Tag Archives: Donald Trump

WHO Gets Trampled

THERE ARE SEVERAL interpretations of the Trump administration’s latest attacks on the World Health Organisation (WHO): they are a diversionary tactic to deflect scrutiny of the United States’ response to the Covid-19 pandemic; they represent an expansion of this particular front in ‘the new Cold War’ between Washington and Beijing; or they are a central plank of the president’s re-election campaign for November. Whatever view you hold, there is no escaping that they were predictable.

The WHO and the Donald have previous.

In 2016, the WHO urged then-President-elect Donald Trump to expand ‘Obamacare’, the signature health insurance legislation of his predecessor President Barrack Obama, whose enabling legislation, the Affordable Care Act, Trump had promised on the campaign trail to repeal immediately he took office. This did not bode well for the relationship doing the Trump presidency.

His administration from its outset embarked on a decrease of US support for global healthcare assistance in line with the ‘America First’ agenda on which the president was elected and campaign promises to end what the president described as other countries taking advantage of the United States and ‘failing to pay their fair share’. Its first budget, the administration proposed a $4.6 billion cut in humanitarian assistance and global health spending. Some $2.2 billion was accounted for by the latter.

This signalled the United States intent to remove itself from a two-decade-long role as the leading funder for preparing for and responding to global infectious disease outbreaks and basic health care delivery to low-income countries. The cuts included reducing funding for national disease surveillance systems, training and infrastructure.

At the time, there were plenty of warnings that these would put at risk rapid and coordinated responses to infectious disease outbreaks that recognise no borders. Nonetheless, barely a year after taking office, the president made the National Security Council’s global health and biodefence team redundant. This had been established by the Obama administration, with pandemic preparedness part of its remit. In a streamlining of the NSC, in which the directorates for arms control and nonproliferation, weapons of mass destruction and terrorism, and global health and biodefense were combined, the administration cut the pandemic preparedness team. Its role was subsumed within the NSC and given a more national security cast.

Nor has the Trump administration been enamoured with the WHO’s director-general, Tedros Adhanom Ghebreyesus, who has been an enthusiastic endorser of the healthcare component of President Xi Jinping’s Belt and Road Initiative. In a 2017 speech, Dr Tedros described the Health Silk Road as ‘visionary‘. The WHO had just signed a memorandum of understanding on a strategic health partnership with China along the Belt and Road and in Africa, The MOU included additional Chinese funding of the WHO.

China’s contributions to the WHO have been steadily climbing, though they still fall far short of the $400 billion-500 billion a year the United States pays in assessed dues and voluntary donations — or had been; even before Trump suspended payments it was almost 70% in arrears for 2019 and hadn’t handed over a dime of this year. While the US is on the hook for around 27% of the WHO’s member-nation dues, its share of the WHO’s total budget falls below 20% once voluntary contributions are factored in.

China has again offered to up its contributions to the WHO by $2 billion over the next two years to fight the pandemic, including making China the hub of global supply chains for anti-epidemic equipment and products, and to share any vaccine that it develops. The offers are efforts to defuse international criticism of its early response to the outbreak, but put the WHO in a tight spot.

Dr Tedros could call the United States’s bluff, and risk Washington walking away from membership as Trump has threatened. However, this Bystander does not reckon Trump would carry through the threat because of the win it would give Xi in expanding China’s global influence. Beijing would then be in pole position as the WHO’s lead funder and patron. However, it would also give substance to Trump’s allegations that the WHO is in Beijing ‘pocket’. That will concern a significant number of the WHO’s other members, including some who would not see themselves as in the first rank of allies of the United States.

It would also cut the WHO off from the United States’ technical expertise in public health and medical research — not to mention future funding under a different US administration. Setting up a review of its handling of the pandemic (update: now agreed in principle), some cosmetic distancing from Beijing and possibly the premature departure of Dr Tedros before his term of office is due to expire in July 2022, seem more likely.

