Opinion

Mark Leonard

China’s technology revolution

Mark Leonard
Sep 27, 2012 16:32 UTC

It was a blood bath. A methanol tanker crashed into a bus, killing 36 people and injuring more near the Chinese city of Xian on Aug. 26. Soon after the accident, a photograph appeared online of Yang Dacai, the local official in charge of road safety, smirking at the scene of the crash. The photo prompted a flood of Internet anger. The comments of netizens soon moved from the official’s demeanor to the value of the watch on his wrist. Bloggers managed to unearth pictures of Dacai wearing 11 different luxury watches, together worth many times his official salary. Last Friday, the Chinese media reported that Dacai had been sacked after an investigation into corruption.

Yang Dacai is just the latest focus of an electronic herd whose activism and anger appear in sharp contrast to the staid and controlled official politics in China. The regularity with which these scandals erupt helps explain why an opinion poll in China 18 months ago revealed that 70 percent of senior Chinese officials live in a state of “Internet terror.”

Over the last few years, officials at all levels of government in China have fallen prey to electronic vigilantes who have exposed corruption by looking at the value of officials’ possessions or the misdemeanors of their relatives. This is what makes the effect of the Internet on Chinese politics so paradoxical: It could seriously lengthen the life of China’s one-party state. In much the same way that the market has saved the country’s Communist Party, China’s state-controlled Internet could save its leadership.

Deng Xiaoping, one of the reformers of the Communist Party in China, feared the destructive power of unfettered markets. He envisioned “socialism with Chinese characteristics” as an incremental attempt to harness the power of the market while maintaining control of the commanding heights of the economy. Although officials live in terror of the Internet, the party has developed a sophisticated approach that gives citizens a chance to air their views even as it retains control of the servers.

The Internet reaches 538 million people in China, and approximately half of them are on Sina Weibo, which is often called China’s Twitter. Sina Weibo seems to operate as a public sphere where netizens exchange news and views on a range of issues far too sensitive to be covered by the China mainstream media (as the case of Yang Dacai makes clear). Although it is possible to air grievances against party officials and policies on the network, China’s Internet is only a semi-free environment.

The great Sino-American divorce

Mark Leonard
Aug 23, 2012 19:54 UTC

All breakups are tough. But the divorces we have learned to fear the most are protracted, conflict-prone and ultimately unresolved. All the signs are that China and America are in the middle of one of these messy divorces between abusive couples who hate and need one another at the same time. As Washington and Beijing prepare for new political leaderships, they cannot avoid a major renegotiation of the terms of their relationship.

Since the global financial crisis in 2008, we have been living through the slow and painful end of Chimerica — the period when the American and Chinese economies acted as one. It drove one of the longest periods of global growth and prosperity in history. This perfect symbiotic relationship — popularized by the historian Niall Ferguson — was based on China saving half of its GDP while America borrowed the money to finance a spending binge it could not afford. The romance ended in September 2008 with the collapse of Lehman Brothers. Now the terms of the separation between the two nations risk awkward discomfort for the rest of the world.

On a recent visit to Beijing, I was struck by the near-universal assumption that American demand will not return to pre-2008 levels. This has led to a lively debate about how to reorient China’s economy. On the one hand, China is hedging against the dollar by investing in companies and assets outside the U.S. On the other hand, Beijing is bracing itself for slower growth, while looking for substitutes for exports and fixed investment.

China’s affluence crisis

Mark Leonard
Jul 31, 2012 15:40 UTC

For most of the last 30 years China’s leaders have been kept awake at night worrying about their country’s poverty. But as the country approaches its once-in-a decade leadership transition this fall, it is China’s affluence, rather than its poverty, that is causing sleepless nights.

Deng Xiaoping declared in 1979 that the goal of China’s modernization was the creation of a “Xiaokang (moderately well-off) society, where citizens would be comfortable enough to lift their eyes above the daily struggles of subsistence. For more than a decade, Chinese people have been living a version of this once-utopian concept.

On a recent trip to the prosperous Guangdong province on the Pearl River Delta I was struck by the sophistication and wealth of China’s urban experience – but also by the fragility of the social compact on which it is founded. The country’s economic growth “slowed” to 7.6 percent in the second quarter (the weakest quarter since 2009, when 20 million Chinese lost their jobs as a result of the global financial crisis). Only last week, Premier Wen Jiabao warned of tough economic times ahead.

Terminating the European status quo

Mark Leonard
Jul 5, 2012 19:02 UTC

VIENNA — When Arnold Schwarzenegger declared “I’ll be back” at the end of the first Terminator film, very few thought he was talking about returning to Austria. Yet here in Vienna, where Schwarzenegger made a surprise trip this week, there is speculation that his political career will be resurrected – Lazarus-like – in his abandoned homeland. And if he does take the leap, the Terminator could find himself playing a walk-on part in the most grandiose story of his career: the breakdown of the postwar European political order.

