Guest Post: What Will China Look Like?

By commenter t_co

In many ways, the world’s most important election is happening out of sight. Even though there’s been plenty of coverage on the upcoming 18th CPC National Congress, the Bo Xilai scandal has risked overshadowing the more meaty and substantive issues at hand. Taken together, these issues sum up the what ought to be the raison d’etre for this Congress: What should the China of 2022 look like, and how can China get there?

1. How will China move past an investment-driven growth model without fumbling the ball like Japan in 1990 or South Korea in 1997? How can China move past an investment-driven growth model when, right now, every single important interest group in China is tied to the construction/real-estate/investment triad? Can you teach an old dog new tricks? Can you teach an old dog new tricks without giving the dog a heart attack?

2. Who will bear the pain of an economic transition? Basically, the accounting losses from failed projects have to end up somewhere–if not on seizure of assets from local governments, then as NPLs on bank balance sheets; if not as NPLs, then as a hidden tax on household wealth in the form of negative real interest rates on household savings. each of these forms of losses has a different rhythm and pitch to it–short, sharp pain and the feeling of “冤枉” (unjust punishment) on a crop of rising cadres if you seize assets; Japan-style stagnation if you keep it all as NPLs; the possibility of household capital flight if you further lower the real rate of return available to China’s household savings pool.

3. How will the government bridge the credibility gap it has with the populace? Right now, China’s government has the dubious distinction of having substantial credibility issues with every segment of the people. farmers have land seizures and government price hikes in fuel and fertilizer; the urban poor have general inflation as well as a lack of social mobility; the middle class worry about corruption, an invisible ceiling in advancement caused by nepotism, and food/product safety; the upper class fears arbitrary forfeiture of assets and becoming pawns in political struggles. More than ever, the upcoming leadership needs to build trust not only within the apparatus but also amongst the people.

4. How will China create sustainable and flexible safety valves for discontent? Right now the only common safety valve available is for Chinese rich people to pack up their assets and move abroad. The other safety valves (petitioning, protesting, rioting, making angry posts on sina weibo) are all either ineffectual, highly risky, or both–and people are aware of that, so they are losing their efficiency as safety valves. And even moving assets abroad is more of a curse than anything, as it means that wealthy Chinese increasingly have no stake in their country’s future.

5. How can China build up an internal “infrastructure of trust”? China has done a wonderful job building up physical infrastructure–roads, railways, ports, airports, a world-class telecom network–but the soft infrastructure is missing. Soft infrastructure, meaning things like universities that aren’t viewed as merely second-rate stepping stones to graduate school abroad; accounting firms and ratings agencies that are impartial and trusted; a capital market that allocates capital based on economic viability rather than political connections; consumer protection agencies that actually do their jobs; a media that seeks truth from facts rather than seeking profit from rumor; etc…. resting on the bedrock of a people that actually trust each other. Something needs to be done to build social faith between people and institutions and people themselves, or else nefarious forces will take advantage of that drought of faith to create trouble like the Taiping Rebellion did in the 19th century.

6. How can China assert itself on the international stage without causing its neighbors to ally against it? From 2010 onwards we saw an increasing amount of Chinese power being displayed both in its near abroad, the Western Pacific, and as part of multilateral forces in Somalia. China now has its own fifth generation stealth fighter, its own aircraft carrier, guided ballistic missiles, and a cyberwarfare capacity second only to the United States. In and of themselves, all of these systems are great for expanding Chinese reach and influence; but if they cause all of China’s neighbors to bandwagon against it, they may end up paradoxically weakening China. more than anything, as China’s power increases, Chinese diplomacy must become even *more* polite to offset it. Also, given that the United States has pretty much declared its intention to remain the regional hegemon of the Western Pacific, and has forged a coalition with Australia, Japan, and South Korea in doing so, China needs to formulate a strategic response. Its current course will take it into direct conflict with 4 other countries with much more combined power.

7. A subquestion of #6 is what to do with North Korea. North Korea is a long-running strategic liability for china: dependent on food and fuel aid while angering every single neighbor it has, constantly risking a collapse and an exodus of refugees and wholesale domination by the South. North Korea’s role as a buffer against South Korea and the US is rather illusory given that South Korea/the US could annihilate the North Korean military within months if they chose to accept the loss of Seoul and Inchon to artillery. On the other hand, a unified Korea would be a great counterweight to Japan, and would remove one of the key reasons for a forward-deployed US military presence in the Western Pacific. Furthermore, contrary to what might be expected, a unified Korea would not necessarily be anti-China, either–consider that even though Germany and Russia have at times been the worst of enemies, after Russia let Germany reunify, the two nations became decent allies with many areas of cooperation ranging from keeping Europe addicted to Russian natural gas to sharing weapons technology to coordinating the anti-US half of EU foreign policy.

