Cui Tiankai, China’s former ambassador to the U.S. made a public appearance on December 20, 2021, in Beijing. It was his first public comments since leaving his U.S. ambassadorial post and returning to China. Additionally, this image shows Ambassador Cui more recently sitting down with Ian Goodrum for a moderated interview on January 10, 2022 with the ChinaDaily.
During Cui Tiankai’s earlier December speech* he stressed that:
Since the purpose of the struggle [between the U.S. and China] is to protect the interests of the people and the overall strategy, then during the struggle, [we] should reduce the cost and influence to our interests and grand strategy as much as possible. In principle, [we] don’t fight unprepared wars; don’t fight wars that we are not confident with; don’t fight wars due to anger; don’t fight wars of attrition. The people worked very hard for their prosperity; we absolutely cannot have anyone take that away. Also, we absolutely cannot lose it due to our own carelessness, slack, and incompetence.
Moreover, Cui Tiankai claimed that:
The status-quo of U.S.-China relations will continue, the U.S. would not accept the rise of another major power of a different political system, ideology, culture, and even race.
In terms of America’s China policy, there is a strong factor of racism. Some people mention it, but some people don’t. The U.S. will inevitably do whatever it takes and everything it can to suppress, contain, separate, and surround to overwhelm China even without a bottom line. To this effect, we need to have a clear mind and full preparedness to confront a future unstable, difficult, and even roller-coaster-like future of U.S.-China relations.
These views are sobering to say the least.
Cui Tiankai remains a close ally to Xi Jinping, and his experience in the U.S. makes him perhaps the most competent person among China’s senior officials in understanding the U.S. from China’s perspective. Katsuji Nakazawa in an article for the Nikkei Asia explains that Cui Tiankai’s speech aimed to modestly warn Xi Jinping not to engage in unnecessary conflicts with the U.S. and divert China’s current ‘Wolf Warrior Diplomacy” (WWD) and hardline foreign policy towards the U.S. However, Ambassador Cui’s remark could also have served as a wake-up call for top leaders to accept that China may not be in an optimal position to engage in further conflicts.
Implications
At this point, the accusation of racism and the bullish behavior by the U.S. have become a standard practice for some Chinese leaders’ public remarks. Cui Tiankai in his January interview reflected this view in a response to the interviewer:
But as for American policies toward China, you could see some of them, politicians, some of the think tanks or even media people. They are not ready to face a growing and developing China because China belongs to a very different civilization.
So, you can really have a sense of such racist elements in the policy. Remember what happened in the last few years during the previous administration, such hate crimes against not only Chinese but also Asians.
Yet the more important aspect of Ambassador Cui’s remarks reflect, his warnings about not engaging in unnecessary wars with the U.S. It may be more familiar, or usual, to think of kinetic conflict when employing the word “war”, but under the Chinese context, the word “war” is applied to a variety of topics. For instance, the trade tension between the U.S. and China is referred to as “trade war” (贸易战). During the COVID-19 pandemic, a book named the A Great Country’s Battle Against the Epidemic (大国战“疫”) ( 王 佳宁. “《大国战‘疫’》近期出版.” 《大国战”疫”》近期出版-新华网, February 26, 2020. http://www.xinhuanet.com/2020-02/26/c_1125627516.htm)** was published under the supervision of several government agencies and press. In domestic affairs, President Xi declared “‘people’s war on terror’ to combat separatism, terrorism, and religious extremism” in Xinjiang, as noted by China expert Tony Saich in his most recent book on the Chinese Communist Party***. Simply put, these terms draw some parallel to terms such as “war on drugs”, where it involves some level of government operation, but it should not be interpreted as classic ‘kinetic armed conflict’. Under this context, Cui Tiankai’s meaning of ‘war’ may be interpreted in some instances as conventional conflict, but equally it may in other circumstances be understood as unconventional conflict such as a “trade war”.
The four types of wars – unprepared war, unconfident war, war due to anger, war of attrition, mentioned by Cui Tiankai, may not have clear boundaries among each other, the characteristics of each type of war may overlap with another. Cui Tiankai’s remarks, however, could have implications in interpreting major issues between China and the U.S. The more important part of Cui Tiankai’s remark is on his warning about not engaging in wars with the U.S. From Ambassador Cui’s December remarks, the short answer is, yes. But, it is imperative to better understand how the Communist Party of China (CPC) views conflicts and what these conflicts mean for China’s top leader President Xi.
The Culture of War and Conflict within the CPC
The CPC is the single ruling party of China, and it has an ‘appetite’ for words such as “conflict”, “struggle”, and “war”. Literature such as How the Red Sun Rose by Gao Hua (2019)**** and From Rebel to Ruler (2021) by Tony Saich provide extensive examination of the CPC’s state of mind and way of governance before and after the foundation of the People’s Republic of China. Kerry Brown, Professor of Chinese Studies and Director of the Lau China Institute at King’s College, London explains that especially in recent years, the non-public sector in China has played a significant role in China’s development, and the Party has relied upon these sectors for growth whereas these sectors do not require the presence of the party^. In this case, creating and engaging in “wars” and conflicts remain one of the few feasible ways for the Party to maintain its legitimacy. To do so, Saich (2021, 13) explains:
Thus, when mistakes are made, blame must lie either with members of the party following the incorrect political line and leading party members astray, or with “outsiders”, especially foreigners, meddling in party affairs. This results in a particular form of political struggle featuring the use of accusatory language that has moved beyond even that of the Communist Party of the Soviet Union under Stalin.
