Foreign companies confused about China, after raids on consultancies – Victor Shih

 

Victor Shih

China’s new government promised foreign companies a more open economy, but the recent raids on China offices of Bain and Capvision consultancies leave foreign investors confused, says political analyst Victor Shih at Hong Kong FP. “It’s very puzzling considering Beijing says that it will boost foreign investment and entrepreneurial spirit. It seems like the right hand doesn’t know what the left hand is doing.”

Hong Kong FP:

Victor Shih, associate professor at UC San Diego and an expert on Chinese politics, said that the US and China are involved in tit-for-tat moves. Washington slapped sanctions on Chinese companies in the internet, bio-technology and pharmaceutical industries, while Beijing barred US arms manufacturers from investing in China. However, taking action against global advisory firms “took things to the next level,” he added.

Shih said the due diligence and advisory services industries are essential for both foreign and domestic investment in the Chinese market: “You can’t give away your money when you don’t have enough information. And we all know you will come across scams like the case of Sino-Forest Corporation or Luckin Coffee,” he said in reference to recent corporate scandals. “It’s important to invest carefully.”

“Why are there all these consulting companies in China trying to do research on China’s economy and Chinese companies? It’s not like a plot, it is just because China is important.” Shih added. “It’s very puzzling considering Beijing says that it will boost foreign investment and entrepreneurial spirit. It seems like the right hand doesn’t know what the left hand is doing.”

More at Hong Kong FP.

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.

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The upside of China’s leadership changes – Arthur Kroeber

 

Arthur Kroeber

Many observers have been pessimistic about China’s recent leadership changes and the centralization under Xi Jinping. Still, renowned economist Arthur Kroeber sees a significant upside, at least for the short term. Also, what is Xi Jinping’s vision for the country’s economic development?

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What changed since Xi Jinping took charge? – Victor Shih

 

Victor Shih

Political analyst Victor Shih looks at the seachange that has taken place in China since Xi Jin Ping took charge. Especially 2015 was the transition year, where Xi and the party even sidelined the previously more powerful state council, he tells at the China Inside Out meeting at the Asia Society in New York, together with his colleagues from the University of California San Diego’s 21st Century China Center (21CCC).

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Alibaba reorganization unlocks US$220 billion value – Shaun Rein

 

Shsun Rein

Alibaba’s plan to split its US$200 billion company into six entities with IPO potential unlocks massive opportunities for investors, says business analyst Shaun Rein to CNA. It also aligns nicely with Xi Jinping’s intention to make China’s economy, more competitive by dividing up the Alibaba giant, he adds.

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Is China opening for business again? – Ian Johnson

 

Ian Johnson

At the start of his third term China’s president Xi Jinping has been flexing his muscles internationally, while the country also promised to be open for private and foreign business. Ian Johnson, a scholar at the Council on Foreign Relations, tries to make sense of the conflicting messages at the CFR website.

Ian Johnson:

Over the past few months, the Joe Biden administration has limited the export of high-tech chips to China, and made a series of serious allegations against it—to date, without concrete evidence. They include alleging that a Chinese balloon blown off course was a spy balloon, and that China was considering sending weapons to Russia to help it in its war against Ukraine. The United States has also renewed scrutiny into whether COVID-19 could have stemmed from a Chinese laboratory leak.

In this context, Xi and [the new foreign minister ]Qin [Gang]’s rhetoric can be seen as evidence of China’s resolve, even as both sides try to stabilize the relationship. Over the coming weeks, the U.S.-China relationship will be further tested by a visit from Taiwanese President Tsai Ing-wen to the United States, and hearings by a congressional committee on China that seems chiefly dedicated publicizing to Chinese problems and failings.

At the same time, Xi and his team sought to show that China is back open for business after years of a highly restrictive lockdown that slowed economic growth.

In talks at the session, Xi said that private entrepreneurs are “one of us,” countering the conventional view of Xi as hostile to private business. He also has a new premier, Li Qiang, who is widely seen as sympathetic to foreign business.

Li epitomizes the tension between the pro-market growth that has made China rich and the emphasis on stability and control that Xi favors. Li was previously the reform-minded party secretary of Shanghai, and a year ago, he also experimented with ending the city’s zero-COVID policy—before an outbreak forced him to reverse course and implement a harsh lockdown.

