Xi warns against Western “bullies”, to argue for one-party rule

On its 100th birthday, China’s Communist Party boasts that autocracy is better than Western democracy. Sooner or later, a crisis will test its legitimacy

For all who believe that people are endowed with inalienable rights including life, liberty and the pursuit of happiness, and that just governments derive their powers from the consent of the governed, it was alarming to hear the loud applause and cheers that greeted Xi Jinping on July 1st, the 100th anniversary of the Communist Party. 

Speaking at Tiananmen Square, China’s leader had just pledged that any foreigner who tried to bully China would “dash their heads against a Great Wall of steel, forged from the flesh and blood of over 1.4bn Chinese people”. 

The party crushes individual liberties with despotic ruthlessness. 

Yet its leaders are sure that they govern with the consent of the vast majority. 

As a result they claim to enjoy as much legitimacy as any democracy.

It would be dangerous complacency to dismiss the cheering in the square as an empty show. 

True, the crowd was hand-picked and bused in hours ahead of Mr Xi’s arrival. 

Almost all details of the event were kept secret beforehand. 

But as often with Chinese officials’ paranoia, it was probably unnecessary. 

Without prompting, lots of ordinary people express sincere admiration for Mr Xi and would cheer him in person if given the chance.

The party sees lots of promising forces coming together. 

After 40 years of economic, technological and military progress, it is ready to take credit for being an indispensable source of wisdom, guiding China’s rise. 

At the same time, a crisis of confidence grips much of the democratic world. 

Officials delight in comparing their autocracy with what they portray as Western disarray. 

They like to point at America, mocking it as a hellhole of covid-19 deaths, racist policing, gun violence and partisan paralysis.

China’s leaders are, in effect, trying to take established definitions of representative government and redefine them to suit the party. 

Where America’s Declaration of Independence called for free men to pursue happiness as each saw fit, China’s media say the party seeks “happiness for the people”—an unabashedly top-down endeavour. 

Rather than echo Abraham Lincoln’s call for government of, by and for the people, party mouthpieces praise Mr Xi as a “people’s leader” whose years of selfless service led him to “people-centred development thinking” that focuses on “the fundamental interests of the overwhelming majority”.

Western political systems devote much thought to how governments earn and keep the consent of the governed, whether through elections or under the continuous scrutiny of a free press, opposition parties and an independent judiciary. 

The party argues that it deserves to rule because of the impressive things that it does, and that it is held to account by its own self-discipline.

Chinese claims to performance legitimacy, to use the jargon of political scientists, are often strikingly detailed, and not especially ideological. 

All summer, party organs have praised Mr Xi for providing better education, more stable and satisfactory incomes, more reliable social-security payments, higher-quality medical services, more comfortable housing and a more beautiful environment. 

This focus on real-world problem-solving is called proof that “socialist democracy”, meaning rule by unelected technocrats, is more “authentic” than Western political systems. 

As Chinese officials tell it, Western politicians only worry about some people’s interests every few years at election time.

Though Mr Xi is an austere authoritarian, sternly demanding hard work, discipline, and sacrifice from party members and the masses alike, he also has a populist side. 

He and his advisers are careful to buttress dry lists of achievements with emotive stories about heroic party workers, including those who died as martyrs in battle or while serving in harsh and dangerous places. 

A centenary gala at the Olympic stadium in Beijing featured a series of elaborate mini-dramas, such as one depicting white-coated doctors and nurses battling covid-19.

When Chaguan was first posted to Beijing as a reporter, 23 years ago, officials were somewhat defensive about one-party rule. 

They described their political system as a work in progress, befitting a China that was still poor. 

The party could be hard to spot as reformist leaders wooed foreign businesspeople. 

Visiting bigwigs would often meet government ministers, city mayors and university presidents, rather than each institution’s real boss, its party secretary. 

Now senior officials openly talk of their faith in the party like priests describing a vocation. 

“East, west, south, north and centre; the party leads everything,” says Mr Xi.

Ahead of the anniversary Mr Xi has toured revolutionary sites and urged study of the party’s history. 

That does not include Mao-era cruelties, which have been largely omitted from centenary-year reflections. 

People who insist on remembering the millions of deaths caused by the party’s worst mistakes risk being accused of “historical nihilism”, or the crime of slandering party heroes.

When the majority falls silent

The party is increasingly unwilling to accept any principled criticism of its 21st-century autocracy, which it describes as the moral equal of any democracy. 

