Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
The USA is dealing with huge problems and cannot afford to challenge China directly, but decided to stabilize the relations between both countries, says Shanghai-based business analyst Shaun Rein to CNBC-TV18. But the USA is for sure keeping economic pressure going, he adds.
China expert Victor Shih, Director of the 21st Century China Center at the University of California San Diego School of Global Policy and Strategy, discusses the current state of US-China relations with Bill Gertz of the Washington Post, covering questions like, “Is China an existential threat or a competitor?” and “Is China trying to replace the US as hegemon?” at PNYX.
Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
Business analyst Shaun Rein is interviewed by marketing guru Ashley Dudarenok on the most recent developments, as consumer confidence in China is slowly recovering at the end of 2023. But because of the ongoing trouble with the US, and because US firms fear more counterproductive measures by US President Biden, there are still many bears on the road to economic recovery. China focuses more on domestic companies, as US companies retreat, and the global south turns decisively to China for support, he says.
President Xi Jinping has touched down in the US for talks with US President Joe Biden in an effort to get the relations on track between both countries. China’s economy needs US investments, says Shanghai-based business analyst Shaun Rein at CNBC, but US firms fear Biden might announce more restrictions on trade with China. While the economy is doing bad, China is still the world’s largest retail market and the US cannot afford to stay away, he adds.
In short, don’t expect huge breakthroughs. Gone are the days when presidents and premiers met Chinese leaders and came back with a briefcase full of business deals or other “deliverables.” And that’s not a bad thing. Those meetings were often empty, and many of the deals didn’t pan out—letters of intent to invest often languished, and China sometimes promised market access without delivering. Even though it’s easy to reject “empty talk,” it’s important that top leaders keep the channels of communication open.
Isn’t that true for all countries?
No, it matters more in dealing with China. The reason is that Beijing makes it hard for U.S. officials to understand who is advising Xi or what the decision-making channels are. Last year, Xi was appointed to an unprecedented third term as general secretary of the Chinese Communist Party, a position that essentially allows him to run China indefinitely. (Earlier this year, he got a third term as president, but this is an honorific title in the Chinese political system.) Now that he’s ended term limits and has this new third term, Xi is surrounded by people who owe their allegiance to him almost exclusively. Meanwhile, people of Xi’s age—he turned seventy earlier this year— have all retired. Also worrying is that China’s foreign and defense ministers both appear to have been sacked, and the heads of the military’s prestigious Rocket Force were also purged earlier this year, two rare examples of trouble at the top. The changes make it even harder to fathom who is running the show beyond Xi and his immediate circle of loyalists.
So there’s a real possibility that Xi is surrounded by yes-men, who might not want to tell him bad news. In this context, it matters that the president of the United States can talk to him directly to explain why American perceptions of China are so negative and what the direct risks this could bring.
It’s not clear, for example, if Xi is directly aware of risky maneuvers by the Chinese military in recent weeks—notably, the buzzing of a U.S. bomber flying in international airspace. Decisions about such exercises are probably made by commanders on the ground, but they are based on guidelines issued by Beijing. Letting Xi know directly that these events are dangerous and potentially catastrophic could be useful.
“When the Chinese get good at something, all of the sudden, the United States says, ‘This is a national security risk’”, says Shanghai-based business analyst Shaun Rein on the tech arms race between China and the US, where Huawei, TikTok, and others got into trouble in the US, in his interview with Ian Bremmer.
US restrictions on purchasing chips from China are hurting US semiconductor firms, says political analyst Victor Shih in an interview with the state news agency Xinhua. Not every chip sold by U.S. companies is cutting edge or has national security relevance. In those cases, the U.S. government should show some flexibility,” said Shih
Xinhua:
The Biden administration’s curbs on chip sales to China likely have impeded revenue growth of U.S. chips companies to some extent, a U.S. expert has said.
“The U.S. chips companies, like any companies, are very interested in expanding market share, and selling to the China market is very important since China is now the biggest consumer of chips in the world,” Victor Shih, associate professor of political science who also heads the 21st Century China Center at the School of Global Policy and Strategy with the University of California San Diego, told Xinhua in a recent interview…
On July 25, the Semiconductor Industry Association and Oxford Economics released a joint report stating that approximately 67,000 positions in the U.S. semiconductor industry, including roles for technicians, computer scientists and engineers, are projected to remain vacant by 2030.
Besides the shortfall of skilled workforce, the high cost is another hurdle for the industry. “The higher cost basis in the U.S. will not change in the short run. In the medium term, it remains unclear whether the U.S. can set up an apprenticeship program to train sufficient numbers of technicians for semiconductor fabs,” said Shih.
The Semiconductor Industry Association revealed that the 10-year total cost of ownership of a new lab in the United States is 30-50 percent higher than in East Asian economies…
If the restrictions continue, “the segmentation of the global semi market potentially will create very capable Chinese chips competitors to U.S. companies since Chinese buyers now have no choice but to buy from domestic chips makers, giving them a large captive market,” Shih said.
