Bolt from the blue: Democrats hold the Senate

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Hello and welcome to the Intelligence from the Economist. In London, I'm Jason Palmer.

And in New York, I'm John Fastman. Every weekday we provide a fresh perspective on the events shaping your world.

Ahead of the G20 meeting, Xi Jinping and Joe Biden are having a much anticipated sit down. Today. They're first, as presidents don't expect big breakthroughs, though the first step is establishing anything of a rapport before they can tackle the geopolitics.

And the stakes of that meeting between Xi and Biden are a reminder that it's never been more important to understand China. The Economist has a new podcast designed to help listeners do just that. We'll introduce it to you today.

First up, though.

And of course, it's.

A big day, so let's get right.

To the midterm elections. And so far, some of the races haven't turned out the way many predicted.

The day after Americans went to the polls last week, it was clear that Republicans had underperformed expectations, but not by how much.

Democrats overall are doing much better than expected. CBS News says projected winners in two.

Key races because counting the votes can take days. In some states, control of Congress remained unknown, but things got clearer over the weekend.

Over the weekend, Democrats found out that they had clinched control of the Senate.

Idris Kalun is our Washington bureau chief.

That was because two very tight races, one in Nevada, one in Arizona, both had enough results to make a projection. So in Nevada, Catherine Cortez Masto, the Democratic incumbent, fended off a close challenge from Adam Laxalt. Well, first of all, thank you, Nevada.

Thank you.

And in Arizona, the Democratic incumbent, Mark Kelly, also managed to get enough votes to hold off Blake Masters, who was a venture capitalist who mounted a fairly strong challenge to the incumbent astronaut. Senator, we've been successful in this mission, right, Gabby? And I'm so honored that Arizona has entrusted me to represent our state in the United States Senate for six more years.

And so that leaves just one Senate seat to be called.

There's still one outstanding race which we won't know the results of because there needs to be a runoff, which is a peculiar aspect of elections held in Georgia. If any candidate isn't able to clear an absolute majority, there's a separate runoff election. So that's going to happen on December 6th between Raphael Warnock, who's the incumbent incumbent, and Herschel Walker, a former American football star who's picked up Trump's strong endorsement. I don't come to lose, and I told you he's going to be tough to beat. Now, Democrats have been worried that control of the Senate would again come down to a runoff in Georgia. That's what happened in 2020. But it turns out that with the two victories over the weekend in Nevada and Arizona, Democrats can be sure that they will have at least control of the Senate and they may well go up one seat at the end of this election cycle.

And Adris, what does it mean for the administration that Democrats have retained Senate control?

A few concrete things. What it does do is it enables President Biden to appoint a new Supreme Court justice if a vacancy were to arise. We know that if Republicans had taken the chamber, they probably would have had little compunction in keeping a seat open. They did that to Barack Obama, and as a result, Neil Gorsuch is on the Supreme Court appointed by Donald Trump rather than Merrick Garland, appointed by Barack Obama. So in that regard, it's important. But there's a more subtle way in which having the Senate is helpful, even if the House is going to be Republican, which is that having a Democratic led Senate will mean that many of the most difficult bills that the president would be confronted with won't even make it to his desk. So it won't be the case that Kevin McCarthy will be able to put forward a pretty tough deal straight onto the president's desk who he has to veto. I mean, that'll take a lot of pressure off the president. So in that way, it'll make things, I think, a bit easier and remind.

Us where we are with the other chamber, with the House.

The House still looks like it'll go for the Republicans. It'll flip control and we'll have divided government for the next two years, but not by that much. So there are enough outstanding House races whose votes are still being counted such that we don't have a definitive answer for whether or not Republicans will be in charge. It's still leaning that way. And it looks like if they do, it'll be by a very narrow majority. That's certainly far off from the hopes that Republicans had that this would be a wave election. It looks like it'll be one of the barest victories in quite a long time. And that has consequences for the party. I think that it reflects badly on Donald Trump, who intervened to an extraordinary degree in this election cycle, tried to pick candidates wherever he could, use the devotion that the base still has for him to pick candidates, many of whom were rejected. And it also reflects badly on Kevin McCarthy, who made a strategic decision to ally himself with Donald Trump in the hopes of becoming speaker of the House. He may well achieve that, but he'll do it in a significantly weaker position than he had hoped.

