When Xi Jin Ping took the mantle as Chairman of the Chinese Communist Party in 2012 he set forth a bold vision for the future of his country. He dubbed it ‘The Chinese Dream’ and laid out two critical development targets the country would hit on the path towards realizing this dream, calling them the ‘Two Centenary Goals'(两个一百年). These goals are critical markers on the climb to what the Chinese people see as their rightful place atop the global political landscape.

The first goal is set for 2021, the hundred year anniversary of the founding of the Communist Party. By this time they plan to have secured their place as a ‘moderately well-off society’, with a per capita income of $10,000. Officially, China still refers to itself as a feudal country on the path towards modernity, a path that really only began in 1978 when they opened their doors to foreign investment and started integrating themselves into the global economy. By 2021 they will make the political, economic (and rhetorical) shift to this ‘moderately well-off society’.

The much more ambitious second goal is set for 2049, the hundred year anniversary of the founding of the People’s Republic of China. At which point they aim to have living standards equal to those of The West, and China as a whole will be a ‘strong, democratic, civilized, harmonious, and modern socialist country.’ However the underlying message put forward every time China’s leaders and media outlets refer to 2049 has a slightly different tone, to summarize author Michael Pillsbury in The Hundred-Year Marathon, ‘The Chinese Dream is not just some vapid inspirational message to embolden Chinese citizens, it is a carefully planned strategy to become the world’s foremost superpower by 2049.’

(One word that might stand out in the official message is democratic. Don’t let it fool you, the Chinese word for democracy has a slightly different connotation than it does in The West. First, as famed China watcher Orville Schell points out in a recent piece in the Wall Street Journal, much of modern Chinese history was shaped by a variety of democratic movements. Further, many in China claim they are already a democracy because on the local level elections are regularly held to choose who gets to sit in the people’s congress. Finally the word itself, 民主, does not mean ‘rule of the people’ as it does in The West, but ‘owned by the people’. The party officially proclaims itself to simply be acting on behalf of the will of the owners of the country, the people, hence it feels justified in calling itself a democracy.)

Trump vs. Xi

This week is the first state visit between Donald Trump and Xi Jin Ping. During his campaign Trump did a lot of finger waging at China, promising to label them a currency manipulator and impose sanctions and tariffs. In reality, as pointed out in a talk last week at the 1990 institute, Trump is likely to continue back peddling from his bold proclamations as it seems he will stick with many of the policies towards China of the Obama administration. Xi on the other hand is probably going to continue playing the long game, politely smiling across the table from his oranged counterpart knowing that the man he faces is just another in a long line of American President’s that he and his countrymen will have to deal with. They are well aware that whatever ‘demands’ Trump makes, they are only the requests of the day, and that whether it be four years or eight years from now Xi, or someone very much like him, will be back in the same position eyeing a new leader who will have a different agenda. Meanwhile the policies and goals of the Chinese side will be more or less the same, regardless of who sits at that table. And evidence is mounting that Xi will be the one sitting there for some time to come.

No Chinese ruler since Deng Xiao Ping has consolidated power like Xi Jin Ping. Through a series of moves eerily reminiscent of other former Communist strongmen, he has made himself the most powerful man in the world. Early on he got rid of anyone who might be able to mount a credible opposition in a campaign that saw over 120 high-ranking officials either stripped of power or jailed. Recently he has been anointing himself with a plethora of new titles, including ‘core’ leader. And unlike previous Chinese heads of state who by this time had already appointed their successor, he has made no such appointment leading many to speculate that Xi is going to extend the 10 year limit imposed on his predecessors and hold on to power indefinitely.

Xi has also been growing more assertive internationally as his influence and clout on the world stage grows. His boldest statements came at Davos earlier this year when he talked about the need to extend globalization and free trade. As Gideon Rachman in The Atlantic points out, “When Britain was the dominant economy it was the promoter of free trade. When America was the dominant economy it was the promoter of free trade. Now China’s the promoter of free trade, and you can feel the wheels of history turning.”

