Elizabeth Economy on China, Climate Change, and the Environment

November 7, 2017

Elizabeth Economy. CREDIT: Billy Pickett

STEPHANIE SY: Welcome to Ethics Matter. I'm Stephanie Sy.

Our guest at the Carnegie Council is Dr. Elizabeth Economy, an esteemed Asia scholar, an author, and a professor. Liz has written three books on China, including her award-winning treatise on China's environment, The River Runs Black. Liz is the C. V. Starr Senior fellow and director for Asia studies at the Council on Foreign Relations.

It is such a pleasure. I have been following your work for many, many years. I read recently that you actually wrote your dissertation in the 1990s about climate change. It really was not on the radar at that time.


STEPHANIE SY: Why was it on yours?

ELIZABETH ECONOMY: Let me just say it is really great to be here with you, Stephanie.

Back in the early 1990s, when I was a graduate student, I was actually interested in the role of science in policy-making and in the environment. Climate change was just starting to become a big issue because of the Rio Conference in 1992, so a lot of countries were beginning to pay attention to climate change.

But interestingly, China was not really one of them, and when I went to do my dissertation research there, people had not really thought about climate change. They did not have a lot of expertise on climate change except for paleoclimatology, like measuring ancient climate through tree rings. They did not know how to estimate carbon emissions at that point. So it was really a very nascent time in China for thinking and working on climate change. So it was a really great time to get my feet wet and start to engage with the issue really from the ground up.

STEPHANIE SY: You foreshadowed, I think, so much. China today is the largest emitter of carbon dioxide emissions, the greenhouse gas that causes climate change, although on a per-capita basis it is still not matched by the United States.

How does climate change today play into the leadership's larger strategy for China and its economy?

ELIZABETH ECONOMY: There has been a fundamental transformation, of course, in China's role, both, as you suggest, as becoming the world's largest emitter of greenhouse gases, including carbon dioxide, but also in terms of the role that President Xi Jinping wants to play as a climate leader on the global stage. As we have seen the United States take a step back, President Trump saying that he does not want to adhere to the Paris Accords on climate, President Xi has attempted to step in and raise China's profile on this issue. So I think there is an element of asserting Chinese leadership on the global stage. Climate change is an issue that potentially can help him do that.

And I also think that Xi Jinping sees this as an opportunity for China to capture the global market for clean energy technologies. China has become a leader in the development of solar and wind power, and so I think he sees this as boosting the Chinese economy as well.

STEPHANIE SY: For a long time there has been this view that addressing climate change must be a trade-off and the actions that it takes to address emissions is a trade-off between economic growth and protection of the environment.

How does the Chinese leadership see that right now? And I guess the Chinese leadership is really all President Xi at this point because he recently completely consolidated power and enshrined that in the constitution. How does Xi view it?

ELIZABETH ECONOMY: You are right; Xi Jinping has certainly amassed more institutional power than any Chinese leader really since Mao Zedong. So how he looks at climate change, the actions that he is prepared to take, matter a lot. But it is not all that matters. A lot of what happens in China with regard to climate change depends on how the country actually implements what Xi Jinping wants to see happen.

So I think there are two different things operating. One is Xi's vision for China and climate change, the other is actually what takes place on the ground, and oftentimes they are quite different.

STEPHANIE SY: Let's delve into that a little bit more. You mentioned China's commitments in the Paris Climate Accords. It was back in the Obama years when he and President Obama got together and they both made commitments, and that later became their pledges in the Climate Accords.

How meaningful was what China pledged? If I recall, the pledge was a cap on emissions by 2030 and more and more use of renewables. Is that significant, and is that going to make a major dent when it comes to China's impact on the planet?

ELIZABETH ECONOMY: I think the significance of China's commitment was really twofold. First, that President Xi stood up side by side with President Obama and said, "The two largest emitters in the world, the two biggest countries in the world, we're stepping up and we're going to lead on this issue." That really did help to bring along the rest of the world in terms of forging a real climate agreement. I think that was probably the most important thing that happened.

