US, China issue climate change agreement ahead of Biden-Xi meeting
Ahead of Wednesday’s Nov. 15 meeting between President Biden and Chinese President Xi Jinping in San Francisco, the United States and China announced an agreement to address climate change. In a statement on Tuesday, Nov. 14, the State Department said both countries will “rise up to one of the greatest challenges of our time for present and future generations of humankind.”
We’re very close to hitting rock bottom.
Former Miami Herbert Business School Dean John Quelch
The two economic giants agreed to revive a bilateral climate working group, which China suspended last year amid growing tensions over Taiwan, that will address issues like energy transition, methane, resource efficiency, and deforestation. By 2030, both countries aim to halt and reverse deforestation and forest loss through regulation and policy, and enforcing bans on illegal imports.
According to the State Department, both sides have agreed to hold a “high-level event on subnational climate action in the first half of 2024.”
The announcement comes less than a month before the annual U.N. climate change conference in Dubai and hours before the first in-person meeting in a year between the two countries’ leaders. The two leaders last met in Bali in November 2022.
🚨 Greenhouse gas levels have hit a record high. Again.
According to a new report from @WMO, carbon dioxide concentrations were a full 50% above the pre-industrial era for the first time.
With U.S.-China relations strained over the past year, from a spy balloon to close calls in the air to new export rules over semiconductors, China expert and former Miami Herbert Business School Dean John Quelch tells Straight Arrow News that this meeting is a good sign of things to come for the relationship between the two countries.
“We’re very close to hitting rock bottom. And I see the meeting in San Francisco, following a series of cabinet visits to Beijing, as very encouraging that we will look back on this as the turning point and that the relationship will be improving henceforth,” Quelch said.
IDF carries out ‘targeted operation’ in Gaza hospital: The Morning Rundown, Nov. 15, 2023
The Israeli army says it is carrying out a ‘targeted operation’ at Gaza’s largest hospital. And the United States and China agree to address climate change as the countries’ two leaders are set to meet. These stories and more highlight The Morning Rundown for Wednesday, Nov. 15, 2023.
IDF says troops carrying out ‘targeted operation’ at Gaza hospital
The Israeli army has accused Hamas of operating out of various departments of the Gaza hospital, as well as using underground tunnels beneath the facility, which stopped operations over the weekend due to dwindling supplies and lack of electricity.
In a statement, the IDF said, prior to the raid, it had given 12 hours for all military activities to cease within the hospital, calling Hamas’ alleged use of the hospital a violation of international law.
White House officials on Tuesday, Nov. 14, said U.S. intelligence backs Israel’s claims regarding Hamas’ use of the largest hospital in Gaza.
Hamas and hospital officials have denied those allegations. The terrorist group released a statement that said it holds Israel’s army and President Biden “fully responsible” for the raid on the hospital, where thousands of civilians have been sheltering along with hundreds of patients and staff amid Israel’s continuous strikes in Gaza in the wake of the Oct. 7 attacks.
The IDF’s precise and targeted operation against Hamas in the Shifa Hospital is still ongoing.
We can now confirm that incubators, baby food and medical supplies, provided by the IDF, have successfully reached the hospital.
The IDF’s “targeted operation” came a day after President Biden said hospitals in Gaza “must be protected.” Biden also said he hoped there would be “less intrusive action relative to hospitals.” The White House said the U.S. would not support airstrikes on any hospitals.
The Israeli army said its forces in the raid included medical teams and Arabic speakers, and its intent was not to harm any civilians.
House passes two-step funding bill to avert government shutdown
“Just like the continuing resolution that was approved at the end of September, Republicans needed significant help from Democrats to get it approved. More Democrats provided votes than Republicans to get it approved. Senate Majority Leader Chuck Schumer, D-N.Y., said his chamber will work to approve the continuing resolution as soon as possible.
“The continuing resolution funds the government in two parts at 2023 spending levels: money for veterans programs, transportation, housing, agriculture, and energy would flow through Jan. 19.
“Funding for the military, State Department, Department of Homeland Security, and other government agencies would last until Feb. 2.
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“It is a temporary solution and Congress needs to approve a full year appropriations bill for all of 2024. They want to include funding for Ukraine and Israel, natural disasters in the U.S., and border security. But that will take a lot of negotiating.”
Us, China address climate change ahead of Biden-Xi meeting
In a statement on Tuesday, Nov. 14, the State Department said both countries will “rise up to one of the greatest challenges of our time for present and future generations of humankind.”
