China's Strategic Policy Shift under Xi Jinping

Key Insight

Under Xi Jinping, China initiated a profound shift towards a policy of 'in China, for China,' designed to lessen reliance on Western markets and establish a new leadership model. This included the launch of the Belt and Road Initiative in late 2013, a grandiose project connecting China to approximately 140 developing countries via land and sea routes. The policy aimed to boost China's global influence and economic self-sufficiency.

A key component of this shift was the Made in China 2025 blueprint, aiming for self-sufficiency in advanced electronics, biomedicine, and aerospace. This plan, viewed by Washington as a rebuke of open markets, involved government subsidies, state-owned enterprises, and intellectual property acquisition to surpass Western technological prowess. Critics, including the US Council on Foreign Relations and the Information Technology and Innovation Foundation, characterized it as an 'aggressive by-hook-or-by-crook strategy' involving market manipulation and coerced tech transfer.

Xi's administration also reinforced political control through measures like the 'seven unmentionables' – a list of ideas to vigilantly suppress, including freedom of the press and judicial independence. Regulatory actions, such as the 2013 CCTV attack on Apple and later, the mid-2014 labor dispatch law which aimed to limit temporary workers to 10%, were not mere misunderstandings but signals to foreign corporations: comply with China's evolving agenda or face significant operational risk. This era marked a return to 'Rule by Law,' where legislation compelled corporate behavior to align with state interests.