The Applause at Davos for Milei’s Defense of Free Market Capitalism “Was More Than Polite”

(p. A17) There were no marches for Adam Smith or posters of Milton Friedman at Davos this year, but the applause for the combative defense of free markets by Argentina’s new libertarian President Javier Milei was more than polite. Citing the contrast between ages of stagnation and the miracle of accelerating progress in the modern era, Mr. Milei reminded his audience that “far from being the cause of our problems, free-trade capitalism as an economic system is the only instrument we have to end hunger, poverty and extreme poverty across our planet.”

His words resonated because, as one heard in panel after panel, the empirical foundations of the fashionable statist view appear to be crumbling. For now at least, the China miracle seems to be over. Beijing isn’t only suffering one economic shock after another. Its worst problems—demographic decline, a property bubble, overinvestment in manufacturing, and fear of arbitrary state actions against both foreign and domestic businesses—are the result of government planning gone wrong. As China doubles down on repression, its economic problems get worse.

Fifteen years after the financial crisis, meanwhile, tightly regulated Europe has fallen behind the U.S. Using chained 2015 dollars to minimize the effect of currency fluctuations, total European Union gross domestic product in 2008 was 81% that of the U.S. In 2022 it was 73%, hardly an argument for the European way.

For the full commentary, see:

Walter Russell Mead. “GLOBAL VIEW; Davos Turns Gently to the Right.” The Wall Street Journal (Tuesday, Jan. 23, 2024): A17.

(Note: the online version of the commentary has the date January 22, 2024, and has the same title as the print version.)

“Xi Is Dampening the Energy and Optimism of the Chinese People”

(p. A1) A song called “Tomorrow Will Be Better” became a sensation in mainland China in the 1980s, when the nation was emerging from the poverty and turmoil of Mao Zedong’s rule.

Its inspirational lyrics, which exhorted listeners to “look upward for the wings in the sky,” came to represent a generation that was starting to believe in a brighter future.

Now people in China are listening to the song again—but for a very different reason. Videos of the song are circulating on WeChat and other communications apps, often with taglines expressing sadness about the end of that era.

“The 1980s are gone forever,” wrote one listener. “So long, those years of burning passion,” wrote another.

For many Chinese, especially those who came of age during the past 40 years of reform and opening, China appeared to be on an irreversible path forward toward more growth, openness and opportunity.

But now China’s leader, Xi Jinping, is restoring aspects of Mao’s rule, forcing people to confront a more uncertain future rooted in China’s past.

Xi’s predecessors, beginning with Deng Xiaoping, embraced market forces, growth and limited freedoms. Xi, by contrast, is placing national security over the economy, tightening government control, and putting the Communist Party—and himself—at the center of Chinese society.

A Dec. 16 [2023] article published by the party’s influential journal, Qiushi, elevated Xi to the same historical status as Mao, calling Xi “the People’s leader”—a title previously reserved for China’s Great Helmsman.

Gone is the booming China that inspired many young people and entrepreneurs to take risks and bet on the future. Home prices are falling, youth unemployment is at a record high, private investment is shrinking, the financial system is drowning in debt and deflation is setting in.

. . .

(p. A9) “Xi is dampening the energy and optimism of the Chinese people,” said Susan Shirk, a former senior diplomat during the Clinton administration and author of a recent book, “Overreach: How China Derailed Its Peaceful Rise.”

“In a system so dominated by one leader,” Shirk said, “everyone feels powerless to effect positive change.”

. . .

In Shenzhen, Deng’s reform policies helped transform the former fishing village in the shadow of neighboring Hong Kong into a cosmopolitan city of 13 million, home to globally competitive tech companies such as Tencent.

“Time is money, efficiency is life” was the slogan that guided the city’s early development.

Today, Shenzhen has a new slogan: “Follow the party, start your business”—with the party coming first.

Communist Party direction doesn’t seem to be brightening the city’s future. More than a quarter of Shenzhen’s office space sits empty after Xi started a campaign in 2020 to rein in risk-taking at private firms. The regulatory crackdown wiped out more than $1 trillion in market value from publicly-listed tech firms and triggered layoffs and business retrenchment.

. . .