8. What is the contingency plan for Chinese stability? what if China experiences mass instability–does the administration have a plan that doesn’t involve international embarrassment or a mass reduction in the credibility of the government?

Note that none of these questions relate to what most speculation has tended to focus on–*who* gets the 9 standing committee seats. In the end it matters little which combination of cadres wins, because every one of the candidates has been nominated for their ability to execute on policy. Therefore any policy that comes out of the congress has a decent chance of being executed to the best of the ability of the Chinese government. What *is* important is the party line and policy that comes out of this meeting (even if that policy is hidden from public view).

The one thing to bear in mind about the resulting party line is that a simple focus on “continuing reform” or “maintaining social harmony and stability” will no longer be enough. A superficial and vague policy that comes out of the 18th congress will be the path of least resistance–but also the worst possible outcome for China. Now is *not* the time for singing songs or pithy slogans or a revival of the ideas of the 1960s or the 1980s. Now *is* the time for an actual vision on what the China of 2022 ought to be, and how to get there.

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Richard Burger is the author of Behind the Red Door: Sex in China, an exploration of China's sexual revolution and its clash with traditional Chinese values.

The Discussion: 41 Comments

An absolutely superb post. Perhaps an addition or two

- How to deal with Tibet and Xinjiang without completely alienating the local population. Both are perfect examples of what might become a national issue for China – the fact that economic development is a crucial and necessary condition for progress but not the sole condition.

- How to deal with the loss of one of its competitive advantages in the long run – cheap labour. Labour has already become more expensive than competing countries, but China’s many other advantages like scale, a developed supply chain, infrastructure, etc will carry it for perhaps a decade. Cost of labour will then rise to a point which will start to outweigh everything else. Then what ?

April 23, 2012 @ 10:00 am | Comment

Couldn’t agree more on 7), nowadays there’s pretty much nothing keeping the PRC/DPRK alliance together except misty-eyed nostalgia on the part of some senior CCP officials. Perhaps China also gets to extract some favours for excercising influence on the DPRK (which may or may not actually have an effect), but that’s about it.

Back in the cold war there was occasional talk of creating a unified, neutral, demilitarised, nuclear-free Germany. This was never anything more than a pipe-dream as Germany was not the only frontier between the main power blocs, would never have been accepted by the DDR or BRD, and would have resulted in a withdrawal by both sides to the borders of Germany, not an actual detente. I think at least some of these factors would not apply to a unified, de-(foreign)-militarised, nuclear-free Korea. The DPRK leadership might block it, but they are, by this stage, so reliant on China that China could probably over-throw the Kims (a move that would be popular everywhere – China included) and pick a government that would be willing to go along with it.

Korea would be removed as a competitor for a generation at least – this is how long the former DPRK would have to be on economic life-support. The ROK would require large-scale assistance in rebuilding North Korea – assistance that China is best-placed to give. Yes, it would give China a frontier with the “capitalist” world, one which they would then have to protect, but the Yalu is not so easily crossed, and a neutral Korea would likely no more trouble to China that a neutral Finland was to the USSR.

Really, all it would require is an abandoning of the sentimental ties between the PRC and the DPRK, but I think this would still be a step too far for any forseeable PRC government.

April 23, 2012 @ 3:30 pm | Comment

Excellent. A very fair and balanced post, that is realistic and practical and considers the short term and long term requirements of China rather than (sorry, but I had to take a pot shot here…) some of the more idealistic, poorly thought out demands common of several folks frequenting this website.

Also, one must not forget the big picture of time for China…. this reincarnation of China is only 34 years old (or 62 / 63 years old, whichever way you want to view it). It is still a very very young country with a lot of growing pains to sort out and a lot of mental and emotional maturity issues to get over. These things do not get sorted out in a day – Rome was not built in one night. But China will eventually regain her place at the top of the world, irregardless of what other people wish or think of her.

April 23, 2012 @ 5:37 pm | Comment

@TE Low – And what would those demands be?