The U.S. and China agreed to revive a bilateral climate working group, which China suspended last year amid growing tensions over Taiwan, that will address issues like energy transition, methane, resource efficiency, and deforestation.
President Joe Biden said on the eve of his much-anticipated meeting with China’s Xi Jinping that his goal for the talks is simply to try to get U.S.-Chinese communications back on stable ground after a tumultuous year. https://t.co/GKXXo4yX6M
The announcement comes less than a month before the annual U.N. climate change conference in Dubai and hours before the first in-person meeting in a year between the two countries’ leaders.
With U.S.-China relations strained over the past year, from a spy balloon to close calls in the air to new export rules over semiconductors, China expert and former Miami Herbert Business School Dean John Quelch tells Straight Arrow News’ Business Correspondent Simone Del Rosario that this meeting is a good sign of things to come for the relationship between the two countries.
“We’re very close to hitting rock bottom. And I see the meeting in San Francisco, following a series of cabinet visits to Beijing, as very encouraging that we will look back on this as the turning point and that the relationship will be improving henceforth,” Quelch said.
Federal climate report finds America already feeling effects of climate change
A newly released federal report shows that the effects of climate change are already being felt across America, particularly by families living below the poverty line, and those effects are becoming more and more evident.
This report is not being covered by all media.
This assessment shows us in clear scientific terms that climate change is impacting all regions all sectors of the United States, not just some, all.
President Joe Biden
The Straight Arrow news Media Miss™ tool shows the majority of outlets covering it are left-leaning.
Right-leaning news outlets are under-reporting the results of the Fifth National Climate Assessment. Our real-time Media Miss™ tool spotlights which stories right-leaning and left-leaning outlets aren’t covering so you get a complete picture of the news. This is how the news should be fair, factual, and unbiased.
Horrific damage in Matador Tx after a violent tornado came through. I tried to help a family locate there dog and cat but was unsuccessful. People missing and multiple fatalities. Prayers for this community! #txwx#tornadopic.twitter.com/TNekXNloQC
On Tuesday, Nov. 14, President Joe Biden addressed the report.
“This assessment shows us in clear scientific terms that climate change is impacting all regions all sectors of the United States, not just some, all. It shows that communities across America are taking more action than ever to reduce climate risk. It warns that more action is still badly needed. We can’t be complacent,” Biden said.
In his speech, Biden announced that $6 billion in federal funding will go to communities across America to take steps towards climate resilience. The congressionally mandated climate report is designed to help policymakers make fact-based decisions about climate change nationwide.
Straight Arrow News strives to provide unbiased, fact-based news in addition to offering a comprehensive look at how the media is covering stories that matter most. Learn more about the Media Miss™ tool and decide for yourself.
YouTube to make changes amid rise in AI-generated content
In a post on YouTube’s official blog Tuesday, Nov. 14, titled “Our approach to responsible AI innovation,” the company’s vice presidents of product management wrote, “all content uploaded to YouTube is subject to our community guidelines, regardless of how it’s generated, but we also know that AI will introduce new risks and will require new approaches.”
Those who consistently choose not to disclose that they are using AI-generated content will be subject to penalties like video removal and suspension from the YouTube Partner Program.
YouTube will begin showing labels, letting viewers know when a video has manipulated material.
In addition, YouTube will soon be making it possible to request the removal of any content that uses someone’s face or voice without permission. Music labels will also be able to make removal requests. SAN reporter Shannon Longworth has more on YouTube’s approach to AI.
Horse gets loose on plane, forcing flight to return
A flight headed to Belgium was forced to return to New York due to the conduct of a traveler, but this time, it wasn’t because of an unruly human passenger; it was because of a wayward horse.
“Yes, sir, we are a cargo plane. We have a live animal, horse on board the airplane and the horse managed to escape its stall. We don’t have a problem flying-wise, but we need to return back to New York. We cannot get the horse back secured,” the pilot said, according to audio obtained by You Can See ATC via Live ATC.
According to data from the Nov. 9 flight, the 747 cargo plane took off less than 30 minutes before the pilot radioed into air traffic control about the animal on the loose.
The plane was forced to make a U-turn near the Canadian border, and in order to return safely to JFK Airport, the pilot dumped about 20 tons of fuel over the Atlantic Ocean, 10 miles west of Martha’s Vineyard.
Horse Escapes Plane's Cargo Hold, Pilot Makes Emergency Landing in NYC | Click to read more 👇 https://t.co/8KFDFldIvX
It remained unclear how the horse got loose, and while no injuries were reported, the pilot requested a veterinarian once the plane landed. The flight was able to make its journey to Belgium the following day.
