A fortnightly podcast from the Spectator on the latest in Chinese politics, society, and more. From Huawei to Hong Kong, Cindy Yu talks to experts, journalists, and long time China-watchers on what you need to know about China.
History and belonging: life in a Chinese mega-city
In the last four decades, hundreds of millions of Chinese have moved into cities. Today, two thirds of the country live in urban areas (compared to just one third in 1985), and many of these are hubs with tens of millions of people – mega-cities that many in the West have never heard of before.
What does this fast urbanisation do to communities and tradition? On this episode, my guest Austin Williams (an architect turned journalist and academic) explains how these populations were thrown up into 'vertical living'. ‘If Ayn Rand had created a country, then China would be it’, says Austin. In other words, the family unit matters more than the community surrounding you.
This episode is a deep dive into urban life in China. Austin and I discuss the residential compounds that we in the West have seen so much of through reporting of China's lockdowns; the demolitions required to pave the way for this wave of urbanisation, which, sadly, left some towns disembowelled without rebuilding (see Austin's film Edge Town about one such settlement outside the city of Suzhou); and we debate whether it's a good thing that traditional Chinese aesthetics are returning to the country's modern architecture.
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Will Liz Truss declare a genocide in Xinjiang?
After a long summer of hustings, Liz Truss has finally been confirmed today as the next leader of the Conservative party. As she gets the keys to Downing Street, she'll finally be able to carry out her vision of Sino-British relations. But what is that vision?
On the latest Chinese Whispers, I speak to Sam Hogg, editor of the must-read Beijing to Britain newsletter, about what we know about Truss's views on China so far. Will she declare a genocide in Xinjiang? What is an acceptable level of trade with Beijing?
The difficulty for Truss is that she has never had to balance her opinions on China with the wider remit of government (for example, when it comes to the trading relationship that she lambasted her rival Rishi Sunak for pursuing, while at the Treasury). As Sam points out, taking the example of declaring a genocide in Xinjiang (something she has privately expressed support for):
‘When you officially recognise that a genocide is taking place, that puts an onus on the country that has done so to try and actively stop that, using a variety of means (that could be sanctions for example). With that in mind, one can see why it’s a useful campaign pledge, but a difficult policy to carry out once in power’Then she might be held hostage by China hawks on the backbenches – those MPs like Iain Duncan Smith who have lent her his support, but may want to see her be as vocally sceptical of China in Downing Street as she has been so far. In that case, there could be a vibe similar to how the hardline Brexiteers held previous Conservative prime ministers to ransom on seeing through their visions. ‘She’s made a series of political contracts with various backbenchers about how hawkish she is going to be towards China. And each of these backbenchers will have a limited amount of patience’, Sam points out.
We won't have long to find out as she gets her feet under the desk at No. 10 and, in a couple of months, meets with President Xi Jinping at the G20 summit in Indonesia.
The new great game: how China replaced Russia in Kazakhstan and beyond
What does China want with Xinjiang? Its systematic repression of the Uyghur people and other regional minorities has shocked the world, eliciting accusations of genocide from politicians and activists across the West. The Chinese Communist Party claims that its re-education camps are an anti-terrorism measure, but surely if anything is going to radicalise vast swathes of a non-Han population, it’s their forced internment and (for many) subsequent incarceration. So what is the CCP’s long term aim?
According to Raffaello Pantucci, senior associate fellow at the think tank Rusi, ‘the Central Government recognises that a very strong security crackdown is not necessarily going to deal with these problems in perpetuity’. Instead, ‘long-term stability for Xinjiang is going to come from economic prosperity’.
That’s where Central Asia comes in. On this episode, I talk to Raffaello about China’s relations with the five ‘Stans that sit cushioned between China (to their east) and Russia (to their north). As with China’s relationship with any developing region, Beijing is motivated by access to its significant oil and mineral resources. But there’s something special about Central Asia - Raffaello argues that it’s an extension of Beijing’s Xinjiang strategy: ‘It’s really about trying to improve the prosperity in this border region around Xinjiang to help improve its prosperity and stability… If you’re going to make Xinjiang economically prosperous, you’re going to have to find a way of connecting it to the world.’
