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The Right War for the US and China

22 days ago

Either everyone wins the fight against climate change, or no one does. So, while the world’s great powers – especially the United States and China – should prepare for war, they must wage it against the right enemy.

HONG KONG – The planet is heating up – and so are global geopolitics. With less than two months until the crucial United Nations Climate Change Conference (COP26) in Glasgow, the United States and China must commit to cooperate on the existential challenge global warming represents. But bilateral relations remain burdened by mistrust, antagonism, and even warmongering.
Biden’s Collaborative Containment Strategy

CHRIS KLEPONIS/AFP via Getty Images

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How Paradigm Blindness Leads to Bad Policy

August 27, 2021

Though we live in a highly complex, networked world, the paradigm that guides policymaking is largely linear, mechanical, and “rational.” This leaves us blind to the obvious – including our own blindness – and vulnerable to conceptual traps and collective-action problems.

HONG KONG – We live in an age of systemic gridlock, policy chaos, and sudden-shock failures. How is it possible that Afghan security forces – built and trained by the United States military at a cost of $83 billion over two decades – succumbed to a militia of fighters in pickup trucks in a mere 11 days? How could America’s best and brightest intelligence experts and military leaders have failed to foresee that the rapid withdrawal of US air support

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The Circular Economy Grows Up

July 30, 2021

If we do not abandon the prevailing “take-make-waste” pattern of global production and consumption soon, we will need the equivalent of almost three Earths to provide enough natural resources to sustain current lifestyles, and annual waste generation will increase by 70%. But there is a better way.

HONG KONG – Every year, 400 million tons of heavy metal, toxic sludge, and industrial waste are dumped into our waterways. At least eight million tons of plastic end up in our oceans. Some 1.3 billion tons of food – about one-third of all that is produced – is lost or wasted, while hundreds of millions of people go hungry. Our oceans are being overfished, our lands degraded, and biodiversity rapidly eroded. Meanwhile,

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Accommodating China Is Unavoidable

June 23, 2021

"Absolute national security" might have been a reasonable goal for the US when the country stood at the helm of a unipolar world order. But in today’s world, attempting to “contain and confront” those with different values or systems, rather than negotiating a new global compact that accommodates them, is a recipe for conflict.

HONG KONG – In their latest communiqué, NATO leaders declared that China presents “systemic challenges to the rules-based international order.” The response from China’s mission to the European Union was clear: “We will not present a ‘systemic challenge’ to anyone, but if someone wants to pose a ‘systemic challenge’ to us, we will not remain indifferent.” Such a tit-for-tat rhetoric is

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Do Free Markets Still Beat Central Planning?

May 25, 2021

Institutional arrangements are complex systems, shaped by history, geography, and culture. The objective should not be to identify a one-size-fits-all approach, but rather to devise the combination of characteristics that would deliver the greatest good for the greatest number of people, with the right checks and balances.

HONG KONG – In 1944, Friedrich A. Hayek suggested that the spontaneous order of markets was inherently superior to the supposedly dynamism-draining totalitarian order of communist or fascist regimes. The ensuing decades – when free-market economies thrived, and the Soviet Union’s centrally planned economy imploded – seemed to vindicate him. Then along came China.

How Not to Launch a

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A One-Earth Balance Sheet

April 28, 2021

At the dawn of the nuclear age, Albert Einstein wrote that “a new type of thinking is essential if mankind is to survive and move toward higher levels.” As the world confronts the escalating climate crisis, a new type of thinking is needed once again – and it starts with a new type of accounting.

HONG KONG – Last week, the world marked the 51st Earth Day. This year’s theme – “Restore Our Earth” – was apt. As the COVID-19 pandemic has reminded us, the effects of human activity on the planet do not respect borders. The Earth is a single living, self-regulating system, and it demands a single, shared system of accounting that balances at the global level. We need a one-Earth balance sheet.

Build Back the

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China Must Create Shared Global Wealth

March 24, 2021

China has become vastly more prosperous in the last two decades, but with greater wealth comes greater social responsibility. Instead of quarreling, the United States and China need to start solving global problems together.

HONG KONG – The OECD is projecting an uneven K-shaped economic recovery from the pandemic in 2021. Richer countries with more extensive vaccine rollouts that can afford to reopen and reflate their economies will do so. Poorer economies will struggle to stay healthy and avoid debt crises. But the mantra that “no one is safe until everyone is” highlights the need to spread health, wealth, and self-respect to all. An increasingly prosperous China can and should play a central role in this effort.

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How to Cooperate with China

February 24, 2021

With his plan to build a concert of democracies to contain China, US President Joe Biden is making a grave mistake. The US and China should each be doing their part to protect the global commons, not competing for global dominance.

