China Doesn't Know What To Think About Donald Trump

There’s a rather large problem with the notion that China is the main beneficiary of the just-concluded America presidential election.

There’s no evidence thus far that the Chinese leadership thinks so.

Indeed, just as the results of Donald Trump’s stunning victory are still being digested and debated in the United States, something of the same sort of searching about seems to be occurring here in China. While President Xi Jinping made the obligatory phone call to his soon-to-be counterpart in Washington, he’s made no public speeches or statements about the American election. China’s Foreign Ministry spokesman had a boilerplate response to the results the day that those became official. Neither reaction is surprising, but they’re revealing.

Meanwhile, Chinese state media is currently all over the place when it comes to the choice made by the American electorate. Television news broadcasts here have focused primarily on what they see as the chaotic and corrupt process by which leaders are elected in the United States, as well as accounts about various protests in the aftermath of Trump’s victory. Otherwise, there’s reluctance to adopt a particular line. In one instance, a noted American expert on US-China relations was interviewed about the impact of the presidential elections on ties between Beijing and Washington, but only his comments about why Trump was elected were run for broadcast. If the Chinese leadership had made any hard and fast conclusions, there would have been a different result in that editing.

Social media has been lit up by various posts, to be sure, but that’s to be expected; Chinese citizen cyberspace is active and interesting anyway, though it almost always reflects individual views rather than speaking for Chinese officials. And Chinese society is far too diverse to have personal comments to be seen as somehow representative of the nation as a whole—an error all too often made by some analysts outside China who pull and pick at various postings that support preconceptions about “what Chinese think”. Interviews with local residents reveal that there may well be distinct notions in urban areas here about what Trump’s election actually means for China, as opposed to those who haven’t been all that attentive. 

Most importantly—and most revealingly--State media has been cautious, careful and largely quiet. Communist party newspapers, which always reveal and reflect debates and deliberations about major issues, haven’t taken on Trump’s election with any consistency, preferring to largely run carefully selected reports from international media. Those outtakes might reflect an emerging view out of Beijing, but we’ll only know that in hindsight.

There’s a lot of useful analysis out there, to be sure (an excellent list of links has been compiled here). It’s good that some international commentators have talked about what Trump’s election might mean for relations and the region. It’s certainly crucial to consider scenarios about Beijing’s reactions. And a few analysts are rightly concerned about the implications of Trump’s ascension to the American presidency where trade and economic challenges are concerned.

But its nonetheless a bit baffling as to why far too many others have jumped to conclusions about what Xi, his comrades and his advisers, see as the implications of the American presidential election for Sino-American relations—especially why they would be gleeful. How can these commentaries possibly know such information, given the closed nature of China’s political system? What sources do they have? Where are their references to Chinese media--that is where such views are usually found? How is that many of those writing about Chinese views are themselves based outside of China, and don’t have access to even the Chinese street here to make such determinations, never mind Chinese officials? Who speaks for “China” anyway?

What’s likely happening here is the all-too-usual projection of preconceptions about what China’s leaders and Chinese citizens should think into conclusions about what China’s leaders and Chinese citizens actually do believe. Just as we’ve seen analysts assuming that Beijing is fully behind far-reaching financial reforms when the party media hardly ever refers to anything of the kind, the same sort of tendency for others to speak for China seems to be happening here. That isn’t happenstance; it’s hubris. One would have hoped that the recent American presidential election would have caused some pause and ponder before they spoke about what people really think. Apparently at least where China and especially the Chinese leadership are concerned, that was too much to hope for.

The Exit of China's Finance Minister Won't Leave Everyone Gloomy

The sudden transfer of Lou Jiwei from his position as China’s Finance Minister to overseer of the country’s pension system comes as a complete surprise to many commentators—or it should be. It might well have been a shock to Lou himself, given that he’s only just approaching the semi-official retirement age of 65 (and current Central Bank governor Zhou Xiaochuan is already past that point) and he’s currently part of Premier Li Keqiang’s high-level trade and finance delegation to Europe. In fact, the front page of Monday’s edition of People’s Daily has Lou sitting behind Li, and the paper spends a lot of space on the various economic agreements signed between Beijing and various East European countries during this trip. Lou wasn’t airbrushed but he was certainly given an abrupt brushoff.

