Author Archives: Graham Webster

China policy in Trump’s new National Security Strategy: Excerpts and commentary

After a quick read of the Trump administration’s new National Security Strategy, here several passages bearing on U.S.–China relations, as well as a few comments on them. Not included are several mentions of China’s involvement in other regions of the world.

  • “Every year, competitors such as China steal U.S. intellectual property valued at hundreds of billions of dollars. Stealing proprietary technology and early-stage ideas allows competitors to unfairly tap into the innovation of free societies. Over the years, rivals have used sophisticated means to weaken our businesses and our economy as facets of cyber-enabled economic warfare and other malicious activities. In addition to these illegal means, some actors use largely legitimate, legal transfers and relationships to gain access to fields, experts, and trusted foundries that fill their capability gaps and erode America’s longer-term competitive advantages. We must defend our National Security Innovation Base (NSIB) against competitors. The NSIB is the American network of knowledge, capabilities, and people—including academia, National Laboratories, and the private sector—that turns ideas into innovations, transforms discoveries into successful commercial products and companies, and protects and enhances the American way of life.  The genius of creative Americans, and the free system that enables them, is critical to American security and prosperity” (21).
    • COMMENT: This not just about intellectual property theft, but also about preventing “legitimate” transfers of IP to strategic rivals.
  • “While maintaining an investor-friendly climate, this Administration will work with the Congress to strengthen the Committee on Foreign Investment in the United States (CFIUS) to ensure it addresses current and future national security risks.  The United States will prioritize counterintelligence and law enforcement activities to curtail intellectual property theft by all sources and will explore new legal and regulatory mechanisms to prevent and prosecute violations” (22).
    • COMMENT: CFIUS reform has strong bipartisan support in Congress, and it is in no small part aimed at erecting or legitimizing barriers to Chinese investments that would result in IP transfer.
  • Leading language under Pillar III, “Preserve Peace Through Strength: — “A central continuity in history is the contest for power. The present time period is no different. Three main sets of challengers—the revisionist powers of China and Russia, the rogue states of Iran and North Korea, and transnational threat organizations, particularly jihadist terrorist groups—are actively competing against the United States and our allies and partners. Although differing in nature and magnitude, these rivals compete across political, economic, and military arenas, and use technology and information to accelerate these contests in order to shift regional balances of power in their favor. These are fundamentally political contests between those who favor repressive systems and those who favor free societies. China and Russia want to shape a world antithetical to U.S. values and interests. China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor. Russia seeks to restore its great power status and establish spheres of influence near its borders. The intentions of both nations are not necessarily fixed.  The United States stands ready to cooperate across areas of mutual interest with both countries. For decades, U.S. policy was rooted in the belief that support for China’s rise and for its integration into the post-war international order would liberalize China. Contrary to our hopes, China expanded its power at the expense of the sovereignty of others. China gathers and exploits data on an unrivaled scale and spreads features of its authoritarian system, including corruption and the use of surveillance. It is building the most capable and well-funded military in the world, after our own. Its nuclear arsenal is growing and diversifying. Part of China’s military modernization and economic expansion is due to its access to the U.S. innovation economy, including America’s world-class universities” (25).
    • COMMENT: This is the broadest top-level statement of Trump administration views on China. It places China alongside Russia as actors intentionally seeking to move the world away from U.S. interests. It categorizes both as challengers alongside Iran, North Korea, and terrorism. China is unmistakably situated as the most capable “challenger,” set apart from the others in this framing by technological prowess that is both impressive and illegitimately obtained.
  • “In addition, after being dismissed as a phenomenon of an earlier century, great power competition returned. China and Russia began to reassert their influence regionally and globally. Today, they are fielding military capabilities designed to deny America access in times of crisis and to contest our ability to operate freely in critical commercial zones during peacetime. In short, they are contesting our geopolitical advantages and trying to change the international order in their favor” (27).
    • COMMENT: Chinese diplomats might call this “Cold War thinking,” but it’s long been the case that U.S. strategists perceived a strategic competition between the United States and China. The irony of the Chinese accusations of a Cold War mentality has always been that Chinese strategists think that way too. This new U.S. strategy is strong on recognizing some realities of competition, but weak on assessing how today’s global economic and security environment are drastically different from earlier eras of “great power competition.” There really is a downside in depending too much on analytical tools from another era.
  • “[A]dversaries and competitors became adept at operating below the threshold of open military conflict and at the edges of international
    law” (27). “China, Russia, and other state and non-state actors recognize that the United States often views the world in binary terms, with states being either ‘at peace’ or ‘at war,’ when it is actually an arena of continuous competition” (28).