Faced with growing economic headwinds and challenges to order, Xi is doubling down on Mao-style control, embracing a Mao-era tool as a way to ensure national security.

The practice, called the “Fengqiao experience,” is named after a town in eastern China that gained national fame in the early 1960s when Mao praised the way its officials mobilized people to identify and punish so-called enemies of the proletariat—capitalists, traditionalists and the like.

People were encouraged to report on one another, with husbands informing on wives and children on their parents, leading to some of the most brutal aspects of the Cultural Revolution. After that tumultuous period, the “Fengqiao experience” faded into history.

Xi is trying to revive aspects of it to mobilize people to fix problems at the local level before they lead to widespread social unrest.

. . .

John Ling, an e-commerce entrepreneur in Shanghai in his late 40s, recalls a far more liberal environment in the early 2000s. Lured back home by China’s seemingly limitless opportunities after studying in the U.S., he started a business trading goods online.

Back then, “I did feel like you could realize your American dream in China, as long as you worked hard,” Ling recalled.

Year by year he felt greater government interference. As more capital poured into e-commerce, he said, Beijing grew concerned that the sector was diverting resources away from more strategic areas such as semiconductors, an industry in which China still heavily relies on Western firms.

Ling said it became so difficult to raise fresh funding for e-commerce that he decided to shut his venture earlier this year. “It’s all about hard-tech these days,” he said, referring to sectors now favored by the government. “But can you sustain the entire economy with just hard-tech?”

“It feels like nothing is possible” nowadays, he said.

For the full commentary, see:

Lingling Wei. “China Is Looking to Move Ahead, But Xi Revives Mao-Era Playbook.” The Wall Street Journal (Friday, Dec. 29, 2023): A1 & A9.

(Note: ellipses and bracketed year added.)

(Note: the online version of the commentary was updated December 28, 2023, and has the title “China Wants to Move Ahead, but Xi Jinping Is Looking to the Past.” The fourth and eighth paragraphs quoted above appear in the online, but not the print, version of the commentary. In other sections where the online version is more detailed than the print version, the passages quoted above follow the online version.)

The book by Shirk mentioned above is:

Shirk, Susan L. Overreach: How China Derailed Its Peaceful Rise. New York: Oxford University Press, 2023.

China-Born Dissidents Supported Trump for His “Willingness to Confront Beijing”

(p. A18) Many who fled abroad after being detained in China for their political activism have been won over by President Trump’s willingness to confront Beijing.

. . .

Fewer than one-quarter of Chinese-Americans voted for Mr. Trump in the 2016 presidential election, according to a study by the Asian American Legal Defense and Education Fund.

But many mainland-China-born exiles are different. Teng Biao, a prominent U.S.-based Chinese lawyer and a critic of Mr. Trump, draws parallels to Cuban exiles, who aren’t so much pro-Trump as they are anti-communist.

For the full story, see:

Sha Hua. “Chinese Dissidents Back Trump Claims.” The Wall Street Journal (Thursday, Nov. 23, 2020 [sic]): A18.

(Note: ellipsis added.)

(Note: the online version of the story has the date November 22, 2020 [sic], and has the title “Chinese Dissidents Back Trump’s Claims of Election Fraud.”)

Communist China Increases Censorship of Negative News and Views of “Struggling Economy”

(p. A16) BEIJING—Several prominent commentaries by economists and journalists in China have vanished from the internet in recent weeks, raising concerns that Beijing is stepping up its censorship efforts as it tries to put a positive spin on a struggling economy.

. . .

. . ., Li Xunlei, an economist at state-owned Zhongtai Securities, warned in a column published on Chinese news outlet Yicai that insufficient household consumption would persist unless China’s leadership took steps to help lower-income families. Li also highlighted a study conducted by Beijing Normal University showing that some 964 million Chinese people, representing roughly 70% of the population, were living on a monthly income of less than 2,000 yuan, equivalent to about $280.

That data point quickly went viral on Weibo before it disappeared from the Chinese microblogging platform’s official list of trending topics. Before long, Li’s column vanished from Yicai’s website too. It has also become inaccessible on Li’s public account on Chinese messaging platform WeChat, where a message read: “The content can’t be viewed due to violation of regulations.”

