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Legislative elections in South Korea

Giancarlo Elia Valori

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In the elections held on April 13, 2016 all the 300 seats of the Seoul National Assembly were renewed. 253 members of Parliament were elected with the typical British first-past-the-post system, the traditional mechanism by which the candidate winning 50% of votes + 1 or, alternatively, the candidate obtaining the majority of votes in a particular constituency, regardless of the percentage of his/her valid votes, is elected.

47 representatives were elected from proportional party lists, in accordance with Constitutional provisions. Against all odds, the elections were clearly won by the Minjoo Party of Korea.

The Minjoo Party, formally the New Politics Alliance for Democracy, is a political grouping of liberal-democratic culture, at least according to Western political science criteria.

It was created on March 26, 2014, as a merger of the Democratic Party with the preparatory committee of the New Political Vision Party. In fact, the old Democratic Party was fully absorbed in the New Politics Alliance for Democracy, while the preparatory committee was dissolved and has no relevant members in the new grouping.

The losing party is the liberal-conservative Saenuri Party, defeated by one single seat in the Assembly and in votes for party lists, while the Minjoo Party came third, in terms of total votes, behind the Saenuri Party in first place and the new centrist People’s Party in second.

The Saenuri Party, also known as the New Frontier Party, has a center-right political tradition and, until February 2012, it was known as the Grand National Party.

It was created in 2012 as a merger of the United Democratic Party and the New Korea Party. In fact, its earliest ancestor was the Democratic Republican Party under the authoritarian-Gaullist rule of Park Chung-Hee. In 1980, upon Park’s death, it was renamed Democratic Justice Party, under the rule of an equally authoritative leader, Chun Doo-Hwan. In 1993 it was officially called Democratic Liberal Party.

In 2002, this political group was reconstituted again and the already-created Saenur Party merged with the Advancement Unification Party.

Hence these elections mark a radical change of the South Korean institutional scene, with a hung Parliament which is no longer able to provide sound majorities, but is open to government bargaining.

A dangerous practice which comes after the South Korean Constitutional Court authoritatively dissolving the Progressive Party, a leftist grouping largely characterized by a Marxist-Leninist culture.

In 2012 the Saenur Party had won 152 seats out of the 300 available.

Nevertheless the candidate of this group, Ms. Park Geun-Hye, had won the presidential election despite the Saenur Party had recorded a decrease of its seats to 146 out of 292, exactly 50% of the Assembly votes.

Undoubtedly those elections had been affected by the decision of the Constitutional Court which, while noting that the electoral districts had led to an asymmetry of representation, reduced the size of most constituencies.

After 2013, when the Progressive Party was dissolved by decree, due to its alleged ties with North Korea, the decision of the Supreme Court led the Justice Party to be the only leftist organization on the South Korean political scene.

The Justice Party was later supported officially by the powerful union of trade unions, but its members were close to the left wing of the Minjoo Party in terms of programs and policies, while one of its leaders, Ahn Cheol Soo, walked out of the party and founded the new People’s Party in early 2016.

By constitutional law, the next presidential elections scheduled for 2017 are off limits for the current President Park Geun-Hye.

Let us see the possible candidates.

Firstly, there is Moon Jae-In, who had been defeated by the current President, who in mid-February was elected as leader of the main old opposition party, the aforementioned New Politics Alliance for Democracy.

His allies include the mayor of Seoul, Park Won-soon, who, at least according to the polls, is currently the most popular presidential candidate.

Moon can rely on the Left votes of the South-Western province of Jeolla but, however, he is also capable of winning over the conservative votes in the city of Busan, currently ruled by the Saenur Party.

Also the leader of the Saenur Party, Kim Moo-Sung, comes from Busan. He is an old acquaintance of the National Assembly since he was elected five times.

However, which are the real themes of the South Korean electoral campaign and policy?

First and foremost, there is the maintenance and transformation of the Welfare State.

The old government has always supported the line of “maintaining and expanding welfare without raising taxes”, especially corporate income ones.

However, specific taxes on tobacco and cars were introduced last September, with a further restructuring of the income tax which, in effect, increases the tax revenue.

Therefore the idea that South Korean voters had of the government is that it raised taxes for the middle class and workers without expanding the Welfare State, which is currently weak.

Conversely Moon wants to raise corporate income taxes, especially on the chaebol, the business conglomerates which have always characterized the South Korean production system.