So let's look at some of the consequences of this performance. Where does this leave President Biden's legislative agenda?

So for President Biden, it was an unexpectedly good week. Democrats didn't think that they would be in such a good position at the moment. Unfortunately for him, though, even if Republicans do take the majority with a small number of seats, it'll still be a majority. And that will mean that much of his legislative agenda is going to be dead on arrival. All the things that Democrats wanted to do that they didn't manage to accomplish in the last two years, like increases in safety net spending, increased taxation on the wealthy, maybe a bit more climate spending, will probably not materialize now. And it also means that the Biden administration will have to steel itself for a much more uncomfortable few years. That will mean quite a lot of negotiating around things like the debt ceiling, around deals to keep the government open. Republicans will probably use those moments as periods of maximum leverage. And it will also mean contending with a lot of investigations into the administration's conduct into probably the president's son, Hunter Biden, who has colorful personal history and a penchant for overseas business dealings, which Republicans are very keen to explore. All of that will mean that although this victory for Republicans is much more modest than anticipated, it will still not be a very pleasant few years for Democrats if, as expected, Republicans do end up taking the House.

One of the issues that people were concerned about before these results were known was the future of American aid to Ukraine, which where do these results leave that, do you think?

I don't think that they devastate the prospect for continued American aid to Ukraine, but I think that if Republicans take control over the chamber, as expected, the process will be perhaps a little bit tougher. Kevin McCarthy had given an interview to a D.C. publication in October in which he said that there would be no blank check for aid to Ukraine, which a lot of people were concerned with. He later walked that back a bit. And certainly the more America first members of the Republican caucus, such as Marjorie Taylor Greene, are much more vociferous in saying that they don't want any more money to go to Ukraine. Marjorie Taylor Greene actually said that she would make sure that not another penny would go to Ukraine. If Republicans retook Congress under Republicans, not another penny will go to Ukraine. I don't think that that'll actually happen, but I think that it might be seen as a political leverage point for Republicans. So there might be one thing that is used to horse trade for other priorities of theirs. I don't think that'll mean that it'll erode. Entirely. For one, Mitch McConnell, the Republican leader in the Senate, is quite committed to ensuring that there's a steady supply of money for Ukraine. But I do think that it will become a bit more of a clash than before.

And of course, there are presidential elections just two years away. Joe Biden has said he'll make a decision about running early next year. Do you think the midterms influenced that decision? And which way do you think he's leaning?

I think that they certainly helped his prospects for staying in the race. I think that if he had had a pretty devastating defeat, then it would have been harder for him to say that he wants to remain the candidate. And I think ambitious younger folks within the Democratic Party might have taken it upon themselves to ease him out. His public statements so far say that he's going to be running again. And I think that if he does decide to do that, it's going to be hard to imagine Democrats trying to muscle him out, particularly given this surprisingly good result that he's had. Of course, the fear that many Democrats had is that his age is showing. One of the primary jobs of the president is to be able to communicate with the American people, and I think that he struggled to do that in his first two years in office. So they worry about what the campaign in 2024 might look like.

And what about President Biden's 2020 rival? How have these results been for Donald Trump?

They've been pretty dismal for Donald Trump. He inserted himself in the process, and it seems like all of his interventions were for the worse for the party. Nonetheless, he's fairly undeterred. He gave an interview to a conservative publication in which he said that if his candidates won he should get all the credit. And if they lost, it wasn't his fault. He's going to announce it's expected, his candidacy for the presidency on Tuesday. He's giving a speech at Mar a Lago on Primetime. But I think that after this week's vote, he looks a lot more vulnerable than at any point since January 6, 2021, when his supporters attacked the US Capitol in a bid to keep him as president. We know that that event wasn't enough to break his hold over the party, but perhaps electoral loss will be.

And Idris, when you were on the show last week, you discussed the number of candidates running for governor or secretary of state who questioned or rejected the results of the 2020 election. How did those candidates do and how does the state of American democracy look, do you think, now, compared to two weeks ago?

