Contents:

THE BIG PICTURE China’s growing influence in the geo-political sphere THE HOME FRONT The trials and tribulations of ongoing domestic change AROUND THE REGION Commercial and diplomatic movements in East Asia ELECTIONS IN AMERICA The Democrats take Congress and then take aim at Beijing EUROPEAN ANGST Protectionist noises from the EU as it struggles to deal with China SELLING IT TO THE NATIVES Foreign and domestic brands compete for Chinese consumers SCANDAL IN SHANGHAI Corruption, pension funds and political ambition rock China’s second city

Summary:

Domestic distractions are no excuse for China to ignore its international obligations. Beijing must counterbalance UuS reservations and throw its weight behind the UuN China’s leaders could do without external distractions. They have a difficult enough job to do anyway without being too bothered by turbulence in the outside world. The attack recently by party hard-liners on further efforts to reform the banking system reminded us of what is bound to be the leadership’s primary preoccupation. It is of course true, as the die-hards insisted, that the more you loosen the party’s grip on the economy, the more difficult it becomes to tighten it on the state. So far, economic reform has not led to any systemic challenge to one-party rule. But you do not have to be a Marxist-Leninist, even one with Chinese characteristics, to believe that economic change does have political consequences, sooner or later.