As future historians look to 2022, they will have many alternatives when asking themselves: what was the most important event of that year? would be that Brexita Chexita Ruxit Or the Trumpet?
It would be the collapse of the sixth largest economy in the world United Kingdomspurred in part by his careless departure European Union? Or the insane attempt to do so Wladimir Putin to delete Map of Ukraine, pushing Russia away from the West (what I call Ruxit), creating havoc in global food and energy markets? It would be the almost complete contagion of the Republican Party by Donald Trump’s (Trumpit) Big Lie that would have stolen the 2020 election, undermining our democracy’s most valuable asset: the ability for legitimacy and the transfer of power peacefully?
Or would it be the impulse of China of the President Xi Jinping towards Chexit the end of four years of steady integration of the Chinese economy with the West, an end symbolized by the phrase my colleague in Beijing, Keith Bradsher, uses to describe where Western multinationals are considering their next Build factory: “Everywhere except China”.
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US President Joe Biden virtually meets with Chinese leader Xi Jinping in November 2021 Photo: Susan Walsh/AP
It’s hard to choose. And when we mention them together, we see how 2022 has become a turning point in history. But I would choose Chexit.
We’ve had four decades of economic integration between the US and China, which has greatly benefited US consumers. This created new export opportunities for some Americans and unemployment for others, depending on the industry they worked in. It helped lift hundreds of millions of Chinese out of poverty. It kept inflation under control and helped prevent wars between major powers.
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Overall, we will miss that era now that it is over, as our world will be less prosperous, less integrated, and less geopolitically stable. But the fact is, it’s over.
As New York China expert Evan Osnos pointed out in October: “In 2012, 40% of Americans had a negative opinion of China; today, according to the Pew Research Center, more than 80% think so.”
If China had a democratic government, surely someone there would ask, “How did we lose that? United States?”
The US is not exempt from responsibility for the erosion of this relationship. Since World War II we have never had a geopolitical rival who came close to being our equivalent, both economically and militarily. We have never been satisfied with Beijing’s growing challenge, especially as China has not been fueled by oil but by its own savings, hard work and the application of homework that is, a willingness to make sacrifices to achieve national greatness, with a strong emphasis on Education and Science. This description used to apply to us Americans.
But China is much more responsible for this. To get an idea of how far China has supplanted the US, we could start by asking Beijing: “How is it possible that you have the most powerful lobby of them all in Washington without costing you a penny, and but have you ruined everything?”
I refer to USChina Economic Council and the USChinese Chamber of Commerce. These powerful corporate groups, representing America’s largest multinationals, have campaigned vigorously for four decades to advocate for more investment in China and China, which would be a winwin for all involved. The same applies to the EUChina Chamber of Commerce.
Today these lobby groups are not very active.
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What happened? We had the culmination of four trends.
The first began in 2003, shortly after China was admitted to the World Trade Organization (thanks to the US) when China’s leading market reform advocate, Prime Minister Zhu Rongji, resigned. Zhu wanted American companies to be present in China because he believed that in order to compete effectively in the world, Chinese companies should compete domestically with the best.
But Zhu faced opposition in China’s many inland provinces, which were dominated by Chineseowned industries that had neither the interest nor the ability to compete globally, as was the case in China’s coastal provinces. And her influence grew.
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A World Trade Organization meeting in Beijing in 2018 Photo: Thomas Peter/Portal
When China joined the WTO and was given immense dutyfree or reducedduty access to Western markets, the country pledged to sign a WTO parallel government procurement agreement that would have limited China’s ability to discriminate against foreign suppliers in massive government purchases. But China never signed it. Instead, it continued to direct its vast state purchasing power to its stateowned industries which it continued to subsidize.
Too many Chinese companies simply copied or stole the intellectual property of Western companies setting up factories in China. So Chinese industry used its sheltered home market to grow in size and then competed with the same Western companies at home and abroad AND STILL received subsidies from Beijing.
