[WSMDiscuss] Misreading Xi and the rise of Li

Wed Oct 26 00:23:15 CEST 2022

https://asiatimes.com/2022/10/misreading-xi-and-the-rise-of-li/ <https://asiatimes.com/2022/10/misreading-xi-and-the-rise-of-li/>
> Misreading Xi and the rise of Li
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> Li Qiang’s appointment shows China is still on a private-led high-tech path and not at all reverting to Maoism
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> by Uwe Parpart <https://asiatimes.com/author/uwe-parpart/>  / Asia Times / October 24, 2022
> The professional China commentariat and its echo chamber in the Western media were blindsided by the appointment of Shanghai party head Li Qiang as the country’s premier, the number two position to Xi Jinping.
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> Li is a tech-savvy supporter of high-tech entrepreneurship who believes that China’s future lies in the digital economy. Xi, the Western press insisted with near unanimity, had reverted to Maoism.
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> Precisely the opposite of what the commentariat expected seems to have happened and the Western press is scrambling to explain the anomaly. Here’s a sampling of Western press comment:
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> “Xi Jinping promotes loyal Shanghai chief” (Reuters)
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> “Xi Jinping promotes loyal Shanghai chief to upper echelons of power” (Financial Times)
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> “A loyal aide in Shanghai takes a leading role in Beijing” (New York Times)
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> “Xi loyalist likely to be China’s next premier” (Barron’s)
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> “Promotion of Shanghai chief puts loyalty over everything” (Bloomberg)
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> Bloomberg tried to explain why it failed to foresee Li’s rise saying, “When Li’s initial lighter-touch approach to China’s strict Covid Zero strategy was breached by the more transmissible omicron variant earlier this year, [his] ascent was cast into doubt.”
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> That loyalty was a factor in Li’s appointment is obvious. Political leaders, Chinese or Western, do not normally appoint deputies who are known for disloyalty.
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> The “loyalty” explanation is no explanation at all. A better explanation is that the Anglo-American political establishment has misread Xi from beginning to end.
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> Li’s appointment should be a wake-up call. The ubiquitous ideological blinders and preconceptions in the foreign policy establishment are the cause of a chronic misreading of China, leading to concomitant political reactions with dangerous implications and consequences. 
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> In fact, Li’s appointment as premier-designate was foreseeable as well as foreseen. Asia Times wrote as much on October 21, forecasting that Xi would opt for retiring four out of the seven Politburo Standing Committee members, including not only Premier Li Keqiang, but also the widely touted premiership candidate Wang Yang, and would not miss the opportunity to install a new, younger and different cast of leaders.
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> Li is the Shanghai party chief. Few if any previous Shanghai leaders have failed to advance to the Standing Committee, Xi included. That his advance to the number two position nonetheless came as a surprise to most Western analysts merely proves how much so many have misread Xi in particular and Chinese governance in general.
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> Li studied business administration and holds an MBA degree from Hong Kong Polytechnic University, a top-tier Asian business and technology school funded by Hong Kong tycoon Li Ka-shing. He has supported technological entrepreneurship as the leading edge of China’s development.
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> Among other things, Li was one of Jack Ma’s most visible supporters in the China Communist Party leadership. He brought Elon Musk’s Tesla to Shanghai. His appointment affirms the leadership’s support for private-led high-tech industry.
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> Accelerated technological innovation and STEM talent development were keywords in Xi’s work report. What Western analysts (and US Secretary of State Antony Blinken) picked out instead was the reiteration of China’s longstanding policy with respect to Taiwan.
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> Li was chosen for his track record of economic and financial innovation in the Shanghai Free Trade Zone, for bringing in major foreign investment (up by 32% in 2021 despite Covid) and for the policy papers on economic development he wrote for Xi as his assistant in Zhejiang.
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> So, then, what should be made of Xi’s alleged neo-Maoist, leftist and anti-capitalist emphasis on “common prosperity?”
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> Throughout his career, Xi has shown himself to be a master of the most characteristic maneuver in Chinese imperial governance: Feint in one direction in order to disarm prospective opponents, while preparing to move in another.
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> The elements in the Party who opposed Xi in 2012 remain his antagonists, the supporters of a Fortress China that shares the poverty rather than creates the wealth. His first move in power after 2012 was to crush the group around Bo Xilai centered in Chongqing and part of China’s northeastern rust bowl, and to unleash China’s private sector.