The WHO may also look at the state of the World Trade Organisation and be reminded that when elephants dance, it is the grass that gets trampled.

1 Comment

Filed under Belt and Road Initiative, China-U.S.

China’s Rocky Road To The US Elections

US President-elect Donald Trump. Photo credit: Gage Skidmore. Licenced under Creative Commons

CHINA-US RELATIONS were always going to be rocky in the run-up to November’s US presidential election. Then-candidate Donald Trump made hay out of China-bashing in the 2016 campaign. For President Trump, finding a way to replay the theme this year was a given.

The coronavirus pandemic has provided unanticipated means for that — and taken the bilateral relationship to rock bottom. The US president has been unsparing of China, with the US economy, on whose job-creating growth he was already hanging his re-election campaign, devasted by the measures to mitigate the infection.

Most Western allies of the United States have no taste for the Party claiming the superiority of Chinese system of governance for the country getting through the first wave of Covid-19 even while castigating the United States for its tardy response. They criticise Beijing for its initial mishandling of the outbreak in Wuhan and for being duplicitous with its data. Trump has given that narrative a more malevolent twist by suggesting that the pandemic was an attempt to destroy the US economy with the intent of undermining his re-election bid.

US Secretary of State Mike Pompeo, a relentless critic of the Party and the most public of the administration’s China-hawks by dint of his office, has held fast to his so far unsubstantiated assertion that there is ‘enormous evidence’ that the source of the outbreak was the Wuhan Institute of Virology, a Chinese Academy of Sciences lab in the city that researches dangerous pathogens. He has eased back from suggestions that Covid-19 was developed there as a bio-weapon, but still claims it escaped from the Institute one way or another.

The foreign ministry has challenged Pompeo to show his evidence and, of late, distanced itself from conspiracy theories advanced by its diplomats, notably that US participants in the World Military Games in Wuhan last year brought the infection with them. State media remain on the offensive, however, bluntly accusing Pompeo of lying and ‘spitting poison’.

Even US allies are privately sceptical of Pompeo’s claim, despite Trump pushing his intelligence services to find support for it that is more than speculative. The scientific evidence is that SARS-CoV-2 is not a synthetic virus but originated in bats from which it jumped to humans, probably via an as yet unknown intermediary species and likely at a wet market.

However, Beijing has resisted an independent international inquiry into the origin of the pandemic called for by Australia as current chair of the World Health Assembly, the governing body for the World Health Organization (WHO), and echoed by the EU. This reluctance sustains credence in the possibility of an accidental escape of the virus from the Insitute, even though that remains a conceivable, not likely theory.

True, there is a history of lax security in Chinese biological labs and the Politburo discussed earlier this week reform of China’s disease control system. However, that is more directed at lapses in the early response to the outbreak. The initial public suppression of information about its emergence may have followed the official playbook, but it is unclear from the outside when Party leadership first knew of its potential severity. Improved epidemic monitoring and early-warning capabilities, revamped public health emergency laws and enhanced responses to major epidemics will be introduced, according to state media. So too, this Bystander will hazard, new internal reporting guidelines for local officials that will tighten central control.

Separately, the WHO is again talking to China about sending in an academic team to look for the origin of the outbreak. However, a WHO team sanctified and sanitised by Beijing would have scant credibility in Washington. The Trump administration already believes the UN agency is in Beijing’s pocket and intends to cut off its US funding.

Sentiment shifts

Public and political-class opinion in the United States has swung evermore behind Trump. Polling by the Pew Research Centre in March, as many US states initiated lockdowns, showed that US views of China had become increasingly negative. Roughly two-thirds of those polled said they hold an unfavourable view of China, the highest level since the survey started in 2005, and up nearly 20 percentage points since the start of the Trump administration. Republicans, and more fruitfully for a campaigning president, those who are Republican-leaning, were more negative than Democrats, but sentiment towards China is now negative within both parties.

