2018: year of the backlash?

China’s first bullet trains left Beijing for Tianjin in December 2007 and most domestic media at the time focused on its role serving the capital’s 2008 Olympiad. But it was actually the start of something more profoundly far-reaching. This week the China Daily reported that a record 1.71 billion trips were made on bullet trains in 2017.

China’s high-speed rail system serves as a metaphor for the country on multiple levels. In just over a decade, the construction of a bullet train network covering 25,000km has demonstrated China’s unrivalled ability to build transformational infrastructure on a vast scale and at rapid pace. The Chinese network now accounts for over two-thirds of the high-speed track in commercial service worldwide.

At another level it reveals insights into Beijing’s long-term industrial policy. Through the lure of its giant market, China’s rail bosses were able to absorb key technologies from both Europe and Japan – places where high-speed trains had been used for decades. As these trainmakers salivated over the business opportunities they agreed to partner with local firms in China.

It didn’t quite work out how they expected: thanks to China’s bold network build-out and ambitions to move up the value curve, the nation’s railway engineers learned fast and had soon produced a faster generation of their own trains.

Known as the Fuxing class (it means ‘rejuvenation’), the new streamlined bullet technology is said by state-owned trainmaker CRRC to be “84% Chinese in design and parts” with a lifespan a decade longer than earlier trains and with 17% better energy efficiency at its average speed of 350km/h (the top speed is 400km/h).

On another level the nation’s new high-tech train system says something about China’s accessibility to foreigners. Naturally enough, the network has been built with the country’s 1.4 billion citizens in mind, and not the 0.000001% of foreigners now seeking to travel on it. For locals it is astoundingly efficient to use, with online ticket purchasing, machines at stations which speedily deliver boarding passes after scanning ID cards, and security gates that use facial recognition systems. On the flip side, non-Chinese still need to navigate chaotic ticket halls to pick up their boarding passes, they have to show their passports to railway officials, and then figure out how to get through security with very little guidance. It is a messy process and prohibitively difficult for anyone who does not speak or read Chinese.

As such the system is not foreigner friendly, albeit WiC suspects this is inadvertent (the needs of huge local passenger volumes and higher security explain the design). Still, it does mark a contrast to the 1990s when China sought enthusiastically to lure foreigners with their much needed capital and ideas. Now – as officials from the EU have repeatedly reiterated in the past couple of years – the Chinese seem to value foreign input less. Indeed, Brussels and Washington both worry that European and American firms face an unlevel playing field in the Chinese market versus homegrown competitors.

Lastly the bullet trains speak to another area of China’s interaction with the wider world, namely the country’s signature overseas policy: the Belt and Road Initiative.

A key part of this massive $1 trillion spending plan – which seeks to better connect China with markets in Asia, Europe, the Middle East and Africa – are Chinese financed railway lines, a host of which are either in the works or planned for the future. In many cases they have run into political concerns that reflect on the rise of China as a superpower. For instance, the EU has opened an investigation into whether a high-speed line that connects Serbia’s Belgrade with Hungary’s Budapest has violated EU procurement laws, even though both countries have already agreed a deal with China to build it.

A possible subtext to that investigation is concern about China’s cultivation of a bloc of 16 Central and Eastern European countries, which Beijing has wooed with investment. Some Western European governments fear this is bloc is an attempt to divide EU decisionmaking and give Beijing a backdoor veto over areas where Chinese interests might be compromised.

Likewise, it is instructive to look at where proposals for Chinese high-speed rail have been rejected – most notably India’s decision this year to opt for a Japanese-built bullet train over a Chinese one. The move (again) was seen in many quarters as geopolitical: a sign of both India and Japan moving to curb China’s new reach.

Indeed, the recent newsflow seems to suggest that China is facing a wider backlash as international governments – from Australia to America – seek to check its increasing political, economic and military might.

Western media and Chinese netizens have taken very divergent views on this touchy subject, with the latter angrily describing the ‘backlash’ as yet another case of China-bashing by foreigners.

What backlash?

In recent years Australia has becoming more dependent on China as its biggest export market for everything from iron ore and wine to education and tourism. It also has a sizeable ethnic Chinese population, and for some time there have been local media stories about the country’s political system being infiltrated by pro-Beijing lobbyists.

