On May 5, 2021, the APARC China Program hosted Professor Yuen Yuen Ang, Associate Professor of Political Science at the University of Michigan for her program, "The Role of Corruption in China's Speedy, Risky Boom." Based on her recently published book, China's Gilded Age, Ang explored the impact of corruption on China's economy and how it compares to other countries around the world, including the United States during the late 1800s. Professor Jean Oi, William Haas Professor of Chinese Politics and director of the APARC China Program, moderated the event.

While corrupt countries are usually poor, China appears to be an exception. President Xi Jinping acknowledges that corruption in the country has reached crisis proportions. If this is true, Ang asks, why has China nevertheless sustained 40 years of economic growth and deep transformation?

In fact, Ang argues, China is not as anomalous as it seems; its experience is strikingly similar to America’s Gilded Age during the 19^th century. Ang unbundles corruption into four different types that each harms the economy in a different way. Similar to America’s Gilded Age, reform-era China has steadily evolved toward a particular type of corruption: access money (elite exchanges of power and wealth). Simultaneously, beginning in the 2000s, the central government effectively curbed directly growth-damaging types of corruption such as embezzlement and bureaucratic extortion. Access money fueled commerce by rewarding politicians for aggressively promoting growth and connected capitalists for building more and taking on more risky ventures. But such corruption also produced systemic risks, distortions, and inequality—problems that define China's Gilded Age under Xi's leadership. As a result, China today is a high-growth but risky and imbalanced economy.

Despite popular perceptions that China and the United States are two polar opposites, Ang argues, contemporary China and 19th century America share more similarities than we normally think. Their divergent political systems, however, drove contrasting responses to the excesses of capitalism. Watch now:

This commentary by Kiyoteru Tsutsui and Charles Crabtree was originally published in The Hill.

The recent White House summit meeting between President Biden and Japanese Prime Minister Yoshihide Suga signaled to the world, and especially to China, that the U.S.-Japan alliance is strong and ready for intensifying competition in Asia.

For the first time in more than 50 years, the Japanese and American leaders mentioned Taiwan in their joint statement. China immediately responded with strong words, as expected, but since has moderated its tone. Furthermore, Chinese leader Xi Jinping participated in the U.S.-organized Leaders Summit on Climate the week after the Biden-Suga meeting and took a collaborative stance, a hopeful sign that competition will not eliminate the possibility of some collaboration and that climate change is an area where Beijing, Tokyo and Washington can work together.

But the U.S. and Japan still have at least three concerns about China: Beijing’s continued posturing on Taiwan and the Senkaku Islands; its significant leverage in economic relations; and its repression of human rights in Xinjiang, Hong Kong and beyond. How should the alliance handle these important issues? 

On the security front, America’s return to multilateralism under Biden is a welcome development for Japan and other like-minded states in the region. The U.S.-Japan alliance is obviously central in the coalition of democratic nations concerned about China’s ambitions. The primary goal of these countries ought to be walking the thin line between demonstrating their resolve to counter any aggressive behavior by China with force and avoiding any unnecessary provocation against China. 

Toward that end, the most promising framework is the Quad that includes India and Australia in addition to Japan and the U.S. The first-ever leader-level meeting in March elevated the Quad’s status significantly. While it still is a long way from becoming a NATO-like security apparatus — and it’s not even clear if that’s the consensus goal — it could help stabilize the region by creating a credible counterweight to check China’s territorial ambitions.

Beyond the Quad, the inclusion of other like-minded stakeholders such as South Korea and ASEAN countries on security matters is important. With South Korean President Moon Jae-in’s visit to Washington planned in late May, a good first step for the Biden administration would be to invest some diplomatic capital in mending fences between Japan and South Korea. A full-scale reconciliation between the two regional powers is unlikely this year; Suga faces elections in the fall, for which he needs to consolidate the conservative base, and Moon is a lame duck with limited political power. But some reconciliation would be welcome for the U.S. as it seeks to resurrect the trilateral alliance with Japan and South Korea to complement the Quad in deterring China’s ambitions and addressing the threat posed by North Korea. 