    • COMMENT: Lyle Morris points to the former quote as the “First instance of an NSS identifying the gray zone challenge to the U.S. Certainly not the last.”
  • “Maintaining America’s central role in international financial forums enhances our security and prosperity by expanding a community of free market economies, defending against threats from state-led economies, and protecting the U.S. and international economy from abuse by illicit actors” (34).
  • Information Statecraft: America’s competitors weaponize information to attack the values and institutions that underpin free societies, while shielding themselves from outside information. They exploit marketing techniques to target individuals based upon their activities, interests, opinions, and values. They disseminate misinformation and propaganda. Risks to U.S. national security will grow as competitors integrate information derived from personal and commercial sources with intelligence collection and data analytic capabilities based on Artificial Intelligence (AI) and machine learning. Breaches of U.S. commercial and government organizations also provide adversaries with data and insights into their target audiences. China, for example, combines data and the use of AI to rate the loyal of its citizens to the state and uses these ratings to determine jobs and more.” (34–5).
    • COMMENT: As U.S. scrutiny of official Chinese influence operations abroad rises, here it is melded rhetorically with oblique references to both authoritarian Internet censorship and (perhaps even) Russian election interference. For obvious reasons, a deeper meditation on the Russian operations is set aside. What’s left is an allusion to the OPM hack, one to the hype-and-reality of AI/ML factors in national security, and a reference to China’s “social credit system” that conflates the government’s plans and some capabilities already installed in privately-run systems. 
  • “Today, the United States must compete for positive relationships around the world. China and Russia target their investments in the developing world to expand influence and gain competitive advantages against the United States. China is investing billions of dollars in infrastructure across the globe. Russia, too, projects its influence economically, through the control of key energy and other infrastructure throughout parts of Europe and Central Asia.  The United States provides an alternative to state-directed investments, which often leave developing countries worse off. The United States pursues economic ties not only for market access but also to create enduring relationships to advance common political and security interests” (38).
    • COMMENT: I suppose then the U.S. plan to compete with Chinese and Russian influence through investment is to just let the private sector do what it will and bet on a positive result, eh?
  • Ensure Common Domains Remain Free: The United States will provide leadership and technology to shape and govern common domains—space, cyberspace, air, and maritime—within the framework of international law. The United States supports the peaceful resolution of disputes under international law but will use all of its instruments of power to defend U.S. interests and to ensure common domains remain free. Protect a Free and Open Internet: The United States will advocate for open, interoperable communications, with minimal barriers to the global exchange of information and services.  The United States will promote the free flow of data and protect its interests through active engagement in key organizations, such as the Internet Corporation for Assigned Names and Numbers (ICANN), the Internet Governance Forum (IGF), the UN, and the International Telecommunication Union (ITU)” (41).
    • COMMENT: The strategy does not advocate for the ratification of the UN Convention on the Law of the Sea (UNCLOS), so I’m not sure what to make of claims that “international law” should be the framework for maritime governance. “International law” isn’t really the animating framework behind all the cyberspace institutions listed, either. 
  • Under the Indo-Pacific regional section: “A geopolitical competition between free and repressive visions of world order is taking place in the Indo-Pacific region. … Although the United States seeks to continue to cooperate with China, China is using economic inducements and penalties, influence operations, and implied military threats to persuade other states to heed its political and security agenda. China’s infrastructure investments and trade strategies reinforce its geopolitical aspirations. Its efforts to build and militarize outposts in the South China Sea endanger the free flow of trade, threaten the sovereignty of other nations, and undermine regional stability. China has mounted a rapid military modernization campaign designed to limit U.S. access to the region and provide China a freer hand there. China presents its ambitions as mutually beneficial, but Chinese dominance risks diminishing the sovereignty of many states in the Indo-Pacific. States throughout the region are calling for sustained U.S. leadership in a collective response that upholds a regional order respectful of sovereignty and independence” (45–6).
  • Action items under the Indo-Pacific regional section: “Political: Our vision for the Indo-Pacific excludes no nation. We will redouble our commitment to established alliances and partnerships, while expanding and deepening relationships with new partners that share respect for sovereign, fair and reciprocal trade, and the rule of law. We will reinforce our commitment to freedom of the seas and the peaceful resolution of territorial and maritime disputes in accordance with international law. We will work with allies and partners to achieve complete, verifiable, and irreversible denuclearization on the Korean Peninsula and preserve the non-proliferation regime in Northeast Asia. Economic: The United States will encourage regional cooperation to maintain free and open seaways, transparent infrastructure financing practices, unimpeded commerce, and the peaceful resolution of disputes. We will pursue bilateral trade agreements on a fair and reciprocal basis. We will seek equal and reliable access for American exports. We will work with partners to build a network of states dedicated to free markets and protected from forces that would subvert their sovereignty” (46).
    • COMMENT: The political vision “excludes no nation” but promises to work with “new partners that share respect for sovereign, fair and reciprocal trade, and the rule of law.” So does that include China? The economic vision promises bilateral trade agreements and a “network of states dedicated to free markets.” Given those goals, wouldn’t it make more sense to get that network together for a broader, more interoperable trade regime—say based on a modified Trans-Pacific Partnership? 
  • “We will maintain our strong ties with Taiwan in accordance with our ‘One China’ policy, including our commitments under the Taiwan Relations Act to provide for Taiwan’s legitimate defense needs and deter coercion” (46).
    • COMMENT: Taiwan was not mentioned in the Obama administration’s February 2015 National Security Strategy. For comparison, here’s the full paragraph on China from that document: “The United States welcomes the rise of a stable, peaceful, and prosperous China. We seek to develop a constructive relationship with China that delivers benefits for our two peoples and promotes security and prosperity in Asia and around the world. We seek cooperation on shared regional and global challenges such as climate change, public health, economic growth, and the denuclearization of the Korean Peninsula. While there will be competition, we reject the inevitability of confrontation. At the same time, we will manage competition from a position of strength while insisting that China uphold international rules and norms on issues ranging from maritime security to trade and human rights. We will closely monitor China’s military modernization and expanding presence in Asia, while seeking ways to reduce the risk of misunderstanding or miscalculation. On cybersecurity, we will take necessary actions to protect our businesses and defend our networks against cyber-theft of trade secrets for commercial gain whether by private actors or the Chinese government.” Other mentions in that version flagged “China’s rise” as a condition that needs to be handled and celebrated U.S.-China cooperation on climate change. The Trump document does not see the climate as a challenge, but does flag climate regulation as a barrier to energy sector success.

