CARACAL INSIGHTS: COMMUNICATIONS GLOBALIZED
THE CURRENT STATE OF US-CHINA COMMERCIAL RELATIONS IN TEN POINTS
1. Hyper-politics in America will make all moves by elected officials short-term heavy with an eye on the next elections in 2020, 2022, and 2024
Plus, regardless of who wins Election 2020 in November, 60 candidates will be seeking the Oval Office in 2024.
New York Times: Hogan, Maryland governor, plans book tour as he eyes 2024 White House run
The presidential race Florida is really talking about: Politico reports, in the South’s biggest battleground, it’s already 2024, and the backstabbing and money-grabbing have already begun.
Why Biden’s choice of running mate has momentous implications: New York Times reports, Joe Biden has hinted that he might serve only one term if he wins. That would set up a woman as the front-runner for 2024 and perhaps define the Democratic agenda for the next decade.
Axios: Josh Hawley (R-MO) crafts the case against China
The GOP’s No. 1 coronavirus China hawk: Politico reports, Senator Tom Cotton's (R-AR) fierce attacks amid the pandemic could help him stand out in a crowded GOP field to succeed Trump.
2. These are the four factions shaping the environment: Communists vs. Capitalists vs. Cranks vs. Connectors.
Note that one person can be in all four factions at the same time, with various intensity depending on the situation, politics, or commercial goal.
Xi Jinping promises foreign firms reform, opening up amid heightened US tensions: South China Morning Post reports, in a letter to the Global CEO Council, Xi Jinping said China will deepen reforms and expand market opening up to create a ‘better’ business environment.
Bloomberg: Xi reassures global CEOs as Trump steps up push to isolate China
Business Insider reports, "Washington's China hawks, especially Republicans in the Senate, can't seem to get the president to focus on any China issues that don't have to do with trade."
Barr warns against corporate America’s China ‘appeasement’: Financial Times reports, US attorney-general suggests executives advocating for Beijing may be deemed foreign agents.
Bloomberg: Barr says Disney, Apple, and other firms are now pawns of China
Is TikTok's new CEO a puppet of Beijing? CNBC reports, White House trade advisor Peter Navarro has branded TikTok's new American CEO a "puppet" for fronting the Chinese-owned social media service. Kevin Mayer, a former Disney executive, was hired by TikTok parent ByteDance earlier this year. The Trump administration is considering banning both TikTok and WeChat, which is also a Chinese product.
3. Xi believes the "Chinese Dream" is a reality not fully realized yet - there is more work to be done.
The Chinese Dream is a concept promoted widely within Chinese society since 2013. Xi Jinping describes the “dream” as a set of personal and national ethos to create the ideal in China.
Xi’s Chinese Dream sets to achieve the “Two 100s”: the material goal of China becoming a “moderately well-off society” by 2021, the 100th anniversary of the Chinese Communist Party, and the modernization goal of China becoming a fully developed nation by about 2049, the 100th anniversary of the People’s Republic.
Party man: Richard McGregor in Foreign Affairs writes, Xi Jinping’s quest to dominate China.
The meaning of Xi Jinping thought: Salvatore Babones in Foreign Affairs writes, national revival and military power.
European Council on Foreign Relations: China’s “new era” with Xi Jinping characteristics
4. Whatever soft power China has cultivated over the last twenty years has been extinguished by developments in Xinjiang, South China Sea, Hong Kong, and its response to COVID. It is now China vs. The World.
AFP: China calls Britain 'America's dupe' for banning Huawei
Arvind Subramanian: China has blown its opportunity to control the world with soft power
David Wertime: Canada, COVID, Kashmir — nothing to see here, says Beijing
Simon Shen: The world is awakening to China’s sharp power: China’s sharp power first began to be displayed in Hong Kong. Now it is seen all over the world.
5. Coffee vs. Chips will shape commercial relations
For example, if you are selling coffee (Starbucks) and other consumer discretionary items, no problems.
For example, if you are selling computer chips ( Micron Technology) and other strategic technologies, mo’ problems.
Apjit Walia, Global Head of Technology Investment Strategy @ Deutsche Bank, warns that the demand disruption, supply chain upheaval, and bifurcated tech standards from a "Tech Cold War" between the US and China could cost the sector more than $3.5 trillion over the next five years.
US weighs ban on TikTok as friction with China rises: Financial Times reports, options include putting video app’s parent ByteDance on a blacklist or pushing for a break-up.
Huawei and the tech cold war: China v America: Economist reports, trade without trust.
6. Not all businesses are created equal or have the same commercial objectives, or the same stakeholder responsibilities, hence different enterprises have different perspectives on China:
MNCs vs. SMBs vs. Mom + Pops = Where you sit is where you stand.
MNCs = Need to be in China, regardless of challenges
SMBs = Need protection from China and see many problems
Mom + Pops = No need for China and vote accordingly
7. Politicians talking about new supply chains and re-shoring is fanciful, feel-good, campaign trail nonsense. Don’t be fooled by easy solutions to complex global commerce.
