Next Wednesday, the 19th National Congress of the Communist Party of China willbegin. The week-long event, during which President Xi Jinping will furthercement his control of the government, comes at a pivotal time for the Asian superpower.
Countries in the region — and, indeed, much of the rest of the world — are increasingly looking to China for guidance. For years, in fact, the media has painted the image of Chinaovertaking the United States as the dominant force on the planet.
As Anti-Media has previouslyobserved, evidence suggests that under a freshly anointed Xi, a post-Congress China may be ready to fully embrace this role of world leader. Anarticle from its state-run Xinhua News Agency last week, titled “China offers wisdom in global governance,” speaks directly to this shifting geopolitical tide.
But Anti-Media has also explored China’s glaring problem in the midst of all its power projection. As the country seeks to present a strong, unified front to the international community during the Congress — the “One China” it very much wants to be recognized — Hong Kong and Taiwan continue to push for independence.
On Tuesday, the president of Taiwan, which China views as a breakaway province, used aspeech at the capital city of Taipei to, as Reuterswrote, “warn that the self-ruled island would not bow to pressure” from Beijing.
“Today, on our National Day, we should remember that democracy and freedom are rights that only came following the joint efforts of all Taiwanese people,”said President Tsai Ing-wen. “As a result, the government must make the utmost effort to safeguard Taiwan’s values of democracy and freedom, as well as our way of life.”
In the speech, which focused on her ideas for building a better Taiwan, Tsai says her administration is dedicated to improving the Taiwanese military. In doing so, the delicate line the leader must walk, even while holding her ground on the issue of self-determination, is clear to see:
“Although we are strengthening our military capabilities, we do not seek war. We remain committed to maintaining peace and stability both in the Taiwan Strait and across the region. Meanwhile, we will continue to safeguard Taiwan’s freedom, democracy, and way of life, as well as ensure the Taiwanese people’s right to decide our own future.”
Tsai went on to say that Taipei and Beijing have thus far been able to “maintain the basic stability of cross-strait relations” and that she hopes both sides can be “pragmatic and realistic” in future exchanges.
A large chunk of Tsai’s speech, however, was focused on how Taiwan isworking to get as far out of China’s sphere of influence as possible — precisely what China doesn’t want. Specifically, Tsai discussed the New Southbound Policy (NSP),described by Taiwan’s Central News Agency (CNA) on Wednesday:
“The NSP seeks to increase cooperation with Southeast Asian and South Asian countries, as well as New Zealand and Australia, as a means of reducing Taiwan’s trade and investment reliance on China.”
CNA was reporting on the fact that President Tsai just pledged to establish a $3.5 billion fund to assist countries involved in the NSP project. In her Tuesday speech, Tsaisaid flatly that the purpose of the NSP is to help Taiwan achieve a “more advantageous position in international society.”
It will be interesting, to say the least, to see what happens following the Party Congress. If a more forceful China decides to flex a little muscle, the stubbornly independent Taiwan could make for a very convenient target.
On Friday, the government of China made it officiallyclear to Chinese companies that overseas investments in projects linked to the “One Belt, One Road” initiative will take priority going forward.
“Profound changes are taking place in international and domestic situations, and Chinese enterprises face not just relatively good opportunities but also various risks and challenges in overseas investments,” the State Councilwrote in its introduction of the new rules.
The Belt and Road Initiative, unveiled in 2013, is China’s grand plan to link over 6o countries across Asia, Africa, the Middle East and Europe through infrastructure such as roads, railways and ports.
Theguidelines, according to the government, are meant to “promote the continuous and orderly and healthy development of overseas investment” in Belt and Road-linked countries, and to “effectively guard against all kinds of risks and to better meet the needs of national economic and social development.”
Without naming the “One Belt, One Road” initiative directly, the State Council’s language leaves little room for confusion, directing Chinese companies to focus overseas investments on enterprises that “promote the ‘one way along the road’ construction” and “infrastructure interconnection” between countries.
