The Great Leader in Davos

I try to avoid writing about current events in as much as I write about the latest headline about China or US-China relations but ever so often, something just so grabs me that I can’t not write about it.  I decided to write this morning after reading a stunning amount of laudatory press and commentary about the Great Leader Xi Jinping’s Davos speech.

Before I begin, I feel it is important to emphasize a couple of caveats.  First, I am absolutely no fan of Trump.  I did not vote for him, I do not agree with his policies, nor his style for trying to execute his policies. Where some people get confused is that not everything I say is entirely critical of President Elect Trump.  One of my personal thoughts on the problem with US politics is that lines are drawn and you either have to be entirely against or entirely for the President (Trump or otherwise).  In reality, most of has have a range of agreements and disagreements with any elected official.

Second, more substantively and specifically, the general idea of Trump that the United States should take a stronger stance in its relationship with China I believe actually has pretty widespread support not just within US policy circles, but across political identification and even around the world.  Chuck Schumer, Bernie Sanders, Theresa May, and Angela Merkel (just to name a few of a diverse group) have all indicated willingness to take a stronger stance against China in various ways.  While I strongly disagree with the specific implementation and approach of what Trump has so far indicated, there is nothing with his fundamental idea that is anyway outside the mainstream of US policy, politics, or global thinking in major countries.

Third, I fully understand the concerns about Trump and all the issues I just mentioned, but we shouldn’t let these concerns about Trump stand in the way of real analysis and compilation of facts.  Probably the most common mistake in today’s information age is that they read the headline or first paragraph but gain little understanding of what are the actual issues and facts.  We cannot mistake rhetoric or press releases for what is actually going on.  A couple of people on Twitter noted something to the effect that we wished Trump sounded like Xi and Xi like Trump as it would fit the reality much better.  We do not know what policies Trump will implement once in office but we do know the policies the Great Leader of China and if there was ever an example of the execution acting as a stark contrast to the soothing words in a Swiss ski resorts this is it.  We can never let a well(poorly) crafted press release/3am Tweet substitute for reasoned analysis and fact gathering.

With that said, I want to briefly address the laudatory statements about Xi and China as the global leader.  Rather than focusing on the press release differences between Xi and Trump let’s focus on facts.

  1. As of a couple of years ago, there were less than 650,000 foreigners living in China and only 1,200 had received a Chinese “Green Card” granting permanent residency. China is now the largest sender of immigrants to the United States due to concern about a variety of issues.
  2. China is the worlds largest user of coal, the dirtiest energy source, and plans to use more.
  3. Wind power generation, as a share of all power generation, is roughly 50% higher in the United States than in China.
  4. Average US internet speeds topped 50 MBs while in China that number just passed 10MBs and for accessing foreign sites it is significantly slower due to the Great Firewall.
  5. The China plans to shut down Chinese access to non-Beijing controlled websites. This is on top of their enormous censoring work and rumored work on their tests to disable the entire internet or their nearly half trillion fake social media posts to push the Party line.
  6. An average Chinese tariff rate of 3.4% compared to the US rate of 2.6%. China maintains a 9.9% average rate for other WTO members while the US has a 2.5% weighted average for WTO members.
  7. China maintains an long “negatives” list of industries in which foreigners simply cannot invest. This includes such high tech national security industries as cotton.  Even the recent roll back still includes “2 entries, down from 93 ones in the previous version.” Even now, most investors require a Chinese joint venture partner and are simply prohibited from having a wholely owned Chinese subsidiary.
  8. China recently denounced judicial independence telling judges they were to do what the Party wanted.
  9. China openly admits to imprisoning critics and political enemies of the Great Leader.
  10. China continues to restrict international capital flows despite joining the IMF SDR and promoting RMB internationalization.  Excluding flows within China controlled territory, the RMB ranks below the Danish krone for international payments and transactions.

I could do this all day long pointing out the facts that paid consultants and press shills for China are required in their contract to abide by, but we should make sure that we do not let fake news or well crafted press release outshine the reality.

Nor should we let very real concerns about President Elect Trump distract from real issues and concerns where, even if by accident, there are valid issues that should be addressed.  We cannot let pure paid propaganda by paid spokespeople obscure the real issues.

8 thoughts on “The Great Leader in Davos

  1. US should control the applications of “Green Card” for Chinese. Though most elites are trying to send their families to US, spend money and contribute US economics, but it only pushes up real estate prices and does not help for US workers. Keep or detain these elites and middle classes or rich people in China, then govt. will look after them for how their money are coming from, then they will fight back to support and promote democracy. The political policy of China is ” I can do whatever in your countries, because you are an opening market, but you need to follow my rule in mine, and I must be the only beneficial winner .

    • I have to disagree strongly with “only pushes up real estate prices”. The positive economic effects have been well documented at this point, there is really no excuse for this type of misconception. The mix of relatively highly educated immigrants, who tend to work for cheap (I.e. check out the PhD programs at many state and private universities) is an especially good deal for the US. Perhaps the redistribution of some of the generated wealth is an issue, but it is one regardless of whether the worker in question is foreign or not.

      I also don’t subscribe to the idea that you can make China more free by isolating its people from the rest of the world, but I’m unsure of the literature.

      • There are many many positive effects to immigration from both high and low skill labor. Also agree that isolation is not the way to make more free. The ones that are most interested in freedom are those that have been exposed to foreign ideas in some capacity.

  2. “An average Chinese tariff rate of 19.6% compared to the US rate of 2.6%. China maintains a 9.6% average rate for other WTO members while the US has a 2.5% weighted average for WTO members.”

    I went to the Worldbank’s website and it indicated that China had a tariff weight of 3.41%. Am I looking at the wrong page?

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