For the full story, see:

Jonathan Cheng. “Negative Takes on China’s Economy Vanish Online.” The Wall Street Journal (Thursday, February 1, 2024): A16.

(Note: ellipses added.)

(Note: the online version of the story was updated January 31, 2024, and has the title “Negative Takes on China’s Economy Are Disappearing From the Internet.”)

“Audacious” Filipinos “Push Back Against” Chinese Communist “Bully”

(p. A18) The tiny crew had a risky mission: Sail to a contested coral atoll in the South China Sea, cut a barrier blocking Filipino fishermen and get out before Chinese ships catch on.

. . .

They would try to slip past the four Chinese coast-guard ships in the area without attracting attention and cut it, said Commodore Jay Tarriela, spokesman for the Philippine coast guard.

. . .

A diver plunged in and swam just below the surface of the water to the line anchored at one end of the buoys. A video released by the Philippine coast guard on Monday shows him severing the rope after briefly sawing it with a knife. The crew heaved aboard the anchor securing the barrier—and left.

The buoys had been set adrift, no longer blocking the entrance to the atoll, Tarriela said.

It was a small, audacious act that, in some ways, had no real practical effect for Filipino fishermen. They couldn’t enter the atoll, which is guarded at all times by Chinese ships.

But it was an act of defiance against a powerful rival, showing a new effort by the Philippines to push back against China’s claims in the South China Sea.

The goal was “to show the Filipino people, to show the world, that we’re now going to stand up against the bully,” said Tarriela. “This is the main message of what we did.”

For the full story, see:

Niharika Mandhana. “How a Tiny Boat Buoyed Resistance to Chinese Barriers.” The Wall Street Journal (Friday, Sept. 29, 2023): A18.

(Note: ellipses added.)

(Note: the online version of the story has the date September 28, 2023, and has the title “How a Tiny Crew Struck a Blow Against China With a Wooden Boat and a Knife.”)

Shih Ming-teh Spent 20 Years in Prison for Arguing That Taiwan Should Be Free from Communist China

(p. B10) Shih Ming-teh, a lifelong campaigner for democracy in Taiwan who spent over two decades in prison for his cause and later started a protest movement against a president from his former party, died on Jan. 15, [2024] his 83rd birthday, in Taipei, the island’s capital.

. . .

Mr. Shih helped lead a pro-democracy protest in 1979 that was brutally broken up by the police and that is now viewed as a turning point in Taiwan’s journey from authoritarianism to democracy. When he stood trial over the confrontation, he smiled defiantly to the cameras, although his original teeth had been shattered years before under police torture, and delivered a groundbreaking argument for Taiwan’s independence from China, an idea banned under the rule of Chiang Kai-shek and then his son, Chiang Ching-kuo.

. . .

“I could see that he was working like a man on fire to challenge the authoritarian rule,” Linda Gail Arrigo, an American scholar and pro-democracy campaigner in Taiwan, who was married to Mr. Shih from 1978 to 1995, said in a recent interview with the Formosa Files podcast. “He expected to die in prison — by execution.”

. . .

Many of his colleagues were quickly arrested, but Mr. Shih eluded the police for nearly a month before being captured and tried with seven others. An arrest photo showed his jaw covered in bandages, the result of a hasty attempt at plastic surgery to alter his appearance.

The trial drew yet more attention to their calls for democracy, especially because the government — eager to prove its case to the Taiwanese public and the wider world — let journalists and international observers into the courtroom. Tall and lean, Mr. Shih smiled for the cameras, his hands tucked in his pockets, in what he said was an effort to convey insouciant confidence.

He used the trial to attack the Nationalist government’s position that Taiwan was part of China. Instead, he argued, Taiwan had been separated from China for decades and had in effect become independent, even if Taiwan’s rulers would not accept that reality. That argument would enter the island’s political mainstream.

“Nowadays these claims seem nothing out of the ordinary, but at the time they were a breakthrough,” Mr. Shih wrote in an account of the trial published in 2021. “My smile and my political counterattack were the reason that the tyrants did not dare to execute me.”

For the full obituary, see:

Chris Buckley and Amy Chang Chien. “Shih Ming-teh, 83, Defiant Activist for a Democratic Taiwan, Dies.” The New York Times (Thursday, January 25, 2024): B10.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary was updated Jan. 24, 2024, and has the title “Shih Ming-teh, Defiant Activist for a Democratic Taiwan, Dies at 83.”)

