Top Chinese Economic Adviser Preparing for Trade War with Trump

by | Jan 18, 2017

This article originally appeared at Anti-Media.


On Wednesday, the New York Times ran a biographical piece on Lui He, the top economic advisor to Chinese President Xi Jinping. Described as a “soft-spoken, American-educated technocrat” with influence “some believe rivals that of the prime minister,” the Times goes on to suggest Lui may be preparing for a trade war sparked by the incoming presidency of Donald Trump.

Lui, currently a deputy director at the National Development and Reform Commission — a powerful agency of which Lui is widely expected to become the next director — has, throughout his career, consistently pushed for open markets and the liberalization of the Chinese economy.

This position, however, has been met with staunch resistance just as consistently, as the Times explains:

“But even as he has gained influence, his ability to push through changes in these areas has been limited. Mr. Xi still calls the shots, and his pledge to revamp the economy jostles alongside his fiercely conservative agenda to restore party control and protect state companies.”

Donald Trump ran on an anti-China platform and has threatened to raise tariffs on Chinese goods once in office. His nationalistic agenda of economic protectionism stands in stark contrast to Lui He’s goal of open markets — a common problem, according to Lui, and one he addressed three years ago.

“Populist policies adopted by the governments of developed countries are often the instigators of crisis,” he wrote in a study that was published as a book.

This is, in fact, what’s happening in Europe right now. There, nowhere near recovered from the Brexit fallout, many European governments are having to combat potent, anti-globalization populist sentiments.

This is precisely the type of sentiment that allowed Donald Trump to defeat Hillary Clinton.

Now, with “Mr. Trump and his selection of a trade team that seems ready to restrict Chinese exports to the United States,” the Times writes, Lui’s task ahead — should he remain President Xi’s top economic advisor — will, undoubtedly, only get tougher.  

The publication also noted that, for its part, China may already be preparing for a trade war:

“Chinese trade experts with government ties have already hinted that if the Trump administration imposes barriers on Chinese goods, they are ready to retaliate through steps like switching aircraft contracts from Boeing to Airbus, diverting food import contracts to rival countries like Brazil and possibly making it more difficult for Apple to sell iPhones in China.”

But the Times also notes that Lui is a shrewd and savvy player who’s managed to amass a great deal of power despite the fact some of his policies run counter to the party. This assessment would seem to be backed up by at least one seasoned China analyst.

“There’s no doubt in my mind that Lui He is extraordinarily powerful,” says Christopher K. Johnson of the Center for Strategic and International Studies in Washington. “He has shifted from a stance earlier on when he was very careful not to demonstrate the level of influence he had.”

James Holbrooks

James Holbrooks

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