In other words, the Central Government is never to be questioned. From the CPC’s point of view, all problems come from incompetent local officials (who might not share the same view as the dominant CPC factions) and/or foreign actors that have malicious intention to hinder China’s growth. With such a reasoning, the CPC rightfully stands for the people and fights against those in the way. This “fight” could take the form of simply removing an official from office through strong accusatory statements at diplomatic events and retaliatory actions such as extra tariffs and military expansions.
President Xi’s Agenda
After taking office, President Xi has created an ambitious goal not only for himself but also for the whole nation. “The China Dream”(中国梦), “national rejuvenation” (民族复兴), and “a community of shared future/fate for mankind” (人类命运共同体) became popular catchphrases under Xi’s rule. These catchphrases commit to a prosperous and respected future for China and the world. Nevertheless, it does not appear to be in President Xi’s interest to take a pacifist approach to achieve “the China Dream” and “National Rejuvenation”. In The Long Game (2021), Rush Doshi^^ explains that President Xi inherited the belief of a declining West and a rising East from the CPC after the 2008 global financial crisis. Moreover, President Xi sees this opportunity as “great changes unseen in a Century” for China to overtake the West even if there will be many challenges. China’s increasingly assertive military, WWD, and economic behavior despite international pressure are signs that President Xi’s agenda is being put into practice.
It is Now or Never
As aforementioned, even if there will be many hardships and setbacks along the way, CPC leaders believe that now it’s the time to press forward. As COVID-19 pandemic brings many countries’ normal operations to a halt, China still benefited from low case counts due to draconian lockdown measures and strict border controls. Even with the global pandemic and supply chain issues, China has broken its record for trade surplus, and its trade volume seemingly will increase in 2021. As major countries continue to increase their import from China, this continued reliance would only grant China more leverage in negotiations. From the CPC top leader’s point of view, China may be in peak condition to out compete its adversaries. Ambassador’s Cui warning for some could appear to be trivial.
An ‘aerial view’ of China’s current standing exhibits promising results in relatively low COVID cases and record-breaking trade surplus in an export driven economy. The progress made is a result of the contribution of China’s 1.4 billion population. However, the underlying social economic issues at a grass root level are emerging. Engaging in any kind of war at this point may not be an optimal choice.
The Reality
The actual social and economic climate in China, in fact, may not be suitable for engaging in long term and unnecessary conflicts.
Aging Population
China’s aging population and low birthrate has prompted the government to abolish the infamous “one-child” policy. Instead, the government is now promoting a “three-child” policy to encourage citizens to have more children. Nevertheless, and unfortunately for the government, the public response to this policy change has been underwhelming. Especially for the younger generation, many experienced difficulties finding employment after graduation. For those who could find a job, many suffered from a toxic work culture and long working hours widely known as 996 (a common phrase for work intensity where the worker starts working at 9AM, finishes at 9PM, 6 days a week). Unaffordable housing and fierce competition in major cities have led to the creation of a new popular phrase among Chinese youngsters “lie flat” (躺平, tang ping), which promotes a low demand and low desire lifestyle. CNBC reports that the unemployment rate for youth in China is as high as 13.1 percent. In comparison. youth unemployment rate in the U.S. was 10 percent in July 2021. None of these conditions are optimal for the middle class to grow or encourage younger people to form new families.
As a countermeasure to low birth rate, economist Ren Zeping proposed China’s Central Bank to increase money supply by 2 trillion yuan to create inflation and social welfare to families with children. However, this comment was met by criticism as many complained that “…inflation is an alternative form of taxation for the people… and people have grown tired of hearing about inflation”. Social welfare programs such as cash transfer may be welcomed by some families, but in the Chinese-context, more people are concerned about buying an affordable home, which social welfare isn’t likely to make a significant difference. The size of China’s middle class has been growing rapidly, but the market and future environment does not appear to be very bright for the middle class due to unaffordable housing and increasing cost of living. Aging population and low birth rate could only worsen the problem as fewer people will join this cohort.
Debt Problems
Besides high youth unemployment rate and low birth rate, many Chinese businesses suffer severe debt problems. Most notably, the Chinese real estate development firm Evergrande Group has accumulated debts of over USD$300 billion, the most indebted developer it would seem, in the world. Besides the Evergrande Group, many other Chinese developers also suffer from their inability to repay debt.
