Xi Jinping

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Xi Jinping

Elizabeth C. Economy, the C.V. Starr senior fellow and director for Asia studies at CFR, discusses the leadership style and policy choices of Chinese President Xi Jinping.

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Speaker

Elizabeth C. Economy

C.V. Starr Senior Fellow and Director for Asia Studies, Council on Foreign Relations

Presider

Irina A. Faskianos

Vice President, National Program and Outreach, Council on Foreign Relations

FASKIANOS: Good afternoon from New York, and welcome to the CFR Academic Conference Call Series. I’m Irina Faskianos, vice president for the National Program and Outreach here at CFR. Today’s call is on the record and the audio and transcript will be available at CFR.org/Campus if you would like to share it with your colleagues or classmates.

We’re delighted to have Elizabeth Economy with us to talk about the leadership style and policy choices of Chinese President Xi Jinping. Dr. Economy is the C.V. Starr senior fellow and director for Asia studies here at CFR, and a distinguished visiting fellow at Stanford University’s Hoover Institution. She is an acclaimed author and expert on Chinese domestic and foreign policy, writing on topics ranging from China’s environmental challenges to its role in global governance. In June 2018, Dr. Economy was named one of the “10 Names that Matter on China Policy,” by Politico magazine. Her most recent book, and the topic of today’s discussion, is The Third Revolution: Xi Jinping and the New Chinese State. She is also the auto of By All Means Necessary: How China’s Resource Quest is Changing the World, co-authored with Michael Levi, and she has also authored The River Runs Black: The Environmental Challenge to China’s Future.

So, Dr. Economy, thanks for being with us today. I thought you could just start us off by talking about The Third Revolution, Xi Jinping, and his leadership, and how he has and is transforming China.

ECONOMY: Great. Thanks so much, Irina. It’s a real pleasure to have the chance to speak with all these students who are interested in studying China.

What I’d like to do is just offer a potential framework for understanding Chinese politics and foreign policy in what I consider to be this truly transformative era of Chinese President Xi Jinping and, as you noted, what I term the third revolution. So I’ll talk for ten to twelve minutes and then open the line for questions. And I’m really looking forward to hearing the thoughts and interests of the students. And please feel free, for those of you who are listening, to, you know, ask questions or offer your thoughts on issues that I don’t necessarily raise in this sort of short set of remarks.

So let me begin, first, just by taking you back, but not too far back, just a little bit over a year, to October of 2017 and the 19th Party Congress in China, where Chinese President Xi Jinping was re-selected as general secretary of the Communist Party for his second five-year term. And in his acceptance speech, which ran over three hours—over three and a half hours—he uttered the phrase: China has stood up, grown rich, has become strong, and is moving towards center stage. And I think that this phrase, more than anything that I’ve encountered, really encapsulates not only the evolution of China’s political ambitions over the past several decades, but also helps us to understand how Xi Jinping understands his own tenure in the context of China’s contemporary and political history.

So if we look back and look at “China stood up,” that part of the phrase refers to the period of Mao Zedong, a time when the Chinese Communists stood up, in part, against the Japanese invaders, but really against the Kuomintang, the ruling party at the time, and created the contemporary Chinese Communist Party state in 1949. If you fast-forward thirty years to 1979, you have Deng Xiaoping, who ushered in the period of reform and opening up. This is the time that Xi refers to as China has grown rich. And China—and Deng Xiaoping really opened China—open China to foreign influences, foreign ideas, and foreign capital. He introduced the market into the Chinese economy. Not just the economic market, but also marketplace of ideas. And this is was a time when Chinese civil society began to blossom. It had its first nongovernmental organization.

Deng also moved away from the Mao sort of single man, one-man authoritarian rule, to a much more collective and consensus-based decision-making process. And he adopted, you know, very famously, a low-profile foreign policy. (Inaudible)—is a phrase that’s become well-known during his tenure, because he wanted to focus on developing China at home, improving the living standards of the Chinese people, and not being sort of otherwise—you know, otherwise having to focus on external events.

And then finally, if you fast-forward one more time a little bit more than thirty years to 2012, you have the advent of Xi Jinping. And this is the period in which China has becoming strong and is moving towards center stage. And that’s really the Chinese dream for Xi Jinping, his Chinese dream, the great rejuvenation of the Chinese nation and reclaiming a much greater degree of centrality for China on the global stage. In the process of doing that, I think he’s really upended much of the Deng period. And actually, Deng termed his tenure China’s second revolution. And I think Xi Jinping has really launched a third revolution and moved to create what I consider to be an almost new model of Chinese politics.

So what I’d like to do now is just sketch out for you how I see that new model evolving. And I think there are four significant shifts that are emerging under Xi Jinping. The first shift is away from the collective and consensus-based decision-making process that Deng put in place, and back towards a more Maoist one-man authoritarian form of rule. Xi Jinping has consolidated an enormous amount of institutional authority into his own hands. He sits on top of most of the important commissions and committees that oversee large parts of Chinese domestic and foreign policy.