In truth, that claim is untested. 

For one thing, censors, propagandists and security agencies devote so much effort to hiding errors and silencing critics that it is not possible to say public consent is fully informed. 

For another, every political and economic system eventually makes mistakes that are too big to conceal, such as a financial crash or defeat in war.

As plenty of Western experts could attest, reputations for competence are powerful assets right up until they are not. 

China has avoided a grave, society-shaking crisis since the Tiananmen Square protests of 1989. 

But one will come and, at that point, other forms of legitimacy will be needed. 

Even the party’s focus on serving majority interests is a problem. 

It involves trampling on groups that are millions strong, from Muslims in Xinjiang to democrats in Hong Kong. 

At 100 years old, this remains a party to which not all are invited. 

Getting into the vanguard of the Chinese elite

To well-educated Chinese, Communist Party membership is worth fighting for, even if it is not easy to attain

The fight against covid-19 has been a propaganda boon for the Communist Party. 

China swiftly crushed the disease and allowed its economy to return to near normal, even as much of the rest of the world struggled to cope. 

State media have crowed. 

“The advantages of the leadership system of the Chinese Communist Party and the shortcomings of the capitalist party system have been shown up in clear contrast,” said an article by the party’s discipline-enforcement agency. 

Many Chinese, though initially critical of officials’ cover-up of the outbreak, seem to agree that the party has triumphed.

In the West, many wonder if China was partly responsible for the pandemic, by failing to respond sooner to early signs of a new coronavirus and by keeping news of it secret—or even by allowing the virus to escape from a laboratory in Wuhan. 

China’s censors tolerate no such speculation. 

State media report only on the party’s resolute response, the results of which are clear. 

The country has had few cases for months and most of these were attributable to imported infections.

China’s efforts have involved not just mobilising the obvious people like medical staff, community health workers, scientists and police.

It has also made extensive use of the party’s network of branches to provide manpower and management expertise for a party-led operation on a scale rarely seen in the post-Mao era. 

In the early months village perimeters were guarded by temperature-checking volunteers in red armbands. 

They took their orders from members of village party committees who bustled about sporting party lapel-pins. 

In cities the party’s myriad grids proved crucial in controlling people’s movements.

Front-line responders who were not already party members have rushed to join: some 440,000 by late June last year. 

Yet less than 6% of these applicants had actually been admitted. 

For the party is highly selective when it comes to recruitment.

Indeed, it is one of the world’s hardest ruling parties to join. 

And to keep out closet liberals and other undesirables, Xi Jinping is making it even more so. 

In other countries few mainstream parties would turn away anyone willing to pay their membership dues. 

In the Chinese Communist Party these can amount to as much as 2% of income for the wealthiest members. 

But party officials were wary of last year’s flood of applications. 

They detected opportunism—a chance to get an application fast-tracked by helping the party at a time of need. 

“Fishing in troubled waters”, they called it. 

They warned party branches not to lower their guard. 

To qualify, officials insisted, applicants had to prove themselves in the toughest of covid-fighting roles, not to mention stand up to political scrutiny.

Mr Xi began putting the brakes on recruitment soon after he took over in 2012. 

In the following year the numbers of new members fell to 2.4m, the lowest in a decade. 

In 2019, the most recent year for which data are available, it was closer to 2.3m.

Chinese officials are fearful of the party gradually becoming a “party for everyone”, as Nikita Khrushchev declared the Soviet Communist Party to be in 1961. 

Such deviancy, they say, was one reason why Soviet communism collapsed: it had lost its “class character”. 

A scholar quoted by Beijing Youth News, the organ of the capital’s Communist Youth League, has said that China’s party would be better with about 40m fewer members than today’s 92m.

Not too many workers, please

Yet the professed importance of class background may be misleading. 

The party is still keenest of all to recruit the educated elite. 

In 2000 only about one-fifth of members had degrees—about the same proportion as those who had not advanced beyond primary school. 

Now about half are graduates, helped by a big increase in university enrolment. 

Students make up about 30% of new entrants to the party. 

But many join largely for self-interested reasons. 

Membership is needed for good jobs in the civil service and state-owned industries, which offer greater security than private employment. 

So the party is raising the bar even for students. 

In 2019, 1.96m were party members, around 300,000 fewer than a decade earlier. 

They made up perhaps 5% of the total student body, down from nearly 8% in 2009.