There has also been a significant shift to seeing China’s power and influence as a major, not minor threat to the United States. The 62% of US adults polled who identify China as a major threat is 14 percentage points higher than in 2018.

Congress reflects this shift. It, too, has become more hawkishly anti-China, especially as Beijing has moved into the diplomatic space opened up by the Trump administration’s ‘America First’ withdrawal. At a time of deglobalisation in which the administration’s world view is of contesting national powers, China is magnified as a rising power in a zero-sum game.

Beijing is seen in Washington (and Brussels) as exploiting the pandemic to advance its global strategic rivalry with the United States. Its critics point to its international ‘health diplomacy’ in sending supplies and skills around the world to aid coronavirus-struck countries and to its putative reinvigoration of the Health Silk Road. They also accuse it of opportunistic expansion in the South China Sea and of taking a more belligerent posture towards Taiwan and Hong Kong.

These misgivings are expressing themselves within the US Congress not only as criticism for mishandling the outbreak but also as a greater willingness to legislate on human rights issues, such as the treatment of Uighurs and Christians within China. Trade policy and the pursuit of market access for US businesses pushed such matters to the back. However, while Beijing can take an international backlash against its handing of the coronavirus in its stride, it will not take kindly to being pressed on what for it are highly sensitive internal issues — just as it will get prickly over US attempts to bolster Taiwan by drawing it more into the WHO’s discussions of lessons to be leaned from those places that have handled the pandemic well.

An indication of how the political winds have shifted in the United States is that both Trump and his presumptive Democratic presidential rival, Joe Biden, are vying to outdo each other on being ‘tough on China’. One telling sign of this campaign dynamic is how Trump is seeking to undercut his challenger by changing his soubriquet from ‘Sleepy Joe’ to ‘Beijing Biden’.

Thus the administration’s fiery rhetoric is turning to threats of action. How many can be carried through without damaging the recovery of the US economy is a moot point. The truce in tensions that the signing of the Phase One trade deal in January marked is over. Moves by a couple of states to sue China are mere showboating, as is the historically tone-deaf suggestion that the US should pursue reparations from China for the economic damage caused by the epidemic.

Tariffs return?

White House threats to reimpose tariffs on Chinese exports are not. Trump has threatened to pull the plug on Phase One if China fails to meet the requirement to buy an additional $200 billion of US exports over two years compared with 2017’s level. ‘If they don’t buy, we’ll terminate the deal. Very simple’, Trump has said. Bluster, perhaps. Nonetheless, China is behind the pace and the agreement’s lead negotiators, Vice Premier Liu He and US Trade Representative Robert Lighthizer, brought forward to this week their scheduled biannual call to review progress on the deal. with US Treasury Secretary Steven Mnuchin joining the call.

China has a couple of years to comply. It might yet invoke the agreement’s force majeure provision but for now is expressing its best intentions to catch up with its obligations under the deal once the pandemic has passed. If the deal falters (and this November, not end-2022 is the political deadline), tariffs from both countries suspended by the agreement will snap back into place. That would do little good for either economy amid a global recession.

Trump’s re-election campaign would anyway be better served by his being able to revert to his original election stratagem — to boast to voters that his tariffs and threats of yet more had yielded results in the form of a trade deal (limited though it was in many aspects), and to have by polling day in November tangible jobs and business for farmers and manufacturers who would vote for him in the crucial swing states, as a result of large-scale Chinese purchases.

Less simple as a campaign message, but more significant in substance are the administration’s denial to China of access to US foundational and emerging technologies. Its domestic and international campaign against China’s two leading telecoms-equipment makers, Huawei Technologies and ZTE Corp., are the focus but not limit of its policy of broad-based containment of Beijing’s indigenous technology ambitions under Made in China 2025. There will be no let-up. Export controls on semiconductor sales to China have been tightened again in recent weeks. They are likely to tighten further, especially for any technology that might have dual military-civilian use.