Can Biden and Xi hit a turning point with US-China relations near ‘rock bottom’?
President Joe Biden and China’s President Xi Jinping are coming together for a highly anticipated meeting Wednesday, Nov. 15 in San Francisco. It’s their first in a year, and what a year it has been. From a spy balloon to Rep. Nancy Pelosi’s Taiwan visit, many say the relationship between the globe’s two economic powerhouses is at a new low.
Following Pelosi’s Taiwan trip, China severed military-to-military communications. Biden’s goal is to restore that contact as the leaders meet face-to-face, while Xi will likely take issue with recent export controls on AI chips implemented by the U.S. in the name of national security.
China expert and former Miami Herbert Business School Dean John Quelch rated the current relationship between the U.S. and China a three out of 10.
“We’re very close to hitting rock bottom,” Quelch said. “I see the meeting in San Francisco, following a series of cabinet visits to Beijing, as very encouraging that we will look back on this as the turning point and that the relationship will be improving henceforth.”
The following interview has been edited for clarity.
Simone Del Rosario: What do you think has been the most damaging action in the past year that each side has taken when it comes to this relationship?
John Quelch: There was an incident where the U.S. Defense Secretary reported that he had attempted to call his counterpart in China and had not been able to receive a return call. Military-to-military communication breakdown is an extremely serious threat to global peace.
Simone Del Rosario: Is there one side that you would say is more reliant on this interdependent relationship?
John Quelch: No, I think both are equally reliant and should realize that global peace and prosperity depend on them both behaving in an appropriately adult fashion towards each other. I would say, for example, that China should be much more self-confident about its ability to compete with an economic-level playing field. And for its part, the U.S. should be not quite so alert to restricting all forms of technology on the grounds of national security.
Simone Del Rosario: Less than a month before this face-to-face, the Biden administration did tighten those export controls on semiconductors, further blocking advanced AI chips from getting to China. CCP spokesperson Mao Ning said, “The U.S. needs to stop politicizing and weaponizing trade and tech issues and stop destabilizing global industrial and supply chains.” Do you expect China to retaliate in any way for this?
John Quelch: The use of that rhetoric is absurd and unconstructive and the Chinese should be called out for it. Secretary Blinken has made it very clear that the U.S. wants to have a high fence around a small yard when it comes to restrictions on technology. The Chinese, of course, believe that the yard is anything but small, that it’s actually very significant and sizable and is blocking their ability to develop the new technology they’ve stated publicly for a number of years that they want to lead the world in.
I think retaliation at this point is not the language that should be used. The language that should be used is, let’s forge a pathway on as many issues as possible where our joint collaboration can achieve benefits for humanity and for global prosperity.
Companies in multinational industries, let’s take the pharmaceutical industry, for example, cooperate and compete every day without any particular problems. I mean, occasionally, there are legal disputes, of course, but basically many companies in that industry are collaborating at the same time as they are competing in other areas. Why nation-states have so much problem doing what the private sector is perfectly adept at never ceases to amaze me.
Simone Del Rosario: For the first time in recorded history, China marked a quarterly deficit in foreign direct investment from July to September. Would you say this is de-risking at work or more?
John Quelch: There’s no doubt that China’s internal investment has reduced in size and scope in the last five years. But that is actually what many economists recommended. They recommended that Chinese investment should go down and Chinese consumption should go up.
What has happened though, is Chinese investment has gone down but for various reasons, including the COVID crisis and the lockdowns. Confidence among consumers in China has not increased, in fact, it’s diminished. And as a result, the Chinese consumer is not consuming, but rather saving. And so the much-vaunted shift from an investment-driven economy to a consumption-driven economy has simply not occurred as advertised.
Now to your question regarding the foreign direct investment, foreigners typically aren’t excited about investing when domestic investment is going down. I mean, if your own country can’t eat its own dog food, why should foreigners get into the game?
So there needs to be a restoration of confidence internally in China, both among the investors and among consumers. Once that begins to happen — and it hasn’t happened since COVID, whereas the rest of the world has rebounded — once that begins to happen, then foreign investors will begin to go back into China. It’s an enormous market, it’s obviously 20% of the world’s population, and so it simply cannot be ignored by multinational players.
Simone Del Rosario: Going back to this meeting at hand, what would you say both sides are realistically looking for so that they can walk away and say, that was successful?
John Quelch: I would say No. 1 would be a joint statement that restores joint leadership on climate change ahead of COP28. COP28 looks like it’s going to be a non-event. But if China and the U.S. can come up with a plan that will lead the rest of the world, that will be a big plus.
