A big choice awaits China – money or theory

A big choice awaits China - money or theory

Five-star red flags line Nanjing Road Pedestrian Street on June 22, 2021 in Shanghai, China. This year marks the 100th anniversary of the Chinese Communist Party.

price photo | Barcroft Media | Getty Images

China is at a critical juncture in its political and economic development. The political roar that tries to become a major roar comes up against unexpected economic hurdles. As China aspires to become a global superpower, it’s tempting that it faces the same test it believed the Western world would fail: money or theory.

The Chinese leader from 1978 to 1989, Deng Xiaoping, was recognized as “the architect of modern China”, once telling his country to “hide its abilities and pass its time.” Current Chinese President Xi Jinping boldly declares through his politics and rhetoric that the time of hide and seek is over.

Under Xi’s leadership, China’s Machiavellian approach to international relations is now fully transparent. The proposal to design and market diplomacy fails to mask raw ambition and a ruthless grasp of power and influence.

China cannot maintain our economic ties when technology is shamelessly stolen, copyrights are ignored, Hong Kong is subjugated, Uyghurs are persecuted, and Taiwan is threatened. Nor can we ignore the way Xi seeks to reshape China, as entrepreneurs are silenced, businesses are more government-controlled, and technology and big data come under Orwellian social control. is spread for

Sun Tzu’s “The Art of War” argues that understanding your adversary is fundamental to a winning strategy. China’s understanding of the West in general and the United States in particular is arrogant, hedonistic, and greedy for money. He assumes that Western countries will sacrifice principles in search of profit. The greedy West paradigm has served China well from Tiananmen Square, but recent experience with Australia suggests that China may have made the wrong decision.

A Foreign Affairs magazine article by former US Deputy National Security Advisor Matt Pottinger states: “The CCP leaders have bet that Australian companies suffering from the targeted trade embargo will pressure their government to he makes political concessions to Beijing. But Australians, including business leaders and exporters, understood that accepting China’s ultimatum would mean the introduction of a dangerous new order. Australian companies have absorbed their losses, faced sanctions and found new markets. The people decided that their sovereignty was more important than the sales of lobster – no doubt in Beijing which assumed that Canberra would put Australia’s economic interests ahead of its core values.

By putting pressure on our allies abroad, Xi and his colleagues are trying to turn China’s economy and society into a techno-authoritarian state market. Regulatory measures cover the private sector and broad areas of individual activity. The state is now telling companies how to write their algorithms, cracking down on social media accounts posting financial information, specifying how many hours of video games kids have, and when it comes to business and technology. Implements opaque national security rules.

Hong Kong is constitutionally described as “one country, two systems”. In July 2020, China promulgated a “National Security Law,” which effectively reduced Hong Kong to “one system,” a world trading center with one of the largest stock exchanges. The assumption that global market players will continue to trade the same volume through a newly restricted and more opaque Hong Kong affects economic growth and national income. Jack Ma, the founder of online giant Alibaba, has disappeared from the public eye with his charismatic voice silenced. Alibaba shares which traded at $ 319.32 on October 27, 2020, closed last week at $ 170, and the technical chart remains negative.

Here’s the nonsense: China’s access to power and hegemony comes at economic costs. It’s ironic that the world can now know whether China will follow its principles or its money. Years earlier, Sister Irene Cross, a Roman Catholic nun in charge of a large hospital system, said: “No margin, no mission. This gospel for health care managers across the country is also good advice for government leaders. Democratic strategist James Carville once told American voters, “It’s the economy, idiot.

In short, it is difficult to support the people, to maintain internal peace and to govern effectively without a respectable economy on the world stage. How long can we continue to view China as a calm and respectable trading partner?

If Beijing relaxes enough to revitalize economic activity, global markets will benefit. Nonetheless, Xi’s long-term course is clear. Whatever the outcome of the current test for China, the United States and other world powers will never forget Beijing’s ambition to reshape the world.

Already, US politicians are responding to the challenge, as the Trump and Biden administrations have been tough on China, while Congress pushes back US R&D and proposals for investing in China and its impact on corporate boards. American. considered. Nonetheless, Beijing will continue to pressure our private sector leaders in areas such as technology, finance and entertainment as it seeks to differentiate and reshape the economy and global institutions for their own purposes. Our country is founded on principle, and on the strength of our friendship and business with our allies and partners. Let us understand the magnitude of this threat and let us be vigilant to preserve, protect and defend our principles, values ​​and treasures.

Michael K. Farr is a CNBC contributor and the President and CEO of Farr, Miller & Washington.

Dan Mahafi is senior vice president and director of policy at the Center for the Study of President and Congress in Washington.

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