Washington is concerned about China’s modernisation of its armed forces. Meanwhile, Chinese concerns have surfaced that jaw-jaw might turn into war-war long before the People’s Liberation Army is ready to fight a hot war with the currently superior US military.

US government pension funds are also likely to be prevented from investing in some Chinese companies, again particularly those held to have ties to the military. Ways are being looked for to put similar constraints on private US investment funds, which, perversely, are meant to be getting greater access to Chinese capital markets under the Phase One trade deal.

The cancellation of China’s holdings of US Treasury debt, which has been discussed, appears to be off the table for now. That is a slippery slope that Washington should be extremely wary of approaching. Not so, US infrastructure, a likely beneficiary of massive post-virus stimulus spending. That is expected to be off-limits to Chinese investors.

Further immigration restrictions are also likely, not just to keep a second wave of Covid-19 infections at bay but Chinese citizens well distanced from US intellectual property in companies, universities and research centres. New applications for permanent residence by non-citizens (‘green cards’) are already suspended. Short-term work visas will control who comes into the United States.

The post-virus stimulus may also be used to reduce US dependence on Chinese supply chains, particularly in the technology and healthcare sectors. Tax and other incentives for US companies to expand their domestic manufacturing operations are likely well before the elections. This will hasten the reconfiguration of supply chains that touch China that is already underway.

Made in America now or Made in China 2025 both speak to growing economic nationalism that can easily spill into political nationalism, which in turn can have accidental and unintended consequences. A clash of differing ideologies and contesting strategic ambitions could spark what some are starting to call ‘a new sort of Cold War’.

Oddly enough, if there is a safety valve, it is the personal relationship between Trump and President Xi Jinping, which seems able to bring both countries back from the brink of their worst intentions. It is a slender thread from which to hang relations between the world’s two largest economies.

The broader concern in the business community about the deterioration in relations between the two countries is that it puts both on a downward spiral of shrinking trade and investment flows. That would deepen the US and global recessions and hasten the decoupling of two economies that three decades of deglobalisation have tightly entwined.


Filed under China-U.S., Economy, Trade

US-China Trade Deal: A Less Than Wonderful World

Vice Premier Liu He and US President Donald Trump present the signed US-China Phase One economic and trade agreement during a ceremony at the White House in Washington DC on January 15, 2020. Photo credit: Xinhua/Wang Ying.

DONALD TRUMP TODAY applied his humungous signature and, in a tiny but telling sign of the continuing competition between the two powers, Vice Premier Liu He inscribed his name in matchingly large characters on the Phase One US-China trade agreement. The signing of the deal in a White House ceremony signals a pause to the escalating tariffs war between the two countries, but, as this Bystander has noted before, far from its conclusion.

The US president left the room to the strains of ‘What a Wonderful World’. Nonetheless, the next year and beyond in the world’s most critical bilateral relationship is likely to be uneasy. As Liu noted, both sides now must focus on the implementation of the deal.

However, even what that deal is still seems open to interpretation. In another telling couple of moments during the signing ceremony, Trump said that China had agreed to buy $50 billion worth of US farm produce. In his remarks, Liu put the figure at $40 billion, which is in line with the numbers in the actual agreement behind Trump’s signature.

Game on.


Filed under China-U.S., Trade

Biden Twist Throws Beijing For A Loop

US PRESIDENT DONALD TRUMP’S unpredictable relationship with China has taken an unexpected turn even by his mercurial standards.

Facing an impeachment inquiry by the US Congress in connection with allegations that he pressed the president of Ukraine to investigate his Democratic political rival, former Vice-President Joe Biden, and his son, Hunter, for corruption, Trump has doubled down by urging China to do the same.

One of Trump’s (unsubstantiated) allegations is that the elder Biden was ‘probably’ responsible for Beijing’s ’sweetheart’ trade relationship with the United States because the younger Biden had received what Trump said was $1.5 billion for being on the board of a Chinese private equity company.

