The Chinese leadership will face daunting challenges in the coming year
It is appropriate that the year began with the Tiger Mom and closed with an official indictment of the management of the Chinese high-speed rail program. The book ends of this year's China narrative capture the zeitgeist in 2011: the ever fiercer duels between the China bulls and bears. Yes, Amy Chua is American, but her story became instantly linked to the general competitive fears that Americans had about what appeared to be an unstoppable juggernaut -- perhaps one of the most overused nouns in describing China. From raising future Ivy Leaguers to clocking the fastest bullet trains, the Chinese can do it all and with exacting efficiency. It was a year in which many latched onto the China story, many more traveled to China for days or weeks and commented on it, and many used the country as a reflection of America's own debilitating dysfunctions. A "juggernaut" it may be, but China's size is also its curse. The country is no longer under the proprietary province of China specialists -- it is now subject to Saturday Night Live parodies and Gary Shteyngart's literary satire. For better or worse, 2011 saw the democratization of the China narrative.
This debate is due in large part a consequence of this democratization, leading to a proliferation of "takes" on China that make it difficult to separate the good from the bad. Each camp can marshal enough evidence to support their respective cases. To be sure, the China bulls had plenty of ammunition entering into 2011. China was the indisputable growth engine in the wake of the financial crisis, just as the Eurozone was lurching from fiscal to political crises and the U.S. faced abysmal employment figures. Formally assuming the #2 spot in the global economy, China took on some swagger. President Hu Jintao's January state visit in Washington was popularly viewed as a debt-collection exercise (call that the "SNL effect"). I recall watching Hu's motorcade, regaled in Chinese flags, descending Connecticut Avenue as a random passerby quipped, "you know what that means, he's gonna want his money back."
Of course, Hu wasn't asking for his money back and in fact continued to pile China's foreign exchange reserves into U.S. Treasuries as the export sector boomed amid a global downturn. Yet support for an export-led strategy had already waned and was clearly de-prioritized as Beijing finally unveiled its long-awaited 12th Five-Year Plan in March, as I have previously discussed. (Also see here, here, and here.) The rebalancing agenda incorporates a major effort to restructure China's energy landscape, including a commitment to nuclear energy. And so, despite initial concerns over the prospects of China's nuclear program in the immediate aftermath of the tragic Fukushima disaster, China never intended to ditch its ambitious program. The Chinese position lent some cheers for those hoping for a nuclear renaissance.
Things appeared rather swell, even as the perception on China began to shift. For the next several months, China was walloped by investor bears, who overwhelmed the bulls. Few were as colorful as investor guru Jim Chanos in describing China as running on a "treadmill to hell". But the compounded effect of stubbornly high inflation, a clampdown on the property sector, cleaning up the stimulus hangover, a deadly bullet train crash, and embarrassing discoveries of fraudulent Chinese IPOs all made China appear much more wobbly than many had thought. And all of this took place as the Arab Spring reached a crescendo, prompting the arrest of activist Ai Weiwei -- the Liu Xiaobo of 2011 -- and as the mood over Eurozone prospects grew darker than ever. "Pork prices," "ghost cities," "hard landing," "political repression," and "debt-laden local governments" became the watch words for the rest of the year.
So did the Beijing mandarins over-tighten as it was heading into a double dip because of Europe? In other words, was China repeating the mistakes of the 2007-08 period? For markets, China was the remaining leg in the tripod of global growth -- the other two being the U.S. and EU -- and any sputtering of its economic engine could prove disastrous. Beijing responded by signaling a looser fiscal and monetary policy to put a floor on growth, even as it is determined to keep the screws tight on the housing market to prevent another bout of irrational exuberance. Why? Because despite the preference for full-throttle growth by some, the Chinese public still ranked inflation and housing prices as top issues in 2011, according to a recent survey by an influential state think tank (h/t China Smack):
Indeed, nearly 60 percent of respondents believe that inflation was the #1 issue, while housing costs ranked #6. Healthcare and education costs, employment, social security, wealth gap, and corruption all made the top ten. These are largely bread-and-butter issues that have little to do with demanding Western-style political liberalization, though corruption and the income gap would require political solutions. What transpired in "Occupy Wukan" over the last month or so was not an urgent demand for democracy, but is emblematic of the worsening rural-urban divide and local government malfeasance. Wukan alone won't bring down the Chinese government, but the two structural maladies, if left untreated, could, not least because they have before.
