China's 4 red lines, "high sea fishing" goes public, $$ bond sale in Saudi, export tax rebate cut - Week in Review #35

Hi folks, welcome to Week in Review #35

You would expect to see me reviewing events of the last week(s) that I think carry a long-term impact on China. I try to stick to a weekly publishing schedule but there is no guarantee about it. Occasionally, I also publish in-depth essays about some major themes listed in the Master Plan and Table of Core Contents.

#1 China’s “4 red lines” unveiled in Peru

In last week’s review, I shared a summary of a podcast by MAGA politician Vivek Ramaswamy (Week in Review #34), in which he stated the need for "strategic clarity" between the US and China. He believed that the strategic ambiguity of the past was wrong and that all world wars were caused by strategic ambiguity because major powers didn't know what others intended to do. Therefore, "strategic clarity" should be adopted, clearly defining red lines and bottom lines between both sides.

It seems Xi Jinping agrees with Vivek very much.

This week, when meeting Biden (possibly for the last time) on the sidelines of the APEC Summit in Peru, Xi outlined China’s red lines. There are 4 of these:

1. The Taiwan question

2. Democracy and human rights

3. China's path and system

4. China's right to develop

Red lines #1,#3, and #4 are quite straightforward. And it’s no surprise that Taiwan is put at the very top of this list.

For redline #2 though, I think the wording in the official readout was a bit confusing. Does it mean China does not care about democracy and human rights? I don’t think so. I think the intended message is that China has its own view on democracy and human rights and doesn’t want to be challenged in this regard. In this sense, #2 and #3 are essentially the same. China is intent on charting its own course when it comes to the choice of the political system.

What’s the most interesting thing about these red lines is what is absent. One notable absence is the South China Sea. China clearly has contesting claims for that region, but seems to suggest that exactly how China shall manage disputes and differences in this regard can be a matter of negotiation, and it will not be a one-way street, and we will try to find a solution with stakeholders.

Also missing are Sino-India relations, Sino-Japan relations, and Sino-Russia relations. All of these are not non-negotiable.

Now that China has shown its hand for “strategic clarity”, it is the US’ turn to show what its red lines are.

I am a nobody in geopolitics, so I am only thinking out loud here. Hypothetically, these will be some US red lines that I guess the China side will stomach:

1. China does not seek to change or sabotage the American people’s way of life;

2. Does not seek to challenge the United States of America’s right to create prosperity for its own people;

3. Does not use force in Taiwan, if it can be ensured that Taiwan does not go on the pro-independence path.

These lines look simple, but as far as I understand, if both sides can adhere to them, I can see a great Pax Americana-Sinica for the rest of our lives.

This could be totally wishful thinking, but I am crossing my fingers for this future.

[The section below is exclusive for paying subscribers. I will cover the significance of tax rebate cuts for some export products, China’s USD bond sale in Saudi Arabia, and a rare case of “high-sea fishing”, the illegal “kidnapping” of private businesspeople by law enforcement of faraway regions, that was made public by one local government

If you are already a Baiguan paying subscriber, please contact me for free access here or for a refund if you have double-spent]