Sometimes coincidence illuminates history.
Last
week, the news that self-declared democratic socialist Zohran Mamdani
had won the Democratic mayoral primary in New York City, the capital of
global finance, broke just as Chinese Communist party premier Li Qiang
was in the midst of his address at the World Economic Forum’s Summer
Davos meeting in Tianjin, China. Delegates shared their disbelief, not
at what they were hearing from the podium, but from the other side of
the world.
Though
they avoided any mention of America, Li’s speechwriters had framed his
text against both the backdrop of today’s global turmoil and the memory
of the financial crisis of 2008. When Summer Davos gathered for the
first time at Beijing’s invitation 17 years ago, dramatic news from New
York was shaking the world. Wall Street was melting down. As the crisis
unfolded, China suddenly took on a new role as a point of global
stability.
In
the aftermath during the 2010s, the world tilted irrevocably towards
the east. Today, it is hard to avoid the impression that it is tilting
further China’s way.
The contrast between the turmoil in Donald Trump’s America and the mood of calm progress exuded by Beijing is striking both in style and substance. Both
the CCP and the US political establishment habitually talk in
high-flown terms about their nations’ destinies. But whereas Li calmly
insisted on the logic of history and the inexorable process of
globalisation, quoting growth figures to a decimal point and
interrupting his flow to clarify the currency units in which he was
citing China’s record exports, US politics is in a state of delirium. While
Trump denounced Mamdani as a “100% Communist Lunatic”, the guardians of
centrist common sense went one better, with one Democratic panjandrum
declaring that a policy of freezing rents for a year on around a million
regulated apartments in New York was little better than bombing.
One
can’t help wondering how residents of Tehran or Gaza, or Tel-Aviv for
that matter, would feel about that comparison. Meanwhile, the
Congressional debate over Trump’s signature “big, beautiful bill” is
conducted in tones that are even more bathetic. For Stephen Miller,
Trump’s henchman and nationalist adviser, extra billions for ICE are a
matter of the survival of western civilisation.
As
for China, it undoubtedly faces substantial macroeconomic challenges.
Growth has slowed and youth unemployment is in double digits. In 2020-21
Beijing deliberately stopped the most dramatic process of urbanisation
and private property accumulation in history, redlining further credit
to its most inflated private developers. Unsurprisingly the ensuing real
estate slump has produced a lasting hangover.
But
the remarkable thing is that, unlike in Europe and the US in 2008, this
has not morphed into a systemic crisis. If China’s annual growth rate
stabilises at around 5 per cent, it will have to be counted as the most
successful soft landing in the history of economic policy. If further
stimulus is required, one would expect the policy process in Beijing to
be laboured, but to result in an intelligible outcome.
By
contrast, to refer to policymaking in Washington as a process, is to
indulge in euphemism. When confronted with the macroeconomic
consequences of the “big, beautiful bill”, White House spokespeople do
not bother meddling with the statistical record or fiddling with the
models. Their answer is Baath-style denial: growth will go up and
deficits come down if Trump says so.
Similarly,
where the global threat of the climate crisis is concerned, we wait to
see in which direction China’s climate policy will go next. There is
some hope that emissions have peaked and that China and Europe will both
deliver ambitious “nationally determined contributions” on emissions in
time for the UN General Assembly in September. At the same time, in
Trump’s America, any reference to global warming is hors de discussion and the Republicans are doing their best to stop the green energy transition in its tracks.
The
White House favours gutting any effective regulation of artificial
intelligence, even as more and more experiments confirm that existing
large language models are not safely aligned with acceptable political
and social norms. China’s platform giants are ploughing huge resources
into AI too. The results are no more predictable. But if there is any
prospect that AI development poses a threat to the social and political
order Beijing deems acceptable, can anyone be in doubt that it would be
halted in its tracks? That is what the humbling of the platform
oligarchs in 2020 betokened. What analogous guarantee is there in the
west?
The
contrast is stark. On the Chinese side technocratic, top-down
managerialism to please any centrist pining for the 1990s. In the US,
policy as post-truth reality TV.
Merely
recounting these contrasts can seem like an exercise in caricature.
But, as Li remarked, sometimes history rhymes in strange ways. And when
its tone is shrill and dissonant, and “Alligator Alcatraz” passes for
immigration policy, we should be honest enough to face the facts.