As Trump’s America looks increasingly inwards, China continues its expansion around the globe. They are now the world’s largest trading partner, thanks, in part, to the US as many nations are finding it harder to know what kind of partner they are getting with them. Often a deal is made with one American leader, only to have the next one come along a few years later and rescind everything or make new demands, as shown again recently by Trump’s pull out from the TPP. China, on the other hand, has become a bastion of stability and this has allowed them to make substantial in-roads in Africa, Latin America, Eastern Europe, and countries on the old silk road. Also, in a further sign that the global balance of power is shifting, long term allies of the US like Israel and Saudi Arabia have also recently been spending more time cozying up to China.

Perhaps no where is this new-found brashness more clear than in China’s expansion in the South China Sea. Bolstered by the steady increases they have been making to their military, China is making it clear that this is their territory and any claims that any other nations have to it are illegitimate.

山雨欲来风满楼 – A Rising Wind Forebodes A Coming Storm

However domestic issues are still at the heart of everything China does. To that end the CCP has lately been tightening the reigns on its people and thickening the firewall that surrounds the Chinese internet. But the beating heart of the country is economic growth, and if there is anything that scares the leaders in Beijing it is the fear of a slow down as it could disrupt their well-laid plans. Key to maintaining economic growth will be the need to reform the ambiguous role of state-owned enterprises, to re-think the incessant push for fixed-asset investments, and to continue fueling domestic consumption. All of which are colorfully highlighted by the hip-hop parody of macro-economist Big Daddy Dough…

China’s Trump Cards

America’s strength does not rest in the Presidency, it comes from the ingenuity of its people and its ability to attract the best minds in the world to its shores. It is not the Trump administration that China really has to compete with, it is America’s role as the hub for global innovation.

But China has two hands to play that no other country has. As outlined above, they are able to set in motion long term strategies without worrying about the outcomes of elections every few years. And they are a collective of 1.36 billion people that the party has managed craft into a single unified force, an immensely powerful weapon if they can continue to wield it in the right direction. Both of these hands will be critical as they work to transitioning the economy.

For decades they relied on being the world’s producer of cheap goods to spur economic growth, this led to the fastest period of economic growth the world had ever seen and it lifted over half a billion people out of poverty in just a couple of decades. Now they are making moves towards becoming a modern economy and in the latest five year plan they have laid out how they are going to leverage their strengths and rally the Chinese people to turn themselves into a hub for many future technologies.

Throughout history, when new disruptive technologies come along those societies that adopt them first tend to gain a leg up on others. A host of disruptive innovations are just starting to come online, from self driving cars to genetic modification therapies to artificial intelligence. While the west will wait for policy makers to decide on the ethics of each and then wait for regulators to set up provisions to ensure their proper use, China will implement them as soon as possible. This has already begun, the first human trials of CRISPR, the new gene therapy technique, took place late last year in China.

国家利益高于一切 – National Interests Above All Else

These new technological innovations are also being used to further the CCP’s control over the Chinese people. The surveillance state is in full effect in China and its most striking new feature is the social credit system that not only looks into an individuals economic history, but also their social media history to determine everything from their loan eligibility to the degree of their political allegiance.

Quotes by Xi Jin Ping

“Why did the Soviet Union disintegrate? Why did the Soviet Communist Party collapse? An important reason was that their ideals and beliefs had been shaken.”

“Some foreigners with full bellies and nothing better to do engage in finger-pointing at us. First, China does not export revolution; second, it does not export famine and poverty; and third, it does not mess around with you. So what else is there to say?”

“Our responsibility is to rally and lead the whole party and the Chinese people of all ethnic groups, take up this historic baton and continue working hard for the great renewal of the Chinese nation, so that we will stand rock firm in the family of nations and make fresh and greater contribution to mankind.”

“Comrade Mao, whether he was crossing ‘a sea of surging waves’ or scaling ‘a mountain pass impregnable as iron’ always held unwaveringly to his course, setting a shining example for the Chinese Communist Party.”

“Happiness does not fall out of the blue and dreams will not come true by themselves. We need to be down-to-earth and work hard. We should uphold the idea that working hard is the most honorable, noblest, greatest and most beautiful virtue.”

“We should recede from our respective national positions and embark on the right pathway towards economic globalization at the right pace.”

“The Fourth Industrial Revolution is unfolding at an exponential rather than a linear pace.”