David M. Lampton gave a talk titled “Chinese Power and Rail Connectivity in Southeast Asia” before the Stanford China Program audience on February 6^th. He addressed three issues in particular: the scope of his research project, conducted in partnership with two co-authors based in Singapore and Malaysia; the long genesis of this railroad construction idea from Southeast Asia to China; and, third, the overarching question of whether China can effectively implement the gargantuan feat – technologically, financially, and politically. The high-and conventional-speed rail project will span seven Southeast Asian countries, plus China, Lampton highlighted.  This project is not only geographically forbidding, but the political terrain, and its socio-economic variety, is an even greater challenge.  Lampton’s talk comprised part of Stanford China Program’s 2019 Colloquia Series, “A New Cold War?: Sharp Power, Strategic Competition, and the Future of U.S.-China Relations.”

Lampton began by clarifying that the vision of rail connectivity through Southeast Asia into China is not the brainchild of either China’s leadership or Xi Jinping. This idea has a long history, he stated, beginning with the British and the French in the 19^th century when they were occupying Burma and Indochina, respectively; and even during World War II when Japan further entertained building railroads from the Korean Peninsula to Singapore to advance their military ambitions. In contemporary times, ASEAN had articulated a plan in 1995 to develop a rail line from Singapore to Kunming city, P.R.C. In 2010, ASEAN again put forth a master connectivity plan for 2025 where railroad development comprised a prominent part. Only in the aftermath of these many plans and proposals did Xi Jinping, in 2013, officially announce China’s Belt and Road Initiative (BRI), an infrastructure initiative with a scope far greater than simply Southeast Asia. The idea of infrastructural connectivity in the region, in other words, has a long history that predates China entering the picture as a major actor. Only recently has China amassed the technological capacity and financial wherewithal to realize this enormous project, with economic, diplomatic, and strategic military implications.

Next he described the key role that Beijing’s industrial policy has played in the rapid development of China’s high-speed rail. From a nonexistent industry in 2001, China has built a sector that is now an international powerhouse in high-speed rail technology. As of 2014, China boasted four trunk lines, North and South; and four trunk lines, East and West, crisscrossing the P.R.C. China’s industrial policy has clearly delivered striking results (as well as some setbacks) not only with respect to high-speed rail but also in other industries.  In light of this, Lampton opined that China is not likely to yield to U.S. demands for major structural reforms in onoing trade talks with China. 

Lampton described the progress in high-speed and conventional-speed rail construction with partners in Southeast Asia (ASEAN) that the Chinese have made, with Laos and Thailand furthest along in implementation. Nonetheless, Beijing also has met with significant resistance due to the complicated political situation in various regions. Lampton described, for example, the drawn-out financial negotiations between Singapore and Malaysia with respect to the rail line connecting Singapore to Kuala Lumpur; and the jockeying among various heads of Malaysia’s federation of local states. The election of Mr. Mahathir in 2018 also put an at least temporary halt to the construction and planning of two rail projects for many reasons, including the corruption of the preceding regime of Najib in Kuala Lumpur. Although Lampton expressed overall confidence that the rail lines will get built to Kuala Lumpur and Bangkok, for example, in the not-too-distant future, the political complexities of the region and China’s ability to successfully navigate them are still open questions.

He also described the competing world views regarding infrastructure construction and economic development. There are powerful constituents in China – now backed by Xi Jinping himself – who believe that infrastructure development drives growth: i.e., “if you want to get rich, build a road.” By contrast, the U.S. and entities such as the World Bank are more cautious, seeing all the negative social and environment extenalities such massive projects create. They also want to see greater assurances of projected returns from these infrastructure projects before devoting resources. Having said this, both multilateral financial and development institutions, and the United States Government, are gradually adopting a more supportive posture on large infrastructure projects, in part not wishing to abandon the commercial and strategic battlegrounds of the future to the PRC.