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> During the past two years, Xi adopted the rhetoric of income redistribution under the watchword “common prosperity,” and cracked down on China’s consumer Internet sector. In classic Chinese style, he adopted the rhetoric of the Communist Party elements he most opposed, only to move decisively in the opposite direction.
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> Ideologically blinded Western analysts and officials consistently miss the point. China’s state is the least ideological, most ruthlessly pragmatic entity in the world. To the extent its leaders succeed, they do so by achieving prosperity and security by whatever means necessary to meet their objectives.
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> Xi knows that China’s state-owned industry is too sclerotic and corrupt to lead the transition to a digital economy and that the Chinese state needs private entrepreneurs to take the lead. But he also knows that entrenched political interests linked to the state sector will not just grumble at the sudden ascendance of entrepreneurs but also make determined political moves.
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> “[Li] has a much closer relationship with Xi compared to [Premier] Li Keqiang. … Xi is likely going to give him much more room and power to manage the economy,” Deng Yuwen, a former deputy editor of the Study Times, the official newspaper of the Central Party School, told the South China Morning Post.
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> To stay in power, Xi or any other Chinese leader must placate the old guard and defuse popular envy of the newly rich while allowing entrepreneurs to lead economic transformation.
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> But Xi’s core agenda, repeated in the work report, is to make China a moderately prosperous economy by 2035. To do so, China needs and he must achieve a gross domestic product (GDP) growth rate of between 4% and 5% per annum.
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> Li has demonstrated that he has the energy and executive capability to get things done. A Brookings Institution study reports that in 2018-19 he mobilized Shanghai’s capabilities and workforce in tandem with Elon Musk to build a Tesla factory capable of making 500,000 electric cars annually.
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> Amazingly, It took only ten months for this joint venture to advance from construction to full operation.
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> The sweeping change in China’s leadership denotes an inflection point. Deng Xiaoping’s 1979 reforms eventually moved nearly 700 million Chinese from countryside to city, replacing the rural economy of traditional China with a smokestack economy dominated by state-owned enterprises.
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> China’s state sector, in turn, became a political power base in its own right. Xi concluded that he needed a new broom to sweep aside the obstacles to a digitized industrial economy. With Li’s appointment as his de facto deputy, Xi’s well on his way.  
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Uwe Parpart is the Chief Strategist of Ideanomics and the Chairman of Asia Times Holdings, the Hong Kong company, which owns Asia Times, Asia’s largest English language newspaper (ex-India). Prior to that, he was a founding member and Chief Strategist and Head of Research at Hong Kong investment bank The Reorient Group (376HK). He has served asHead of Fixed Income and Currency Research at Cantor Fitzgerald Hong Kong, Senior FX strategist at Bank of America, and adviser to the Mitsubishi Research Institute. He has contributed to numerous magazines and newspapers, was a contributing editor of Forbes magazine and a columnist for Shinchosha Foresight magazine, Tokyo, and is a frequent guest on CNBC, Bloomberg, and NHK TV.

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"The NSS provides no indication that the Biden administration recognizes the limits to American power, particularly in the current age of uncertainty … We need a national security strategy that relies much less on military spending and deployment, and far more on diplomacy and economic development. We need a Congress that is more supportive of arms control and less supportive of modernizing nuclear weapons.  And we need a president and a public that endorses restraint in force deployment and rebuilding the role and influence of the Department of State and the Foreign Service."

> https://www.counterpunch.org/2022/10/25/bidens-obsession-with-china/ <https://www.counterpunch.org/2022/10/25/bidens-obsession-with-china/>
> Biden’s Obsession With China
> 
> Melvin Goodman <https://www.counterpunch.org/author/ru8acub/>  2022/10/25
> The Goldwater-Nichols Department of Defense Reorganization Act of 1986 mandated that the White House produce for the Congress an annual report on its national security vision.  The National Security Strategy (NSS) is supposed to discuss all facets of U.S. power that can achieve the nation’s security goals.  The NSS must discuss U.S. commitments and objectives, along with defense capabilities to deter threats and implement plans.  For the most part, the report is a boilerplate document.  The Trump administration ignored the requirement for four years, and the Russian invasion of Ukraine led to delays in producing President Biden’s first NSS.