April 23, 2012 @ 5:52 pm | Comment

Just my impression: what T E Low thinks of China isn’t really that much about China, but about grievances he has against parts of the world outside China. That’s an old tradition – I recommend Shirley MacLaine’s “You can get there from here” as a popular sample of using China as a personal projection screen.

MacLaine’s book was, I must say, much more entertaining than those of many intellectuals, though.

April 23, 2012 @ 8:17 pm | Comment

Thoughtful post, to which I’d add the general point that achieving true, non-negotiable rule of law would help on most of the goals laid out by t_co. This for now is more important than democratization or freedom of speech and assembly, which won’t be fully meaningful without rule of law.

To point one, I’d add the need to foster a culture of innovation and wean Chinese entities away from the easy path of pilfering outside (or other Chinese firms”) technology.

I see more grave problems with the Chinese media than “seeking profit from rumor” and these require more dramatic changes in the way China is run than can be achieved by 2022 without regime change. (I’m not calling for that.) More accurate, neutral education in history would be helpful here.

On point 6, it may be too late to restore trust through suave diplomacy if there is no substance behind it. Until 2010, China’s diplomats did mount a successful charm offensive there. But as long as the unrealistic 9-dotted line concept is widely taught and upheld in the PRC, the SE Asian neighbors who actually live right next to those waters will never trust PRC intentions.

I’m not sure sentiment drives PRC-DPRK ties, even if it exists in some hoary quarters. I’d say it’s driven by China’s clear geopolitical interest, fear of trying an unknown path that may lead to conditions worse (for China) than the status quo, some economic benefits from extracting NK minerals (at least for the bordering provinces), and mistrust of US and Japanese motives in the region. South Korea’s neutrality might have been achievable 5-7 years ago, but I sense the Koreans have soured on China considerably. (I sure hope China aims higher than to be a Russia to its neighbors.)

April 23, 2012 @ 8:22 pm | Comment

Just my impression: what T E Low thinks of China isn’t really that much about China, but about grievances he has against parts of the world outside China. That’s an old tradition – I recommend Shirley MacLaine’s “You can get there from here” as a popular sample of using China as a personal projection screen.

MacLaine’s book was, I must say, much more entertaining than those of many intellectuals, though.

April 23, 2012 @ 8:48 pm | Comment

Nice post.

+++++++++++++++++++++++

“a lot of mental and emotional maturity issues to get over.”
—you can say that again…and again and again.

“But China will eventually regain her place at the top of the world”
—that seems to be a recurring theme among a certain subset of the population that visits blogs. Definitely some unresolved issues there.

April 24, 2012 @ 1:35 am | Comment

Taipei Times has this on China
http://www.taipeitimes.com/News/editorials/archives/2012/04/24/2003531108
seems to echo Slim’s post #6
Of course, China’s diplomacy with the Philipines doesn’t sound…errr, diplomatic
http://www.atimes.com/atimes/Southeast_Asia/ND24Ae01.html
“Beijing, on the other hand, has remained steadfast in its preference for bilateral negotiations with Manila. It continues to insist that the Spratlys have belonged to China since ancient times and is now showing it has the modern firepower to stake those claims.

“Ever since the ancient times, numerous documents on the Chinese history have put down definitely in writing that Huangyan Island belongs to Chinese territory,” the Chinese embassy in Manila said in a statement issued in response to the recent standoff. ”
And now with the US there….hmmm…..

April 24, 2012 @ 5:52 am | Comment

Great post!

I especially liked this: “Now is *not* the time for singing songs or pithy slogans or a revival of the ideas of the 1960s or the 1980s. Now *is* the time for an actual vision on what the China of 2022 ought to be, and how to get there.”

Xi Jinping’s term is going to be pivotal. Some sort of political reform must happen in the decade to come following the handover of power, or China will face serious problems down the road. Of course, it will have serious problems too if it does liberalize, which is why I’m happy I’m not in Xi’s shoes.

April 24, 2012 @ 5:57 am | Comment

I’ve been surprised at the optimism I’m hearing from some China watchers about the potential for Bo affair to push the CCP toward taking a new look at political reform. I don’t yet see evidence of this, but there is some sign of activity on the financial policy front.

April 24, 2012 @ 8:59 am | Comment

Those who don’t understand that Chinese maps (land, sea and air) come without appeal will have to pay the price, just like the stupid little mermaid did.

April 24, 2012 @ 2:22 pm | Comment

@ justrecently:

Hmmm….. are you implying that I am a Chinese? If that is the case, then you have gotten it wrong.

