China in 2015: Year in Review

China Focus reviews 2015 ²s top stories and how they were covered here at UCSD:

Whither the New Normal Economy

The Chinese economy faced strong headwinds in 2015 and struggled to meet the lowest growth target (7%) in 15 years. In August, the stock market crash erased billions of dollars in market capitalization on ˜Black Monday' and the yuan suffered its worst one-day loss in decades (1.9%) when the central bank devalued the currency. The slowdown hit northeastern China, which depend more on coal mining and heavy industry, much harder than coastal cities, where technology and consumption are fueling a retail boom. Scholars disagree about whether or not these setbacks mark the beginning of the end for China's economic miracle or represent much needed structural reforms to usher in a new stage of development.

The most read article on this blog last year featured a debate between Victor Shih and Barry Naughton on this very topic (watch it here). After 2015, both cases still stand and the jury is still out; we encourage readers to revisit the arguments! Professor Shih can claim that he foresaw the collapse of the stock market and that defaults by heavy industry firms represent the tip of a much larger iceberg of debt. Professor Naughton has grown more concerned about the tepid pace of state-owned enterprise reform and the centralization of economic policy but still believes that policy entrepreneurs will continue to advance the reform agenda.

In April, UCSD hosted Zhang Xiaojing, director of the Chinese Academy of Social Sciences Institute of Economics for a talk China's economic strategy and the New Normal, as well as some of the barriers to continuing economic growth. While Professor Zhang is, like Victor Shih, concerned about local government debt, he argued that by only focusing on debt (the liability side of the ledger) we ignore China's assets, which will help it deal with any potential defaults.

More Money, More Problems in Foreign Policy

In 2015 China scored a number of foreign policy victories but its clashes with the United States also became more public. Robert Hormats delivered the Ellsworth Memorial Lecture, in which he discussed growing storm clouds in the U.S.-China relationship (a common theme amongst this year's speakers) but also many of the bright spots. Most notably, Hormats argues that China's recently announced One Belt One Road and its New Silk Road might help integrate the country into the global order by fostering better relations with its neighbors. As part of its One Belt, One Road initiative, Beijing established the Asian Infrastructure Investment Bank (AIIB) with the support of American allies and over Washington's initial opposition (we asked Victor Shih about his take on the AIIB, read his response here). The IMF declared that the yuan was no longer undervalued and added it to its Special Drawing Rights (SDR) basket, marking an important milestone in the internationalization of the renminbi. Xi Jinping became China's most traveled leader in 2015, taking 14 trips abroad, signing $130 billion worth of business deals, and promising billions in foreign aid.

China's growing clout in the international arena has heightened the sense of rivalry with the United States. China's island construction in the South China Sea and alleged cyber espionage became major sources of tension this year. Last minute negotiations on the eve of Xi Jinping’s state visit brought about a historic U.S.-China Cybersecurity Agreement. To make sense of this complex issue, we recommend Tai Ming Cheung and Jon Lindsay’s new Oxford University Press book on China and Cybersecurity.

As Thomas Christensen noted in his talk in November, while the U.S. and China aren't heading towards a new Cold War, their current relationship seems messier than the Cold War. The two biggest challenges facing their relationship is security and global governance. Susan Shirk argued that”China is starting to place its maritime sovereignty disputes as a higher priority than its own national security.” Orville Schell remarked the same event that, even though it’s a quaint notion that history is moving in one direction, it's difficult to see the current U.S.-China relationship moving in the right direction. One silver lining is that the problems associated with climate change might force the two countries together. 

From Laggard to Leader in Environmental Policy

China's air pollution continued to make headlines in 2015 even as Beijing garnered praise for its leadership on climate change. Dai Qing, a prominent environmental activist, visited UCSD in May to deliver a lecture on China's ongoing struggle with environmental pollution, and the institutional and policy fixes needed to address the problem moving forward. In December, Beijing issued its first red alert warnings, which halted construction, thinned traffic, closed factories, and cancelled schools in response to unhealthy levels of smog in the city. A documentary by Chai Jing went viral and launched a national conversation despite being removed from all major Chinese websites. Deborah Seligsohn thought that it was no surprise that the Chinese public was ready for such a documentary and believed that Chai more powerfully communicated a message that the Ministry of Environmental Protection (MEP) has been trying to convey for years: that coal and petroleum interests form institutional barriers to air quality standards. Others in the ChinaFile conversation about Under the Dome point out that the film signifies high-level support for environmental policy and that the Party now sees pollution as a threat to its continued rule. But it is unclear how quickly entrenched interests can be overcome and how much civil society will be allowed to play a role.