He’s launched, a very famous now, anti-corruption campaign that has only become stronger every year. So every year since he began, in 2013, more Chinese officials have been detained or arrested than the year before. Last year about 527,000 officials—Chinese Communist Party officials were detained. And anti-corruption campaigns, you know, have been around since time immemorial in China. You know, dating back practically to the Qin Dynasty, they were concerned about corruption. But Xi has really distinguished his anti-corruption campaign from everything that’s come before simply by how robust it is.

Corruption is a real and endemic problem in the Chinese political system. But Xi has also used it as another means of consolidating his own personal political power by targeting senior officials who are in some way tied into his political competitors or opponents and having them detained or arrested for corruption. So there was a study that was done by a professor who is now at Harvard, had previously been at Penn. And he looked at the level of vice minister and above in the Chinese political system. And found that of the officials who’d been detained or arrested, 40 percent of those at that sort of senior official level were in some way tied into networks of Xi’s political opponents or competitors. So he’s used the anti-corruption campaign to consolidate his own political power.

And then finally, you know, something that got a lot of attention in the Western media last spring, he amended the Chinese Constitution to eliminate the two-term presidency. And this allows him to hold the position of president indefinitely. So now he can hold the position of general secretary of the Communist Party, president of the country, and chairman of the Central Military Commission—arguably the three most important positions in the country—for as long as he wants, or at least for as long as the Chinese Communist Party elite and Xi Jinping agree that he can hold it.

So, again, the first significant shift is really just consolidating power back into his own hands. The second is what I would call the reassertion of the Communist Party back into the everyday life of the Chinese people and more strongly into the Chinese economy. Still one of the hallmarks of the Deng era was really the withdrawal of the party, in many respects, from the economy and from peoples’ lives. Again, he wanted the market to grow. He wanted civil society to blossom, or he allowed civil society to blossom. But Xi Jinping has moved in the opposite direction. And I think you can see this in a number of respects.

You know, first, in terms of the massive surveillance system that the Communist Party is putting in place, already close to 200 million cameras that can do facial recognition. They’re moving forward with voice recognition so that they can listen in on any conversation between two people and know precisely who is speaking. They’re even doing recognition of people’s gait, you know, how they walk. If you want to see or understand the extremes to which this can be taken you can look in the far western autonomous region of Xinjiang and the incredibly repressive set of—or the fusion of technology in political repression that’s occurring there. But in any case, I think for the vast majority of the Chinese people, you know, this is a much greater level of intrusion than they’ve had in the past. And Xi wants to have the number of cameras increase by 2020 to some 600 million cameras.

There’s also the introduction of the social credit system. This is an effort to sort of determine the trustworthiness of the Chinese people. Right now, this is mostly done as a series of pilot projects in various parts of the country. But the government wants to roll this out as a national program, even though there will be regional differentiations, but a national program by 2020. This is basically evaluating each Chinese individual on the basis of their behavior, behavior types such as have you repaid your loans, or do you jaywalk, or did you participate in a protest? Even more so, you know, are your friends participating in protests, or jaywalking, or otherwise doing things they shouldn’t be doing. That too can affect your social credit scores, if your friends are—what the actions that your friends take.

So the social credit score will then determine things like, you know, can you get to the head of the line at the airport. You know, if you have a high social credit score you get a lot of advantages. But if you have a low social credit score—for example, there are already ten million people in the country who can’t even board a plane or a train because, for example, they have not repaid their loans. So it’s a pretty comprehensive—potentially comprehensive system of social control that the party is introducing into Chinese society. We’ll have to wait to see how it plays out, but I would say early indications are that it will be fairly comprehensive.

And then finally, I think if you look at the Chinese economy you can also see that Xi Jinping has moved to increase the role of the party by heightening the role of party committees within Chinese enterprises—not only state-owned enterprises, but also private enterprises and joint ventures. This is basically saying—these party committees are made up of the members of the firms that are also members of the Communist Party. And while typically they might meet once a week or once a month depending on the enthusiasm of the head of the committee to talk about, you know, Xi Jinping’s latest writings or his, you know, latest speech, or to do some kind of social good like a tree planting campaign, Xi Jinping has moved to have these party committees play a much greater role in directing the investment decisions of companies.

And so, for example, when I was doing research for my book I talked to the heads of some multinationals based in China and learned that the party committees have started to try to tell them where to invest, or to try to put some of the members of the party committee on the board of the companies. So these are changes that are, for the most part, very unwelcome—(laughs)—by the joint ventures and, frankly, by many private enterprises in China as well. But affords Xi Jinping, you know, a greater opportunity, a stronger mechanism for directing the actions of these private enterprises in ways that he believes will suit the broader economic interests of the country.