HONG KONG – China is a tough country to comprehend – even for most Chinese. But much of what makes China enigmatic – its long history, vast and varied territory, huge and diverse population, complex politics, and massive, dynamic economy – also makes understanding the country important. For better or worse, what happens in China affects everyone.

No Time to Waste

PS OnPoint

John Keatley 
Free to read

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A New Tone in US-China Relations?

January 25, 2021

Both the US and Chinese governments must start to understand that combining cooperation with competition is the best way forward. Presidents Joe Biden and Xi Jinping, both chastened by four years of Trumpian disruption, have a real chance to reverse the course of bilateral relations.

HONG KONG – Donald Trump has left the White House, but Trumpism has not left US politics. With Joe Biden as America’s president, the world hopes that the United States will shift away from Trump’s disruptive confrontational approach toward China relations and embark on a path of pragmatic engagement. At stake is whether this crucial bilateral relationship serves to strengthen or shatter the global order.

Liberation

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The Sino-American Race to Zero

December 31, 2020

If China and the US – the world’s two largest emitters of carbon dioxide emitters – reach net-zero emissions by mid-century, everyone will be better off. A strategy of constructive competition, rather than a cutthroat race, will get both countries to the finish line much faster.

HONG KONG – As the United States prepares for a radical course-correction on climate change, China is raising its game. Climate action has become yet another front in the competition between the world’s two largest economies. Who will cross the net-zero-emissions finish line first?

How Might COVID-19 Change the World?

PS OnPoint

STR/AFP via Getty Images

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Division or Dialogue with China?

November 26, 2020

Joe Biden’s presidency amounts to a golden opportunity to initiate a direct and honest dialogue with China on issues that require constructive engagement. But time is of the essence. If Biden begins his term by choosing division over dialogue, changing course will soon become difficult, if not impossible.

HONG KONG – Americans don’t agree on much of anything nowadays. Yet they are largely united in their belief that China represents an existential challenge to their country and the international order it has long led. This combination of internal division and external demonization has made the Sino-American rivalry increasingly inescapable – and potentially catastrophic.

America’s Political Crisis and

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Shenzhen’s Game-Changing Reform

October 27, 2020

In an increasingly hostile external environment, sustaining progress on development requires China to adopt an updated approach to its four-decade-long process of "reform and opening up." Shenzhen – the star performer among the first cohort of special economic zones – is the ideal testing ground.

HONG KONG – Early this month, on the 40th anniversary of Shenzhen’s designation as a special economic zone (SEZ), Chinese President Xi Jinping unveiled a blueprint for building the city into a trade, finance, and technology hub. Most China-watchers have focused on what this means for Hong Kong, Shanghai, or at most the Guangdong-Hong Kong-Macau Greater Bay Area. But such narrow assessments fail to capture the true

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Minimizing the Social Cost of COVID-19

August 26, 2020

Efforts to turn an effective institutional response to the pandemic into a political or ideological battleground are misguided, at best. As the late Nobel laureate Ronald H. Coase showed, regardless of ideology or politics, each society must develop institutional arrangements that constrain individual freedom.

HONG KONG – In 1960, the Nobel laureate economist Ronald H. Coase introduced the “problem of social cost”: human activities often have negative externalities, so individual rights cannot be absolute. Institutions must intervene. There is no better example of this dynamic than the COVID-19 crisis.

The Post-Pandemic Economy’s Barriers to Growth

PS OnPoint

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The Economic Costs of National Security

July 29, 2020

As the US-China rivalry escalates, the growing emphasis on national security will undermine global trade and investment, leaving fewer resources to finance social policies, address inequality, and tackle climate change. This is a global tragedy of the commons, and there is no guarantee that recognizing it will change the outcome.

HONG KONG – By disrupting the world’s interconnected economic, social, and geopolitical spheres, the COVID-19 crisis has exposed just how fragile and inequitable the institutions that govern them really are. It has also highlighted how difficult it is to address systemic fragility and inequity amid escalating national-security threats.

From American to European

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The American Muddle

June 26, 2020

Longstanding and bipartisan pretensions of American exceptionalism, rising domestic concerns, and a lack of policy clarity suggest that, even if Donald Trump is voted out in November, the US-led cooperation the world needs will not soon emerge. But another four years of Trump would almost certainly make matters worse.

HONG KONG – Former US National Security Adviser John Bolton’s new book The Room Where It Happened bills itself as “the most comprehensive and substantial account” of President Donald Trump’s administration. And, indeed, it has quickly become a critical resource for those seeking to understand Trump. But, despite Bolton’s juicy revelations about Trump’s conduct of foreign policy (which his administration

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Cooperate with China or Suffer

May 28, 2020

Neither confronting a threat that doesn’t respect borders nor safeguarding an economy that is deeply integrated with the rest of the world can be done alone. Yet it remains far from clear that the US will subordinate its geopolitical rivalry with China to these vital objectives.

