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Monday, August 22, 2022
Strategic Misjudgments of the Chinese Authorities
Kung Chan

From the waves of anti-globalization, geopolitical conflicts, the rise of populism, trade wars, and the arrival of Industry 4.0, to the final realization of information globalization, all these are shaping and transforming the world as we know it. China too is witnessing an international environment vastly different from what it experienced since its reform and opening-up.

Facing such an unprecedented situation, there have been misjudgments and misunderstandings in the way how China sees the world. As an observer, ANBOUND's founder Chan Kung has listed a series of such perceptions, from geopolitics to national policies, to discern what lies behind them.

These are also some of the topics of discussion and assessment among researchers and experts at ANBOUND. If you are interested, or would like to further discuss these topics, please share and comment.

1. "Western values are merely rhetoric"

Misjudgment: No country can really decide policies based on morality, justice, and values. All the decisions are made based on real interests.

Assessment: This type of misjudgment mainly affects China's foreign policy, geopolitics, bilateral agreements, etc., especially the prediction of the direction of bilateral relations.

Such a perception misunderstands Western values are in fact social ideological foundation, and they determine diverse aspects from public opinion to official policy. While the social system in the West is complicated, its values dictate who the leaders would be. Such a misjudgment on China's side mainly affects U.S.-China trade, the Belt and Road Initiative, and U.S.-China relations.

2. "China can use its entire national strength to accomplish great deeds"

Misjudgment: The "China Model" has its own unique features, especially compared to the Western society, which always spends more time on words than deeds. The "China Model" is more efficient, and can do what the West cannot.

Assessment: In China, there is the expression "ju guo zhi li" that can be translated as "using the entire national strength to achieve something". This stems from the sense that the country as a unified whole can mobilize its resources and power for a particular endeavor.

This type of misjudgment is a typical logical fallacy that abuses special practice in a certain unique period, thinking that it can be used regardless of the situation. In reality, using the "entire nation's strength" is to exchange the strength of the node with the weakness of the whole, with the hope that the strength of the node can feed back the whole. Some examples of such practice include China's atomic bomb project, or its strategy of letting a smaller group of people to prosper so that the livelihood of more people could be improved. However, when the utilization of "entire national strength" becomes ubiquitous, the internal logic of such an idea would be overturned, and difficult to realize the intended results.

3. China can say 'no'"

Misjudgment: China is a major power, or at least it is an increasingly powerful nation, so it can do what a major power should do.

Assessment: This kind of misjudgment is unable to distinguish the so-called "power" in the world. There are, in fact, two distinctive types of powers, namely land and sea.

Historically, the United Kingdom is a sea power in history, but not a land power. Conversely, Russia is a land power, but it cannot beat Japan in the sea power competition. China too is also a land power, and rarely in its long thousands of years of history that its power traversed through the great oceans.

The so-called "China can say no" is actually a product of this vague claim of power. This kind of false self-confidence might directly lead to untimely strategic expansion, similar to the mistakes that Japan has made twice (Showa and the Plaza Accord). The outcome as experienced by Japan is of course, very clear.

4. "Trial and errors" & "Seeking common ground while preserving minor differences"

Misjudgment: This is a Chinese-style experience that is often used during the country's reform and opening-up. As this is the experience most familiar to the Chinese, China often requests foreign countries to accept this kind of thinking and arrangement, that the main deals with China in international relations will need to be conducted first and other issues emerged can be resolved later.

Assessment: This kind of Chinese experience is completely incompatible with how the West does things. Western countries emphasize that all major deals should be done in accordance with a fixed framework, while the minor ones should be done in accordance with agreements and contracts, without any ambiguity. Therefore, the West often regards any differences in the deals as the parts that should be given up, instead of holding on to them for later discussions, as China thinks. When such requests on China's side occur repeatedly, this would cause it to lose credibility in the eyes of the West.

In the negotiation of bilateral agreements, China considers that once major deals are arranged, everything would turn out fine. Yet, more often than not, it cannot cope with the West's pursuit of the details of interests. The failure of China's "new major power relationship" was, to a certain extent, a direct result of this misjudgment.

5. Admitting mistakes equals failure

Misjudgment: China has historically been a nation that pays attention to "face", and this cultural trait has also been carried over to its diplomacy. For the sake of "face", it is a common practice to refuse to admit mistakes. It is also common to take a hard stance to the end because of it.

