Neican: 26 July 2020

China Neican is a weekly column of the China Story blog that brings you concise, timely, and policy-focused analysis. Neican 内参 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, everyone is welcome to read what we write.

1. Consulate tit-for-tat

This week saw further escalation in China-US bilateral tensions (what, again?!) with the US ordering the closure of the Chinese consulate in Houston and Beijing retaliating by ordering the closure of the US consulate in Chengdu.

The US Government alleges that the Houston consulate is a hub for espionage and intellectual property theft. This is not surprising given that most embassies and consulates are involved in intelligence work. But taking the dramatic step of ordering the closure of a consulate speaks volume about how far the relationship has deteriorated. This is, in fact, unprecedented in US-PRC relations.

We should expect further escalation in the lead up to US elections in November, given that the Trump Administration has decided to go hard after China across a spectrum of issues.

Beijing’s general approach in dealing with US escalations has been consistent: tit-for-tat. We saw that in Beijing’s retaliation against US efforts against Chinese state media outlets operating in the US. We also saw that with respect to targeted human rights sanctions and the trade war. And we’re seeing this again with the consulates.

From Beijing’s perspective, it has to choose between conciliation and assertiveness when responding to the hardline actions of the US. A conciliatory response would be perceived by whom as weak, sending the message to the US (and the rest of the world) that Beijing’s behaviour can indeed be altered when faced with coercion or toughness. Instead, Beijing wants to communicate that the current hardline approach by the US does not work, so this rules out conciliatory responses.

An assertive tit-for-tat approach, on the other hand, risks further escalation, but at least sends a consistent message that Beijing is willing to impose costs on the US in response to US actions. So Beijing will almost certainly continue to adopt a tit-for-tat approach to responding to Washington.

2. Communist China and the Free World’s Future

US Secretary of State Mike Pompeo gave a landmark speech on China policy on Thursday declaring the end of the era of engagement, and the beginning of a new titanic struggle between the free world and Communist China.

Not coincidentally, he made the speech at the Richard Nixon Presidential Library. Nixon’s opening of China in the 1970s started the era of engagement. And it is here that 50 years of engagement is judged by Pompeo to be a failure.

Pompeo calls for unity among the free world to address China’s rise:

We, the freedom-loving nations of the world, must induce China to change, just as President Nixon wanted. We must induce China to change in more creative and assertive ways, because Beijing’s actions threaten our people and our prosperity.

As a part of inducing changes, Pompeo effectively called for regime change by the Chinese people themselves:

But our approach can’t just be about getting tough. That’s unlikely to achieve the outcome that we desire. We must also engage and empower the Chinese people – a dynamic, freedom-loving people who are completely distinct from the Chinese Communist Party.

The failure of a crusade against Communist China, in his mind, would have existential implications for freedom around the world:

And if we don’t act now, ultimately the CCP will erode our freedoms and subvert the rules-based order that our societies have worked so hard to build. If we bend the knee now, our children’s children may be at the mercy of the Chinese Communist Party, whose actions are the primary challenge today in the free world.

Pompeo’s speech reads more like a preacher calling for a holy struggle than a well-thought-out manifesto for great power competition. Here are a few observations about where we think Pompeo and the US Government have gotten China wrong:

First, a mischaracterisation of the China challenge. Instead of an evil empire bent on world domination and destruction of freedom around the world, the actual China challenge is far more complicated. China is a rising great power and, like all rising great powers in history, it is seeking a path to (regime) security, international esteem, power and wealth. China is not trying to overturn the international order, but to adapt it for its own purposes. This distinction might sound academic, but it is not — it implies that the world can and should work with China in some areas, and challenge it in others.

Second, the current strategy against China is based on unbridled confrontation and punishment. This has not proven to be effective. US policy on Iran, North Korea and Russia have taught us lessons about the limits of coercive power. Unbridled competition and confrontation is not a strategy in and of itself, because, if anything, it will cause the CCP under Xi to walk further down the path of illiberalism due to regime insecurity.

Third, the idea of calling for regime change is absurd and dangerous. Have US misadventures in the Middle East and Afghanistan not taught us anything? Even if regime change can be achieved (which is unlikely), a new China would unlikely to be amiable to American interests. The potential externalities would be both massive and unpredictable.

Fourth, currently, the US Government is in a frenzy to demonise China. This is likely for domestic political purposes due to the upcoming election in November. Trump has made China the top issue. Sure, Beijing has done bad things, in Xinjiang and Hong Kong for example. But there is no need to invent additional charges. COVID and the US economy are two cases in point where the Trump Administration is demonising Beijing unfairly.

Fifth, the narrative of America’s failed engagement with China is based on ahistorical or dubious foundations. In May, we noted why we think that is:

First, contrary to the narrative that the US engagement with China was for the purpose of liberalising China, the predominant reason for engagement was self-interest. During the Cold War, the US-China strategic realignment aimed to contain the Soviet threat. Post Cold War, the two countries benefited greatly from their economic ties. 

Second, engagement has produced mixed results, but it is far too simplistic to say that it has straight up “failed”. This, of course, depends on what criteria we measure it up against. For one, China participates in the international system today like any great power instead of a state bent on exporting revolutionary violence and overthrowing the existing order. Moreover, despite efforts by the party-state to prevent “foreign [ideational] pollution” and at social and economic control, today’s China is more open to foreign ideas, good, and people than almost anytime in modern Chinese history. Further, the human rights situation in China has improved since Maoist times when tens of millions died because of the crushing brutality of the party’s political campaigns. This is, of course, no comfort to those locked up in Xinjiang’s concentration camps, but in some ways, China has changed. 