In fact the New Politics Alliance for Democracy focuses on the “Welfare State”, with Moon who wants free meals for all South Korean pupils and argues with the South Korean chaebol which, in his opinion, now epitomize a backward development model.

The Saenur Party has no clear position on these issues.

But the Party knows all too well that currently, in South Korea, the welfare cannot be expanded without raising taxes and, above all, without forcing the chaebol (such as Samsung) to pay higher taxes.

This could lead many businessmen to leave the country and set up factories in Vietnam or, even, in the North Korean Free Economic Zones, which have never taken off.

The latest polls show that South Koreans do not want a bigger Welfare State, but 52.8% of them want to directly increase the corporate tax, regardless of this new tax revenue being used for welfare purposes.

The problem lies in the fact that currently the South Korean economy and incomes are very polarized between the haves and the haves not, while the network of small and medium sized enterprises has not yet become the key to the new national economy.

In foreign policy, the Saenur Party is clearly conservative and has no intention of adhering to new negotiations, or even softening its position vis-à-vis North Korea’s actions.

On the contrary, President Park wanted a Summit with North Korea without preconditions, i.e. without Kim Jong Il giving up his “new militarist” line.

Paradoxically, but not too much, the South Korean conservatives have always been those having a more open-minded attitude towards their North Korean “brothers”, while the South Korean center-right leadership has always aimed at having a preferential relationship with China at economic, political and cultural levels.

Moon, however, is heir to the legacy of former President Roh Moo-Hyun, who has always advocated a compromise with the North Korean “brothers” at all costs.

China, however, does not like the correlation of forces between South Korea and the United States.

Hence we are witnessing a radical transformation of the South Korean political scene: for the first time in 16 years, the President’s party has lost the elections.

As we have already partially noted, this is due to the “hard line” against North Korea and the neo-liberal and free trade economic policy which for the Western political parties and alike is a one-way ticket in elections.

The Saenur Party won 122 seats out of 300 and, inter alia, many candidates have abandoned it during the campaign because they did not feel protected and safeguarded at organizational and electoral level.

As we have already seen, the Minjoo Party won 123 seats and, according to its leaders, the success of the opposition party results from South Korean slow growth.

Last year the GDP growth rate was a meager 2.6%, with youth unemployment which, last February, reached the “European” level of 12.5%.

The People’s Party won 36 seats, probably thanks to the positive effects of the mass demonstrations against the new particularly pro-business labour legislation which had been supported by President Park.

The Minjoo Party wants above all to create more jobs; it plans to increase the minimum wages and pensions and build affordable housing for young people.

As we have already noted, it is very likely for the issue of North Korea and its relations with South Korea to be the priority.

In terms of national security, the vast majority of South Koreans support President Park’s line, much in line with the US one, which would impose the immediate end of North Korea’s nuclear program and the end of its missile launches.

Nevertheless, all the opposition parties, including the center-right ones, emphasize the gap existing between President Park’s pro-American line and the pursuit of South Korean national interest, which coincides with an easing of tensions with North Korea.

However, while China does not want to undermine its relations with South Korea, certainly it cannot sever all its ties with North Korea, although it should be noted that the Chinese leader, Xi Jinping, has not yet found the time to visit the North Korean “comrades”.

This adds to the internal situation prevailing in South Korea: first and foremost, the division and the infra-electoral controversy between the two democratic progressive parties, which has favored the conservative-liberal party, although not to the extent it was assumed.

Secondly there is an explosive youth issue, that a South Korean sociologist summed up with the “three no” slogan: no work, no house and no marriage.

During the 2008 crisis, which severely hit also the fourth Asian economy, the old parties’ choice was to maintain and protect the traditional system of chaebol, the Korean version of the Soviet kombinat, without preparing the structural reforms which were immediately needed.

As we have already noted, 12.5% of young people are unemployed, but the South Korean average unemployment rate is 4.9%.

Young voters blame the Saenur Party: only 17% of young people under 30 show a preference for this party.

Hence the “Korean dream” has been shuttered, namely the 1960s idea that, by working hard, everybody would anyway have a good job and a good income.

