Is America at Risk of Not Participating in a Changing China?

Thanks to misguided stories about President Xi’s reforms, The united states risks losing the opportunity to take part appropriately in China’s massive economic rebalancing and reform drive.

In their Animal Spirits, George A Akerlof and John J. Shiller, two Nobel Prize those who win, show how human mindset drives the economy as well as why it matters with regard to global capitalism. In particular, they show how stories move markets and therefore are themselves a real part of the way the economy functions.

The same goes for other economies, including China. Washington’s political pundits, policy wonks, economic analysts, and news oracles filter what “we” in America know about China through aggregate tales. Some stories reflect realities; others do not. Still others tend to be misguided and flawed, as the rest have self-serving agendas.

As Leader Xi Jinping is in his first recognized state visit in the Ough.S., he remains an enigma to most Americans – not in spite of these stories, but due to them.

Stories about Xi’s key agenda

After his first year in power, leading media, such as Bloomberg, documented “Xi amassing most power because Deng raises reform risk.” After two years, the Chinese president was portrayed in the West as “Xi who should be obeyed” as The Economist put it in its cover tale, calling him the most powerful Chinese language ruler certainly since Deng, and possibly since Mao.

What united these tales, which quickly spread across the world via lesser-tier media channels, was their common denominator: Xi had obtained too much power.

More recently, Washington’utes stories would like us to think that the problem with President Xi isn’t that he has too much power, but that he is increasingly powerless.

The new conventional wisdom came about after Chinese equity market volatility, that the Financial Times thought showed that “Xi’s imperial presidency has its own weaknesses.” That wisdom had been quickly seconded by the Wall Street Journal, which reported that crises place dents in Xi’s armor, as “Chinese president is looking more vulnerable than at any time since taking office this year, insiders say.”

Despite the demise of the Cold War, the actual West’s old imperial inclination to see the world through the glasses of good (“we”) and evil (“they”) permeates the Xi biographies. From Foreign Affairs and Foreign Policy to the Atlantic and the New Yorker, the story starts with a good “insider” anecdote, a political recollection or recent event which presumably serves as an introduction to the Xi narrative. In reality, it is a Potemkin bridge because of its basic stage: If you serve in a Communist Celebration, you are “Born Red,” because Evan Osnos entitled his Xi story in the New Yorker – not one of “us” but “them,” and thus neither credible nor reliable.

Xi’s policy stance doesn’t need deeper economic, political, or defense analysis; a quasi-Freudian insight will do. As Osnos puts it: “When Xi was fourteen, Red Guards warned, ‘We can perform you a hundred times.’ He or she joined the Communist Party at twenty.” With that simple but shrewd overture, President Xi’s whole life story presents as a case of psychoanalytic identification with the aggressor.

In these “in-depth analyses”, the explanations basis for key biographical data are often condescending Cold War like interpretations of Chinese history and frontrunners.

Accordingly, none – and at best, few – real insiders or opinion-leaders within China are consulted. Rather, the “real story” is from former US ambassadors, US believe tanks, and a list of shady US “well-informed sources” – which usually represent one of the numerous three-letter abbreviated organizations that have sufficient reason to remain unidentified.

Xi’s massive reform agenda

Following in Deng’utes footprints, President Xi’s management is pushing new change and opening-up policies that seek to transform China into a post-industrial, middle-income society by the late 2020s. The huge plan focuses on tripartite reforms, eight core sectors and three deals.

The triple reforms comprise the marketplace, government and corporations. Market reforms accelerated after the arrival of the new leadership. Governance reforms permeate the public sector. Neither, foreign-owned multinationals nor mighty state-owned businesses (SOEs) can escape antitrust laws, which are now enforced.

The eight primary sectors include finance, taxes, state assets, social well being, land, foreign investment, innovation, and good governance. Monetary and foreign exchange reforms advanced, along with accelerated attempts at capital convertibility to modernize China’s financial markets and to make the renminbi an international currency reserve. The new SOE reform strategy has been launched and gradual privatizations will ensue.

The evolving basic social security package displays by modest pension, medical insurance and education support. The development of new rules for the product sales of collectively owned rural land, while the phasing-out of the aged household registration system (hukou) may support Beijing’s new urbanization agenda in mid-size cities of 1-5 zillion people.

Foreign investment in manufacturing is inspired in the less-developed provinces, while international capital in R&D and business services is favored in the more-developed coastal provinces. The actual central government is also pushing efforts to increase higher efficiency and R&D, which will soon exceed that in European countries.

When President Xi launched his far-reaching marketing campaign against corruption, it was portrayed in Washington as ‘Xi’utes effort to consolidate his own power’ because, as the Atlantic put it, Chinese language politics represents “a persistent culture of patronage, factionalism, and cronyism.” However, to Xi and his anti-graft tsar, Wang Qishan, former key negotiator in the US-China Strategic & Economic Conversation, any real anti-corruption struggle must crack down on “both lions and flies,” both small civil servants and high-level officials as well.

Curiously, after decades of criticism against Chinese corruption, Wa has begun to argue that, really, anti-corruption struggle can be bad for china economy. Such double requirements cast a dark shadow over U.S. trustworthiness in Beijing and Chinese language popular opinion.

New terrain of bilateral relations

For three decades, China’s role because exporter and US capital within China overshadowed bilateral economic ties.  While the mainstream Washington continues to fault China for “taking the jobs,” the new normal is actually reflected by rapidly increasing US exports to China as well as Chinese capital in the US. At the same time, Beijing and Washington tend to be completing the highly anticipated US-China bilateral expense treaty (BIT).

In the Asia Pacific, the White House has done whatever it could to deter China’s free-trade plans, while seeking to complete the Trans-Pacific Partnership (TPP) agreement, which leaves out China, India, and Indonesia – the three largest and most consequential economies of Asia.

In Washington’s stories, the actual portrayal of President Xi’utes foreign policy is more “assertive.” An alternative view is that it is largely a defensive posture, deemed vital in Beijing, because of NSA’s controversial cyber actions and Washington’s “pivot to Asia”; that is, Cold War-like containment policies that seeks to encircle as well as suppress China’s economic, politics, and security ties using its regional neighborhood. In contrast, Leader Xi’s historical “One Road, One Belt” initiatives are likely to defuse military distractions and to enhance economic development regionally.

Along along with other large emerging economies, China has also pushed for the BRICS New Development Bank (NDB) and the Oriental Infrastructure Investment Bank (AIIB) which are  each vital to desperately needed infrastructure projects in Asia, The african continent, Latin America, and somewhere else – but the White House fought against until it found itself alone, even amid it’s closest security allies.

Thanks to those ongoing reforms, the very environment of Chinese-US bilateral relations is below drastic transformation. Yet, Wa has too often than not embraced old Cold War coverage stances rather than embraced the new possibilities inherent in Xi’s reform plan. The Cold War finished a quarter of a century ago. It is time to be on the right side of history.

What Washington needs are, well, new stories.

President Xi and His Reform Agenda – Really is republished with permission from The Difference Group