The third sort of shift under Xi Jinping has been a move to create a virtual wall of restrictions and regulations that allow him to more tightly control what comes in, and even what goes out of the country. You know, I think sort of the most basic one of these is certainly the greater constraints on the internet, internet content, the free flow of information. But you can also see it in other ways. For example, the passage of a law on management of foreign nongovernment organizations. So just to give you a quick sense, this law came into being in January of 2017. And before it came into force, there were upwards of 7,000 foreign nongovernmental organizations operating in China. So these are environmental organizations. Some of them you might be familiar with, like the Environmental Defense Fund or the Natural Resource Defense Council, the Asia Foundation. Again, not only American NGOs, but European, Canadian, and other Asian foreign NGOs as well.

But generally involved in working on issues like the environment, or poverty alleviation, or health care, and very much cooperating with their Chinese counterparts, doing capacity building, really supporting the development of civil society within China as well. But in January of 2017, this law came into force that made it much more difficult for foreign NGOs to operate. Required them to register with a government agency. Moved control from the ministry of civil affairs to the ministry of public security. And the number of foreign NGOs is now, so not quite two years later, are operating in China has dropped to between 3(00) and 400. And this has—this has implications, you know, not only for the ability of, you know, foreigners to operate in China, but also, again, for the development of civil society within China. Because, you know, at one point these foreign NGOs and foundations were responsible for the financial support—90 percent of the financial support of domestic Chinese environmental NGOs. So their impact really was quite significant. So this is a constraint not only on sort of international cooperation with China, but also on the very development of civil society within China itself.

And I’d also note maybe the Made in China 2025 program, just briefly, as an area in the certain economic realm, a way in which Xi Jinping is trying to limit multinationals—the ability of multinationals to compete within China. And this is China’s high-tech, industrial program sort of thing, that in ten areas of critical, cutting-edge technology, like AI, or new materials, electric cars, medical devices, that the government wants Chinese firms to dominate, you know, 80 percent of the market by 2025. Different technologies have different sort of quotas, but nonetheless overall to sort of command the vast market share within China, and also to be global champions. So limiting opportunities for foreign firms to compete through subsides, through barriers to market entry, a number of different—a number of different ways. So I think these—you know, this effort by Xi Jinping is directly—runs directly counter to what Deng had attempted to do in terms of his openness to foreign ideas and to foreign capital. A very different approach.

And then finally, the fourth major shift, is the rejection of Deng Xiaoping’s low-profile foreign policy in favor of a much more ambitious and expansive foreign policy. And I’m just going to tick off the three major areas so that I don’t go too far over my time limit. But I would say first, moving from staking to realizing Chinese claims around sovereignty. So this is looking at Chinese actions in the South China Sea, Hong Kong, and Taiwan, where the Xi regime has been far more assertive than its predecessors.

Second, the development of the Belt and Road initiative, China’s grand-scale infrastructure project to connect China to seventy countries throughout the world. Now actually the whole world is involved. Xi Jinping announced this in 2013. And first it as hard infrastructure—ports, and railroads, and highways. And then it became digital infrastructure—satellite systems, and e-commerce, and fiber optics cables. There’s a polar ice belt. And just recently China has welcomed Latin America into the Belt and Road initiative. So it really incorporates the entire world. So that’s—in many respects, I think Belt and Road initiative is Xi Jinping’s signature foreign policy initiative.

And then third, I think there’s an effort within the Chinese government to play a greater role in shaping global governance, the norms, and priorities, and institutions around human rights, or internet governance. I think Xi Jinping famously said, you know, China should not only write the rules of the game but help create the playground on which these games are played. And he very much wants the next round of global institutions to reflect Chinese values and priorities, as much as they might reflect those of the United States or perhaps other liberal democracies.

So the tagline, I would say, the takeaway in short form is that Xi Jinping’s China is one that is more repressive and authoritarian at home, but more ambitious and expansive abroad. So why don’t I stop there. And, again, I welcome your questions and comments on anything that I’ve said, or, you know, things that I haven’t said.

FASKIANOS: Liz, thanks very much for that comprehensive analysis. Let’s go to the questions, please.

OPERATOR: Thank you.

(Gives queuing instructions.)

Our first question will come from Georgetown University.

Q: Dr. English, this is Major Wertz (sp). Thank you very much.

My question is, given China’s redefining of human rights, how will their expanding influence in countries already susceptible to ethnic conflict and civil war destabilize the geopolitical environment?

ECONOMY: So I think there’s a challenge with China’s—the Chinese commitment to human rights I think plays out in a couple of different ways globally, that we’re seeing. First, in countries where there are already sort of authoritarian inclinations, China has become very active in training officials on how to manage dissent, how to control the internet, how to control the media. There’s—they’re putting in digital infrastructure that limits people’s access to the BBC and Al Jazeera in favor of Chinese networks, CGTN. So there’s an effort underway in some significant parts of the still-developing world for China to export elements of its more authoritarian political model. Not to export communism, but its more authoritarian model.