Obviously, today this is no longer the case in South Korea. And politics reflects this with its main feature in these cases, namely uncertainty.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs "La Centrale Finanziaria Generale Spa", he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and member of the Ayan-Holding Board. In 1992 he was appointed Officier de la Légion d'Honneur de la République Francaise, with this motivation: "A man who can see across borders to understand the world” and in 2002 he received the title of "Honorable" of the Académie des Sciences de l'Institut de France

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East Asia

The Implication of China’s Diplomacy in APEC and ASEAN

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It is truly unusual that the Chinese President Xi Jinping and its Premier Li Keqiang are visiting the same area during nearly the same time: Xi’s visit to APEC from15th to 21st November and Li’s visit to ASEAN on 15th November. Yet, if we look into China’s foreign policy towards this area over the past years since President Xi took power, it is not difficult to understand both Xi’s and Li’s official visits to the “larger Pacific” and the meaning beyond.

As we know, President Xi has reiterated that the Pacific is large enough for the countries involved to share the prosperity with each other. In order to achieve the inclusive rather than exclusive benefits for all, China’s diplomacy aims to reject any kind of unilateralism, trade protectionism and anti-globalization. Given this, Xi’s at APEC and Li’s at AEASN is defined as a signal of China’s diplomacy to further reform and bold openness.

As a rising great country, China is surely eager to expand its investment and trade with the south Pacific area, and Papua New Guinea (PNG) is the first country visited by Chinese president. What is more, PNG joined the Asian Infrastructure Investment Bank (AIIB) early 2018 and then became the first state of Pacific islands to sign the MoU on “The Belt and Road Initiative” construction. As the theme “Harnessing Inclusive Opportunities, Embracing the Digital Future,” the APEC summit will focus on Regional economic integration, digital economy, connectivity, sustainable and inclusive growth and so forth.

Also during Premier Li’s visit to the ASEAN, he highlighted the necessity of the collaboration and mutual benefit among the countries involved on the 21st China-ASEAN leaders meeting. This is also the 21st ASEAN Plus Three Summit (10+3) and the 13th East Asia Summit (EAS).

Quite understandable, since the 1960s, the center of world economy has shifted from North Atlantic to Asia-Pacific, its dynamic growth in the region create countless jobs and push the development of world economy. This is the reason that Asia-Pacific region has the most trade agreements and the most complicated economic architecture around world. APEC and ASEAN, as two institutions that possess most member states, are the very pillars of the tumbledown regional economic architecture. APEC was launched by Australia and later included 21 member states in the region, amongst are United States, China, Japan, the economic giant three of the world economy. ASEAN is an institution that consist of ten small and middle states. Though they are not strong enough to meet the challenges from the power politics alone, ASEAN is a core force that firmly facilitate the economic integration of the whole region of East Asia and the Pacific. No matter what the way they embrace, they are the de facto basic regionalism of Asia-Pacific. The withdrawing of United States from Trans-Pacific Partnership (TPP) and hard-achieved Regional Comprehensive Economic Partnership (RCEP) once brought the regional economic architecture a fig leave and strengthened the impact of APEC and ASEAN.

As a result, the two visits of Chinese top leaders to the same region at the same time definitely attract worldwide attention, because they not only represent China’s recent diplomatic focus but also mark the fact that Asia-Pacific region has become one of the vital fields where China’s diplomacy will be actively conducting in terms of the Belt and Road Initiative, and carry on the good-neighbor policy. Since China has argued for creating a peaceful development milieu, to enhance economic transformation and upgrading oversea markets and partners in Asia-Pacific region.

Consider these facets, China, as the second largest economy, aims to promote its well-articulated stance on multilateralism and inclusiveness and globalization. As both President Xi and Premier Li have strongly said that China is ready to work with Pacific island countries to endeavor together and sail for a better future for bilateral relations. For the sake of that goal, China always believes that as long as all the countries involved have firm confidence in each other’s development, cooperation and the future of East Asia, and work closely together and forge ahead, all sides would achieve more and reach a higher level in the next 15 years.

For sure, China belongs to the part of a larger Asia-Pacific family, and the Chinese government defines its goal as the shared prosperity of this region. Therefore, China will continue to work hard and constructively to promote the overall development of impoverished but promising Pacific island countries under the Belt and Road Initiative.

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An uncertain step in moving China-Japan relations

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Authors: Meshach Ampwera  & Luo Xinghuan

On October 26, Chinese President Xi Jinping met Japanese PM Shinzo Abe and praised that both China and Japan have pledged to strengthen bilateral ties amid continuous efforts made by the two nations. Xi said, “Bilateral relations have returned to the right track and gained positive momentum, which is something the two sides should cherish.” As the two largest economies in Asia, China and Japan are also the vital players in Asian security and the global development.

