April 06, 2018
China is on holiday through Sunday for the Qingming, or Tomb Sweeping Festival. There's no rest for the officials tasked with reacting to the latest tariff threat from the Trump administration, but the PRC media response has been relatively muted today.
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1. Upping the ante on China tariffs...
President Trump raised the ante significantly with his instruction Thursday to the U.S. Trade Representative to look at another $100 billion in tariffs against Chinese products, for a potential total of $153 billion.
Shot: China’s reaction has been rhetorically harsh and predictable but we'll probably not see a specific retaliatory list from Beijing unless and until the U.S. releases an additional schedule of tariffs.
- China’s 2017 exports to the U.S. were about $130 billion so Beijing will have to come up with other measures to match the $153 billion.
- One possible move that has been hinted at in some Chinese media is that it could go after the PRC operations of major U.S. firms like GM and Apple, as their sales are not counted in trade numbers but are seen as “American” revenue.
Chaser: Trump’s gamble appears to be that this new threat will cow China President Xi Jinping and bring the Chinese to the negotiating table with more sincere and substantive concessions. However, China filed a complaint with the World Trade Organization (prompting new tweets from Trump on an "unfair WTO" and a warning of possible trade war from Treasury Secretary Steve Mnuchin).
My thought bubble: China is willing to make some concessions, though none that jeopardize its "Made in China 2025" plan. Those betting Beijing will just crumple in the face of U.S. pressure will likely be very disappointed.
We should expect the official propaganda to take a nastier nationalist turn as this gets spun as yet another attempt by the evil American hegemon to keep China down and prevent the Great Rejuvenation.
...is leading to China's new global offense
Xi is scheduled to give a speech next week at the Boao Forum, a Davos-like gathering put on by the Chinese government on Hainan Island. 2018 is the 40th anniversary of the “Reform & Opening’ policy. He is expected to announce more reform and opening policies, especially around the financial sector.
What we're hearing: Xi will also continue to position China as a responsible, rules-abiding guarantor of the global trading system with an inclusive vision of trade and development for all. That argument is more propaganda than substance but Trump may have so alienated allies and other countries that more and more people may be willing to buy what Xi will be selling.
A senior Chinese official provided a glimpse of that theme at press conference in Moscow. According to Xinhua:
"Chinese State Councilor and Foreign Minister Wang Yi said in Moscow on Thursday that the United States' protectionist trade policies will affect the development of the world trade and economy, and the international community should jointly boycott such moves of unilateralism to maintain the global economic growth."
"The recent move by the United States has violated the rules of the World Trade Organization (WTO), which posed a threat to the foundation of the global trade system and will certainly impact the normal development of the world trade and economy, Wang said at a press conference after talks with Russian Foreign Minister Sergei Lavrov during his visit in Russia as the special envoy of Chinese President Xi Jinping."
2. Beijing sends diplomat and general to Moscow
China sent a general and its top diplomat, both state councillors, to Moscow, where the South China Morning Post reports General Wei Fenghe announced he was visiting as China's new defense minister to strengthen strategic cooperation.
Per SCMP, Wei told his Russian counterpart Sergei Shoigu that he wanted to:
“let the Americans know about the close ties between the armed forces of China and Russia.”
My thought bubble: China conspicuously leaned toward the Russian side in the Western outrage over the Salisbury nerve agent attack. Now that the U.S. is descending into a new Cold War with Russia, and embarking on what may end up as a new Cold War with China as well, maybe history has not ended?
3. Roadblocks in Japan's plan to counter China
Axios' Erica Pandey writes: Trump thought Japan was taking advantage of the U.S. in the 1980s, but now it's his closest partner in confronting a new rival — China.
The U.S., India and Australia have joined Japan in its apprehension about China's widening influence, in part because China is starting to infiltrate their own neighborhoods. Chinese cash has reached Latin America's shores, and its ships are appearing in the Indian Ocean.
Japan's plan is to use the Trans-Pacific Partnership as its key tool and to be an alternative development and funding source for projects in Indonesia, Burma and Vietnam, experts tell Axios.
Yes, but: The Trump administration is complicating Japan's plan. For instance, Japan was surprised it was not exempted from Trump's steep tariffs on steel and aluminum. However, it's still banking on U.S. doubts about China's intentions.
