U.S.–China Week: Tillerson’s ‘mutual respect,’ Scarborough outpost, trade winds, Chinese students in Iowa (2017.03.21)

Welcome to Issue 92 of U.S.–China Week, coming to you on Tuesday this week due to travel. New at SupChina, I have a long-ish article examining China’s domestic cybersecurity policies and what the focus on “secure and controllable” means for international business. It turns out there was a lot of attention to these issues this week. FT ran a feature story on Chinese efforts to become a world tech leader. The U.S. Chamber published a report on the Made in China 2025 plan. ITIF has a new report on “Stopping China’s Mercantilism.” And Bloomberg reported on multinationals’ efforts to lobby in China, focusing on the Party.

As always: Please encourage friends and colleagues to subscribe to U.S.–China Week. Here is the web version of this issue, ideal for sharing on social media. You can also find U.S.–China Week on Medium and Facebook, and you can follow me on Twitter at @gwbstr. Please send your comments, quibbles, and suggestions to [email protected].

EMISSARIES
Tillerson adopts Chinese frame for bilateral ties, signals possible shifts in North Korea policy in first Asia trip

Secretary of State Rex Tillerson shocked reporters and commentators during a meeting with Foreign Minister Wang Yi in Beijing when he said the U.S.–China relationship since normalization “has been a very positive relationship built on non-confrontation, no conflict, mutual respect, and always searching for win-win solutions.” This closely followed the standard Chinese talking points associated with the “new model of major country relations” concept that U.S. officials under Obama came to avoid supporting. As if to show his use of the phrase was no accident, Tillerson deployed the talking point again. The Washington Post framed these remarks as handing a victory to the Chinese government by uttering the words “mutual respect,” with Bonnie Glaser telling the paper, “By agreeing to this, the U.S. is in effect saying that it accepts that China has no room to compromise on these issues.” Ely Ratner, a former adviser to Vice President Joe Biden, has a representative commentary on what he calls “Tillerson’s mishap.”

Tillerson also met with President Xi Jinping (video and Chinese readout; Xinhua English; U.S. documents). While Tillerson was seen to be playing nice, at least in public, President Donald Trump tweeted that North Korea has “been ‘playing’ the United States for years. China has done little to help!” Reports said the two governments were still working on a previously reported plan for Trump and Xi to meet, and Scott Kennedy of CSIS identifies the likely meeting as a deadline for the Trump administration to form a China policy.

Appearances aside, North Korea was the policy centerpiece of the visit, with Tillerson saying in South Korea that “the policy of strategic patience has ended” and that “all options are on the table,” including military action “if North Korea takes actions that threatens the South Korean forces or our own forces.” It was also a rich week for analysis on the Korean Peninsula situation. Former Deputy Assistant Secretary of Defense Abe Denmark described “the disingenuousness of China’s claimed fear of THAAD’s radar.” Michael Swaine argued the U.S. and China need a “one Korea policy.” And Victor Cha said China’s government has to do more than a coal ban.

ANALYSIS: While it was certainly odd to see a top U.S. official repeat a Chinese talking point that had been so carefully avoided in the last administration, I think the shock of hearing the words may have led some to overreact. Tillerson did lose an opportunity to describe bilateral ties in his own words, and he certainly gave the appearance of friendliness to China’s government in a way that gives allies reason for concern. But saying “mutual respect” does not mean acceding to some specific list of Chinese demands; if he had said “mutual respect for each other’s core interests,” we could have a different discussion. While the statement was in my view a mistake, it did little real damage. Far more important will be the policy outcomes on North Korea and other issues. Here’s a question: Was there any discussion of human rights? In an interview, Tillerson said human rights “will always be ever-present in our conversations with the Chinese,” but “ever-present” could also refer to an elephant in the room that no one wants to discuss.