That is precisely what the rebalancing agenda seeks to solve. It is meant to rescue the party-state from defeating itself by allowing these problems to fester. I think what I wrote in last year's wrap-up remains valid as we head into 2012:
...But the outstanding question remains whether China's leaders will pursue the right policies with the kind of urgency necessary. Major economic adjustments are usually never pleasant, and most leaders would prefer to minimize the pain on the largest swath of the population possible during that process. The Chinese are no different in this regard, but how much heavy-lifting can they tolerate?
Yu and a similarly reform-minded lot are advocating temerity over timidity, likely in a bid to influence the direction of debate as there are forces inevitably arrayed against them. Plenty of interests in China eschew these changes that will involve taking away some of their wealth, likely prompting a vigorous defense of the status quo...
To me, one of the biggest questions next year is whether China can create the necessary political conditions, amid one of the most important transitions in a decade, to forge ahead with its restructuring. With the anticipated slow down in growth and a shrinking export surplus, there appears to be an opportunity to steer the ship of state in a different direction. Yet with a political leadership still unsettled, I find it hard to be optimistic over the extent of progress next year. But I am fully open to being surprised.
Damien Ma is a fellow at the Paulson Institute, where he focuses on investment and policy programs, and on the Institute's research and think-tank activities. Previously, he was a lead China analyst at Eurasia Group, a political risk research and advisory firm.
Even prominent right-wing populists are beginning to worry that they invested their faith in an unstable leader.
This week, as Donald Trump publicly attacked Attorney General Jeff Sessions, an assault one restrained observer described as “a multitiered tower of political idiocy, a sublime monument to the moronic, a gaudy, gleaming, Ozymandian folly,” even David Horowitz, the anti-Leftist intellectual and author of Big Agenda: President Trump’s Plan to Save America, felt compelled to admit something to his Twitter followers: “I have to confess, I'm really distressed by Trump's shabby treatment of Sessions.”
Trump has always been vehemently opposed from the left and distrusted on the right by Never Trump conservatives, who continue to be dismayed by his behavior. But this week as never before, public doubts surfaced among Trump boosters and apologists, prompting Jay Cost to quip, “at the end it's just gonna be Sean Hannity huddled in a corner, quietly whispering to himself that Trump is a great American.”
“I hope that my story will help you understand the methods of Russian operatives in Washington and how they use U.S. enablers to achieve major foreign policy goals without disclosing those interests,” Browder writes.
The financier Bill Browder has emerged as an unlikely central player in the ongoing investigation of Russian interference in the 2016 elections. Sergei Magnitsky, an attorney Browder hired to investigate official corruption, died in Russian custody in 2009. Congress subsequently imposed sanctions on the officials it held responsible for his death, passing the Magnitsky Act in 2012. Russian President Vladimir Putin’s government retaliated, among other ways, by suspending American adoptions of Russian children.
Natalia Veselnitskaya, the Russian lawyer who secured a meeting with Donald Trump Jr., Jared Kushner, and Paul Manafort, was engaged in a campaign for the repeal of the Magnitsky Act, and raised the subject of adoptions in that meeting. That’s put the spotlight back on Browder’s long campaign for Kremlin accountability, and against corruption—a campaign whose success has irritated Putin and those around him.
Lisa Murkowski of Alaska is no vulnerable GOP squish—she wields significant power over the Interior Department and once won her seat as a write-in candidate.
Updated on July 27 at 1:22 p.m. ET
It’s arm-twisting time in the Senate as Republicans close in on a decisive health-care vote, and the arm President Trump has decided to wring hardest belongs to Senator Lisa Murkowski of Alaska.
Murkowski, a former member of the party leadership now beginning her third six-year term, angered the president by defying him on a key procedural vote to begin debate on Tuesday. Along with Senator Susan Collins of Maine, she was one of two Republicans voting against the motion, which succeeded only when Vice President Mike Pence broke a 50-50 tie. Trump ignored Collins but assailed Murkowski in a tweet on Wednesday morning, saying she “really let the Republicans, and our country, down yesterday.”
More than two years ago, soon after Donald Trump entered the presidential race, I noted online that no one like him—with no political, military, judicial, or public-service experience, with no known expertise on policy matters, with a trail of financial and personal complications—had ever before become president. Therefore, I said, it wasn’t going to happen this time.
Quite obviously that was wrong. Penitent and determined to learn from my errors, I’ve avoided any predictions involving Trump and his circles ever since.
But a few days ago, I edged back into the danger zone, after my very first look of the just-named White House communications director, Anthony Scaramucci, on TV. Via the ever-perilous medium of Twitter, I observed that he seemed more at ease on camera than Sean Spicer ever had, and less committed to flat-Earth stonewalling denials than Kellyanne Conway or Sarah Huckabee Sanders. Maybe his smooth-schmoozy approach would be what the Trump team needed? Maybe the press should get ready to be handled by a pro?