U.S.–China Week: Trade confrontation brewing? (2017.11.27)

Welcome to Issue 120 of U.S.–China Week, and greetings from Beijing.

Some exciting professional news: I have signed on as a fellow at New America, where I’m part of a team developing our new DigiChina project to translate and contextualize important developments in China’s digital economy and technology policies. We have four great pieces up so far, and many more to come. Thanks to New America’s Cybersecurity Initiative and DigiChina colleagues for getting us this far, and I’m looking forward to building the effort and collaborating with others in the field. Drop me a line if you have ideas for digital policy issues that need exploration. I remain (newly) based in Oakland, Calif., and continue to also work as a senior fellow with the Paul Tsai China Center at Yale Law School, both on the broad U.S.–China relations agenda and on bilateral issues related to emerging technologies.

Programming note: U.S.–China Week is and will remain on an irregular publication schedule at least until after my return to the United States on Dec. 7. As this project’s third anniversary approaches in February, I am considering changes in format, emphasis, and publication schedule. In this context, I’d be especially grateful for any comments on what’s been most valuable, and what could safely go away, in any future iterations. Thanks to all subscribers for following along with me.

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, and you can follow me on Twitter at @gwbstr. Please send your comments, quibbles, and suggestions to [email protected].

TRADE WINDS
Signs of a coming, more confrontational U.S. policy on China trade

  • U.S. Trade Representative Robert Lighthizer’s reported role
    Axios reported that Lighthizer played a central role on President Donald Trump’s trip to Asia, and that he declared the U.S.–China economic relationship “bullshit” at a meeting with National Economic Council head Gary Cohn, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, and Agriculture Secretary Sonny Perdue—supposedly arguing that the succession of approaches previous administrations have developed with China have gotten nothing done.

    ANALYSIS: Lighthizer’s attitude toward economic ties with China reportedly worries free trade proponents within the administration, but the idea that previous modes of dialogue and policy were not up to the challenge is no Trump administration innovation. The Obama administration’s approach hinged on leverage many thought the United States would gain through the Trans-Pacific Partnership, and then through negotiations toward a U.S.–China bilateral investment treaty. Of course, U.S. participation in TPP is dead for the foreseeable future, and this also removes an incentive for China to play ball on a BIT (even if the U.S. government were interested, which it’s apparently not for now). Any U.S. administration at this stage could be expected to reach for new approaches. What the U.S. public and media should be looking out for is whose interests the Trump approach appears to serve, and at what cost to others.