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> The report that was released two weeks ago is a predictably superficial rendering of U.S. plans for global cooperation, but contains no original ideas for the U.S. role in doing so.  There is nothing in the report that suggests the Biden administration has any ideas for reversing the downturn in relations with China—our most important bilateral relationship—which points to increased bilateral tensions and greater defense spending. There is no indication that we have learned important lessons from the isolationist step of withdrawing from the Trans-Pacific Partnership or the militaristic policies in the Middle East and Southwest Asia that depend on use of force.
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> Military spending accounts for more than half of discretionary federal spending, and the NSS doesn’t suggest that the Biden administration will change the U.S. approach to the global environment in order to reduce spending.  Ever since the 9/11 attacks, the United States has relied on increased military power to advance its international interests, spending more than $6 trillion in fighting counterterrorism wars.  We have more people working in military grocery stores or marching in military bands than we have diplomats.  Biden’s NSS presents no alternatives for curbing our military deployment in more than 100 countries or for returning arms control and disarmament to the national security dialogue.
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> The report relentlessly focuses on the confrontations with both China and Russia.  The most worrisome aspect of Biden’s NSS is the view that we have the resources to challenge both Russia and China, even in their respective zones of influence.  With the release of the NSS, President Biden proclaimed that we would be “outcompeting China and restraining Russia,” even though the real challenge to the United States is the current perilous state of our democracy.
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> In a typical exaggeration of the threat, Biden said that China was the “only country with both the intent to reshape the international order and increasingly, the economy, diplomatic, military and technological power to advance that objective.”  Last week, the Washington Post  referred to China’s security presence as “increasingly visible around the world,” and that Xi will “probably test the country’s willingness to compromise with the existing global security order.”  Biden and the Post are talking about a country [China] that has not used military force outside its borders for more than 40 years, and has only one military facility [Djibouti] outside its zone of influence.
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> It should be Geopolitics 101 that the United States cannot simultaneously confront two nuclear superpowers, particularly at a time when Moscow and Beijing have their closest political and military relationship within memory.  There is an assumption that we can build strong alliance partners in the European and Asian arenas to join this confrontation, but there are numerous countries that don’t want to be part of a U.S.-sponsored revival of the Cold War.  The NSS doesn’t acknowledge that the United States has choices regarding Russia and China, particularly in view of the rapidly declining power and influence of Putin’s Russia and the Asian resistance to China’s “wolf warrior” diplomacy.  Meanwhile, Sino-American cooperation on the climate crisis and the Russian-American dialogue on arms control have come to a halt.
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> Typically, the National Security Strategy is followed by the National Defense Strategy and a nuclear posture review.  We will soon learn what Biden means by his emphasis on a “speedier modernization” of the military.  Bipartisan support in the Congress for increased spending can be expected.
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> The NSS provides no indication that the Biden administration recognizes the limits to American power, particularly in the current age of uncertainty.  Various administrations have tried the same policies vis-a-vis Venezuela, Syria, and North Korea, but Nicolas Maduro, Basher al-Assad, and Kim Jong-un have not bowed to U.S. demands.  U.S. pressure against Cuba and Iran over several decades has not altered their policies to accommodate the United States.  President Biden even raised the possible use of force against Iran during his trip to the Middle East in August.  The NSS provides grand objectives, but fails to take account of operational realities.
> 
> We need a national security strategy that relies much less on military spending and deployment, and far more on diplomacy and economic development.  We need a Congress that is more supportive of arms control and less supportive of modernizing nuclear weapons.  And we need a president and a public that endorses restraint in force deployment and rebuilding the role and influence of the Department of State and the Foreign Service.
> 
> _______________
Melvin A. Goodman is a senior fellow at the Center for International Policy and a professor of government at Johns Hopkins University.  A former CIA analyst, Goodman is the author of Failure of Intelligence: The Decline and Fall of the CIA <http://www.amazon.com/exec/obidos/ASIN0742551105/counterpunchmaga>, National Insecurity: The Cost of American Militarism <http://www.amazon.com/exec/obidos/ASIN/0872865894/counterpunchmaga> and A Whistleblower at the CIA <http://www.amazon.com/exec/obidos/ASIN/0872867307/counterpunchmaga>. His most recent books are American Carnage: The Wars of Donald Trump (Opus Publishing, 2019) and Containing the National Security State (Opus Publishing, 2021). 
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