Assessment: For diplomatic practices to be accepted in the world, in addition to the exchange of interests, there is also the use of verbal humor to admit mistakes. If a country is not good at such humor, it will need to pay a higher practical price. More importantly, when a country insists that it "can never go wrong", it actually loses the strategic maneuver space and the significance of diplomacy.

6. Blind faith in the authority

Misjudgment: It is a common practice in China to locate an authoritative person who can make the final decision. The same practice is often brought over to international relations, where the Chinese authorities believe that once they have settled with such a figure, everything will become favorable to China. If they are unable to settle with such a figure, they would attempt to do it to the next one perceived as the leading authoritative person.

Assessment: Chinese authorities will need to be aware that the mechanisms in other countries are different from that of China. In many countries, a figure who makes the "final decision" more often than not does not exist at all. Rather, decisions are made collectively by a group, or multiple groups. Therefore, rather than locating such a figure, the Chinese authorities need to understand the general social trend. Meanwhile, as more countries increasingly understand such a misjudgment on China's side, whenever there are major incidents, there would be a number of people ostentatiously claiming, or implying to be the final decision-makers. This was exactly what happened during the U.S.-China trade war, and China would bear the brunt in the end.

7. Chinese culture is the norm in the world

Misjudgment: Chinese cultural traits, particularly the ethical thoughts derived from Confucianism, are frequently found in China's diplomacy. China often considers that these traits are what all countries in the world should understand and practice. A classical example is that after the Sino-Indian conflict in 1962, China retreated and returned the territory, as well as released prisoners of war and their equipment, claiming that it was being "courteous", and hoped that India would understand China's goodwill.

Assessment: Chinese culture has its own unique features, but it is not the mainstream culture in the world today. Outside of China, most people would not understand how China thinks. It is precisely of this that India still believes that China invaded, and continuously invades India's borders, instead of accepting China's "goodwill". This is also what happened in Vietnam and the South Sea. This situation will not improve unless China has the ability to explain its own cultural traits (or force others to accept them). Looking at what happens now, the possibility of this gets even lower.

8. Integration of culture and publicity

Misjudgment: In China's understanding, culture and publicity are integrated and inseparable. This thought has been solidified in China's administrative system, which in turn, is reflected in its administrative responsibility.

Assessment: There are three major differences between culture and publicity. First of all, publicity definitely needs cultural elements, but culture itself is by no means publicity. Second, publicity has specific political goals, whereas the goal of culture is of cultural nature. Third, culture pays attention to creativity, taste, style, form, genre, and technique, while publicity emphasizes clarity, appeal, and simplicity. The people factor too, determines the differences between the two. In the West, respect is given to those in the cultural field, yet not to those who deal with publicity, or propaganda. Hence, there are few in the world's cultural scene willing to speak for China.

9. Ignoring the West's value influence

Misjudgment: China believes that Western values do not apply to itself, resulting in a conflict of values between the country and the rest of the world. In its attempt to resolve this, China either amplifies the shortcomings of Western values, or ignores these values completely. This of course, is hard to convince the rest of the world.

Assessment: China needs to realize that, unlike its values, Western values are the mainstream in today's world, and that the situation where the world was split into two parts during the Cold War has long been over. This means that if China wishes to change the concept that is recognized by the vast majority of the world and make everyone else acknowledges its thoughts, this is next to impossible. In fact, there is absolutely no need to be afraid of Western values, or to artificially stand against the mainstream trend. "Localizing" Western values, internalizing, and integrating them may be a better approach.

10. Ideological Position

Misjudgment: China divides countries into two parts: those whose ideology is aligned with China are considered to be its "friends", and those who are not are thought of as "foes". This is even reflected in diplomacy, where the Central Liaison Department manages "friends", and the Ministry of Foreign Affairs deals with the rest. The outcome is that the Ministry of Foreign Affairs has much heavier workloads.

Assessment: The most important principle of the united front is to "draw lines according to common interests" rather than according to ideology. As things stand, ideology can be ambiguous and difficult to explain. Now, many countries have discovered this characteristic of China and use it to gain advantages over China.

11. "Anything that can be resolved with money is a trivial matter"

Misjudgment: There are those in China who believe that money is the reason behind everything.

