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Re-Engineering China’s Economy

2 days ago

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

27 days ago

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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China and Its Western Critics

March 26, 2019

Contrary to popular belief in the West, China’s trial-and-error approach to policymaking supports accountability. In fact, the evidence shows that Chinese policy is responsive to feedback from the Chinese people and the international community, with leaders correcting mistakes and updating policies as they gain new information.

HONG KONG – In Washington, DC, a bipartisan consensus about China has emerged: the United States is facing a trade-manipulating, authoritarian intellectual-property thief that represents a strategic threat to the US and its allies and deserves to be punished. But the consensus is wrong. In fact, China deserves recognition, if not appreciation, for its achievements.

Jose Luis

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Can Trump Make a Deal with China?

February 22, 2019

In the ongoing US-China trade talks, considerable progress has been made on several key trade issues, such as intellectual-property rights protection. But to defuse tensions in any sustainable way will require a more comprehensive approach, based on a fundamental shift in mindset.

HONG KONG – Trade negotiations between the United States and China are closing in on the March 1 deadline, after which the bilateral tariff war will resume – beginning with an increase from 10% to 25% on $200 billion worth of Chinese products. While global financial markets are fluctuating wildly, investors seem to assume that too much is at stake for the US and China to fail to reach a deal. Their optimism could prove short-lived.

Wojtek

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When Will China Achieve Quality Growth?

January 29, 2019

China has not yet realized President Xi Jinping’s vision of an inclusive, green, innovation-driven economy. But if policymakers continue to strengthen property rights and work to improve market confidence and foster fair competition, a breakthrough should not be far off.

HONG KONG – Even before the 2008 global financial crisis laid bare the limits of China’s export-oriented growth model, the country’s leaders were stressing the need for quality growth. In 2007, then-Premier Wen Jiabao argued that Chinese economic growth had become “unstable, unbalanced, uncoordinated, and unsustainable.” More than a decade later, how close is China to overcoming Wen’s “Four Uns”?

Fred Dufour – Pool/Getty Images

Chip

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Reconciling Chinese National Security and Economic Growth

December 28, 2018

The increasingly hardline “America First” approach taken by the US risks strengthening China’s own hardliners, who will push to emphasize national security over continued "reform and opening up." So far, however, President Xi Jinping remains committed to maintaining the pragmatic approach that has guided China for 40 years.

HONG KONG – Earlier this month, at a conference to commemorate the 40th anniversary of China’s “reform and opening up,” President Xi Jinping underscored the tension between the continuation of that process and the imperative of protecting national security. Xi recognized that “China cannot develop itself in isolation from the world, and the world needs China for global prosperity.” Yet he also emphasized that

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China’s Four Traps

November 26, 2018

During its 40 years of reform, China has mastered learning by doing, engaged in bold policy experimentation, and become steadily more integrated into global economy. It will need to bring all of this experience to bear, as it attempts to avoid the pitfalls that could derail its effort to achieve high-income status.

HONG KONG – On the 40th anniversary of the launch of China’s “reform and opening up,” the country is well on its way to recapturing its former status as the world’s largest economy, having made substantial progress toward modernizing its agricultural sector, industry, defense systems, and scientific capabilities. But four major traps lie ahead.

Jabin Botsford/The Washington Post via Getty Images

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America’s Self-Defeating China Policy

October 30, 2018

US President Donald Trump may think that his approach to China amounts to putting “America first.” Yet his policies will hurt not only China, but also the US and the rest of the world, not least by undermining leaders’ ability to address shared challenges like inequality and climate change.

HONG KONG – Trade tariffs may be getting the most attention, but the conflict between the United States and China is actually being fought on multiple fronts, including exchange rates, technology, cyberspace, and even arms. This does not bode well for the world’s capacity to confront shared challenges, from migration to climate change.

Spencer Platt/Getty Images

Saudi Kingdom Council/Handout/Anadolu Agency/Getty Images

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Chinese Reform During a Trade War

September 27, 2018

China has only limited influence over the evolution of the rules-based world order. But, by upgrading its property-rights infrastructure, it can support shared prosperity and mutually beneficial engagement, potentially defusing some of the tensions that have lately been fueling instability worldwide.