Given the hoops that have to be jumped through, it is striking how many still bother to apply: about 844,000 students managed to join the party in 2019. 

As well as the practical benefits, there is also the cachet. 

“It’s like an Oxford dining club,” says Peter Mattis of the Australian Strategic Policy Institute (aspi). 

“You’re in on the secret, if you’re in. 

That is good for recruitment—and for creating fear.” 

It is also a badge of academic success: the party prefers students with the highest grades. 

In today’s party good degrees count for a lot. 

While working as a provincial governor, Mr Xi managed to squeeze in a phd in Marxism (though doubts abound about the quality of this credential). 

Kjeld Erik Brodsgaard, an expert on the party at Copenhagen Business School, says that the Central Committee is “better educated than the Danish parliament”.

Induction begins with an application letter that needs the endorsement of two party members. 

Next comes an interview with an official from the party branch. 

Then the branch considers whether to proceed. If it does, the applicant becomes a “party-entry activist”. 

This phase can last a couple of years, during which the applicant must submit thought reports every three months, join political study sessions, do volunteer work and meet mentors from the branch who write evaluations. 

Then there are the background checks—a process that involves investigating the political reliability of family and friends and examining school records. 

An applicant in the West for a government job involving official secrets would require less rigorous vetting.

If all goes well, the applicant then has to swear an oath in front of the party flag, promising to guard party secrets, remain loyal and be “ready at all times to sacrifice my all for the party and the people”. 

This means being willing to do as Mr Xi orders, without question. 

The party is his machine.

Rushing for the exit

Covid-19 is inspiring separatism in Argentina’s winelands

Independence is a sozzled fantasy, but calls for autonomy will grow

On a recent Friday evening in Mendoza, the capital of Argentina’s wine country, a group of well-to-do Mendocinos held a Zoom session with Luciana Sabina, a historian. 

“Self-rule, it’s a big part of our dna,” she declared, as she took her viewers through earthquakes and economic crises, singing the praises of Italian immigrants who planted fructuous vineyards in the Andes. 

In her telling, an epidemic was a turning-point in the province’s history. 

During a cholera outbreak in the 1880s Mendoza wanted to close itself off from the rest of the country. 

Argentina’s then dictator, General Julio Argentino Roca, forced the province to open. 

“We lost the battle for self-rule, thousands of lives too,” Ms Sabina concluded.

Once again, a pandemic is driving a wedge between Mendoza and Buenos Aires. 

Covid-19 is surging in Argentina; the country is recording 35,000 new cases a day. 

The provincial government has defied President Alberto Fernández by keeping its schools open. 

It has imposed a looser curfew and was against extending Argentina’s lockdown beyond May 30th. 

The tension is inspiring demands for autonomy more generally. 

Some political activists even talk of independence from Argentina. 

They call it “MendoExit”.

“The government just takes from us, it’s a disgrace,” says Luciano, a farmhand on a small vineyard in the province’s Uco valley, where Malbec, the soft red wine that helped make Mendoza famous, is produced. 

“We live by our work, we Mendocinos provide for ourselves,” remarks Cristina, a young mother checking French oak barrels in a nearby winery. 

Taxes on exports in particular are disliked. 

“That money, from our labour, should stay in Mendoza,” says Juan, a winemaker.

Per person, Mendoza gets the least funding from the central government of all of Argentina’s 23 provinces. 

Last spring José Manuel Ortega, a former investment banker and winemaker, paid for an opinion poll of Mendoza, Córdoba and Santa Fe, the country’s richest provinces, which are all home to opposition leaders. 

Two-fifths of respondents in Córdoba and a third in Mendoza said they would back seceding from Argentina. 

Another poll in April showed support rising. 

“I hate saying it, but this is a failing state,” says Mr Ortega.

One Mendocino legislator, José Luis Ramón, has proposed a plebiscite on independence when the province votes in mid-term elections later this year. 

A MendoExit movement, run by Hugo Laricchia, a pugnacious acupuncturist, has joined forces with the established regional Democratic party to present a new force in regional politics, called Éxito. 

Alfredo Cornejo, a former governor of Mendoza and the leader of Argentina’s Radical party, says that “Mendoza has what it needs to live independently.” 

Mr Cornejo, who has presidential aspirations, is not calling for independence himself, but he plays up to it. 

“People want out of this Argentina and the way it’s run, not the country itself,” he says.

