Are US, EU and UK Based Editorial Fit For Purpose When Trying To Understand China? – China Briefing
by Chris Devonshire-Ellis
China media analysis has tended to be dominated by US-based opinion in recent years, with blogs and websites, such as China Big Idea, Sinocism, and Sup China, as well as columnists, such as Tom Friedman, all based in the States and referred to as the go-to pearls of wisdom when looking for China opinion. But do sources such as these – and there are European equivalents too, such as Merics, and Beijing to Britain, among others – actually deliver when it comes to truly understanding China?
It is a pertinent question to ask when two are actually banned in China and some of their executives barred from the country, while all ask for subscription money for dispensing their wisdom. Sup China had to rely on a somewhat dubious share option scheme for readers to keep themselves afloat as well as asking for subscription access. Are these expenditures value for money?
Other products, such as China Law Blog, and newer ones, such as China Boss News, the aggressively titled Trade War, and Watching China in Europe, also all suffer the same issue – none are actually based in, or written from China. Does this matter?
While they may provide localized opinion, in the case of US-based sites, they tend to follow a perspective of China based on Washington’s political policy as the European sites also do in their respective political undercurrents, which is fine, if limited to one political perspective. However, they fall down on their ability to understand China’s foreign policy towards them.
I question how valid this now is in a rapidly changing world, and one where both Washington’s and Brussels influence on China is diminishing. Getting to the heart of China today means being there, not ‘I used to live there’ – as the relevance rapidly begins to diminish. I also question how relevant they are to commercially minded readers who wish to understand and do business with and in China.
What is noticeable is that most of the overseas content providers have tended to gravitate towards an overall, consistent China negativity. The slightest bump, such as a GDP slowdown, is regarded as a Chinese State policy failure. Taiwan is considered intellectually superior to Beijing despite it having a population equivalent to just 1.5% of mainland China’s. The Belt & Road is referred to in constant negative terms while the US and EU develop their ‘B3W’ and ‘Global Gateway’ clones. China-bashing has become the gold standard of Western media attention towards China.
Is this an accurate portrayal, or a subversive viewpoint deliberately designed to criticize Beijing while promoting the West? Or is it that singular opinionated content is just not representative any more as an increasingly multipolar China has moved on?
Is it possible that part of the content demise of these types of China content providers has been created because China itself has changed, and the old style of analyzing China from the singular perspective of US foreign policy – typically these days followed letter for letter by the EU and UK – 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, Washington, London, and Brussels all 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 January 1, 2010. Tariffs between China and the 10 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 volume 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 center 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, while only the United States and much of the European Union have 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 outbound investment center. 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 in China or having at least a presence in a BRI-affiliated country.
The Trans Pacific Partnership (TPP) had been under negotiation for nearly 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, the next US President, Donald Trump withdrew the US’ application in January 2017.
This meant that the United States could not be trusted as being necessarily reliable or sincere about entering into longer term planning and commitments, impacting China and felt across Asia. Washington’s decision also shifted the Asia-Pacific trade focal point away from Washington to Beijing, and to a lesser degree, Tokyo, and has diminished US influence in the region. The TPP was subsequently revived as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which came into effect from January 1, 2019 – and without US membership. It means that in terms of commenting on and analyzing regional China trade, a base in Asia instead of the United States or Europe, is now a prerequisite.
This occurred from 2018 under US President Trump and severely impacted US-China trade. Even today, many of the high tariffs imposed by Trumps’ administration remain in effect. In 2017, the US exported US$129 million worth of goods to China, by 2019 that had declined to US$106 million, a decline 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 the US, China, and crucially, ASEAN.
The EU-China Comprehensive Trade Agreement (CAI) took seven years of negotiations and was concluded on December 30, 2020. At the time, the EU said it was the most ambitious trade deal China had ever undertaken with a third party. It lasted just five months, being indefinitely suspended on May 4, 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 on 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 politically 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.
