Looking For China Big Idea Style Intelligence? Find SupChina Tedious? Paying For Sinocism? There are Alternatives! – Asia Business News – Asia Briefing
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Op-Ed Commentary by Chris Devonshire-Ellis – April 28th, 2022
It is a great shame that Shirley Yu has ceased her ‘China Big Idea’ newsletter, it was a good source of data driven research into China’s state policies, although often slanted towards the United States position on this rather than the impact on China or Asia. Hopefully we’ll be seeing more of Shirley in another format sooner or later.
Sinocism, published by Bill Bishop, gives a useful, but again one-sided perspective of China based on Washington’s policy. Nice, and recommended for US based readers, but for the fact that Washington’s influence on China is diminishing. Getting to the heart of China means being there, not ‘I used to live there’ as the relevance rapidly begins to diminish. Bill means well bt he does not deliver China Global.
SupChina meanwhile in their round ups tend to concentrate on the negative aspects of China, which after awhile, written again from the United States, becomes tedious. They have also had to rely on a somewhat dubious share option scheme for readers to keep themselves afloat in a business plan that is clearly not working very well. They are simultaneously becoming irreverent and irrelevant at the same time, which is not surprising when as a web-based product the content is written mostly in the United States yet is banned in China, giving a strong hint as to where their access to useful China content is minimal.
Part of the demise of these types of China content providers has been created because China itself has changed, and the old style of analysing China from the perspective of US policy isn’t as valid as it once was.
In the past decade, several events have occurred to dictate that commentary about China, and the necessary research to understand the country and its policies has also undergone a fundamental evolution. Examining China from the US, or any other singular perspective such as the EU and UK just doesn’t cut it any more. Events that have dictated that comprehensive China commentary, and understanding where the country is going and the impact it has on the global economy – of which we are all part – now needs rather more attention to detail than purely following the Washington policy line. In fact, both Washington, London and Brussels have become less, not more instructive when attempting to piece together what China is really all about. There is a distinct, decade long evolutionary path that illustrates this shift rather well.
This came into effect a decade ago, from 1st January 2010. Tariffs between China and the ten ASEAN nations were slashed, and on 95% of products, completely eliminated. The impact has been huge. China replaced both the United States and European Union as ASEAN’s single largest, and subsequently most important trade partner, while trade between China and ASEAN more than doubled. In 2021, that trade reached US$878.2 billion, with a year-on-year increase of 28.1%.
This compares with China-EU trade in 2021 of US$731 billion and with China-US trade of US$775 billion. This has meant that China’s main centre of global trade, worth US$100 billion more to China than either the EU or US, is now Singapore rather than Washington or Brussels. Understanding what China does, the reasons why, where the opportunities are and the global impact cannot be understood any more from purely viewing China from US or EU tinted glasses.
The BRI came into effect in describing China’s overseas investment policies as a distinct, titled strategy in 2013, nine years ago (although China had of course been investing internationally way before then). During that time, US and EU based politicians have expressed a myriad of opinions and negative commentary about it and raised integrity doubts about its overall intentions (although in the last two years they have released schemes of their own, suggesting the Chinese concept was actually pretty good from the start). As of March this year, 146 countries have signed BRI MoU agreements with China. The United States and much of the European Union has declined. China’s investment into BRI projects globally is now estimated to have reached US$500 billion, with US$59.5 billion being spent in 2021. This has made Beijing, not Washington or Brussels the global centre for outbound investment. Understanding that means having a base in Beijing and being close to China’s investment policies. It is impossible to properly comprehend the BRI without being based from China or having at least a presence in a BRI-affiliated country.
The Trans Pacific Partnership (TPP) had been under negotiation for close to a decade with the United States primed to join forces in a free trade agreement with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. It had been signed off by then US President Obama in February 2016, and was due to be multilaterally ratified, however new US President Trump withdrew the US application in January 2017. This introduced a new concept of the United States not being necessarily reliable or sincere about entering into longer term planning and commitments, not just in China but also across Asia. It also shifted the Asia-Pacific trade focal point away from Washington to Beijing, and to a lesser degree, Tokyo and diminished US influence in the region. The TPP has been revived as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and came into effect from 1st January 2019 – but without the US. It means that in terms of commenting on and analysing regional trade, a base in Asia instead of the United States is a pre-requisite.
This occurred from 2018 under US President Donald Trump and severely impacted US-China trade. Even today, many of the high tariffs imposed by Trumps’ administration continue to remain in effect. In 2017, the US exported US$129 million of goods to China, by 2019 that had declined to US$106 million, a drop of over 20% at a time when other countries were increasing their exports to China. The result has been a shift to a ‘China plus’ strategy for US sourcing businesses, but the longer term implications have been a loss of some China trade trust, and an overall diminishing of Washington in Beijing’s eyes. Bilateral US-China trade will only reach the levels in attained in 2018 by the end of 2022 – a five-year lapse. Understanding the bilateral impact and its overflow into other markets such as Vietnam requires analysis and a presence in both the US, China and ASEAN.
