Why Xi Jinping gets good press in the west?

If The Economist ever got close to endorsing state capitalism, this article on Xi Jinping's China is the one. It is effectively an acknowledgement that central planning can be reconciled with market discipline. It makes the case quoting its signatures of success of Xi Jinping's policies. There could not have been a better endorsement of Mr Xi's policies from a western ideological fountainhead than this. 

The article has a good summary of the essence of Xi Jinping's reforms,

Xi Jinping is presiding over what he hopes will be the creation of a more muscular form of state capitalism. The idea is for state-owned companies to get more market discipline and private enterprises to get more party discipline, the better to achieve China’s great collective mission. It is a project full of internal contradictions. But progress is already evident in some areas... Mr Xi announced his agenda in 2013, vowing that China would “let the market play the decisive role in allocating resources”, while reinforcing “the leading role of the state-owned sector”... Mr Xi’s push can be broken down into two big segments. The first is to establish clearer boundaries for the fizz and ferment of the Chinese marketplace: a stronger legal system for businesses; simplified rules for day-to-day activities; a financial system better at allocating funds. The second is to make more adroit use of the government’s grip on the economy’s main levers: to make state firms more efficient; and to team them up with private firms in new industrial-policy initiatives. Entrepreneurs still have considerable latitude, so long as they stay in their lane and move in government-endorsed directions. And they still have powerful incentives. “To get rich is glorious”, a quip attributed to Deng Xiaoping that became a mantra for China in its go-go years, still applies. But only so long as your pursuit of riches also benefits the state.

In general the article rationalises away important risks to financial stability like that posed by the massive debt build-up. It is also optimistic about efforts at micro-managed industrial policy as the economy becomes more developed and sophisticated and marrying attributes of private sector entrepreneurship into the bureaucracies of state-owned firms, even being satisfied with merely quoting government officials to justify some of the optimism. 

This conclusion says it all,

It is getting harder to distinguish between the state and private sectors. It is getting harder to distinguish between corporate and national interests. And for all its inefficiencies, contradictions and authoritarianism, not to mention its increasingly pious cult of personality, it is getting harder to claim that state capitalism will hobble China’s attempts to produce companies and master technologies that put it on the world economy’s leading edge.

By the way, the article has a very useful graphic of central planning priorities of China since the nineties.

I cannot imagine any other non-western country, including an ally, getting this kind of press coverage. And The Economist is only following the pattern of other mainstream western media channels and commentators. Martin Wolf in the FT has been a frequent admiring commentator on China.

There is an intriguing contrast between the western media coverage of the erstwhile USSR and present day China. It is no exaggeration that in the late fifties to early seventies, the USSR was competing as an equal with the US on many of the most important cutting-edge technologies. Besides, its political influence was far greater than that of China's, and economic record was impressive. But the western coverage of USSR was one of outright hostility. In contrast, the coverage of China is often not only sympathetic but even apologetic (of the actions of President Trump, say). 

An important reason is that, unlike the USSR, China is far more integrated into the western economic system. Most leading western firms and commercial entities benefit from China. The big western companies benefit from China's massive market and/or its role as the factory of the world. The consultants and financial institutions make handsome profits from doing business with Chinese companies (one only needs to count the number of times the heads of leading consultants and financial institutions have visited Beijing in the last ten years). The entertainment industry from Hollywood to music labels, and basketball to football teams, make significant and a growing profit share from China. Universities and think tanks too benefitted from large numbers of Chinese students, Executive education programs, research and other related donations, and connections to high-ranking Chinese officials whose princeling children invariably study in US universities. Even retired politicians and public servants, and media commentators, have attractive avenues to enrich themselves by being connectors and intermediaries in the eco-system which transacts with China.

For more on these connections read the speeches by William Barr, Mike Pompeo, and Christopher Wray. 

There is a materially rewarding relationship that conflicts all the aforementioned actors in their assessment of a relationship with China, which the latter obviously understands and plays to its advantage. In contrast, there was hardly any economic relationship between the West and the USSR. This was partly a result of the times - it pre-dated the age of globalisation and the technological progress that enabled globalisation. Besides, given its backdrop, it was also an ideological battle between two distinct political and economic systems. 

The symbiotic economic relationship with China had become entrenched. Such entrenched equilibriums can be broken only through disruptive change. When the history of today is written in a decade or more, Donald Trump's Presidency may come to be acknowledged as a paradigm re-defining one. I cannot imagine any mainstream political leader, cut from the same cloth that wraps an establishment which has benefited immensely from the Chinese economic growth, with the courage and conviction, much less the motivation, to upend the order in such a dramatic fashion.

And I am inclined to argue that it was unlikely any ideological antipathy or deep conceptual understanding that guided Trump in this regard. It appears more a mix of nous that it is good politics (for his constituents), some conservative instincts on American supremacy and umbrage at China's provocations, and plain simple megalomania of showing who's the boss by punching the biggest antagonist around. But all done with strong personal conviction and by allowing the build-up and functioning of a team of hitherto marginalised ideologues and others with similar views to execute his agenda.

Irrespective of whether Trump loses the election, it is fair to say that the US-China relations have been significantly reset permanently, perhaps to the extent of creating the conditions for a new Cold War. It is a matter of debate about how or whether this denouement could have been avoided. But it cannot be denied that the existing modus vivendi with China was working only to the advantage of China and at a cost to every other country, including the US.