Sunday, March 1, 2020

Spring 2020 Issue 63

Sino-Russian Consolidation at a Time of Geopolitical Rivalry

Elizabeth Wishnick

Sunday, March 1, 2020

There has a been a notable consolidation of the Sino-Russian partnership during the past two years.  Although this has coincided with the U.S.-China trade war and a period of increased tensions between the United States and Russia, the Sino-Russian partnership began deepening well before the changes in U.S. policy toward each country, as a discussion of Sino-Russian cooperation in agriculture, technology, military affairs, and the Arctic attests.  Nonetheless, there are limits to cooperation in all of these areas and Chinese analysts are now debating the desirability and feasibility of such a partnership.  Strong personal ties between Xi Jinping and Vladimir Putin enable them to steward the relationship, which is further strengthened by their parallel approaches to authoritarian governance.  However, potential shifts in U.S. policy and especially developments in Central Asia and the Arctic may challenge the Sino-Russian partnership in the future.

Taiwan’s 2020 Election Analysis

Shelley Rigger

Sunday, March 1, 2020

On January 11, 2020 Taiwan’s voters went to the polls for presidential and legislative elections. The Democratic Progressive Party (DPP) retained both the presidency and a legislative majority of 61 out  of 113 seats. The magnitude of the DPP’s victory was surprising; barely a year earlier it was drubbed in local elections. Between November 2018 and January 2020, domestic and external factors became far more favorable to the DPP and the incumbent president, Tsai Ing-wen (蔡英文). Tsai and her party changed policy and personnel, whereas the KMT standard-bearer, Han Kuo-yu (韓國瑜), failed to live up to expectations. Tsai’s robust defense against PRC pressure was an important factor, as it came at a time when Taiwanese voters’ perceptions of the PRC were being shaped by the upheaval in Hong Kong.

China’s Social Credit System: Genesis, Framework, and Key Provisions

Minxin Pei

Sunday, March 1, 2020

The Chinese government launched an ambitious program to build a social credit system in 2014.  During the last six years, the State Council issued several key documents that seek to define the objectives and key parameters of such a system.  Based on these documents and reports on the progress of the system in the media, it is evident that the Chinese government has made significant progress in conceptualizing and specifying the functionalities of its social credit system.  At the moment, Beijing’s current approach remains experimental, seeking to gradually improve the design and capabilities of the system through trial-and-error at the local levels.  Judging by the ambitious goals set forth in the State Council’s outline document issued in 2014, actual progress in building the system may be limited due to the immense technological and administrative challenges. 

From the CCP Dilemma to the Xi Jinping Dilemma: The Chinese Regime’s Capacity for Governance

Guoguang Wu

Sunday, March 1,  2020

This essay analyzes how the Fourth Plenary Session of the Nineteenth Central Committee of the Chinese Communist Party (CCP), held in October 2019, furthered the concentration of power in the hands of party chief Xi Jinping, a concentration of power epitomized by the personification of party leadership over the party-state system. This took place against the background of a strengthening of the regime’s capacity for governance, but the consequence has been an upgrading of the CCP’s governance dilemma, which features unbalanced strength to promote economic growth and political stability on the one hand and to deal with the social, environmental, and public costs of development on the other hand, and Xi Jinping’s governance dilemma, which involves overall control by the supreme leader as a result of the impotence of the regime and accordingly the institutional decay in present-day China. The COVID-19 crisis is the latest example of the overlapping of these two dilemmas.     

Financial Liberalization in China: The Contradiction Between Opening and Guaranteed Outcomes

Victor Shih

Sunday, March 1,  2020

In recent months, the Chinese leadership has trumpeted the opening of its financial sectors, including President Xi Jinping’s expansive promise at the 2018 Bo’ao Forum.  However, because the government continues to place a heavy priority on financial stability and the funding of key government objectives, developing liquid and transparent markets have taken a back seat.  In fact, across the credit market, the bond market, and the stock market, financing debt roll-over in an orderly manner and minimizing volatility have led to an increasing degree of state intervention in these markets, rendering them increasingly illiquid and non-transparent.  For investors interested either in attractive pricing or greater transparency, the Chinese financial market continues to hold less profitable potentials than other emerging market economies.  Even with granting foreign institutions more licenses to operate in China, foreign participation in China’s financial market will continue to stagnate.      

CLM Insights Interview with Richard McGregor on his recent paper: 

Xi Jinping: The Backlash 

(Lowy Institute, 2020)