The goal appears to be to limit Chinese companies’ exposure to overseas investment risk by channeling those funds into projects that support the Belt and Road initiative. This is evidenced by a statement released by another Chinese government entity on Friday.FromReuters:
“China will strengthen rules to defuse risks for domestic companies investing abroad and curb ‘irrational’ overseas investment in its Belt and Road initiative, the state planner said on Friday.
“The National Development and Reform Commission (NDRC) said in an online statement lauding the Belt and Road initiative that it would provide better guidance on risks to companies investing overseas in order to prevent ‘vicious’ competition and corruption.”
The NDRC statementhighlights the Chinese government’s emphasis that the economic health of China itself should be a major consideration when contemplating overseas investments:
“Some companies focused on property rather than the real economy, which, instead of boosting the domestic economy, triggered capital outflows and shook financial security.”
This tendency of the Chinese government to go easy on companies looking to invest overseas in Belt and Road-linked enterprises was pointed out earlier this week in a Reutersexclusive published Tuesday:
“Companies enjoy a relatively smooth approval process for deals along the Belt and Road project as regulators tend to put them in a different basket when reviewing outbound investments, according to lawyers and dealmakers.”
Continuing, Reuters notes that outbound deals “currently take as long as six months to be approved by Chinese regulators” but that “Belt and Road investments tend to get regulatory clearance within three or four months.”
One Chinese financial analyst told Reuters that if you’re “doing One Belt, One Road, that becomes the first sentence in the document” for companies seeking approval to make overseas investments.
Andrew Polk, co-founder of research firm Trivium China,toldBloomberg on Friday that China’s codification of a new set of investment rules to favor Belt and Road projects makes sense given all the earlier indications:
“This is the state saying we want better say over where China’s resources are going abroad. We didn’t have a clear accounting of this before, but we could piece it all together from what was said by various elements of the government. Now it’s de jure policy while previously it was de facto policy.”
On Friday, the government of China made it officiallyclear to Chinese companies that overseas investments in projects linked to the “One Belt, One Road” initiative will take priority going forward. “Profound changes are taking place in international and domestic situations, and Chinese enterprises face not just relatively good opportunities but also various risks and challenges in overseas investments,” the State Councilwrote in its introduction of the new rules. The Belt and Road Initiative, unveiled in 2013, is China’s grand plan to link over 6o countries across Asia, Africa, the Middle East and Europe through infrastructure such as roads, railways and ports. Theguidelines, according to the government, are meant to “promote the continuous and orderly and healthy development of overseas investment” in Belt and Road-linked countries, and to “effectively guard against all kinds of risks and to better meet the needs of national economic and social development.” Without naming the “One Belt, One Road” initiative directly, the State Council’s language leaves little room for confusion, directing Chinese companies to focus overseas investments on enterprises that “promote the ‘one way along the road’ construction” and “infrastructure interconnection” between countries. The goal appears to be to limit Chinese companies’ exposure to overseas investment risk by channeling those funds into projects that support the Belt and Road initiative. This is evidenced by a statement released by another Chinese government entity on Friday.FromReuters: “China will strengthen rules to defuse risks for domestic companies investing abroad and curb ‘irrational’ overseas investment in its Belt and Road initiative, the state planner said on Friday. “The National Development and Reform Commission (NDRC) said in an online statement lauding the Belt and Road initiative that it would provide better guidance on risks to companies investing overseas in order to prevent ‘vicious’ competition and corruption.” The NDRC statementhighlights the Chinese government’s emphasis that the economic health of China itself should be a major consideration when contemplating overseas investments: “Some companies focused on property rather than the real economy, which, instead of boosting the domestic economy, triggered capital outflows and shook financial security.” This tendency of the Chinese government to go easy on companies looking to invest overseas in Belt and Road-linked enterprises was pointed out earlier this week in a Reutersexclusive published Tuesday: “Companies enjoy a relatively smooth approval process for deals along the Belt and Road project as regulators tend to put them in a different basket when reviewing outbound investments, according to lawyers and dealmakers.” Continuing, Reuters notes that outbound deals “currently take as long as six months to be approved by Chinese regulators” but that “Belt and Road investments tend to get regulatory clearance within three or four months.” One Chinese financial analyst told Reuters that if you’re “doing One Belt, One Road, that becomes the first sentence in the document” for companies seeking approval to make overseas investments. Andrew Polk, co-founder of research firm Trivium China,toldBloomberg on Friday that China’s codification of a new set of investment rules to favor Belt and Road projects makes sense given all the earlier indications: “This is the state saying we want better say over where China’s resources are going abroad. We didn’t have a clear accounting of this before, but we could piece it all together from what was said by various elements of the government. Now it’s de jure policy while previously it was de facto policy.”
