The hard-working staff here at Spoiler Alerts sojourned to Beijing for a long weekend to attend a special fall session of the China Development Forum (the big CDF annual event, which involves dozens of chief executives and Chinese Politburo members, is held in the spring). I had not been to mainland China in a couple of years, so I was curious what could be gleaned from this trip about China and the state of the bilateral relationship. What I discovered was grim:
China is both richer and more closed off. What I saw was consistent with the data about China getting richer: The cars in Beijing were nicer, and the traffic was worse.
What was more striking was the stronger reach of the Chinese state. Since last year, foreigners entering the country are required to have all 10 fingers scanned into a database. It is an Orwellian way to enter a country.
The degree to which China has closed itself off from the Western media is also extraordinary. Without a VPN, I could not access The Washington Post, the New York Times, the Wall Street Journal, Bloomberg News, the Associated Press, Reuters, pretty much every major American news outlet (oddly, Politico remained accessible). Even the CDF itself was essentially closed off to foreign reporters, as none of them were given any accreditation. Besides the Spoiler Alerts staff, the only attendees who write for news outlets were lunchtime speaker Thomas Friedman and the New York Times Beijing correspondent who advanced for him.
There was no U.S. support for President Trump’s trade wars. It is possible that the organizers stacked the deck against those who supported the trade wars. An awful lot of the CDF invitees from the United States were signatories to an open letter published in The Post in July decrying the Beltway consensus on China.
It is more likely, however, that there was no intersection between the circles of “Trump supporters” and “people considered to know anything about the global economy.” A few U.S. attendees made Trump-friendly feints. Economist Robert Barro praised the 2017 tax bill — but not the trade war. Former officials with the Office of the U.S. Trade Representative tried to explain the resentments in the United States that led to Trump’s victory — but also did not defend the trade wars. Neil Bush’s speech was so dovish that China Daily had a field day with it.
Still, not a single American attendee — many of whom were Republicans — had a positive thing to say about the trade wars. Not. One.
Chinese attendees unintentionally acknowledged some of their own issues. I am familiar with the sounds of Chinese boilerplate, and there was a lot of it at this forum. Chinese speakers pressed a few points very hard: that they are still much poorer than the United States on a per capita basis (something Michael Beckley would agree with), that their new foreign investment law (allowing 100 percent foreign-owned entities to set up shop) was working out great, and that globalization would continue regardless of Trump’s trade wars.
Still, Fu Ying got at something when she talked about China not knowing what rivalry with the United States meant. “Rivalry for what?” she asked. But although that may have sounded disingenuous, there was an unintended grain of truth to it. None of the Chinese attendees could articulate their grand strategy terribly well. There was a lot of happy “win-win” talk but very little about how China viewed itself in East Asia and in the world. A lack of realistic-sounding policy preferences is a surefire way to inject uncertainty into the balance of power. Sure, Trump is an uncertainty engine, but Beijing is not that much more certain.
“Mutually assured disruption.” That’s the term that Robert Hormats used to describe the current state of relations. There were varying opinions about the implications of the trade war, and whether it could be resolved quickly. Some participants were optimistic. Several old China hands recalled that the relationship has hit patches of deadlock in the past.
Still, there were three overarching themes to the trade commentary. First, there is a mutually beneficial agreement to be cut on everything except 5G. No one had a good answer on Huawei, which is not surprising, given the weaponized interdependence issues that 5G brings up. Second, the odds of such a deal getting cut are small. Both sides are dug in, and the ability of both sides to credibly commit at this juncture is hampered. Finally, distrust is high and rising while multiple channels for the two countries to reassure each other have dissipated. That is a recipe for a long, messy, costly trade war.
I was told that there was more anger at the last CDF because the trade war had just begun. This time around, both sides appear to have moved beyond denial and bargaining to depression.