  • WSJ: Trump team rebuffed Chinese offer to announce financial services opening during state visit; official says ‘no negotiation’
    In a story that provides an excellent summary of the emerging Trump administration approach to China trade, WSJ reported that U.S. officials rejected Chinese offers to announce a limited opening of China’s financial services sector while Trump was in Beijing. One official quoted said:”We said, ‘No, we’re not going to take your gifts because you’re just trying to sucker us.’ … The idea with China is no negotiation because it will just make us beholden to them and reluctant to slam them on other stuff.” The story also reported that trade actions against China are likely to be decided early in 2018, and that some actions may be delayed until after the Republican tax legislation effort concludes.
  • Kennedy: ‘New Washington consensus: China plays unfair’
    Writing in SCMP, Scott Kennedy of CSIS observed: “My sense is that we are on the cusp of a new American strategy in which Washington replaces dialogue and multilateralism with extended unilateral pressure. This U-turn was possibly solidified in July, when the latest round of high-level bilateral dialogue failed to yield anything of value. Since then, the Trump administration has been moving systematically to put the regulatory pieces in place so that it can credibly threaten China with limits on its exports, investment and other elements of the relationship. [Archived copy; original link possibly broken.]
  • USTR investigation result likely in coming weeks, may provide U.S. government with new kinds of leverage
    The conclusion of the USTR’s Section 301 investigation announced in August is likely to emerge in the coming days or weeks, but its conclusion is not much in question. The U.S. government is almost certain to declare that “acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation are actionable.” The question is what actions the U.S. government threatens to take, and what if any are actually implemented. Using the Section 301 tool enables the Trump administration to more credibly threaten China with measures that might go beyond what is allowable under World Trade Organization rules.

    ANALYSIS: Like several other actions by the U.S. government in recent months, the investigation lays the groundwork for implementing measures the Chinese government would find especially unpalatable. The question will be whether the Trump administration uses this increased threat of countermeasures effectively to win concessions, what if any countermeasures it actually implements, and how Chinese officials respond to the threat or reality of new actions. Chinese officials could respond to U.S. measures with sober, procedural efforts for instance at the WTO, or they could employ a range of tactics both quiet and overt to impose costs on U.S. interests. Quiet concessions should not be expected.

#USChinaWeek1967
‘China says U.S. Threatens To Spread War to Cambodia’

“TOKYO, Monday, Nov. 27[, 1967] (UPI)—Communist China accused the United States today of threatening to spread the Vietnam war into neighboring Cambodia. It promised ‘staunch backing’ for the Cambodians if this happened. North Vietnam, in a related development, rejected the recent South Vietnamese offer for peace talks and said the Hanoi regime was determined to ‘fight o the death.””

(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 fellow at the Paul Tsai China Center at Yale Law School, where he specializes in U.S.–China relations and technology, and a fellow at New America, where he is developing the DigiChina project on China’s digital policies. His website is gwbstr.com, and he is based in Oakland, California.

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

Free Subscription to U.S.–China Week by clicking here or e-mailing me is open to all, and an archive of past editions appears at my long-running website on East Asia and the United States, Transpacifica.

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

U.S.–China Week: Trump’s trip, CFIUS revision, loose talk of war with North Korea (2017.11.13)

Welcome to Issue 119 of U.S.–China Week. This edition comes after a period of busy travel and an energy-sapping cold (for me) and (for everyone) a torrent of fragmentary news emerging from President Donald Trump’s travel in East Asia, including a state visit to China. I thus do not aim for a comprehensive retelling, but rather an accounting of important take-aways from the two weeks. Trump is to return from Asia Tuesday after attending the East Asia Summit in the Philippines—a meeting at one time trimmed from his schedule but added back as final preparations for the trip concluded.

Programming note: I will be in China from approximately Nov. 26–Dec. 6. Please drop me a line if you want to connect in Bejing or Shanghai. Publication will remain irregular until my return to the United States.

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, and you can follow me on Twitter at @gwbstr. Please send your comments, quibbles, and suggestions to [email protected].