The second was that it gave some energy to China's own climate work. So it inspired Chinese scientists and Chinese non-governmental organizations, those people who had been long working on the issue, to feel as though "Yes, China is going to do something, all of our work is worth something, and we can push forward on this."

In terms of China's actual commitment, it is not insignificant. It is significant that it took a commitment, because until that time it had refused to take a commitment on the grounds that it was still a developing country. But the actual commitment—pledging to cap emissions and begin to decrease them by 2030 and to improve energy intensity by about 60-65 percent at the same time; that is the amount of energy used per unit of gross domestic product (GDP)—is not enormously significant, for two reasons.

First, it is kind of what China could do just by improving energy efficiency along the path.

STEPHANIE SY: So sort of low-hanging fruit.

ELIZABETH ECONOMY: Low-hanging fruit.

And it does not actually get the world to that point that all of the climate scientists agree is necessary, not having the Earth warm more than between 1.5 and 2 °C. So what China has pledged to do does not make a meaningful contribution to achieving that target, and in that context what we really want now is for China to take on additional commitments.

STEPHANIE SY: China has to balance again that commitment to renewables, that commitment to lowering emissions, with its economic growth.

When you look at China's growth today, do you think that it will, even maybe the modest commitments you would call that it committed to in Paris, do you see it fulfilling those if growth starts to slow down in a meaningful way?

ELIZABETH ECONOMY: I do not think there is any doubt that China is going to meet its commitments, and it is going to meet them probably 10 years early. That is the great news, which is why I think they probably could step up and do a little bit more.

I think it is important to recognize that the Xi government does understand that you can grow the economy and grow it sustainably, that you can integrate environmental protection and economic growth in a good way. Whether or not they actually manage to do that at all times, I think probably that is not the case. So we see that when growth does start to slow we see a new push on investment, construction, all those kinds of things that tend to lead to greater greenhouse gas emissions. But I think the overall trajectory, the overall effort of the Xi administration, is to do a better job in terms of accounting for the environment as it develops.

STEPHANIE SY: It is so interesting that you are saying that you really do believe that President Xi believes that you can grow the economy sustainably, because in this country, in the United States, the political conversation is very much still you have to choose between environmental protection and economic growth.

In that way, is China really going to be a leader?

ELIZABETH ECONOMY: I think that has not been the case. I think that is the case now with this particular administration in the United States. I think if you look at many states, if you look at U.S. businesses, you still see a lot of corporate leaders and a lot of state leaders stepping up and saying, "We are not going to go back to the fossil fuel-led economy. We are pushing forward with wind power and solar power and electric cars and taking all those actions that we know are going to propel the United States to become the economy of the future."

So I think it is true that the Trump administration has taken a significant step backward, but it is not true that the United States as a whole is following the administration along that path.

STEPHANIE SY: The Chinese government's push for renewables, which you mentioned earlier, has made it so that solar panels are much cheaper for everyone, and so renewables are at parity and even more cost-effective than fossil fuels in many markets now.

Has China started to beat the United States when it comes to renewable energy production? When you look at it from the lens of an economic rivalry, is this an area where China sees an opportunity?

ELIZABETH ECONOMY: I think there is no doubt that China looks at its production of solar panels and wind turbines as an opportunity to become a major exporter in these areas and to sell its technologies globally, especially into developing countries.

I think there is a big competition here in terms of the overall use of renewable energy. If you include natural gas, cleaner-burning fuels, the United States is still far ahead of China.

China also has an issue domestically, in that although its installed capacity of wind power and solar power is significant, its curtailment rate—that is the amount of solar and wind power that is not actually used—is very high, as high as 40 percent in some of the major provinces that use these renewable energies. So there is a big disconnect in China between the numbers that we see—you know, China has this percentage of solar and wind power—and actually what is being used. It is not connected to the grid because it is still more economically beneficial for local governments and local grids to use what is coming from coal. Coal is generally a more reliable source of energy. So they have to fix some pretty significant problems to take advantage of the good work that they have done in terms of developing solar and wind.