HONG KONG – As governments worldwide confront the terrible choice between saving lives from COVID-19 and protecting people’s livelihoods, economic indicators highlight the intensity of the dilemma. Unemployment has skyrocketed, trade has plunged, and the global economy is facing its worst downturn since the Great Depression. There is only one way to limit the pandemic’s economic fallout: Sino-American cooperation.

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What COVID-19 Reveals About the US and China

April 23, 2020

Differences in the American and Chinese pandemic responses are often attributed to their political systems: Chinese central planning allows for more resolute action. But this explanation misses the extent to which the two countries’ growth models have shaped their responses – and the financial and economic impact of the crisis.

HONG KONG – There is nothing like a pandemic to expose systemic differences. For China and the United States, which were locked in an ideologically driven competition even before the COVID-19 crisis, those differences are stark. But the two countries have at least one thing in common: when this is all over, they will need to rethink their social contracts.

The EU

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Waging War on COVID-19

March 27, 2020

Like any war, the fight against COVID-19 will disproportionately hurt those who were already vulnerable. Unless countries can move past destructive nationalism and petty competition in order to engage in constructive cooperation, millions will suffer, both physically and economically.

HONG KONG – The world is at war. The enemy is resilient, ruthless, and unpredictable, with no regard for race, nationality, ideology, or wealth. Already, it has killed more than 26,000 people and infected over 560,000, from ordinary workers to the United Kingdom’s prime minister and crown prince. It has halted economies, overwhelmed health-care systems, and forced hundreds of millions to remain confined to their homes. And it will not

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PS Say More: Andrew Sheng

March 24, 2020

Project Syndicate: You recently wrote that, in China, COVID-19 has already led to a “massive re-orientation of priorities, such as innovative ways of dealing with business cash flows, survival of [small and medium-size enterprises (SMEs)], job disruptions, and restoring key supply chains.” Should we expect the government to revise its policy approach in the wake of the crisis? What might the most significant changes be?Andrew Sheng: The COVID-19 outbreak is perhaps the biggest wake-up call in history, threatening both individual lives and entire economic and social systems. It is truly a “viral” crisis, not only because of the pathogen in question, but also in terms of information transmission. Never have so many people been alerted so fast to new developments

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China’s COVID-19 Moment

February 26, 2020

Even when the coronavirus is contained, escalating geopolitical rivalries, technological disruption, climate change, and the likelihood of new pandemics loom. So, beyond tackling the current crisis, China’s government should be preparing to implement resilience-building reforms.

HONG KONG – Last October, the 2019 Global Health Security Report included a stark warning: “National health security is fundamentally weak around the world. No country is fully prepared for epidemics or pandemics, and every country has important gaps to address.” Just a couple of months later, a new coronavirus emerged in Wuhan, China – and quickly demonstrated the accuracy of the report’s assessment.
When China Sneezes

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Re-Engineering China’s Economy

January 27, 2020

The recent “phase one” trade deal between the United States and China does not resolve core outstanding bilateral issues, and the two countries’ strategic rivalry will likely intensify in the medium to long term. But the accord gives China’s leaders a new opportunity to develop better and more open domestic markets.

HONG KONG – On January 15, US President Donald Trump and Chinese Vice Premier Liu He signed a “phase one” agreement aimed at containing the two countries’ long-running bilateral trade war. But no sooner had the deal been concluded than China was confronted with an emergency in the form of the deadly coronavirus outbreak in Wuhan.
How a Democratic Counteroffensive Can Win

PS OnPoint

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Why a Cool War May Be Worse than a Cold One

January 2, 2020

The unfolding Sino-American conflict is far less cut and dried than the Cold War was. Minimizing the fallout will require both sides to recognize that, in an interconnected world, efforts to strengthen their own position become self-defeating when they undermine global stability and dynamism.

HONG KONG – In recent years, fears of a new cold war between the United States and China have been proliferating. But the tensions between the two powers would be better described as a “cool war,” characterized not by old-fashioned spheres of interest, proxy wars, and the threat of “mutually assured destruction,” but by an unprecedented combination of wide-ranging competition and deep interconnection.
How Truth Survived

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Can Hong Kong Avoid Tragedy?

November 26, 2019

To protect their own futures, the people of Hong Kong must reflect carefully on the need to end violent protests and work together to address genuine grievances. The alternative is not some fantasy of an independent and thriving Hong Kong. It is a devastated economy, a divided society, and a lost generation.