Xi said during the meetings that there is no contradiction between the two positions, saying “security is the foundation of development, and stability is the precondition for strength and prosperity.”

Speaking at the closing press conference on March 13, however, Li gave a robust defense of private enterprise, promising to “treat companies under all forms of ownership as equals.”

Li’s concrete policies, however, are still unclear.

Much more on the CFR website.

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What to know about China’s new premier Li Qiang – Victor Shih

 

Victor Shih

Political analysts Victor Shih looks into the background of Li Qiang, China’s new premier, and his past in the country’s elite for NPR.

NPR:

China’s annual session of parliament ended today. President Xi Jinping secured a third term and stacked the government with allies, including a new premier. But as NPR’s John Ruwitch reports, it’s unclear if Li Qiang’s loyalty is an asset or a liability.

JOHN RUWITCH, BYLINE: The story of Li Qiang’s rise goes back two decades. He was working in his home province of Zhejiang next to Shanghai. Xi Jinping was the provincial Communist Party secretary, the boss. And Li became his chief of staff, a role in which…

VICTOR SHIH: He is the enforcer or go-between the party secretary of the province and all the subordinate units.

RUWITCH: A critical job, says Victor Shih, a specialist in elite Chinese politics at the University of California San Diego. Xi Jinping was on his way up but fighting factional struggles in Zhejiang. Li stood by his side.

SHIH: At that time, there were sort of two camps in the province, and so Xi Jinping’s trust of Li Qiang might have started in this period of relatively intense conflict.

RUWITCH: That apparent trust grew. Li got promotions and was soon governor of the province. Along the way, he developed a reputation as a champion of private business… But Victor Shih of UC San Diego says there’s still a big lingering question. Which of the 63-year-old Li’s instincts will we see more of?

SHIH: You know, whether it will be his – you know, his own belief in the market, in private entrepreneurship or whether it’s going to be his reflex to always carry out instructions from his patron.

More at NPR.

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What has changed on Taiwan, the economy in China? – Ian Johnson

 

Ian Johnson

China veteran Ian Johnson, senior fellow for China studies at the Council on Foreign Relations think-tank, discusses at Channel News Asia how different China might treat much-discussed political issues like Taiwan after the visit of US House speaker Pelosi and possible new tracks in economic directions. The recent shift of focus towards the private sector as a key part of China’s economic growth strategy is more of a “tactical adjustment” instead of a change in the leadership’s thinking, said Mr. Johnson.

Channel News Asia:

Mr Johnson said that US House Speaker Nancy Pelosi’s visit to Taiwan in August had set a precedent for future House Speakers, regardless of their party, to make the “mandatory” visit as a show of support for the island.

“I think this was one of those cases where the Biden administration probably didn’t want Pelosi to visit, but didn’t feel in the current climate in Washington, where there was a bipartisan consensus against China, that they didn’t feel they could speak up and ask her not to go. And so she went,” he said.

He noted that while unprecedented military activity followed the visit, it was “relatively limited” and died down after about a week.

“I think China made its point. Nothing untoward happened. There were no planes shot down or ships sunk, or anything like that,” he said, adding that it remains a “worrying” development for Beijing and those in Washington who are seeking better ties.

The recent shift of focus towards the private sector as a key part of China’s economic growth strategy is more of a “tactical adjustment” instead of a change in the leadership’s thinking, said Mr Johnson.

China’s two-pronged approach is to have domestic consumption drive the economy, while also attracting foreign investments through its markets and production capabilities.

Mr Johnson said that President Xi and his party have over the decades shown a “certain amount of pragmatism” and know that economic growth is important.

“In China, just like in other countries, people are most affected by their wallets and their livelihoods. And so they (the party) realise they have to get back on track. Getting rid of zero-COVID is part of that, for sure,” he said.

More at Channel News Asia.

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Behind the end of China’s zero-Covid policies – Victor Shih

 

Victor Shih

Strategic analyst Victor Shih, author of Coalitions of the Weak, (2022), looks at China’s sudden exit from its contested zero-Covid policy. Was it because of the protests, was it planned before, and what does it mean for the country’s domestic policies and economics? A discussion at the New Yorker on how decisions at the  top-level take place.

The New Yorker:

Were these policy changes announced because of the protests, or for economic reasons?