There are those analysts who will no doubt insist that Lou’s removal is part of Xi consolidating his power—apparently a never-ending process because that’s what they tell us that Xi’s been doing whenever some high-level minister or provincial officials gets shunted aside. One can only wonder what Xi does, according to this school of thinking, when he’s not strengthening his political position or engaging in power struggles in the run-up to the 19^th Party Congress. Perhaps trying to run China’s Communist party? Perchance even endeavouring to govern the country?

Of course it’s possible that Lou asked to be replaced, and went on the previously scheduled high-level trip so as not to roil China’s markets, or its relations with its East European partners. Perhaps it’s simply a matter of health, overwork and strain for him. Maybe Lou jumped instead of being pushed.

Maybe. Maybe.

No one outside elite political circles can know for sure at this moment precisely what happened and why Lou was relieved of his portfolio—at the beginning of the week, not the end after markets are largely closed. What is known is that there has been more than a fair amount of tension between provincial and lower-level officials and Beijing about just how the former is supposed to generate local growth in a period of economic sluggishness. Property prices go up, land revenue increases--and Beijing reaches in to slap-down local governments for creating a real estate bubble. Provincial officials have been told for months to make the restructuring of local debt their policy priority—and suddenly the Ministry of Finance that Lou was then running announces that the central government would not be liable for debts incurred by special financing vehicles set up by local authorities to do just that.

None of that created a lot of goodwill between Beijing and its local brethren.

Nor was Lou helped by Premier Li’s agenda--streamlining administration, investing in innovation instead of infrastructure, and reforming China’s financial and fiscal sector. That strategy is popular among China’s technocrats and scholars (and consequently the international visitors who swing by the country to seek the odd insight by speaking only with them and the expat crowd) and probably makes good sense for China in the long-term. But that approach wins no plaudits from local politicians here, who deal with the daily, and dislike being told how to run their backyard—especially when what they say they see from Beijing are instructions to focus on the economy one week, and are then told to emphasize ideology the following one—and perhaps the one after that. Some local officials, especially in major cities, were already relieved that Xi was designated “core”, because they wanted some consistency and clarity from the capitol about what they’re supposed to be doing. 

Financial managers and stock traders may be shaken by Lou’s departure, but many China’s lower-level officials will sleep well this evening knowing that Lou Jiwei won’t be around to curtail them.

Xi At The Core At Least Means Clarity For Local Chinese Officials

The recent discussion of Xi Jinping’s appointment as the “core” of the Chinese Communist Party’s collective leadership is useful in at least one respect: that the collective understanding of the event illustrates yet again the deficiencies in analyzing China’s politics from afar, and that local pressures on Beijing need to be accounted for.

Perhaps the most important point to be made about the commentary thus far is how widely—even wildly—varying the significance of Xi’s elevation is seen to be. Some analysts are arguing that it’s equivalent to anointing Xi as a dictator, the equivalent of Mao and his authority. Others are insisting that this is simply a change in wording; that the naming of Xi as the core leader is merely a moniker, not carrying much meaning if only because many of his policy initiatives have yet to reach fruition. There’s also the vast and sometimes muddled middle ground, which assumes that Xi needs the title as he’s running into resistance, and that he was somehow granted the position in spite of opposition.

It’s difficult to know what to make of these conclusions. Mao may have been China’s preeminent leader but all sorts of sources make it clear that he ran into pronounced political opposition at various points. Indeed, it was precisely that resistance to aspects of his rule from Mao’s lieutenants that appears to have led to Mao launching the Cultural Revolution. So, if the claim is that Xi is becoming more like Mao because he’s been elevated to “core of the leadership” [在以习近平同志为核心的党中央周围], that’s not exactly a ringing endorsement of Xi’s authority. If one wants to wonder if this approval of Xi being so-named could signal Xi’s interest in a wider political purge and his comrades’ approval that something of the sort is needed—well, that’s a different (and more valid and intriguing) question.

