Under constant pressure from the U.S. tariffs and sanctions, Chinese President Xi Jinping has called for developing self-reliance in society, painting the United States as the “foreign enemy.” Meanwhile, China’s middle class seems to be swinging back and forth in their support of the communist government’s policies, while being very afraid that they might have to suffer through economic hardship if the trade war worsens.
The call for self-reliance
So far, the U.S. has imposed tariffs on billions of dollars’ worth of Chinese goods. In addition, Trump has been enacting policies that would stop China from stealing American intellectual property (IP) and technology.
For instance, visas for Chinese students in specific STEM fields have been restricted after the administration found that some of the students were stealing and transferring knowledge from American tech firms where they worked back to China. In addition, Trump has also banned several Chinese firms from acquiring American companies after it was discovered that many of these firms received support from Beijing and the acquisitions were intended to transfer as many U.S. technologies as possible to China.
The introduction of tariffs on a wide range of Chinese goods and the increasing restrictions of Chinese people and companies seem to have made the Communist Party realize that they are going to face some tough times ahead. As a consequence, Beijing has strengthened its public propaganda, stating that China is aiming for “self-reliance” when, in actuality, the U.S. and the rest of the world only seem to be fed up with Beijing’s shady trade practices and wish to isolate China.
“Internationally, it’s becoming more and more difficult [for China] to obtain advanced technologies and key know-how. Unilateralism and trade protectionism are rising, forcing us to adopt a self-reliant approach. This is not a bad thing,” Xi is quoted by South China Morning Post.
While Xi might proclaim that self-reliance is not a bad thing, one needs to keep in mind the fact that China was practicing the very same “self-reliance” prior to the market reforms of 1978 when the Communist Party decided to open up the society for foreign investment and relax domestic protectionist measures.
China after 1978 has been one of the biggest economic success stories in the world. And the only way for China to keep growing and have an influence on global culture is by continuing to liberalize and giving up excessive state control over the economy and public freedoms. But if Xi were to go back and install stronger control over the economy, then the Chinese growth story would simply come to an abrupt end.
The Chinese middle class
Meanwhile, the Chinese middle class is definitely getting worried about the U.S.-China trade war. Many of them are engaged in white collar jobs, follow Western culture, are tech-savvy, and have a variety of investments. A worsening relationship between the U.S. and China would simply hit the investments and savings of the middle class negatively.
This realization has created conflicting emotions in the Chinese middle class. While on one side, they blame the excessively harsh policies of Beijing for the current trade war, there are also people who see the U.S. as the aggressor thanks to an intense propaganda campaign being run to paint Beijing as a saint.
Some people believe that Xi Jinping’s call for self-reliance might simply push China back into the days of being a planned economy with stricter economic and social control. And that is something that the middle class, which has been exposed to the free societies of the West, definitely does not want.