Donald Trump has delayed the March 1 deadline for increasing tariffs on Chinese imports, saying that he expects the details of a final deal between the U.S. and China will be worked out at a summit meeting with Chinese President Xi Jinping, to be held at President Trump’s Mar-a-Lago estate in Florida. One question, of course, is what any such agreement would provide. Would it just cover China agreeing to buy more stuff from the United States or would it really change the way the Chinese economy works?
The Economist, in a leader in its current issue (“Can pandas fly?”1), encourages President Xi to, inter alia, limit the state’s role in allocating capital and temper China’s industrial policy. The Economist says that “[a] more economically liberal China would end up richer and make fewer enemies.”
But this misunderstands President Xi’s priorities – and the priorities of his predecessors. Thirty years ago, Deng Xiaoping crushed the protesters in Tiananmen Square because maintaining control was worth putting his economic reforms on hold for a time. It is the same with President Xi. Growth is nice, but political control is more important.
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1 “Can pandas fly?” was the title of the leader in the print edition of The Economist.
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