Neican: 19 April 2020
Welcome to the first issue of China Neican 内参 on the China Story blog. Neican is a weekly brief on China issues that brings you concise, timely, and policy-focused analysis. Neican or “internal reference” are limited circulation reports only for the eyes of high-ranking officials in China, dealing with topics deemed too sensitive for public consumption. But rest assured, you are welcome to read our (occasionally coherent) thoughts regardless of who you are. You can find past issues here.
1. Official first-quarter GDP
As expected, China’s first-quarter GDP growth is negative. China’s economy shrank by 6.8 per cent year-on-year — the first year-on-year fall since 1976.
The economic data for the second quarter may not be rosy either, as China will not be fully recovered from COVID-19. China has been careful in its push for the resumption of work and production (复工复产). For example, Harbin, the capital of Heilongjiang province, on the border with Russia, has imposed new lockdown restrictions.
However, despite being the original epicentre of the infection, China is unlikely to be the worst-hit economy. The projection by the International Monetary Fund in its April World Economic Outlook predicts that Euro Area GDP will plunge by 7.5 per cent in 2020 (compared to a 1.2 per cent growth in China).
As Jane Golley writes in the China Story blog, for countries like Australia, China is still likely to be the most significant source of renewed demand for exports.
2. “Wolf Warrior” diplomacy
Chinese diplomats, once known for their conservative manners, have now become more assertive and combative. This has been highlighted in the unfolding COVID-19 pandemic as the party-state tries to amplify its narrative of effective party leadership and national resilience.
Chinese officials have highlighted shortcomings of foreign governments’ responses to the virus, and have gone as far as to give credence to conspiracy theories about the origin of the virus. But why this new combativeness? One explanation is the changing power relativities. In the words of a recent Global Times article:
As China rises and walks close to center stage of the world, facilitated by the relative decline of the West, many Western countries are feeling uncomfortable, which is behind their unwarranted accusations against China. In the eyes of Westerners, China is not behaving as humbly as it once did. The West believes it occupies the high moral ground and only it can point a finger at others who it deems submissive, which reflects the West’s deep-rooted, self-centered mind-set.
The days when China can be put in a submissive position are long gone. China’s rising status in the world, requires it to safeguard its national interests in an unequivocal way. After all, what’s behind China’s perceived “Wolf Warrior” style diplomacy is the changing strengths of China and the West. When the West falls short of its ability to uphold its interests, it can only resort to a hysterical hooligan style diplomacy in an attempt to maintain its waning dignity. As Western diplomats fall into disgrace, they are getting a taste of China’s “Wolf Warrior” diplomacy.
China’s rising power and stature certainly has something to do with its new-found diplomatic assertiveness. But there are at least two other possible drivers. First, the rising pressure on the Chinese bureaucracy to respond forcefully to external criticism. Xi’s lofty promises of national rejuvenation require China to be respected on the international stage. Perceived disrespect, that in Beijing’s perception based on “incorrect” views, biases, and malign intent, requires an aggressive rejoinder.
The second is the increasingly nationalistic tone of public discourse in China. The empirical evidence for the linkage between China’s rising popular nationalism and its foreign policy is unclear. But popular nationalism constrains Beijing’s spectrum of foreign policy options since perceived weakness and inability to defend China’s interests and dignity has costly public opinion ramifications.
While internal drivers are giving rise to “Wolf Warrior” diplomacy which plays well with the domestic audience, the aggressive tone of Chinese diplomats is damaging China’s standing abroad. In fact, foreign officials are increasingly critical of this new rhetorical approach.
However, “Wolf Warrior” diplomacy is not evidence that there are fundamental shifts in China’s foreign policy are afoot. If anything, it confirms that regime legitimacy and stability will continue to be its cardinal aim. As Bates Gill puts it:
[W]e can expect more—perhaps much more—of the same from China, both at home and abroad. That is because the core means and ends which animate CCP rule have not changed and are unlikely to do so in the near- to medium-term. Tactics may shift with circumstances—for example, Beijing will seek ways to gain advantages during the current [virus] calamity—but the strategic aims of such efforts remain steadfast.
