The US and others had looked the other way on China’s mercantilist actions in the past on a strategic gamble that China would slowly evolve into a more democratic state, with open markets, freedoms and rule of the law. This strategy had worked out well with South Korea and Taiwan as they made their transitions from poor dictatorships to wealthy democracies (and peaceful US allies).
During the reign of Xi’s predecessors this did seem to be a possibility but Xi’s policies and perhaps most importantly his ascension to President for Life ended any illusion that China would make this sort of evolution.
The Made in China 2025 program for example explicitly codifies what many had long assumed - that China is directly targeting the most advanced foreign industries with a state backed industrial policy.
With China moving away from even playing lip service to liberalization and now directly threatening US/European interests with Made in China 2025 and other initiatives, there is no longer any reason for the US to play nice with China.
Frankly if China had simply continued quietly moving forward as they had under Hu and made perhaps some nominal reforms or concessions they probably could’ve continued their plans unabated.
If I'm not mistaken, both these countries became wealthy during the dictatorship period. It was only after the stability and wealth that they become democracies.
Taiwan's first democratic vote was in 1996 and South Korea's first public election was in 1987.
One important difference is that both Taiwan and South Korea have been continuously dependent on US military protection from WWII until now.
It may look like that to us now, but these things have a way of unraveling themselves faster than we expect. Xi is 65 and it's unlikely he'll try to hold on to power for more than the next 15 years. China's GDP/capita is currently right around where SK and Taiwan's were when they switched to democracy. And SK, Taiwan, and Japan all have tried, in many ways succeeding, to have their own advanced industries - it didn't spell the end of the world when they did so.
Dictatorships often crumble suddenly, and China is still on the approach of the trajectory that SK and Taiwan followed. For that reason I think it would be silly to write off China just yet.
> Xi is apparently painted by US officials as an elitist ‘who believes that the offspring of Maoist revolutionaries are the rightful rulers of China.’
> On the question of human rights, the cables apparently have little to say on Xi’s views, but they do note that his father was critical of the crackdown on the Tiananmen Square protesters and also that the Dalai Lama apparently had ‘great affection’ for Xi’s father.
> There’s also mention of Xi’s now notorious (and not very diplomatic) outburst during his trip to Mexico a couple of years ago, when he complained to some overseas Chinese that: ‘There are some well-fed foreigners with nothing to do, who point to China and make unnecessary accusations.’
The similarity in outlook with Western business interests in that respect is striking, and much obscured by the lack of Chinese democracy and the resulting difficulty in news-gathering.
It is "a not a secret secret" that a lot of party higher ups covertly own big parts of Chinese industry, including export oriented ones.
The squabble is about them being caught in the crossfire. Their message: "make peace with USA for as long as we make money." Now the talk is over them being thrown under the train. Naturally, they are frustrated by that.
I want to remember that Xi Jingping himself came to power on the promise of "making party membership great again" and rode the wave of anger of minor and midtier party bureaucrats over them being sidelined during Jiang and Hu's eras. But now, he himself is busy throwing its own "powerbase" under the train.