The kernel of the allegation is an official two-day visit Biden senior made to China in 2013 when he was President Barack Obama’s vice-president. During the visit, Hunter Biden, who had accompanied his father, met Jonathan Li. Li’s Bohai Capital and Rosemont Seneca Partners, a firm founded by Hunter Biden and the stepson of former US Secretary of State John Kerry, jointly created the private equity fund Bohai Harvest RST (BHR).

Hunter Biden was reportedly an unpaid advisory board member of BHR, rather than a main board director as Trump implied, although this remains unclear. A Biden spokesman said that the figure of $1.5 billion was false. (It is probable that derives from the capital the fund sought to raise.) However, Biden does appear to have become a 10% equity investor in the fund some two years after his father left office. As such, he may not yet have received any payout.

It is not unknown for Chinese companies to court the families of high-ranking officials, either their own or those of foreign governments. In that light, the younger Biden has attracted the criticism of Republicans before for his involvement with Li.

Chuck Grassley, who chairs the Finance Committee in the US Senate, raised concerns about the Obama administration’s approval of US automotive technology company Henniges being acquired for $600 million by state-owned Aviation Industry Corporation of China (AVIC) and BHR. Grassley also asserts that in 2015 another Chinese-government linked entity, Gemini Investments, acquired a 75% stake in Rosemont Realty, a sister company of Rosemont Seneca. Gemini Rosemont invested in US real estate.

US media are reporting that Trump raised Biden in a call with President Xi Jinping in June (the same one in which Trump reportedly said he would not raise the unrest in Hong Kong in order not to derail US-China trade talks). What the two presidents discussed about Biden is not known. The US transcript of their conversation was put into the same highly secure electronic storage system used to conceal, as Trump’s critics would have it, the transcript of his call with Ukraine’s President Volodymyr Zelenskiy.

This will all be extraordinarily perplexing and uncomfortable for Beijing, which will not want to be seen to be interfering in the domestic politics of a foreign government.

Next week, US-China trade talks are due to resume in Washington. The Biden twist throws another tangle into that knotted negotiation.

Leave a comment

Filed under China-U.S.

Trump’s Deft Hong Kong Suggestion

Chinese President Xi Jinping (R) meets with his U.S. counterpart Donald Trump in Buenos Aires, Argentina, Dec. 1, 2018.THERE IS NO chance that President Xi Jinping will take up his US counterpart Donald Trump’s suggestion to meet with the Hong Kong protestors. For one, it would be too reminiscent of Premier Li Peng’s meeting with the student leaders of the 1989 Tiananmen Square protest. For another, it is unimaginable that Xi would meet with the leaders of a group Beijing is branding as “rioters with behaviour that is close to terrorism”.

However, the suggestion is a deft one on the part of Trump. It tacitly acknowledges China’s right to intervene directly in the Hong Kong protests, now in their tenth week, without condoning a ‘send in the tanks’ approach. It gets Trump off the hook for his ill-judged earlier proposal that he and Xi meet to resolve the protests, and it ties the protests to the China-US trade dispute. By saying that the situation in Hong Kong has to be resolved first, it provides convenient cover for any lack of progress in the trade talks regardless.

Leave a comment

Filed under China-U.S., Hong Kong, Trade

China-US Trade: Trump’s Two-Step

US President Donald Trump (left) and Chinese President Xi Jinping pose for a handshake at the G20 Summit in Osaka, June 2019. Photo credit: Xinhua

US PRESIDENT DONALD TRUMP cannot strike a trade and technology deal with China unless Beijing is at the negotiating table. He needs a deal, however cosmetic, to fire up his base ahead of the 2020 US presidential elections. He also needs it before the tariffs he has imposed and the slowdown to global growth the prospect of a full-blown US-China trade war has caused start to inflict consequential pain on the US economy.

President Xi Jinping, too, needs a deal to ease the domestic political and economic pressures on himself and the economy, respectively.