And re: grievances that I have against the world outside China… don’t think I have many grievances though. I do look at certain parts of the world with disdain, especially those with a hypocritical, morality and superiority complex. But whatever, me trying to scream my head off on the internet against them is nothing but an exercise of impotence at best… just like some folks whining and moaning about China, its government, its culture, its people, yada yada yada. I just get on with my on personal life to the best of my ability rather than let the world or the past hold me back.

@ S.K. Cheung:

You can jump on the “China will collapse” bandwagon. It is not my issue or problem where you choose to be or what opinion you choose to exercise. I, on the other hand, would rather be on the other bandwagon. My choice is based on my knowledge (albeit still superficial), experience, observations and life values. If your view contrasts with mine, then whatever, feel free to go your own way as it pleases you.

April 24, 2012 @ 7:09 pm | Comment

No, TE Low – I’m aware that your name isn’t Chinese, just as Shirley MacLaine isn’t Chinese. One doesn’t need to be Chinese to have issues – as you’ve explained yourself.

April 24, 2012 @ 8:18 pm | Comment

@TE Low – And what would those “idealistic, poorly thought out demands” you refer to above be?

April 24, 2012 @ 10:28 pm | Comment

It’s clearly in China’s strategic interest to get rid of North Korea, preferably by merging it into South Korea. Two caveats, however.

One, it is also in China’s strategic interest to keep foreign troops out of countries that border China. Thus, I believe that the the only way to convince China to accept a merger of North Korea into South Korea would be as part of deal to make Korea a neutral country with all American troops withdrawn.

Two, while it would be in China’s interest to send the Kim gang to swim with the fishes, it would not be in the interests of the Chinese Communist Party. After the fall of the Soviet Communist Party, the CCP figured out that propping up other CPs around the world was necessary to lend some ongoing legitimacy to the CCP. That calculus has only gotten worse. In the economics world, we would call this an “agency costs” problem. Not sure what the answer is.

April 24, 2012 @ 10:40 pm | Comment

The pollyannaishness of the comments by the individual in question suggested PRChineseness to me, at least maybe the diaspora, like the Hidden Harmonies crew.

But all this digression is unfair to t_co, who does know China and has offered some ideas to chew on.

April 24, 2012 @ 11:13 pm | Comment

Interesting piece. Like to ramble a bit only on the 1st two points.

Japan in 1990 and South Korea in 1997 were quite different. Japan in 1990 achieved rough parity vis-a-vis the US in GDP per labor hour. The valuations of its real estate and stock markets were at such elevated levels as if they would be leaving the US behind, but it didn’t happen — even today Japan’s GDP per labor hour is still roughly the same as the US’. The peaks Japan reached in 89/90 were secular peaks. One of the things in life is aware of false expert advices. It’s advised to the Japanese after their downturn became apparent to let the failing firms go under — the equivalent of letting AIG go under, which would drag Morgan Stanley and Goldman Sachs down, which would bring J. P. Morgan Chase down, so on and so forth, eventually nothing left standing.

On the other hand, Korea’s problem is 1997 was purely a liquidity squeeze. Lots of its chaebols borrowed short-term foreign loans and found themselves unable to roll over the loan in a global panic. The whole nation of Korea, simply didn’t have enough foreign money. After the downturn Korea’s GDP per labor hour has returned to the growing mode vis-a-vis the US’, and the troughs Korea reached in 97/98 were cyclical troughs. Kospi has more than tripled since then. Again one of the things in life is aware of false expert advices. One of the recommended solutions by the “experts” was to boost domestic consumption, which brought them the 2003 credit card crisis though it was mitigated somewhat by a global economic upswing. Man is first a producer only then a consumer — any policies go against that will eventually fail, and often fail spectacularly. IMHO, the whole Western financial meltdown is far from over and the denouement will involve failures of central banks, but I digress.

What Japan has shown for other East Asian nations is that they can achieve parity with major Western nations at a per unit (e.g. per labor hour) basis, provided that their labor force as a whole is equally educated. Based on that, there is a long way to go for China, and I very much doubt China will slow down dramatically as some predict. Granted, I am somewhat disappointed by that premise. If we go by the relationship between IQ and nations’ wealth, East Asia’ peak should be higher.