Lower-Middle-Class Chinese Risk the Darién Gap to Seek Opportunity and Freedom in the U.S.

(p. B1) Mr. Gao said he felt he had no choice but to leave China.

“I think we will only be safe by coming to the U.S.,” he said, adding that he believed that Xi Jinping, China’s leader, could lead the country to famine and (p. B4) possibly war. “It’s a rare opportunity to protect me and my family,” he said.

A growing number of Chinese have entered the United States this year through the Darién Gap, exceeded only by Venezuelans, Ecuadoreans and Haitians, according to Panamanian immigration authorities.

. . .

Their flight is a referendum on the rule of Mr. Xi, now in his third five-year term. Boasting that “the East is rising while the West is declining,” he said in 2021 that China’s governance model had proved superior to Western democratic systems and that the center of gravity of the world economy was shifting “from West to East.”

Every immigrant I interviewed this year who passed through the Darién Gap — a journey known as zouxian, or walking the line, in Chinese — came from a lower middle-class background. They said that they feared falling into poverty if the Chinese economy worsened, and that they could no longer see a future for themselves or their children in their home country.

In Mr. Xi’s China, anyone could become a target of the state. You could get in trouble for being a Christian, Muslim, Uyghur, Tibetan or Mongolian. Or a worker who petitions for back pay, a homeowner who protests the delayed completion of an unfinished apartment, a student who uses a virtual private network for access to Instagram or a Communist Party cadre who is found with a copy of a banned book.

. . .

Another migrant I spoke with who crossed the Darién Gap, Mr. Zhong, who wanted to use only his family name for fear of retribution, has a background similar to Mr. Gao’s.

. . .

The trouble for Mr. Zhong, now in his early 30s, started last December [2022] when police officers stopped his car for a routine alcohol test and saw a copy of a Bible on the passenger seat. They told Mr. Zhong that he believed in an evil religion and tossed the Bible on the ground and stomped on it. The officers then took his phone and installed an app on it that turned out to have software that would track his movements.

On Christmas Day, four police officers broke into a home where Mr. Zhong and three fellow Christians were holding a prayer service. They were taken to the police station, beaten and interrogated.

Like Mr. Gao, Mr. Zhong came across social media posts about the Darién Gap. He borrowed about $10,000 and left home on Feb. 22 [2023].

. . .

Mr. Zhong soon moved to a town of 30,000 people in Alabama. He had grown up near Chengdu, a city of 20 (p. B5) million. Now he felt truly alone. He works at a Chinese restaurant 11 hours a day, he said, and is unwilling to take a day off. He has learned to cook General Tso’s chicken and other Chinese American dishes. The pay is much better than in China, and he can send more money home. Every Sunday, he joins an online religious service, hosted by a church in Brooklyn’s Sunset Park, another community with a large population of Chinese immigrants.

He told me a joke over the phone: “Why did you go to the United States?” someone asks a Chinese immigrant. “Aren’t you satisfied with your pay, your benefits and your life?” The immigrant responds: “Yes, I’m satisfied. But in the U.S., I will be allowed to say that I’m not satisfied.”

“I can live like a real human being in the U.S.,” he said.

. . .

. . . Mr. Gao got his work permit, bought a car and started delivering packages for an e-commerce company. He makes $2 per package. The more he delivers, the more he makes.

. . .

On one Wednesday in November [2023], Mr. Gao said, he woke at 4 a.m., delivered more than 100 packages and didn’t get home until after 9 p.m.

He took the next day off. When the motorcade of Mr. Xi, who was in San Francisco for a meeting with President Biden, drove by, Mr. Gao joined other protesters on the sidewalk, chanting in Chinese, “Xi Jinping, step down!”

For the full commentary, see:

Li Yuan. “THE NEW NEW WORLD; Why More Chinese Are Risking Danger in Southern Border Crossings to U.S.” The New York Times (Monday, December 4, 2023): B1 & B4-B5.

(Note: ellipses, and bracketed years, added.)

(Note: the online version of the commentary has the date Dec. 3, 2023, and has the same title as the print version.)