Last month the topic became a source of serious friction between the two nations with the resignation of an Australian senator. The issue at stake was a recording in which politician Sam Dastyari urged Australia to “respect” Beijing’s territorial claims in the South China Sea. Complicating matters was the senator’s relationship with Huang Xiangbo, a Chinese businessman who moved to Australia in 2011 and set up a think tank. Dastyari’s South China Sea ‘position’ contradicted both his own Labor Party’s stance as well as the government’s, so the optics did not look good and last month he stepped down from office.

In the row’s wake the government released draft laws that will seek to ban foreign political donations and force lobbyists to reveal when they are working for overseas bodies. In announcing the move Prime Minister Malcolm Turnbull – with no little irony – paraphrased Chairman Mao Zedong. “The Australian people have stood up,” he declared (in Mandarin, no less) invoking the Chinese leader’s 1949 proclamation that threw off the shackles of colonialism and foreign influence. In defence of the new measures, Turnbull added that there had been “disturbing reports about Chinese influence” in Australian politics.

None of this pleased the Chinese embassy, which cautioned Australian officials about “irresponsible remarks” and lashed out at the local media’s reporting of the topic.

The embassy noted that some articles “were made up out of thin air and filled with Cold War mentality and ideological bias, reflecting a typical anti-China hysteria and paranoid [sic]”. (In a subsequent setback for relations, news emerged towards the end of December that Chinese firm Huawei looks like it will be blocked from laying a seabed cable between Sydney and the Solomon Islands, based on Canberra’s security concerns.)

Further south in New Zealand there had also been controversy some weeks earlier when the Financial Times reported that a local member of parliament had taught at a Chinese spy school for years but neglected to mention it on his CV when he applied for citizenship.

Meanwhile in Germany the country’s espionage agency has accused China of using social media to contact 10,000 German citizens, in order to “glean information and recruit sources” in areas like the civil service.

Of course, the major headlines come from the US where Trump adveered away from his November bromance with Chinese leader Xi Jinping (Trump had earlier told the New York Times: “I like very much President Xi. He treated me better than anybody’s ever been treated in the history of China”). By mid-December he’d shifted to a more confrontational stance.

In the sort of Christmas present that Beijing probably wasn’t expecting, Trump’s new National Security Strategy labelled China as a “revisionist power” seeking to “shape a world antithetical to US values and interests”.

A Chinese foreign ministry spokeswoman riposted in familiar form that Washington must “abandon its Cold War mentality and zero-sum game concept” warning that the failure to do so “would only harm itself as well as others”.

But in both the US and Germany the new tone has led to M&A deals falling through in the opening days of 2018. First, Washington’s Committee on Foreign Investment in the US blocked Jack Ma’s Ant Financial from taking over America’s MoneyGram for $1.2 billion. Then on Thursday a new German law designed to block sales in strategic sectors vetoed a Chinese firm from purchasing Cotesa, an innovative local aircraft parts maker.

In the case of the MoneyGram deal the Financial Times Lex column declared: “It has been obvious for some time that Chinese bids for US semiconductor firms are futile. With the demise of the payments merger, any Chinese company wanting to buy anything of significance in the US should give up.”

More broadly, how has Western media reacted to the ‘backlash’?

The mainstream press has latched onto the idea of a global reaction against the projection of Chinese power and influence. The New Yorker’s former Beijing correspondent Evan Osnos wrote this week. that “China’s efforts to extend its reach has been so rapid that it is fuelling a backlash”. In a similar vein an article in the Washington Post actually carried the headline: “The global backlash against China is growing”.

However, it was probably The Economist which was earliest to pick up on the mood change, noting how a “backlash has started to take hold” in a cover story at the start of December entitled “Sharp power: the new shape of Chinese influence”. Its report described how Beijing “is using stealth to shape public opinion and mute criticism in other countries”. In one instance it cited an investigation “that revealed that a subsidiary of the Chinese government, China National Radio International, was also covertly backing at least 33 radio stations in 14 countries, including Australia and America. These formed a global network broadcasting positive news about China – mostly in English and Chinese, but also in Italian, Thai and Turkish.”

And a long piece by the FT’s Asia editor Jamil Anderlini raised similar themes, noting in its headline: “West grows wary of China’s influence game”.

Anderlini’s article looked at the activities of the United Front Work Department, a branch of the ruling Chinese Communist Party that’s particularly active abroad.

Traditionally its work has targeted a Chinese diaspora of 60 million and sought to marginalise dissident opinion. But the FT thinks that “the objective has expanded and now encompasses efforts to convince Western elites and the broader public of the legitimacy of the Communist Party and its right to rule China.”