In addition, since this is the first official visit to China by a Japanese PM in a seven-year “Cold Peace” period, it is widely assumed that Abe’s visit symbolizes the resumption of high-level visits and will be followed by an increasing rapprochement between China and Japan. True, the leaders of the two economic giants witnessed a wide range of agreements, including a 30 billion US dollar worth of currency swap pact, the establishment of a maritime and air liaison mechanism, and enhancing people-to-people exchanges.

Yet, three factors have to be considered seriously in looking into Japanese foreign policy given the current changing geopolitical landscape regionally and globally. First, Japan has still regarded itself as a “defeated” state during the WWII. Since then, Japan’s postwar posture has frequently described as a new pacifism; yet in fact it is considerably more complex. As Henry Kissinger put it: “Japan had acquiesced in the U.S. predominance and followed the strategic landscape and the imperatives of Japan’s survival and long-term success.” This means that the governing elites in Tokyo used to hold the constitution drafted by U.S. occupying authorities with its stringent prohibition on military action, and adapted to their long-term strategic purposes. As a result, Japan was transformed from the pacific aspects of the postwar order (that prohibited military action) into a nation that has focused on other key elements of national strategy, particularly using economic leverage regionally and globally, though not uncontroversial.

Second, in a recently-released paper written by the former US Secretary of Defense Ash Carter, he maintained that “Japan is a close ally of the U.S. and a rising military power, too, because of legal and constitutional changes of great significance championed by Prime Minister Abe.” In practice, the Japanese administration has engineered an expansion to enable its military to operate regionally and even globally in response to the rise of China, violent extremist activity in Asia, and the alleged North Korean belligerence.

Actually in 2013, Japanese Government White Paper revealed a desire to become a “normal country” with an active alliance policy. In a searching for a new role in the Asia-pacific region, Japan aims to act as an “anchor” of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) concluded in 2018 after the withdrawal of the United States. Now it involves 11 countries and representing 13.4% of global GDP ($ 13.5tri.). As the largest economy of the CPTPP, Japan has been active in moving it forward. Early this year when the British government stated it is exploring becoming a member of the CPTPP to stimulate exports after Brexit in 2019, Abe stated that the United Kingdom would be welcomed to join the partnership. It is said that even the U.S. reconsiders possibly rejoining the CPTPP if it were a “substantially new deal” for the United States.

Japan’s ardent involvement into the US-led strategy in Asia has also been endorsed to expand steadily as a normal power regionally and globally. For example, the Asia-Africa Growth Corridor (AAGC) is the result of the joint declaration issued by the India and Japan in 2016. Although it is premised on four pillars of development and cooperation, it is self-evident that the AAGC reflects a growing special “strategic and global partnership between India and Japan” in which both sides have viewed China’s growing, pragmatic and successful presence in Africa as a menace. There is no question that AAGC is a well-crafted vision and agenda of both India and Japan, linking with their own development priorities. But with increasing pressure from Washington and Brussels, Japan and India are in effect driven by the option for the AAGC to rebalance China’s Belt and Road Initiative (BRI).

From the inception of the BRI, they have more than ever before been concerned with being isolated in Africa by Beijing’s initiative. But, as Ampwera Meshach, a researcher at Jilin University put it, “Africa is on the growth trend and offers potential markets and raw materials. For this reason, Africa largely needs pragmatic and scientific, technological and development- oriented initiatives and these are clearly reflected in China’s BRI.” In light of this, the AAGC does neither reflect a novel nor pragmatic approach on how it fits within the African agenda. Instead, AAGC’s foundational pillars seem more inclined to the Western cooperation approaches that have for decades not been translated into development.

Controversially, two days before Abe’s visit to Beijing, Japan had decided to scrap official development assistance (ODA) to China, which is a program where Japan provides aids to developing countries starting back in 1954. Even though some people argue that Japan’s ODA is reasonably cancelled because China’s GDP is even 2.5 times larger than that of Japan, yet, it is necessary for Chinese to be aware of the reality that Japan is a longstanding ally of the United States. As Japan has long been an economic power, its impressive military capabilities would not be confined to a strict policy of territorial defense—no projection of Japanese power or the U.S.-Japan alliance to the region as a whole.

It is during the Abe’s administration which has recognized an environment of growing Chinese assertiveness, violent extremist activity in Asia, and North Korean hostility, and therefore, Japan has eagerly participated in Asian security, including training and exercising with other nations, beyond a purely passive, home-island defense role. This makes it an increasingly important player serving the US strategy in Asia but challenging the rise of China globally.