China's commitments at Paris climate change summit drive home China's ongoing transformation from ˜world's largest polluter' to leader in environmental policy. China is the world's largest coal user and carbon emitter. But, as Seligsohn points out, China has unilaterally pledged to reduce carbon intensity, expanded dependence on renewable energy, shut down or upgraded dirty industries, and cut energy intensity by nearly 20%. Further reforms such as a national cap-and-trade system for CO2 and an environmental tax will be scrutinized as barometers of Beijing's sincerity. Two U.S.-China climate agreements also played a major role in enabling the Paris climate deal to be struck in December this year. As Zhang Junjie noted, Climate change is one of the few areas that the U.S. and China can achieve successful collaboration. As the rivalry between two countries has intensified in recent years, mutually beneficial climate collaboration can be an important step stone to improve bilateral relationship. 


Debating the Rule of Law

China passed a number of important laws and repealed its controversial One-Child Policy but has been roundly criticized for its crackdown on lawyers in 2015. Critics allege that Beijing's campaign of legal reforms since the 4th plenum represent ˜rule by law' rather than ˜rule of law.' In 2015, China passed the National Security Law and Anti-Terrorism Law, which give the government sweeping powers to deal with a range of emerging threats. Foreign scholars, activists, and firms worry that the vague language in these statutes might be used to curtail exchange, quash dissent, and extort business. A draft law on cybersecurity has garnered similar concerns. Meanwhile the Environmental Protection and Domestic Violence Laws have generally earned praise.

But as Jerome Cohen, widely considered to be the preeminent scholar of Chinese law in the United States, noted in his February lecture: repression has increased, law is the instrument of this repression, and police action take place against individuals with no legal authorization. This was evident when over one hundred human rights lawyers were detained or went missing in July as part of a crackdown on the weiquan movement. This was seen again in the mistreatment of foreign diplomats and journalists at the trial of Pu Zhiqiang in December. But perhaps most starkly it is reflected in the ongoing anti-corruption campaign dragged in some of its wealthiest businessmen into its clutches: Guo Guangchang of Fosun, Chen Boming of CITIC, Jiang Jiemin of CNPC, and Chang Xiaobing of China Telecom.

Also visiting UCSD this spring was, Wang Zhiqiang, one of China’s top legal scholars from Fudan University. In the wake of the 3rd Plenum's decision to implement 依法治国 , or to rule the country by law,  Wang argues that this is part of a slow move towards implementing a rule-based system of governance. Yet Wang admitted that there was a tension between the CCP's belief that it rests above the law and the goal of implementing rule of law  throughout the entire country.

Despite the intimate connection Professor Cohen has with many who have ended up on the wrong side of the law, he remains optimistic that the situation can improve. A self-described traveling salesman for the rule of law in China who doesn't make many sales , he likes to recite the poem by Alexander Pope, Hope springs eternal in the human breast.  He is not as fond of the next line, however, Man never is, but always to be blessed. 

The 21st Century China Program

The 21st Century China Program at the UC San Diego School of Global Policy and Strategy (GPS) enters 2016 with a new video, new logo, and a slew of upcoming events. We bid farewell to Assistant Director Jude Blanchette, who is starting a new job at the Conference Board in Beijing, and to Professor Fan Lizhu, who has returned to Fudan University after serving at the first Managing Associate Director of Fudan-UC Center on Contemporary China. We also welcome to UCSD new assistant professors Xu Yiqing and Shi Weiyi!

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Jack Zhang

Jiakun Jack Zhang is Assistant Professor of Political Science at the University of Kansas (KU). He received his Ph.D. from the Department of Political Science at UC San Diego. His dissertation examines when and why economically interdependent countries use military versus economic coercion in foreign policy disputes. In 2018-2019, he was a postdoctoral research fellow in the Niehaus Center for Globalization and Governance at Princeton University. Jack holds a bachelor's degree in political science and a certificate in East Asian studies from Duke University, where he served as the Editor-in-Chief of Duke East Asia Nexus and was a co-founder of the Duke-UNC China Leadership Summit. At UC San Diego, he served as the senior advisor to the 21st Century China Center’s China Focus Blog. Prior to coming to UC San Diego, Jack worked as a China researcher for the Eurasia Group in Washington, DC. Follow him on Twitter @HanFeiTzu.

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