So a lot of those candidates who got through their primary elections by devoting themselves closely to Donald Trump's belief that his election was stolen, a lot of them won their nominations and a lot of them failed to win their general elections. So a lot of the candidates who Trump handpicked to be secretary of state, which oversees elections, lost their races in states like Arizona and Nevada and Michigan. A lot of his candidates for governor who were most closely identified with the lost cause story about 2020 also lost, such as Doug Mastriano in Pennsylvania and Tim Michaels in Wisconsin. It looks like at the margins, having extreme beliefs like this hurt Republican candidates in general elections, which mattered in states in which margins are very thin. And at the end of these elections, the stakes for American democracy seem healthier than many had feared.

All right, Idris, thanks so much for joining us today.

Great. Thank you for having me. Foreign.

There hasn't been a whole lot of time for President Joe Biden to celebrate the Democrats keeping the Senate. He has some pressing engagements at the G20 summit in Indonesia, most of all, a meeting with his Chinese counterpart, Xi Jinping, that started this morning. Speaking ahead of the chat, Mr. Biden reminded reporters that the two men have history.

We spent a lot of time together back in the days when we were both vice presidents, and it's just great to see you. And you and I have had a number of candid and useful conversations over the years. And since I became president as well, you're kind enough to call me to congratulate me, and I congratulate you as well.

This kind of bonhomie masks a tremendous rift between America and China on trade, on technology, on Taiwan and more. Mr. Biden, though, sounded hopeful of a thaw in what have become truly icy relations.

As the leaders of our two nations, we share responsibility, in my view, to show that China and the United States can manage our differences, prevent competition from becoming anything near conflict, and to find ways to work together on urgent global issues that require our mutual cooperation.

There's a lot there. Sorting out competition, avoiding conflict, fostering cooperation. First, they have to get back onto normal speaking terms.

This morning, President Biden of the U.S. and President Xi Jinping of China are meeting for the first time since President Biden became president.

Jeremy Page is our Asia Diplomatic editor.

It's the first time face to face. They have spoken over the phone. They've had virtual meetings, but this is the first time they've met since 2017, when they both went to the World Economic Forum in Davos. And there hadn't been a meeting between US And Chinese leaders face to face since President Trump was in office. So it's considered a very important step in trying to, as American officials put it, build a floor in a relationship that has really been deteriorating very rapidly over the last couple of years.

So lay that out a bit for us. What is the current state of affairs between these two men, between these two leaders?

Relations between China and the US have been on a downwards trajectory for some time. They deteriorated pretty rapidly under President Trump, particularly due to tensions over trade. He launched a trade war with China, took several measures to step up confrontation with China on the security front. And then of course, things got very bad over Covid when he and many of his officials accused China of being sort of the cause of the virus. Chinese officials certainly expected things to improve under Biden, and they really haven't. If anything, President Biden has taken a harder line against China. Most recently he unveiled some very tight restrictions on exports of US Semiconductor technology to China. And then in August of this year, there was a visit to Taiwan by the speaker of the House of Representatives, Nancy Pelosi. And even though it seems that the White House did try to stop that, certainly from China's perspective, it felt that because she's Democrat, this was all sort of coordinated by the White House and was a very severe provocation because China obviously claims Taiwan as its own and is very fiercely opposed to any American attempts to enhance its official contacts with the island. After that visit, China basically suspended all high level dialogue with the United States. So for the last few months, there has really been very little contact at all. It's just picked up in the last few weeks as they've tried to lay the ground for this summit. But Essentially, for much of the last year, the world's two biggest economies haven't really been talking to each other.

So that's what's been going on from the American side. What about from the Chinese one?

Well, from America's point of view, there have been several troubling developments over the last few years. They feel that China has really been stepping up its pressure on Taiwan in a number of ways, particularly on the military front. There have been a lot of incursions by Chinese military aircraft close to Taiwan's airspace. The US has also been concerned about the domestic political trajectory within China with Xi Jinping's increasing concentration of power. And indeed, we saw him taking things several steps further just last month with the Communist Party Congress, where he secured another five year term in violation of retirement norms and unveiled a new leadership that was just crammed full of his own loyalists. And then, of course, there's great American concern over the Chinese position on the war in Ukraine, where it has offered considerable rhetorical support for Russia. Though it claims sometimes to be taking a neutral stance, it has been unwilling to condemn Russia's invasion of Ukraine and indeed just last week declared that its relationship with Russia was rock solid.