STEPHANIE SY: Let's talk a little bit about coal. I was living in Beijing in 2007 and 2008 in the run-up to the Beijing Olympics, and because these international delegations and athletes were coming to China, they actually turned off and shut down a lot of the coal-fired plants right around Beijing. And still the air was terrible. But since that point, has coal been phased out in many places, or is it still heavily part of Chinese economic planning, the coal?

ELIZABETH ECONOMY: Coal is still a major source of energy. About 62 percent of China's electricity comes from coal. But in the most populated areas—and you mentioned Beijing—they are really trying to move to natural gas and move away from coal. But still, the Beijing-Tianjin-Hubei area's use of coal is 30 times higher than the global average. The goal right now is to reduce the overall use of coal within the Chinese economy from 62 percent to 58 percent by 2020. That is significant, it is a significant shift, but it is still very slow-moving.

And China faces another threat from automobiles. In Beijing alone, part of the reason why on many days in Beijing you still have that soupy gray haze where you cannot even see across the street is because you are getting the emissions from automobiles as well. So, as the economy develops, they are facing new challenges and new threats to their air quality

STEPHANIE SY: That is a great point, because when you think about the number of people in China who are still in poverty and are trying to reach the middle class where they might own a car, where they might have an air conditioning unit in their house—I mean, how does China grapple with raising people up from poverty, which I know President Xi has said he wants to eradicate poverty in China, and balancing that with the impacts that it is having on its own environment? Climate change aside, we can also talk about local pollution and what that means for public health.

ELIZABETH ECONOMY: Right. I think one of the things that is probably underappreciated in the Western narrative on China's environment—because we do tend to focus on the coastal provinces, the wealthiest provinces, the places where the Chinese people agitate the most for cleaner air, so they get the most attention, the most money.

STEPHANIE SY: So, Beijing, Shanghai.

ELIZABETH ECONOMY: Right, all down the Chinese coast—Guangzhou, all of them. We forget about a lot of the rest of the country. Unfortunately, when you look at the rest of the country, you can see still that China is putting in place new coal-fired power plants, new coal-to-gas or chemical plants. Right now they have plans to put in place—and this is mostly in the Western part of the country, interior provinces—maybe 22 coal-to-chemical plants. If they do that, they will produce as much carbon dioxide emission as what is produced by Germany.

STEPHANIE SY: In a year?


So, on the one hand, you can see what is the good news, what is taking place in terms of the deployment of renewables and what is taking place in the coastal part of the country. On the other hand, when you really begin to look country-wide, you start to get a slightly different picture because still that development imperative drives a lot of the Chinese government thinking.

When they look out, there is a kind of—first it is a little bit like Deng Xiaoping "get rich quick, get rich first, and first some people will get rich and then the rest of the country will get rich." This is kind of like, "First the coastal provinces will get clean and then the rest of the country will get clean."

STEPHANIE SY: What about the citizenry of China in these different places? You talked about maybe there being more of a movement in the coastal cities, maybe more demand from the citizenry to clean up the air. Is that a geographical divide in China that you see? Where is the environmental movement, and how much pressure is there on the government to do things to clean up the air in different parts of China?

ELIZABETH ECONOMY: One of the interesting things is that the environment has been a leading source of social unrest in China since the 1980s, and it has only grown in importance. A few years back, maybe around 2012-2013, the Chinese government reported that the environment had become the leading source of social unrest in the country.

Traditionally, environmental protests took place in the countryside. You would have a local factory that was spewing noxious gases or was polluting a local stream or river, it was harming farmers' crops, people were getting sick, so it was a very immediate kind of, "This factory is making us sick, it's ruining our economic livelihood," and they would protest. But a lot of these were fairly small-scale protests; it could be 100 or 200 farmers, sometimes up to several thousand.