A second area where I think President Biden will be looking for action is fentanyl. Because with an election next year, there’s no doubt that millions and millions of U.S. voters have been affected directly or indirectly know of a friend or a family member who’s passed away or been really badly affected by fentanyl coming in from China through Mexico. So that’s an election issue. That’s a hot button and President Biden needs help on that.
I think in the third arena, there may well be a useful joint statement regarding restrictions on artificial intelligence being used as a basis for activating nuclear arms. So in other words, we won’t have auto-pilot AI determining whether or not to press the nuclear button. That’s a very simple and I think easily agreed-to measure that will bring the visibility back to military-to-military collaboration.
Simone Del Rosario: Do you think there’s any instance where there wouldn’t be a joint statement at all leaving this meeting?
John Quelch: I think perhaps on tariffs. I think the Chinese would obviously like to see changes in U.S. tariff policy toward China, exports coming into the U.S. But I think from an election point of view, that would be probably a bridge too far for President Biden to excise the Trump tariffs, even though they’ve been entirely unproductive.
Simone Del Rosario: Before I let you go, I want to talk about something that you described in your latest op-ed with the Tampa Bay Times. You talked about cultural asymmetry. The number of U.S. students taking Mandarin courses peaked in 2013. We’re seeing China’s economic influence and power grow around the globe. But in the U.S., the UK, Australia and more countries, the interest in China expertise is waning. What do you think is behind the disconnect here and does it give the U.S. a competitive disadvantage?
John Quelch: It’s definitely a disadvantage. As I said in the op-ed, the Chinese know vastly more about the United States than the U.S. or Americans know about China, whether it be adults or school children or whatever group. The fact of the matter is that, as you correctly say, the interest in enrollment in Chinese language programs has gone down significantly in the last five years. And I think that it’s very unfortunate.
We need to encourage and motivate more study of Chinese language, culture and history. How does that happen? It has to happen through travel, it has to happen through cultural exchange and educational exchange, for example. But COVID and related visa restrictions have, of course, impeded progress in that area. So this is an issue that I hope will gain some visibility in the course of the conversations between the two leaders. I would like to see much more easy flow when it comes to visas. These are opportunities for tourism and for educational travel.
Simone Del Rosario: What do we have to gain by infusing more interest in these cultural studies?
John Quelch: Being a, originally, liberal arts undergraduate in history myself, I have a strong belief that understanding the history and culture of a region is very important to understanding what the political dynamics of the present moment happen to be. It’s also a matter of respect as well.
When I was working in China, whenever I used to go to a meeting, I always used to research the company or research the history of the city or region which I was visiting and make sure that my remarks included references to the context in which I was speaking. It’s just a matter of respect, it’s a matter of common sense, and it doesn’t take that much time to do it. But Americans in general are not that attuned to the need to behave in this way.
San Francisco cleans streets, moves homeless as it prepares for APEC Summit
San Francisco is preparing for the Asia-Pacific Economic Cooperation leaders’ conference (APEC) by cleaning streets, increasing local security, and installing fences around Moscone Center. Streets once occupied by homeless encampments are now cleaned and gated, with some featuring planter boxes adorned with wildflowers.
NEW – Newsom on Xi's visit: "I know folks say, 'Oh, they're just cleaning up this place because all these fancy leaders are coming into town.' That's true because it's true."pic.twitter.com/qxp8UXZUuW
The summit meetings of the 21-member APEC forum are scheduled for the week of Nov. 11-17. Police anticipate multiple protests during the APEC week, reaching a peak on Wednesday with the first meeting between U.S. President Joe Biden and Chinese President Xi Jinping since last year’s G-20 conference.
On Sunday, Nov. 12, protesters gathered at the plaza in front of San Francisco’s ferry building, displaying banners and posters opposing the forum, advocating for economic and environmental change, and waving Palestinian flags.
For Xi visit San Francisco cleared our homeless and put about 100 new planters.
Marty Brewer, a protestor, stated his presence was to urge leaders to address the climate crisis. Others expressed that the money spent on hosting world leaders could have been better utilized for the community.
The U.S. Secret Service designated the summit a National Special Security Event (NSSE), entrusting the Secret Service with leading all security operations related to the summit. The federal agency, in collaboration with the city’s police force and other entities, including the Federal Bureau of Investigation (FBI), has been conducting security drills for months, according to Jeremy Brown, assistant special agent in charge with the Secret Service and coordinator for the summit.
