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Poisoning the Well of U.S.-China Relations

by Elizabeth C. Economy
July 8, 2015

Investors look at computer screens showing stock information at a brokerage house in Shanghai, China, July 8, 2015. Chinese stocks dived on Wednesday after the securities regulator said the tumbling stock market in the world's second-biggest economy was in the grip of "panic sentiment" as investors ignored a battery of support measures from Beijing. REUTERS/Aly Song Investors look at computer screens showing stock information at a brokerage house in Shanghai, China, July 8, 2015 (Aly Song/Reuters).


It was bound to happen. As China’s stock market continued its wild ride, dropping 30 percent by early July from a seven-year high only a month prior, rumors started swirling that Goldman Sachs, Morgan Stanley, and George Soros, among other vague forces of international capital, were to blame for the stock market plunge. No matter that foreign investors have only limited access to mainland Chinese stock exchanges, the current Chinese leadership has become addicted to the foreigner blame game. The phrase “hostile foreign forces” has become a catch-all for Chinese officials, scholars, and media commentators who cannot acknowledge the reality of China’s current political and economic situation.

In the past few years, virtually no area of Chinese policy has remained untouched by the influence of “hostile foreign forces.” China’s education minister Yuan Guiren argues that “young teachers and students are key targets of infiltration by enemy forces” and condemned Western concepts such as the rule of law, civil society, and human rights. The Chinese Academy of Social Sciences (CASS) accused “hostile Western forces” of exaggerating the number of people who died during the Great Leap Forward in order to undermine the legitimacy of the party. CASS also worked with China’s National Defense University and the General Staff department of the People’s Liberation Army to produce a film that claims U.S.-China military-to-military exchanges offer Americans a chance for infiltration and attacks the longstanding Fulbright program as an element of “America’s cultural invasion.” Western reports of police violence in Xinjiang were attributed to hostile foreign forces in August 2014. The vice chairman of the All-China Federation of Trade Unions, Li Yufu, blamed hostile foreign forces for attempting to undermine the solidarity of the Chinese workers. Early in China’s clean air movement, as well, some officials argued that the activists were being used by hostile foreign forces. And, of course, hostile foreign forces were a major contributor to the protests in Hong Kong. Even President Xi Jinping has warned against outside forces intruding on Chinese religions, although virtually all major religions in China today came to the country from outside its borders, and two of the largest, Buddhism and Catholicism, are led by religious figures who reside outside China.

This flurry of anti-Western rhetoric has also been accompanied by a number of legislative efforts designed to limit Western influence. A broad-reaching new National Security Law is tasked to “safeguard national security, defend the people’s democratic dictatorship and the socialist system with Chinese characteristics” as well as to realize “the great rejuvenation of the nation.” China’s national security commission is also drafting legislation to severely regulate foreign-based nonprofits for fear that Western governments will use these organizations to undermine the Communist Party. A cybersecurity law presented earlier this year, since put on hold, would have required the banking industry to use equipment deemed “secure and controllable” by Beijing, essentially closing the door for foreign information technology firms. Meanwhile, a separate proposed anti-terrorism law would require technology firms to provide encryption keys and install backdoors to allow law enforcement to access information.

While the Chinese leadership may see such rhetoric and policies as a cheap and easy way of deflecting attention from their inability to address the challenges before them, this strategy trades short-term gain for long-term pain. As the political atmosphere turns sour, China will become a less attractive destination for many foreigners. Overall, twice as many foreigners left China than arrived in 2014, and while the United States still supplies more expats to China than any other country, 22 percent fewer Americans moved to China in 2014 than in 2013. Beijing also risks losing credibility with the most educated segments of Chinese society. Even as less informed Chinese may buy into the anti-Western narrative, each time the “hostile foreign forces” argument is introduced, Chinese netizens fight back. Chinese labor union activists, for example, have argued that their discontent derives not from the infiltration of foreign forces but from the failure of the All-China Federation of Trade Unions to protect their interests. And certainly the constant drumbeat of anti-Western sentiment emanating from senior Chinese officials does little to support their claim that they want a trust-based “new relationship among major powers.” The China Dream may eventually come to represent a unique and compelling combination of Chinese traditional values, Marxism, and Xi Jinping Thought; but in the meantime, Chinese leaders shouldn’t take the easy, but ultimately self-defeating and poisonous, path of using anti-Western values to fill the void.

Post a Comment 5 Comments

  • Posted by fatman51

    China is inevitably bumping into physical limitations of her growth with present day technologies. At present it is impossible to convey middle class standard of living on the majority of the Chinese. A significant technological restructuring is needed to do that, assuming that the task is even feasible. It is actually a matter of simple numbers. The frozen-in inequality is likely to lead to social tension, which is historically best controlled by designating the enemy and cracking down in the name of war with the said enemy. No matter what anyone says outside of China, this is the most likely course China will take because the alternative is most likely fragmentation. I am sure the CPC apparatchiks have a portrait of Gorbachev somewhere on their walls, as a reminder of what may happen.

  • Posted by David Dunn

    Great essay. China so badly needs MORE foreign interaction and it’s current policy is very counterproductive. This much I can see with great confidence, China can not solve their air pollution problem without much more foreign involvement. Period. They don’t understand how. They have some vague notions in theory, but in practice they just don’t get it. With China’s reversal of openness if full force it’s no wonder many people in China have come to calling their country 西朝鮮。:-)

  • Posted by Michael Pillsbury

    Excellent observations. This propaganda has to influence the younger generation in China – even the 240,000 students in the USA are hearing about the US harming China.
    In the Cold War, there was an office at State Department to identify and counter Soviet disinformation. So far, all these comments you identify are allowed by the US government to stand – without rebuttal. Bravo to CFR for this listing. There is a lot more.

  • Posted by Zach

    I don’t agree that the most likely course for the Chinese to take is war. While the Chinese may denounce the West, and predictably so considering their history of denouncing others to legitimize their regime, it would be uneducated to say that the Chinese are not aware of the importance of their relations with the West especially economically speaking. China acting belligerently. especially towards the US, would be economic suicide and would threaten the whole region pushing countries such as India, the Philippines, South Korea, and Vietnam to the side of the U.S. China is an export based economy and the trade value they would lose with the before mentioned countries, as well as the EU and possibly countries in Latin America would be devastating. China may talk aggressively, especially to its domestic audience, it is no more than a political ploy aimed at keeping the domestic audience content and to portray themselves strongly at home – China understands the importance of stability, both at home and abroad, and acting as a revisionist power will hurt, more than it will help.

  • Posted by Stock Brokers In India

    China is on brick of Collapse and India is fast catching up with tie ups with neighboring countries under the leadership of Mr.Narendra Modi. Watch On

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