The Washington Post’s article was penned by John Pomfret, author of an extensive history of Sino-US relations, The Beautiful Country and the Middle Kingdom (see WiC355), who noted that “the backlash is building as many in the West worry that China is winning a global competition for resources, market share and ideological influence”.

So what type of shape is that much-mentioned backlash taking? “In recent weeks the Trump administration has joined with the European Union in rejecting China’s claim that, under the terms of its accession to the World Trade Organisation, it should be granted market-economy status, which would protect Chinese industry from anti-dumping duties,” Pomfret noted. “At the WTO ministerial meetings in Buenos Aires, the US, EU and Japan confronted China over its willingness to scale back its industrial production and other questionable trade practices.”

And Chinese netizens’ response?

The ‘backlash’ theme has rankled with China’s more nationalistic netizens. They have bristled at their country being portrayed as an aggressor and interferer, and left critical comments beneath online articles in the Western media.

While some of these folk are paid to post by government bodies (so called ‘50-centers’), a big proportion are volunteers from Diba, a popular discussion board under Baidu which has 29 million active members (we first cited them in WiC311 – their slogan is “when the Diba marches to battle not an inch of grass can grow”). The FT also profiled them last week, giving them the English name ‘Emperor’s Board’.

So what sort of things have the Diba patriots been saying? On the subject of who is interfering most in other nations’ affairs one wrote: “It is only the US that stations troops in Australia, Japan, South Korea and other countries… If you do not think this is interference in internal affairs, it is suggested that China send the People’s Liberation Army to those countries too.”

Another netizen touched on a similar theme: “China doesn’t meddle 10% as much as Western nations do.”

Another added: “When was the last year that the US military machine wasn’t actively deployed abroad? The US is now in a state of perpetual war. China doesn’t have a history of starting wars.”

As for the idea of a backlash against China, some netizens turned the concept on its head and suggested that it was the Americans that faced the phenomenon because of the activities of the Trump administration. “There are more global backlashes against America than China. America is condemned worldwide for the unilateral relocation of its embassy to Jerusalem, its unilateral withdrawal from TPP, UNESCO, the Paris Climate Accord, the Iran nuclear agreement, and its unilateral invasions in the Middle East, and so forth,” one commentator fumed.

Another even contrasted the rise of Chinese influence overseas with the decline of American power: “I suppose the fact that right now there are only 36 comments on [this thread] on the most profound shift of power in over a century shows the priorities of Americans. They are too busy talking about suicidal tax cuts and the mental illness of their president. Nature abhors a vacuum and the US has been wilful in its stupidity over the last few decades, squandering trillions in illegal wars, drone strikes while simultaneously increasing the dysfunction on which the country seems to be based.”

2018: the year of the backlash?

Famously, former paramount leader Deng Xiaoping practiced a low-key foreign policy, described under the motto of ‘hide brightness, nourish obscurity’.

During those decades Deng and his successors went out of their way to avoid upsetting other countries (with the exception of Vietnam, which China briefly invaded in 1979).

During Hu Jintao’s administration (which occupied most of the first decade of this century) the term ‘peaceful rise’ was coined to try to make China’s growing might sound as unthreatening as possible.

Something has changed since then. Some parts of the world are drawing closer to China (particularly those benefiting most from Xi’s Belt and Road largesse) but others are clearly concerned about the reach of Chinese ambition.

In fact, China’s state media has even started to measure this phenomenon. Late last month the Global Times surveyed its readers on the “Least friendly country to China in 2017”. Historically, you’d have guessed Japan would have run away with this title, but the online poll – which the Global Times carried out for the first time ever – saw the Japanese rank a surprising fourth. Second and third places respectively were held by India (probably due to a territorial standoff in the Himalayas last summer) and the US.

Perhaps the surprise is that Australia – once considered one of the friendlier countries towards China – easily topped the poll with 59.6% of the vote. “In Chinese culture, treachery is really despised, and this is a key reason why Australia received the most votes,” Yu Lei, a research fellow at the Oceania Research Centre of Sun Yat-sen University, told the Global Times.

“China has made efforts to sincerely boost bilateral cooperation, but Australia has never stopped inflaming hostility on the South China Sea issue. Recently, Australian politicians’ and the media’s anti-China chorus became more rampant. Chinese netizens felt that China’s efforts and sincerity in developing bilateral ties was not properly appreciated by Australia,” Yu explained.

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