US National Zoo pandas returned to China amid growing diplomatic tensions
Weeks before President Biden is set to meet with China’s President Xi Jinping at an economic summit in San Francisco, the U.S. said goodbye to the Smithsonian National Zoo’s three pandas. Pandas have been a staple at the National Zoo since 1972 when the Chinese Communist Party gave them to then-President Richard Nixon in exchange for two musk oxen, a move to push diplomatic relations forward at the time. The exchange was later dubbed “panda diplomacy.”
“On behalf of the people of the United States, I am pleased to be here and accept the precious gift of the pandas and also these other mementos from the government of the People’s Republic of China,” former first lady Pat Nixon said.
The pair of pandas lived in the National Zoo, where thousands of Americans witnessed the “panda-monium” until they passed away in 1999.
Smithsonian’s National Zoo and Conservation Biology Institute
Originally slated for Dec. 15, the panda’s move was pushed up to Wednesday, Nov. 8. The pandas have long been seen as a symbol of goodwill between China and the U.S., and they’re often referred to as “friendship ambassadors.”
But the expedited departure of the animals is raising questions as tensions grow between China and the U.S. The speculation is that China is asking for the panda’s return due to the crumbling diplomatic relations with the U.S.
ABC reported that zoo officials would not directly answer whether any attempts to extend the panda’s stay were made. However, panda experts told The New York Times that the pandas have reached an age when they should head home to China.
The panda family departure leaves four remaining pandas in the U.S. at Zoo Atlanta, but it is unclear how long those pandas will stay as their agreement expires in 2024.
Biden and President Xi are not expected to talk about “panda diplomacy” when they meet in San Francisco later in November.
Nicaragua’s Catholic president is persecuting members of his own religion
Nicaragua’s President Daniel Ortega is persecuting members of his own religion. Ortega is Catholic, however it is the official position of the U.S. Commission on International Religious Freedom that Nicaragua’s government “has taken harsher measures against Catholic-affiliated organizations such as shutting down charities and expelling their workers, stripping universities of funding and legal status, shutting down news media, and eliminating non-governmental organizations.”
Ortega’s actions are being monitored by many groups, including the Tom Lantos Human Rights Commission in Congress, co-chaired by Rep. Chris Smith, R-N.J.
“He has so far departed from basic decency,” Smith said in an interview with Straight Arrow News.
Smith compared Ortega to Chinese President Xi Jingping and North Korea’s Kim Jong Un.
“There’s just a malevolence there, a hatred of people,” Smith said.
Ortega’s regime has shut down at least 26 private universities and 54 news outlets.
In August, a Nicaraguan court ordered Ortega’s government to take control of the Jesuit-run Central American University (CAU). The judges ruled that the school was a center for terrorism.
Ortega briefly attended CAU before joining the junta. His children also attended the university.
“Everything is imposed. It’s a perfect dictatorship. It’s a perfect tyranny,” Ortega said of the church in a televised speech. “If they are going to be democratic, let them start with Catholics voting for the pope, for cardinals, for bishops.”
Ortega also said he doesn’t feel represented in the church as a Catholic and as a Christian.
On Feb. 10, 2023, Bishop Rolando Alvarez was sentenced to 26 years in prison for criticizing religious freedom conditions in the country. He declined to be exiled to the United States. Smith asked Ortega to let him meet with Bishop Alvarez in person so he can perform a welfare check.
If the meeting happens, it wouldn’t be Smith’s first time in the country. Smith met with Ortega in 1984 along with other members of Congress including former Reps. Frank Wolf, R-Va., and Tony Hall, D-Ohio.
The delegation raised human rights concerns, specifically about torture. The group then had a suspicious experience after Ortega served them tea.
“The three of us that drank it got deathly sick. So I’m sure he drugged it or did something. You know, for two weeks, I was doubled over, as were my colleagues,” Smith said.
The State Department says the Ortega regime has allowed corruption and impunity to reign. The Biden administration imposed sanctions on the state-owned mining company after it said Ortega stole the 2021 election. But Smith wants more.
“Shut him down.” Smith said. “No economic trade, nothing. How else you reach a guy that is destroying his own people?”
Biden in Vietnam: ‘We’re all better off if China does well’
After attending the G-20 Summit over the weekend in India, President Joe Biden made a stop in Vietnam — a move opposed by neighboring China. On Monday, Sept. 11, Biden said the United States’ relations with Vietnam had “entered a new stage.” The Southeast Asian nation lifted the U.S. to its highest diplomatic status alongside China and Russia.