In terms of how China’s engaging in conflict within areas, I think we can see that the Chinese, the Belt and Road initiative, is coming under some challenge. In areas recently, you know, Chinese workers were attacked, and some were killed, in Pakistan. There have been protests around Chinese engagement when China doesn’t do deals in a transparent way, when it ignores good environmental or labor practices, it tends to stir up unrest and social protest in many of the countries. You know, when it strike deals in a non-transparent manner with other authoritarian leaders, it often leads to conflict. So I think there are a number of areas and ways in which China’s sort of authoritarian political system engages globally in ways that are not necessarily terribly productive.

You know, China has had a longstanding sort of norm of not mixing business with politics. And so it, you know, doesn’t want to play an active role in areas where there is, you know, ongoing conflict. It doesn’t—you know, it shies away from taking sides, you know, based on human rights principles. And so it will do business with whomever, wherever. It’s up to those sovereign leaders to decide, you know, how to engage and, you know, whether to engage. So I don’t think we’re going to be able to anticipate that China is going to play a particularly helpful role in resolving global conflicts, by dint of its expanding economic presence. That could change in the future. Again, as Chinese citizens who are living in some of these areas come under greater stress, it’s possible that China may make a turn to understand that sort of longer-term stability is rooted in better governance and begin to play a role in that respect. But that would also require that China itself perhaps transform its own system of governance.

FASKIANOS: Thank you. Next question.

OPERATOR: Thank you. Our next question will come from Penn College.

Q: My name is Samuel Pham (sp). I’m a student studying aviation maintenance technology.

I had a question regarding mostly around tariffs. Most of our school’s majors are based around manufacturing—whether it be production, design, or transportation aspects after the fact. Mostly worried—most of my classmates are worried about or ask is the trade war continuing and continues to escalate? Because even with the tariffs, most of the common raw goods are what we use daily in our manufacturing processes. Do you see the president continuing the trade war, or do you see an end in sight?

ECONOMY: (Laughs.) So as you probably know, President Trump and President Xi are scheduled to have dinner together at the G-20 meeting in Argentina. And there’s been a lot of talk about the possibility for some kind of agreement that might if not completely end the sort of trade and tariff war, at least put a cap on it for the time being so that we won’t see another round of tariffs being put in place in January, that really would be much more devastating in terms of, you know, hitting the middle class consumer as well as manufacturing, because a lot of component parts from China that are involved in manufacturing here in the United States will also be targeted in this next round of tariffs, if it goes through.

You know, I am cautiously optimistic. So knowing that this is—you know, my prediction will be proved right or wrong in just a few days—I am cautiously optimistic that we might have the beginnings of a deal and moving forward a negotiation. I think the president has signaled—our president, Trump, has signaled that he is open to a deal. He’s made a number of comments over the past few weeks that suggest he even perhaps likes to come to some sort of agreement or arrangement. You know, he’s noted that the Chinese have met all by four or five of the U.S. demands. He says that the Chinese—this is erroneous, of course—but he said that the Chinese have given up on Made in China 2025 because he didn’t like it. And he said that the Chinese want a deal.

And so I think he’s signaled, and certainly Larry Kudlow has continually keep the door open for the Chinese and the Americans to come to some kind of arrangement. So I think it’s possible that we’ll get an agreement. In many respects, it’s less in the Chinese hands. Look, they’re not going to undertake the kind of structural economic reform that the U.S. is demanding when it comes to things like Made in China 2025, you know, ending subsidies for state-owned enterprises. They’re simply not going to do that on the basis of this tariff war. But they will, you know, look to make—to reduce the bilateral trade deficit by making significant purchases of American goods. They will, I think, make a good-faith effort to crack down more on intellectual property rights violations as they relate to American companies. And they are already making move to open more markets to foreign investments. It’s not all about U.S. companies, but it certainly includes U.S. companies in these sectors.

And so I think the Chinese are prepared to do all of that. They have been prepared to do that. You know, I think they’re trying to sweeten the offer by opening up more sectors or talking about opening up more sectors. So in many respects, I think coming to an agreement at this point is really about whether or not President Trump is ready, you know, and wants to be able to say: OK, I won, and let’s move on from here. Or, at least, I won the first round. And there’s more to be done, but he—you know, hopefully will recognize that the amount of pain that will be inflicted on Americans and the American economy probably outweighs whatever benefit we would get by continuing to ramp up this trade war. So we’ll have to wait to see, but I think there’s reason for some cautious optimism.

FASKIANOS: Thank you. Next question.

OPERATOR: Thank you. Our next question will come from Washington and Lee University.

Q: Hi. My name is—(inaudible)—from Washington and Lee University.

My question is about how the Chinese government is endorsing this view of national revival. And I was wondering how that kind of correlates with Trump’s narrative of make America great again. Do you think this is just a coincidence, that the two biggest nations in the world, economically, have similar slogans in the same era? Or do you think there is something behind it? And what should we make of it, if there is something?

