China’s Got Its Own Swamp

(Bloomberg Opinion) -- Beyond retaliating with more tariffs and ads in Iowa newspapers, Chinese leaders have yet to devise a coherent strategy for contending with U.S. President Donald Trump’s escalating trade war. Perhaps they can’t figure out what his divided and erratic administration actually wants. Or maybe they’re so dead set on pursuing their own economic agenda that they just don’t care.

There may be another factor, too:  President Xi Jinping and his closest allies appear to be more isolated than their predecessors, and that may have left them out-of-touch with what’s really happening in other countries, including the U.S. That may be leading them to misread warning signs and stumble into policy missteps, serious enough to threaten China’s larger diplomatic agenda.

Americans know all too well how such mistakes can happen. They’ve coined the term “inside the Beltway” to describe how a self-absorbed Washington can become dangerously disconnected from the outside world. Just look at the disastrous consequences of U.S. support of Iran’s Shah, or its miscalculated invasion of Iraq -- both the result of horrible misunderstandings of reality on the ground.

In China, the political elite are similarly trapped inside the “ring roads,” the thoroughfares that enclose the sprawling capital. They appear to have been caught off guard by the severity of Trump’s trade war: The scant offers Beijing made earlier this year to stave off tariffs showed how little appreciation Chinese policymakers have of the growing ire among its trading partners.

Nor do they seem to have any plan to reverse the escalating resistance to Xi’s most high-profile international initiative, the infrastructure-building Belt and Road program. Xi characterizes the scheme as a selfless quest for peace and development. By contrast, Malaysian Prime Minister Mahathir Mohamad, wary of the intentions of the Chinese program, warned recently of “a new colonialism.”

It’s not hard to figure out how Xi got himself into this mess. When paramount leader Deng Xiaoping toured the U.S. in 1979, he hung out at a Texas rodeo, chomped on barbecue and endured assorted mispronunciations of his name. It’s impossible to imagine Xi similarly cavorting with foreigners. On the rare occasions Wang Qishan, China’s vice president and a top Xi adviser, has emerged from hiding to meet foreign business and government leaders, he’s often done more lecturing than listening and, according to the Financial Times, struck his guests as somewhat oblivious to the darkening attitude in America towards the Middle Kingdom.

China’s Communists have never been the most accessible bunch. But, when capitalist reform began in the 1980s, they actively sought out foreign ideas and advice as they strove to remake their moribund economy. Now Chinese leaders, made (rightfully) confident by their own success over the past four decades, are more and more charting their own course. As Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies in Washington, D.C., notes: “China’s current leaders now seem to think China has all the answers and that foreign experiences offer less of a guide than in the past.”

Adding to the problem is an ever-more stifling political environment. While the authoritarian Chinese state never fostered free thinking, Deng did at least encourage Party members to “emancipate the mind” and devise new ideas to help the nation. Xi has instead imposed a climate that demands greater ideological conformity and personal loyalty.

His dismissal of term limits means that subordinates have every incentive to tell him what he wants to hear. As Bloomberg News recently reported, officials at one ministry spent countless hours compiling documentation to prove they’ve been faithfully following Party guidance. Such an atmosphere certainly doesn’t incentivize mid-level officials to challenge policy orthodoxy, suggest alternatives or bear bad news.

The point isn’t that Chinese leaders should do what foreigners say. It’s that an insulated leadership will struggle to achieve its superpower ambitions. That’s most definitely one lesson Beijing can learn from Washington, where an often-arrogant foreign policy, immune to outside criticism, has gotten the U.S. into all sorts of avoidable quagmires. If Xi and his comrades don’t venture outside the ring roads more, they’ll never escape their troubles.

To contact the editor responsible for this story: Nisid Hajari at nhajari@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Michael Schuman, who is based in Beijing, is the author of "The Miracle: The Epic Story of Asia's Quest for Wealth" and "Confucius and the World He Created."

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