Economist on China’s Future and What the West Misunderstands

AMANPOUR, CHIEF INTERNATIONAL ANCHOR: Now, the United States and China are looking to reset relations as the U.S. secretary of state prepares to visit Beijing this weekend. The trip comes months after the meeting was canceled, when the U.S. shot down a Chinese spy balloon over its airspace. Our next guest was born in China, educated in the United States, and she is a world-renowned economist. They Keyu Jin traces China’s rise and relationship with the West in her new book, and she is joining Walter Isaacson with your valuable perspective.

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WALTER ISAACSON, HOST: Thank you, Christiane. And, Keyu Jin, welcome to the show.

KEYU JIN, AUTHOR, “THE NEW CHINA PLAYBOOK”: Thank you. Great to be with you, Walter.

ISAACSON: The news in the past few days has been about China, perhaps, developing a listening or a spy station in Cuba, that comes out on the heels of the balloons that perhaps China sent over, that were surveillance balloons. As somebody who was born in China, has three degrees from Harvard, now lives in London and Beijing, you understand this relationship well. To what extent is there something alarming about the increase in surveillance, or is that just a normal order of business between the two countries that we should live with?

JIN: Well, I think there are a few people who will disagree with the statement that everybody spies on everybody. But to be fair, you know, it is — China is a rising nation with rising aspirations. And as we’ve seen throughout history, all of these rising nations have had their global agenda, and China certainly wants to have a greater say in the global norms and order, and it’s often interpreted as aggressive tactics and acts. But the Chinese also have their own perspective. They consider their influence in the region to be increasingly important. Yes, they probably have aspirations to diminish U.S. power and influence in what they believe to be their sphere of influence. As we know, from the Monroe Doctrine way back, the U.S. always also interested in ousting European powers as it became a much stronger nation. But leaving all of that aside, I think, you know, in the short-term, the Chinese and the Americans are pointing fingers at each other and talking past each other. But most recently, they do have a desire to stabilize the relationship for their own good and to take the temperature down.

ISAACSON: Well, the big news in the coming weeks will be the fact that Secretary of State Antony Blinken is traveling to China. A trip that was canceled earlier on or postponed earlier on because of the balloon surveillance issue. What do you think he should say on that trip, and do you have hopes that that will lower the temperature in this confrontation?

JIN: Look, the dialogue channels have to be open. As in any relationship, as we all know, communication is key here. But they have to start really having substantive dialogue, and there’s also a Chinese perspective on this. For the whole list of U.S. grievance on China, there’s a similar one of Chinese grievances against the U.S. and so, the dialogue needs to be kept open, but the U.S. should also focus on subspecific issues, subspecific areas where China is pushed to negotiate or change, rather than having all of this tension corrode the entire economic and trading relationship, and the world economy. I think that China believes it’s new normal now with U.S. restrictions on technology, but they do have hope that trading and investment relationships can resume normality and further talks about discussions on collaboration. And China has also accepted it has a new normal that these technology restrictions are simply going to be around. But for the U.S., is China going to go away? No.

ISAACSON: What fundamental misunderstandings do you think that Americans have about China?

JIN: Well, how the model works, the unique economic system, the fact that there’s just a centralized state with an almighty — a centralized system with an almighty state. I think they often miss the very creative, entrepreneurial, on the ground decentralized mechanisms that China — has made China very successful and early reformer and an innovative power. But I think we also miss a cultural and historical lens. This is why Americans and Chinese will look at the same question and come to radically different conclusions.

For one, the tolerance of state. In some cases, the Chinese State intervention is not only expected, they are also desired. But the same actions would be totally intolerable to other cultures. So, we come back with a different take on the similar issues, and this is why we keep on talking past each other, by not seeing the others perspective.

ISAACSON: Do you think that also exists the other way, which is that China’s leadership, or the Chinese people, have some fundamental misunderstandings about the U.S.?

JIN: Absolutely. I think the fundamental understanding that the U.S. wants to suppress China’s growth, wants to hold back China’s growth, is also misplaced. I think the Chinese government underestimates the scope and room for dialogue, and to ease tensions, with China negotiating and giving up some. And also, the huge impact that China could have by opening up its economy further and much more enthusiastically to American businesses, let them make money, give them level playing fields. I think these could be real accomplishments, and American businessmen will then go on and lobby their governments. So, I think there’s a lot more to do. But from the Chinese perspective, it’s almost like, this is it. There’s nothing we can improve on, there is no ground for really improving the relationship, and I think that’s mistaken.