What started about in 2007 is that you started to get the middle class protests. It really began in Xiamen over the planned siting of a paraxylene (PX) chemical factory which was going to be put too close to the city center. Local university students and professors got wind of it, and they said, "This is illegal. You're not allowed to do this." They planned a very peaceful march. About 10,000-15,000 people marched over the course of a weekend wearing yellow armbands. That was really the beginning of that middle-class awareness and protest of things that would happen before. So not simply a Chinese reaction to something that was already polluting, but a knowledge that "This is coming, it is going to harm us, and we are going to put a stop to it."

I think that is the big change that we have seen in terms of the role of the Chinese people in affecting environmental protection, is that they know now what is coming down the pike and they stand up and say, "This is not acceptable." I think it is a fundamental transformation really in the past decade or so.

STEPHANIE SY: Does it concern the one-party authoritarian system and the government in China that the environment may be the issue that the Chinese people will not tolerate, that they will protest about, versus something like human rights?

ELIZABETH ECONOMY: Absolutely. And I think that, in fact, is why the Xi government began to take action. It really was not because within the Chinese government there was a version of Al Gore, somebody who in himself or herself was a true environmentalist.

The Xi government began in 2012-2013 to take action because there was just a mass protest emerging online via the Internet. Some well-known Chinese billionaires and children's authors began to try to rally the people online, to say "We want you to take action."

The initial response from the Chinese government, from Li Keqiang and from Xi Jinping, was, "Well, it took 30 years for us to get to this point. It is going to take another 30 years for us to address this problem."

And the Chinese people said, "No. We want you to take action now. We don't want our children not to be able to go outside, and we don't want to be living in an environment where our lungs"—it is the equivalent of smoking two packs of cigarettes a day just breathing the air in Beijing—"we want you to take care of this now."

I think that was the inflection point when the Chinese government began to take this issue of air pollution seriously.

STEPHANIE SY: A lot of people have compared China's modernization and its economic development and the fact that it ended up polluting vast parts of its land and water and soil—and I want to get more into the specific issues in a bit—to the Industrial Revolution in this country or in Europe, and said, "Why shouldn't China be able to do everything that it has to do to exploit its own natural resources in order to grow?"

You have been researching this issue for so many years, what is your response to that explanation?

ELIZABETH ECONOMY: I think there are a couple of things. First, it is not a terribly useful comparison to make, China to the United States or Europe, for example, because environmental degradation and pollution in China have been taking place for centuries, whether from war or overuse of land, or even back in the 1700s you could find that there were reports of protests around polluted water from a local dyeing factory in China. So China has been suffering from environmental degradation and pollution for centuries. It is not simply a function of the past 30 or 40 years of very rapid economic development.

In fact, you can go back and look at the memoirs of China's first environmental protection agency head, Qu Geping, and he talks about China during the 1950s and the 1960s, during the Great Leap Forward and the Cultural Revolution, when Beijing had 700 factories, inside the city of Beijing, spewing toxic gases, and he talks about the polluted water.

By the time China began its rapid period of industrialization—from Deng Xiaoping and afterward—it was already about a quarter desert or highly desertified, very severe land degradation. It is roughly the same size as the United States. We have never faced a condition like that. So, from the beginning, I do not think it is a terribly useful comparison to make.

The other reason it is not that useful is because we know so much more now about the impact of the environment on the economy, on people's health, than we did back in the 1800s or early 1900s when Europe and the United States were going through the Industrial Revolution, and we should be able to do better, and we have the technologies to do better, and we have the policy instruments to do better. Saying that China should just develop and watch its people suffer and watch 1.6 million people die prematurely every year because of air pollution-related diseases to me seems criminal.

STEPHANIE SY: You wrote The River Runs Black in 2004, which is read by everyone who is interested in what is happening in the environment in China, about the environmental degradation there. You went into the history as well.

Was your book a warning to China; and do you think it was heeded, because I imagine the officials in China have read The River Runs Black?