Geopolitical moves are being made on the issue of North Korea. A day after South Korea’s new governmentoffered to hold military talks with its neighbor to the North, the United States’ second-highest ranking military officialadmitted Tuesday that North Korean missiles lack the accuracy to effectively target U.S. cities.
On Monday, South Korea’s defense ministry proposed that representatives from both the South and North Korean militaries meet at the border village of Panmunjom in North Korea for talks.
“We make the proposal for a meeting…aimed at stopping all hostile activities that escalate military tension along the land border,” South Korea’s defense ministrysaid in a statement.
The man in charge of North Korean affairs, unification minister Cho Myoung-gyon, said his country “would not seek collapse of the North or unification through absorbing the North” andsuggested a positive response from Kim Jong-un’s government would represent a show of good faith.
“North Korea should respond to our sincere proposals if it really seeks peace on the Korean Peninsula,” Cho said, adding that if “North Korea chooses the right path, we would like to open the door for a brighter future for North Korea, together, by cooperating with the international community.”
The defense ministry’s overture falls in line with theapproach advocated by new South Korean president Moon Jae-in, who supports diplomatic talks with the North led by South Korea.
Recently, ahead of the G20 summit in Germany, Moonstated that “the need for dialogue” with North Korea is “more pressing than ever before” because the situation had “reached the tipping point of the vicious cycle of military escalation.”
North Korea has yet to respond to the South’s proposal.
Meanwhile, on Tuesday, the primary driver of the “evil North Korea” narrative, United States appeared to go against the grain and actually downplayed the effectiveness of Kim Jong-un’s nuclear weapons program — or, at least, one senior defense official did.FromReuters:
“North Korea does not have the ability to strike the United States with ‘any degree of accuracy’ and while its missiles have the range, they lack the necessary guidance capability, the vice chairman of the U.S. Joint Chiefs of Staff said on Tuesday.”
Speaking before the Senate Armed Services Committee, General Paul Selvasaid North Korea’s July 4 intercontinental ballistic missile (ICBM) test showed that the country has no hope of hitting a U.S. target with any “reasonable confidence of success” and that recent talk about its ability to strike Alaska or the Pacific Northwest is overblown:
“What the experts tell me is that the North Koreans have yet to demonstrate the capacity to do the guidance and control that would be required.”
While the general’s admission isn’t on the same level as the actual act of diplomacy just demonstrated by South Korea, the fact that the U.S. military is walking back — even if only just a step or two — a narrative it fought so hard to establish is itself worthy of commentary.
So what gives? Why, in the last two days, have both the U.S. and ally South Korea suddenly taken a softer line — again, in their own ways — on the North Korea issue? Are all parties concerned about to knock off the rhetoric and allow the Hermit Kingdom to continue to fire missiles into the sea?
Not likely. As with most other issues of geopolitical significance in that region of the world, these moves likely have far more to do with China.
On Wednesday, President Donald Trump and Chinese President Xi Jinping willmeet in Washington, D.C., for annual bilateral talks, this year dubbed the “U.S.-China Comprehensive Economic Dialogue.” It will be the third meeting between the two men, after Xi’svisit to Mar-a-Lago three months ago and theirdiscussions on the sidelines of the G20 summit in Germany.
Recently, Trump reignited concern over a trade war between the U.S. and China when he said he wasconsidering slapping import tariffs on steel. But these kinds of tactics are nothing new ahead of economic negotiations, as the Washington Postnoted last Friday:
“In 1981, the Reagan administration convinced Japan to reduce the number of cars it was exporting to the United States in a bid to boost the U.S. auto sector. In 1984, the administration used the tactic again with the steel industry, as it told dozens of countries to either limit their steel shipments to the United States or lose access to the American market.”
