Happy New (Western) Year to you all!
Article below for those interested in predictions for China's development next year.
By BILL BISHOP
Agence France-Presse — Getty Images
WELL WIRED The number of Internet users in China is expected to pass 600 million in 2013.
NEW LEADER Xi Jinping has moved quickly in his first three weeks to project an image of change. The government faces a growing expectations gap with its citizens and needs to rebuild public confidence. Mr. Xi is talking a lot about the Chinese dream and the “great renewal of the Chinese nation” — nationalist concepts with significant appeal. Mr. Xi’s choice of Shenzhen for his first domestic inspection trip is a symbolic tribute to Deng Xiaoping’s 1992 southern tour that restarted reforms after 1989. Mr. Xi’s visit is most likely a signal that he is serious about pushing forward with changes. Expect renewed energy around overhauls, primarily economic and administrative but possibly some political ones.
Vincent Yu/Associated Press
TROUBLE WITH THE NEIGHBORS China’s external environment is increasingly complex. Mr. Xi is likely to work hard on maintaining stable relations with the United States, while at the same time expanding China’s military capabilities and asserting its regional interests. China has unsettled its neighbors with its approach to the disputes over the Diaoyu/Senkaku Islands in the East China Sea and the various islands in the South China Sea. Both issues look intractable, so a solution is unlikely in 2013. Expect a quickening arms race in Asia, increasingly nationalist rhetoric, continued tensions with Japan, Vietnam and the Philippines and growing risks of misunderstandings — and possible mishaps — as the various countries send more vessels into the disputed areas.
NOT EASY BEING GREEN China has some of the worst environmental problems in the world, and they increasingly pose a threat to social stability. The leadership is aware of the problems, and the report from the 18th Communist Party Congress included a section calling for improving the environment. Expect increased emphasis on clean energy, conservation and green growth, though the challenges are so huge that it is hard to be optimistic.
RISING ACTIVISM Environmental issues are leading to political activism. In 2012 China had several not-in-my-backyard protests involving thousands of people, many of whom mobilized online. Social media use, especially via smartphones, is rapidly expanding from urban to rural users and is making it much harder to cover up problems. The government now requires that all major industrial projects pass a social risk assessment before they begin. Expect more environmental protests as citizens become more aware of their rights and are emboldened to protect them.
INTERNET PRESSURE China has the most Internet users in the world. At some point in 2013 its population on the Internet will exceed 600 million people. China has a sophisticated Internet censorship and filtering system that is unlikely to disappear. But that does not mean the Internet will not pressure the government. Cheap smartphones with good cameras and 3G connectivity are proliferating, in large part thanks to Google’s Android mobile operating system.
China is expected to have several hundred million smartphone users by the end of 2013. The Internet is unlikely to bring change to the system, certainly. But all those smartphone-wielding, social media-savvy citizens will force a more accountable authoritarianism. Expect more scandals to break online and increasingly responsive, accountable government at all levels.
OVERSEAS INVESTMENT Chinese companies are going global, by expanding their operations overseas and by acquiring foreign firms. Yet Chinese investment is a contentious issue in the United States and other developed countries, and several deals failed in 2012 at the hands of regulators. Huawei, a Chinese networking and telecommunications giant, is effectively blocked from doing business in the United States because of security concerns.
Regardless, Chinese companies will continue to invest overseas, both to increase and to secure resources. Tencent, for one, is on the verge of becoming China’s first globally competitive Internet company.
Its WeChat mobile social networking application already has more than 200 million users and may give Facebook a run for its money in many developing countries. Expect growing overseas investment, increasing political scrutiny of Chinese deals and possibly invitations to WeChat from your social networking friends.
All in all, Mr. Xi appears to be a change-oriented nationalist. His energetic and straightforward style, his apparent commitment to fighting corruption and his determination to reinvigorate at least economic reform should buy the government time to tackle some of China’s difficult problems in 2013.