The Trump effect on China


The Globalist

Given Donald Trump’s triumphant performance on Super Tuesday and the increasingly likely prospect that his Long March to defeat the Republican Party establishment will succeed, it is high time to think about the Trump effect on China.

Millions of Chinese are watching the spectacle, including the roughly 2½ million citizens of the People’s Republic of China living in the United States, but also millions more both at home and abroad. No doubt with some bemusement they are asking, “So this is democracy?”

Given the xenophobic populism that has become the hallmark of the Trump campaign, one must wonder how a similar mindset would play out in China.

Things are not going well in China. It is not just that the economy is in trouble and the environment stinks — literally and metaphorically — but that the Chinese Communist Party (CCP) is losing its legitimacy.

Under Mao Zedong’s rule (1949-1976), and its personality cult, it did not matter too much that the management of the economy was disastrous.

But since the reforms instituted by Deng Xiaoping, the CCP has not claimed legitimacy based on ideology. The CCP regime’s legitimacy has rested on economic growth.

Having no solid growth thus hollows out the party’s legitimacy. This generates anger and resentment especially among the “aspiring classes.”

In this context, it is important to know that a favorite read among Chinese intellectuals is Alexis de Tocqueville’s “The Old Regime and the Revolution” (1856), in which he demonstrates that revolutions occur not when the masses are downtrodden, but when things get better.

The current situation in China is in many ways reminiscent of pre-revolutionary France where senior members of the CCP form a sort of feudalistic; corrupt, aloof, arrogant and nepotistic aristocracy that enjoys significant privileges.

These privileges are not available to the hard-working meritocratic aspiring middle classes. The scandalous behavior of their scions, the “princelings,” can appear especially offensive.

China has a fractured society, with huge gaps, indeed chasms, between urban and rural, central and peripheral, “pure” ethnic Chinese (Han) and minorities (Tibetans, Uighurs, etc.), and rich and poor. China’s Gini coefficient is at least as great, if not greater, than that of the United States.

It also has major demographic problems, including a rapidly aging population and a significant gender imbalance.

Managing global and regional (South China Sea) geopolitical challenges is not easy, especially as China has few friends. Its only ally is North Korea. As the saying goes, with friends like that, who needs enemies?

As is the case currently in the U.S. with the triumphal rise of Trump, all of this is highly fertile territory for xenophobic populism.

Until the Trump phenomenon, I used to fret that the worst possible post-CCP scenario would be the emergence of a “Chinese Putin.” But what about the emergence of a Chinese Donald Trump? After all, the standard refrain of Western policymakers and thought leaders is to urge China to embrace democracy.

Given the apparent turn of events in the U.S., perhaps they should be a bit more careful of what they wish for. At a minimum, this suggests great circumspection.

The Chinese are well aware that over a century of humiliation, impoverishment and exploitation at the hands of the Western powers and Japan lies barely behind them. Under those circumstances, the fact that, following the economic reforms of the 1980s, China decided to re-join the global community should be celebrated.

At the same time, given the scars of the past, there is a strong potentially revengeful nationalist undercurrent. Since this is a time, after a quarter century of upward movement, that the national revival appears under some threat, this is politically a very fragile moment.

Nationalism through populism can be transformed into xenophobia — as we know so well from bitter experiences in Europe and see currently in the U.S. with Trump. If the Chinese believe that they are being thwarted from getting their due place in the global sun, popular anger may boil over.

A decade ago, I was a member of a team at the World Economic Forum (WEF) assessing scenarios for China to 2025.

The two major factors that would determine the scenarios, we proposed, would be (1) the degree to which China remained committed to reforms and (2) the degree to which the international environment would be open and collaborative or closed and confrontational.

To a very considerable extent, of course, the “international environment” means Washington.

The best scenario would be one where the international environment was open and collaborative and domestic reforms in all domains — political, economic, social and environmental — were implemented. Presciently, we titled that scenario the “New Silk Road.”

The worst possible scenario, for which we gave no name, so alarming did it sound, was one where the international environment was closed and confrontational and reforms eventually became still born. Based on current trends, that seems where we are heading.

To prevent a populist revolutionary uprising and the emergence of Mr. Chinese Trump, the CCP is in desperate and urgent need of fundamental reform.

In the 1980s, the CCP carried out dramatically radical agrarian reform, including through setting up multiple town-and-village enterprises, but especially unleashing surplus labor that poured into the new special economic zones such as Shenzhen.

This was followed by radical industrial reforms thereby unleashing the animal spirits of entrepreneurs inspired by Deng Xiaoping’s famous dictum, “To be rich is glorious.”

