The US government criticized Beijing's plan to inject billions of dollars in areas such as microchips and robotics to get out of foreign technology – known as "Made in China" 2025 ". And Washington is campaigning against Huawei, a Chinese tech champion who hopes to build the world's 5G mobile networks.
Under pressure from US export tariffs and a growing economic downturn, Chinese leaders are looking for ways to avoid further confrontations without jeopardizing these long-term strategic goals.
The Chinese government decided to reduce its tariffs on US-made cars, recommenced buying soybeans from US farmers, and showed signs of rethinking "Made in China 2025".
The steps follow a truce in the trade war agreed between President Donald Trump and his Chinese counterpart Xi Jinping at a dinner earlier this month. They hoped for an agreement that could include important changes to allow foreign companies to play a bigger role in the Chinese economy. Trade experts are skeptical.
"Beijing will not give up its plans to become a dominant industrial and technological powerhouse just to please Washington," said Kristen Hopewell, senior lecturer in international political economics at the University of Edinburgh . "Any changes may be superficial and not substantive."
& # 39; Made in China 2025 & # 39;
In 2015, China announced a 10-year plan to transform its vast manufacturing sector by pushing it forward in high-tech industries, including the electric car, aerospace and other industries. advanced medical devices.
The Communist Party sees this strategy as essential to guarantee China's continued development. However, the ambitious goals of the plan to dominate supply chains of entire sectors have fueled concerns of foreign companies, who fear losing the benefit of Chinese companies and governments, who see a potential threat to Security.
"These are things that, if China dominates the world, are bad for the United States," US Trade Representative Robert Lighthizer said in March. His report alleging unfair Chinese practices, which laid the foundation for Trump's trade war, referred to or quoted "Made in China 2025" 116 times on a charge.
Will this change?
in China 2025 "has become a central point of the trade war, the Chinese government has begun to minimize it.
The list of priorities that Beijing reported to local governments last week made no mention of "Made in China 2025", although it was included in the previous version two years ago, and the Wall Street Journal announced that the Chinese authorities were preparing a replacement plan more open to foreign companies and likely to To be deployed early next year.
"What has been perceived as an exclusionary policy can now become a positive vehicle for the future." from China. Harley Seyedin, president of the South China Chamber of Commerce.
Experts who study China's role in world trade are less optimistic, arguing that change is likely to be superficial.
The forms of state intervention are at the heart of China's development strategy, "said Hopewell." China is trying to manage the external lens of its economic policies, but it is highly unlikely that it will undertake the kind of deep structural reforms aimed at a more market-oriented economy that the United States seeks. "
Tactics of Commercial Warfare
] The potential changes made to "Made in China 2025", as well as the actions of Beijing following the Trump-Xi meeting in Argentina, are widely interpreted as attempts to defuse the commercial war. [19659008] China temporarily reduces tariffs on US auto imports ” data-src-mini=”//cdn.cnn.com/cnnnext/dam/assets/180522184328-china-autos-parking-lot-small-169.jpg” data-src-xsmall=”//cdn.cnn.com/cnnnext/dam/assets/180522184328-china-autos-parking-lot-medium-plus-169.jpg” data-src-small=”http://cdn.cnn.com/cnnnext/dam/assets/180522184328-china-autos-parking-lot-large-169.jpg” data-src-medium=”//cdn.cnn.com/cnnnext/dam/assets/180522184328-china-autos-parking-lot-exlarge-169.jpg” data-src-large=”//cdn.cnn.com/cnnnext/dam/assets/180522184328-china-autos-parking-lot-super-169.jpg” data-src-full16x9=”//cdn.cnn.com/cnnnext/dam/assets/180522184328-china-autos-parking-lot-full-169.jpg” data-src-mini1x1=”//cdn.cnn.com/cnnnext/dam/assets/180522184328-china-autos-parking-lot-small-11.jpg” data-demand-load=”not-loaded” data-eq-pts=”mini: 0, xsmall: 221, small: 308, medium: 461, large: 781″ src=”data:image/gif;base64,R0lGODlhEAAJAJEAAAAAAP///////wAAACH5BAEAAAIALAAAAAAQAAkAAAIKlI+py+0Po5yUFQA7″/>
Xi features do political coverage to make changes. Tuesday is the 40th anniversary of the beginning of China's "reform and opening", which launched the rapid leap from a predominantly rural economy to a country's heavyweight.
But any measure announced by Xi should be a continuation of the gradual changes. it has been introduced in recent years to open up more of its economy to the world.
"China is speeding up a series of economic reforms, which it could have adopted for the most part anyway, and is trying to present it as a major concession to American demands," he said. said Mark Wu, professor of international business at Harvard Law School.
Trump administration officials still take a cautious approach to China 's supply.
Secretary of Commerce Wilbur Ross said last week that Beijing "downplayed" the "Made in China" plan since the early days of the United States and other countries.
"They did not talk much about it," he told CNBC. "It does not mean that they have let it down."
The heavy hand of the state
US business leaders say that a redesign of "Made in China 2025" gives Beijing a chance to reduce the role of the state in its economy and give greater freedom to competition.
Despite all the talk of reform, Chinese state-owned companies play an even bigger role in Xi's economy. Industrial policies have injected huge amounts of subsidies into sectors such as electric vehicles.
The business model of some Chinese companies "is simply to receive subsidies without developing a viable product," said William Zarit, president of the American Chamber of Commerce in China. "It's terribly useless."
If Beijing opens its plan for 2025 and gives foreign companies a footing of equality with domestic firms, "it will be a win-win for China and the rest of the world," Zarit said.
But he warned that the Chinese authorities were in the habit of changing the written rules to make the situation fairer, but then used unwritten practices to disadvantage foreign companies.
"As long as the Communist Party controls the financial system, key resources and the Internet, the government can always tip the balance in favor of national companies in strategic technology sectors," said Wu, who previously worked for the World Bank. in China.
The Huawei Wild Card
The Trump Administration added this month a new unpredictable element to the confrontation with China.
The arrest of Meng Wanzhou, Huawei's chief financial officer, gave more strength to the opinion that the US government is trying to defend. undermine the technological boom of China.
Huawei's products also fall under the scrutiny in Europe and the Asia-Pacific region, under the of an attempt by the US government to crack down on society, which he sees as a threat to security.
The US Department of Justice seeks to prosecute Meng, who was arrested in Canada, over allegations that she helped the company circumvent US sanctions against Iran. Huawei says he is not aware of the actions of Meng, the company founder's daughter.
"Meng's detention stresses that even though Beijing and Washington have reached an agreement to avoid punitive tariff increases, the United States has many other non-tariff weapons, and it can deploy its economic and technological campaign against China." , wrote this month Tom Holland of the research company Gavekal in a note.
Serenitie Wang contributed to the writing of this report.
