U.S.–China Week: Trump and Abe, Obama and Xi, Scarborough fishing deal, Wuzhen (2016.11.21)

Welcome to issue 78 of U.S.–China Week. So much material this week that the analysis will be thinner. Please note that publishing may be irregular in the coming several weeks as the U.S. Thanksgiving holiday and a busy travel schedule approach.

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PEOTUS
Trump meets Japanese prime minister; Several named to transition positions

In Donald Trump’s first in-person meeting with a foreign head of government since the election, he welcomed Japanese Prime Minister Shinzo Abe to Trump Tower. Pictures circulated by the Japanese government showed Lt. Gen. Michael Flynn, who has been named as Trump’s prosepctive national security adviser, and Trump’s daughter Ivanka attending the meeting. Ivanka Trump’s husband Jared Kushner was also photographed speaking with Abe. No U.S. interpreter or note taker was visible in the meeting. Flynn had reportedly visited Japan in October with the goal of reassuring high Abe deputy Yoshihide Suga about Trump’s intentions. And Flynn reportedly spoke with South Korean officials about the North Korean nuclear program. (Reuters reported Chinese sources said the Chinese government will be watching closely on the THAAD missile defense issue to glean Trump’s intentions.) / Before the Abe meeting, FT reported that a source advising the transition team said “The Chinese ambassador is driving everyone crazy saying ‘Who is in charge of China?’.” / Alex Gray, co-author with Peter Navarro of the FP piece on Trump’s Asia policy, was named in the first wave of the transition’s State Department “landing team.” Steven Groves, who has argued against U.S. accession to UNCLOS even in the South China Sea context, was named in a second group. Others named on those teams include Erin Walsh (State), who a bio says led Goldman Sachs’ “philanthropic activity in the Asia Pacific”; Dan DiMicco (USTR); and Robert Lighthizer (USTR), who defended Trump as early as 2011 on China trade rhetoric. / Others reportedly advising Trump include Frank Gaffney, who wrote a foreword for and promoted a book titled “Warning Order: China Prepares for Conflict and Why We Must Do the Same” (see video). Though not listed as an adviser, Henry Kissinger reportedly visited Trump. / Meanwhile, a reported Trump campaign adviser disclosed an investment in Didi Chuxing.

ANALYSIS: Though we await some of the most important signals the Trump transition can sent in the foreign policy sphere (naming candidates for secretaries of state and defense), the news this week should further undermine any sense that Trump is on a path toward retrenchment from the Asia-Pacific. Senator Jim Talent, who has been discussed as a possible secretary of defense, writes in the Gaffney-tied Warning Order volume a sentiment representative of many of the views currently tied to the Trump team: “The key to a successful policy is to understand that America is in a strategic competition with China, and probably will be for a long time.” If Trump is looking for “win-win” solutions, he is not sending that message with his early personnel picks. Still, uncertainty is great about who will play what role and which ideas and inclinations will characterize policy. If the FT report was correct that Amb. Cui Tiankai was scrambling to try to establish a regular contact with the Trump team, I hope that link has been established by now.

GLOBAL LEADERSHIP
Obama and Xi meet alongside APEC summit amidst talk of trade deals and global leadership

The Asia-Pacific Economic Cooperation (APEC) summit in Lima brought talk of a shift in global trade leadership from Washington to Beijing, with both the Washington Post and the Global Times publishing ruminations on the possibility of Chinese global leadership. GT concludes: “In the foreseeable future, it’s impossible for the US to abandon its global leadership. … So Sino-US cooperation is the only choice for future global governance.” WaPo‘s Denyer declares that China’s influence will grow if Trump does not move forward with TPP. A NYT editorial agrees. At APEC, President Xi Jinping spoke in favor of the Free Trade Area of the Asia-Pacific (FTAAP), a nascent negotiation that would include all APEC members. / A President Barack Obama meeting with Xi was panned in the SCMP as comparatively insignificant before it even happened. A White House readout of the meeting contained nothing new. A Chinese readout remarked on more than three years of Xi-Obama meetings and touted “wide ranging consensus, especially the decision to work hard to build a new model of major country relations between China and the United States.” Xi reportedly told Obama (in my unofficial translation from the Chinese): “Together with Trump, I am ready to strive to expand bilateral, regional, and global cooperation in all areas; to constructively manage differences; to realize non-conflict non-confrontation, mutual respect, and win-win cooperation; and, from this new starting point in U.S.–China relations, to push toward greater progress.” / Meanwhile, action continued on U.S.–China bilateral investment. Rhodium Group and the National Committee on U.S.–China Relations released a detailed report on FDI in both directions over a quarter century from 1990-2015. The U.S.–China Commission recommended the U.S. government “bar Chinese state-owned enterprises from acquiring or otherwise gaining effective control of U.S. companies,” among numerous other recommendations. And a Chinese firm in talks to acquire the German semiconductor firm Aixtron appealed to Obama after CFIUS recommended the deal be dropped because of U.S. national security concerns.

ANALYSIS: So much commentary, angst, and symbolic import has been invested in the TPP that it is hard today to untangle the true significance of the very likely outcome that the U.S. abandons the deal. Those who expected a Hillary Clinton win on Election Day seem tacitly to have expected that a President Clinton would find a way to push through a version of the deal after a period of adjustment. No one seems confident Trump will do the same. Still, the consequences for the United States of the possible conclusion of the competing RCEP agreement are unknown. And much has been made of China’s positivity about the FTAAP—a grouping that is very much nascent and would actually include the United States. Before the election analysts were arguing that, precisely because the rhetoric of the U.S. commitment to Asia under Obama’s rebalance had been based on the TPP, therefore the substance of U.S. ties to Asia were also dependent on TPP’s success. Ratifying TPP, in this view, was necessary to maintain credibility; it was no longer about what the deal would provide to the U.S. people. The continuity of U.S. Asia-Pacific policy is in question now far beyond the TPP question. When it comes to economic deals, the U.S. debate ought to center around the economic effects, not the rhetorical and geopolitical symbolism.

