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The writer is an FT contributing editor and writes the Chartbook newsletter
Sometimes coincidence illuminates history.
Last week, the news that self-declared democratic socialist Zohran Mamdani had won the Democratic mayoral primary in New York City, the capital of global finance, broke just as Chinese Communist party premier Li Qiang was in the midst of his address at the World Economic Forum’s Summer Davos meeting in Tianjin, China. Delegates shared their disbelief, not at what they were hearing from the podium, but from the other side of the world.
Though they avoided any mention of America, Li’s speechwriters had framed his text against both the backdrop of today’s global turmoil and the memory of the financial crisis of 2008. When Summer Davos gathered for the first time at Beijing’s invitation 17 years ago, dramatic news from New York was shaking the world. Wall Street was melting down. As the crisis unfolded, China suddenly took on a new role as a point of global stability.
In the aftermath during the 2010s, the world tilted irrevocably towards the east. Today, it is hard to avoid the impression that it is tilting further China’s way.
The contrast between the turmoil in Donald Trump’s America and the mood of calm progress exuded by Beijing is striking both in style and substance.
Both the CCP and the US political establishment habitually talk in high-flown terms about their nations’ destinies. But whereas Li calmly insisted on the logic of history and the inexorable process of globalisation, quoting growth figures to a decimal point and interrupting his flow to clarify the currency units in which he was citing China’s record exports, US politics is in a state of delirium.
While Trump denounced Mamdani as a “100% Communist Lunatic”, the guardians of centrist common sense went one better, with one Democratic panjandrum declaring that a policy of freezing rents for a year on around a million regulated apartments in New York was little better than bombing.
One can’t help wondering how residents of Tehran or Gaza, or Tel-Aviv for that matter, would feel about that comparison. Meanwhile, the Congressional debate over Trump’s signature “big, beautiful bill” is conducted in tones that are even more bathetic. For Stephen Miller, Trump’s henchman and nationalist adviser, extra billions for ICE are a matter of the survival of western civilisation.
As for China, it undoubtedly faces substantial macroeconomic challenges. Growth has slowed and youth unemployment is in double digits. In 2020-21 Beijing deliberately stopped the most dramatic process of urbanisation and private property accumulation in history, redlining further credit to its most inflated private developers. Unsurprisingly the ensuing real estate slump has produced a lasting hangover.
But the remarkable thing is that, unlike in Europe and the US in 2008, this has not morphed into a systemic crisis. If China’s annual growth rate stabilises at around 5 per cent, it will have to be counted as the most successful soft landing in the history of economic policy. If further stimulus is required, one would expect the policy process in Beijing to be laboured, but to result in an intelligible outcome.
By contrast, to refer to policymaking in Washington as a process, is to indulge in euphemism. When confronted with the macroeconomic consequences of the “big, beautiful bill”, White House spokespeople do not bother meddling with the statistical record or fiddling with the models. Their answer is Baath-style denial: growth will go up and deficits come down if Trump says so.
Similarly, where the global threat of the climate crisis is concerned, we wait to see in which direction China’s climate policy will go next. There is some hope that emissions have peaked and that China and Europe will both deliver ambitious “nationally determined contributions” on emissions in time for the UN General Assembly in September. At the same time, in Trump’s America, any reference to global warming is hors de discussion and the Republicans are doing their best to stop the green energy transition in its tracks.
The White House favours gutting any effective regulation of artificial intelligence, even as more and more experiments confirm that existing large language models are not safely aligned with acceptable political and social norms. China’s platform giants are ploughing huge resources into AI too. The results are no more predictable. But if there is any prospect that AI development poses a threat to the social and political order Beijing deems acceptable, can anyone be in doubt that it would be halted in its tracks? That is what the humbling of the platform oligarchs in 2020 betokened. What analogous guarantee is there in the west?
The contrast is stark. On the Chinese side technocratic, top-down managerialism to please any centrist pining for the 1990s. In the US, policy as post-truth reality TV.
Merely recounting these contrasts can seem like an exercise in caricature. But, as Li remarked, sometimes history rhymes in strange ways. And when its tone is shrill and dissonant, and “Alligator Alcatraz” passes for immigration policy, we should be honest enough to face the facts.