It’s somewhat more puzzling to know how to react to those commentators and media reports who downplayed the news, insisting that the naming of Xi as “core” is really just words without real political import where Xi’s power is concerned. Words are actions in Chinese politics, especially where the leadership is concerned. That’s why party members are told to read speeches, documents, pronouncements, editorials and the like. (What’s troubling is how few analysts take the time to do so these days, and nonetheless feel free to prognosticate on what’s going on in Chinese political affairs.) Major announcements aren’t to be scoffed at, if only because party cadres don’t do that; they seek direction from such statements. Yet that’s what’s happening in some international commentaries where Xi’s elevation is concerned. Simply put, the Party wouldn't go to the trouble of making that decision at the recently concluded plenum unless it meant something major to those inside the organization at all levels. Dismissing the announcement is frankly dumb, and a disservice--at least if one wants to carry on a meaningful conversation of the current state and trajectory of politics in China.

The middle ground view—that this is Xi amassing more power because he needs it, and his colleagues recognize that—misses the larger point that the audience isn’t outsiders but the Party itself. Xi has made it clear on many occasions that he sees his mandate as cleaning up the Communist party, a departure from his predecessor’s focus on stabilizing Chinese society. This naming isn’t about Xi having more power (that old shibboleth about Chinese leaders in power struggles), but being able to proceed with his policy agenda because the “core” designation means that his reforms thus far (conservative though they are) are what the Party as a whole approved at the plenum.

Moreover, the title doesn't mean that Xi will get everything he wants at next year’s 19^th Party Congress (how anyone can possibly know that at this stage is baffling). This is a battle over policy agendas and party lines, not who’s seeking to screw-over whom.

What the designation does mean is that Xi needs lower-level cadres to recognize that it’s his programs—not anyone else’s, such as Premier Li Keqiang’s—that are to be studied and implemented, and the title of “core” gets him that. That was Central Party School senior researcher Deng Maosheng’s [邓茂生] clear message at the authoritative news conference yesterday: the title is really meant to help the current reforms because there’s too much lethargy or resistance locally [這對扭轉“上有政策、下有對策”的不良作風、對改革更加深化和順暢具有重要意義.]. A number of international media reports focused instead on the potential that Xi would stay beyond the usual two terms as Party secretary. 

Yet the real takeaway in Deng’s statements wasn’t the absence of dissension in the upper echelons (debatable, and he must know that ) but ongoing problems in the bureaucracy and at lower levels in accepting reforms. Local officials, for their part, have privately indicated their distress at not knowing which line in Beijing is the one they should be subscribing to: Xi’s “clean-up and discipline” campaign, or Li’s focus on investment and innovation. From their perspective, they’d like some clarity. Making Xi “core” gets them that.  

It’s worth mentioning that the coverage of the aforementioned news conference here in China was almost as interesting as the conference itself. While it was televised widely in-country, there’s been little official coverage in China’s domestic print and internet media thus far. So, it’s not entirely clear how “authoritative” Deng’s statements will turn out to be, and for whom precisely he was speaking.

For now, the issue isn’t that Xi’s at the “core”, but what the response will be in China’s provinces and localities. That’s unknown, but worth watching for.

Power For The Sake of Property in Local China

Property matters. In China, it matters massively—not just as an investment, but increasingly in some localities as an asset to be safeguarded.

Recently, a community in Jiangsu illustrated that the narrative of home purchases and upgrades in China shouldn’t only be about bubbles about to burst (even though they never seem to do so) or about nail-house owners who refuse to move unless the government meets their demands for compensation (which in many cases the local authority yields to).

The story of home buying in China is also about the inclination of some in the upper-class to employ violence to defend property.

Much is made of China’s growing middle class—a concept which is amorphous at best, another projection of Western stereotypes on a society that’s simply too diverse to tolerate such a template. Rarely do observers identify with any precision where the middle-class in China starts or stops financially, or investigate why Chinese themselves rarely if ever refer to themselves as “middle-class” [中产阶级] and why many prefer the moniker “mortgage slave” [房奴]. The appellation denotes economic status for residents of China, but outsiders tend to ascribe all sort of political dimensions to "middle class" here--a desire for government accountability, a quest for participation in the policy process, and the like. Chinese citizens often see matters otherwise--an issue of financial position, not of political leanings.

Moreover, the assumption in much of the international media is that property owners in China must be “middle class” in the same sort of Western sense, and that their growing numbers (whatever those are) are a direct challenge to the Communist Party, purportedly because their interests don’t align with the ruling leadership—though why that’s the case here remains entirely undemonstrated and is quite wrong. Hardly any mention is made of a housing market that was created by Beijing’s policies after all, and why a buying of a home here almost always demonstrates hope and joy, instead of illustrating smoldering social resentment that’s about to suddenly topple authority—reasoning that really has no connection to China’s local reality.