ECONOMY: You know, I don’t know that they’re necessarily related. I think Xi Jinping, you know, came into power at a time when the Chinese people were feeling as though the previous leadership has not really taken full advantage of everything that they have achieved economically. Xi came in with an idea of making China great again, but making China great again in the way that it was great, you know, hundreds of years ago, right? (Laughs.) And so the, you know, sort of making China on par with the United States, really. And so I think, yes, there’s an element that’s similar in terms of addressing domestic social ills. But I do think that—I think the two are fundamentally different.

I think President Trump, you know, recognized that a large swath of the American populace had been left out of the—left out of, you know, many of the gains that the United States has achieved in the recent past. And at least part of his efforts, in terms of make America great again, was to deal with that. And that, you know, required a number of policies, like bringing manufacturing back to the United States but, you know, interestingly, was not about making America great on the global stage, which is really a lot of what Xi Jinping is about. You know, in many respects it’s the opposite, right? President Trump is about America first. It’s about taking the United States out of, you know, international agreements, in some respects, you know, reducing sort of the position of paramount leadership that the United States has occupied, you know, for the past however many—seventy years or so.

And so I think—I think there—the question is really whether or not Xi Jinping’s, you know, grand vision for China in terms of first putting China on par with the United States, and then perhaps even supplanting the United States. You know, whether China really has the capacity and the capabilities and the interest to assume all of the responsibilities of global leadership that are involved—so when Xi Jinping talks about, you know, China is the leader of globalization, or China is the leader of climate change, what does that really entail? You know, at the same as President Trump has pulled us out of the Paris climate accords and, you know, doesn’t really seem to be a big fan of globalization. But it’s not clear to me that, you know, Xi Jinping is actually prepared to allow for the free flow of capital, the free flow of ideas, to really be a leader in globalization. Nor is China really a leader in global climate change.

So I think in some respects it is interesting to see that both of them are about making China great again, making the United States great again. But in, I think, fundamental ways, that vision of what they see as making China great again, making the United States great again, are fundamentally different—almost 180 degrees different.

FASKIANOS: Thank you. Next question.

OPERATOR: Thank you. Our next question will come from the University of Minnesota.

Q: Good morning. My name is Kiki Zimmerman (sp).

My question is, do you think that the Belt and Road initiative, and other globalizing features of the Chinese administration, outweighs the domestic politics and the suppression or authoritarian aspects of it on whether or not China will rise peacefully, and how other major world players will react to those, and which one weighs more heavily?

ECONOMY: (Laughs.) That’s an interesting question. I think, you know, outweighs maybe—I’m not sure if that’s exactly how I would describe it. I think—I think the greater challenge for China at this point—I think when Xi—is that, you know, when Xi Jinping first announced the Belt and Road initiative in 2013, it was very positively received by most of the world, because it really did look like it was going to meet a big demand for global infrastructure, right? It was a demand that wasn’t being met by the World Bank or the Asian Development Bank. And there was this sense that China was going to step into the breach and really fill this need. I think since then, you know, many Chinese projects have run into trouble for some of the reasons that I alluded to earlier. They’re not done in transparent manner. They don’t operate with best environmental or labor practices.

Part of the challenge is that China tends to import a lot of Chinese workers for many of the infrastructure projects, so that local people often don’t get the benefit of the job. You know, there are issues of sovereignty. You know, China’s been called a neo-colonializer. So when it—you know, when Sri Lanka couldn’t pay the interest on its debt to China, then it—you know, China took control of the port. That didn’t go over very well. So I think, you know, people in Kazakhstan protest the idea that China’s going to take land. So there are a lot of protests now in many countries around these Belt and Road projects. In addition, alongside the Belt and Road, there’s that export of political values that I mentioned, right? So as China puts in place the digital infrastructure in Kenya or, you know, is working with these officials in Tanzania, or is exporting its surveillance systems to Peru, maybe Bolivia and Pakistan, I think that people in these countries begin to look at Chinese engagement as, you know, less of something positive, and with a great deal more concern.

And then finally, we’ve heard a lot about this here, is this issue of debt sustainability, and the fact that, you know, a number of groups—Moody’s, I think the IMF, some researchers up at Harvard, have undertaken these studies that have found that, you know, at least ten countries that are deeply engaged in Belt and Road with China have now assumed levels of debt that they’ll never be able to repay. And you have countries like Pakistan, one of China’s closest partners, you know, looking to the IMF for help at this point, so—because of its Belt and Road obligations.

So I think—I don’t think it’s really possible for China to sort of trade out its repressive nature at home or concerns over what it’s doing at home because of the goodwill that it’s going to generate through the Belt and Road, if that is what you meant in the question, because I think that the Belt and Road itself is producing some backslash against China. And the very way that the Chinese government operates at home is the way that it operates abroad. So it’s not as though Chinese companies and Chinese political actors all of a sudden transform themselves, you know, away from that more authoritarian, repressive way of doing business when they go abroad. Basically, the way they behave at home is the way they behave abroad. So if that is what you meant by your question, I don’t think that there is—that kind of tradeoff will be successful.

FASKIANOS: Thank you. Next question.