The debt problems of these developers have a domino effect on many others in China. For instance, significant debt problems make it impossible for the companies to pay construction workers their wages. As construction workers are not being paid, many on-going projects are forced to stop. Therefore, new homeowners are unable to utilize their new property. Some fear that these debt problems will result in anger and protest from construction workers, homebuyers, creditors, etc,. The most vulnerable population here are the workers and the middle class. Low-income families are unlikely to afford a new home and high-income families either already have or could afford multiple new properties from a more reliable developer. In Middle Class Shanghai, Cheng Li^^^ offers an extensive review of the role of the middle class especially in Shanghai. Further, Li frames the country’s middle class as “a wild card” in terms of foreign relations. As the Chinese middle class becomes the most vulnerable population in the debt crisis and aging population, the middle class would eventually shrink. If that occurs, a shrinking middle class may no longer be able to generate a great demand for consumption and long-term economic growth.
Business Crackdown
Private Tutors and Gaming Industries
China’s education sector is extremely competitive. This fierce competition allowed many private tutoring firms to thrive. According to the UK newspaper the Guardian, some Chinese families spend a significant portion of their annual income on private tutoring to improve their child’s performance at school. However, the government banned “…for-profit companies from tutoring in core curriculum subjects, and foreign investment in such companies. No new licences would be issued and all existing outfits must register as non-profits…” On the other hand, the government also imposed draconian measures on online gaming by limiting under 18 players to play a maximum of 3 hours playtime per week during specific time of the day. The government imposed such restrictions in the name of curbing online addiction. According to Reuters, in 2021, China’s gaming industry outcompetes the U.S. and represents a revenue of $USD45.6 billion. Both crackdowns that took place in the name of protecting the interest of the youth in China will inevitably lead to economic damage. However, the effect may not be as positive as parents and children could find ways to circumvent these new rules.
Foreign Businesses and the Private Sector
It is not a secret that many foreign businesses are departing China due to growing costs and increased government regulations. Especially for multinational technology companies, these firms are finding the business environment in China increasingly difficult and less rewarding. China’s export sector seems to be robust enough to keep its economic growth, but its growth is decelerating. Local small businesses are also finding it challenging to survive due to frequent lockdowns and a shift to online shopping during the pandemic. Intuitively, as many activities shift to online during the pandemic, technology companies are likely to experience growth. However, up to 19 large technology firms in China experienced layoffs. News media criticized these large companies for irrational growth in early years and praised the massive layoffs as a transformation into an era of rational business behavior. However, increased government regulations and the government crackdown on certain businesses would inevitably bring a negative impact to these firms. For the foreign businesses, they could choose to leave China, but for domestic businesses, laying off staff may be the only option to survive given reduced revenue.
Simply put, sudden change in the regulations create a great uncertainty for both domestic and foreign firms in China. While risks could be assessed through historic data and local knowledge, few could predict what is in the mind of top CPC leaders. As uncertainty of doing business becomes greater, many businesses may choose to relocate elsewhere.
Why Do They Matter
Every country has its underlying social and economic problems, and so does China. The progress that China has made would not have been possible without its working middle class. However, major problems such as aging population, debt problems, and crackdown on businesses have adverse effects on the middle class seemingly the most. These issues exhibit that the power of the middle class could be waning in the future. A shrinking and diminishing middle class would not bring China more prosperity. If the CPC leaders irrationally choose “war”, the wars due to anger will only accelerate the weakening of the middle class in the long run. A war of attrition could drive more foreign businesses to leave China and choose other countries and leave domestic consumers very limited options. Overtime, it could make China a less competitive market for foreign investors.
In a sense, Ambassador Cui could have meant that the Chinese people are not prepared and not confident with “war” just because of the anger of a few CPC officials. Cui Tiankai as the longest serving ambassador to the U.S. might understand the social and political environment in the U.S. better than any other senior CPC officials. As the growing middle class in China continues to exhibit similarities to the middle class in the U.S., some problems with the middle class in the U.S. may also turn out to be problems in China. Choosing “war” over other options could bring many setbacks to Xi’s agenda, the goal of “national rejuvenation”, and China’s international commitment as a whole.
Citation
*There was no complete English translation Cui Tiankai’s December remarks. The source was from the following: 王 二丫. “崔天凯：原则上，不打无准备、无把握的赌气仗、消耗仗 .” 搜狐, December 22, 2021. https://www.sohu.com/a/510707915_120099890.
**The actual Chinese character for battle or operation would be “zhan yi” (战役). Since both characters “役” and “疫” share the same pronunciation, the latter character which also represents epidemic was used to replace the original character.
***Saich, Tony. 2021. From rebel to ruler: One hundred years of the Chinese Communist Party. Cambridge, MA: The Belknap Press of Harvard University Press, 2021.
****Gao Hua. 2019. How the red sun rose: Development of the Yan’an rectification movement, 1930-1945. Hong Kong: The Chinese University Hong Kong Press.
^Brown, Kerry. 2018. The World according to Xi: Everything you need to know about new China. London, New York, Oxford ; New Delhi ; Sydney: I. B. Tauris et Co. Ltd, (2018): 63.
^^Doshi, Rush. 2021. The long game: China’s grand strategy to displace American order. NY: Oxford University Press.
^^^Li, Cheng. 2021. Middle Class Shanghai: Reshaping US-China engagement Washington: Brookings Institution Press.
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