There’s also hardly any discussion of what Chinese residents do with the property that they’ve purchased. Many new owners renovate in ways that are at least somewhat outlandish (giddy, one might say) and off-putting to one’s neighbors. Some purchasers illegally restructure parts of their homes or grab adjoining land for their own private use, acting illegally and without permission, flaunting rules and regulations to their own ends.

It’s the latter that happened in the aforementioned instance and locality--a gated Jiangsu community that’s a mix of 4-5 story apartment buildings and separate villas, populated primarily by retired government officials, party cadres, and military families. There’s nothing especially exclusive about the community, save that it was one of the first large-scale projects inaugurated in the area by the local government, and many well-connected people were granted ownership of apartments in appreciation of their previous employment by and service to the State. (In the years that followed, apartments in many newly constructed buildings were often gifted to local officials by developers grateful for the green light that allowed them to build in the first place.) Some homeowners in this particular community do enjoy a level of local influence through previous relationships, to be sure. But many have now moved elsewhere and the compound is full of almost as many new owners as old.

The villas are another part of the story. They were built to entice foreign managers and company owners to bring business to the area, but they’ve long departed as well, replaced by affluent Chinese who aren’t looking to emigrate--or actually want to own a large home in China, as well as abroad. A number of the villas are currently being renovated, upgraded to more opulent standards.

It’s one of these villa owners who started the contretemps in question. He decided to extend his property line into another’s yard in the course of renovating his home. The adjoining neighbor protested and sought out assistance from the property management, which dithered about putting a stop to the expansion—something that occurs more often than not in local China, especially when, as in this case, the current management is supervising the community illegally, having lost its authority some months ago when residents chose not to renew the company’s charter when their 3 year term expired and the local court upheld that decision on appeal.

The offending homeowner though was not certain that the property management office wouldn’t step in (it’s likely that at least some in that office were interested in doing so for purely mercenary reasons, and wanted some consideration or compensation for their intervention).

And so the homeowner who wanted to skirt regulations called in reinforcements.

The first wave landed rather awkwardly: A handful of badly uniformed workers pretending to be police. The community’s security people had no idea who they were, as they appeared out of a renovation van they unknowingly let through the gates instead of announcing their presence to the property management company. It became clear quickly that their role was to deceive residents into thinking that they represented official authority in the matter. Their ill-fitting outfits and farmer footwear gave them away, and security guards compelled them to sit down and stay put.

Meanwhile the real action was taking place at the gates of the community residence, as a dozen or more tee-shirted, heavily-muscled, tattooed men sought to gain entrance, saying that they were “visiting a friend who invited them to a party”—and gave the address of the villa owner who wanted to secure the new property line. Evidently, they were there to threaten the angry next-door neighbor with retaliation if he refused to allow the change.

Remarkably, security guards refused to allow this group past the poorly built gates to the compound, despite threats by the assembled to breach the barrier. There was pacing, much finger-pointing, many cigarettes offered and not a few bottles of alcohol offered to those guarding the community. Finally, after over an hour of confrontation and the threat of combat, a single police car (official) rolled into the residence area, the contingent withdrew, and the rent-a-cops inside disappeared, having ditched their clothes in the van they arrived in. It’s not at all clear that the struggle is actually over, but at least that standoff ended.

Dramatic in its own way, this instance is all too typical of trends in many of China’s old and new localities. Many property owners in China don’t see ownership as another step towards inevitable democracy for the nation, but bestowing an inalienable right to deny Others (i.e., not members of the upper-classes) what they have and what those Others don’t. This isn’t a new middle class seeking mediation, nor a situation where property rights is creating a new class of citizens demanding more rights from a government reluctant to grant them. At China’s local level, this is property emboldening individuals, bestowing (at least in their eyes) a curious sense of entitlement to use power--which in local China incorporates violence if necessary. Consultation is supplanted by confrontation. These are homeowners not looking to overthrow the government, but simply ignoring it, and trying to settle local matters as if they are the authority. 

That’s hardly community-oriented or emblematic of a model middle class. Indeed, such attitudes and the actions of a privileged few have more in common with despotism than democracy. Property rights in China aren’t producing local political pluralism, but all too often serving to undermine what little is left of it.