In an article published Sunday titled “U.S.-China trade talks sputtering at 100-day deadline,” Reutersoutlined how results from economic negotiations between the two countries have been less than encouraging since Trump and Xi first met at Mar-a-Lago. The generalconsensus is that Donald Trump needs a major win with China to prove he’s sticking to the “America first” guns that got him into the White House.
Noting that “North Korea has cast a long shadow over the relationship” between Trump and Xi, Reuterspoints out that the Hermit Kingdom and its nuclear weapons program has been a hindrance to cooperation for the U.S. president:
“Trump has linked progress in trade to China’s ability to rein in North Korea, which counts on Beijing as its chief friend and ally.”
On Tuesday, the Associated Press alsohighlighted how Trump has used the issue of North Korea as a bargaining chip at the negotiating table with China:
“As a presidential candidate, Trump attacked China for refusing to pressure Pyongyang to back off from developing nuclear weapons. After the Mar-a-Lago summit, though, Trump praised Beijing for agreeing to help deal with North Korea. As a reward, he abandoned his vow to accuse China of manipulating its currency to benefit Chinese exporters.”
So it may be that this one-two punch from the United States and ally South Korea was a coordinated effort to ease tensions and create an atmosphere conducive to cooperation ahead of critical negotiations between the U.S. and China.
It may be that the Trump administration is signaling that it would be willing to back off on pressuring China to rein in Kim Jong-un if China is willing to make concessions on the economic front — and give Trump the win he needs.
Geopolitical moves are being made on the issue of North Korea. A day after South Korea’s new governmentoffered to hold military talks with its neighbor to the North, the United States’ second-highest ranking military officialadmitted Tuesday that North Korean missiles lack the accuracy to effectively target U.S. cities. On Monday, South Korea’s defense ministry proposed that representatives from both the South and North Korean militaries meet at the border village of Panmunjom in North Korea for talks. “We make the proposal for a meeting…aimed at stopping all hostile activities that escalate military tension along the land border,” South Korea’s defense ministrysaid in a statement. The man in charge of North Korean affairs, unification minister Cho Myoung-gyon, said his country “would not seek collapse of the North or unification through absorbing the North” andsuggested a positive response from Kim Jong-un’s government would represent a show of good faith. “North Korea should respond to our sincere proposals if it really seeks peace on the Korean Peninsula,” Cho said, adding that if “North Korea chooses the right path, we would like to open the door for a brighter future for North Korea, together, by cooperating with the international community.” The defense ministry’s overture falls in line with theapproach advocated by new South Korean president Moon Jae-in, who supports diplomatic talks with the North led by South Korea. Recently, ahead of the G20 summit in Germany, Moonstated that “the need for dialogue” with North Korea is “more pressing than ever before” because the situation had “reached the tipping point of the vicious cycle of military escalation.” North Korea has yet to respond to the South’s proposal. Meanwhile, on Tuesday, the primary driver of the “evil North Korea” narrative, United States appeared to go against the grain and actually downplayed the effectiveness of Kim Jong-un’s nuclear weapons program — or, at least, one senior defense official did.FromReuters: “North Korea does not have the ability to strike the United States with ‘any degree of accuracy’ and while its missiles have the range, they lack the necessary guidance capability, the vice chairman of the U.S. Joint Chiefs of Staff said on Tuesday.” Speaking before the Senate Armed Services Committee, General Paul Selvasaid North Korea’s July 4 intercontinental ballistic missile (ICBM) test showed that the country has no hope of hitting a U.S. target with any “reasonable confidence of success” and that recent talk about its ability to strike Alaska or the Pacific Northwest is overblown: “What the experts tell me is that the North Koreans have yet to demonstrate the capacity to do the guidance and control that would be required.” While the general’s admission isn’t on the same level as the actual act of diplomacy just demonstrated by South Korea, the fact that the U.S. military is walking back — even if only just a step or two — a narrative it fought so hard to establish is itself worthy of commentary. So what gives? Why, in the last two days, have both the U.S. and ally South Korea suddenly taken a softer line — again, in their own ways — on the North Korea issue? Are all parties concerned about to knock off the rhetoric and allow the Hermit Kingdom to continue to fire missiles into the sea? Not likely. As with most other issues of geopolitical significance in that region of the world, these moves likely have far more to do with China. On Wednesday, President Donald Trump and Chinese President Xi Jinping willmeet in Washington, D.C., for annual bilateral talks, this year dubbed the “U.S.