Raffaello’s new book is Sinostan: China’s Inadvertent Empire, based on a decade of travel in and around the region (there were two when they started, but Raffaello’s co-author, Alexandros Petersen, died in a Taliban attack in Kabul eight years ago). As well as the Xinjiang implications, Sinostan looks at China’s oil and gas trade with these resource-rich countries, the cultural exchanges (or lack thereof, and often promoted by Confucius Institutes) and the difference in approach between Moscow and Beijing, all of which we discuss on the episode.
On China’s usurpation of Russia in the region, it’s striking that some public opinion is deeply suspicious of the new power in the region, a general Sinophobia that crystallises in numerous conspiracy theories (for example that roads built by Chinese companies are specifically designed to the weight of Chinese tanks). Welcomed by governments keen to benefit from the economic clout of their neighbour, some Chinese companies end up trying to hide their presence to avoid the ire of the locals. Raffaello recounts that ‘there are some cities in Kazakhstan, particularly in the oil regions, where we know CNPC [China National Petroleum Corporation] is a big player, but we just couldn’t find evidence of them. You’d ask the locals “where are the CNPC guys” and they’d say “we don’t know what you’re talking about”’.
But China’s influence is very much there. It remains a ‘huge lacuna in Western strategic thinking’ that cannot be ignored, Raffaello says. Tune in to get ahead on this next geopolitical hot topic.
This episode is sponsored by the SOAS China Institute. Buy tickets for their three day course on China and the media at www.spectator.co.uk/soas.
Learn more about China's relationship with Afghanistan here: https://www.spectator.co.uk/podcast/will-china-become-afghanistan-s-new-sponsor-
Pelosi's swansong: the Taiwanese view on her fleeting visit
Nancy Pelosi’s controversial trip to Taiwan made headlines across the world this week, after President Xi’s warnings to the US ‘not to play with fire’. Furious, Beijing has responded with economic sanctions and a flurry of missiles over and around the island, as well as sanctioning Pelosi and her family. But as the West frets about possible escalation, often lacking from the discussion is what Taiwanese people actually think. In fact, as Taipei-based journalist Brian Hioe explains to Cindy Yu in this episode, most people there were less worried about the visit than you might expect. ‘There’s been so much in terms of Chinese military drilling or activity directed at Taiwan for a decade, people are quite used to it.’
Comparisons to the calm in Ukraine before the Russian invasion are unfounded: ‘we are not seeing troops massing’. That is not to say, though, that the situation is without danger. A more limited and realistic threat is of China imposing a blockade, or attacking one of Taiwan’s outlying islands. Other possible repercussions include a salvo of cyberattacks, one pro-China actor having already hacked supermarkets and train station displays on the island this week.
So given all these dangers, why did Pelosi come at all? Perhaps telling is the Taiwanese government’s silence over whether it actually invited her. US domestic politics is probably a factor, as is her own legacy. Regardless of her motivation, President Biden said the move was unwise, and the situation remains delicate.
Careful diplomatic management of the crisis requires reliable information. But in the context of Taiwan, that is by no means a given. Brian explains the bizarre dynamic that exists between international and Taiwanese media, where each assumes the other is better informed. ‘The two sides are actually somewhat bad at fact-checking each other. Then they’re just amplifying what is sometimes discrimination but primarily misinformation.’
Tune in to hear more about the view from Taipei.
Is China's property market about to go bust?
China’s property market accounts for something between 20 and 29 per cent of the country’s total GDP. The seemingly never-ending rise of residential blocks were how ordinary people like my family could see and touch China’s miraculous economic growth. Home ownership was to be expected, especially for young men looking to marry and start a family. Across the country, 70 per cent of household wealth is held in real estate.
But in recent months, China's property hasn’t been so hot. The sector has shrunk 7 per cent year on year. Developers have run out of money to complete complexes that they've already sold; while consumers across dozens of cities are refusing to pay their mortgages in protest. 'The thing about real estate is that it's intensely pro-cyclical – everything that's good feeds on itself in the boom, and everything that's bad feeds on itself in the downturn', the economist George Magnus tells me in this episode of Chinese Whispers. He's the author of Red Flags: Why Xi's China is in Jeopardy and has been warning about the underlying problems in China's economy for years.