Rich Chinese “Moved Hundreds of Billions of Dollars Out of” China in 2023

(p. B1) Affluent Chinese have moved hundreds of billions of dollars out of the country this year [2023], seizing on the end of Covid precautions that had almost completely sealed China’s borders for nearly three years.

They are using their savings to buy overseas apartments, stocks and insurance policies. Able to fly again to Tokyo, London and New York, Chinese travelers have bought apartments in Japan and poured money into accounts in the United States or Europe that pay higher interest than in China, where rates are low and falling.

The outbound shift of money in part indicates unease inside China about the sputtering recovery after the pandemic as well as deeper problems, like an alarming slowdown in real estate, the main storehouse of wealth for families. For some people, it is also a reaction to fears about the direction of the economy under China’s leader, Xi Jinping, who has cracked down on business and strengthened the government’s hand in many aspects of society.

In some cases, Chinese are improvising to get around China’s strict government controls on transferring money overseas. They have bought gold bars small enough to be scattered unobtrusively through carry-on luggage, as well as large stacks of foreign currency.

Real estate is an option, too. Chinese have emerged as the main buyers of Tokyo apartments costing $3 million or more, and they often pay with suitcases of cash, said Zhao Jie, the chief executive of Shenjumiaosuan, an online real estate listing service in Tokyo. “It’s really hard work to count this kind of cash.”

Before the pandemic, he said, (p. B5) Chinese buyers typically bought Tokyo studio apartments for $330,000 or less to rent out. Now they are buying much larger units and obtaining investment visas to relocate their families.

All told, an estimated $50 billion a month has been taken out of China this year, mainly by Chinese households and private-sector companies.

For the full story, see:

Keith Bradsher and Joy Dong. “Suitcases of Cash: How China’s Money Flows Out.” The New York Times (Tuesday, Nov. 28, 2023): B1 & B5.

(Note: bracketed year added.)

(Note: the online version of the story has the same date as the print version, and has the title “Gold Bars and Tokyo Apartments: How Money Is Flowing Out of China.”)

As Freedom Left Hong Kong, So Did Hundreds of Billions of Dollars and 100,000 Citizens

(p. B1) This summer, when Hong Kong’s stock market rout seemed to have no end in sight, the city’s financial chief, Paul Chan, jumped into action, creating a task force to inject confidence into a market that was being pummeled by global investors wary of China.

Hong Kong cut taxes on trading, and Mr. Chan went on a roadshow to Europe and the United States, promising measures to “let investors feel optimistic about the outlook.” Investors were anything but sanguine, however, and the city’s stock exchange is among the world’s worst-performing stock markets this year.

. . .

Hundreds of billions of dollars flowed out this year as money managers and pension funds reduced their holdings in Hong Kong, which has long been a gateway for foreign investors wanting to put money into mainland China. The outflows were largely driven by an economic downturn in China and mounting pressure on American investors to sell their (p. B3) exposure to Chinese companies.

. . .

A former British colony, Hong Kong was handed back to China in 1997 with a pledge that it would maintain a high degree of self-governance under a policy called “one country, two systems.” For two decades, this allowed Hong Kong to define itself as unique and distinct from the rest of China, while offering financial access to the world’s second largest economy.

But after citywide protests in 2019, Beijing imposed the national security law, which has silenced political debate and stifled civic activity.

More than 100,000 residents have left Hong Kong over the last few years, in part because of the security law and tough pandemic restrictions. Many young Hong Kong professionals who are still there have expressed a desire to leave, making it a challenge to recruit the talent that has helped the city function as a financial center.

Once a major hub for Wall Street banks, Hong Kong had a drought of initial public offerings this year. Companies raised the lowest amount of money since 2001, resulting in layoffs at financial institutions citywide.

Many international companies have stopped hiring for new positions in Hong Kong. With less money coming into the exchange and fewer transactions, dozens of brokerages have also closed.

For the full story, see:

Alexandra Stevenson. “Hong Kong Stock Market Ends in Loss For 4th Year.” The New York Times (Saturday, December 30, 2023): B1 & B3.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 29, 2023, and has the title “Hong Kong Stocks Plunge to Losses for 4th Straight Year.”)