So quite a lot of very thorny things that are straining this relationship. How much should we expect that those tensions might relax after this meeting? How much of this could be solved?

Not very much from this meeting. When American officials talk about finding a flaw in the relationship, what they seem to mean is that they want to be able to talk openly and frankly with China about both sides, red lines, so that both have a very clear understanding of what their fundamental interests are and what kind of behavior they're unwilling to accept. And then from the American side, we often hear talk about guardrails. The American want to try and set up some sort of mechanisms, channels of communication, which can help the relationship, prevent it from spiraling into conflict. That's particularly important on the military front, where at the moment, most dialogue mechanisms have been suspended. But then this is mostly coming from the American side. They'd like to actually find some areas where the two sides can cooperate, areas of mutual interest, maybe relating to climate change, food security, illicit drugs. The problem is that China and a lot of the discussions preceding this meeting has wanted to link any cooperation in those areas to America making concessions on some of these more fundamental issues, like Taiwan and trade and semiconductors.

Still, though, you're talking about policy points, confrontations of the biggest sort. And President Biden in particular is the kind of guy who thinks that sitting down and Having a chat and meeting face to face must surely improve relations, regardless of the challenges that are around.

Yes, that's right. There are some hopes, certainly on the American side. Obviously, we get less input from the Chinese side, but I think there's some hope that the two might be able to draw on some sort of limited chemistry that they were able to establish when they were both vice president. So 2011 and 12, just before Xi Jinping became China's top leader, Biden and Xi met several times, sort of deliberate efforts on the American side to try to get to know him when it was clear that he was going to be able to take power. And I think within limited parameters, they were able to establish something close to a rapport. And so there are some hopes that they're going to be able to build on that in trying to find this more stable foundation for the relationship. But I think there are real limits to that. Xi Jinping is not an informal, chatty kind of guy. He's very confident in himself, but he does tend to see stick pretty closely to the script. So I don't think anyone's expecting them to really make any big breakthroughs at this meeting based on their personal relationship. But the hope is that the sort of limited rapport that they managed to establish in those early meetings might help to at least build a foundation on which they can build as they go forward.

Jeremy, thanks very much for joining us.

Thank you.

The meeting of Biden and Xi, as welcome as it is, is a reminder of how frosty the US China relationship has become. But for China, relations with its biggest global rival is just one of a series of issues it's facing at the moment. The strict Covid strategy is hurting the economy. The wealth of the new middle class is threatened by a property crash. And as President Xi consolidates power, the world is wising up to the challenge he poses. Understanding China has never been more important. To reflect that here at the Economist, we're expanding our China coverage, launching a new weekly show that unpacks China inside and out.

I'm David Rennie. I'm the Beijing bureau chief and I write the Charguan column, and I'm based in Beijing.

Hi, I'm Alice Su. I am the senior China correspondent, and I cover China from Taiwan. We have a new podcast called Drum Tower about China.

It will run every week on Mondays, and it talks about China in all its breadth and depth.

We chose the name Drum Tower because we were inspired by the actual Drum Tower, or Gulo, in Beijing for almost seven centuries.

The Gulo's drums kept the people of Beijing to time. And it's a kind of public service. It tells you what's important. So we thought that was a neat name for this podcast, which is really not just about the breaking news, though there will be breaking news, but also how China sees the world. How the world sees China.

So what have you been looking at this week on Drum Tower?

So our first episode builds off of a special report that David wrote recently. It's called the World China Wants, and it's about how China wants to reshape the world order. Now that's a big topic. And in order to get deeper into it, we zoomed in on one aspect, which is the Chinese argument about universal values. And by universal values, we mean things like human rights, liberty, freedom, democracy.

So help us understand that. What is China's position on the idea of universal values?