ELIZABETH ECONOMY: At the time it came out, I will say I did hear that at least parts of it were translated for the Chinese leadership and they were very unhappy with the book. I think they were probably unhappy because it pieced together a lot of what they already knew, of course—it is not like they were ignorant of what was happening in their own country—but it made it a kind of complete whole and story. And I think they were unhappy because it also talked about the environment as a potential source of social unrest, and even of political change down the line, because the environment has served that capacity in other countries, like countries in Eastern Europe. So I think both from a "here's what's happening" writ large in China with regard to the environment and "here's how the environment could lead to the downfall of the Communist Party," I think they probably were not too happy about the book.

STEPHANIE SY: Fast-forward to today. How would you change the thesis of that book, if at all? How would you revise it?

ELIZABETH ECONOMY: I think in terms of the way that the Chinese leadership approaches the environment, the policy mechanisms that they utilize, a lot has not changed. Still it is an authoritarian state, so a lot happens from the top down.

Many of the policies that are touted as new are old. For example, they say, "Well, now we're going to evaluate our local officials based on how well they protect the environment," not really just on how well they grow the local economy. That was something they were doing in the mid-1990s. So a lot of what is being billed as, "Hey, this is really innovative, and look at the new seriousness with which we are addressing this challenge," they are really drawing on very traditional means of tackling the problem.

On the other hand, I do believe this is the first time that the Chinese leadership fully recognizes the import of the environment and is seriously attempting to tackle the problem. I do not think any Chinese leadership until this one has said, "We really need to change the way we do business."

STEPHANIE SY: As part of that—and you mentioned the years 2012-2013 when maybe the citizenry through social media and other means was getting more aware of the problems—has the government been more transparent when it comes to the actual public health risks from air pollution, from water pollution, things like that?

ELIZABETH ECONOMY: I think the government has been more transparent. I think they have been more transparent in terms of trying to push localities to report pollution levels. That also came from non-governmental organizations, that push for transparency.

In terms of the transparency about the health risks, I think some of that comes from the government. A lot of it comes from outside the government. For example, the fact that we know that there are 450 or more "cancer villages"—villages where the rate of cancer is much higher than the norm—dotted along many of China's rivers, that comes from scientists, that comes from epidemiologists, both here in the United States and in China, and non-governmental organizations working. So now it is known within China.

The World Bank has done a lot of work in conjunction with the Chinese government, and initially the Chinese government did not want published how many people died prematurely from air pollution. They tried to quash that number. Now it is out there.

I think there is still a hesitancy to let the full amount of information be known. I think most recently they did a survey on soil contamination that came out a couple of years ago. While they were willing to give the overall percentage of soil that was contaminated—roughly 20 percent from heavy metals and other pollutants—they did not want to say where the soil was polluted, because who wants to find out that where your house is built you are living on arsenic or that where your children are playing the soil is enormously contaminated. I think there is partial transparency, but not yet full transparency.

STEPHANIE SY: What does that lack maybe of knowledge mean for citizens of China? You talk about 20 percent of the soil potentially being contaminated, and the ramifications of that for the food supply as well. What does that mean for Chinese people?

ELIZABETH ECONOMY: Of course, I think there is a lot of concern. A lot of parents are very concerned for their children. Food safety has become a very big issue in China. There is a whole organic food movement that has developed in China over the past probably five to ten years.

They develop the same sets of concerns that middle-class people develop everywhere else. Once you have your food, your shelter, your clothing, you begin to become more concerned about things like the environment, like the safety of that food supply. And so I think this is an issue alongside the environment, food safety, that has captured the Chinese people's attention.

STEPHANIE SY: You kind of touched on this in an earlier answer. When you compare the systems of government in the United States versus China, which do you think ultimately has a better ability to address things like climate change?

ELIZABETH ECONOMY: The way that I think about this is actually the United States has a much more difficult time coming to the right conclusion at the very top; but once we have come to that conclusion, then we do a much better job of actually implementing laws.