-China Comprehensive Economic Dialogue.” It will be the third meeting between the two men, after Xi’svisit to Mar-a-Lago three months ago and theirdiscussions on the sidelines of the G20 summit in Germany. Recently, Trump reignited concern over a trade war between the U.S. and China when he said he wasconsidering slapping import tariffs on steel. But these kinds of tactics are nothing new ahead of economic negotiations, as the Washington Postnoted last Friday: “In 1981, the Reagan administration convinced Japan to reduce the number of cars it was exporting to the United States in a bid to boost the U.S. auto sector. In 1984, the administration used the tactic again with the steel industry, as it told dozens of countries to either limit their steel shipments to the United States or lose access to the American market.” In an article published Sunday titled “U.S.-China trade talks sputtering at 100-day deadline,” Reutersoutlined how results from economic negotiations between the two countries have been less than encouraging since Trump and Xi first met at Mar-a-Lago. The generalconsensus is that Donald Trump needs a major win with China to prove he’s sticking to the “America first” guns that got him into the White House. Noting that “North Korea has cast a long shadow over the relationship” between Trump and Xi, Reuterspoints out that the Hermit Kingdom and its nuclear weapons program has been a hindrance to cooperation for the U.S. president: “Trump has linked progress in trade to China’s ability to rein in North Korea, which counts on Beijing as its chief friend and ally.” On Tuesday, the Associated Press alsohighlighted how Trump has used the issue of North Korea as a bargaining chip at the negotiating table with China: “As a presidential candidate, Trump attacked China for refusing to pressure Pyongyang to back off from developing nuclear weapons. After the Mar-a-Lago summit, though, Trump praised Beijing for agreeing to help deal with North Korea. As a reward, he abandoned his vow to accuse China of manipulating its currency to benefit Chinese exporters.” So it may be that this one-two punch from the United States and ally South Korea was a coordinated effort to ease tensions and create an atmosphere conducive to cooperation ahead of critical negotiations between the U.S. and China. It may be that the Trump administration is signaling that it would be willing to back off on pressuring China to rein in Kim Jong-un if China is willing to make concessions on the economic front — and give Trump the win he needs.
While many are still breathing a sigh of relief that President Donald Trump pulled the United States out of the controversial Trans-Pacific Partnership (TPP) trade deal, some are noting that the world is nowhere near out of the woods yet. There’s another deal being negotiated right now, and this one may be even scarier than TPP. And like the TPP, it’s been quietly cobbled together behind closed doors for years.
The Trade in Services Agreement (TISA), which governments began crafting in 2012, represents 50 participating countries around the world. Before examining the text of agreement, however, it should be noted that TISA is largely a U.S.-E.U. deal and excludes some notable global players, as Glyn Moody highlighted for Ars Technica in 2015:
“Significantly, all the BRICS countries — Brazil, Russia, India, China, and South Africa — are absent, and are therefore unable to provide their perspective and input for what is essentially a deal designed by Western nations, for the benefit of Western corporations.”
As TISA is described on its page at the European Commission’s website:
“TiSA aims at opening up markets and improving rules such as licensing, financial services, telecoms, e-commerce, maritime transport, and professionals moving abroad temporarily to provide services.”
But many analysts are concerned that TISA’s aim of “improving rules” is really only about corporations tightening their grip on their respective industries. Deborah James, writing for the Center for Economic and Policy Research, concluded in November of last year:
“The TISA is intended to lock in a system of rules to allow multinational companies to operate in a borderless digitized environment with minimal regulation and maximum rights regarding the treatment of labor, capital, inputs, and the new key element of data.”
Continuing, she states:
“As promoted by the multinational financial, logistics, and big data corporations through Team TISA, the agreement would set severe limits on the ways that governments can regulate domestic economies, removing key tools of economic management and the ability to shape the service economy while providing an extensive corporate bill of rights for multinational companies’ operations across the globe.”