HONG KONG – Last June, The Economist lamented that “Donald Trump is undermining the rules-based international order,” as he seeks “short-term wins for America” at the cost of “long-term damage to the world.” With Trump now escalating his trade war with China – and with both sides seeming to be girding for protracted competition over technological leadership – the threat is only growing.

Spencer Platt/Getty Images

Bryan

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How Cities Are Saving China

August 28, 2018

The threat of a trade war may not be good news for China, but it will not bring down the economy. The real challenge China faces is how to take advantage of dynamic urban clusters to generate growth and address structural challenges in financially and environmentally sustainable ways.

HONG KONG – The world has a demand problem, and it is dealing with it all wrong. Rather than allowing itself to be harmed by other countries’ problematic policies, China must work to create its own demand by making full use of its capacity for policy experimentation, long-term planning, and pragmatic decision-making.

Spencer Platt/Getty Images

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In the decade since the 2008 global

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Stress Testing China’s System Reform

July 25, 2018

For China, America’s rejection of the rules-based multilateral order and embrace of bilateral deal-making creates significant uncertainty. But Chinese policymakers have the tools to overcome the challenge ahead, beginning with the systemic mindset that has shaped decision-making in the country for millennia.

HONG KONG – The historian Wang Gungwu recently observed that, whereas the West thinks in terms of ideologies, China has long thought in terms of systems. In today’s age of rapid and profound change – characterized, in particular, by a fundamental shift in America’s attitude toward the rest of the world – China’s system reform approach is being put to the test.

GIANLUIGI GUERCIA/AFP/Getty Images

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Anger in America

June 25, 2018

US President Donald Trump has exploited popular anger to advance his own interests, but he did not create that anger. America’s elites have spent decades doing that, creating the conditions for a figure like Trump to emerge.

HONG KONG – Many blame today’s populist rebellion in the West on the far right, which has won votes by claiming to be responding to working-class grievances, while stoking fear and promoting polarization. But, in blaming leaders who have seized on popular anger, many overlook the power of that anger itself, which is aimed at elites whose wealth has skyrocketed in the last 30 years, while that of the middle and working classes has remained stagnant.

Project Syndicate

SAUL

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Managing China’s Global Risks

May 29, 2018

In addition to structural and cyclical risks, China must address the “gray rhino” (highly likely, but often ignored) strategic risks arising from the intensifying Sino-American geopolitical rivalry. Here, the emerging trade war is just the tip of the iceberg.

HONG KONG – The world economy and international system are now characterized not only by deep interconnectedness, but also by intensifying geopolitical rivalries. For China, the situation is complicated further by US President Donald Trump’s evident view of the country as a strategic competitor, rather than a strategic partner, not to mention massive domestic social change and rapid technological disruption. The only way to mitigate the risks that China faces is with a

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From Dollar to e-SDR

April 27, 2018

The rise of cryptocurrencies has created a unique opportunity for market forces to spearhead a shift toward a truly neutral reserve asset. With the leadership of the US – the issuer of the main international reserve currency – more unpredictable than ever, it is an opportunity that should not be missed.
HONG KONG – As the risk of a US-China trade war mounts, creating a geopolitically neutral and fair monetary system has become increasingly urgent. The shift from a unipolar to a multipolar world order has not been particularly orderly. Instead, it has produced a kind of monetary non-system that depends on a debt-driven, dollar-based model that is too pro-cyclical, fragile, and potentially biased to support the management of trade conflict.

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The Right Way to Judge Chinese Governance

March 26, 2018

In a fast-changing world, governance systems must support rapid decision-making under conditions of radical uncertainty, while maintaining accountability. That – not the Western expectation of what a governance system should look like – is the standard by which we should be assessing political developments in China.
HONG KONG – Following China’s “two sessions” – the annual meetings of the national legislature and the top political advisory body – all Western observers, it seems, are discussing the removal of the two-term limit for the president. Xi Jinping, the international media insists, is consolidating power, and may even be laying the groundwork for a Mao Zedong-style personality cult. But this reading is fundamentally flawed.