Biden’s trip to two neighboring countries of China prompted Mao Ning, of China’s Foreign Affairs Ministry, to say the U.S. needs to “abandon the Cold War mentality and zero-sum-game mindset.”
“I don’t want to contain China,” Biden said on Sunday, Sept. 10 in Hanoi. “I just want to make sure we have a relationship with China that is on the up and up, squared away — everybody knows what it’s all about.”
Biden reassured Beijing, saying, “We’re not looking to hurt China — sincerely. We’re all better off if China does well.”
While Chinese President Xi Jinping skipped the G-20 Summit, Biden said he spoke with Premier Li Qiang, the country’s No. 2 leader, while in New Delhi. This was the highest-level meeting between the two countries in nearly 10 months.
“We talked about stability,” Biden said. “It wasn’t confrontational at all.”
At age 80, President Biden is looking to win reelection in 2024. His age was a topic of conversation for Vietnam’s Communist Party General Secretary Nguyen Phu Trong, 79, who told the U.S. president, “You have nary aged a day and I would say you look even better than before.”
China’s population problem: Aging people, fewer babies, ‘lying flat’ youth
At one point, China was so worried about its rapidly growing population that the Chinese Communist Party implemented notorious family-planning policies. But now its population has peaked, its workforce is aging and the party can’t convince its people to have more kids.
In 2023, India will take the long-held title of the world’s largest population from China. In August, state media reported that China’s fertility rate hit a new record low of 1.09 births per woman in 2022. The United Nations population replacement level is 2.1.
“I think the government underestimated what the one-child policy would do,” China sociologist Doug Guthrie said.
Flipping the family-planning switch
After the Chinese Communist Party took control in 1949, leader Mao Zedong encouraged the Chinese to have many children, believing population growth would strengthen the country.
In a two-decade span, China’s population surged from around 550 million to over 800 million. By the 1960s, women on average were having more than six kids each.
“China had a massive population and needed to really think about economic growth in the context of that demographic bubble,” said Guthrie, who is director of China Initiatives at Arizona State University’s Thunderbird School of Global Management.
The CCP determined it was time for a course correct. In the 70s, the party launched a nationwide family planning program, promoting delaying marriage and childbearing, child spacing and limiting fertility.
The fertility rate plunged but by 1980, the CCP took it even further with the one-child policy. China’s fertility rate eventually dropped below the replacement level and after decades of low fertility, the CCP again tried to course correct. In 2016, the one-child policy became the two-child policy, and in 2021, they upped it to three. But still, the fertility rate dropped.
“They thought, ‘If we just take away the regulations, people will have more children and we’ll have a new demographic level growing up to help run the economy,’” Guthrie said. “And I think the cultural change was what the party underestimated because people didn’t immediately start having more children and bigger families. They thought, actually, a single child for two parents is the right number.”
China recorded its first population drop in modern history in 2022. China’s total population could be cut nearly in half by 2100, according to the UN’s medium projection.
I don’t think it’s catastrophic. This is still the second-most populous nation in the world. There’s 1.4 billion people. There’s a lot of people that still live in abject poverty who need to work in the manufacturing sector. And there’s a very robust, private economy.
Doug Guthrie, China scholar and sociologist
The age-old problem
It’s the rapidly aging population that’s of bigger concern for China’s economy. By 2079, there could be more people outside the working-age population than in it, according to the UN’s medium estimate. That would mean a lot of dependents for a shrinking workforce to take care of.
But while that is decades down the road and China’s working population is currently at its peak, there are already economic implications at play for the working age.
“Most of the consumption in a modern system happens when you’re in your 20s and 30s, when you’re buying cars and raising kids and buying homes,” geopolitical strategist Peter Zeihan said in a recent SAN commentary. “Because of the one-child policy, the Chinese don’t have much of a generation in that block at all. And since the one-child policy is now over 40 years old, we’ve now had a full generation of people to not have kids and that is manifesting in the data as well.”
Not only are they not having kids, there is a movement of young adults that are not buying into the grind. In China, it’s called the “lying flat” youth, where a generation is rejecting working long hours for little pay.
“Maybe this is a vestige of the sort of cultural residuals of the one-child policies,” Guthrie said. “If you have two parents taking care of you and then you go off to college, maybe you’re not so ambitious, maybe you do just want to lay at home and look on social media. So there’s a big demographic here that I think the government worries about. It’s not just about people not finding jobs, it’s people are not wanting jobs to be the engine of the performance as much as possible.”