Assessment: There are many things in the world that the Chinese are unfamiliar with. Henry Kissinger for instance is a household name in China, yet many Chinese do not know that Kissinger is not a rich person. George Kennan, the American diplomat who helped the United States to win the Cold War, did not have much money in his life, and he belonged to the mid-lower class. Colonel T.E. Lawrence, better known as Lawrence of Arabia, was of British nobility, yet he refused to accept the money given by the British government and would rather write articles to subsidize his family. Such idealists will be regarded as respectable people in the West. China, which had experienced economic shortages before, naturally believes that money is highly important. However, this is not the case in other parts of the world. There are indeed people in different countries who want to earn China's money, but this is definitely not mainstream, nor is it highly regarded, just as Europeans still look down on Americans today. Therefore, the first step for China to improve its international image is to get rid of its "nouveau riche" mentality.

12. "All Western entrepreneurs are money-minded"

Misjudgment: There are Chinese who think that in the market economy, businesses will have the final say, and all entrepreneurs are money-minded. They see this as the truth that can be used against Western businesses.

Assessment: The social system of Western countries is generally a five-level linkage system of people-laws-politics-capitals-enterprises. The "people factor" is the most basic social foundation. The will of the people would form the laws, and this is followed by politics. The capitals and enterprises, in turn, are under the pressure of laws and politics. Therefore, even if the entrepreneurs are money-minded, they must follow the people's will. In the United States and Europe, being labeled as "entrepreneurs who cooperate with the Chinese government" would be a stigma that few can bear.

13. "Western countries are all the same".

Misjudgment: Most of the time many in China cannot differentiate many countries in the world, and they lump these together as "Western countries", considering them to be homogenous.

Assessment: "Western countries" have never been monolithic. Europe is different from the United States, and Japan is not the same as the United States. There are many more different countries, all with contradictions and conflicts of interest with each other. Europeans look down on the United States culturally, the United States looks down on Japan in geopolitics, and Japan looks down on the United States even more though the Japanese see Europe in a favorable light. Yet, this is not how China understands the world, and when it realizes the reality is different from its perception, it would be too late. It is often only when China needs friends that it finds out these "friends" have turned into its "enemies".

14. "Geopolitics is all in all, politics".

Misjudgment: Because the word "geopolitics" contains the term "politics", many Chinese consider them to be one and the same.

Assessment: Geopolitics is the relationship between major powers and their national interests. It is about strategies, methods, resources, and cultural prowess. Therefore, it would be inappropriate to mix domestic politics with the relations of major powers. Some in China would point out that certain foreign powers are aiming to subvert China. While this may be true, the reasons behind this should be understood. This has to do with the relationship between different countries, and it is the attempt to curb the existence and development of another country. As long as China can manage its relationship with other countries well, no one can subvert it. Otherwise, no matter how it engages its internal politics, China will still be unable to win in the relationship with other great powers.

15. "National security relies on national productions."

Misjudgment: There are those in China who believe that industries of systemic importance must be domestically produced and cannot be controlled by another power.

Assessment: This is a paradox. What is systemically important for China will be the same for other countries as well. Therefore, the more systemically important an industry is, the higher chances that the products cannot be made domestically in China. This is even more improbable in the context of globalization. The real problem is not about being controlled, but having the ability to control others as well, i.e., establishing a balanced symbiotic or interdependence relationship. The idea of "national production" is simply impossible to achieve. It can only be used by those with ulterior motives and a lot of resources have been wasted because of this. Semiconductor chip fraud is one such example.

16. "The United States is a country hijacked by Wall Street."

Misjudgment: Similar claims include the United States being hijacked by the military-industrial group, oil giants, etc. Such claims imply that the U.S. leadership cannot make its own decisions and there are other forces behind its government.

Assessment: These claims simply ignore that the U.S. is a country that upholds the separation of powers, and they overestimate and exaggerate the power of the lobbying system. The influence of capital on U.S. policy is mainly in two stages: interference in political elections, and influence on members of Congress. However, the relationship between capital power and the executive and the judiciary is anything but harmonious. Those who hold this view appear to not know that after the Occupy Wall Street movement, the image of Wall Street plummeted. It also shows that they do not have a sufficient understanding of American politics. Instead, they appear to possess an oversimplified understanding of the country's policies. An example of such an understanding would be the attack on Iraq by the U.S. was to satisfy the interests of military enterprises and to control the oil in the Middle East.