OPERATOR: Thank you. Our next question will come from the Hamilton Lugar School at Indiana.

Q: Hi, Dr. Economy. Thanks for taking our question.

So I was wondering about this, given that we often don’t discuss the domestic constraints on China and China’s president, how an economic downturn would affect China’s, you know, state—party-state structure, and how that would affect Xi Jinping’s tenure as president and general secretary?

ECONOMY: Yes. So very important question, especially right now. So it’s been interesting. And I think it’s important—and I did not mention this—but it’s important to distinguish even between Xi Jinping’s institutional control and his political support, right? So those are two different things. He can control the institutions, but that doesn’t mean that all the people are supportive of what he’s doing or the direction in which he’s moving the country. And since sort of economic growth is one of the two most important pillars of sort of Xi Jinping’s legitimacy, along with nationalism, the fact that the economy is slowing, is weakening substantially, and people are beginning to feel it, and you’re beginning to see it in terms of, you know, auto sales and the property market, you know, there’s a significant drop—30 percent drop in stock exchange this year. It’s beginning to hit people in their pocketbooks. That does undermine Xi Jinping’s political legitimacy.

So I think there are a number of what I would call pockets of discontent within China today. Let me just tick off a couple. First, I would say liberal intellectuals and entrepreneurs who are unhappy with the growing role of the party in their lives, the constraints that they place on their freedom of thought and their freedom of action. Also, Xi Jinping’s amendment of the constitution last spring, enormously unpopular within China. Unpopular among the retired party elite—people Jiang Zemin and Hu Jintao, the former leaders of the country. In fact, it’s been said that Hu Jintao actively told Xi Jinping not to do this, and that Jiang Zemin and former premier Zhu Rongji have submitted a letter to—now, these are rumors, but I think they’re interesting nonetheless—have put—sent a letter to the elite of China, saying that Xi Jinping has overreached by a significant amount and needs to be reined in.

So you have many elements within the Chinese elite who are not supportive of pretty significant elements of Xi Jinping’s political moves. You also have broad movements, like the LGBTQ movement, the feminist movement, the environmental movement, that refuse to be repressed, right? So despite the fact that the party has tried to quash them at various points in time, these movements generate a lot of interest and enthusiasm, especially among the young people in China. You have retired pensions, military officials, who are concerned because, in some cases, they haven’t been getting their pensions for a few months. So you have protests around these kinds of issues. And I think one of the issues that we hadn’t looked very closely at with China is the implications of China’s sort of technological revolution on the labor, right?

You know, we started to think about that here in the United States as something we need to be concerned about, right, that, you know, as we advance towards robotics and AI, this is going to put a lot of people out of work. Well, imagine a country where still 40 percent of the people live on under $5 a day. And many of those, you know, less skilled jobs are the first ones to go. And so what kind of pressure is that going to put on China and the Chinese economy? But I think—so I think there’s no doubt right now. Reform economists—sorry—reform economists have been speaking out against the Xi government because they believe that Xi Jinping has not moved forward with economic reform—with the necessary economic reforms that were promised back in the 18th Party Congress in November of 2013. So many different groups are out there now talking about the fact that the country is not moving in the right direction.

And interestingly, and this is the last point I’ll make, is there are people who are critical of Xi Jinping now because of the deterioration in the U.S.-China relationship, because that is one thing that is expected of a Chinese leader, is that he will be able to manage the relationship with the United States, to maintain stability in that relationship, and what the Chinese people, and what the Chinese elite in particularly are seeing now, is that that’s not happening. And so very oddly, I will say, and I’ve heard this from a number of different people including some Chinese who come to visit me, there are actually those in China who are unhappy with Xi Jinping, who like President Trump because they believe that he is pushing back on Xi Jinping in ways that are actually making Xi Jinping weaker. So this is just the—sort of this narrative has just started in the past couple of months. But, anyway, I think it gives us some interesting food for thought.

FASKIANOS: Thank you. Next question. Do we have additional questions? Hello?

ECONOMY: I’m here. Did we lose our moderator?

FASKIANOS: Yes. I don’t know where the operator has gone. Hmm.

OPERATOR: Yes. Our next question will come from the University of Texas, Rio Grande Valley.

Q: Thank you for the lecture, ma’am. Very informative.

What is your opinion with respect to the potential coordination with a greater degree of authoritativeness, including of surveillance and the—what seems to be the endless power that this president, this individual, has over the nation, and potential rise in activism—conservative activism nationally, and perhaps world condemnation, given these practices that we currently relate to the manner in which the Chinese are being overseen by their government?

ECONOMY: So I think, if I understood your question, is it likely that the greater repression, the surveillance system, Xi Jinping’s, you know, very strong consolidation of institutional authority, will produce a backlash that will produce activism among the Chinese people, and international condemnation?

Q: That’s correct. Yes, ma’am.