The talk is that Schwarzenegger could be one of the most visible faces supporting a putative new “Alliance for Austria” party that is being planned. The man behind it is the expatriate self-made billionaire Frank Stronach, who has pledged to launch a revolution in this placid corner of Central Europe. Last month he released a glossy eight-page personal manifesto that starts with the memorable phrase “unhappily, government is made up of politicians.” Pledging to rectify this anomaly, he talks about instituting lotteries that will allow ordinary people to suggest topics for parliament to debate, introducing a flat tax, and scrapping all corporate taxation for companies that invest in Austria.

According to the Austrian magazine News, Stronach has not yet decided whether to launch a brand-new party or effectively to buy the existing BZO party (a more moderate breakaway from the neo-fascist Freedom Party) by making a big enough donation. Apparently the former would cost 20 million euros, while the latter would be cheaper at 7 million. Stronach hopes to capture up to 20 percent of the vote, which would be the biggest political upset to hit this country since Jörg Haider’s party won a shock victory in the 1999 general election.

Europe will leave G20 with a unilateral future

Mark Leonard
Jun 20, 2012 21:08 UTC

It may have been championed by European leaders such as Gordon Brown and Nicolas Sarkozy, but the G20 is increasingly seen as a disaster for Europe’s vision of global order. “We are not coming here to take lessons on democracy or on how to handle the economy,” said EU Commission President José Manuel Barroso ahead of the G20 meeting in Los Cabos, Mexico, where the euro zone crisis was expected to play a central part in discussions.

But after years of being on the receiving end of lectures from Europeans about how to run their affairs, the leaders of the world’s largest economies, including the “BRICS” nations (Brazil, India, Russia, China and now also South Africa) are seizing the chance to return the favor.

The EU’s lack of solidarity in the face of the debt crisis has squandered its moral high ground and engineered the region’s marginalization. Europeans are strongly in favor of global governance when it is a process they inflict on others, but they are not so keen when others comment on Europe’s affairs.

from The Great Debate:

The dark flip side of European technocracy

Mark Leonard
May 31, 2012 16:23 UTC

How many countries will Germany need to bail out before it has erased the guilt of the Holocaust? That is the provocative question posed by Thilo Sarrazin, a publicity-hungry maverick whose 2010 book attacking immigration shattered Germany’s political consensus and sold more than 1 million copies. Last week he returned to the scene of the crime with a new book called Why Europe Doesn't Need the Euro. In a much-quoted passage, he says supporters of eurobonds are driven “by that very German reflex according to which atonement for the holocaust and the world wars will never be complete until we have delivered our entire public interest, and even our money, into European hands.” This title has raced to the top of best-seller lists and sent jittery markets into panic. Sarrazin is a narcissist who is more interested in self-promotion than serious analysis. But his views on Europe – as well as the political class’s reaction to them – tell us a lot about how the euro’s political travails have come about, as well as how they are likely to unfold.

An opinion poll last week provides just the latest proof that Sarrazin has his finger on the national pulse: Over half of Germans think their country has suffered by joining the euro, while 79 percent reject eurobonds as a solution to the crisis. Sarrazin – a former regional politician and Bundesbank governor who was stripped of his official positions because of his views on immigration – is not a man to do things by halves. His book breaks not one but two German taboos by linking Holocaust guilt with questions about the sustainability of the euro. (It is designed to be a refutation of Angela Merkel's argument that the breakup of the euro would lead to the breakup of the EU.) But although – or rather because – Sarrazin is so good at mirroring public opinion, the German political establishment is falling over itself to bury his arguments: Peer Steinbrueck, the former finance minister (and possible candidate for chancellor), described it as “bullshit”; while the current finance minister, Wolfgang Schaueble, described it as "appalling nonsense."

The antics of Thilo Sarrazin are a product of the constrained, elitist nature of German politics where – after the experience of National Socialism – many topics are declared outside the realm of political competition. As a result, all mainstream parties are in favor of Europe, the euro and the Atlantic alliance, and against war, inflation and nationalism. The result is a restricted political sphere where politicians have often been able to act against public opinion without fear of challenge – including the decision to replace the über-popular Deutschmark with the strikingly unpopular euro. But those who dare cross the threshold of political correctness – as Sarrazin has repeatedly done – tap into a vast reservoir of pent-up popular frustration. And because the establishment cartel turns them into outcasts rather than arguing with their views, this reservoir continues to grow.

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