Whereas in China, Xi Jinping, as I suggested, can say, "We need to do X or Y or Z," oftentimes that directive gets mutated all the way down the chain, because in many instances it is simply that, it is a directive or it is a campaign, like "Let's have a tree-planting day, and we are going to plant 5 million trees across this country to help green the country, to help stem desertification." But then the problem is that nobody waters those trees; that actually they plant the trees too close together and they die; but they do not pay attention to what kind of tree they are planting. So there is a disconnect between what is mandated from the top and what happens at the bottom.

Another example would be Beijing telling Hubei Province, "You need to shut down all these steel factories." The people in Hubei were saying, "Okay, well, we need more inspectors. Provide us with more inspectors to go around and inspect these steel factories so that we know what the emissions are like."

They do not necessarily pay for what needs to be done from the ground up to implement those directives. And then you end up with a situation where every province is supposed to cut X or Y or Z, and they say, "Okay, we just cut it," without any regard for whether or not that particular steel factory is one of the most inefficient or most polluting.

So there is a lot of inefficiency that is built into a top-down system. Our inefficiency tends to come in the decision-making process at the very top.

STEPHANIE SY: And really, what you are addressing is a sort of a lack of accountability at all levels to implement this so-called "directive."

I want to talk about something else, which is just China's thirst for natural resources and raw materials. We know that China is getting those raw materials. They cannot get them all domestically, so it is going into Africa and into South America. What does that mean for the environments of those places? Is it mining and procuring those raw materials in a responsible, environmentally friendly way?

ELIZABETH ECONOMY: I think it is difficult to ask Chinese companies to do things differently abroad from the way they do them at home. So, to the extent that you have Chinese companies that have begun to take on corporate social responsibility and environmental protection at home within China in a serious way, they will tend to be the better actors abroad.

I think over the past 10 years Chinese companies have developed a very bad reputation across the full spectrum of resource-rich countries in terms of their environmental practices, also their labor practices. There has been some corporate learning, I think, that has taken place, but overall Chinese companies are generally considered to be bottom of the barrel when it comes to are they doing environmental impact surveys, are they taking into account when they are developing a mine that there is a water resource right here and how the mine tailings might affect that. They just have not been very good about it because they have not had to be very good at home. So I think there is a lot of learning that is taking place, a lot of learning yet to take place. But you can see that there have been also a lot of local demonstrations around Chinese investment in many of these countries.

And sometimes, frankly, it is not simply state-owned enterprises that are doing this, but you can have 2,000, 3,000, 4,000 small-scale gold miners from China in Ghana, and they are going through without any sort of environmental thought. But in part it may be because the environmental regulations in those countries are weak. That is often the case that China has made, that "We will adhere to whatever the environmental regulations are." But basically, at this point, with China being so large, being such an important power, I think countries expect more.

STEPHANIE SY: Yes. When you talk about in some ways one might say the exportation of environmental degradation—and China is not the only country that should be held accountable for that, and it certainly is not the only country that does that—but how much of that is because China has degraded its own environment and rivers and raw materials and resources to such a degree and has to support such a large population and such a hunger for growth and exports? How much of that exportation of degradation is because it has so badly degraded its own environment?

ELIZABETH ECONOMY: I think you would see that mostly when it comes to food and agriculture, so China going to Argentina or Brazil or in some cases countries in Africa and trying to buy land and develop large-scale farming to bring soybeans, for example, from Brazil back to China.

I think the mining of resources is less related to the degradation of the environment within China. Every country has a limit to some of those resources. So I think China going out reflects the fact that it wants to continue to grow its economy at home, it has enormous development and infrastructure needs, and so it needs those raw materials, and it is going to go wherever they are, wherever they can get them most cheaply, most effectively, and most efficiently.

But I think, in terms of its own degradation, the most important area is probably agriculture.