It is true that Abe tweeted about the trip — while recognizing the challenges in moving bilateral relations forward, he said that he would still work to “push Sino-Japan relations to the next level”. Given the two countries’ economic links, it is only understandable that there is a need for the two sides to come closer. Moreover, Japanese businesses has been an extremely active force behind the government’s shift of attitude on the Belt and Road Initiative (BRI).

Yet, all in all, we should never ignore that Japan’s ambitious foreign policy has gone beyond the economic goal.

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Red Flags: Why Xi’s China is in Jeopardy – Book Review

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George Magnus writes about the dangers of the Middle-Income Trap in the Middle Kingdom, among other issues, in Red Flags: Why Xi’s China is in Jeopardy. President Xi’s face adorns the book cover, with his name looming above.  Fitting, seeing as China has removed presidential term limits; China’s fate is thus likely to be tied to the decision making of Xi for the next couple decades.

Magnus writes about the dangers of Xi’s likely ascendance to President-for-Life.  Ever since the excesses of Mao’s one-man rule, China’s Communist Party has largely ruled by consensus, while provincial governments have served as a counterweight to federal authority via control of their land and many of their local State Owned Enterprises (SOEs).  Xi is challenging this staus quo.  So-called Xi Jinping Thought is now official party canon, being taught in schools and in the media.  The 2012 crackdown on corruption by Xi in his inaugural year was widely seen as a pretense for taking out political opponents and sending a message to his potential opponents.  Ever since, Xi has been working to centralize power to himself.  Magnus notes that being leader for life largely shields Xi from short-term popular discontent, but also means that every long-term decision, good or bad, will become part of Xi’s legacy.  Hence, the book informally reads as a personal policy checklist for Xi.

Red Flags lists four, well, red flags of likely impediments to Chinese economic development.  Firstly is debt.  China has been an unprecedented money-making machine for the past three decades or so.  However, signs are starting to appear of a possible economic slowdown.  Most significant is the debt-GDP ratio, which has skyrocketed over the past few years.  Magnus writes extensively about how China’s growth, up to this point, has largely been fuelled by credit (debt).  China’s much-maligned (by Trump, most notably) trade balance surplus has shrunk to no more than a few percent, statistically insignificant.  China could theoretically make up for shrinking foreign demand for goods and services with domestic consumers.  Magnus is unfortunately the bearer of bad news in this regard: “Household savings rose from about 5% of disposable income in the late 1970s to about 38% in 2016, or just over 25% of GDP. Savings by companies are also elevated, amounting to about 17% of GDP in 2016.”

Hence, the Xi regime has been trying to maintain economic growth via ever-greater sums of state investment funding.  Magnus explicitly warns against this: “The reason the investment rate has to fall is because the more China relies on it, the more inefficient that investment will become.”  Such a statement might seem self-evident, but Magnus backs it up with facts.  For instance, he points out, “Between 1978 and 2006, for example, China spent between 2 to 4 yuan of investment to get 1 additional yuan of GDP. Since then, the amount has risen steadily to reach about 9 yuan in 2015, corresponding to a marked fall in investment efficiency.”

Magnus writes a lot about the inefficiency of China’s thousands and thousands of SOEs.  “Officially, and according to some China-watchers, SOEs now account for just a fifth of output and a tenth of employment. The presumption though that the rest of the economy is in private hands, as we understand it in the West, is incorrect. Many private firms have large or majority state owners, who exercise significant control over senior appointments and corporate strategy, and state ownership is often disguised by multiple layers of investment companies ultimately owned by a state entity. Allowing for these opaque adjustments, the purely private part of the enterprise sector may actually be little higher than 20–30 per cent.”  SOEs have built much of modern China, but their efforts are increasingly being wasted on skyscrapers and airports that remain almost empty, Chinese Roads-to-Nowhere.  A blank check invites planners to ignore long-terms concerns of viability, blinded by short-term gains that go directly into the pockets of Party-affiliated contractors.  China’s financial services sector isn’t much better off.  Magnus writes about all the bailouts, takeovers and general heavy-handedness by the government of various Chinese banks and other related companies.  Due to a slowdown in trade and many other issues discussed in the book, state investment will figure to play an ever-larger role in China’s economy, inefficiency be damned.