Also on the podcast is Lulu Chen, a Bloomberg journalist reporting on real estate trends in Asia. She was one of the first to break the story of the mortgage protests. The picture they paint is one of a long overdue bust in the cycle.
Back in the 90s when the country was fresh out of communism, most housing was still allocated by the state or employers. Since then, market reforms allowed people to buy and sell their own places (China's home ownership rate is 95 per cent). The market became hotter and hotter, and the proliferation of new builds (in order to keep up with demand) meant that developers were selling homes before they'd even built them. Real estate companies ran on borrowed money.
All good and well when the money was flowing. But in the last few years, the amount of corporate debt wracked up by this model concerned policymakers in Zhongnanhai, who then put forward the 'three red lines' stipulating debt controls on real estate companies. Evergrande was the first to trip, but since then, even companies thought to be in the green have fallen to an industry-wide contagion of fear and default. Then came the harsh and sudden lockdowns of zero Covid which added fuel to the fire as consumer confidence and earnings were destroyed.
Tune in to hear about just how bad the situation is this time (as I suggest to George, haven't warnings sounded about China's property bubble for years now?) But remember, economic problems can quickly turn into political ones for a government that bargains for legitimacy from economic growth. I ask Lulu what the ramifications of a property bust that makes the middle class poorer could be. She sums up the stakes nicely:
'[The Chinese] have this idea of the world and what it’s like. Life is always going upwards, and tomorrow is going to be better than yesterday. And that’s kind of the mentality of people born in the 70s, especially 80s, 90s... They’ve never experienced a full economic cycle… So it really changes their world view of what life is going to be like for them in the future. It really casts doubt on whether the economy and the future of the country is going to as they envisioned when they were growing up’That's why this moment is one to watch.
Semiconductors: the next technological arms race
Semiconductors are the most important thing that you've never heard of. These little computer chips provide the processing power for everything from cars and iPhones, to unmanned drones and missiles. In Beijing's Made in China 2025 industrial strategy, through which China seeks to move up the value chain to become a high-tech superpower, semiconductor self-sufficiency was one of the targets.
Beijing is falling far behind on this target. MIC 2025 stated the aim of meeting 70 per cent of China's demand through domestic production by 2025, but, seven years on, it is only meeting 20 per cent of its domestic needs (by one estimate). The world's leading manufacturer of semiconductors is in fact in Taiwan. The Taiwanese Semiconductor Manufacturing Company dominates more than half the global market, and controls 90 per cent of the cutting edge 5 to 10 nanometre sector (in this industry, size matters; the smaller the chip, the better). Even American companies like Intel outsource a substantial amount of production to TSMC.
A tech arms race is underway. In order to control the supply of this small but vital component, China and the US are desperately funnelling money into their own national champions, whilst 'kneecapping' each other's efforts, as my guest Nigel Inkster tells me on this episode. He's the former director of operations and intelligence at MI6 and author of The Great Decoupling: China, America and the Struggle for Technological Supremacy .
We discuss Washington's relatively effective efforts on this front – from instituting export controls on western companies (not just American) that supply Chinese semiconductor companies, to pressurising TSMC to share its know-how worldwide (TSMC will open an Arizona branch in two years, thanks to pressure from President Trump). It's got wolf warrior and Foreign Ministry spokesperson Zhao Lijian hopping mad; he has accused the American approach as being 'technological terrorism'.
Yet America's approach could be instructive for the UK, where there's a live political question over the Chinese acquisition of Newport Wafer Fab, a relatively low-end semiconductor manufacturing site that is the subject of an ongoing national security review.
Some in the West also fear that TSMC's success will lure China to invade Taiwan, while some in Taipei see the company as their 'silicon shield', Nigel says, as its accidental destruction (or at the hands of the Taiwanese or American governments) may deter China from an aggressive incursion.
On the episode, Nigel and I discuss all this and more (whether China is inherently less innovative, how painful and inevitable a tech arms race would be, and Nigel's reaction to MI5 and the FBI's recent joint warning about Chinese espionage).