ECONOMY: OK. I think—I think it’s actually quite likely. I think that the fact that Xi Jinping is so extreme and is pushing things so far is likely to produce more of a backlash. And I think if he were to moderate his policies, there’s less of a chance that he would get the sort of more extreme, you know, pushback. Already, I think we can see, in terms of what’s going on in Xinjiang, again, that far-western autonomous region of the country, and the extraordinary level of political repression, and the fact that, you know, as many—as much as 10 percent of the adult population of the Uighur Muslims has been put in these reeducation camps, these labor camps, you know, without any due process, has produced a lot of international backlash. A lot of condemnation of China at the United Nations. The United States is considering some pretty serious sanctions, economic sanctions, employing the Magnitsky Act, which would, you know, sanction the leaders most responsible for the policies in Xinjiang. Looking at companies that do business in Xinjiang or manufacture in Xinjiang, so Chinese companies and Western companies.

So I think there’s—there is certainly, I think, the possibility of a backlash. And I’ll also say that I’ve actually traveled a bit in Europe over the past few months, and been talking with European officials about China, participated in one trilateral dialogue with Chinese, Europeans, and Americans. And sort of the consensus that you hear in the United States about the direction in which China is moving politically and how repressive it’s become is something that is not unique to the United States, but very much shared by Europeans. And so even as we look at sort of the tougher policies that are emanating from the United States, I have to say that I heard a lot of consensus, you know, throughout my travels, support for what the United States is doing. Not for the tariffs on the economic front, but support on the political front, and support for trying to push back against things like Made in China 2025.

So I think the international condemnation is already emerging. And I think domestically there is also—you know, it’s hard to—it’s hard to know the point at which the level of political repression, of coercion, of the sort of Chinese people and students, will produce the kind of event that we saw, for example, in 1989 in Tiananmen. But what I can say is there is a lot of negative talk at many sectors—in many sectors of Chinese society about sort of the political repression in China. You know, how that coalesces remains to be seen. And the things—like, when we’ve seen Chinese students, for example, Chinese university students, go to help Chinese laborers organize, right, to develop a labor union in a—in a company, which we saw just a few months ago, those students were, you know, detained. Some were kicked out of school. Some were put on probation. So, you know, a range of different punishments.

So the Chinese government is very quick to crack down. But nonetheless, it demonstrates that that type of linkage among different parts of Chinese societies, so not just the students but students, and workers, and farmers—that type of coordination can still happen in China. So—and people still do communicate through the internet, despite the growing levels of constraints. So I think it’s—I think it’s entirely possible that we could see, you know, a pretty significant backlash against this regime, unless Xi Jinping begins to moderate his policies.

FASKIANOS: Thank you. Next question.

OPERATOR: Thank you. Our next question will come from—(inaudible)—College.

Q: Hi. My name is Xichao Wu (sp).

I have a question about the social credit in China. So for all social credit that people that were—had been down on social credit, their name has been printed on newspaper and all over the internet. I wonder what will happen to them, and what are the ways for them to raise their social credit? And how will the social credit impact China in the future?

ECONOMY: Hmm. So I think—you know, as I tried to suggest, different parts of China, they are still pilot projects, right? And there is no national program yet on social credit. And even when there is a national program in 2020, apparently, there will still be regional differentiations. So you’re right, in some places people with low social credit scores or people who haven’t repaid their loans, their names have been printed up, or even there have been some billboards with their faces put on the billboards, you know, as kind of naming and shaming, sort of reminiscent of, you know, Cultural Revolution, calling people out in this way.

So, you know, how can they raise their social credit scores? Well, there was a case of somebody who tweeted something negative, and had his social credit score—you know, went far down. Couldn’t, you know, get on a plane to get out. He went to apologize before a judge. The judge told him that his apology was not sufficiently—you know, he didn’t really mean it, not sufficiently sincere. And so now he’s kind of stuck. So, you know, to tell the truth, I don’t know exactly how one begins the process of improving one’s social credit score, except by undertaking activities that are considered to be positive within whatever that region’s social credit metrics might be.

So, for example, in some places it’s been said that they’re going to use, you know, buying Chinese products as a measure to improve—you know, buy more Chinese products, and your social credit score will go up. So that might be one thing you could do to improve your social credit score. But I think place by place, it will depend on what the local officials have determined to be the metrics for measuring social credit. But generally speaking, you know, good behavior will be the way to go. Not playing too many hours of video games or other sort of negative behaviors.

FASKIANOS: Thank you. Next question.

OPERATOR: Thank you. Our next question will come from Mills College.

Q: Hi. This is Jessica Glify (sp) from Mills College. Thank you for speaking with us today.

You mentioned that China’s attempting to influence the ways and norms of the international community. NPR currently has a series called “China Unbound.” One of the things that they reported on, briefly, is that there was a book trying to be published in Australia criticizing the Chinese government. The author had a hard time publishing it. And the theory is that it has to do with President Xi’s relationship with the Australian government. Do you have any comments on China trying to influence free speech, not just in developing countries but developed countries?