STEPHANIE SY: With the little time we have remaining, I want to ask you about President Xi Jinping and how significant are the changes he has made to the constitution and what that means for China, what that means for democratic reform, and what that means for human rights?

ELIZABETH ECONOMY: I think, as we know, Xi Jinping really has centralized power to an unprecedented degree. He began very early on by assuming control of many of the committees and commissions that oversee Chinese policy on a range of areas, from the economy, to foreign policy, to national security issues.

He has looked for provincial officials, for the media, for the generals, to pledge their fealty, not simply to the Communist Party but to Xi Jinping himself, which is quite unusual, a sense that there has been a cult of personality that has developed around Xi. He published a book of his speeches within the first two years. Again, a lot of this is quite unusual for a Chinese leader. Since Mao Zedong we really have not seen this kind of behavior. And now, at the most recent Party Congress with the 19th Party Congress, yes he got his thought, Xi Jinping thought, enshrined in the constitution, again placing him basically on par with Mao Zedong.

And he did not name a successor, did not signal a successor, leaving open the possibility that in 2022 he will defy convention and seek to be the president for a third term. He can be the general secretary for a third term of the Communist Party, but not the president.

So what does that mean for human rights and political reform? Well, if Xi Jinping were a different kind of leader, it could be good, because it could mean that he would push forward with political reform. But he is not, and everything that we see about Xi Jinping tends to suggest that he is more interested in regressing in terms of political reform—so deeper penetration by the Communist Party into civil society, into the economy; putting Party committees into NGOs, limiting very significantly the engagement of Chinese domestic NGOs with international NGOs through a new law on foreign NGOs. So I think the political space—clamping down on the Internet, which had become a very vibrant political space prior to Xi Jinping taking power—I think all of that suggests that he is not interested in debate, certainly not dissent, and that from his perspective what Xi Jinping says goes.

STEPHANIE SY: What is your prediction? You talk about the Internet. As much as perhaps the Great Firewall has been effective to a certain degree, there are still ways around that, and China is not as isolated as it was. Can he effectively for a long time really tamp down on all political dissent in China in the digital age? Is that possible? What are your thoughts on that?

ELIZABETH ECONOMY: I think he can for a long time—certainly not on all debate, not all discussion and I do not mean to suggest that he has. We still see discussions of differences in policy toward North Korea, in terms of economic reform. So, definitely scholars and analysts are still out there offering differing opinions. But the range is much more narrow and the punishment much more severe for activists and lawyers who try to push against this kind of wall against political freedom.

I think as long as Xi Jinping delivers on economic growth and he continues to build this sense of pride within the Chinese people over the emergence of China, the rejuvenation of the great Chinese nation, there probably is sort of greater latitude for him to continue to narrow the space for political debate.

Frankly speaking, you can look and see what is happening with American publishers and others going into China and being told, "You must remove these thousand articles that touch on sensitive topics." While most have pushed back, some have not. So I think there is a challenge. When you can begin to persuade foreign media content providers, foreign companies, to begin to censor themselves, I think then Xi Jinping is really developing quite an effective political wall around the country.

STEPHANIE SY: How do you see President Xi in relation to the election of President Trump?

ELIZABETH ECONOMY: In some ways the two men are rather similar actually. Both men come from privileged backgrounds. They both went to the masses. They went around the traditional political elites, attacked traditional political elites, and sought a populist base, and they both want to make their countries great again. So there are a few similarities there, maybe authoritarian tendencies.

But obviously, Xi Jinping is preaching an internationalist vision while President Trump has generally preached a nationalist vision. Again, I think it matters how China delivers on that internationalism. I think Xi Jinping has been very quick to step up, for example, at Davos last January, and say that China is going to be a defender of globalization and "we will remain open."

Well, the Chinese economy is much less open than the U.S. economy. He does not allow for the free flow of capital. He does not allow for the free flow of information or ideas. The Internet is heavily blocked. So it is one thing to say rhetorically "we will defend globalization." It is another to do it. So I think increasingly the international community will be looking to Xi Jinping to see whether or not he lives up to all of his big words and claims.