Whether all this will come to much is unclear. The constitution does not allow for secession, notes Anabel Sagasti, a senator of the ruling Peronist party. 

But in the Uco valley Raúl, a worker loading cases of Malbec for export, says he would vote for Éxito. 

“We can’t go it alone, but with others like Córdoba, we could.” 

His boss laughs at the idea. 

Not everybody will. 

The Great Lockdown and Global Trade

Global supply chains have weathered the pandemic intact, and the deep recession has not unleashed a wave of protectionism. That is good for global trade, and probably for foreign direct investment, too, and suggests that predictions of globalization’s demise were premature.

Daniel Gros

BRUSSELS – Trade is recovering robustly alongside the upticks in growth in major economies. 

This good news deserves more attention. 

Less than 12 months ago, many observers were predicting an end to globalization. 

The pandemic disrupted supply chains, and governments, suddenly confronted with the resulting vulnerabilities and dependencies, encouraged “reshoring” production of critical goods.

Today, the outlook is much brighter. 

There is little indication of a sustained movement away from global supply chains. 

And many governments have realized that trade is more of an opportunity than a threat to national sovereignty. 

As a result, the World Trade Organization expects the volume of global trade to increase by 8% in 2021, more than offsetting last year’s 5.3% decline.

True, foreign direct investment (FDI) still lags, having plummeted 42% in 2020. 

Europe actually recorded a negative flow. 

But the pandemic’s differential impact on trade and investment is not surprising. 

Transporting goods around the world requires little physical human interaction. 

Giant cranes, often remotely operated, load and unload containers, and supertankers pump oil ashore.

In contrast, acquiring a firm or establishing a new production facility in another country requires travel to meet potential partners, and in many cases close contact with foreign governments to obtain permits. 

Pandemic-induced border closures and travel restrictions obviously made this much more difficult.

But FDI is notoriously volatile, often plunging one year and recovering the next, so it could still bounce back strongly in 2021. 

In fact, the OECD has already detected signs of a recovery.

Moreover, global supply chains have proved to be less vulnerable than many had feared. 

The notion of a “supply chain” conjures up an image of a fragile arrangement, with each enterprise depending on inputs from the adjacent link. 

And a chain is only as strong as its weakest link.

The global trading system’s vulnerability to choke points seemed to be driven home in March, when a single large freighter blocked the Suez Canal, after sandstorms restricted visibility and transformed the huge stack of containers on board into sails. 

But this incident, which was resolved relatively quickly, is not representative of how global trade works.

It is more accurate to talk of interrelated networks of suppliers than supply chains. 

Most enterprises have more than one supplier of key components, and multinational companies with operations in many countries source supplies from many other countries. 

The pandemic has reinforced multi-sourcing, rather than triggering a retrenchment from the division of labor.

Yes, governments almost everywhere have interfered with trade during the pandemic to address acute shortages of key products, such as personal protective equipment in 2020 and COVID-19 vaccines during the first few months of 2021. 

But both of these products, while vital in the context of the pandemic, play only a marginal role in the wider economy. 

The rich countries could vaccinate the entire world for less than a dollar a week from each citizen.

The main danger is that governments, fearing similar dependence on foreign suppliers for many other key products, introduce protectionist measures. 

Prompted by the EU’s concern that such dependence could leave the bloc vulnerable to political pressures from hostile governments, the European Commission has recently completed a fascinating study of strategic dependencies and capacities.

The Commission examined more than 5,000 products and found only 137 in the most sensitive sectors, accounting for about 6% of all EU imports by value, for which the EU is highly dependent on imports from outside the bloc. 

For 34 of these products, constituting only 0.6% of all imports, the EU could be more vulnerable, owing to the low potential for further import diversification or substitution through EU production.

In other words, for the overwhelming majority of products, large economies like the EU have a sufficiently diversified supply base to make them independent of any single supplier. 

And broad protectionist measures like tariffs or quotas would have little impact on the few goods for which only a single source may exist.

Moreover, most of the 137 sensitive products that the Commission identified are raw materials and related commodities that are easy to store. 

It would thus be relatively straightforward for the EU to build up strategic stockpiles of those goods.

In the end, governments do not appear to have resorted to protectionism in response to the COVID-19 crisis. 

Although precise data on new trade barriers erected last year are not yet available, the strong expansion of trade in 2021 implies that the use of such measures must have been limited.

In fact, some governments have been eager to create more trade opportunities to help foster the recovery. 