China's Communist Party now says basically that there are no such thing as universal values. That this is a phrase used, it's a Western excuse to keep China down, to try and delegitimize China. And I think one of the things that we try and explain in the podcast is that for people in the west, in America or in Europe, a lot of what we think of as universal values comes from the end of World War II. That never again moment after the horrors of Nazism in Asia, the horrors of Japanese imperialism, and that was certainly the driving force of the founding of the United nations, things like the Universal Declaration of Human Rights. And China doesn't find 1945amagic year. There were lots of other years that were very important in Chinese history and they don't believe that, say European powers at the end of World War II have a special moral mandate to tell anyone about values. Because from China's perspective, these are former colonial powers that did terrible things to China. And we've seen Xi Jinping, the current Supreme Leader, push back hard even this year at a summit with European leaders and say, you don't have some special right to care about human rights because of what happened in Europe in World War II. What about what you did to us in China? And so as China rises, becomes more self confident, we are seeing China reopening old arguments to do with the founding of the post World War II order.

Why did you want to begin with that question?

In some ways it can seem like a very abstract question, right? You know, universal values, do they exist? But it's actually at the heart of a real time clash of ideologies. We've all seen, for example, in Ukraine this year, why it matters, this question of whether we live in a world of might makes right or in a world where even great powers are constrained by rules.

And I think what's fascinating is the way that China senses that it actually has a lot of countries, say, in the global south, on its side because they think that the west has no right to lecture about rules. Because the west democracy is looking like a failure. You have populist leaders being elected. China is really keen to sort of accuse the west of using double standards to try and maintain its privileged, arrogant, racist, sort of top dog status. And so it senses an opportunity. And so I think the liberal principles that the Economist stands for, we're trying to examine them and defend them from first principles, because this is a time when liberals are on the defensive.

So in that defense of first principles and in that investigation of China's position on them, you spent a lot of time investigating it. Tell us about some of the people you've been speaking to.

I think one of the things we try and do in this podcast, in common with all of our China reporting, is to speak to people who strongly disagree with us and sometimes their opinions are uncomfortable. So in the podcast, we hear from a retired senior colonel in the People's Liberation Army, Zhou Bo, who is absolutely clear that the Western rules based order for him is a myth and just an excuse. And so those are the kind of voices that even if it's a bit uncomfortable, we're going to try and explain this is why China thinks it's winning. This is how China sees the West.

But at the same time, we wanted to hear from Chinese individuals because we know that the party doesn't speak for everyone. Right. So one person we interviewed was a Chinese writer. Her name is Zha Jianying. She is part of a generation of Chinese who grew up during the Mao era and really suffered from it. Her father was in the labor camp. And as a result, you know, they really put their faith in democracy and in these ideals. She went to study in the us they moved to the US and because of that, they were called traitors back in China. Especially now when the Chinese government is pushing this line that these values are not universal and that Chinese people who speak about them are being controlled by hostile foreign forces. She really pushes back strongly against that and says, you know, well, I lived through all these different eras in China. I lived through the Mao era, I lived through Tiananmen Square. And I know that Chinese people also have the right to ask for these things.

We're talking about certain fundamental truths that every human being who want to live in dignity would want to. These are true Chinese aspirations. And the Chinese Communist Party and its propagandists should not be the sole arbiter of what Chinese aspirations are. What are the universal values? Every Chinese like myself who share these values, but so many of them are silenced, especially those in China.

We're very interested in history in this podcast. And so we looked at those founding discussions of things like the United Nations Charter, the Universal Declaration of Human Rights. Fascinating detail that actually some big Western countries, including Britain, didn't play necessarily an entirely heroic role. They tried to defend their colonial possessions, deny their colonial subjects the same rights. And it was Chinese diplomats and other people from the global south you pushed back. And it's incredibly important to make the point. This is not just a Western conspiracy. These genuinely were seen as the whole world coming together to try to work out basic rights that all people should enjoy.

So when and where can we find this podcast?

Well, the first episode is coming out later today. After that we'll have new episodes every Monday.

And what will we be talking about in the weeks coming up?

Some big themes. So we're going to look at the US China relationship, climate change, you know, is China a serious player, Xi Jinping's surveillance state. We're going to look at poetry, we're going to look at zero Covid, how good the People's Liberation army is at fighting wars.

Now I should come clean here and say that I listened to an advanced episode. It was terrific. I am always proud of my colleagues work, but I can endorse this one especially highly. As a listener I really can't recommend it highly enough. You should be very proud. Alison David, thank you so much for joining us today.

Thanks John.

Thank you.

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