“A balance between national security concerns and commercial concerns is possible. Not every chip sold by U.S. companies is cutting edge or has national security relevance. In those cases, the U.S. government should show some flexibility,” said Shih.
The geopolitical arguments between China and the USA are developing fast. Renowned economist Arthur Kroeber takes the stock right now as US treasury secretary Yellen visits Beijing, for the NPR. How can two major economies disentangle if they rely so much on each other?
NPR:
SCHMITZ: It’s been four years since a U.S. treasury secretary visited Beijing. And in that time, relations between the U.S. and China have worsened considerably. For years, these two economies really needed each other. To what extent is that still the case?
KROEBER: I think that’s still enormously the case. You know, all-time – trade is at an all-time high, over $700 billion. You have a lot of U.S. companies that still rely on China as one of their major markets, both for volume and for growth. So there’s definitely been some chipping away in certain areas, notably semiconductors. But the level of interdependence is still extremely high.
SCHMITZ: And, you know, the U.S. has been trying to disentangle itself from China more recently, you know, reshoring supply chains, placing controls on semiconductor technology, as you mentioned, you know, keeping Trump era tariffs on Chinese goods in place. I’m curious, how do you think this has shaped how China interacts with the rest of the world?
KROEBER: Well, I think the Chinese have come to the conclusion that it is the purpose of U.S. policy not just to reduce its reliance on China but to slow down China’s growth and its technological development. So it’s made China a lot more suspicious than it already was of U.S. intentions. So it’s created that problem. It’s also encouraged the Chinese to ramp up the charm offensive to international companies both from the U.S. and from Europe, and in other areas because they want to continue large inflows of foreign investment and looking for companies to act as a counterweight against political pressure that’s coming not only from Washington but also from Europe as well.
SCHMITZ: You know, to what degree does reduced dependence between these two superpowers increase the risk of greater hostilities or even conflict between the two?
KROEBER: Well, if we really get to a point where the economies are significantly less dependent on each other, I think that is a problem. And if you look at two simple examples from the last two decades – we’ve had an extraordinary period of peace over Taiwan, which is kind of disputed territory. And one of the reasons for that is because the high level of economic interdependence between China and the U.S. and Taiwan means that the costs of China trying to solve that issue by military means are extremely high.
I think you can also see that in the Russia-Ukraine situation, that China has an alignment with Russia. They would probably like to do more to help them in the current situation. But they’ve been very, very cautious about staying away from exporting weapons to Russia, again, because of the costs, because of their high interdependence. So I don’t think we’re at a low interdependence level yet.
China business veteran Shaun Rein discusses with Cyrus Janssen how China has faced challenges since it opened up post-Corona. Outbound travel has not resumed, expected revenge spending did not happen and consumer confidence is at the lowest rate ever. No, he says, China is not yet back to normal, because consumers sit on their corona savings, unwilling to spend. And foreign investors, while CEOs are going to China, are hesitant to resume investing in China, at least till the end of 2023. But support for Xi Jinping is still he, he sees. Though, expect a tough 10-20 years.
Business analyst Shaun Rein visits the US for the first time in four years after Covid-19 lockings in China, and he explains why he has become bearish on the country. Consumer confidence is down at a historic low, and an expected revenge purchase after the lockdowns ended stayed away. Foreign companies are pressured by the US to split off their operations, despite a wide range of international CEOs visiting China last month.
China veteran Kaiser Kuo, co-founder of the Sinica Podcast and editor-at-large of the China Project, discusses the current state of the US-China relations, together with Susan Shirk, introducing her latest book, Overreach: How China Derailed Its Peaceful Rise at the Richard M. Krasno Distinguished Professorship at UNC-Chapel Hill, presided by Klaus Larres.
Tense relations between China and the US, a pandemic, and limited access to the country are firmly limiting a new generation of China hands to explore a career in the second economy of the world, says China professor Victor Shihin the South China Morning Post. “China was [once] seen as a kind of land of opportunity for young foreigners. That is no longer the case,” said Shih,
The South China Morning Post:
Victor Shih, a China scholar at the University of California San Diego, said reduced economic opportunities, combined with China’s zero-Covid approach, have put foreigners off China who might otherwise be interested in the country.
“China was [once] seen as a kind of land of opportunity for young foreigners. That is no longer the case,” said Shih, who regularly visited the mainland for decades until the pandemic. He described the “golden period” for aspiring China experts as spanning the 1990s to 2017-2018 when foreign nationals with “some Chinese skills” and China knowledge had ample job opportunities in Hong Kong, Macau and mainland China.