As I explained in a 2018 column, even as the US protested at the WTO as it did when China unfairly kept American credit card companies out and lost the case at the WTO China continued to make slow progress on its commitment to to open its markets to them. , made 17 years ago. Chinese companies like UnionPay so completely dominated the market that American companies like Visa had to make do with the remaining crumbs. Is it surprising that the volume of EU exports to China is currently slightly higher than that to Switzerland?
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That’s why many US and EU companies have changed their stance: if they previously pretended not to see Chinese market manipulation since they were still making money in the country, they started complaining to their governments, but without they are complaining to Beijing for fear of retaliation and are now trying to expand their supply chain outside of China. Even Apple is now trying to diversify its manufacturing more, relying on Vietnam and India.
“The American business community loved China there was always tension, but the sense of partnership to seize opportunities prevailed. It wasn’t easy for China to keep the business world from doing it, but the Chinese did it,” Jim McGregor, who has spent 30 years as a business consultant in China and has written three books based on his experience, told me.
It is not surprising that when Trump started his trade war with Beijing, an American executive who had worked in China for a long time told me that Trump was not the president the United States deserved, but he was the American president that China deserves. Someone had to defend our side of the game.
Now President Xi has done the same on his side. As Jörg Wuttke, President of the EU Chamber of Commerce in China, said in an interview, the election of Xi to an unprecedented third term on the basis of a platform that emphasizes Marxism and ideology over markets and pragmatism shows “to me that the opening up of the Chinese economy will not continue. … We have to assume that China will distance itself from other countries and build a model against the western, liberal and marketoriented model.”
The second trend dates back to the sequence of events in Tiananmen Square in 1989, when the Chinese Communist Party leadership sought to smother the democratic aspirations of Chinese youth with a dip in hypernationalism. My colleague Vivian Wang in Beijing recently interviewed the political author Wang Xiaodong, long regarded as the standardbearer of Chinese nationalism, who once said that “China’s progress march is unstoppable”. However, Wang Xiaodong told the Times that the Chinese nationalist movement under Xi, spurred on by other social media influencers, has gone too far: “I’ve been called the godfather of nationalism. I created them. But I never told them to be that crazy.”
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Wang Xiaodong, a writer once dubbed a bastion of Chinese nationalism Photo: Gilles Sabrié/The New York Times
I got a taste of that in 2018 when I spoke to key government and business figures in China. When I mentioned China’s unfair trade practices, the reaction went something like this: “You realize you Americans are late? Now we’re too big to be bullied. They should have tried that ten years ago.” I replied that this kind of arrogance often causes problems for countries.
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Which brings us to the third trend: a much more aggressive Chinese foreign policy, seeking to extend its dominance over the South China Sea and deter the country’s key neighbors: Japan, South Korea, Vietnam, India and Taiwan.
But the most recent trend is perhaps the most revolting: Instead of importing effective Western vaccines to keep the pandemic under control, China is adopting a policy of “Covid zero’, which envisages lockdown of entire cities, plus all the new tools of a vigilante state: drones, facial recognition, ubiquitous closedcircuit cameras, cell phone tracking, and even tracking diners in restaurants who are required to show a QR code to digitize and record .
It is like Xi’s strategy to prevent the spread of Covid and also freedom.
What Xi fails to understand is that all of the most advanced technologies of the 21st century like semiconductors and mRNA vaccines require large and complex supply chains because no country can be the best at each of its increasingly sophisticated components. But these supply chains require immense cooperation and trust between partners, and that’s exactly what Xi has squandered over the past decade.
Xi’s belief that China can be the best at everything on its own is like the belief that China’s basketball team will always be able to beat a team of the world’s best players.
Hard to believe.
But that worries. I confess that I don’t like using the term “China”. I much prefer to speak of the “sixth mankind to speak Mandarin”. It’s something that better captures the true magnitude of what we are facing. I want the Chinese to prosper; that is something positive for the world. But today they are going the wrong way. And in our stillconnected world (China, for example, still holds nearly $1 trillion in U.S. Treasury bonds), if onesixth of humanity takes the wrong turn, everyone will suffer. / TRANSLATION BY AUGUSTO CALIL