing United Kingdom busy chasing (possibly chimerical) trade deals with China, it is hardly likely that either will make criticism of China’s domestic politics a high priority anytime soon.

Whether China starts to buckle under systemic failure, or re-equilibrates and becomes even more confident, managing relations with it will remain a crucial task for the rest of the world – and especially for the US. These books, with their widely varying perspectives and approaches, provide an excellent survey of what is – and what could be – at stake.


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