We don’t have a lot of detail. But, as far as some of us can piece together, there has been a debate among top-level leaders. And we definitely can see the debate among experts who advise the Chinese government on the degree of opening. For a long time, there has been a side which strongly advocated for the continuation of a “zero covid” policy. But in recent months, even before the protests began, there were experts in the Chinese government who increasingly spoke out in favor of a more relaxed approach, emphasizing vaccination instead of draconian levels of quarantine. And I think the protests perhaps tipped things a little bit more in favor of the opening camp, or at least some degree of opening. It is unclear at this point how much opening there will be.

It really speaks to the challenge of authoritarian government, especially a kind of dictatorship that controls all forms of media, and has explicitly ordered the media to obey everything the government wants to convey. Sometimes even the Politburo itself does not get a lot of information about the level of satisfaction or dissatisfaction in the population. It took something like a multi-city protest to really make Xi Jinping realize that perhaps there is a groundswell of demand for a more relaxed approach.

Your answer implies a certain amount of debate on this, that it’s not just Xi making these decisions on his own. Is that how you see it?

At the highest level, among Politburo Standing Committee members, we don’t know whether there has been a debate. I suspect that there has been—not an open debate, but someone must have pushed some of this expert opinion to the Politburo level for the opening that we’re seeing to happen so quickly. Briefing material about why opening is potentially justifiable, and potentially not so disastrous for China, must have been there already or it wouldn’t have happened so fast after these protests.

I think that someone like Sun Chunlan, who is in charge of health policies in China, must have read a lot of this briefing material. Whether she was in favor of more opening to begin with is unclear. In fact, I think that may not be the case. It might have been someone else who has been advocating for more opening. The rumor is that Wang Huning, who’s a Politburo [Standing] Committee member, and has been an adviser to Xi Jinping since he took office, was or has been the person pushing for a more relaxed approach to covid. But these are just rumors…

Were you surprised by how quickly, at least publicly, China backed away from its covid policies? People I’ve talked to who know more than me seemed a little bit surprised.

I was surprised. There was this rumor that Wang Huning was advocating it for quite some time, but I never really believed in that rumor. I don’t really know if that’s the case. But it would take an advocate at that level to make it happen. There are two surprising aspects of this. One is that, in some places at least, we are seeing lockdown policies being liberalized very rapidly. And even in Beijing. My previous assessment had been “Oh, there could be relaxation in other parts of China, but certainly not Beijing, where the leadership lives.”

More at the New Yorker.

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How Xi Jinping tries to balance between control and growth – Arthur Kroeber

 

Arthur Kroeber (right)

Leading economist Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know®, discusses how China’s leadership balances between control and economic growth, looking at the zero-Covid policies and the property crisis at the Fairbank Center for Chinese Studies and the Harvard Kennedy School Rajawali Foundation Institute for Asia.

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How can China deal with the anti-Covid protests? – Victor Shih

 

Victor Shih

China’s leaders face unprecedented protest against its rigid anti-covid policy after earlier this week ten deaths in Urumqi were to blame for that. Political analyst Victor Shih sees China’s Communist Party walking on a tight rope, he says in the Hindustan Times.

The Hindustan Times:

An expert on China said Beijing has missed maintaining a balance between Covid control and economic growth, leading to citizens’ anger.

“Basically, what the (Chinese) leadership wants, a fine balance between growth and Covid control, is beyond the capacity of grassroots level enforcers. Instead, they are using draconian measures which invite popular anger,” Victor Shih, Associate Professor, School of Global Policy and Strategy, UC San Diego, expert on Chinese elite politics, said.

There is apprehension that the ruling Communist Party of China could respond with hard measures against the protesters.

“In the short term, the government walks a tight rope between too little repression, which may lead to more protests, and too much, which triggers backlash protests. Unfortunately, with the pervasive surveillance in China, the government will be able to arrest and punish the ring leaders after things have cooled,” Shih added.

“However, with Covid policies still unclear, popular anger may persist for a long period of time, something the regime has not had to deal with for decades,” Shih said.

More at the Hindustan Times.

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The upside of Xi Jinping’s centralized grip on China – Arthur Kroeber

 

Arthur Kroeber

Many analysts took a negative view of Xi Jinping’s more centralized grip on China’s policies, but leading economist Arthur Kroeber looks at it differently, at least in the short run. Major problems like the zero-covid approach and the downturn of property have already benefited from Xi’s more coherent approach, Kroeber says at the Starr forum at MIT.

