Business Day 21 DECEMBER 2018 – 06:43 SHAWN HAGEDORN
Cheerleading the virtues of the righteous is child’s play. Looking beyond the foibles of a loud-mouthed lout offers adult satisfaction. In recent weeks heads of state have, while remaining critical of Donald Trump’s style and many of his policies, begun to accept that he is well suited to thwart the dangerous global consequences inherent in his Chinese counterpart’s master plan.
China is an extreme outlier. Francis Fukuyama, the widely followed political theorist, points out that the “Middle Kingdom” became the first modern state more than 2,000 years ago. Its tradition of transcending kinship- and patronage-based political structures to favour bureaucratic competency is many times longer than those of European nations. China’s so called “one-child” policy illuminated the pervasiveness of its culture of subservience to central planning.
Western leaders mistakenly presumed that after China fully joined the World Trade Organisation (WTO) and its people became prosperous, it would then embrace democratic principles, as had South Korea, Taiwan and many others. Instead, over two millennia of subjugating individual desires to collective control embedded cultural imprinting which, alongside formidable bureaucratic capacities supporting high growth and communism’s political ideology, cemented China’s bias to subjugate citizen rights in favour of centralised political control.
China’s ascension from ubiquitous poverty to becoming the world’s largest manufacturer and exporter traces to Deng Xiaoping’s reconceiving his country’s centrally commanded economy. He handpicked his next two successors, who then advanced Deng’s model of global integration through capitalism with Chinese characteristics.
Deng’s vision changed the world, but it has run its course. The global economy’s capacity to absorb annual increases in Chinese exports continues to ratchet lower. Beyond shunning domestic democratic-friendly reforms in favour of an Orwellian point-scoring system to further curb modest citizen freedoms, China’s international engagement style under emperor-for-life Xi Jinping frequently exerts corrosive effects on good governance, poverty alleviation and democracies in developing and developed nations.
Trump’s routine vacillations reflects both his not being particularly principled and a negotiating style that intentionally provokes cognition-impairing emotions. Yet many of Trump’s staunchest critics now acknowledge the merits of his long-standing opposition to the West’s uncritical support of China’s rise. Meanwhile, various influential voices remain too invested in the Trump-is-a-buffoon narrative to objectively assess his tactics, which, while unconventional, show much potential to deter China from undermining global growth and co-operation.
If Trump at some point announces a deal to end the trade war, that will merely be a negotiating ploy. China employs a multitude of centrally orchestrated manoeuvres that exploit and threaten the global order. A persistently formidable response is required. Might Trump’s electoral mandate, following from his campaign’s emphasis on countering China’s unfair trade practices, and his appetite for aggressive negotiations, qualify him as the ideal streetfighter to counter China’s predatory tactics?
Trump has championed a palpable political shift whereby US legislators now anticipate many years of their pressing for Chinese reforms. Politicians in other countries are moving similarly. Capital markets and media voices are struggling to frame the issues.
Trump is happy to be extremely ruthless. Xi, the son of a propaganda chief under Mao, is more extreme still, as demonstrated by his locking up his would-be Chinese Communist Party challengers.
While both US political parties now recognise the need for some type of long-term cold war with China, European politicians are vulnerable to China’s efforts to gain favour through aggressively investing in cash-strapped, rebellious countries, such as Greece and Hungary, to block EU legislative efforts to counter predatory Chinese trade practices. European leaders are increasingly acknowledging the threats of concerted Chinese efforts to exploit the wealth and openness of their economies.
The heads of state at the recent G20 signalled a crucial pivot when, in response to US insisting, their communique called for “the necessary reform of the WTO”. Importantly, the US’s considerable vulnerabilities to China’s commercial and wider aggressions are modest relative to those of many nations across Asia, Europe and Africa.
Few people have the time, inclination and discipline to develop a well-informed, and objectively grounded, world view. People’s reactions to global events are shaped by their values and those of the groups they trust. Thus despising Trump feels gratifying while prohibiting open-mindedness to the possibility that some of his instincts and annoying negotiating tactics can be quite useful.
Trump frequently compliments his Chinese counterpart, then almost instantly opens a new line of attack. This isn’t backfiring on Trump as Xi has so boldly exploited the same world order that made possible China’s phenomenal rise. The big picture is that China is antidemocratic and highly predatory. Therefore other nations must assertively persuade China to pursue legitimate interests through legitimate means.
It is certainly possible that Trump will stumble badly, though that was more likely during his administration’s first two years. As long as he is in office, domestic political forces will motivate him to challenge Xi’s deeply mercantilist and antidemocratic policies. Such a US policy stance is now widely expected to outlive the Trump administration.
That scholarly types have been inching towards supporting Trump’s general response towards China — while deriding him and many of his other policies — is telling. It took several years, and the release of the Gupta e-mails, for South Africans to begin to appreciate the extent of Jacob Zuma’s patronage network. This was preceded by a first-rate scholar, RW Johnson, researching and reporting rampant abuses.
This is where the world is now regarding China’s unsavoury tactics. That China has targeted dozens of investment-hungry governments strongly suggests that its often secretly negotiated deals can provide fountains of future revelations.
Many abuses preceded today’s highly peaceful and prosperous global order. In recent times, such injustices have been giving way to win-win collaborations. Deng’s path was consistent with big wins for the East and the West. That is, the Mao-to-Deng pivot underlined the importance of good governance.
Good governance, infrastructure and access to deep consumer markets has led to more than 1-billion people, mostly Chinese, escaping poverty in recent decades. China has developed tremendous expertise at building infrastructure, but whereas western institutions seek to tie funding for such projects to governance upgrades, China differentiates its foreign engagements by supporting cronyism and state capture.
China is like a big factory that buys natural resources from poor countries and sells finished goods to wealthy countries. They have cornered much of the access to wealthy consumer markets necessary to fuel rapid economic development.
Trade that benefits a strong country at the expense of weaker nations is termed “mercantilism”. Much evidence indicates Xi’s new economic model and his massive Belt and Roads Initiative are mercantilist and undermine democracies.
Xi’s grand plans are premised on the West being unable to muster a co-ordinated response — as required in a multilateral world. Trump bypassed this trap and is now seeking to ensnare Xi within it. Trump will continue to use multilateral institutions when it suits him while routinely criticising them. This seems sensible given China’s preferred path threatens national interest from Indonesia to Africa and Europe.
Perhaps it’s all down to dumb luck, but Trump is also turning China’s long-term perspective and the importance it places on saving face against it. The G20’s formal acknowledgment that the WTO rules must be improved opens a long-term, evidenced-based challenge to China’s trading abuses within the world’s top multilateral trading forum. It will surface that Xi’s chosen path is unnecessarily, and imprudently, adversarial.
Having only recently come to acknowledge merit in Trump’s efforts to resist Xi’s overly aggressive tactics — while maintaining more than 30 years of disdain for Trump’s values — I feel my shift was the mature, responsible thing to do.
Published in Business Day