In real terms, the China market is more open to foreign investors now than at any other time. Yet, one wouldn’t know that from regular US, EU, and UK opinion sources. This is probably due to two issues; firstly, the concentration on US, EU, or UK foreign policy as opposed to an understanding of Chinese foreign policy, and secondly, a lack of business and investment knowledge.
Getting to grips with China’s investment policy requires a background in China law and tax issues and the ability to interpret these correctly; content that can only be derived from having a China presence. Doing so means that advice can be provided concerning China’s ‘Dual Circulation Strategy‘ (designed to spur domestic consumption, surely a matter of interest to US and EU exporters), the contents of the so-called ‘Negative List‘ (which this year relaxed more foreign market access to China’s domestic market than ever before) in addition to regional policies, such as those impacting Hong Kong and the Greater Bay Area (a massive financial services hub designed to allow foreign access to mainland China’s US$3 trillion of assets) as well as the impact of trade agreements like RCEP, which while not directly impacting the US or EU, will have massive knock-on effects in both investment opportunities and trade flows. Understanding China’s foreign policy and its impact on the US and EU requires being based in China and having a background in international trade, not journalism.
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 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 too 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 not 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 viewing the Ukraine conflict from a purely 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 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 are 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 scattergun social China commentary written largely from a North Carolina commercial and trade viewpoint). Today, understanding China requires far more than a singular perspective.
The danger in just that is a failure to see the bigger picture and being alert to where future opportunities – and challenges – are appearing. There are telling signs about the content failings – most of the sources mentioned above charge for their content, suggesting a somewhat individualistic, rather than corporate attitude towards China also prevails.
This is one reason that Asia Briefing has become so successful. It is based on a corporate platform and doesn’t require subscription fees from readers to access it. A basic subscription form is required to be completed but the content access is complimentary.
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 and 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 from Silk Road Briefing, the latest ASEAN regional trade and investment news with ASEAN Briefing, a separate Vietnam Briefing, and the latest from India with India Briefing. All provide on-the-ground content that has direct relevance to understanding China – including how China views the US and EU.
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. 70% of Russia is in Asia and the conflict is directly changing supply chains east. That impacts not just China but all of Asia and has immense geopolitical implications for Europe. Understanding that means understanding Russia.
Asia Briefing, and the perspective of China from overseas as well as within, provides a far more nuanced and accurate geopolitical overview.
That is one reason why the Asia Briefing collective readership is now over 20 million per annum. If you really want a complete China and multi-perspective overview of China – the source is now available and is complimentary and can be checked out in terms of content here: Asia Briefing.
About Us
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com. We also maintain offices assisting foreign investors in Vietnam, Indonesia, Singapore, The Philippines, Malaysia, and Thailand in addition to our practices in India and Russia and our trade research facilities along the Belt & Road Initiative.
Previous Article
« Belt and Road Weekly Investor Intelligence #79
Next Article
China Coronavirus Updates: Latest Developments and Business Advisory »
Dezan Shira & Associates´ brochure offers a comprehensive overview of the services provided by the firm. With its team of lawyers, tax experts, auditors and…
A firm understanding of China’s laws and regulations related to human resources and payroll management is absolutely necessary for foreign businesses in…
Doing Business in China 2022 is designed to introduce the fundamentals of investing in China. Compiled by the professionals at Dezan Shira & Associates in…
With the scope and penalties of China’s social credit system being further clarified in 2021, legal and regulatory compliance has become more important than…
As a legitimate tool for reasonable tax planning and cost saving, tax incentives play an important role. Companies also use tax incentives as a useful…
Over the last few months, China has been quickly expanding the pilot program on electronic special value-added tax (VAT) fapiao (hereafter special VAT…
Dezan Shira & Associates helps businesses establish, maintain, and grow their operations.
Stay Ahead of the curve in Emerging Asia. Our subscription service offers regular regulatory updates,
including the most recent legal, tax and accounting changes that affect your business.