China’s under-consumption problem first and foremost is a statistical phenomenon. In other words, China doesn’t under consume, just appears to do so based on the stats provided by NBS. They sold 18 million cars in China compared to some 12 million in the US in 2011. Heck, even retail sales to GDP ratio in 2011 was higher than the US. (39% vs. 31%) The key is how China collects its economic data. For instance, China does not include imputed rents (or virtual rents) home owners “pay” to themselves in its expenditure-based GDP data (available much later than the production-based GDP data). This would be a much longer conversation…

China’s real-estate sector is a much smaller portion of the overall economy than many people think. The large firms that pay a lot of taxes to the central government are the likes of banks, energy companies, telecom companies, etc. Real-estate though as it stand is mightily important to the local government financing. Land sales are a major source of local governments’ funding source. The dirty little secret is if there is no property tax in the future, the housing prices in major Chinese cities are actually still very cheap, if you factor in the expected rise of incomes in the years to come. One possible reform, which should depress the housing prices, is to implement property taxes — and replace land sales as a major local government revenue source. Of course, like everything else there will be winners and losers…

“Failed projects”, such as? HSR (hell no)? Ordos “Ghost Town” (actually no)? New South China Mall (actually yes)? What is the scope of them, e.g. what percentage of all projects?

April 25, 2012 @ 1:54 am | Comment

The biggest problem in predicting what China will look like is that what China looks like will be highly dependent upon what the global economy and various national economies do. It will also depend upon what the cultural and social landscape looks like.

I would point out that the US looks neither as good nor as bad as was predicted by all the experts.

But the conjecure and speculation is very entertaining.

April 25, 2012 @ 7:10 am | Comment

To slim #17
Agreed. The dude in question has the capacity to utter many words without saying anything of consequence.

To Doug,
I agree a neutral Korea would have no need for US military presence. But I wonder if unification is sufficient for neutrality.

I also agree that the ccp likes to prop up like-minded regimes. But NK makes china look like a human rights nirvana by comparison. It’s bizarre that the ccp would expect the Kim’s to lend it legitimacy.

April 25, 2012 @ 9:04 am | Comment

@ Slim and S.K. Cheung:

I may sound PRC-ish, but I am actually Malaysian *chuckle*

Don’t worry about not taking me seriously. I don’t take you guys seriously either :)

P.S. Have only visited Hidden Harmonies once, but not really my type of place… opinion seems to be very one sided… like er… some folks here? Heh.

P.S.S. Re the unification of South and North Korea – I wonder how a unified Korea would behave on its historical claim to Gando / Jiandao and certain other lands in Jilin. A unified Korea would have a ridiculously strong army – about 1.5 million strong, plus all males have military / reservist training. If the thought of a Chinese government with a nationalistic bent is scary to many Asian nations, a fully united Korean government with an extremely nationalistic bent would be very frightening to China….

April 25, 2012 @ 6:35 pm | Comment

@TE Low – In the case of German unification, the “Treaty on the Final Settlement with Respect to Germany” (AKA the “2+4″ agreement) locked in the borders of Germany on the Oder-Neisse line (which, as you know, had historically stretched far across the River Oder into what is now Polish, Czech, Latian and Russia territory). This agreement also limited the German armed forces to 370,000 (from a pre-unification combined total of roughly 700,000). It seems likely that any agreement on peaceful Korean unification would require a similar final settlement of the land border with China, and a reduction of armed forces on the peninsula.

Of course, as you are likely also aware, neither South and North Korea officially claims territory in China.

Whilst an agreement on the border was signed between North Korea and the PRC in 1962, this agreement was denounced by the PRC following North Korea’s decision not to support the PRC in their dispute with the USSR, a decision which was followed by border clashes between the two allies. China latter dropped its claim to territory controlled by North Korea under the 1962 agreement, but this does leave the question open as to whether the 1962 agreement has been returned to. South Korea has remained fairly quiet on the issue, but it would be fair to assume that they would be willing to uphold North Korea’s commitments, although some on the nationalist fringe would criticise this.

I guess the biggest problem would be a requirement for neutrality. Germany was not willing to forego the NATO alliance in order to acheive unification as this would limit the independence of the unified state. Koreans do not appear, speaking generally, all that keen on their American allies, and North Korean sympathies towards the PRC are hard to assess, but it at least seems possible that the Koreans might be more willing to become an officially neutral state than the Germans were.

How powerful would a unified Korean state be? Well, during the first 20 years at least it would be significantly weakened – North Korea is, quite simply, a continuous humanitarian disaster. Following unification the main weight of this disaster would fall on the South Korean economy. In the long term the combination of a cheap Northern workforce and a developed Southern economy might be a strong one though.