17. "Anti-globalization will not appear"

Misjudgment: As one of the countries that have benefited the most from the wave of globalization, it is easy for China to generate a judgment based on optimistic expectations that the stage of "anti-globalization" will never come.

Assessment: This is not so much a judgment as it is wishful thinking. The basic logic is the same as that of many investors who are new to the stock market: because they made money in a bull market, they hope the bull market will last forever. In reality, anti-globalization and globalization are two sides of the same coin, and we are now in the stage of anti-globalization. The biggest impact of this misjudgment is a sense of blind optimism and a lost opportunity to prepare for a possible crisis. When anti-globalization really came, many scholars, business practitioners, and officials were caught off guard. Even when anti-globalization has clearly emerged, there are those in China who still refuse to believe it and instead only see partial signs of optimism. In the end, they will only be swallowed up by waves of market changes.

18. "Globalization is the transnational flow of 'economic factors'"

Misjudgment: China has a simplistic understanding of globalization. The so-called "globalization" here is understood to be the "transnational flow of economic factors".

Assessment: There are many published materials on globalization worldwide, yet many of these remain little noticed in China. The essence of globalization is actually an expansion of human living space. The large-scale flow of people, culture, aspects, and information. It cannot be limited to merely the economic level, let alone the economic factors. There are indeed business opportunities brought about by globalization, yet it should be remembered that there are also others losing such opportunities due to it. Judging from the investment patterns of China's state-owned enterprises (SOEs) in the Belt and Road Initiative, most of these SOEs still simply attribute the resistance they encounter to geopolitical influences. While such influences do indeed exist, they are not the only reason for the resistance that Chinese enterprises face internationally. The root cause is still the inaccurate understanding of globalization.

19. "It is impossible for the formation of an anti-China alliance"

Misjudgment: "Countries in the world still need to do business, hence the formation of an 'anti-China alliance' is merely empty talk"

Assessment: This misjudgment actually shows a loophole in strategic decision-making thought, i.e., the unwillingness to consider all possible situations. China's decision-making and analysis process is largely influenced by its expectations. For example, because of not wishing to see China being isolated internationally, some of its policymakers deny the possibility of such a situation in the analysis process. In reality, when it comes to important strategic predictions, the worst-case scenario is often more meaningful than the best case. Judging from the situation in 2022, China obviously lacks an understanding of the degree of deterioration of the situation. Hence, it still insists on implementing an expansionary international strategy. In fact, an anti-China alliance is in the process of being formed, and the desire to "do business with China" cannot prevent its formation. This is because such an alliance is based on multiple factors, chiefly industrial and economic competitions, as well as values, international credit, historical issues, and others.

20. "It is proper to trade technology for market"

Misjudgment: Such a misjudgment is formed by overextending the successful experience in the early days of China's reform and opening-up. During that time, China formulated the market access rules of "trading technology for market". This was a common practice in China at the time.

Assessment: This approach is reasonable in the early stage of China's development. During that time, Western companies were willing to accept this arrangement, because China's manufacturing capabilities did not pose a competitive threat, and there was sufficient labor supply. For Western companies, this advantage could be a hedge against the compromises they made on technology. However, things have changed significantly now. On the one hand, China's manufacturing industry is now beginning to challenge all countries in the world market, but at the same time, it is difficult for Western countries to enter its consumer market. Therefore, it is impossible for Western companies to accept the condition of "trading technology for the market" anymore. This is the root cause of the West accusing China of unfair competition that led to trade disputes.

21. "Defining international relations with revolutionary friendship"

Misjudgment: This misjudgment is formed by the combination of the inertial influence left by the ideology in the past and the lack of professional ability. One example of this is the Chinese People's Liberation Army singing the Soviet Russian patriotic song "Katyusha" on the Red Square at Moscow, a song that even most Russians today would not sing.

Assessment: It should be noted that even during the time of the Cold War, there was no so-called "revolutionary friendship" between China and the Soviet Union, Vietnam, and even North Korea. The saying of "there are no permanent friends in international politics, only permanent interests" is rather accurate. The Chinese leaders in the past were very aware of this, otherwise U.S.-China diplomacy in the 1970s would not have been possible. Many Chinese people today begin to choose to believe in the so-called "revolutionary friendship", which is tantamount to accepting that some countries are destined to be China's enemies. This is simply naivety in international relations.

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