Beidaihe meeting

With trade war looming overhead, China’s Beidaihe meeting a chance to discuss what went wrong

Deng Yuwen says that the annual informal late-summer gathering of China’s ruling party will almost certainly be devoted to US tariffs and how to respond to them, as well as containing public dissatisfaction and, on a subtle level, discussing the leadership’s mistakes

PUBLISHED : Wednesday, 25 July, 2018, 5:02pm
UPDATED : Wednesday, 25 July, 2018, 8:51pm

The annual Beidaihe meeting will take place soon against the backdrop of the China-US trade war, which makes it of exceptional interest to the outside world.

This is by no means a formalised meeting of China’s Communist Party. Rather, it refers to the casual meetings and “catch-ups” of senior party officials, usually in late July or early August, while they are in Beidaihe enjoying their summer holidays. No directives or resolutions will emerge. Its function is largely as a venue for current and retired leaders to express their thoughts in casual conversations. Inevitably, those conversations involve reflections on current issues and policies. This is why the Beidaihe gathering is keenly watched.

In the past, the topics discussed have included personnel changes – especially before the National Party Congress sessions – policy mistakes, “hot potato” issues that need dealing with, and even the current leader’s leadership style.

On the eve of this year’s gathering, the most significant current event is undoubtedly the trade war and its impact on China’s domestic and external environment. This is almost certain to be a major topic of discussion.

On July 6, the United States kicked off the trade war by imposing tariffs on Chinese imports to the US. China has responded with counter-measures of the “same scale and intensity”, but the wider impact of the tariffs won’t be known for several months.

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The Trump government has threatened to add a 10 per cent tariff to an additional US$200 billion worth of Chinese goods, but this is still under discussion. This would give the Chinese some time to discuss how they should respond.

There’s a rumour that the two countries are likely to negotiate over the trade war as early as August. It is very possible that some senior officials will disagree on this matter and probably argue fiercely over it at the meeting. The decision will depend on how they anticipate the trade war affecting China’s society and economy, and how they evaluate the cards China has to play.

In addition to coping strategies for the trade war, the coming Beidaihe meeting is likely to include discussions of the trade war’s impact on Chinese society – including the most subtle of changes – and what this could mean for the Communist Party’s rule. For Chinese leaders, both current and retired, the main worry will be the impact on both party and society. It is likely that the trade dispute has opened their eyes to several unpalatable truths about China, including its scientific and technological capabilities, the overinflated sense of national strength, the discontent of the public, and China’s real place on the international stage, which is not that pretty.

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During their stay in Beidaihe, the following questions could be discussed: how should the bilateral relationship be defined? Is the US a competitor or an enemy? Has the strategic window of opportunity for China ended? Is a peaceful rejuvenation for China possible? Should current diplomatic policies continue? Is the public’s increasing discontent about the ruling party a long-term trend, or do problems arise over particular issues at a particular time? Will the trade war lead to an economic crisis? Should current economic policies be adjusted?

It is very unlikely that this meeting alone could produce any consensus on these issues. The government emphasises confidence in the path, theory, system and culture of socialism with Chinese characteristics, asking its people to have faith in Communist Party rule, trusting that the party could bring China to a bright future and realise the “two centenary goals”: a “moderately prosperous society” by 2021, and a country that is “rich, powerful, democratic, civilised and harmonious” by 2049.

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However, openly and secretly, the party has a heightened sense of crisis, and is always on the lookout for any factors that could harm its political dominance and which need to be eliminated before they accumulate. We can expect disagreements at the Beidaihe gathering when these issues are discussed.

On the surface, the trigger for the trade war is the deteriorating imbalance of bilateral trade over the years. But the real reason is the rivalry of their two systems and cultural clash. As noticed by all, US trade concessions have not successfully altered China’s state system, and with China’s rapidly increasing national power, it intends to compete with the US on a systemic and civilisational level, which has sparked US dissatisfaction and vigilance.

The contest has been going on for years but became especially obvious in the past five years. The turning point was the 19th Communist Party congress last October and the “two sessions” this year. China’s high-intensity propaganda, both nationally and internationally, also intensified the US’ strategic doubts.

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For some key current and retired officials, the outbreak of the trade war and the dilemma China now faces are directly related to the removal of presidential term limits, the emphasis on loyalty and the ruling style that values and advocates obedience and hero worship. Recently, the cooling of the propaganda for documentary films such as Amazing China and the subtle changes in the tone of media reports have raised hopes in foreign circles that some change is afoot. Is this just an illusion? The Beidaide meeting may have the answer.

Given China’s political culture, there should be no expectation of open criticism of the top leader, even from retired officials who no longer have to worry about repercussions for their careers if they spoke up. Those who expect the leadership to be held to account will be disappointed.

The atmosphere for this year’s Beidaihe meeting will be heavy and the process will be difficult. Though all know the root of the problems, nobody dares to bring it up. Surely, the current government will call for unity through the tough times, but this meeting will also clearly show that the rift between interest groups within the party and among the higher leading members is undeniable.

Deng Yuwen is an independent political commentator and international relations scholar. This article is translated from Chinese