In China, trade war fears stoke new criticism over the country’s direction

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Last year, a prominent Chinese economist declared that his country had shed its status as a mere emerging superpower and ascended to a position of unchallenged supremacy. China, Tsinghua University’s Hu Angang said, eclipsed U.S. economic power in 2013 and surpassed American technological might in 2015.

His triumphant conclusion was not supported by most statistics. But it came amid a swell of self-confidence in Beijing, where China’s leadership seized upon the election of Donald Trump as a moment to attain a position of new influence. Chinese President Xi Jinping went to the World Economic Forum in Davos, Switzerland, to position himself as the leading global champion of free trade and openly spoke about China standing astride a “great era,” one where the ways of Beijing presented a “new option” for others to follow.

Now, Mr. Xi’s confidence is beginning to look like hubris. Threatened by a trade war with the United States, spurned by increasingly skeptical economic partners elsewhere and even rebuffed by potential loan recipients, the welcome for China’s corporate and diplomatic agenda is souring. At home, meanwhile, sharp new criticism has emerged of China’s posture, a rare internal rebuke that, this week, included a public petition signed by alumni of Mr. Hu’s own university to have him removed from one of the country’s most prestigious posts.

Even the financial markets offered a symbolic portent on Friday of Beijing’s changing circumstances, after Japan’s stock-market value overtook that of China for the first time since 2014.

The architect of at least some of the upheaval appears to be Mr. Trump, whose unyielding pursuit of tariffs has raised worries that China is being driven into a trade war it cannot win – and that part of the blame lies with Beijing for adopting a domineering posture that is now provoking global reprisal.

That was among the complaints listed by the growing list of petitioners calling for Mr. Hu’s removal in a letter warning that claims of surpassing the United States risk contorting domestic decision-making while also provoking “other nations' concerns, making China’s neighbours afraid of us. It will harm the country and bring calamities on the people!” (None of the signatories responded to requests for comment.)

Indeed, the spectre of a trade war has “revealed underlying weaknesses and the soft underbelly of the system,” Tsinghua law professor Xu Zhangrun added in a searing essay published in late July. Mr. Xu faulted Mr. Xi for “overweening pride” and ”vanity politics” that the professor called “odious.”

His writing, broadly shared among Chinese intellectuals, crystallized some of the internal apprehensions about China’s course under Mr. Xi. (Among Mr. Xu’s demands are the restoration of presidential term limits, the abandonment of the cult of personality around Mr. Xi, the publication of officials’ personal assets, the cessation of “wasteful” international aid and to allow new discussion of the events around the June 4, 1989, deaths around Tiananmen Square.)

The country’s elites are “feeling disappointed, anxious, angry, helpless and dissatisfied with their increasingly powerful leader,” wrote Minxin Pei, a scholar of Chinese politics at California’s Claremont McKenna College, in an online commentary. Mr. Xi’s ambition for China’s “revival as a world power,” he wrote, has been revealed as hollow through the continuing trade dispute, which has underscored the depth of Chinese reliance on the United States.

“Far from a rejuvenated hegemon poised to reshape the global economy, Xi’s China has been exposed as a giant with feet of clay.”

Concerns inside China have emerged in parallel with a foreign re-evaluation of Beijing and its intentions. The most recent U.S. National Defence Strategy called China “a strategic competitor using predatory economics to intimidate its neighbours.” Germany, concerned about Chinese corporate raiding, enacted legislation providing Berlin new powers to block foreign acquisitions. Australian lawmakers have written new rules to counter foreign political influence. Canada has also discussed with intelligence allies ways to limit the adoption of next-generation Chinese telecommunications technology.

In Pakistan, meanwhile, China has been accused of “reckless lending.” Myanmar is moving to vastly diminish the size of a port project backed by Chinese money over debt concerns, Reuters reported this week.

“Donald Trump’s trade war has galvanized all the previous misgivings which different countries in the West have toward China,” said Willy Lam, a Hong Kong-based expert in Chinese elite politics who is a senior fellow at the Jamestown Foundation in Washington.

Those external difficulties have provided an opening for internal dissent. Mr. Xi “retains power as the No. 1, but his authority has been severely dented,” Mr. Lam said. “That means the degree to which people respect him as a worthy leader of China.”

Indeed, Mr. Trump has “been quite effective in really challenging this myth that the Chinese are invincible, because the tariffs really hurt China at a very bad time, when the economy is experiencing serious trouble,” said Zhang Baohui, a political science professor at Lingnan University in Hong Kong.

That’s not to say China’s relative position has shifted: “China is a rapidly rising power. China is closing the power gap with the United States, even though it is still behind,” Mr. Zhang said.

But the emergence of questioning commentary illuminates a larger problem inside China, he said: the lack of open debate under Mr. Xi, who has been vigilant about squelching dissent.

“The current trade war has created an opportunity for more critical voices to resurface. In a sense, it is a good thing.”