Hence President Trump’s announcement following his meeting with Xi on the sidelines of the G20 summit in Osaka that the two countries would resume their high-level trade talks and that US companies would no longer be prevented from selling components to telecoms giant, Huawei, hitherto vilified by the Trump administration as a national security risk to the United States.

In return for returning to the negotiating table, China would have the threat of a blanket 25% tariff on all its exports to the United States suspended.

This is a retreat from the United State’s previous position. The question is whether it is the one step back to take two forward that Trump hopes or just the one step back that it appears to be.

Leave a comment

Filed under China-U.S., Technology, Trade

China-US Trade: Storm Before The Calm Before The Storm

US PRESIDENT DONALD TRUMPis far from alone among his compatriots in taking a harder line against China. There is now agreement across the political spectrum in the US about the course the president has set, which Beijing would underestimate at its peril.

Let this Bystander recap where we are:

  • trade talks have stalled;
  • tariffs on Chinese imports to the United States have been imposed with more threatened;
  • US measures are being taken against the leading telecoms equipment maker Huawei that will have significant business consequences for the company in its Western markets;
  • powers have been activated that if deployed would cut off Huawei and other Chinese multinationals’ access to US components and technology on which they rely, such as, in Huawei’s case, Google’s Android operating system and Qualcomm, Intel and Micron Technology’s chipsets; and
  • sanctions against Beijing for its actions against Uighurs in Xinjiang, while still being held in reserve by the US administration, are now being talked about openly, as is criticism of the proposed extradition law for Hong Kong.

Until about a week ago, it seemed as if Beijing had navigated its way through the trade talks to a place that was acceptable if uneasily so and was, following its customary negotiating practices, backtracking at the eleventh-hour to ease its main pain points.

These included how the scale of its concessions, the conditions under which they have been made and how equally any agreement would be perceived to be in China, points on which the Trump administration, which regards all negotiations as zero-sum games, had no interest in accommodating.

The Clinton administration’s similar experience with talks over China’s accession to the WTO two decades ago would have provided some precedent to draw on, but the US administration’s default position is that any and all trade deals made by a Democratic predecessor are the worst deal in history, and allowing China into the WTO particularly egregious.

The consequence is that President Xi Jinping is increasingly being pushed into a corner. The tone of state media has in recent days been more defiant and nationalist. Officials have been quoted along the lines of, we would prefer to resolve the issues through dialogue but if the United States wants a trade war, then bring it on.

For now, there will be more tit-for-tat retaliation on tariffs while China will take informal administrative measures against US companies operating in China proportionate to the measures imposed on Chinese companies by the United States. If there is to be trade war, Beijing will wage a guerrilla campaign while Washington will fire its financial big guns. That will include quiet operations by Beijing in the three other theatres where the Trump administration is fighting its ‘strategic rivals’, Iran, North Korea and Russia.

The next breakpoint is the G20 meeting in Osaka next month where Trump and Xi will be in attendance, offering the possibility of a similar session to the one held during the last G20 summit in Buenos Aires over dinner on December 1 that kicked off the current round of discussions.

Trump believes that the United States has a stronger economy, and thus, he holds the upper hand. Being tough on China plays well electorally for him. No Democrat is going to campaign on being soft on China. For that reason, too, he will be in no hurry to strike any deal that does not look triumphant from a US perspective, providing the US economy holds up, and US consumers do not notice that they are paying up to an estimated $2,000 a year for Chinese products because of the US tariffs.

Xi’s position domestically remains strong, but the troubles with Trump provides scope to embolden internal critics The National Development and Reform Commission, sidelined by Xi’s centralisation of control generally and over economic policy in particular, and seen by Xi when he took power as controlled by other factions, is, tellingly, starting to show signs of recovering its standing.

The republication of old Xi speeches by Party theoretical journals is also a straw in the wind that Xi is in a position where the rectitude of his line on economic development needs reinforcing.

