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China 2017: New global agenda

Overview

“I think it’d be good if people compare Xi’s speech at Davos and President Trump’s speech in his inaugural. You’ll see two different world views.”

Steve Bannon, White House Chief Strategist

“Without going through the wars, it’s impossible for other nations to respect China’s stance, and it’s impossible for China to become a global leader.“

Li Daokui, prominent Chinese economist

This year will be of special importance for China in three main areas: the economy, as growth slows and multiple challenges develop; domestic politics, leading up to the key Communist Party Congress at the end of 2017; foreign policy, as the People’s Republic expands its influence and confronts the Trump administration. This is the first of three notes analysing these themes and their interplay as the grey shades of the China-US relationship in the Obama era are replaced by starker choices under Donald Trump.

Key judgments:

  • China has embarked on an ambitious global policy.
  • It sees Trump’s isolationist leanings as an opportunity.
  • The potential for confrontation stretches far beyond trade.
  • Relations with the US are closely linked to domestic policy.
  • The main danger is that a deal-minded Trump administration will not appreciate how deep-rooted the PRC positions are.
  • Increased overseas investment and aid are among Beijing’s tools.
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