China + Russia = Anxiety?

I have spent the last few weeks in the UK, Russia, and Hong Kong.   The UK was very standard British — gloomy grey skies and damp  air, wretched coffee (for the most part, better to stick with tea), and a wonderful hodge-podge of people and ideas.  The place is clearly open to the world for migration, business, scholarship, and fun.  And the people are enjoying it.  They gave an unexpectedly solid vote of confidence to Tory leader David Cameron, whose party won a clear majority in Britain’s parliament.

In Russia, skies were also mostly grey and gloomy.  St. Petersburg is a beautiful city, and it was clean and inordinately patrolled by security for President Putin’s St. Petersburg International Economic Forum.  But the mood was a bit gloomy as well.  Putin gave a bravura performance when interviewed by American TV host Charlie Rose.  “Why is Russia being so aggressive,” Rose asked?   “Who, us?”  replied Putin.   “NATO has expanded into the Baltic States, Eastern Europe, and southeast Europe, and you say we are being aggressive? ”

“Doesn’t Russia have an obsession with being respected?” Rose asked.   “Can you show me a large historic nation that does not want to be respected?”  was the reply.   “Do you think we or any nation should want to be humiliated?”   And one last question:  “Are Russia and China working together to form an alliance against the West?”  “That is a silly question,” replied Putin.  “China and Russia are working together to further their own internal goals of economic growth and development.  We have common interests.  There is no alliance against anyone; we are cooperation for ourselves.”

In his prepared remarks, President Putin gave a detailed accounting of Russia’s economic progress despite falling oil prices and international sanctions, down to the pounds of chicken produced by Russia’s farms.  Things are not nearly so bad as feared, and next year will be better.  No mention of any war or conflict on Russia’s borders, or of any need for economic reforms.

Yet the parade of foreign leaders on display hinted that something was amiss.  It was kind of a rogues’ party of regimes on the outs with the west: leaders from China, Myanmar, and Greece joined Putin on the main stage.  No signs that Russia was open to the world, or open to change.  It seems “Stay calm and carry on,” that slogan posted on mugs and walls all over the UK, should in fact be on display in Russia instead.

Hong Kong, as usual, is buzzing with life.  For a few days, it was clouded by rain, but then the blue skies appeared, the sun shone, and the beauty of the city soared above our heads once more.  Dizzying skyscrapers in amazing abundance, brilliant green mountain peaks, and ships, cars, beaches, and people all side by side.   The air was exceptionally clear (as measured by the Hong Kong University of Technology pollution spotter as well as the wonderful visibility) and the temperatures balmy.

Things heated up in the HK Legislative Council as well.  The Democratic Alliance for the Betterment and Progress of Hong Kong — which is the pro-Beijing party in the legislature — and the rest of the establishment bungled their effort to stop the pan-democrats from blocking Beijing’s voting plan from being accepted.  The pan-democrats wanted to block the plan because it gave Beijing and its supporters the ability to restrict who could be a candidate for chief executive, even though all candidates would have to face a popular election to contest for the office.  The pan-democrats, although a minority, still had the votes to block the plan, which required a two-thirds majority to pass.  But the vote was 28-8 against the plan, because several dozen pro-Beijing legislators mistakenly walked out just before the vote believing they had called a recess.  Oops!  The vote went on without them, and the measure was voted down by a quorum to a clear defeat.

This comedy of errors has left everyone wondering what comes next; but the streets remain calm and it is the pro-Beijing legislators who look the fools.

In China, however, they are not laughing.  The mood is gloomy there, I am told, with ever-greater restrictions on internet access, on international travel, and research.  Is this a temporary consequence of anxiety about the government’s crackdown on corruption, which has left everyone uneasy?  Or a permanent shift toward fear and paranoia about all foreign influences?

It is too early to tell.  But at the moment, both Russia and China are becoming more closed societies.  If they are so confident in their systems, and so optimistic about their future, why this extreme fear of foreign influences?  I fear that Russia, which sees only enemies to its West, and China, which is seeing mainly enemies to its East (Japan and the U.S.), are reinforcing each other’s anxieties.

Let us hope the Sino-American dialogue can at least calm some of China’s fears, and that the Pacific trade agreement and the Chinese infrastructure bank can overcome those anxieties and emphasize cooperation among nations.  Something needs to tilt the balance in that direction; otherwise the gloom will get deeper still.

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About jackgoldstone

Hazel Professor of Public Policy at George Mason University
This entry was posted in The Global Economy and tagged , . Bookmark the permalink.

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