Property price slide continues, EU delays vote on Chinese EV duties, and Tokyo demands answers over fatal stabbing of 10-year-old boy

+ an American pastor detained in China for nearly 20 years has been released

Welcome back to What’s Happening in China, your weekly update on the latest news and developments from the country.

I took this week’s featured photograph in the fall of 2015, during a memorable little day trip to the unique Liyuan Library on the outskirts of Beijing, in the district of Huairou. A friend and I hired a driver with a sidecar and set out early in the morning. Along the way, we stopped to brew coffee on the roadside. It was refreshing to get out of the city and see the countryside.

Even though the building was unexpectedly closed and we couldn’t go inside, we enjoyed exploring the surrounding nature and wandering through the nearby village. On the way back, we got caught in traffic when it was already a bit too cold—but nothing a checkered blanket for the side passenger couldn’t fix.

Memorable little adventures. I wish you an autumn full of them.

Before we begin, please consider upgrading your subscription to unlock exclusive, paid subscriber-only posts and stay informed on China.

Today's issue may be cut off in your inbox. Click here for the full content.

Let’s jump into it.

— PC

Was this forwarded to you? You can click here to get What’s Happening in China delivered straight to your inbox every Saturday.

---

Through the Lens

Sidecar driver on a road in Huairou District, northern Beijing.

---

In Focus

I. “A More Durable Basis for Coexistence”

U.S. policymakers should seek a more durable basis for coexistence, striking a careful balance to ensure that efforts to address the real threats from China do not undermine the very values and interests they aim to protect. Deterrence, particularly in the Taiwan Strait, can be achieved only with the backing of strong diplomacy that combines credible threats and credible assurances. And both deterrence and prosperity require some degree of economic integration and technological interdependence. If policymakers overplay competition with Beijing, they risk more than raising the likelihood of war and jeopardizing efforts to address the many transnational challenges that threaten both the United States and China. They also risk setting the United States on a path to what could become a pyrrhic victory, in which the country undermines its own long-term interests and values in the name of thwarting its rival.

Read: The Case Against the China Consensus (Foreign Affairs)

Related: How Does the U.S.-China ‘Cold War’ End? (Foreign Policy)

II. Reform and Opening up With Xi Characteristics

Xi’s ‘reform and opening up’ come with the added qualifier ‘with special Chinese (or Xi) characteristics.’ He has made it clear that ideology, politics, national security (the three overlap) come before the economy. The political, economic, and social system will remain Leninist, with the state (i.e., the party) dominating all aspects. The constitution of the PRC, as well as that of the CCP itself, ordain that the state sector of the economy shall be the leading force in the economy. Too often, commentators focus on the ‘overall objective’, repeated in the Third Plenum Resolution, of ensuring that ‘We will see that the market plays the decisive role in the allocation of resources’, but fail to appreciate the important (over)rider ‘and that the government (i.e., the CCP) better fulfils its role’. The market and private sector are to flourish – but within the CCP’s Leninist cage.

Read: Understanding Xi Jinping’s ‘reform and opening up’ (Council on Geostrategy)

III. “What Happens if China Stops Trying to Save the World?”

What does it mean to place China at the incontrovertible center of any story about, or analysis of, the green transition?

The question is an enormous one, perhaps as large as geopolitics and as capacious as the scope of possible global futures. But in the short run, at least, two basic points stand out to me.

The first is that the energy transition is, at present, to a large degree, a Chinese project. There is progress being made around the world, but the gap between China and everybody else is much larger and more intimidating than is widely acknowledged, and the global story looks much less optimistic once you set China aside — which is, in some ways, precisely what America is trying to do by engaging in a green-tech trade war.

Much of the argument for those tariffs has concerned the challenge of Chinese subsidy and “overcapacity” — and what the United States and its allies might do, if anything, to enable us to properly compete with a green economy producing today twice as many solar panels as the world has demand for, as well as an E.V. company taking over the world while mostly posting losses. But another aspect of the imbalance is perhaps more worrying, at least for those of us concerned about the pace of decarbonization: that China might back off, reducing its support for green industry in much the way that it purposefully deflated its own real-estate bubble, somewhat idling the engine of the global green transition and leaving the rest of us in the lurch.

Read: The Green Energy Transition Is Powered by China (The New York Times)