What is now urgently needed is political reform. Many among the more progressive members of the party know that, but fighting against the entrenched interests of the new party elite is proving immensely difficult.

At the moment, the party seems reactionary. Without reforms, the days of the CCP will become increasingly numbered.

Political turbulence is likely to occur that might witness the appearance of pluralism and some form of “democracy” — democracy with Chinese characteristics, of course!

However, if the “international community” — i.e., Washington — is provocatively stoking the fires of Chinese nationalism through aggressive words and policies, especially ones that appear to thwart, exclude or indeed discriminate against China, that too will provide scope for the emergence of Mr. Chinese Trump.

To give but one example, the Trans-Pacific Partnership is a colossal mistake. This is the case not only in respect to the policy itself — which is bad enough in excluding China — but even more so when taking into consideration the rhetoric that accompanies it.

U.S. President Barack Obama’s statement “we can’t let countries like China write the rules of the global economy, we should write those rules” is especially offensive.

What rules were we (the West and Japan) playing to when we were carving up and exploiting China? Besides, would it not be more proper in the 21st century to be writing the rules together?

One could assume that an Obama administration would be reasonably sensitive and sophisticated. It has failed the test. Imagine a Trump administration!

The Trump spectacle is frightening for America and indeed for the world, especially for China. An American Trump as leader has good chances of begetting a Chinese Trump. There is no more frightening scenario than a “G2” composed of these two Trumps.

We are not there yet and we may never get there. However, one factor that may propel us in that direction would be complacency.

The world is a dangerous place. It would be far more dangerous with one Donald Trump in Washington. With two Donald Trumps, one in Washington, one in Beijing, the prospects become cataclysmic.

Jean-Pierre Lehmann, an emeritus professor of international political economy at IMD in Lausanne, Switzerland, is a contributing editor at The Globalist. © The Globalist 2016

  • CaptainAsia

    Sheesh! Talk about normalizing the CCP and China. Don’t forget that USA is losing in trade to China, not to mention China’s CCP shady conducts. Talking about reform: CCP has failed to reform, rather Xi has gone backwards invoking Maoist philosophy. Trump is a good man wanting to rebuild America and if that means the Chinese are going to be affected politically or economically so be it. Why Should the US have to lose out to China and for that matter, why should any country have to always lose out to China. How can the author not talk about the facts of China channeling huge amounts of its profits into arms and territory expansions and claims throughout the asian region. China has started an arms race and threatens almost all of its neighbors with war on a daily basis.
    The world needs a strong US leader. Only then will China cool it’s rhetoric. If dialog works with China, it should have by now, especially with the Obama regimes approach. Instead China has interpreted dialog as a weakness and taken advantage of the situation. As for the century of humiliation, China cant keep using that forever as an excuse for its conduct. What about all the internal abuses, murders, Tibet, oppression, suppression, lying through censorship, propaganda etc…. the list goes on and on. Dont forget that plenty of nations have suffered humiliation at the turn of the century from colonial and imperial forces. Most of them have managed to reconcile and move on, why not China? Instead Xi and the PLA are talking about war and conquering territory. You would think that after being the victims of such actions that they would have learned that such attitudes are wrong and commit themselves to peace, instead they only see strength in invoking fear, violence, threats and intimidation.
    Lastly: China already has a Donald Trump which is ten times worse as the worst Donald can ever be and that persons name is Xi Jinping.

    • Viva75

      100% correct.

  • Jonathan Fields

    I’m a Sanders supporter, and even I think this article is silly. The idea that we should choose our candidates based on whether or not China will react in a reasonable manner is a bit silly, no?

    • Tando

      This article is spot on. Do Americans really want to sell Trump’s populism as a model of democracy?!? He scares not only the Chinese. But it is telling that bigmouth Trump is even getting that far, scary!

  • Jonathan Fields

    I’m a Sanders supporter, and even I think this article is silly. The idea that we should choose our candidates based on whether or not China will react in a reasonable manner is a bit silly, no?

  • Paul Martin

    Problem is China wants to own the sun, moon, earth and the whole damn universe!
    Donald Trump would change all that from happening!

  • raj

    Chinese leadership, whenever threatened goes on offensive to divert attention of the people and call for unity based on patriotism. Slowing economy and plethora of problems on the home front, could lead to sever threat to Leadership. Should that happen, all issues incl Trump and other minor provocations may lead to serious clashes in South China Sea. Caution and vigilance need to be of high order, lest caught sleeping