The bottom line: The U.S. and Japan agree on the threat posed by an increasingly ambitious China. But Japan wants to counter China through international partnerships, while the Trump administration is actively retreating from those alliances in favor of going after Beijing alone.
4. Wanted: politically correct sperm
The Third University Hospital of Peking University is running a sperm donation campaign that states their requirements to become a potential donor include both good health and "favorable political qualities," the SCMP reports. The article says these requirements include:
“[The donors must] love the socialist motherland and embrace the leadership of the Communist Party.”
“[He must] be loyal to the party’s tasks, be decent, law-abiding and be free of any political problems.”
Quick take: This is more likely an opportunistic administrator tilting toward the prevailing political winds than a directive from somewhere above in the health bureaucracy. Regardless, it's a sign of the times, and in the Xi Era where the party leads everything, it looks like donors’ sperm has to be both healthy and Red.
5. China tests its social credit system
Simina Mistreanu gives us an excellent look at the growing social credit system — one that is designed to rank and modify behavior — in her piece in Foreign Policy.
The details, per Mistreanu:
- By 2020, the government plans to roll out a national system, which the founding documents from 2014 states will "allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step."
- In this system, citizens would receive or lose points, depending on what they did in their society. For instance, a person would lose 5 points for a traffic ticket or gain 30 points for a heroic deed.
- However, fears are growing that this is another way for China to limit personal freedoms, particularly as the Chinese Communist Party is pushing its agenda across town halls and company boardrooms.
- Rongcheng, a city on the eastern tip of China’s Shandong province overlooking the Yellow Sea, has one of three dozen pilot systems in China.
"But it has been hard to distinguish future promises — or threats — from the realities of how social credit is being implemented. Rongcheng is one place where that future is visible," Mistreanu writes.
More: Read the whole thing here.
6. China leads booming renewables growth
Axios' Ben Geman reports: A new report, published by United Nations Environment Programme (UNEP) and partners, underscores how additions of new renewable power capacity — especially solar in China — greatly outpaced other sources in 2017.
Key numbers, per UNEP report:
- Global investment in renewables rose 2% in 2017 to $279.8 billion.
- China alone accounted for 45% of that investment and added 53 gigawatts of solar capacity.
The bottom line: Read the full story here to learn more about the UNEP report. But, let's not forget, Chinese financial institutions are still the largest global investors in coal plants outside of China, as CNBC points out here.
7. China bans online bible sales
Axios' Alayna Treene writes: Online retailers in China are no longer allowed to sell the Christian Bible, reports the New York Times, as the Chinese government continues its crackdown on religion and the influence of Christianity in the country.
Why it matters: Censorship has always been an issue in China and it continues accelerate, especially within its digital borders as Xi. The government's efforts to ban online sales of the Bible serve as the latest example of Xi's promotion of China's traditional values.
Between the lines: Read the full story here. Ironically, just the month before, Xinhua reported that China released a white paper on religion that touts freedom of religious belief (although it also "provide[s] active guidance to religions so that they can adapt themselves to the socialist society.")
8. Worthy of your time
ESPN — China’s Li Haotong is fourth, three strokes behind Jordan Spieth, after the first round of the Masters.
The Sacramento Bee — Federal agents are seizing about 100 homes they say are used to grow pot for a Chinese crime syndicate.
Bloomberg — "China's Alarming Debt Pile Could Finally Stabilize This Year"
The New York Times Magazine — "The Case of Hong Kong’s Missing Booksellers"
Hong Kong Free Press — "Attacks against me may be intended to pave way for a tougher nat. security law, says embattled law prof. Benny Tai"
SCMP editorial — Related to the article above on Benny Tai, this editorial says "The responsible use of freedom of expression is the way to defend it"
The Cipher Brief — "Catching a Chinese IP Thief: How the FBI Tracked and Caught Sinovel"
Department of Justice — "Chinese Scientist Sentenced to Prison in Theft of Engineered Rice"
Anthony Bourdain Parts Unkown — "Your guide to Sichuan cuisine"
Dallas News — "Texas A&M System cuts ties with China's Confucius Institute after congressmen's concern over spying"
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