TRADE + INVESTMENT
USTR pick Lighthizer identifies China as challenge; Autos, agriculture on U.S. agenda; Chinese countermeasures planned

“If you look at our problems, China is right up there,” Trump’s nominee for U.S. Trade Representative, Robert Lighthizer, said in a confirmation hearing. Bloomberg reported that he said the United States needs to be “imaginative” and that WTO avenues won’t be enough to cope with Chinese industrial policy. Former IMF economist Zhu Min told FT, “Trump likes to make threats, so trade friction is inevitable,” though most seemed to agree this week “trade war” was unlikely. Some new measures are being considered. A Senate bill would expand scrutiny of foreign acquisitions of U.S. agriculture and food companies, FT reported. And Axios has “senior White House officials” flagging a tariff imbalance in automobile trade as likely to land on the bilateral agenda. NYT followed with word that Larry Summers raised the auto trade in a closed-door meeting with Premier Li Keqiang. Chinese officials were preparing countermeasures for potential U.S. trade moves, Reuters reported.

CYBERSPACE + TECH

  • During a speech in Beijing, Apple CEO Tim Cook praised globalization and spoke in favor of data privacy, saying, “We think that an individual should own their data and should be able to control their data,” according to WSJ. Apple also announced two new R&D centers in China—in Shanghai and Suzhou.
  • WSJ reported on Google, Facebook, and Chinese investor Wei Junkang’s deal to lay an undersea telecommunications cable from Los Angeles to Hong Kong.
  • “To comply with local laws, Airbnb set up Airbnb China, a separate business entity, that will host all data related to Chinese property listings and Chinese users’ booking information,” Jing Daily reported.
  • Stephan Haggard of the Peterson Institute examines the ZTE settlement over sanctions violations.

SOUTH CHINA SEA
Chinese plans to build research outpost at Scarborough raise ‘red line’ questions

“The top official in Sansha, which administers China’s island claims, was quoted by the official Hainan Daily newspaper as saying [environmental monitoring] stations were being built on six islands and reefs, including Scarborough Shoal,” AP reported. WSJ has somewhat more depth. Construction by China on Scarborough Shoal, which is claimed by China and the Philippines, has been seen as a potential red line for U.S. or Philippine policymakers. Philippine President Rodrigo Duterte, however, said, “We cannot stop China from doing [these] things,” AFP reported. “What do you want me to do? Declare war against China? I can’t. We will lose all our military and policemen tomorrow and we [will be] a destroyed nation.” Duterte also seemed to contradict his Defense Minister, saying that Chinese ships were allowed in Philippine waters and that “They have no incursion because we have an agreement.” In the United States, Senators Marco Rubio and Ben Cardin introduced a bill that would “sanction Chinese individuals and entities that participate in Beijing’s illegitimate activities in the South China Sea and East China Sea.”

PEOPLE TO PEOPLE
More Chinese students in U.S., but experiences vary with U.S. students, Christian and Chinese groups, fellow Chinese

Brook Larmer has an excellent story on Chinese college students at the University of Iowa, some of whom face loneliness and class issues within the large Chinese student community there, and in some cases isolation and academic difficulties in the broader Iowa City context. The story challenges the idea that if more Chinese students study in the United States, their experiences and understanding of U.S. society would be a stabilizing force in bilateral ties. It follows several individual students while examining the role of Christian outreach organizations and the Chinese government–linked Chinese Students and Scholars Association.

#USChinaWeek1967
‘Peking Criticizes Hong Kong on U.S.: Assails Use of Port by navy Ships Serving in the War’

“HONG KONG, March 17[, 1967]—The Chinese Communist press made an unusually heavy attack today against British authorities in Hong Kong. Reporting the arrival of the nuclear-powered United States aircraft carrier Enterprise on Tuesday, Hsinhua, the Chinese press agency, said the ship had been used in the ‘massacre of the Vietnamese people.’ The Seventh Fleet’s use of Hong Kong as a rest and recreation port has previously been criticized by Peking, which asserts that the British colony is being used as a base for ‘aggression’ in Vietnam. … Hsinhua declared: ‘It is pointed out that if the British Government and British authorities in Hong Kong continue to act arbitrarily, to serve as accomplices of United States aggressors, it is certain that they will not come to a good end.'”

(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].