The

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The Asian Values Debate Returns

March 2, 2018

For the time being, concrete evidence of policy success in countries like China and India may well be the most effective way to buttress the case for applying non-Western perspectives to national development strategies. But, in the longer term, non-Western thinkers will need to translate their ideas into testable models and theories.
HONG KONG – In 1998, when China’s economic rise was just beginning, Kishore Mahbubani ignited something of a global intellectual firestorm with his book Can Asians Think? Two decades later, with Asia forming the core of the world economy, and China challenging the United States for hegemony in the Asia-Pacific region and even for global leadership, Mahbubani’s question has gained new, and perhaps more profound, resonance.To be clear, Mahbubani

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Why There Is No “Beijing Consensus”

February 27, 2018

HONG KONG – Four decades would seem to be plenty of time to identify the underlying logic of China’s development model. Yet, 40 years after Deng Xiaoping initiated the country’s “reform and opening up,” a “Beijing Consensus” – that is, a Chinese rival to the Western neoliberal Washington Consensus – has yet to be articulated.

The Year Ahead 2018

The world’s leading thinkers and policymakers examine what’s come apart in the past year, and anticipate what will define the year ahead.

Order now

Over the years, China has worked to transform its closed, planned economy into a more open, market-based system. Industry and, increasingly, services have replaced

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China’s Search for Quality Growth

January 30, 2018

China’s leaders have demonstrated a willingness to accept lower rates of GDP growth as they shift toward a more balanced growth model that emphasizes human wellbeing. It will not be easy to realize the vision of "people-centered" development that President Xi Jinping announced in October 2017, but the country is on the right track.
HONG KONG – As Chinese President Xi Jinping begins his second five-year term, shifting toward “quality growth” is at the top of the country’s policy agenda. Across China’s government, a quiet but resolute commitment to fostering a new growth model that corrects the distortions created by decades of double-digit growth – including corruption, pollution, rising inequality, and other structural imbalances – is taking root.

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The Challenges Confronting China’s Digital Economy

December 26, 2017

If China is to ensure the continued development of its digital economy, while containing the risks associated with disruption, its leaders will need to implement smart regulations. And that will require careful consideration of the factors that have contributed to – and impeded – its progress so far.
HONG KONG – China’s digital economy is a force to be reckoned with. The country now accounts for 42% of global e-commerce, boasts one-third of the world’s most successful tech startups, and conducts 11 times more mobile payments than the United States per year. But there are major challenges ahead.

The Year Ahead 2018

The world’s leading thinkers and policymakers examine what’s come apart in the past year, and

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The Next Battle in China’s War on Corruption

November 23, 2017

Chinese President Xi Jinping knows well the threat that corruption poses to the authority of the Communist Party of China and the state it controls. But moving beyond Xi’s anti-corruption purge to build robust and lasting anti-graft institutions will not be easy, owing to enduring opportunities for bureaucratic capture.
HONG KONG – Corruption is a cancer to which no society is immune. It raised the death toll of Iran’s recent earthquake, owing to substandard housing construction ten years ago. It has afflicted the United States Navy, which is now investigating more than 60 admirals and hundreds more officers for fraud and bribery. It has brought down countless governments, from Brazilian President Dilma Rousseff’s administration last year to Chiang Kai-shek’s Nationalist

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Modernity with Chinese Characteristics

October 25, 2017

In a world comprising a diverse array of countries, each with its own complex, dynamic, and evolving system, there can be no one-size-fits-all development path. With Xi Jinping’s speech at the Chinese Communist Party’s 19th National Congress, China’s path has now been mapped, with the understanding that the map can and will be revised as needed.
HONG KONG – At the start of the 19th National Congress of the Chinese Communist Party (CCP) this month, President Xi Jinping unveiled his “two-stage development plan” to turn China into a “modern socialist state” by 2035. Since then, commentators have furiously debated the theme of “China rising” and Xi’s concentration of power in his own hands. They are missing the point.

Kevin Frayer/Getty Images

Getty

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Are the Sustainable Development Goals Achievable?

September 27, 2017

The SDGs were always bound to meet strong headwinds, owing to technological disruption, geopolitical rivalry, and widening social inequality. But populist calls for nationalist policies, including trade protectionism, have intensified those headwinds considerably.
HONG KONG – US President Donald Trump’s recent speech at the United Nations has gotten a lot of attention for its bizarre and bellicose rhetoric, including threats to dismantle the Iran nuclear deal and “totally destroy” North Korea. Underlying his declarations was a clear message: the sovereign state still reigns supreme, with national interests overshadowing shared objectives. This does not bode well for the Sustainable Development Goals.

Sean Gallup/Getty Images

Justin Tallis/Getty

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