For June, China’s urban youth unemployment rate hit a new record of 21.3%. July’s numbers are not publicly known. China said it would suspend reporting the data, mere months after it stopped publishing consumer confidence.
Banks bear down on China’s growth but this bull is bucking the doom and gloom
After repeatedly churning out disappointing economic data, banks are slashing China’s growth outlook for 2023. Many economists now say the modest 5% growth target China set in March is now at risk, with JPMorgan Chase cutting its estimate to 4.8% and Barclays going down to 4.5%.
The world’s second-largest economy cut two key policy rates during the week of Aug. 13 after broad misses across the economy. Nomura analysts characterized the Chinese economy as facing “an imminent downward spiral with the worst yet to come.”
China has experienced tremendous growth over several decades, dipping below the 5% GDP mark only twice since 1976: while under international sanctions following Tiananmen Square and since the COVID-19 onset. Today’s sputtering economy, serving lackluster recovery from the pandemic, has some questioning if the growth slowdown is here to stay.
“I absolutely don’t think this is the beginning of the end,” Doug Guthrie said. “I have been somebody who has studied China’s economy from the perspective of being very bullish on the gradual institutional transformation that’s been happening.”
Guthrie is a professor and director of China Initiatives at Arizona State University’s Thunderbird School of Global Management. Before taking the post, he worked for Apple in Shanghai, advising executives on business in China. Guthrie, as he notes, continues to be bullish on China, and still believes the country will hit its modest growth target this year.
“There’s a lot of hand-wringing and doom and gloom,” he said, noting the many challenges China does face, from pandemic recovery and a property crisis to trade wars and companies de-risking from China. “There’s certainly concern here, but here’s the reason it’s not the beginning of the end. For the last 43 years, the Chinese government has been striking what I like to call a gradual and institutional approach to the economy, in which the party is very involved in what’s actually going on.”
Guthrie pointed out that in August, China’s leaders are partaking in the Beidaihe meeting, an annual summer retreat.
“They don’t go and sit on beaches and hang out,” he said. “They go and get together and have casual conversations about, ‘What are we going to do for the second half of the year?’ I guarantee you those conversations are happening right now. And I’m just not that concerned. I think it’s a very, very robust economic system.”
Watch the video above for the full interview on China’s growth and challenges. Below is a shortened transcript, edited for length and clarity.
Simone Del Rosario: From the outside looking in, it doesn’t seem like fiscal policy has caught up to what is happening on the ground. There is some criticism out there that Beijing isn’t doing enough to help its troubled sectors. What do you say?
Doug Guthrie: Certainly housing is a big concern. A lot of my collaborators on the ground immediately mentioned that when I took this question to them. People are worried about a couple of different sectors. There’s housing. There’s also the question about manufacturing in a couple of different sectors, electronics, for example, going abroad. The automobile industry is doing great in China. Ford is suffering a little bit but BYD is doing great and I think Tesla’s position in China is very strong.
So there are sectors to worry about. But this is a very complex economy. A lot of people, I think, mistakenly think of the Chinese economy as just being built on the floating population and the 500 million people of cheap laborers that float around the country and provide cheap labor for organizations like Walmart. That is not what China is. China is far and away the most sophisticated manufacturing system in the world, hands down. And that can’t simply be reproduced in places like India and Malaysia. I mean, it could be, but it would take 40 years. And so I think it’s quite robust.
Simone Del Rosario: We’re looking at the second-largest economy in the world, accounting for a very large percentage of the world’s GDP. How does what’s happening in China impact the U.S. economy and why are U.S. politicians concerned about it?
Doug Guthrie: If you look back at the early days of the economic reforms when 800 million people lived in abject poverty, nobody would have predicted that by 2035, China was going to be the largest economy in the world, hands down. And I and my collaborators, we believe that number.
Right now, China is the No. 2 economy in the world and is soon to be the largest economy in the world. And this is not just a matter of us putting tariffs on goods. This is a matter of China having developed the most sophisticated manufacturing supply chain in the world. And you can’t just say, ”We’re going to have Apple stop producing iPhones in China and move them to India.” This doesn’t work that way.
So there’s a big threat here. China will become the largest economy in the world and there’s not much that a single politician, whether they’re named Trump or Biden, can do about it.
We could do something about it if we decided to invest in restructuring and rebuilding the manufacturing sector and doing all of the kinds of things that would help us, but there’s nothing we can do.