A corporate bill of rights.
The fact that we know anything at all about TISA is due largely to a series of data dumps from WikiLeaks beginning in 2014, then another later publication from Bilaterals.org, an organization dedicated to shedding light on trade negotiations taking place outside the scope of the World Trade Organization (WTO).
For their part, governments participating in TISA have been reluctant to post updates on the status of negotiations — if they decide to inform their citizens about the deal at all.
Canada’s last update, for instance, is from June, and it says vaguely that “Parties conducted a stocktaking session to assess the level of progress on all issues.” On the Office of the U.S. Trade Representative site, TISA is still described as being “part of the Obama Administration’s ongoing effort to create economic opportunity for U.S. workers and businesses by expanding trade opportunities.”
Given that TISA would do things such as prohibit regulation of the financial industry, including proven-harmful instruments like derivatives — and even, shockingly, instruments and products that have yet to be invented — curtail efforts to safeguard online and digital privacy, and effectively eliminate net neutrality, it’s not surprising that governments haven’t been advertising the deal.
In fact, many are noting that TISA is nothing more than an updated — and reinforced — version of the TPP. Bilaterals.org, noting that despite its unpopularity, the TPP is still being used as the model for TISA, explains:
“Several proposed texts from the failed Trans-Pacific Partnership (TPP) agreement have been transferred to TISA — including state-owned enterprises; rights to hold data offshore (including financial data); e-commerce; and prohibitions on performance requirements for foreign investors.”
While these proposals originated in the U.S., which has since pulled out of the deal, Bilaterals.org points out that “they appear to be supported by other members of the TPP” and, as such, the Trans-Pacific Partnership, through the Trade in Services Agreement, still has the potential to become the “new norm.”
And to that idea, the organization concluded quite succinctly:
“TPP cannot be allowed to become the new ‘default’ position for these flawed agreements.”
Washington D.C. — After months of tough talk on the campaign trail on how to handle China — and after weeks of even tougher talk from some in his administration since being elected — President Donald Trump, according to official statements, has agreed to change course and abide by the “One China” policy.
“President Donald J. Trump and President Xi of China had a lengthy telephone conversation on Thursday evening. The two leaders discussed numerous topics and President Trump agreed, at the request of President Xi, to honour [their] ‘one China’ policy,” a White House statement said.
Describing the phone call as a “very cordial,” one in which the two leaders “extended best wishes to the people of each other’s country,” the statement says that going forward, “the United States and China will engage in discussions and negotiations on various issues of mutual interest.”
In a statement published by China’s Foreign Ministry, President Xi appeared appreciative of Trump’s acceptance of the “One China” doctrine:
“I believe that the United States and China are cooperative partners, and through joint efforts we can push bilateral relations to historic new high.”
Suggesting there’s no reason both nations can’t grow at the same time, Xi added, “The development of China and the United States absolutely can complement each other and advance together. Both sides absolutely can become very good cooperative partners.”
Trump campaigned on nationalistic rhetoric rooted in an “America First” ideology that advocated economic protectionism. This stood in stark contrast to the “One China” policy the Asian superpower requires other countries to recognize if they wish to engage it in trade and commerce.
Since entering the White House, comments made by Trump and certain members of his administration — such as Secretary of State Rex Tillerson, who suggested the U.S. should block China’s access to artificial islands in the South China Sea — have had world leaders and analysts worrying about a possible trade war, a global currency crisis, and the potential for a military conflict between the two superpowers.
Now, with Trump seemingly succumbing to the will of the Chinese leader, many analysts are saying the new U.S. president has lost serious face.
James Zimmerman, former head of the American Chamber of Commerce in China, told the Washington Post that Trump never should’ve raised the “One China” issue in the first place.
“There is certainly a way of negotiating with the Chinese, but threats concerning fundamental, core interests are counterproductive from the get-go,” he said. “The end result is that Trump just confirmed to the world that he is a paper tiger, a zhilaohu — someone that seems threatening but is wholly ineffectual and unable to stomach a challenge.”