April 25, 2012 @ 7:54 pm | Comment

“Germany was not willing to forego the NATO alliance in order to acheive unification as this would limit the independence of the unified state.”

This sentiment would probably be just as strong in a unified Korea, which as TE Low notes, could be fiercely nationalistic and resent having its autonomy foreclosed by outside powers. I lived a total of 5 years each in South Korea and China and, despite the prominence of nationalism in current PRC discourse, media and dealings with the outside world, I’d still maintain that South Koreans on the whole are more nationalistic than Chinese. And North Koreans are off-the-charts more jingoistic than that. Trust of China is not particularly high among Koreans on either side of the DMZ, and we might expect considerable North Korean popular resentment toward the PRC as the chief outside power keeping them in their miserable state — once the North Koreans are free to speak their mind. Although ROK official policy is silent on border issues and Kamdo etc, revanchism is somewhat more than a fringe sentiment in society or among rank and file politicians. The Americans are the outside power Koreans mistrust the least.

One factor that tempers all this is that unification is for South Koreans that kind of lofty goal most want to uphold in theory, but dread in practice, given, as Gil notes, the extreme depth of the North’s humanitarian crisis. North Koreans are not only dirt poor and unskilled for modern economic life, a significant portion of children are developmentally stunted as a result of malnutrition that is now into its second generation. Many South Koreans don’t want that millstone around their neck at a time of a rapidly aging society and slower growth associated with a more mature economy.

April 25, 2012 @ 10:40 pm | Comment

@slim

The Americans are the outside power Koreans mistrust the least.

Of course you have to realize that a unified Korea would also contain all 20 million North Koreans, who would likely distrust America over any other country.

Overall though, Koreans harbor distrust towards every single neighboring country. Can’t blame them, given how their neighbors have conspired to keep them divided or subjugated for their own geopolitical ends for over a century.

April 26, 2012 @ 3:07 pm | Comment

Hmmm….. this is the way some middle / elderly South Koreans see it the situation on the pain, cost and headache of integrating a …. messed up North Korea into a full united Korea… and if I were in their shoes, I would probably agree with them too.

It follows the saying: If you want to gain something, sometimes you have to be prepared to lose something first.

A merger of North and South Korea (let’s avoid calling it an integration for the moment… I doubt the North or South would like themselves to be labeled as … being integrated… heh…) would no doubt inflict tremendous pain on both nations. Ways of lives are going to be completely disrupted, there is going to be a huge clash of mindset and subcultures, and there is going to be a rather substantial economic cost inflicted to pay for the merger (at least on the former South Koreans…). Politically, they are going to have one heck of a time sorting out the game.

But…. and let me add two caveats here…. if they can reunite PEACEFULLY… and if they can MANAGE the reunification SMARTLY….. yes, no doubt one whole generation of Koreans are going to suffer a huge burden…. but their children, and their descendants, are going to benefit from what is going to be a MONSTER of a nation. If you want to look at a contemporary nation that truly truly punches above its weight in a lot of matters, especially in modern Asia, it is South Korea, and a properly united Korea, is going to be one heck of a puncher for certain.

So let’s say I am a middle aged South Korean today. If I had a vote on whether both countries should unite, I know that the two caveats can be fulfilled, and that the burden on me would be heavy. I would pull the trigger. I may not reap the benefits of unity …. but my children and their children will enjoy it in my place.

Now, let’s reconcile it with China’s point of view. If Korea had a government that was even neutral or ambivalent to China, the the Chinese would be happy happy joy joy (or probably one big “meh”). But if the Koreans had a nationalistic one, one that is eager to “reassert its strength” in the region (sounds familiar? Where have I heard it before?), then the Chinese would become very wary, because the easiest target for Korea to attack in the region is China. Say all you want about Korea aiming at Japan…. a sea is a far far bigger obstacle than a river (sorry for being obvious). And of course, it would remind China of the days of old when it was neighbouring countries who were the ones trying to invade China, not vice versa.

I may have rambled on for too long, but what I am trying to say is that I would kinda understand if the Chinese (oh sorry, on this board it should be properly labeled the CCP…. :P ) are leery of nudging / pushing the two Koreas to reunify….

April 26, 2012 @ 4:33 pm | Comment

@TE Low – Of course the alternative (i.e., the current military standoff) is not actually all that attractive. At some point, the North may well go to far – the sinking of the Cheonan was an unbelievably dangerous (and of course, insanely callous) move and could easily have resulted in a war which would have ended up involving China.