ECONOMY: Sure. So that’s interesting. You may be referring to the book by Clive Hamilton on the sort of Chinese influence, where he talks a lot about Chinese influence in Australian politics. I think the reason—if it’s not that book, I don’t know. But if it is that book, I think the reason was more about the Australian publishers’ concerns over libel issues. The Australian government actually has been pretty tough when it comes to China, I have to say. And in terms of Chinese influence operations, it was really John Garnaut, who was a Chinese—who is an Australian reporter in China, and then went back and worked within the prime minister’s officer for a few years, sort of really exploring the ways in which the Chinese government is attempting to influence the Chinese diaspora in Australia, as well as Chinese media, and also potentially elected officials. So John really blew this wide open. And Australia is moving to develop some of the toughest regulations and restrictions with regard to Chinese influence operations really anywhere.

So I—you know, putting aside the NPR report, which I haven’t—I haven’t listened to—I would say that’s sort of my experience with Australia. Here too, in the United States, actually as part of a group with the Hoover Institution at Stanford and the Asia Society based in New York, we are actually tomorrow—(laughs)—we’re releasing our report. It’s a three-hundred-page book on Chinese influence in the United States. And I worked most particularly on the think tank chapter. And I can share some of that with you. So I interviewed seventeen members—sort of China expert scholars in U.S. think tanks, including, you know, CSIS and the Brookings Institution—you know, basically the major think tanks in our country—to try to understand how Chinese try to influence the thinking driving he behavior of these analysts.

And you know, my conclusion is, frankly, that there are definitely efforts underway, through things like, you know, controlling access to visas, controlling access to meetings and opportunities to collaborate with Chinese counterparts, funding opportunities from Chinese sources, many, just, you know, opportunities for think tanks to host prominent Chinese officials. For example, saying, you know, you can have the foreign minister come to speak at your think tank, but not if you have this American scholar that we don’t like in the audience, or not if you host this Taiwanese official, or have anything to do with the Dalai Lama. But my conclusion, after all of these interviews and research, is that by and large American think tank, and in particular the China think tank experts, are quite resilient, understand the sort of mechanisms and efforts by Chinese government officials to influence what they do and say, and are very good at pushing back. There are a few exceptions, and they’re noted in the chapter. But overwhelmingly, you know, our society is pretty robust and resilient, I would say.

You know, last point I’ll make on this, because of course the whole issue of Chinese influence in universities is a big one. And there is a separate chapter in the report in the book that deals with that. You know, I think there are reasons for concern, primarily around, you know, Chinese students being asked to report on other Chinese students. I think that’s not acceptable in an American university. But I think when it comes to thinks like Confucius Institutes, we ought to think about very nuanced and finely grained responses, not simply saying no Confucius Institutes. (Laughs.) But rather, perhaps, saying, you know, Confucius Institutes, thank you very much, China, for supporting Chinese language and culture training. But, by the way, you know, these institutes have to operate according to, you know, American governance principles in universities, which means, you know, that universities choose the language teachers, that they are subjected to the same kinds of, you know, tenure processes, et cetera, that any other professor would be subjected to, that the curriculum is overseen by the university.

So I think there are ways to work with the Chinese to accept their support and help, but to ensure that in no way, shape, or form, are they constraining these types of issues and ideas that American students are able to engage in in their Chinese, you know, language classes or, you know, visitors to Chinese universities, et cetera. So this is just a very narrow slice of this whole issue of Chinese influence. And, again, the report’s coming out tomorrow. (Laughs.) We’re doing a briefing in Washington tomorrow morning. And, yeah, I think you’ll be seeing a lot of reports on it in The Wall Street Journal, The Washington Post, et cetera. But for my money, it’s important to understand very, very precisely and carefully the ways in which China’s actually trying to influence the United States, and to address those, you know, issues where they, in fact, do threaten to undermine our core values and principles, like freedom of speech, but not to allow sort of these kinds of things to get blown out of proportion and to return to some kind of McCarthyite era.

Hello?

FASKIANOS: Liz, we’re out of time. But thank you very much for sharing your insights with us today, and to all of you for your excellent questions and comments. I’m sorry that we could not—we still have many on the line wanting to ask questions. And I’m sorry that we couldn’t get to you all. You can see why Liz Economy is here at the Council. I hope you take a look at her books. She also writes on CFR’s Asia program blog, Asia Unbound. And you can follow here on Twitter at @LizEconomy. So you should go there as well. So, Liz Economy, thank you very much.

ECONOMY: Thanks very much.

FASKIANOS: This concludes our fall 2018 Academic Conference Call Series. Our next call will take place in the—in 2019. We will begin on January 30 with American University President Sylvia Mathews Burwell, leading a discussion on mental health on college campuses. We will be sending out the full spring call schedule in the coming weeks. So look—keep a lookout for that. In the meantime, I also encourage you to follow us on CFR Campus on Twitter at @CFR_Campus for information on new CFR resources and upcoming events. And thank you all for your participation this semester. Good luck on your exams. And enjoy your winter break.

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