The New York Times, noting in its article title that Trump just gave China an upper-hand, opened the piece by suggesting the new U.S. president has “handed China a victory and sullied his reputation with its leader.”
Speaking with the Times, Shi Yinhong, professor of international relations at Renmin University in Beijing and advisor to China’s State Council, would seem to agree with this assessment.
“This will be interpreted in China as a great success,” he said, “achieved by Xi’s approach of dealing with him.”
Hugh White, professor of strategic studies at the Australian National University, concurs.
“The Chinese will see him as weak,” he told the Times. “He has reinforced the impression in Beijing that Trump is not serious about managing the U.S.-China relationship.”
Whatever the reputational fallout for President Trump, there’s no question the Chinese are feeling much more comfortable about future dealings between the two nations.
Stating that previous comments from the Trump administration had U.S.-China relations “tumbling and collapsing,” Ni Feng, deputy director for the Institute of American Studies at the Chinese Academy of Social Studies, suggested to the Times that there could much clearer skies ahead:
“Now we can say that Sino-U.S. relations can proceed.”
Australia — A day after China sent warships into the East China Sea—a less than subtle message to the Trump administration that the Asian superpower is prepared should the United States decide to make good on its vow to protect Japan—China’s foreign minister warned Tuesday there would be no victor if such a military conflict were to erupt.
“There cannot be conflict between China and the United States, as both sides will lose and both sides cannot afford that,” Wang Yi told the media in Australia’s capital of Canberra.
As Anti-Mediareported Monday, President Donald Trump’s secretary of defense, James Mattis, made comments over the weekend in which he doubled down on the United States’ security obligation to Japan. China and Japan and currently locked into a South China Sea-style territorial dispute. Both nations claim a sovereign right to the Senkaku Islands in the East China Sea.
Calling the relationship between Japan and the U.S. an “example for other nations to follow,” Mattis made it clear the U.S. would have the Pacific Rim nation’s back into the foreseeable future:
“The U.S.-Japan alliance is critical to ensuring that this region remains safe and secure—not just now, but for years to come.”
The Chinese response was not difficult to interpret. Two days after the defense secretary’s comments, China sailed three warships into the East China Sea—just 12 nautical miles off the coast of the Senkaku Island chain.
The situation is somewhat ironic in that while Mattis—through his remarks made over the weekend—was essentially warning China to back off on the East China Sea dispute, he was simultaneously suggesting the tension between the U.S. and China over the South China Sea should be settled diplomatically.
China, through a state-run editorial, praised this sentiment, calling it a “mind-soothing pill” that “dispersed the clouds of war that many feared were gathering over the South China Sea.”
This, on the same day it steamed warships past the Senkaku Islands.
The Chinese position, with regard to the United States, seems to be clear. The Asian superpower hopes for peace, but is ready for war. This appears to be the note Foreign Minister Wang Yi was trying to hit on Tuesday in Australia.
On the issue of economics—which pits Donald Trump’s “America First” protectionist policies against China’s push for economic globalization—Wang reiterated the Chinese stance.
“It is important to firmly commit to an open world economy,” he said, addressing leaders around the globe. “It is important to steer economic globalization towards greater inclusiveness, broader shared benefit in a more sustainable way.”
The core of the U.S.-China tension goes far beyond economics, however. The heart of the problem, as many are increasingly pointing out, is rooted in the speculation that China is overtaking the United States as the new world leader.
For China’s part, it has previously suggested it has not sought this role. It has suggested the role is being forced upon it as more and more countries are turning to China for guidance. This, too, was an item addressed by Wang on Tuesday—suggesting, perhaps, that for China’s sake, it would nice if other nations cooled off on such talk:
“We must remain clear headed about the various comments demanding China play a ‘leadership role.’”
In a lengthy editorial published Tuesday, TIME magazine chronicled recent actions taken by both China and the United States in the buildup to what many are speculating could be a coming cold war. The article suggested that some, if not most of the tension is rooted in the Trump administration’s outdated view of China as a Soviet-era communist state.