I think to a lot of politicians, and to a lot of people just in American society, they think that and hear that and it’s threatening, it’s scary. Wow, China, this formerly impoverished society that we could lambaste as a communist system that just didn’t win the battle between communism and capitalism, they’re gonna win, they’re gonna be the largest economy in the world. And there’s nothing we can do about it.
There’s an added piece here, though, which is that President Xi, his own ambitions have been not just that China return to its position as the most powerful economy in the world, but that China be respected as a geopolitical power. And so when you saw the deals happen with Saudi [Arabia] and Iran, and sort of the Middle East summit, I think that there’s a lot to be worried about, and the economics and politics get intertwined here. So it’s an interesting time.
Simone Del Rosario: I think that the reason that we continue to see repeated cycles of conversations about when China’s growth is going to slow down, especially seeing the last few years that they’ve had where it has significantly slowed down from decades past, is that it’s hard to imagine that this nation can keep up the level of growth they’ve seen.
As we saw in the United States, that level of growth starts to taper after a while. What does that tapering look like in China? I know that you believe that this current situation is temporary, but it’s hard to imagine the growth they’ve seen being sustained over continued decades.
Doug Guthrie: To be clear, as bullish as I am on the Chinese economy and how smartly it’s been rebuilt over the last 40 years, nobody expected double-digit growth to continue forever. It was inevitable that we would see a drop off from 14% to 10% to 5%. So my guess is that we’re gonna continue to see a leveling off and the growth. But if the United States comes in any year at 3% growth, we’re happy. And so my guess is that China’s eventually going to get to that position. And we’re going to continue to see innovation on both the U.S. side and the Chinese side, but we’re not going to return to double-digit growth. It’s never happening in an economy this size.
Yes, China, the US is turning Taiwan into a ‘powder keg’
China said the United States is turning Taiwan into a “powder keg.” According to U.S. military strategy, that’s the idea.
The U.S. is set to announce $345 million in military aid for Taiwan, two officials said. It would be the Biden administration's first major package drawing on American stockpiles under a new policy intended to speed up military aid to help counter China. https://t.co/rXjcwdYV1M
On July 28, the Biden White House announced it is sending Taiwan $345 million in military aid. President Joe Biden is using his authority to draw from current U.S. stockpiles to send the weapons quickly. It’s a similar practice to how the U.S. has been able to arm Ukraine so quickly with certain weapons.
The U.S. is sending mostly missiles and man-portable air defense systems to Taiwan, although rifles, ISR capabilities, education and training are also included in the aid deal. The American government’s official “One China” policy doesn’t recognize Taiwan as an independent nation, but U.S. law requires a credible defense of the island.
The $345 million package is in addition to the $19 billion in major weapons systems like F-16s Taiwan has already bought from the U.S.
Supply chain issues and COVID-related complications resulted in delivery delays. Still, enough U.S. weaponry has been delivered to Taiwan that it’s catching the ire of the People’s Republic of China.
China still views Taiwan as part of its sovereign territory. Chinese President Xi Jinping said on multiple occasions he is committed to using military force to reunify the island if necessary.
Chen Binhua, a spokesperson for China’s Taiwan Affairs Office, said in a statement, “No matter how much of the ordinary people’s taxpayer money the…Taiwanese separatist forces spend, no matter how many U.S. weapons, it will not shake our resolve to solve the Taiwan problem. Or shake our firm will to realize reunification of our motherland. Their actions are turning Taiwan into a powder keg and ammunition depot, aggravating the threat of war in the Taiwan Strait.”
The thing is, if China sees Taiwan as a powder keg, then the U.S. strategy is working. The idea is to arm Taiwan so much so that an invasion would be too costly for China.
The Pentagon said one of the lessons learned from Ukraine is weapon stockpiles are best built before bullets and barrages bear down. Taiwan is an island, so if a conflict kicks off, resupplying troops there will be nearly impossible.
Not all roads necessarily lead to war, though. On the Kinmen Islands, which are controlled by Taiwan, The Guardian reported there’s a growing movement to build a bridge to mainland China.
The 70,000 or so residents living on Kinmen depend on China for some of their power and water. Chinese tourists to Kinmen are also a big economic driver.
Taiwan is roughly 100 miles off the coast of China. The Kinmen Islands are much closer, only about three miles away from Xiamen. A politician running for election on Kinmen said a bridge with China could connect more than just land masses, it could be a path to creating a demilitarized zone on Kinmen.
If a conflict erupted between China and Taiwan, though, Kinmen would be on the frontlines of any attack. Taiwan’s ruling party criticized the bridge proposal, calling it a Trojan Horse that would endanger Taiwan’s national security.
