China Challenges

There is general agreement that Xi Jinping is an excellent negotiator and thus a very good businessman. Certainly, this is the way President Donald Trump has characterized him. If that characterization is accepted, the current crisis involving Hong Kong is clearly not understandable. The attempt unilaterally to alter the agreement reached with Great Britain regarding Hong Kong carries all the elements of a “deal breaker” for the several important trade projects being discussed at the highest levels of the U.S. and China. How can this occur with a supposedly carefully controlled political economy that is the People’s Republic of China (PRC)?

The answer lies in the fact that Xi Jinping really does not sit on top of an administration that is in the total central control envisioned and practiced by Mao Zedong.  On the one hand, such an evolution may seem to carry the seeds of an emerging democratic movement. Unfortunately, this would be an incorrect observation. What is really occurring is the growth of a movement against the leadership of Xi who is viewed in some circles in the PRC as too willing to accede to U.S. interests in general and the machinations of President Donald Trump in particular.

It long has been accepted that there were elements in the Chinese Communist Party that saw the maintenance of Washington and the United States as a permanent adversary on both a political and economic basis. Xi has been successful, so far, in warding off the efforts of the far left – or right – influencing how one views the situation. Ultimately, history indicates that totalitarian regimes of all hues need to have a continuing enemy on which to focus attention in order to maintain political psychological control over their populace.

The fact is that the fifty-year agreement with Great Britain along the lines of “two systems, one country” sounded good but was always vulnerable. The strongest element in the agreement was the economic benefit to China to have a free trade instrument available for Beijing's use as desired. It also was an excellent device for launching foreign intelligence operations for China's external security services. Often these also worked well in reverse for the Western world. Theoretically, it was a win-win situation for all concerned. However, the perception has grown recently in some politically strong circles in the PRC that China was giving up more than it was getting.

The latter situation may have been bound to happen in view of the Chinese Communist Party’s aim to dominate the entire region in one form or another. It's just that this ambition was seen as under attack by Xi Jinping's willingness to engage on an increasingly friendly basis with Washington - justified by the vast financial advantage gained in trade with the U.S. And here is where the problem lies. The opposition forces to Xi needed an issue to divide the Xi/Trump entente. Regaining control over Hong Kong beginning with the new repatriation of “criminals” for legal processing in China was a perfect device. Importantly, the authorities in Shenzhen, Guangdong Province were more than willing to get involved.

The natural reaction of masses of Hong Kong's populace may have been useful for the Chinese hardliners. The question now exists whether Xi can and will secure enough to move against his own party's hardline faithful. One thing is sure. He needs outside help to make this happen. Washington and Donald Trump's holding fire so far has been a help. How long that can last is the question!