TECHNOLOGY
China hosts small-splash Wuzhen internet conference, and other news

Chinese officials hosted the third World Internet Conference in Wuzhen. Qualcomm President Derek Aberle was among the U.S.-tied guests, as reportedly were Amazon’s Jay Carney and Facebook’s Vaughn Smith. Speaking by video, Xi brieflyrecapitulated his proposals from the previous year. “China will work together with the international community to ensure the common well-being of humanity, uphold cyber sovereignty, promote more fair and equitable global internet governance and bring about an open, inclusive and secure cyberspace, that features equality, mutual respect, innovation and orderly development,” he said. The conference released a “World Internet Development” report. Chinese propaganda chief and Politburo Standing Committee member Liu Yunshan spoke about internet governance, saying“Emerging markets and developing countries should have a bigger say. No internet hegemony should be allowed.” / Meanwhile, Freedom House declared that in 2016, “China was the year’s worst abuser of internet freedom.” The “fake news” phenomenon was alive and well on Chinese social media, which reported that anti-Trump protesters were broadly behind harassment against Chinese or Chinese Americans. Some Chinese-made smartphone software was found to be sending “full contents of text messages, contact lists, call logs, location information and other data to a Chinese server” from handsets sold in the United States. And Chinese researchers became “the first to inject a person with cells that contain genes edited using the revolutionary CRISPR–Cas9 technique.”

SOUTH CHINA SEA
Duterte said to declare fishing-free zone inside Scarborough Shoal, allowing Chinese and Philippine fishing outside

FT reported that Philippine President “Rodrigo Duterte has unilaterally declared that the disputed Scarborough Shoal will become a fishing-free zone.” Reuters reported that the declaration was supported by Xi, according to Duterte’s office, and that it only covered the inside of the lagoon formed by the shoal. “Under the plan announced by the president’s office on Monday, fishermen of both countries can cast nets on the fringes of the lagoon, but not inside it, allowing fish stocks to be replenished,” the Reuters report said. Separately, Duterte reportedly said, “You know, if China and Russia would decide to create a new order, I will be the first to join. And Xinhua reported that China’s government will “explore the possibility of establishing an economic and trade cooperation zone in the Philippines.” / Meanwhile, U.S. and Chinese soldiers were conducting a joint military exercise in Yunnan. NBC reported “the drill aims to improve cooperation in rescue operations and involves ‘live troop exercises,’ with U.S. and Chinese soldiers working on disaster relief tasks, such as personnel extraction from debris, according to Chinese and U.S. officials.”

LAW ENFORCEMENT
Major Chinese corruption fugitive turned over; U.S. charges former Chinese diplomats

Chinese press cheered the repatriation of China’s “most wanted fugitive Yang Xiuzhu,” who had reportedly fled to the United States in 2014. “According to Geng [Shuang, a spokeperson], China and the United States communicated and cooperated through a Joint Liaison Group on law enforcement cooperation, to secure the return of Yang,” Xinhua reported. WaPo reported that Yang “claimed to have been arrested when she tried to enter the United States using a false passport.” / Reuters reported: “Two former Chinese diplomats working at a construction company face U.S. charges that they schemed to force employees who received visas to perform work only at China’s U.N. mission and other facilities to instead provide private contracting work.” That supposedly included work on a “$10-million mansion … owned by a Chinese associate of Ng Lap Seng, a Macau billionaire accused of bribing a U.N. diplomat who was questioned by the FBI about the homeowner’s intelligence ties, according to court records.” / Meanwhile, commentators in a Guardian story expressed concern that a Trump administration would downplay human rights in China ties, and Representative Nancy Pelosi and Senator Marco Rubio were among those who met Hong Kong activist Joshua Wong during a visit to Washington.

#USChinaWeek1966
‘An Atom Arms Ban Spurned by China: Peking Sees U.S.-Soviet Plot on Nuclear-Spread Pact’

“HONG KONG, Nov. 15[, 1966] — Communist China declared today that it would never be a party to a treaty banning the spread of nuclear weapons. It asserted that it was continuing development of its own nuclear weapons. The Chinese stand was affirmed in an article published in the party newspaper, Jenmn Jih Pao, and signed by “Observer.” This is the signature attached to authoritative policy declarations. … The article denounced moves by the United States and the Soviet Union toward conclusion of a treaty banning the spread of nuclear weapons. It advocated total prohibition of nuclear weapons, but said this would be possible ‘only when more or all countries possess them’ and when the ‘United States nuclear monopoly’ was completely broken.”

(Source: The New York TimesThis entry is part of an ongoing feature of U.S.–China Week that follows U.S.–China relations as they developed in another era of change and uncertainty, 50 years ago.)

ABOUT U.S.–CHINA WEEK

U.S.–China Week is a weekly news and analysis brief that covers important developments in U.S.–China relations and features especially insightful or influential new policy analysis.

Graham Webster is a senior research scholar, lecturer, and senior fellow of the Paul Tsai China Center at Yale Law School, where he specializes in U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. He is also a fellow for China and East Asia with the EastWest Institute. His website is gwbstr.com.

Disclaimer: Opinions expressed here are my own (and I reserve the right to change my mind).

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Contact: Follow me on Twitter at @gwbstr. Send e-mail to [email protected].