The EU-China Comprehensive Trade Agreement (CAI) took seven years of negotiations and was concluded on 30th December 2020. At the time, the EU said it was the most ambitious trade deal China had ever undertaken with a third party. It lasted five months, being indefinitely suspended on May 4th, 2021. The reasons given at the time were concerns over Beijing’s actions in Xinjiang Province, including ‘genocide’ against the Uyghurs, accusations that Beijing denied but the EU insisted upon. Interestingly none of this is currently raised by the EU, meaning that current affairs in EU opinion polls have now replaced longer term strategy in decision making. It has also meant that China-EU trade potential has been significantly diminished and that Beijing has also lost some trust with the EU as a consistent trade partner. That has meant a partial shift away from reliance with the EU to a reliance upon Asia. Asian economies tend to run on 5 year plans and in some longer term cases, up to 20 and 25 year plans (such as the China-Iran partnership). The EU, and the US have instead become retrenched and are now far more influenced by current opinion polls. This diminishes their ability to plan ahead, and means that both have changeable policies with no sense of real direction. It is impossible to gauge what China’s longer term ambitions are while attempting to do so based on the current short-termism emanating from the EU or US.
It became crystal clear during the first year of the outbreak that what ought to have been a globally unified approach was anything but – Governments worldwide sought to protect their own interests rather than provide global assistance. This included the United States and European Union on one side, and China and Russia on the other. The former insisted on stockpiling vaccines for their own use first, and to have the ability to levy fees for patented products. Both China and Russia provided vaccine assistance in aid and requested global patent waivers be introduced. It is arguable that additional mistrust between the United States, European Union and China and Russia was further aggravated due to these differing approaches to what was a global pandemic and remains so. That cannot be understood from purely EU or US sources.
Much, mostly errant commentary has been made concerning China’s position in this. These have ranged from accusations of the supply of weapons (later discredited) to calls for China to cease trade with Russia (an interference in sovereign affairs). In fact, China is adopting, as is usual, a pragmatic and knowledgeable angle on the conflict, which Beijing has consistently stated is due to an ‘imbalance of European security affairs’ which basically translates as NATO having pushed Moscow to far. There are US vested interests in the conflict as well, while EU energy planning and strategy have been revealed as being woefully inadequate. China has also consistently stated it wishes the conflict to cease, yet its displeasure at the US and EU’s role in allowing this to happen is manifest in its refusal to pass UN votes against Russia at the Security Council. This further undermines the trust and ability to cooperate that both sides really should be looking to achieve. Instead, a schism is occurring, and again this is hard to read while purely viewing the Ukraine conflict from purely the Western viewpoint in the United States or Europe. That is remiss as the geopolitical and supply chain changes that this single issue is wreaking on global trade is the most significant event since the early 1990’s, with the collapse of the USSR and the subsequent economic rise of China.
While the likes of China’s Big Idea were useful in terms of providing a US angle on China policy, both it and other analysts (Sinocism is another) can only address a singular part of the China geopolitical landscape. (Sup China is basically social China commentary written largely from the US commercial and trade hotspot that is North Carolina). Today, understanding China requires far more than a singular perspective.
The danger in doing so is a failure to see the bigger picture and being alert to where future opportunities – and challenges – are appearing.
It is interesting that each of these three sources mentioned above have also all charged for their content, suggesting a somewhat individualistic, rather than corporate attitude towards China also prevails.
This is one reason that Asia Briefing is so successful, it is corporate based and supported and doesn’t require subscription fees from readers to access it. A subscription is required, but is complimentary. That can be obtained here.
The point about Asia Briefing is that it includes access to numerous other, very specific sources of information – China Briefing has been published since 1999 and is written both from within China but with business and corporate experience from elsewhere. That gives the product a far more balanced view than a purely EU or US perspective can provide.
In addition, Asia Briefing also features access to the Belt & Road Initiative reporting Silk Road Briefing, the latest trade and investment news with ASEAN Briefing, a separate Vietnam Briefing and the latest from India with India Briefing. Corporate analysis of the Russia situation and the impact of the current conflict is hosted on Russia Briefing meaning we have covered all the bases as concerns China’s impact on all of these. That is one reason why the Asia Briefing collective readership is now over 20 million per annum.
If you really want a complete overview – the source is now available and is complimentary: Asia Briefing.
Disclaimer
Any views or opinions represented in this blog are personal commentary, belong solely to the contributor and do not necessarily represent the views of Asia Briefing Limited or Dezan Shira & Associates.
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