Sixth, there is a false dichotomy and hypocrisy about the claims of the free world vs Communist China. The biggest challenges to liberal democracies arguably is not China, but come from within: inequality, racial discrimination, surveillance, and rising authoritarianism. China provides a convenient “other” to place blame on even as Trump’s authoritarian tendencies are becoming all too clear. Both Xi and Trump are mercantilist and sceptical of international organisations, norms and rules. The difference is not between the sky and earth, instead, China is a mirror that calls for introspection.

Finally, Pompeo calls for a “new alliance of democracies” to counter China. This may not be what most people in liberal democracies want. Most liberal democracies may not share US interests in containing China, but instead want to see stable and constructive bilateral relations between the superpowers. They would have to chart their own path in this dangerous new world we have sailed into, one where both superpowers are undermining international institutions and norms, with leaders of both espousing authoritarianism. In fact, the US neither has the diplomacy finesse nor moral credibility under Trump to lead the free world.

Pompeo, towards the end of his speech, quotes Nixon who wrote in 1967 that “the world cannot be safe until China changes.” China has changed since the time of Mao. Despite the authoritarian turn under Xi, China today is closer to US ideals than at any time in history. Certainly, more so than when Nixon and Mao met in February 1972. This might not be enough for the likes of Pompeo, but it is enough to suggest that a new existential struggle between China and the US may not be necessary.

3. Department of Justice actions

The US has publicised several cases against China-connected researchers this week. Although this is not the first time the US has laid such charged, it is perhaps noteworthy given everything else going on this week. The deluge of publicised cases this week indicates that the scrutiny of researchers with China connections will only intensify.

First, a visiting Stanford University Researcher has been charged with visa fraud. Song Chen has stated in a visa application that she is no longer in the PLA. However, the US Department of Justice, through open-source research, found that she is still active in the PLA. Among the recovered deleted documents was “a letter from Song to the Chinese Consulate in New York […] wrote that her stated employer, Beijing Xi Diaoyutai Hospital, is a false front, and that, as a result, she had obtained approval for her extension from the PLA Air Force and FMMU.” It appears Song was not very good at hiding her tracks and affiliations.

Second, the Department of Justice accused two Chinese hackers of targeting vaccine development on behalf of China’s intelligence service.

Third, three more researchers were charged with visa fraud. All are arrested, with one initially harboured at the Chinese Consulate in San Francisco. All were related to their answer to the visa application which asked them whether they have ever served in the military.

Fourth, a Singaporean national pled guilty to “acting within the United States as an illegal agent of a foreign power”. Jun Wei Yeo used career networking sites to target Americans with access to sensitive government information. The Department of Justice alleges:

In 2018, Yeo created a fake consulting company that used the same name as a prominent U.S. consulting firm that conducts public and government relations, and Yeo posted job advertisements under that company name. Ninety percent of the resumes Yeo received in response were from U.S. military and government personnel with security clearances, and he passed resumes of interest to one of the Chinese intelligence operatives.

4. Suspension of Fulbright program

Still on universities — it looks like the university sector will continue to be both a  source and victim of bilateral frictions. The US has suspended the Fulbright program for mainland China and Hong Kong, apparently in response to the national security law in Hong Kong. This is significant because the Fulbright program is all about cultural exchange and people-to-people soft power diplomacy. Ending this program means lost opportunity for US scholars to go overseas and gain a better understanding of foreign countries while foreign scholars will also miss out on studying in the US and becoming more appreciative of the American perspective.

At the time of escalating tension, it is even more important that people-to-people links are maintained, not severed. It is unclear what the suspension aims to achieve, as it only punishes scholars and professionals who are curious about different cultures. It does nothing to put pressure on the Chinese Government about the situation in Hong Kong while penalising scholars in Hong Kong.

Perhaps, as Edward Wong and Steven Lee Myers pointed out, the aim of the US Administration on China right now is to “engineer irreversible changes”. And the Fulbright program is yet another step towards that.


  • A typology of “bad China takes” by @BadChinaTake, featuring Mystics China Knowers, Death 2 CCP Squad, Tankies, and CCP Bootlickers.
  • Quote of the week is an excerpt of a poem by the most famous Tang poet (and drunk?) Li Bai 李白, called Invitation to Wine (将进酒)





Do you not see the Yellow River come from the sky

Rushing into the sea and ne’er come back?

Do you not see the mirrors bright in chambers high

Grieve o’ver the snow-white hair though once silk-black?

When hopes are won, O drink your fill in high delight,

And never leave your wine-cup empty in moonlight!

Heaven has made us talents, we’re not made in vain.

A thousand gold coins spent, more will turn up again.


(Translation by X.Y.Z (许渊冲) in Bilingual Edition 300 Tang Poems (2004))

Note: At China Neican, we do not condone drowning your sorrows with alcohol 借酒消愁.

This week on China Story:

  • Gerald Roche, Telling the China story in Australia: Why we need racial literacyA combination of increasing polarisation and rising racism have intensified discussions about what constitutes racist speech, and the relevance of racism to discussions about China in Australia. In order to answer these questions, we need to improve our understanding of what racism is and how it works in Australia.
  • Fiona Cunningham, The role of nuclear weapons in China’s national defencenuclear deterrent plays an important but limited role in China’s national defence. Absent major strategic change, the role of nuclear weapons in China’s national defence strategy is unlikely to expand. And absent major technological change, the relative importance of China’s sea-based deterrent is also unlikely to grow.