ISAACSON: One of the misunderstandings we had, I think, was that if we had a greater trade relationship with China, if they were more networked into the world, if they became part of the World Trade Organization, which they did, that would lead to a gradual liberalization in China. It’s worked the other way. Why is that and was that a misunderstanding?

JIN: Well, I think that the common assumption that somehow globalization will bring convergences of all sorts, apart from economic convergence, was probably a mistake. And this is not just of China, but many other countries and cultures where their peoples are firmly rooted to their local communities. And China, after the WTO, is still very much Chinese. That hasn’t changed.

There’s superficial levels of convergence. The new generation, they aspire to the American lifestyle to a certain degree. They like Hollywood and NBA, but their identity is still firmly local. And the fact that 80 percent of these half a million students studying abroad every year returning to native soil is an indication of that, even though they have great economic opportunities elsewhere.

And I think, yes, you are absolutely right, political liberalization has totally stalled. But we also have to ask, you know, what does the new generation want? Yes, they have very different appetite for consumption and borrowing compared to their risk averse parents’ generation, but politically, what is their mentality?

Now, there are many international surveys that showed they’re much more open-minded and socially conscious, and I think there is a lot more convergence of social values of the new generation around the world with the Chinese, but they also look abroad and do not find inspiration. They don’t look at western liberal democracies as paragons of success, or the other democracies that was transposed onto native soil as models that they aspire to.

Instead, the appetite, again, for stability, for government accountability, for economic opportunities is still dominant in their thinking.

ISAACSON: One of the values of the United States, sort of a moral compass, is that liberties, free press, democracy, these are good in and of themselves. Are you saying this new more cosmopolitan generation of Chinese don’t really believe that?

JIN: No. I don’t think that’s true. I’m not suggesting that in any way. I think they would want to have a freer and more open society. I think that is the desire that the general public have on the — for the — for China. But — and I think these values are evolving. I just don’t think that anything we should treat as totally cultural, totally indigenous, and that things won’t change. That’s not the case. I think if you look at China in the 1990s, there was a totally very liberal era. And people were debating, talking about all kinds of things. So, I’m not suggesting that these are fixed preferences. But I’m — what I’m saying is that, first of all, if they had to choose, and I’m not saying there’s necessarily a trade-off, between freedom and security, as international surveys show, 95 percent of the Chinese population choose security over freedom. In the U.S., 37 percent would make the same choice.

ISAACSON: You talk about surveys. You talk about the opinions that the younger generation have, some of that is in your book. To what extent are those surveys something that is reliable? To what extent would you or, for that matter, a younger person in China, want to speak out against the state?

JIN: Well, these are world values surveys, which are widely recognized and used, and as random selection as possible. They are also American economists or sociologists’ own gathering of data. There’s a wide range of sources that would basically suggest the same. It’s true that the new generation has aspirations for more liberalism. But it’s interesting that their sentiment towards the U.S. or western democracies did also make a turn in 2017, and that’s during Trump era. So, we can’t underestimate how the external environment and what’s perceived to be greater pressure on China, the kind of idea that somehow the West doesn’t want China to become a richer nation, and other developing countries. That really do shift their preference — their sentiment and shape their understandings. And so, we can’t underestimate that as well. So, I think we can’t take these preferences as given. But the external environment, their observations have made them come to a conclusion that maybe the western democracy doesn’t really suit China.

ISAACSON: You say that some of the reaction that’s happened in China against the liberalization that had occurred 20 years ago or so happened out of reaction to Donald Trump or reaction to what the U.S. did. But to what extent is Xi Jinping’s own values that have changed, and to what extent might China change after he’s no longer in power?

JIN: Well, the one thing is true is that China has been constantly evolving, adapting, and adjusting. And maybe because the West has been so focused on the three set of issues that they have often missed, the vast changes and the evolution. And yes, we can maybe say that there are some references on the top that are imposed on the general public, but China, you know, faces a real challenge. It’s no longer the country where the entire population revolves around one goal, which is higher income and more GDP. It’s becoming a much more complex nation with individual preferences, diverse opinions.