Lastly, Lampton debunked the notion that the BRI is a unified, top-down “plan.” Rather, he described it as Beijing’s “umbrella policy” that “creates a predisposition [among Chinese entities] to build infrastructure.” It incentivizes “entrepreneurial SOEs, provinces, localities, overseas Chinese . . . to push their pet projects . . . onto . . . the national largesse.” This being the case, Lampton described the BRI as a dynamic, chaotic and, sometimes, even a rapacious process for the transit countries. Yunnan Province, for example, started a rail line even before the central government had approved it; and Guangdong Province began developing its own special economic zone and port construction in Malacca all without central approval. As Lampton stated, the “BRI isn’t just about Xi Jinping and Beijing . . . . [I]t’s about local initative, and how Beijing can or cannot control or . . . under what circumstances, it chooses to control [its local actors].”

The recording and transcript are available below.  

“Win support from the people,” Yuhua Wang, Assistant Professor of Government at Harvard University, repeated the words from one of Xi Jinping’s speeches that was given to justify China’s massive anti-corruption campaign. The exact scope and motivations for President Xi Jinping’s anti-corruption campaign is, as yet, unknowable, Wang stated; but clearly, a major public aim of CCP Chairman Xi Jinping was to build regime support by cracking down on bad actors in the government.

Prof. Yuhua Wang gave a talk titled “Why Xi Jinping’s Anti-Corruption Campaign has Undermined Chinese Citizens’ Regime Support?” at the Stanford China Program on November 12^th, 2018, based on a national-level survey analysis that he had conducted with his co-author, Prof. Bruce Dickson at George Washington University. Rather than focusing on Xi’s motivations for undertaking his crackdown, however, Wang and Dickson tried to measure the impact of Xi’s anti-corruption campaign on public perception of the central government and the Chinese Communist Party (CCP). Did the campaign, in other words, shore up public support for China’s central government and Party, as Xi hoped it would – or did it, in fact, undermine regime support?

Professor Wang first offered some background on how this anti-corruption campaign got started around 2012-2013, shortly after Xi Jinping became Chairman of the CCP. A staggering 261 vice-ministerial officials and 350,000 officials had been investigated to date; and, even those at the highest levels of China’s leadership – former Politburo and Politburo Standing Committee members, for instance –were not immune from scrutiny. And, equally unprecedented, media coverage of these corruption cases – from Bo Xilai to Zhou Yongkang and Xu Caihou – were extensive, exposing their lavish lifestyles and illicit dalliances on social and traditional media. Wang speculated that such lurid publicity most likely shocked the public, potentially turning citizens against even the central government, which consistently enjoys significantly higher levels of public trust than local governments in China. He decided, therefore, to explore with his co-author what the effects of such exposés might be on public perception of the central regime.

Replicating the same questionnaire and sampling design, Wang and his co-author took a national random sample in two waves – one before the anti-corruption campaign in 2010 and a second one during the campaign in 2014. They interviewed approximately 4,000 people across 25 provinces in China in order to measure potential shifts in people’s attitudes towards the regime over those four years. The findings were, indeed, illuminating:

First, Wang stated, increasing frequency of corruption investigations in a locality was correlated with a greater drop in popular regime support (defined as trust in central government or support for the CCP) in that locality. Higher volume of corruption investigations in a locality was also negatively correlated with people’s perception that government officials were generally honest and clean. The corrosive effects of the campaign, furthermore, proved strongest on those who had initially believed in the integrity of government officials; but for those who were already cynical about official corruption, the campaign had a smaller effect. Lastly, higher the survey respondent’s use of social media like WeChat, stronger the negative effects on his/her support for the regime. The authors also took into account how the chilling effects of the campaign may be negatively impacting local economies and how that slowing economy may actually be the primary cause behind decreasing public regime support. To account for this potentially confounding effect, Wang looked for evidence as to whether the campaign had contributed to a slowdown in China’s economy by 2014. Perhaps because 2014 was still early on in the campaign, he stated that they found no evidence of slower GDP growth rate, growth rate per capita GDP, etc., in the regions where they had undertaken their surveys.

Overall, Wang’s research calls into question whether Xi Jinping’s anti-corruption campaign is, in fact, advancing one of his main goals– i.e., to increase people’s faith in the central regime – or whether it is actually proving counterproductive to his aim. In fact, Wang’s research seems to indicate that the more Chinese citizens are exposed to evidence of government corruption, the more the central regime appears to suffer a loss in credibility. Wang was careful to point out, however, that they were barred, due to political sensitivity, from asking any questions regarding respondents’ attitudes towards Xi Jinping himself. Thus, it is still an open question whether popular support for Xi Jinping himself is increasing even though public trust in the regime might be decreasing.