“For many in the Trump camp, I don’t think they believe the Cold War with China ever ended,” Scott W. Harold, a China specialist for think tank Rand Corp., toldTIME. “They think that America just hasn’t been fighting.”
Highlighting a bit of Cold War-era history, TIME notes that the United States once sought closer relations with China as a means to combat the Soviet threat:
“In an attempt to sideline Moscow, Washington was willing to engage with China in the hope that it would reform, open up and democratize. But the latter never happened, and on democracy and human rights these two blocs remain at ideological loggerheads.”
This ideological disagreement — or, as Scott W. Harold surmises, this perceived disagreement — may be a very large part of the prejudice that highly nationalistic President Donald Trump seems to have toward China.
And Russia, once again, is proving to be an issue in U.S.-China relations.
Trump has proven himself eager, if not willing, to cooperate with Vladimir Putin’s Russia. Days ago, in fact, the U.S. president stated he would be open to the idea of conducting joint airstrikes with Russia against ISIS.
As such, and as another analyst warns, this prejudice against China is something Trump will have to get over if he has any true wishes to work with the Asian superpower. The reason for this, of course, is that China has grown to become the primary ally of the United States’ former Cold War adversary.
“We are going back to a world where you can’t consider the U.S.-China relationship without also considering Russia,” Professor Rana Mitter, China specialist at Oxford, toldTIME.
Trump’s misperceptions about world affairs extend beyond political ideology, however, according to the co-founder of a highly successful tech company in Xiamen, China. Xu Ayi of Newyea — a company setting the standard in the contactless charging devices market — says the new American president has failed to see how the world has fundamentally changed. And the world, says Xu, no longer views China as as a threat as Trump and his team do:
“‘Made in China’ has new meaning today, and the world is opening up, but Trump is trying to close the U.S. Trump’s a bad apple and even Americans need to worry about him.”
Whether or not there’s true cause to worry, the back and forth between the United States and China will no doubt proceed into the foreseeable future, as Trump’s “America First” rhetoric will continue to bump up against the Asian superpower’s intractable “One China” stance.
And this, according to Zhu Feng, a professor of international relations at Nanjing University, is reason enough to prepare for things to get ugly:
“We cannot exclude the possibility of a new cold war.”
Davos —Speaking at the World Economic Forum in Davos, Switzerland, Jack Ma, the founder of Alibaba — the Chinese company surpassed Wal-Mart as the world’s largest retailer in 2016 — said the United States has no one but itself to blame for its economic woes, and that much of the problem is rooted in wasteful spending on warfare.
CNBC’s Andrew Ross Sorkin had asked Ma about his thoughts on the American economy and how it relates to China. Incoming President Donald Trump’s stance has consistently been anti-China — the former reality TV star has long accused the Asian superpower of siphoning U.S. jobs — and he and the trade team he’s putting together appear eager and willing to impose tariffs on Chinese goods.
“It’s not that other countries steal jobs from you guys. It’s your strategy. Distribute the money and things in a proper way,” Ma said, adding, “You’re supposed to spend money on your own people.”
On the issue of military spending, Ma claimed the U.S. has wasted over $14 trillion on warfare over the past three decades — money that, again, could’ve been invested in domestic infrastructure and programs for the American populace.
On Wednesday, as Anti-Media reported, Chinese President Xi Jinping gave a historic speech at the World Economic Forum in Davos in which he praised globalism and made a case for China as the world’s new economic leader.
Speaking of globalization, Ma called it a “perfect” strategy, and pointed out that U.S. corporations have profited substantially from the system:
“The American multinational companies made millions and millions of dollars from globalization. The past 30 years, IBM, Cisco, Microsoft, they’ve made tens of millions — the profits they’ve made are much more than the four Chinese banks put together…But where did the money go?”
In welcoming China’s president to the stage at Davos on Wednesday, WEF founder and chairman Klaus Schwab stated, “In a world marked by great uncertainty and volatility the world is looking to China.”
Alibaba’s Jack Ma, in speaking to CNBC, seemed to echo this sentiment — that’s it’s China and the system of economic globalization that will blaze the path into the future:
“The world needs new leadership, but the new leadership is about working together. As a business person, I want the world to share the prosperity together.”
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.”
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