China is declaring the G20 economic summit, held in the eastern Chinese city of Hangzhou, a resounding success. But in the aftermath of the confab, it’s not easy to specify what, exactly, was achieved.
The positives: There were no public protests. The US and China renewed old vows to curb greenhouse gases. China’s president Xi Jinping and Japan’s prime minister Shintaro Abe managed to scowl a little less than usual while posing for photos after their bilateral meeting. The final communique refrained from singling out China for flooding global markets with low-cost steel.
For the most part, though, the gathering seemed to reinforce, at least for observers outside China, the impression that this year’s host country is a tense and uptight place. Continue reading “About face”
Hong Kong is days away from legislative elections that are unlikely to alter the city’s political power balance but certain to highlight residents’ alienation from their mainland overseers.
I have an essay titled “China’s Hong Kong Dilemma” in the current issue of Bloomberg BusinessWeek in which I ponder the curious rise of Hong Kong’s “independence” movement. In fairness, to call this group a “movement” probably overstates its significance. There is zero chance China’s leaders will permit Hong Kong, which the mainland reclaimed from Britain in 1997, to break away and set itself up as some sort of separate, sovereign entity. Hong Kong relies on China for 70% of its water, most of its food and half its trade. For good measure, Beijing keeps 6,000 People’s Liberation Army troops garrisoned here.
Pro-independence leaders are a fractious and quixotic bunch–nearly all of them idealistic twenty-somethings, fresh from university. To date, their rallies have drawn crowds of no more than a few thousand. But, as with protests here two years ago, a heavy-handed response by Hong Kong’s mainland-controlled government has succeeded in transforming a loose collection of fringe dissenters into high-profile political heroes. Continue reading “In Asia’s World City, a push for “localism””
Chinese tycoons, keen to fulfill President Xi Jinping’s ambition to turn China into a soccer superpower, have invested more than $2 billion in European football clubs since the start of last year, reports Ben Bland in the Financial Times. Among the European teams in which Chinese groups have acquired or invested: Italy’s AC Milan and Inter Milan, England’s Manchester City and Aston Villa, Spain’s Atletico Madrid and Espanol. Many of these investments may pay off. But the article stresses that there is a big difference between the “first division” acquirers such as Wang Jianlin’s Dalian Wanda Group or Fosun International, which have deep pockets and well-developed sports marketing and media strategies, and “second division” investors, for whom there are unlikely to be many synergies. It will be interesting to see if Xi and the Party can will China into global dominance in this sport, which received relatively little state support before Xi came to power. The mixed results achieved by China’s state-led sports machine at the Rio summer Olympic games suggest global victory in soccer could prove a tricky goal.
Here’s what else we’re reading this weekend…. Continue reading “China as soccer superpower?”
I finally got around to reading Gideon Rachman’s essay in the Life & Arts section of the Financial Times. I know, it was last weekend’s Life & Arts section. But the ponderous title, “War and peace in Asia,” gave me pause.
In fairness, Rachman is a graceful writer. He marches briskly through “5,000 years of Chinese civilization,” Europe’s rise and fall and America’s emergence and decline as the world’s preeminent superpower, arriving finally at what he sees as the paradox of US foreign policy during the Obama years:
The US has deliberately hung back from deeper involvement in the Middle East, partly because it is attempting to preserve its power and resources for a struggle with a rising China. Yet power is also a matter of perceptions. So the vision of America that is less committed to playing the role of global policeman in Europe and the Middle East has–ironically–also sown doubts about the durability of US power within Asia itself.
Rachman believes that, if Hilary Clinton triumphs in the U.S. presidential election, she will remain committed to the twin pillars of U.S. foreign policy since 1945: maintenance of open global markets and the U.S. alliance system. But Rachman says the stability of those pillars is being steadily undermined by the “easternization” of global economic and political power.
Continue reading “The “weird irrationality” of America’s China policy”
In 2006, not long after gambling mogul Steve Wynn opened his first luxury hotel-casino in Macau, one of his top lieutenants took me on a tour. We began outside at the “Performance Lake,” a multimedia ballet of music lights and water jets, then worked our way along a concourse of luxury boutiques, through the Wing Lei Cantonese restaurant with its giant crystal dragon, across the crowded casino floor, to arrive at last at a special elevator, which whisked us to one of the lavish VIP suites where high-rollers from China came to indulge their passion for the game of Bacarrat. There my guide, a teetotaling Catholic who had risen up the ranks of Wynn’s operations in Las Vegas from blackjack dealer to floor manager to executive vice president for international marketing, offered to teach me how to play Baccarat on the condition that I swear to never forget the game’s first rule: The house always wins.
That rule has certainly held true for Wynn’s operations in Macau–at least until the last two years. In 2001, Wynn Resorts was among the first gaming companies granted a gambling concession in Macau after the former Portuguese colony’s communist overseers in Beijing decided to the end the two-decade monopoly of local tycoon Stanley Ho. As mainland gamblers flooded in, the tiny enclave boomed. By 2014, Macau’s gaming industry took in seven times the revenue of the entire Las Vegas strip.
On Monday, Wynn will throw open the doors to a second Macau resort, the $4.2 billion Wynn Palace. By all accounts, it will be the most expensive casino in the city. But Wynn’s prospects in 2016 are less certain than a decade ago. Macau’s gambling industry has been hit by a triple whammy of a slowing Chinese economy, Xi Jinping’s crackdown on corruption and a broader effort to transform Macau from high-roller haven to mass-market tourism destination. The Financial Times reports that gross gaming revenue fell 34% last year to $29 billion, and the Macau government forecasts a further decline of 13% this year to $25 billion.
Continue reading “In Macau, Wynn doubles down”
While President Xi remains huddled with China’s top leaders in Beidaihe for the Communist Party’s summer retreat, in Beijing senior officials have begun trying to shape the agenda for next month’s G20 summit in China’s eastern city of Hangzhou. On Monday, public comments by two senior government ministers stressed that as this year’s host Xi wants to focus on the subject of global economic growth.
Vice Finance Minister Zhu Gungyao emphasized the need for the G20 to reaffirm the importance of global trade and investment and deplore protectionism: “We really do need to make sure that the people, the public, benefit from economic development and growth,” Zhu said. “If people don’t feel like they are beneficiaries of economic development, if they don’t think their lot in life is improving, that’s when they start getting all kinds of ideas.” (Ideas? Like voting for Donald Trump, perhaps? Or withdrawing from the European Union?)
Meanwhile, China’s Vice Foreign Minister, Li Baodong, said leaders at the Sept 4-5 meeting shouldn’t get sidetracked by issues unrelated to economics–for example, competing sovereignty claims in the South China Sea. “The G-20 summit in Hangzhou is about the economy,” he said. “The consensus is to focus on economic development and not be distracted by other parties.”
Sticking to economics is usually a safe bet at global gatherings. But this year, it might actually court discord. After all, growth isn’t necessarily a subject that plays to China’s strengths these days. Continue reading “Xi’s Hangzhou agenda”