The recording and transcript are available below.  

A group of more than 100 leading American Asia specialists, former U.S. officials and military officers, and foreign policy experts has signed an open letter calling on President Trump and Congress to develop a U.S. approach to China that is focused on creating enduring coalitions with other countries in support of economic and security objectives rather than on efforts to contain China’s engagement with the world.

The signatories include five FSI scholars: Shorenstein APARC Fellow Thomas Fingar, Oksenberg-Rohlen Fellow David M. Lampton, FSI Senior Fellow and APARC’s China Program Director Jean C. Oi, CISAC Senior Fellow Scott D. Sagan, and FSI Senior Fellow Andrew G. Walder.

In the letter, published in the Washington Post, the signatories express their concern about the growing deterioration in U.S.-China relations and outline several elements of what they describe as a more effective U.S. policy toward China.

China’s troubling behavior in recent years, the signatories write, presents serious challenges that require a firm U.S. response. The best American strategy “is to work with our allies and partners to create a more open and prosperous world in which China is offered the opportunity to participate.”

China’s engagement in the international system is essential to the system’s survival, argue the signatories, and “efforts to isolate China will simply weaken those Chinese intent on developing a more humane and tolerant society.”

Read the full letter in the Washington Post.

The views expressed by the signatories to the open letter are their own and are not opinion or information of Stanford University or of FSI.

Asia Health Policy Program Director Karen Eggleston and colleagues examine China’s progress in enhancing financial protection under its social health insurance to achieve universal health coverage.

In 2009, China launched comprehensive health system reforms to address challenges such as increasing rates of non-communicable diseases and population aging, problems with health financing and healthcare delivery, and overall growing health expectations of its people. Promoting universal health coverage by building a social health insurance system was a central pillar of the reforms.

After a decade of system reforms, has the Chinese government made good on its commitment to bolster universal health coverage? In a new article published in a BMJ collection, a team of four co-authors including Karen Eggleston, APARC’s deputy director and director of the Asia Health Policy Program, evaluates China’s progress towards enhancing financial protection of social health insurance and identifies the main gaps that need to be filled to achieve universal health coverage. Their article is part of a special BMJ collection with Peking University that marks the tenth anniversary of China’s health system reforms by analyzing their accomplishments and challenges ahead.

The 2009 reforms aimed to cover the entire Chinese population with one of three (since 2012 one of two) basic social health schemes. To provide added financial protection to patients with critical illnesses, catastrophic medical insurance was initially launched in 2012 and implemented nationally in 2015. Eggleston and her co-authors determine that the expansion of health insurance has had several major successes. First, it improved access to and use of healthcare. In 2011, China achieved near-universal health insurance coverage, with more than 95% of the Chinese population covered by health insurance. Moreover, the annual inpatient hospital admission rate increased from 3.6% in 2003 to 17.6% in 2017, and admission rates for outpatient services were much higher than the global average.

Second, the expansion of health insurance coverage reduced the share of out-of-pocket heath expenses in total health expenditure, thus raising the level of financial protection. Third, catastrophic medical insurance was also effective in supplementing the basic social health insurance schemes and provided extra financial protection to a range of vulnerable groups. By 2017, more than a billion people in China were covered by such insurance.

However, much remains to be done. Out-of-pocket health expenditures remain fairly high and are one of the main reasons for catastrophic health expenses and low financial protection in China, which disproportionately affect deprived populations. Catastrophic medical insurance currently does not target underprivileged people, while medical aid is relatively small in scale and covers only a minority of patients with catastrophic health expenses.

Eggleston and her colleagues conclude that the Chinese government should focus on underprivileged populations within the current insurance system and enhance their financial protection as an important element of targeted poverty alleviation. Such targeting, the researchers emphasize, requires a clear and integrated policy encompassing the basic social health insurance schemes, catastrophic medical insurance, medical aid, and improved healthcare efficiency.