Economy

Some analyses have sounded the alarm of China lurching to the left in a marked return to Maoism. On closer examination, says Loro Horta, China’s recent clampdowns on capital are rational and not exactly ideologically driven. Issues facing China, such as the need to tackle rising inequality, affect the ruling party’s legitimacy and longevity. These concerns may have a strong push effect on the authorities. In fact, rather than a reversion to Maoism, the Xi government seems to be embracing Confucianism as a basis to enforce social order and norms, just as it derides “evil fan culture” as a means to keep a tight rein on social control.

Academic Toh Lam Seng traces Japan’s long-held foreign policy stance of “following the US’s lead”. Circumstances of history led to this default pattern, even though Japan did try to break out of this straitjacket. Domestic opposition aside, under the US's watchful eye, Japan has not been able to possess nuclear weaponry or have a permanent seat in the United Nations Security Council. But with the changing situation of a rising China, might Japan move closer to getting what it has always wanted?

A year ahead of the Communist Party of China’s 20th Party Congress in autumn 2022, a round of promotions and game of musical chairs is at play again among provincial party secretaries. Which are the stars to look out for?

Policymakers have imposed a series of measures to limit rampant borrowing by developers and tighten standards for mortgage lending since Chinese President Xi Jinping declared in 2017 that “houses are for living in, not for speculation”. Following this, developers are experiencing a sharp drop in home sales, which adds to their financial burdens. In spite of this, industry experts opine that Beijing’s determination to reduce dependence on real estate investment will not change easily.

Like many of us experiencing pandemic days, cultural historian Cheng Pei-kai spent the last two years living quietly. Early last year as the pandemic started getting widespread in the US, he mused about the irony of the situation: the ancients were led by the nose by plagues and could only lift their prayers to the gods. Today, medical technology may be more advanced but a cunning coronavirus has once again brought populations into a tailspin. But even as fate plays tricks, politicians still spend their energy mulling over battling the pandemic without bringing down Wall Street. Are humans just cogs in the economy, and even a plague won’t change that?

Economics professor Zhang Rui notes that the US’s huge trade deficit cannot be looked upon in isolation from the dominance of the US dollar; when exporting countries hold more US dollars, they are more able to purchase US debt and support the US in issuing national debt and get US dollars to flow back to the US. This suggests that looking beyond the surface of its large trade deficit, the US's fundamentals remain strong and with the advantages it has in the capital account and services trade, there is little chance that its leading position in global trade can be usurped.

Observers of China-US competition have commented that a tech war is rapidly becoming the decisive battleground in the big power rivalry for global dominance. While there have been reports saying that the US may lose this war, visiting senior fellow at the RSIS Dr Cung Vu thinks that given the US's recognition of the importance of technology, and China's recent acts of reining in its tech companies, the US should continue to lead.

Erik Baark takes a bird’s eye view of the structure of energy supply and demand in China, analysing how macro issues led to the September 2021 rash of power cuts across China. He notes that China's continued development needs energy, and a shift from heavy industries to services or high-tech fields does not mean that the country's energy needs will decrease. The Chinese government is looking to new and renewable energy resources to take the place of the old, but transitioning to new energy sources is not an easy process, especially when different actors are trying to protect their own terrain and a mindset change is necessary. It will be a tall order for the Chinese government to get local governments, old power grid corporations and the public to align with new policies and thinking. All this means that power cuts will not be going away anytime soon.

In the last few years, China has implemented policies to ban or impose strict restrictions on building supertall buildings. The government is acutely aware that provincial competition to outbuild each other may hurt the country’s overall economy. Not only that, high investment costs aside, the finished buildings may end up as energy-guzzling white elephants.