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China’s tycoons donate US$14 billion for Xi Jinping’s “common prosperity” – Rupert Hoogewerf

 

Rupert Hoogewerf

President Xi Jinping pushes the concept of “common prosperity to diminish China’s grasp between the poor and rich. China’s 49 richest tycoons have donated US$14 billion for that purpose, according to the Hurun China Philanthropy List 2022. “The top three on the list each donated around 15 billion yuan and came from internet companies,” says Hurun’s chief researcher Rupert Hoogewerf in AsiaOne.

AsiaOne:

The founders of three of China’s technology giants each pledged over US$2 billion to charitable causes over the past year, in a collective response to the nation’s call for common prosperity that drove donations to a record, according to the Hurun China Philanthropy List 2022.

The list recorded 49 benefactors who each gave away more than 100 million yuan (S$19 million) from April 2021 to the end of August, driving total donations to a record US$10 billion (S$14 million), the most in 19 editions and “a record year for big philanthropy,” said Hurun’s chief researcher Rupert Hoogewerf.

China’s top 10 philanthropists, all on Hurun’s China Rich list , gave away 6.3 per cent of their total wealth, or around US$8.7 billion, according to the report.

“The top three on the list each donated around 15 billion yuan and came from internet companies,” Hoogewerf said in the list released on Wednesday. “They have recently retreated behind the scenes, and have all responded quickly to the country’s common prosperity drive.”

Common prosperity first emerged as a wealth distribution concept in the 1950s soon after the establishment of the People’s Republic, and resurfaced in the 1980s when China experimented with capitalism and economic liberalisation.

President Xi Jinping has repeatedly called for “common prosperity” as an aspirational concept in the past year to narrow the gap between China’s ultra wealthy and the rural poor. The catchphrase refers to affluence shared by everyone both in material and cultural terms, not the prosperity for just a few nor an absolute equal distribution, and should be advanced step by step, according to the government…

Seven of the top 10 philanthropists donated shares of their businesses to charitable foundations, according to Hoogewerf.

“Charitable trusts have become an important way to promote common prosperity and the development of philanthropy in the country,” he said.

More at AsiaOne.

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How Xi Jinping centralized his power, and what it might mean – Victor Shih

 

Victor Shih

China analyst Victor Shih, author of Coalitions of the Weak, discusses with Bill Bishop and Cindy Yu at China Whispers on how the move from collective leadership to a centralized power might change policies in China after the 20th Communist Party Conference including the current line-up of the leadership, zero-covid and Taiwan.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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How stable will China be under Xi? – Ian Johnson

 

Ian Johnson

With more domestic power in the hands of Xi Jinping, many observers expect a more stable China. China analyst Ian Johnson diverts from that line and expects the current stability is a rather superficial one, he tells NBC.

NBC:

“Our trend, our goals, our path — all are certain,” [Xi] said.

But Johnson said China under Xi has a “superficial stability.”

“The system he’s set up seems somewhat brittle, especially since it flies in the face of how most countries have gotten prosperous and wealthy and how to make friends in the world,” he said.

Xi has also made himself vulnerable by identifying himself so closely with key policies like “zero-Covid,” which he says is necessary to save lives but has caused growing public frustration and economic costs.

“He has less ability to jettison somebody, especially now that he’s surrounded by his team entirely,” Johnson said. “If he gets rid of somebody, that’s one of his allies he’s getting rid of.”

“Our trend, our goals, our path — all are certain,” he said.

But Johnson said China under Xi has a “superficial stability.”

“The system he’s set up seems somewhat brittle, especially since it flies in the face of how most countries have gotten prosperous and wealthy and how to make friends in the world,” he said.

Xi has also made himself vulnerable by identifying himself so closely with key policies like “zero-Covid,” which he says is necessary to save lives but has caused growing public frustration and economic costs.

“He has less ability to jettison somebody, especially now that he’s surrounded by his team entirely,” Johnson said. “If he gets rid of somebody, that’s one of his allies he’s getting rid of.”

More at NBC.

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Who is who at China’s new leadership – Victor Shih

 

Victor Shih

Political analyst Victor Shih looks at China’s new leadership after what he calls a “norm-busting” meeting of the Chinese Communist Party, and who is who at the new line up, for CNN. And where are the women leaders and upcoming new top leaders?

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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