China: Refuge For Globalization or 'U-Turning' From Reform?

Experts discuss the shifting economic and political dynamics affecting ties between China, the United States, and Europe. (1 hr., 23 min. )

In January, Chinese President Xi Jinping delivered a much-lauded speech at Davos defending international trade and economic integration. At a time when nationalist protectionist movements were unfolding in the United States in Europe, it gave the image that China was perhaps assuming the leadership role for globalization.

But belying that idea are policies forged under Xi’s leadership that have restricted foreign organizations in China, including a broad and restrictive NGO law and protective barriers that many foreign companies say amount to increasing protectionism.

“It's fine for Xi Jinping to say all these nice words at Davos,” said former U.S. Deputy Assistant Secretary of State Susan Shirk at Asia Society in New York on Monday. “But the reality is that China has taken a U-turn back from decades of reform and opening to reform going nowhere and the economy becoming more closed.”

Speaking on the same panel, Sebastian Heilmann, founding president of the Mercator Institute for China Studies, said that Donald Trump’s election to the U.S. presidency sent “shockwaves” through the world business community. And China, even while showing little sign of liberalizing its economy, at least projects an image of stability.

“You see realignments taking place,” Heilmann said. “In business, people are really thinking hard if China might offer the better option short-term or mid-term to collaborate with. This is something that I find frightening.”

Federico Rampini, former Beijing correspondent for the Italian newspaper la Repubblica, said that the disparity between China’s current embrace of globalization and the rejection of it in much of the West are correlated and unsurprising, given that China has enjoyed a massive influx in manufacturing jobs and income at the expense of blue-collar workers in the United States and Europe. “[In globalization], there are winners there are losers,” he said. “China has been on the winning side for 25 years, so it's perfectly normal that China is in favor of this system.”

He added that the praise for Xi’s Davos remarks by some international business, government, and media leaders have only fueled suspicions among those already inclined to support populist movements. And although China is often the target of populist angst in the West, its model of authoritarian capitalism is gaining a certain appeal in struggling liberal democracies that are losing faith in their systems. “Authoritarian regimes are seen often as more effective,” Rampini said. “Look at how China managed to avoid the worst consequences in 2008 and 2009 [during the Global Financial Crisis].”

Heilmann guessed though that the shrinking space for free speech and a return to ideological dogma in China will ultimately undermine the appeal of its model. “In many ways people are responding with their stomachs,” Heilmann said. “They don't like what's happening in their societies, so they turn to models they don't really know the details about. … But this contrast will probably be sharpened in the next few years by a further tightening in the Chinese system.”

In the above video, Shirk, Heilmann, and Rampini, along with UK Ambassador to the United Nations Peter Wilson and Asia Society’s Orville Schell, discuss the shifting economic and political dynamics affecting ties between China, the United States, and Europe.