The book’s second diagnosed problem for China’s future growth is its currency, the renminbi.  Xi mirrors the isolationist mindset of China’s ancient emperors with regards to cash inflows and outflows.  It’s very hard for Chinese investors to send renminbi out of the country.  Likewise, China restricts the ability of foreigners to own reserves of renminbi, or Chinese financial assets in general.  The renminbi is subject not only to this lack of liquidity, but also the confines of a planned economy.  China is infamous for its strict control of its currency valuation, as well as its monetary policy via diktats, investment and bailouts.  Its ownership of USD and other foreign currency reserves must always be flawlessly balanced to safely back up the value of the renminbi.  This resulted, for instance, in the selling off of a trillion of its USD reserves between 2014-2016.  The combination of currency illiquidity and over-management limits the ability of the renminbi to fuel Chinese economic growth.

Thirdly, the book mentions the so-called Middle Income Trap.  Once a country reaches a certain benchmark of development, it’s hard to maintain further momentum.  China’s already experiencing slowed growth due to factors such as increased global manufacturing competition.  As Magnus points out, China has already had its coming-out party to the world economy.  It can’t join the WTO again or eliminate mass hunger again.  Likewise, China has stalled in terms of rural development and education.  Rural China is increasingly falling behind the major cities and the hukou system of restricted movement and rights for migrant workers isn’t helping.  Students in China still attend far fewer years of school than students in developed countries like the US, especially in advanced fields like IT.  These issues of inequality and 21st-century education must be addressed if China is to fully develop.

Lastly, Magnus writes about the demographics crisis.  China has one of the highest ratios of elderly people in the world.  Combine this with China’s 1.45 birth rate and the gender disparity caused by the 1-Child Policy and you have a ticking time bomb.  The workforce is increasingly running out of youngsters who can take the place of retirees, causing a slowdown in economic output.  The higher the elderly population becomes, the more each working-age person will have to contribute to pensions and healthcare.  The economic burden that only-children will have to shoulder taking care of their aging parents will inevitably lower marriage rates and thus further lower the unsustainably low birth rate.

This is the most dire problem because there’s very little that society can do about it.  Xenophobia has prevented any meaningful amount of migration to China, but even if China were to let in tens of millions of foreign workers, that would be a drop in the bucket for a nation of 1.4B people.  Even after China ended its One-Child Policy, couples are still averaging well below 2 children, despite increasing prosperity.  The only real hope for China’s demography problem would be a literal ex machina: automation.  Robots may be able to generate untold wealth that could buoy a small nation like Singapore, but even an army of robots is unlikely to completely offset the gradual loss of hundreds of millions of working-age people to aging.  Even if AI is a magic bullet for all productivity woes, it take probably at least a century to meaningfully scale up, by which time China’s population will have substantially shrank.  It doesn’t help that China is, in many respects, barely keeping pace in the AI race with the US, Japan and the EU.  In the race for artificial intelligence, even being a year behind the competition can cost trillions of dollars; China’s tech sector will likely take a few decades to completely match Silicon Valley.  Lastly, it should be noted that not even innovation can overcome the limit resources of our planet.  We’re already running out of industrial resources like oil and lithium.  It would be foolish to place all of one’s eggs in the basket of a sci-fi utopia.

Red Flags is a very detailed and interesting book about the future of China.  Magnus isn’t anti-China by any means; he gives credit to China’s marvelous successes and doesn’t moralize.  If anything, the book was too generous by barely mentioning the unrest in Xinjiang and not mentioning the occupation of Tibet at all.  In an objective fashion, he succinctly explains China’s problems and offers possible solutions.  China has shown an unprecedented ability to adapt to change.  This flexibility may wind up being undone not external adversaries or limitations, but by increasing autocracy.  Dictatorship has rarely resulted in long-term, across-the-board growth.  One can look at a fellow Communist country for an example: the Soviet Union.  Though the USSR made impressive leaps in technology, manufacturing and agricultural output and human longevity, it was ultimately undone by its ideological rigidity.  A lack of accountability for its leaders meant that the USSR was forever a captive to bad policy.  Likewise, a lack of freedom stunted innovation.  If Xi is to avoid the pitfalls of the USSR, he must avoid letting his power get to his head and embrace a flow of ideas from both fellow Party members and private citizens.  Xi’s consolidation of control and crackdown on dissent would point otherwise, unfortunately.  Only time will tell if China will continues to beat the odds…

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