“Bow Only to the Truth”

(p. A19) Jiang Ping, a legal scholar who helped lay the foundation for China’s civil code, and whose experiences with political persecution shaped his relentless advocacy for individual rights in the face of state power, died on Dec. 19 [2023] in Beijing.

. . .

Often called “the conscience of China’s legal world,” Mr. Jiang established himself in the 1980s as a highly regarded teacher and a leading scholar, one of four professors who helped oversee the drafting of China’s first civil rights framework. His reputation was cemented during the 1989 pro-democracy protests in Tiananmen Square, when as university president he publicly supported the student protesters.

After the government quashed the protests and massacred the protesters, Mr. Jiang was removed from the university presidency. But he remained wildly popular on campus. Even after his removal, law students wore T-shirts printed with one of his best-known refrains: “Bow only to the truth.”

. . .

His moral authority was augmented by his own story. In the 1950s, as a young teacher, he was denounced as anti-Communist after criticizing excessive top-down bureaucracy and ordered to be “reformed,” as the government called it, through labor. He was not allowed to teach law for two decades. And, while working, he was hit by a train, leaving him with a prosthetic leg.

. . .

He lamented the lost decades, but he was never bitter. “Adversity gave me the ability to meditate and look back, and see things calmly,” he said at a celebration of his 70th birthday. “There was nothing to believe in blindly anymore.”

Mr. Jiang rose quickly after his political rehabilitation. He oversaw the drafting not only of civil and commercial laws, but also of China’s first administrative litigation law, which gave citizens a limited right to sue official agencies for misconduct.

In 1988, he was named president of the university. The next spring, protests broke out on Tiananmen Square. Mr. Jiang, fearing bloodshed, sat on the ground at the campus gate despite his bad leg and pleaded with students not to go.

When the students went, Mr. Jiang lent his support. Along with nine other university presidents, he signed an open letter urging the government to open a dialogue with the students.

After his ouster in 1990, Mr. Jiang stayed on as a professor.

For the full obituary, see:

Vivian Wang and Joy Dong. “Jiang Ping, 92, Called ‘Conscience’ Of China’s Legal World, Is Dead.” The New York Times (Saturday, December 30, 2023): A19.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary was updated Dec. 29, 2023, and has the title “Jiang Ping, the ‘Conscience of China’s Legal World,’ Dies at 92.”)

Communists Extinguish Hong Kong’s “Brash Flash”

(p. 8) It was never just about the neon, that Cubist, consumerist razzle-dazzle cantilevered over Hong Kong’s streets announcing pawnbrokers and mooncake bakers, saunas and shark’s fin soup shops.

. . .

Because while the government’s crackdown on the neon signs stems from safety and environmental concerns, the campaign evokes the fading of Hong Kong itself: the mournful allegory for an electric city’s decline, the literal extinguishing of its brash flash.

Nights in Hong Kong these days feel as if still in the pall of a plague, or a deep political malaise.

Many of the tourists and resident foreigners are gone, the old party spots unsullied by their beer-guzzling excess.

Hong Kongers have left, too. More than 110,000 permanent residents departed last year, and the city’s population of those worth more than $30 million shrank by 23 percent, according to government and wealth survey data.

Their departure, a quarter-century after the territory reverted from British to Chinese rule, has been spurred by the territory’s economic decline and by an acute diminishment of political rights.

. . .

A national security law, imposed in 2020, criminalizes acts considered threatening to the state. Students, former legislators and a former media mogul sit in prison because of it.

. . .

The Hong Kong filmmaker Anastasia Tsang’s directorial debut, “A Light Never Goes Out,” is about a family coping with the death of a neon sign maker. The film, Hong Kong’s submission for next year’s Oscars, is an elegy for a disappearing craft that could also be a requiem for something larger.

“Hong Kong people have a very strong feeling of loss,” Ms. Tsang said. “Every day you’ve got a friend or relative who’s going to emigrate. Every day you feel like some part of your flesh is being taken from your skeleton.”

For the full story, see:

Hannah Beech. “A City Where a Lot More Than Neon Is Fading Out.” The New York Times, First Section (Sunday, December 10, 2023): 8.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 9, 2023, and has the title “Where Did All the Hong Kong Neon Go?”)