In the economic domain, China is arguably even more difficult to contain, being the largest trade partner for virtually all the countries in the region. Decoupling from China was a key theme at the Biden-Suga summit, but this is a task that has proven much easier said than done. From semiconductors to rare earth minerals, the battle for key materials for the 21st century economy will only intensify, and China’s grand scheme in the Belt and Road Initiative needs to be countered by a similarly grand long-term strategy that would flesh out the Free and Open Indo-Pacific vision.

In this regard, the U.S.-Japan Competitiveness and Resilience Partnership can be quite consequential. In addition to pledging cooperation on “sensitive supply-chain” issues, it outlines the agenda for technological innovation that cuts across security and economic domains, making it a critical tool in the competition with China. This is because whoever develops an edge in transformational technologies — such as artificial intelligence, 5G infrastructure, and outer space development — will enjoy diplomatic and military advantages as well as economic profits. The combined $4.5 billion investment in the partnership is a good first step to ensuring that the U.S. and Japan retain an innovation advantage. Additional expenditures likely will be necessary, though, considering China’s commitment in these areas.

On human rights, Japan and America take different approaches. While the U.S. has called the situation in Xinjiang a genocide and imposed sanctions there, as well as in Myanmar following the military coup, Japan has taken a more subdued stance. This is a standard approach for Tokyo, which prefers to emphasize engagement with violating governments.

The Biden administration seems to accept Suga’s strategy of engagement, and perhaps the diplomatic channel that this approach provides can be useful in negotiating some kind of settlement. However, the strategy of engagement that has produced some benefits in countries such as Thailand and possibly Myanmar is unlikely to be as effective with China. Furthermore, several Western corporations are facing boycotts in China for taking a stand against forced labor in Xinjiang. If Japanese corporations avoid paying the price and continue business as usual, Tokyo might face greater pressure to take some action. Given the central importance of the Chinese market for Japanese businesses, this could give rise to significant tension between Tokyo and Washington. 

On all these dimensions, for Japan and the U.S. to be effective in countering China, both Biden and Suga would have to consolidate domestic support. Biden’s first 100 days generally were seen as successful, with COVID-19 vaccine distribution going smoothly and Congress passing ambitious spending bills. Besides, Biden has at least until the midterm elections in November 2022 to move things forward.

The timetable is less friendly for Suga, who needs to win the Liberal Democratic Party (LDP) presidential election in September and hold a House of Representatives election by October. His fate will be shaped in large measure by his government’s pandemic response and how that influences economic fortunes, and to a lesser extent the success of the Tokyo Olympics. Most Tokyo insiders predict that he will remain in office past October, citing weak opposition both in and outside of the ruling LDP. If, however, COVID-19 vaccine distribution does not move forward by the fall, as projected by the government, and the economy continues to slide, that could still trip him up.

Only with domestic political stability and economic prosperity can Tokyo and Washington take the next steps in projecting strength vis-à-vis China, and that is the best deterrent against China’s expansionist ambitions and toward ensuring peace and stability in the Indo-Pacific area.

On April 21, 2021, the APARC China Program hosted Professor Erin Baggott Carter, Assistant Professor in the Department of Political Science and International Relations, University of Southern California, and Visiting Scholar at the Stanford Center on Democracy, Development and the Rule of Law. Her program, "When Beijing Goes to Washington: Autocratic Lobbying Influence in Democracies," explored how lobbying from China and China-based companies can affect policy in the United States. Professor Jean Oi, William Haas Professor of Chinese Politics and director of the APARC China Program, moderated the event.

Professor Baggot Carter based her talk on a dataset drawn from the public records of the US Foreign Agents Registration Act, which includes over 10,000 lobbying activities undertaken by the Chinese government between 2005 and 2019. According to Baggot Carter, the evidence suggests that Chinese government lobbying makes legislators at least twice as likely to sponsor legislation that is favorable to Chinese interests. Moreover, US media outlets that participated in Chinese-government sponsored trips subsequently covered China as less threatening. Coverage pivoted away from US-China military rivalry and the CCP’s persecution of religious minorities and toward US-China economic cooperation. These results suggest that autocratic lobbying poses an important challenge to democratic integrity. Watch now: