Winter 2019 Issue 62

The U.S.-China trade war has had a huge impact on the supply chains in China, accelerating their relocation that had already begun due to rising taxes, costs of labor, and other input factors. The exodus reported in the past year is only the tip of the iceberg, as more serious effects will not become apparent immediately. A major effect of the relocation on China is job losses, which may reach as many as 5 million in the coming years. Given the unlikeliness of a quick end to the trade war and the reluctance of the Chinese Communist Party (CCP) to make structural changes, the long-term prospects for supply chains in China are not promising because not only will existing firms gradually reduce their exposure to political and economic uncertainties, but also potential newcomers are likely to avoid China. Although the CCP rolled out some policies that may help alleviate the shock, it has yet to come up with specific policies to effectively address the problem.

A standard view of Hong Kong’s months-long anti-extradition protests is that Beijing has not resorted to a crackdown in a manner similar to that which occurred in 1989. I argue that Chinese leaders have long sought to exert comprehensive control over Hong Kong and have exploited the crisis to accelerate the erosion of “one country, two systems.” Beijing has deployed the Hong Kong police and local thugs not just to break up protests, but also to foment chaos and violence. It is also purging the civil service and the broader society. To forestall another mass movement in the future, Beijing will further attempt to create amnesia among the rebellious youth. In essence, Beijing is applying the standard tools of “stability maintenance” to Hong Kong. However, Beijing will not be able to establish iron rule over Hong Kong without destroying the territory.

While reaffirming China’s longstanding “peace and development” line and offering a more positive take on many developments in Asia, the 2019 Defense White Paper highlights many negative features of the global security environment. This suggests an unresolved internal contradiction in China’s security views and policies. Such an apparent contradiction is perhaps resolved by the Defense White Paper’s description of strategic competition as driven largely by the U.S., not by China, and out of step with deeper global trends. Indeed, the PLA under Xi Jinping is depicted as working with other countries to realize Xi’s “shared community for mankind” as it strengthens its deterrence capabilities. Yet this propaganda-laden take reinforces the suspicions of many regarding China’s “real” goals. Beijing must inject a much more pragmatic, hard-power perspective into its public security stance and engage Washington on that basis in order to realize a meaningful level of stability based on mutual accommodation.

The CCP under Xi Jinping’s leadership has launched the most sustained and comprehensive program of ideological indoctrination in the post-Mao era. By issuing new rules and revising old ones on ideological education in the party, propaganda work, education, and patriotic education, the party apparently seeks to use ideological indoctrination to strengthen Xi’s personal authority, demand strict political loyalty from its officials and members, tighten control in the mass media and on college campuses, and mobilize nationalistic support from the public. Although the program is being implemented through administrative measures, its reliance on coercion and material incentives belie the challenge facing the party to carry out ideological indoctrination in a highly materialistic society. This program reflects the regime’s insecurity about the erosion of its members’ ideological commitment and political loyalty. The backward- looking nature of the party’s program of ideological indoctrination is symptomatic of its poverty of ideas, even as the party struggles to project a forward-looking vision. The outcome of this program is likely to be political ritualization and feigned loyalty that are more common in a regime in decay than in a regime undergoing reinvigoration.

China is in the midst of an ambitious rectification campaign. Since 2014, Xi Jinping has launched an aggressive effort to reassert party ideological controls over art, culture, and higher education that had partially slipped during the more relaxed atmosphere of China’s post-1978 reform era. Within Chinese universities, intellectuals are facing intensified pressures for political conformity —through political education, funding pressures, and direct repression. Such efforts resemble the early stages of the campaign to re-establish party dominance over the bar and legal profession in the early 2000s. These pressures are likely to steadily worsen in the near future, with significant negative implications for intellectual life in China.