(bold emphasis added)
3. Letters, letters, letters
Joint letters are all the rage these days. Two weeks ago we wrote about two letters calling for US-China cooperation to fight COVID-19. The first letter, Saving Lives in America, China, and Around the World, is jointly signed by nearly 100 American China experts. The second letter is titled An Open Letter to the People of the United States From 100 Chinese Scholars. Both letters urge China and the US put their political differences aside and cooperate in tackling COVID-19.
This week, we saw two new letters. One calls for an end to hate crimes against Asian American community (we published an Australian letter with similar calls). Another, An open letter to Chinese citizens and friends of China at home and abroad, is essentially an indictment of the CCP:
The global pandemic forces us all to confront an inconvenient truth: by politicizing all aspects of life including people’s health, continued autocratic one-party rule in the People’s Republic of China has endangered everyone. Rather than trusting the CCP’s intentions and accepting establishment academics’ uncritical approval of the party-state’s policies, we should pay greater attention to the voices of what can be termed ‘unofficial’ China. These independent-minded academics, doctors, entrepreneurs, citizen journalists, public interest lawyers and young students no longer accept the CCP’s rule by fear. Neither should you.
As an international group of public figures, security policy analysts and China watchers we stand in solidarity with courageous and conscientious Chinese citizens… Their individual voices are already forming a chorus. They demand nothing less than a critical evaluation of the impact of CCP policies on the lives of Chinese citizens and citizens around the world. We urge you to join them.
(bold emphasis added)
There is much we agree with in this letter, including the need to critically evaluate the CCP and engage with “unofficial China.” But the black-and-white, and confrontational underpinnings of the letter, much like the trajectory of US’ China policy, worries us greatly.
As we noted recently with respect to US-China competition:
The United States needs to recognise that China is NOT the enemy that is made out to be by sections of the American elite. China does not pose an existential threat, but rather serious challenges and opportunities.
Beijing and Washington need to learn to live with each other, to compete in a mature way, to cooperate when possible, to deter and counter each other when necessary, and to…well…not blow the world up (both literally and figuratively).
The CCP is among the greatest abusers of human rights in the 20th and 21st centuries. Its hands are soaked with blood, tears, and shattered dreams of millions of Chinese people. But China will continue to loom large in the international system, at least in the short to medium term, no matter we like it or not. The regime will change and evolve, but a quick toppling is unlikely in the near future — and probably undesirable.
The dichotomy between cooperating with, and fighting against, the CCP is counterproductive — it simplifies the daunting and very real challenges of China policy. The casting of the CCP as only an existential threat, at the very least, provides an incomplete picture. At worst, it leads to dangerous policy prescriptions and a self-fulfilling prophecy with tragic consequences.
4. Hong Kong arrests
Fifteen pro-democracy activists were arrested in Hong Kong for assembling unlawfully during unauthorised protests. Among arrested is the 81-year-old Martin Lee, who helped draft the Basic Law in the 1980s.
China is practising “lawfare” — using the courts and law to punish and deter pro-democracy activists. This gives China’s actions a veneer of legitimacy; it can claim that it is simply enforcing existing laws.
The latest crackdown again received widespread international condemnation, including from the US, the UK, Australia, and the international legal community.
However, these regular international condemnations have not worked. And China knows that most governments have more pressing matters to attend to. As such, these governments do not have the bandwidth to deal with democracy and human rights issues — issues that tend to be ignored even at the best of times.
As we wrote back in December:
[The One Country, Two System] model of central-local relations [is] born out of tactical necessity rather than any deep commitment to political pluralism or respect for the autonomy of Hong Kong and Macao.
Beijing will continue to profess its faith and adherence to the 1C2S framework while at the same time trying to tighten political control and integrate Hong Kong and Macao into the mainland’s economic and political system.
This latest wave of arrests is another nail in the coffin for One Country, Two System.
- Animal Crossing, a Nintendo Switch video game, has been “banned” from China after Hong Kong activist Joshua Wong publicised his usage of the game to promote HK democracy.
- The revise official death toll for Wuhan is *exactly* 50 per cent (allowing for rounding up, since it has to be an integer) higher than the former official figure, raising concerns on the credibility of the revised number.