Shih echoed the view that Beijing’s restrictive entry policies during the pandemic have made China a less attractive place to be. Indeed, a three-month mass lockdown in Shanghai from April 1 to June 1 prompted many foreigners to flee the commercial hub.
US scholar and former foreign correspondent Howard French dives into the US debate on whether sanctioning and divesting from China are helpful. French does not think so and compares the position of China with North Korea – where sanctions did not work – and South Africa, where they did, at a debate at Intercollegiate Studies Institute.
US president Joe Biden and China’s President Xi Jinping plan a virtual meeting next week, after months of rising tension between both economic giants.Political analyst Victor Shihsees the meeting as a step forward,he tells CNN.
CNN:
US officials revealed last month that they had reached an agreement in principle with China to hold a virtual meeting between Biden and Xi before the end of the year, as part of an effort to ensure stability in one of the world’s most consequential and fraught relationships.
That tentative agreement was the result of an extended, six-hour meeting between Biden’s national security adviser Jake Sullivan and China’s top diplomat, Yang Jiechi in Switzerland, just days after Beijing sent record-breaking number of warplanes into Taiwan’s defense zone.
Victor Shih, an expert on elite Chinese politics at the University of California, San Diego, said the meeting is a positive development for bilateral relations.
“I think the bilateral meeting next week is a preliminary sign that the relationship between the US and China is getting back on a more normal track — than (what) had been the case in the later Trump years,” Shih told CNN.
The meeting is also likely to motivate officials, especially on the Chinese side — from the Foreign Ministry to the Commerce ministry — to once again focus their energy on US-China relationship and think of ways to improve it, Shih added.
The last time Biden and Xi spoke was in September, in a phone call that lasted roughly 90 minutes.
China watcher Kaiser Kuo describes at the Varn Vlog how US-China relations went downhill since the 2008 financial crisis, and how that did not improve after President Joe Biden took over from Donald Trump. Also: how the Red Deal in China is changing domestic relations in China.
China and the US have continued their warrior diplomacy, also after US president Joe Biden took over from Donald Trump. CFR-scholar Ian Johnson sees both upsides and downsides in the fierce language both countries use to define their relationship, he tells at ShanghaiEyes.
Former White House advisor Harry Broadman looks at US president Biden’s trip to Europe, the G7, and NATO, and explains why China should be also on the agenda of NATO for Cheddar News.
US President Biden is trying to beat China, just like his predecessor Trump with a strong focus on technology. But Shanghai-based business analyst Shaun Rein does not see how the US can overtake China in innovation, he tells at state-owned Global Times. And more about the tense relationship between both economic powers.
The Global Times:
GT: You are very optimistic about China’s technological innovation. According to mainstream US media analysis, President Biden is putting tech at the center of his China strategy. And some say the US is shifting from Trump’s “decoupling” to Biden’s “small yard, high fence” tactic. How do you view this more targeted approach? What could it result in?
Rein: What Trump did to China was awful. What Biden is doing is just as bad. It’s clear that the US wants to destabilize and destroy China’s high-tech industry. They want to control tech standards. It’s not because Huawei or Douyin (Tiktok), or Chinese firms have done anything bad. I’ve seen no evidence yet from the US that these Chinese firms are doing anything overly bad that is not normal in other countries. It’s clear that the US feels that future war is not conventional war, but over controlling tech standards, and whoever dominates the tech world will be the major global superpower.
Over the last five years, China has become the most innovative nation in mobile APPs. Whenever I go back to the US, I feel like I’m back in the dark ages.
China has Alipay and Wechat pay, which I think is one of the reasons why China is able to stop COVID-19. In the US, people are still using cash and physical credit cards. But because of what Trump and Biden have done to China – such as crippling Huawei – Chinese firms have to focus on semiconductor development. Four years ago they didn’t need to, now they have to. This is a do-or-die situation. So you’re going to see the government and business will all have to work together, in order to shed the yoke of American imperialism in technology, it’s a very dangerous situation.
I work with a lot of American software and technology companies. They are my clients. They’re angry, because they sell to Chinese companies. They were generating billions of dollars a year in profits in China. All of a sudden, they are no longer allowed to sell to Huawei. They can’t sell to these companies.
China is the biggest market in the world for Intel, Qualcomm and Texas Instruments. Those businesses will be gone in five years, because Chinese companies will have to sell what Intel used to sell. So Biden is destroying the American tech sector.
When it comes to semiconductors, China is five to 10 years behind the US. So basically hysteria has captured the US, in DC. You bring up anything about China, automatically Americans go crazy. They think that it’s a new red scare. It’s absurd that people aren’t thinking logically right now.
The US has a rotation between the government and the war machine. Take the new Defense Secretary Lloyd Austin. After he left the US military in Iraq, he worked for Raytheon, a weapons maker, as a board member. Now he becomes the secretary of defense. It’s rotating between government and weapons, which is very dangerous.
