The Difficulties of China's Trade War Will not Disappear After Democrats' Mid-Term Earnings


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China is one of the few areas in which a bipartite consensus has been found. Democrats are largely in agreement that the United States should take tougher action against rising power on various fronts, from the military to trade, intelligence and diplomacy.

Desperate by the search for a solution to the trade war that weighs on the Chinese economy, it is estimated in China that a House led by a democrat could mean a more moderate attitude towards Beijing.

Nick Marro, an analyst at the Economist Intelligence Unit, said this view was flawed because Democrats have always been more supportive of unions and less supportive of free trade than their opponents. "They are unlikely to argue for greater commercial engagement with China," he said.

Even if the House wanted it, the power to impose tariffs on China is essentially up to the executive – that is President Trump. If he needs Congressional support on Chinese politics in the future, Democrats have shown little sign that they would oppose him.

All this is bad news for Chinese President Xi Jinping, whose government has been striving to appease an increasingly hostile US administration, after attempts at flattery and acts of friendship at the beginning of Trump's mandate failed.

Beyond the economic implications, the optics of the line with Trump also hurts Xi at home.

Willy Lam, an adjunct professor at the Chinese University's China Studies Center at Hong Kong University and a well-connected political analyst, said Xi had faced rare internal criticism within the ruling Communist Party. for his management of the American crisis.

"He has been widely criticized, not by his name of course, but subtly, for failing to meet Trump's multi-faceted challenge, and he is very defensive," said Lam.

"Competitive and conflictual"

The trade war between the United States and China, unleashed by Trump in the middle of the year, has steadily worsened over the months. Customs duties now hit more than $ 250 billion worth of Chinese goods.
But it was a historic speech by US Vice President Mike Pence in early October that marked the beginning of a new aggressive policy against Beijing, sparking debate on a new Cold War.
Trump and Xi are on the brink of a new cold war?

"Beijing is using a whole-of-government approach to strengthen its influence and interests and is using this power in a more proactive and coercive way to interfere in the national policies of this country," Pence said in Washington on Oct. 4. .

"Frankly speaking, President Trump's leadership is working, China wants a different American president."

Trump and Pence accused China of trying to meddle in the November 6 elections, citing little evidence. The claims have been firmly denied by Beijing.
US officials have cited as evidence the placement of publisher-reporters in US newspapers, but analysts say the practice has been around for a long time and is derisory compared to Russian attempts at interference in the past.
Tension has also increased in the disputed territory of Taiwan, considered a secessionist province by China, and in the hotly disputed islands of the South China Sea, where the United States opposes more in addition to Beijing.

All of this made China believe that Trump's critics against the country were only one way to lengthen the Republican vote ahead of Tuesday's elections.

Tong Zhao, a researcher at the Carnegie-Tsinghua Center for Global Politics in Beijing, said China has been "overestimated" in US politics lately.

"The feeling is that the US insists on the competitive and conflictual nature of bilateral relations for the benefit of domestic politics."

Tense relationship

But the fear of a more powerful China in the United States is real. Trump has made competitiveness with China an important part of his election campaign two years ago, and now it is not just about trade.

In addition to increasing military maneuvering near China's doors, Trump seems to use the help to counter China's influence in the world.

Trump has threatened to cut off foreign aid before his election, but last month he signed in October the brand-new US International Development Finance Corporation for developing countries, endowed with $ 60 billion in loans and loans. other forms of assistance. This happened just a month after Xi announced his own package of aid, investment and loans in Africa, worth $ 60 billion as well.

However, there are reasons to be optimistic. The friendly relationship between Trump and Xi seems to be warming up after a phone call last Wednesday. It was their first conversation for months and took place just one week before the midterm elections, alluding to a thaw in relations.

Trump tweeted about his "long and very good conversation" with Xi, and called the Chinese president "awesome" several times in a rally speech after the call.

But Beijing has become familiar with Trump's changing nature, and mixed signals have begun to creep into White House messages.

While Bloomberg News, citing sources, reported that Trump had asked his firm to draft a trade deal with Beijing, the White House's chief economic advisor, Larry Kudlow, said the two countries "were not about to reach an agreement ".

Difficult line on China's popular & # 39;

The idea that the Chinese government hopes that the Democrats will calm tensions is remarkable, especially as Xi is tightening his grip on his country and raging against anything perceived as dissent.

For decades, since President Richard Nixon made a historic visit to Communist China in 1972, it is his Republican compatriots – more pro-business than the Democrats – who tend to be China's closest allies in Washington.

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By comparison, Democrats – who have traditionally tended to focus more on human rights issues in China – were reluctant to let Beijing get rid of in hopes of strengthening its trade ties, an opinion that remains valid to this day. .

But while the business community was increasingly frustrated by China's apparent refusal to liberalize its economy, Republicans also toughened their stance on Beijing and business lobbyists have tempered their position in favor of China.

"I do not think Beijing understands how much of a harder line on China is popular in Washington," said Isaac Stone Fish, senior fellow at the Asia Society.

"There is surprising support from political parties in Washington for a tougher, even fairer, policy towards China, particularly with regard to trade but also human rights. "

Panic in Beijing

The United States is midway at a time when Beijing is increasingly uncomfortable with the increasingly hostile administration of the Trump administration.

When the Chinese ambassador to the United States, Cui Tiankai, appeared on Fox News in mid-October, his host, Chris Wallace, asked his host, who at the White House, was responsible for China's trade policy.

The Chinese ambassador to the United States said that Beijing did not know who to talk to

"You tell me," Cui replied with a smile. "(The diplomats) do not know who the final decision-maker is – of course, the president would make the final decision, but who plays what role?" It can sometimes be very confusing. "

The Chinese authorities, who viewed Trump as a politically naive transactional leader, were taken by surprise when relations with the US suddenly tended towards the end of the year. They are now struggling to find a way to restore peace.

But Stone Fish said at the end of the day that Washington's policy may not be the biggest problem for Xi, while the Chinese leader was increasingly in trouble at the helm of his country.

The Politburo of the Communist Party, one of the country's most important decision-making bodies, issued a statement last week in which it acknowledged for the first time "increased downward pressure" on the economy.

Even before Trump began his trade attack against China, the government was fighting hard against increasing debt across the country, while seeking to balance environmental protection by avoiding a slowdown in the economy. the growth.

"Among the concerns that Xi faces, the top 20 companies are much more focused on the domestic market," Stone Fish said.

If Xi and Trump are forced to turn more inward to face domestic turmoil, a diplomatic thaw may take some time.

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