There is an appealing side to being old and doddery, even when you’re the leader of the free world: sometimes you just can’t help telling the truth.
So, in the aftermath of the American-Chinese mini-summit in San Francisco this week, when President Biden was asked by a mischievous journalist if he still regarded President Xi as a dictator, Uncle Joe couldn’t help himself: yes, he blurted, without missing a beat.
The President’s many aides stared at their shoes, not daring to catch each other’s eye. Secretary of State Antony Blinken winced, clearly fearing his months of patient, pre-summit diplomacy had just gone up in smoke.
He needn’t have worried. The Chinese affected to be angry but didn’t resile from anything they’d agreed at the summit, which was little enough.
The rest of us, unversed in the obfuscations of diplomacy, merely shrugged. What else could Biden say? Xi is obviously a dictator – and a pretty nasty one at that, presiding over the most oppressive surveillance state the world has ever known.
Chinese President Xi Jinping waves as he walks with U.S. President Joe Biden in California this week
He’s also a dictator in some trouble, though you would not know that from the way the West in general and America in particular treats him with kid gloves. The inexorable rise of China has been such a dominant part of geopolitics in this century that Western policymakers have barely noticed that it is now faltering badly and could even start to fall back.
China has not risen to global prominence on the basis of its soft power. We do not queue to see its films, watch its TV shows, wear its fashions, listen to its music and devour its books – unlike, say, much smaller and democratic South Korea, a far more influential Asian soft power.
China’s global significance derives entirely from its economic heft and the formidable military machine that its economy has made affordable.
When the economy stutters, so does China’s ability to demand its way in reconfiguring global politics to suit its own purpose.
The Chinese economy is certainly in trouble on multiple fronts. Growth is a fraction of what it was only a few years ago. The world’s appetite for Chinese products turns out not to be insatiable after all: exports are down 15 per cent on the year.
The north-east of the country is scarred by the biggest industrial rustbelt of basket-case enterprises (mostly state-owned) the world has ever seen. The animal spirits of its much-vaunted high-tech sector have been snuffed out by Xi’s repression of entrepreneurs. Even powerful billionaires have not been safe from his secret police.
Slower growth is taking its social toll. Youth unemployment is already 20 per cent and rising (so much so that Beijing no longer publishes the figures).
Xi Jinping and David Cameron drink a pint of beer during a visit to the The Plough pub in October 2015
Its vast property market, so significant because it accounts for an incredible 25 per cent to 30 per cent of China’s GDP, was allowed to balloon into the world’s biggest-ever asset bubble, a $5 trillion market that has now gone pop. Property giants like Country Garden and Evergrande are on their knees, already defaulting on their dollar-denominated debts. Evergrande has even filed for bankruptcy protection in America.
This matters because so much of the economic growth which turned China into the second-largest economy in the world was fuelled by the property boom. Local governments and private lenders ponied up hundreds of billions in loans, much of which will never be repaid.
Local councils now struggle to find the funds to provide basic services. Ordinary Chinese, with most of their wealth tied up in property, now feel a lot poorer, hence the collapse of consumer confidence. Richer investors are already heading for the door.
Capital flight from China has now reached such a scale that it is undermining the yuan (China’s currency), which is at a 16-year low against the dollar and has to be regularly propped up by interventions from China’s central bank. It’s not just the Chinese who are leaving. Foreign investment, which peaked at $75 billion in 2014, is now negative – there was foreign disinvestment of about $35 billion last year.
President Xi was almost downcast when he spoke at a dinner for American CEOs in San Francisco. He lamented that global economic recovery since the pandemic had been lacklustre. What he did not add was that, unlike the recovery from the Great Crash of 2008, which was led by China, his economy is in no position to repeat that global rescue job this time round.
Cameron must realise we are in a very different world from the days when he was cosying up to Beijing, writes Andrew Neil
Indeed, for Xi, it’s worse than that. It is becoming increasingly clear that lower growth and bankrupt businesses mean China cannot afford all the demands for spending currently crowding in on Beijing.
In the past decade, more than 80 million entered the ranks of the over-65s: a Germany of old folks. This ageing population is producing demands for health and welfare spending in a country where the provision of both is rudimentary. The military build-up (China’s aim is to rival America) is also hugely costly, though not as costly as the surveillance systems Xi uses to control his own people.
China spends even more monitoring its own citizens than it does defending the country from its enemies.
Then there’s its Silk Road strategy, a $1 trillion play by which Beijing has tried to ingratiate itself across the world with multi-billion dollar investments in major infrastructure, from Asia to Africa to Europe.
China can no longer afford to do all this. Something has to give. The Silk Road, which became a byword for lumbering poor countries with expensive debt they will never be able to pay back, has already been slashed to a few billion a year. Italy and the Baltic states have withdrawn from it. Developing countries like Sri Lanka wish they’d never heard of it.
Unless it switches resources from defence and surveillance to welfare, the Communist Party’s Faustian pact with the Chinese people – you will have no democratic freedoms, but we will look after your economic wellbeing – is in danger of unravelling. For this, Xi has only himself to blame.
His resort to Maoist folly – rounding up entrepreneurs he thought too big for their boots, resurrecting the cult of personality, returning China to one-man totalitarian rule — is the major reason the economy is now in the doldrums and society creaking at the seams.
There are signs he’s beginning to realise this, which means a less bellicose approach to the West.
Military-to-military communications between America and China were restored at San Francisco, which is important if hostilities are not to break out by accident or through ignorance.
Arms-control talks between the two mega-powers are back on the agenda after a long freeze. Official Chinese media have even resurrected stories of the days when America and China stood as allies against Imperial Japan.
There’s the usual warm, if largely meaningless, words about jointly tackling climate change (meaningless as long as China continues its huge expansion of coal-fired power stations).
These are all constructive steps on the road to peaceful co-existence. And we can take more still, as long as we do so from a position of strength. There are lessons here for our new Foreign Secretary, David Cameron.
When he was Prime Minister, China was seen as the rising, unstoppable superpower.
It was also hoped that closer ties with China would produce a softening of its authoritarian ways. Well, China’s rise to superpower status is on hold – it will not surpass the U.S. economy any time soon – and it is more repressive than at any time since Mao himself.
Cameron must realise we are in a very different world from the days when he was cosying up to Beijing. We don’t want hostilities, but we must no longer be a soft touch, either. As we attempt to accommodate China, we must insist that the freedom of Taiwan and free passage on the vital trade routes of the South China Sea are non-negotiable.
That message must come primarily from America – and President Biden was not resolute enough at the San Francisco summit on such matters – but it is vital that Uncle Sam’s most important allies, including Britain, echo that stance.
It is probably Cameron’s foremost challenge at the Foreign Office. He will meet it by not being intimated by China’s aggressive wolf-warrior diplomacy, which is increasingly no more than sound and fury anyway, or by ingratiating ourselves for economic advantage.
The enemy is not 10 ft tall. It is barely half that height. We should treat it accordingly, with respect and cooperation where sensible. But not with awe or fear.
Source: | This article originally belongs to Daily Mail