I would posit that if Xi Jinping were really ready to lead, for example, he would be looking to forge an agreement on the tragedy right in his backyard, the Rohingya in Myanmar, the refugee crisis. But China has been virtually silent on that.

STEPHANIE SY: China, from what I understand, has always put such a high focus on its sovereignty and staying out of other countries' political affairs. To my knowledge, there is no sign that that is going to change.

ELIZABETH ECONOMY: Right. Well, it is one thing to say, "You can't interfere in my domestic affairs." It is another to say, "I am not going to step up and take an active role in shaping or forging a global agreement to deal with the problem of refugees," for example. That does not require necessarily that you intercede directly in others' internal affairs. It does require that you think beyond your own immediate interests to the broader interests of humanity.

STEPHANIE SY: It also seems to require that you believe, as the Chinese leader and the world's second-largest economy, that you should be a moral leader. Do you see any signs that President Xi has interest in filling the moral leadership vacuum that some would say has been left by the United States in the election of Donald Trump?

ELIZABETH ECONOMY: I think it is impossible for President Xi to fill a moral vacuum when China remains a country that arrests its activists, arrests its feminists, arrests its writers and artists and people who voice dissenting views. I do not know how you get to be a moral leader when you yourself do not defend the rights of your own people within your own boundaries.

STEPHANIE SY: There is something that happened after last year's election in the democratic institutions in this country, which we have discussed a lot with different guests on this stage, the threat to the stalwart institutions that buttress a democracy and whether those were threatened in the 2016 election.

Some on this stage have suggested that the brokenness, or the perceived brokenness, of the democracy—I do not think personally that it is broken—but the perceived weaknesses, let's say, of American democracy have empowered leaders like Xi and like Putin, who have this command and control over the politics of their countries. Do you agree with that statement? Has that in some ways empowered Xi and the Chinese system?

ELIZABETH ECONOMY: I think it has emboldened him certainly, and now, for the first time, in the wake of the Party Congress, we hear China talking about a "China model" that other countries can follow, that will set itself up in opposition to the liberal democracy model of the United States and others.

But again, how many countries are going to be attracted to a Chinese model—because what is that model? It is a repressive political regime that developed through corruption and state-led economic growth. I think there will be sympathy for state-led economic growth, but I do not think many people are going to say, "Yes, we'd like more corruption and more political repression in our society. The China model looks good."

I think instead—and I think this feeds back to your previous question about leadership on the global stage—what we will see are countries like Germany, or perhaps Japan or the United Kingdom, stepping up as democracies and continuing to serve as real representatives, as positive representatives, of a liberal democracy, because those are the countries that have stepped forward when we have seen refugee crises, when Trump pulls back from supporting family planning through the United Nations. It is not China that does that; it is the Netherlands.

So I think that is the way. We need to be looking at the reality of the situation rather than again simply the claim of Xi Jinping or of a Putin that now the United States is "the sick man of the Western Hemisphere, and we are prepared to lead."

STEPHANIE SY: Do you believe that those smaller economies, when compared to the size of the U.S. economy or the size of the Chinese economy, can step into that void? Or does money talk louder than morality on the global stage?

ELIZABETH ECONOMY: I think it depends on the issue. Let's not forget that the German economy and Japanese economy are very strong and important economies, and in many respects more advanced economies still, with much higher standards of living, for their people than China, or certainly than Russia.

Again, I think it is a matter of not just perception but of reality. When we look at the reality of the situation, then China faces a much greater challenge in terms of stepping up into a real leadership role globally. I hope they do because we need their participation and we need their contribution in areas like refugees and counterterrorism and certainly climate change. But I am waiting to see where the actions meet all of the rhetoric.

STEPHANIE SY: Elizabeth Economy, thank you so much for your expertise and your insights on China and climate change.

ELIZABETH ECONOMY: Thank you, Stephanie.

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