April 26, 2012 @ 7:06 pm | Comment

Flash news: Bo Xilai’s schemes went way beyond imagination, reports the New York Times. If you want to predict China’s future, you can rely on nearly a dozen people with party ties.

April 26, 2012 @ 7:59 pm | Comment

@ TE Low

Unfortunately for Korea, even a successful unification would not guarantee its relative independence. Much as the Netherlands, even at the height of her power in the 17th century, was caught between England, Spain, and the French; geography dooms Korea to play the part of a pawn on the geopolitical chessboard.

April 26, 2012 @ 9:55 pm | Comment

@ Justrecently

The more I look at the Bo affair, the less I see a simple corrupt official and the more I see the first time the Chinese government has successfully conducted a PR strategy through social media and Western journalists.

It seems that the party did draw many lessons from the Jasmine Revolution. But instead of using these tactics to defend the regime, the leadership is using these tactics offensively.

April 26, 2012 @ 10:00 pm | Comment

Moral considerations aside, I’m certain Richard can feel a degree of professional kinship in seeing some of these tactics being successfully employed by what was previously one of the most media-inept governments on Earth.

April 26, 2012 @ 10:02 pm | Comment

@t_co – If true, that would mean that the CCP leadership actually reads a lot of evil foreign media. Quelle surprise!

And yes, the drip-drip-drip of back-room briefing, leaks, and the use of opposition press to put the knife in is practically reminiscent of the Blair/Brown years. Except Blair and Brown never tried to have anyone killed or accuse the other of murdering someone. And Brown never tried to set up Blair for a capital offence. One half suspects that Alastair Campbell is over at Zhongnanhai doing some consultancy work . . .

April 26, 2012 @ 10:50 pm | Comment

To T-co,
has the CCP been successful with their media efforts wrt Bo? Their preferred narrative seems to be that the serious allegations against Bo were the cause of his downfall. But it seems the feeling that these allegations are merely the cover for his downfall is still out there, and prominently so. I don’t think the CCP has convinced too many people to completely buy their version of the story. On the other hand, people may not be ready to completely dismiss their version of the story out of hand, so I guess that is an improvement as far as the CCP goes. And to boot, people are also wondering why Bo is getting singled out while many many other dirty officials go unscathed…so the CCP spin may yet do some collateral damage to their own feet.

April 27, 2012 @ 2:25 am | Comment

t_co, re #29, I’m not so sure that the approach is new – at first glance, it looks to me like a tactic which has been used at home, many times. It’s only the first time in a long time that the opera for foreigners is so similar to the domestic opera. Maybe there isn’t only a convergence in what is written in Chinese- and English-language CCP papers, but also a general convergence in the narratives offered to both audiences.

That said, People’s Daily seems to see its main task in telling its readers why the story of Bo Xilai – which, the paper claims, isn’t of much interest for the domestic audience any more – keeps foreigners fascinated. It is, of course, because “Westerners overestimate the Bo Xilai factor”, and because “some Westerners hold deep prejudices re China’s political system”.

April 27, 2012 @ 4:02 am | Comment

I agree with t-co; the way the Bo Xilai affair is unfolding, I am actually wondering whether the ultra upper echelon of the Commie Party isn’t having a good laugh, watching the Western media march to THEIR drumbeat. All the leaks and “sources” being fed to the Western media, and the way the whole thing is being packaged and “rolled out”, just sounds like the agenda is being moved forward in favour of the Hu-Wen faction. I find the whole thing a remarkable drama of irony.

Also, I cannot help but sense that, for all the speculation (again by Western media) that this scandal will cause or lead to the downfall of the Commie Party, that in actuality, the Party knows what it is doing and is still in total control of the situation. Heck, they are probably exploiting the “opportunity” in the “crisis” to the maximum, or, if what is said is true, that the earlier investigation initiated against Wang Lijun was mainly for the purpose of taking down Bo Xilai, then all these events should have been anticipated and accounted for already…. I mean, it is so damn obvious that to bring down a politician of Bo Xilai’s level, there is bound to be a lot of dirty linen aired in public…

My own personal speculation, and this is PURELY speculation, is that the ultimate aim of the whole drama is actually a direct attack by Hu Jintao and Wen Jiabao against Jiang Zemin. The perfect “opportunity” emerged in this “crisis” to have this old fool and his cronies on the back pedal. And probably shift Xi Jinping and several of the princelings into the Tuanpai camp.