And how do you manage a greater complex society is going to be the key critical challenge for the leadership going forward, and it’s not going to be easy. If you look at the youth unemployment rate, 25 percent of people with bachelor’s degrees without a have job, I mean, that is really signaling social instability issues. But also, don’t underestimate the Chinese government in their rapidity and swift adjustment to policies. In the U.S., policies take a time — take a long time to change, but the parties change. In China, parties — the party doesn’t change, but policies can change very quickly. If the government has a mind on something and they believe that’s the right thing to do, things will happen swiftly. So, never read anything as being permanent, even this rhetoric or the ambitions, the grandiose messages, they aren’t permanent. They are always recalibrated, fine-tuned to fit the circumstances and accommodate the reality.

ISAACSON: You talk about a 25 percent unemployment rate among young people, people who have just graduated from college. That seems explosive. Why is that happening? Is that a basic economic problem and what could that mean?

JIN: It is very high, stunningly high, because the world averages is around 14.5 percent of youth unemployment. I think there are some short-term economic reasons. The economy is doing very poorly in China. But I think the more general problem is that diplomas have raced ahead of the economy. The Chinese economy is still very much manufacturing base. They don’t need that many bachelor degrees. But what they do need is vocational, technical skill training, especially when China aspired to be a giant Germany with this industrial power. At the same time, there’s youth unemployment. There’s 30 million manufacturing jobs to be filled by 2025, and every year, 300,000 skill gap in the semiconductors industry. So, it’s really a skill education mismatch.

And also, the big chasm lies in the expectations and reality, the difference between expectations and reality for the youth. They have high expectations. They went to get a college degree, and yet, they have only jobs as nannies or as workers in a cigarette manufacturing company. And that really leads to disappointment, a lost — reduced expectations, and that affects the families as well. And that’s a sign — a real sign to be aware of.

ISAACSON: Chinese lived under zero COVID policy, I think it was almost three years, and the government seemed to begin to pivot away from that following the protests of the — two weeks of protests. How did the COVID zero policy impact the relationship between the state and the people? And what does it show about the Chinese government that it would really do a pirouette on this issue?

JIN: I think in the beginning, early stages of the pandemic, the Chinese public were generally supportive of the controls in place and saw China as a success. But as we know, as the virus evolved, the policies did not involve, and that became a huge problem. And towards the very end, you know, people were losing jobs, they weren’t having any income and they were pretty much fed up with the lockdowns. And in a very surprising turn, you saw how the people’s voices and people’s preferences, ultimately, you can say, it was way too slow, but it did move the government. It did change the government, way faster than anyone had ever expected. And so, I think that it’s one example of this feedback. And this most important thing is that the communist party — the boat stays afloat because of the sea of people. So, that’s something that is really important in China. And so, they always have to answer to the vast majority, not every single individual Chinese, but the vast majority. And if they’re not happy, it will topple the boat. So, do you remember that about China.

ISAACSON: Let me read you a sentence from your book that I found fascinating. You said about China, it’s ambitions to not include exporting its ideology or foisting itself development model on the rest of the world. That, in some ways, said to the part from we always thought about Russia for the past, whatever, 400 years, that it wanted to spread its ideological models.

That’s also is unlike the U.S., which from the days of Woodrow Wilson to the days of George W. Bush and Joe Biden, has felt that we’re supposed to spread democracy. Do you see that as a fundamental clash?

JIN: China is more practical. It understands that its unique model is impossible to be replicated elsewhere. So, it doesn’t strive to do so. But it does also believe that some of the developmental lessons that it can impart on developing countries could be important. For instance, like infrastructure development, on which it has a great amount of expertise. But I don’t think spreading ideologies is really a goal for China. But, you know, this leadership, especially past generation of leadership, have eminently practical. We have to remember that 80 percent of the global population still lives in the developing countries. So, China wants to work more with developing countries, and I think Chinese technology it eminently more suitable for developing countries than many American or European ones. But — and you can say that, you know, the current leadership is more ideological, but it’s more internally driven rather than trying to replicate, trying to want to replicate or export some ideals onto the rest of the world.

ISAACSON: Keyu Jin, thank you so much for joining us.

JIN: Thank you.

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