Xi Jinping is no champion of globalisation

With Donald Trump denouncing globalisation and proposing to diminish the world role of the United States, it was logical that the rival superpower should step into the vacuum. China has been the greatest beneficiary from globalisation since the 1980s and President Xi Jinping duly grabbed the opportunity being created by the President-Elect with his speech at the World Economic Forum in Davis on Tuesday. He championed an open world economy and warned that there would be no winners in a trade war. His address, said the Forum’s Chairman, “gives us confidence for the future.”  Davos Man (and Woman) could heave a sigh of relief. Globalisers could look to Beijing as their champion.

It seemed a somewhat odd turn up for the book—the last major state ruled by a Communist Party riding to the aid of an essentially liberal economic system. No matter. By moving into the vacant space three days before the inauguration in Washington, China appeared to have taken another big step towards establishing itself as the rising power set to dethrone the US from world leadership.

Look a little more closely at the new champion, however, and some significant questions arise. For all Xi’s talk of commitment to open trading, China imposes far higher import duties than the US. It controls its currency and capital flows out of the country. State companies are cushioned with cheap money and low input prices, and operate as monopolies. Foreign companies are often obliged to operate with Chinese joint venture partners, and have been voicing rising complaints about discrimination and the lack of a level playing field. This at a time when the economy is slowing, corporate debt is soaring and outflows of money, despite controls, show the concern of households about the safety of their savings.

Or look beyond the economy. Yes, China has become much freer on an individual basis since the death of Mao four decades ago and more people have lifted themselves out of poverty in the past four decades than ever before in human history. Still, political conformity is rigorously enforced; the 2010 Nobel Peace Prize winner, Liu Xiaobo, is in jail for advocating democracy. Ideas of universal values are dismissed as foreign attempts to undermine China. Chinese who merely call for the application of freedoms enshrined in the constitution are denounced as subversive “black hands.” Human rights lawyers are rounded up and judges have to swear an oath of loyalty to the Communist Party; last week, the Chief Justice insisted that the country should “resolutely resist erroneous influence from the west” on constitutional democracy, separation of powers and the independence of the judiciary.

All conventional media are owned by the state, the Party or other official entities. New media are closely controlled by tens of thousands of “cyber cops” and compliant operators. Though the one-child policy has been somewhat relaxed, the state still reserves the right to intrude into the most intimate of human relationships. The number of foreigners living in the world’s most populous country is only just over half-a-million and a tiny slice of them have the full right to work. Tibet and Xinjiang remain under tightly-enforced Chinese rule.

Nationalism is strong, rooted in an anti-foreigner “patriotic education campaign” and fuelled by the regional rows in the South and East China Sea. There is an obvious parallel between Trump’s “Make America Great Again” and Xi’s proclamation of a “China Dream” of national strengthening as he steps up the repression of any form of opposition.

Since he became General Secretary of the Communist Party at the end of 2012, Xi has accumulated leadership posts at an unprecedented rate—he now holds more than a dozen. Political foes, real or potential, are serving life prison sentences after being pursued through the big anti-corruption campaign he launched at the start of his time in office. Having been given the historic accolade of being the “core leader,” Xi will be re-appointed to a second term as Party chief at a congress at the end of this year and then as state president the following spring.

China will not collapse, as doomsayers have been predicting for much of this century. But its ability to realise its potential is severely limited by its political system which permeates all the way from elite politics in Beijing to Party cells in sports clubs.

As Xi made plain after being elevated to the top job, the preservation and strengthening of Communist Party power is his bottom line. He believes in a big all-encompassing state directed from the leadership compound beside the Forbidden City. Political reform is not on the agenda. Nor is any relaxing of the rule of law. Economic reforms, which the leadership acknowledged as necessary three years ago, will only be introduced when they do not threaten political authority or risk weakening the governing structure.

All these factors will hold China back from realising its full potential, as I argue in my new book. They mean that, for all its material achievements and long history as a civilisation, the rising super power will not dominate the present century as America dominated the last one. The reality in the People’s Republic is a long way from the reassuring message applauded at Davos. The glow round Xi Jinping this week masks the fact that, as much as in the United States, domestic factors will determine policy and, in the case of the People’s Republic, these are far more complex and deeply rooted than the new champion of globalisation could let on.

A new and thoroughly updated edition of Jonathan Fenby’s book, Will China Dominate the 21st Century?, will be published on 24^th February by Polity.