A group of 15 Asia-Pacific countries, accounting for 30% of the global economy, has signed the Regional Comprehensive Economic Partnership, a new free-trade agreement. 

Meanwhile, the EU has concluded two important pacts: a so-called Comprehensive Agreement on Investment with China and a free-trade deal with Mercosur bloc in Latin America. 

The ratification of both agreements is in doubt, but not because of concerns about the economy.

What emerges overall is that global supply chains have weathered the pandemic intact, and the deep recession has not unleashed a wave of protectionism. 

That is good for global trade, and probably for FDI, too, and suggests that predictions of globalization’s demise were premature.

Daniel Gros is a member of the board and a distinguished fellow at the Centre for European Policy Studies. 

Watching: The detectives

Police in 16 countries have arrested hundreds following a massive sting

Criminals used an encrypted communication system that America’s FBI owned and ran

ON FEBRUARY 25th, someone calling himself “TOM FORD” used Anom, an encrypted-messaging platform, to forward a message from another user called “Sion”. 

It read: “We are on standbys [sic] to receive the package today bro.” 

Applying for a warrant to search an email account that the two men used to exchange shipping documents, an FBI special agent said he believed the package in question contained six kilogrammes of cocaine due to be sent from California to Australia, and that while “TOM FORD” was probably located in Australia, “Sion” was likely in Armenia.

The cosmopolitan nature of organised crime in a globalised world calls for secure methods of international communication. 

“TOM FORD” and “Sion” were confident that Anom would keep them safe; they scarcely disguised their exchanges. 

They even exchanged photos of cocaine bricks. 

But, like thousands of other Anom users in more than 300 organised-crime groups in around 100 countries, they were making a calamitous mistake. 

Anom was owned and run by the FBI.

In a flurry of statements and press conferences on June 8th, that agency, along with other national and international law-enforcement bodies, revealed some details of their grand-scale sting. 

Over a period of three years, the FBI and police forces in 16 other countries—in particular, the Australian Federal Police—monitored 27m messages sent via Anom. 

“We have been in the back pockets of organised crime,” said the Australian Federal Police Commissioner, Reece Kershaw.

Police eavesdropped on murder plots, weapons trading, money laundering and drug trafficking. 

In Australia alone, police claimed to have disrupted 21 murder plots, including a mass killing, thanks to Operation Trojan Shield, the code name for investigations arising from the scam. 

The operation has now ended. 

Officials said that police have arrested more than 800 suspects in 16 countries and seized more than 32 tons of drugs, including cocaine, amphetamines and methamphetamines. 

They also confiscated almost $50m in cash and cryptocurrencies.

Operation Trojan Shield is the most wide-ranging attack on underworld communications, but not the first.

Last year, the EU’s law enforcement agency, Europol, revealed that an operation initiated by French police had hacked a system known as EncroChat, which many criminals used. 

The hack has led police to arrest more than 1,000 people so far.

One reason so many criminals embraced Anom was that the FBI, along with agencies in Australia and Canada, dismantled a similar service called Phantom Secure three years ago. 

Anom relied on what the FBI terms “hardened encrypted devices”. 

Unlike smartphones, they cannot be used to make telephone calls or browse the internet. 

Their sole function is to send and receive coded electronic communications, and/or encode the data they store.

The breakthrough that launched Operation Trojan Shield came in 2018, when the FBI convinced Anom’s developer to turn informant in return for $120,000, plus $60,000 in expenses and the chance of a reduced prison sentence. 

The informant then gave the FBI access to the network that distributes hardened encrypted devices across the international underworld.

The introduction of Anom-equipped devices began in Australia and was reportedly aided, unwittingly, by an alleged narcotics kingpin, Hakan Ayik. 

He was said to have recommended Anom to associates, unaware that it was controlled by the FBI. 

They in turn recommended it to others. 

The 42-year-old Mr Ayik, the son of Turkish immigrants to Australia, disappeared abroad after being identified as a suspect in an investigation into heroin smuggling. 

He is believed to be living in Turkey.

If, as the Australian police claim, Mr Ayik was the Anom superspreader, he will have some explaining to do to those who adopted the system on his advice. 

Nor is he the only person likely to be left feeling queasy by the disclosure of Operation Trojan Shield. 

Henceforth, whatever communications systems criminals use, they will have to live with the nagging suspicion that it might be controlled by the men and women whose job it is to put them behind bars.