HONG KONG – Nearly six months after they began, the protests in our city have reached fever pitch. On one particularly devastating day earlier this month, police fired more than 1,500 rounds of tear gas, a police officer shot a demonstrator at point-blank range while being attacked, and protesters immolated a man who disagreed with them. More than 4,000 people have been arrested, infrastructure has been

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China Adjusts to the New World Order

October 28, 2019

Recognizing that global engagement is in its interests, China’s leaders have been working to counter the backlash against globalization and have reconfirmed their commitment to continued reform and opening up. But China does not need the world nearly as desperately as US President Donald Trump and his advisers seem to believe.

HONG KONG – On October 1, the People’s Republic of China celebrated the 70th anniversary of its founding with impressive military and civilian parades meant to showcase the extraordinary progress the country has made under the leadership of the Communist Party of China. Formidable challenges lie ahead. But China’s record so far, and the resources it has at its disposal, indicate that it may

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The Next Phase of China’s Reform and Opening Up

October 1, 2019

Over the last four decades, China has made major progress on integrating into global networks. But it has a lot more work to do – and must do it while confronting an increasingly hostile external environment.

HONG KONG – Over the last four decades, China has integrated into global networks in trade, finance, data, and culture (encompassing social values, religion, and political beliefs). But, as the United States embraces protectionism, continued progress on global integration will require China to adjust its approach.
The Impeachment Trap

Melina Mara/The Washington Post via Getty Images

Can Capitalist

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Hong Kong’s Real Problem Is Inequality

August 27, 2019

A powerful, but oft-ignored factor underlying the frustrations of Hong Kong’s people is inequality. And, contrary to the prevailing pro-democracy narrative, the failure of Hong Kong’s autonomous government to address the problem stems from the electoral politics to which the protesters are so committed.

HONG KONG – Since China regained sovereignty over Hong Kong on July 1, 1997, the city has prospered economically, but festered politically. Now, one of the world’s richest cities is engulfed by protests, which have blocked roads, paralyzed the airport, and at times descended into violence. Far from a uniquely Chinese problem, however, the current chaos should be viewed as a bellwether for capitalist

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Self-Harm in Hong Kong

July 29, 2019

For several months, Hong Kong has been seized by mass protests driven by fear that mainland China is eroding the liberty and autonomy promised under the “one country, two systems” principle. But Hong Kong’s outrage at China’s government is misplaced – and self-destructive.

HONG KONG – Hong Kong has long been a beacon of inspiration for Asian cities. Highly competitive and connected, it has served as a bridge between East and West, earning it the moniker “Asia’s world city.” But this position is now under threat – and it is Hong Kong’s own fault.
Their Faintest Hour

Getty Images

Facebook’s Libra Must

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Corporate America in the Crossfire

June 24, 2019

The US may have a trade deficit with the rest of the world, but its multinational companies have a major surplus when it comes to sales in foreign markets – especially China. If the US-China trade war continues to escalate, these firms will be, as US President Donald Trump might put it, the biggest losers.

HONG KONG – American multinationals may like the idea of forcing China to alter the policies and practices – from subsidies for state-owned enterprises to the requirement that foreign firms share proprietary technology in exchange for access to the Chinese market – that place them at a competitive disadvantage. But, as US President Donald Trump’s trade war continues to escalate, it is worth

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How Will the US-China Trade War End?

May 27, 2019

The US-China trade war seems not to have caused much pain yet. But after 117 consecutive months of economic expansion – compared to an historical average of 48 months – the US could soon find itself thrown back into a painful recession, owing to disruptions caused by its own trade policy.

HONG KONG – Dashing hopes of a quick agreement on trade relations with China, US President Donald Trump’s administration has imposed punitive tariffs on another $200 billion of Chinese goods. Now that the Chinese government has responded with new tariffs on $60 billion of US products, the United States is threatening tariffs targeting yet another $300 billion of Chinese imports. Both sides are now digging in

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The Power of China’s Urban Clusters

April 25, 2019

The “Chinese Dream” of national rejuvenation touted by President Xi Jinping is not, as some in the West seem to think, about world domination. Instead, China has advanced a vision of inclusive, sustainable economic growth – and its leaders are doing what it takes to translate that vision into reality.

HONG KONG – In February, China’s State Council unveiled guidelines for developing the “Greater Bay Area” (GBA), covering nine cities around the Pearl River Delta in Guangdong province, plus Hong Kong and Macau. While the rest of the world remains mired in a seemingly interminable debate over how to achieve inclusive and sustainable growth, China is working to deliver it.
Capitalism’s Great Reckoning

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