Xi has a delicate balancing act to pull off, none the less, rebalancing and deleveraging the economy while not letting trade frictions slow growth rapidly enough to put the main policy targets at risk. Meanwhile, for Chinese companies like Huawei, the race is on to develop indigenous technologies before their stockpiles of critical US components run out and expand sales to non-Western markets.

In that last regard, at least, the tide of economic history is on their side, albeit in the long run. Getting through the short term will be the rough bit on the trade side. But even if Trump gets his trade deal in timely fashion for the 2020 US elections, the struggle for technological supremacy between the world’s two great powers will continue long after.


Filed under China-U.S., Trade

Xi And Trump Provide Temporary Relief

Chinese President Xi Jinping (R) meets with his U.S. counterpart Donald Trump in Buenos Aires, Argentina, Dec. 1, 2018.

CHINA HAS BOUGHT itself some time in its trade dispute with the United States, paying in farm goods, energy products and other industrial imports.

After a two and a half hour meeting over a steak dinner at the G20 summit in Buenos Aires, President Xi Jinping and US President Donald Trump called a time-out in the two countries’ tariff war. The United States agreed to suspend for 90 days the hike in tariffs to 25% from 10% on $200 billion of Chinese imports due to take effect on January 1 and not to introduce any new ones in return for purchases of unspecified but ‘substantial’ value of the above-mentioned goods.

Beijing and Washington will also step up talks on addressing broader structural issues the Trump administration has with China’s economy and body politic, although on those, Foreign Minister Wang Yi was somewhat ambiguous when he said these would cover ‘legitimate’ US concerns, leaving open a vast definitional loophole of what would count under that term.

It also looks as if Beijing has agreed to reverse its regulatory blocking of a proposed $44 billion takeover bid by Qualcomm, the US semiconductor manufacturer that is the world’s largest, for the Netherlands’ NXP Semiconductors that torpedoed the deal. However, Qualcomm has since said the proposed merger is dead.

Perhaps the most impactful part of the deal will be China’s agreement to designate Fentanyl as a controlled substance. The Chinese-made pain-killer is behind much of the opioid crisis in the United States, and one that disproportionately affectsTrump supporters.

In hailing the agreement as ‘incredible’, regardless of the fact that China had given up little if anything, Trump highlighted the positive impact it would have on US farmers, pointing up the most acute political pain point he is feeling at home from his tariffs.

But in truth, he is providing only temporary relief.

Ninety days is not much time to make any progress even on talks about talks on the intellectual property and market access issues. And all the time the threat of a re-escalation of the tensions will hang over discussions.

There might be some opportunity to revive (and rebrand) the agreement Xi struck with President Barack Obama that China would refrain from commercial cyber-espionage, which has, to all intents and purposes, collapsed. However, China will not abandon its ‘Made in China 2025’ industrial policy and will need to acquire foreign technology in support, by whatever means.

In short, the Buenos Aires agreement resolves none of the underlying issues of the economic let alone geopolitical rivalry between the two countries.

We are still in a position in which Trump is addicted to tariffs and Xi has no clear idea on how to treat him.

Update: Trump has tweeted that China has agreed to cut its 40% tariff on US car imports, which were anyway due to be reduced before the tit-for-tat tariffs started. Neither side had mentioned this in public while in Buenos Aires and China has yet to comment on the tweet.


Filed under China-U.S., Trade

Washington Piles It On

IT IS BAD cop and bad cop, as far as the United States goes in the trade dispute with China.

Following US Vice President Mike Pence’s statements that not only would the United States not back down but might even double its tariffs on Chinese exports if Beijing did not mend its ways on alleged intellectual property theft and discriminatory technology licensing restrictions, US Trade Representative Robert Lighthizer has updated his department’s ‘Section 301’ findings to say that China continues to fail to alter its practices.

It was the original findings issued in March that triggered the initial US tariffs on $50 billion worth of Chinese goods, now expanded to $250 billion-worth.