Removing Huawei from the UK’s telecoms infrastructure within a decade would be “impossible”, the BT chief executive has said.
Bloomberg: Biden offers plan to bolster US supply chains in crises
8. 2nd tier nations like the UK, France, Germany, Italy, India, Australia, and Japan will all be making decisions between going with America or going with China. These decisions will impact commerce and defense for their respective nations for a generation.
Xi’s call to Singapore: a subtle ‘reminder’ about the South China Sea? South China Morning Post reports, to some, the Chinese leader’s call to Singapore’s Lee Hsien Loong seemed a routine post-election call. To others, it seemed a warning against siding with the United States.
Los Angeles Times: The US wants Asian allies to stand up to China. It’s not that easy
Mittelstand v Middle Kingdom: Angela Merkel’s soft China stance is challenged at home: Economist reports, German businesses have had enough of being nice.
Germany's reluctance to speak out against China: Deutsche Welle reports, the pressure is growing on Germany to take a tougher stance towards China over human rights abuse. For a long time, business interests have stood in the way. But a united European stance is increasingly imperative.
Deutsche Welle: Many Germans believe China will replace US as superpower: survey
AFP: Beijing says US officials have 'lost their minds' over China
70 percent of polled Australian firms express concern about deteriorating China-Australia ties, up from 45 percent in the 2018 survey.
Rising tension with China rings corporate Australia’s alarm bells: Financial Times reports, spat with Canberra’s biggest trading partner casts a cloud over businesses, from farms to banks and airlines.
Wired: Banning Huawei’s 5G tech in the UK was the easy bit. Now it gets messy. Political sanctions have created new security and logistical challenges in the UK.
Britain toughens stance on China as it eyes US: Politico reports, the United Kingdom is widely expected to adopt a more hawkish stance on Chinese tech giant Huawei.
Reuters: Trump on UK's Huawei ban: 'I did this myself'
The Times: Trump claims credit for Britain’s Huawei ban
@FrancescoBechis: A secret document from the Italian government tightens up rules on #5G de facto excluding Chinese providers like Huawei and ZTE from the network. After the UK, Italy seems ready for a major political shift on 5G
Across the six Asia-Pacific nations surveyed by Pew Research Center between May 18 and Oct. 2, 2019, a median of 64% have favorable views of the US. Positive sentiments are highest in the Philippines and South Korea, with about eight-in-ten respondents holding favorable opinions (80% and 77%, respectively).
9. "America First" thinking coupled with pulling back from global demands and challenges is popular with voters and popular with elected officials in DC. If elected, Team Biden will attempt to revive a multilateral approach to China, but voter sentiment is not there today.
Gallup reports, while foreign affairs rank near the bottom of the list on extreme importance, 68% of Americans say that foreign affairs and trade are at least "very important" to their vote.
Donald Tusk: ‘I pray for Joe Biden’s success’: Politico reports, former European Council president says getting to know Donald Trump is one reason why he backs the Democrat in November’s vote.
Walter Russell Mead: Biden’s foreign-policy blast from the past: He thinks liberal multilateralism will tame China, Russia, and woke Democrats.
The Diplomat: Team Biden’s Policies on China and Taiwan
Defense One: What if Biden wins?
Defense One: Biden’s China policy starts with building a stronger America
Pew Research Center reports, younger generations tend to be more favorable toward international organizations. Millennials are at least 10 percentage points more favorable toward the United Nations than are Gen Xers or Boomers.
10. Election 2020 in November will be all about COVID, Cash, and China, which is all about who can handle Xi Jinping and the Chinese Communist Party going forward.
William Pesek: Donald Trump and Joe Biden are competing to see who is harshest on China
Trump, Biden try to outdo each other on tough talk on China: AP reports: “I think it’s going to be absolutely critical, but I don’t know who is going to have the advantage,” said Republican pollster Frank Luntz. He has been reviewing the ads and thinks China is one of the three leading issues along with the economy and the handling of the coronavirus.
US views of China increasingly negative amid coronavirus outbreak: Pew Research Center reports, Republicans more negative than Democrats toward China, though unfavorable ratings have climbed among both parties
Roughly two-thirds now say they have an unfavorable view of China, the most negative rating for the country since the Pew Research Center began asking the question in 2005, and up nearly 20 percentage points since the start of the Trump administration. Positive views of China’s leader, President Xi Jinping, are also at historically low levels.
Marc A. Ross is the founder of Caracal and is a communications strategist and business advisor working at the intersection of globalization, disruption, and politics. Ross specializes in communications, marketing, and advocacy for economic diplomacy and global commerce.
About Caracal: Working at the intersection of globalization, disruption, and politics, Caracal is a communications advisory firm helping global executives create new opportunities for economic diplomacy and global commerce.
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