Ah well… like politics anywhere in the world… all we can do is conjure up fantastical stories, speculate, and “rumour-monger”… heh….

April 27, 2012 @ 5:02 am | Comment

My friends tell me that some in the party want Bo dealt with before the elections; others want the stink to sit there and ferment so that they will have something to use during the elections.

Basically, Messr. Bo is ironically being protected by his former enemies; after the meetings, he will done for, however.

April 27, 2012 @ 11:53 am | Comment

“The more I look at the Bo affair, the less I see a simple corrupt official and the more I see the first time the Chinese government has successfully conducted a PR strategy through social media and Western journalists.”

This is not it appears from outside China, to those who are paying attention.

The mainland Chinese media remain pretty much AWOL on the story, creating a void filled by Hong Kong outlets, rumor-mill web sites like Boxun, British tabloids (mostly fixated on Heywood) and then the quality Western press, some of whom are breaking news on the story. In most places in the world, the domestic press would be leading coverage.

I don’t see much PR upside for the Party outside China. Claims that this showcases “rule of law” are (rightly) laughed off in the absence of any evidence of due process for Wang, Bo or Gu. No side ends up looking good here, because essentially each is a manifestation of aspects of the same system. Some folks are giving China points for conducting itself quite normally on most fronts — Wen traveling through Europe, Hu coddling North Korea (no points there, actually) — despite the distractions and challenges.

April 27, 2012 @ 8:04 pm | Comment

@ Slim

What I mean is that the “classical liberal” wing of the Party is using the Western media coverage and Weibo to weaken the Statist wing ahead of the upcoming meetings.

Note how on the above questions, both wings have diametrically opposed viewpoints caused by diametrically opposed interest groups. By and large, inland officials prefer a Statist approach, with the financial day of reckoning postponed or pushed onto the shoulders of wealthy consumers and coastal capital; and vice versa.

This is why it is critical for Bo’s wing that Bo quickly leaves the stage. The longer that stink stays on their end, the weaker their hand will be in the upcoming macroeconomic debate.

April 27, 2012 @ 9:25 pm | Comment

That’s an interesting perspective, t_co. Viewed from Washington, and based on outcomes rather than rhetoric, the statists have prevailed since Jiang-Zhu left the scene almost a decade ago, and Bo’s Chongqing model is merely a more extreme variant of national policy. There are those who say that just as Washington was caught off-guard by the statism/mercantalism that took off under Hu, there is a risk that a renewed reform push may again surprise folks here that are resigned to China being an intractably mercantilist trade partner.

In Japan in the 1980s and 1990s, “gaiatsu” was a recognized and arguably indispensible ingredient in the political economy debate and people used to say Japan’s only true opposition party was Washington. Zhu Rongji’s use of WTO accession was in this vein perhaps.

But I do wonder if the “patriotic elements” of China will ever countenance that use of e foreign card in domestic political battles.

April 27, 2012 @ 10:39 pm | Comment

sorry, the foreign card

April 27, 2012 @ 10:43 pm | Comment

@ Slim

Nice touch on the 80s/90s Japan experience. IMO China is risking following Japan’s path into deflation if it doesn’t adopt a different strategy for the next leg of growth.

As for “foreign elements”, that’s a complicated answer, but the short version is that as long as the reformists don’t wear that fact too openly, then it should be fine.

May 2, 2012 @ 9:58 am | Comment

Let us hope that China will allow many more freedoms in their nation such as freedom of speech and freedom of religion which gets out the best ideas to the Chinese people allowing them to prosper in their chosen fields of interest and improving conditions for all the people. And the best way to that is to hear more about the Holy Bible and let the people read it for themselves. As well as about the God of the Bible , the three in one God , The Father , The Son , and the Holy Spirit. And the Father sent the Son , the Lord Jesus Christ into the world to save sinners since the whole human race sinned against God in the garden of Eden and now do wrong things against the creator God. Who also was born of a virgin , lived a sinless life, and died for all peoples sins against God on the cross 2000 years ago,was buried, and rose from the dead the third day, was seen of men , and went back up to heaven. Now all people can be saved from their sins and hell and go to God’s heaven by repenting of their sins and trusting the Lord Jesus as their personal Saviour for new life in Christ. For more information ,HolyBible at dot com as well as fbn radio dot com.

May 11, 2012 @ 2:54 am | Comment

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