| This is Bloomberg Opinion Today, the worst excesses of an ongoing price war of Bloomberg Opinion's opinions. On Sundays, we look at the major themes of the week past and how they will define the week ahead. Sign up for the daily newsletter here. My introduction to daily life in China came from two historical novels that were considered musty even in the long-ago days of my teens. One won a Pulitzer Prize in 1932, the other was awarded its French equivalent, the Prix Goncourt, a year later. But aside from success in a couple of rigged contests, the books didn't have much in common. France's contribution, Man's Fate, is André Malraux's depressing slog through a short-lived 1927 communist uprising in Shanghai; and as you can guess, most of the characters are short-lived as well. [1] Pearl S. Buck's The Good Earth is an engrossing melodrama of the rise and fall of a peasant family from the 1880s onward. It has achieved a sort of double affirmation in my mind, having been banned in Communist China as an embarrassing symbol of imperialism, and pushed to the curricular margins by America's liberal elite under similar judgment. [2] Malraux had never set foot in China before writing his novel. [3] Buck knew a lot about the country, having spent the first three decades of her life in Zhenjiang and Nanjing with her missionary family. [4] But among the sophisticates, it seems, total unfamiliarity of a put-upon nation is far preferable to vast personal experience tainted by Christianity and colonialism. [5] Where am I going with this? I tend to write about contemporary China in terms of a great geopolitical rivalry, in which Xi Jinping plays the bad guy (with Russia's Vladimir Putin as his sidekick) and Western leaders play the bumbling, fumbling good guys who you just know (hope??) will eventually get their act together. It makes my perspective a bit like Malraux's, viewing a rising China from afar, through the lenses of politics and moral relativism. So I cede the field today to the bevy of Bloomberg Opinion columnists on the scene, who understand what is going on with the Chinese people. Like, for example, their fashion sense — or nonsense:  "The country is in the midst of a wellness boom, offering a rare bright spot in an otherwise struggling retail sector — and lessons for luxury players trying to reconnect with their most important market. The rise of the 'Gorpcore' aesthetic is emblematic of this trend," explains Juliana Liu. "Fashionistas sporting this look wear functional outdoor clothing as streetwear. Even though China was late to embrace this phenomenon, it has adopted the concept and moved it firmly into the mainstream." "One example is a viral meme that translates to 'one bird, two trees, and three roads.' It describes the respective logos of a trio of high-end outdoor brands — Arc'teryx, Kolon and Descente — that are considered workplace must-haves for professionals," adds Juliana. "All three labels are controlled by Anta Sports Products Ltd., China's biggest activewear maker with a rags-to-riches origin story as a provincial shoe seller." Rags to riches? The folks at Anta might want to read The Good Earth as a cautionary tale. Meanwhile, China's supercharged carmakers hardly seem to be in danger of heading back into the "rags" part of the cycle — but will their ambitions be as long as their roads? "China's car market is becoming saturated. With sales set to decline in the coming year, it's no surprise that homegrown automakers are looking to redouble their efforts overseas. But in order to remain welcome in their host markets, they should localize production and avoid the worst excesses of an ongoing price war at home," Juliana writes in a separate article. "The consequences have reverberated throughout the supply chain and reduced the profitability of the entire ecosystem, including parts makers. It was the right move for Beijing to step up regulatory scrutiny last week by announcing a proposal to crack down on selling vehicles below cost. However, more regulation won't be enough to fix the underlying problem of too much supply and not enough demand."  With a glut at home in cars (and most things industrial) China needs to look elsewhere for markets. President Donald Trump's America isn't very inviting all of a sudden. So how about a little revenge on the continental colonialists? "European Union carmakers like Volkswagen AG got their wish this week when a combustion-engine ban for 2035 onward was effectively abandoned. It was seen as too ambitious, too costly and a dream for Chinese rivals, whose electric-vehicle head start (powered by subsidies) has given them a 7% share of the continent's autos market. Faced with a choice between climate leadership and protecting jobs, the EU chose the latter," writes Lionel Laurent. "While it's true that the ban failed to spark a true European EV boom, dumping it is nowhere near enough to secure the industry's future. It won't solve Chinese competition. Worse, ditching it sends a signal that carmakers can comfortably take their foot off the investment accelerator. That's the wrong message."  