It was also Lighthizer, before he joined the Trump administration, who had suggested that a case be brought against China under the World Trade Organisation’s Article 23, which would have much the same effect as throwing China out of the WTO as Kevin Hassett, chairman of the White House Council of Economic Advisers, has recently suggested should happen.

Is there a good cop waiting in the wings in the form of US President Donald Trump?

Expectations are rising in some quarters that a meeting between him President Xi Jinping at the G20 summit in Buenos Aires later this month will produce a ‘trade truce’.

Both sides could use a de-escalation of current tensions, but, equally, neither will back down on their fundamental positions.

At best Beijing will be prepared to make no more than cosmetic concessions that Trump can brandish domestically as evidence that his tough line has worked, even if real change is limited.

Leave a comment

Filed under China-U.S., Trade

China Can Be Content With The Trump-Kim Singapore Summit


North Korea leader Kim Jong Un (left) and US President Donald shake hands in the summit room during the DPRK–USA Singapore Summit, June 12, 2018. Photo credit: By Dan Scavino Jr. [Public domain], via Wikimedia Commons.

THE SINGAPORE SUMMIT between US President Donald Trump and North Korea leader Kim Jong Un was a quick-fire and highly choreographed affair, genuinely historic in just happening, but long on symbolism and short on substance.

It may turn out to provide the basis for the eventual denuclearisation of the Korean peninsula, though an equally long-term success would be the integration of North Korea into the international order as a nuclear power that played by international rules and norms.

Alternatively, it may all fall apart in time, as history provides some precedent.

But potentially it is a ‘reset moment’, although this Bystander is not alone in having no idea what Kim’s long-term game is.

For now, China will be pretty happy with where things stand. Kim has given nothing away that would concern Beijing. Meanwhile, the US president has tacitly followed the ‘suspension for suspension’ approach Beijing suggested all along once it was clear that the dormant six-party talks framework was going to be replaced by bilateral talks between Washington and Pyongyang.

Trump’s statements at a post-meeting press conference that the US would suspend its joint military exercises with South Korea and that the president would like US troops to leave the peninsula eventually (neither of which proposal was in the statement the two leaders signed at their meeting) would have delighted China. Beijing has long wanted a scaled-down US military presence in the region.

So, too, would Trump’s promise of security guarantees for the North Korean regime — China wants no outcomes that lead to either the unification of the Koreas or the collapse of the Kim dynasty, either outcome of which risks putting US or US-allied troops on its Manchurian border.

It will, no doubt, take the occasion when it arises to remind Seoul that Trump considered the joint exercises, or ‘war games’ as he called them, too expensive. From there, it will not be too far a stretch to put the idea in Seoul’s mind that the US president could have been suggesting that South Korea would be too expensive to defend in general.

Senior US officials, alive to the broader security implications of that for Japan and in the South China Sea, were quick to row back on that.

Most importantly for Beijing, no detailed plan or process for managing North Korea’s nuclear and missile programmes was laid out at the summit. The only commitment was to hold follow-on summit implementation negotiations, led by U.S. Secretary of State, Mike Pompeo, and an unnamed ‘relevant high-level [North Korean] official’.

This opens the door for all the interested parties, especially China, to turn that into an international effort for what will necessarily be a detailed and painstaking process of inspection and verification if the US aim of ‘complete, verifiable and irreversible denuclearisation’ is to be achieved. The considerable volume of regional diplomacy that has been underway for some months is, in a sense, preparation for that.

“A good beginning is half done,” a foreign ministry spokesman, said of the summit, adding that China wished to “support the two sides to implement the consensus reached by their two leaders, promote follow-up consultations, further consolidate and expand the achievements, and make the political settlement of the peninsula issue a sustainable and irreversible process”.

In other words, it wants a seat at the table. China has a pivotal role to play in as much as it has the critical hand on dialling up or dialling down the enforcement of international sanctions on North Korea.

Pompeo will visit Beijing on Thursday when Beijing’s ‘support’ will immediately be made available.

1 Comment

Filed under China-Koreas, China-U.S., Defence