What Russian officials mean when they talk about “adoptions”
Let’s get something straight: The Magnitsky Act is not, nor has it ever been, about adoptions.
The Magnitsky Act, rather, is about money. It freezes certain Russian officials’ access to the stashes they were keeping in Western banks and real estate and bans their entry to the United States. The reason Russian (and now, American) officials keep talking about adoption in the same breath is because of how the Russian side retaliated to the Magnitsky Act in 2012, namely by banning American adoptions of Russian children. The Russians vowed they were punishing Americans who violated the human rights of Russians, after an adopted Russian toddler died of heat stroke in a Virginia family’s car. But the only Americans the bill directly targeted were the ones involved in putting the Magnitsky Act together.
A new study finds that believing society is fair can lead disadvantaged adolescents to act out and engage in risky behavior.
Brighton Park is a predominantly Latino community on the southwest side of Chicago. It’s a neighborhood threatened by poverty, gang violence, ICE raids, and isolation—in a city where income, race, and zip code can determine access to jobs, schools, healthy food, and essential services. It is against this backdrop that the Chicago teacher Xian Franzinger Barrett arrived at the neighborhood’s elementary school in 2014.
Recognizing the vast economic and racial inequalities his students faced, he chose what some might consider a radical approach for his writing and social-studies classes, weaving in concepts such as racism, classism, oppression, and prejudice. Barrett said it was vital to reject the oft-perpetuated narrative that society is fair and equal to address students’ questions and concerns about their current conditions. And Brighton Elementary’s seventh- and eighth-graders quickly put the lessons to work—confronting the school board over inequitable funding, fighting to install a playground, and creating a classroom library focused on black and Latino authors.
For the past few decades, the unstoppable increase in college tuition has been a fact of life, like death and taxes. The sticker price of American college increased nearly 400 percent in the last 30 years, while median household income growth was relatively flat. Student debt soared to more than $1 trillion, the result of loans to cover the difference.
Several people—with varyingdegreesof expertisein higher-ed economics—have predicted that it’s all a bubble, destined to burst. Now after decades of expansion, just about every meaningful statistic—including the number of college students, the growth of tuition costs, and even the total number of colleges—is going down, or at least growing more slowly.
Less than a week into his job, White House communications director Anthony Scaramucci is accusing President Trump’s chief of staff of leaking damaging information to the press.
When Anthony Scaramucci was named White House communications director last week, he had a dual mandate to fix the president’s dysfunctional press shop and end leaks. So far, those two goals are steeply at odds, as Scaramucci’s fierce, sudden attack on White House Chief of Staff Reince Priebus Wednesday and Thursday show.
An enigmatic series of tweets Wednesday night erupted into a stunning CNN interview Thursday morning in which Scaramucci compared his relationship with Priebus to Cain and Abel (he didn’t indicate which is which) and said he didn’t know whether his relationship with Priebus was “repairable.” He also implied that national-security leakers ought to be executed.
The NSC’s top official for the Middle East was abruptly dismissed on Thursday.
Updated on July 27 at 1:44 p.m. ET
A top Middle East official on the National Security Council was removed from his post on Thursday.
Derek Harvey, a former top adviser to David Petraeus who was brought into the administration by former National-Security Adviser Michael Flynn to serve as the NSC’s senior director for the Middle East, was informed he was being moved off the NSC by current National-Security Adviser H.R. McMaster on Thursday morning.
“General McMaster greatly appreciates Derek Harvey’s service to his country as a career Army officer, where he served his country bravely in the field and played a crucial role in the successful surge in Iraq, and also for his service on Capitol Hill and in the Trump administration,” said NSC spokesman Michael Anton. “The administration is working with Colonel Harvey to identify positions in which his background and expertise can be best utilized.”
It looks like the two tech titans are arguing about AI’s impact on humanity. Really they’re protecting their personal brands.
Elon Musk and Mark Zuckerberg are having a spat about whether or not artificial intelligence is going to kill us all.
Musk, the chief of Tesla and SpaceX who has longstanding worries about the potentially apocalyptic future of AI, recently returned to that soapbox, making an appeal for proactive regulations on AI. “I keep sounding the alarm bell,” he told attendees at a National Governors Association meeting this month. “But until people see robots going down the street killing people, they don’t know how to react.”
In a Facebook Live broadcast, Zuckerberg, Facebook’s CEO, offered riposte. He called Musk a “naysayer” and accused his doomsday fears of unnecessary negativity. “In some ways I actually think it is pretty irresponsible,” Zuck scolded. Musk then retorted on Twitter: “I’ve talked to Mark about this. His understanding of the subject is limited.”