Minxin Pei points out that the West's disadvantages stem from a decades-old mistake. "The US blundered in hoping to convert China into a liberal democracy through free trade" he writes. "For the past four decades, the Chinese Communist Party never disguised and never deviated from a long-term strategy focused on economic development — precisely in order to strengthen one-party rule at home and increase China's influence abroad. Economic reforms served to rejuvenate totalitarianism, not to weaken it." His advice for countering China's manufacturing ascendancy and geopolitical rise: If you can't beat 'em, join 'em. "Rather than lamenting that fact or criticizing previous American leaders for not recognizing China's strategy sooner, the US ought to mimic it to strengthen its own economic and political system. Imitation wouldn't be flattery but the ultimate payback."  The most populous nation in the world only wishes it could imitate No. 2 "In 1980, neither China nor India had much representation in the 'global middle class' — people who neither belong to the bottom half of the income distribution nor rank among the top 10% worldwide. Almost a half-century later, things have changed — but in very different ways. China now accounts for a sizable share of the more affluent middle-income earners, while India seems to have faded in relative importance," writes Andy Mukherjee. "The only two countries with billion-plus populations are both believed to have done well by embracing capitalism and opening their economies after the collapse of the Soviet Union. China became the factory to the world; India became its back office. So why should the outcomes for their citizens be so different?" A key line of The Good Earth holds that, "the poor do come back when the rich are too rich." For India, that may provide hope. For the Chinese, a prescient warning? Bonus Earth Intruders Reading: - The TikTok Question Is Being Swept Under the Rug: Dave Lee
- What's Left of Japan's Pacifism Meets Reality: Gearoid Reidy
- Boosting Nvidia's Bottom Line Won't Make Americans Safer: The Editorial Board
What's the World Got in Store ? - BOJ minutes, Dec. 24: Japan's Rate Milestone Is Just One More Step — Daniel Moss & Gearoid Reidy
- Christmas Day! Dec. 25: The Flu Is Trying to Ruin Your Holiday. Don't Let It. — Lisa Jarvis
- Boxing Day! Dec. 26: Angela Rayner as British Prime Minister? It's a Worrying Prospect — Rosa Prince
As much as I value insider insight into what the Chinese people have going on, I still tend to focus on what Xi and his minions are up to on the grand stage. And it's nothing good. "One of the most dangerous pitfalls in foreign policy is losing sight of what a determined adversary seeks. The US is committing that error today. America's rivals, China and Russia, are aggressively attacking US influence and prosperity. Their ultimate aim is to make today's sole superpower an isolated, second-tier state," writes Hal Brands. "Trump, in his first term, declared that the US had entered an era of great-power competition. He seems set on obscuring that reality in his second." For one thing, there is a particularly troublesome trade giveaway. "Trump's decision to approve previously banned exports of Nvidia Corp.'s powerful H200 artificial intelligence chips to China could turbocharge the People's Liberation Army's technological ambitions, narrowing America's edge in military supremacy," writes Karishma Vaswani. "Over time, this risks shifting the balance of power in the Indo-Pacific, the primary region in which Washington competes with Beijing for influence and power." Mihir Sharma thinks the most worrisome thing the US is sending across the Pacific can't be measured in microchips. "MAGA's most dangerous export, as far as the security of the Indo-Pacific is concerned, is its distaste for the liberal order," Mihir writes. "One day soon, MAGA's ideologues and populists may decide that granting Beijing overlordship of Asia will not affect jobs or profits in the US. From that day on, they will not lift a finger in defense of the Indo-Pacific." Hal gives the bigger picture in a separate long essay. "Trump hasn't yet quit any American alliances. But he has unsettled them by imposing asymmetric trade deals, extracting massive pledges to invest in the US, and demanding that allies take far more responsibility for their own defense … the price of access to the US market and the US security umbrella is going up" he writes. "In an optimistic scenario, that strategy could produce a democratic community that is better armed against deadly adversaries, and an allied techno-economic bloc suited to the rigors of modern rivalry. But in a more pessimistic forecast, Trump's policies — and his predatory ethos — could crater the credibility and cohesion of America's most important pacts." Who would have thought that Man's Fate would be in the hands of a man like that? Note: Please send Arc'teryx Norvan 4 Nivalis and feedback to Tobin Harshaw at tharshaw@bloomberg.net |
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