SUMMIT CIRCUIT
What happened, and what didn’t, during Trump’s China trip

  • A visit devoid of U.S. values on human rights, openness.
    When a U.S. president travels abroad, it’s not uncommon for reporters to gripe about lack of access to key meetings—but U.S. officials generally bring elements of the free press to bear. This time, however, the White House also reportedly acceded to Chinese wishes that the Trump and Chinese leader Xi Jinping not take questions when giving statements to reporters. Meanwhile, there was little indication that the U.S. government pushed any human rights, internet freedom, or other concerns associated with what used to be touted as “U.S. values.” It’s not just Democrats and rights NGOs who hoped for more. Senator Marco Rubio and Representative Chris Smith of the Congressional-Executive Commission on China (both Republicans) in a letter sought Trump administration support for “Internet freedom,” a halt to repatriation of Chinese citizens “until the Chinese government can demonstrate that they are meeting the standards set forth in the International Covenant on Civil and Political Rights,” Hong Kong autonomy, the release of Liu Xia, and other matters—all apparently to no avail.
  • Business deals provide tweetable deliverables, but trade negotiations absent.
    U.S. and Chinese officials touted the signing of a series of commercial deals supposedly worth $250 billion. At least some of that dealing, however, was old wine in new bottles. Of $37 billion in announced Chinese purchases from Boeing, Bloomberg reported, “the pact is largely for jets that have been parts of deals since 2013.” Twenty-nine business leaders, including CEOs of Boeing, DowDuPont, Qualcomm, and Goldman Sachs, were reportedly to travel with Trump to China. Descriptions of each deal are published by the Commerce Department. It’s hard to tell how much of this economic activity was actually assisted by the two governments and made possible by Trump’s visit to China.

    Meanwhile, outcome documents from the U.S. and Chinese (zh/en) governments gave little indication of broader market access negotiations. Neither government mentioned formerly much-hyped talks toward a bilateral investment treaty in any documents I saw. With individual deals apparently substituted for systemic negotiations over market access, this trip presents little more than a blip on the bilateral economic radar. The conclusion of the U.S. Trade Representative’s “Section 301” investigation into Chinese trade and investment practices regarding tech and intellectual property looms much larger. And the revival of the Trans-Pacific Partnership—this time without U.S. involvement—underlines the fact that trade negotiations are sure to continue even if U.S. participation doesn’t.

  • An emphasis (but not innovation) on the “Indo-Pacific.”
    Some commentators and reporters made much of the Trump administration’s use of the phrase Indo-Pacific to refer to a region broader than the vague old Asia-Pacific, explicitly including India. It’s worth nothing this is nothing new, even if it’s risen in emphasis. Last year, the term seemed to rise in prominencewith U.S. Pacific Command officials. Rory Medcalf in 2013 noted the phrase was “thoroughly inducted into the U.S. rhetorical armory.” Secretary of State Rex Tillerson, for his part, pushed a “free and open Indo-Pacific” in a speech at CSIS last month. Until there’s some kind of action associated with the change in regional framing, it’s quite a stretch to mark the phrase’s use as significant.
  • Despite Trump’s rhetoric, little new on North Korea—but case for war picking up in Washington
    Trump’s inconsistent rhetoric on North Korea remained consistent, sending a variety of signals in succession. It’s not worth summarizing two weeks of screaming headlines and childish tweets. But it is definitely worth noting a remarkable statement by Obama’s first Director of National Intelligence Adm. Dennis Blair:

    “If North Korea does in fact launch a nuclear missile into the Pacific, the reaction should be a massive American and South Korean air and missile strike against all known DPRK nuclear test facilities and missile launching and support facilities. The strike should be launched from South Korean and Japanese bases, as well as U.S. ships and bases in the United States. Now is the time to consult with Japan and South Korea about this possibility as well as responses to other potential DPRK provocations. To launch a retaliatory strike of such scope, all three countries will need to increase their military readiness in case of North Korean retaliation and take steps to provide civil defense in South Korea and Japan to protect their citizens and the tens of thousands of Americans who live in both countries.”

    If the U.S. debate over policy toward East Asia often pits pro-alliance arguments against strong-China-ties arguments, Blair usually falls in the former camp. But as a former commander of U.S. Pacific Command, he is as conscious as anyone that what he called here a “retaliatory strike” could result in devastating war. Evan Osnos wrote that “members of America’s political class—the ‘blob’ of government officials, donors, and media types—have started to talk about war with Pyongyang as an increasingly likely prospect.” His observations match mine from two recent trips to Washington.

TRADE + INVESTMENT
Bipartisan U.S. proposal to overhaul inbound investment reviews 

A long-expected proposal to revise the process by which the U.S. government reviews incoming investments for national security risk emerged with bipartisan sponsors in both the Senate and the House. Senators John Cornyn, Dianne Feinstein, and Richard Burr introduced the Senate bill, known as FIRRMA, which would revise the function of the Committee on Foreign Investment in the United States (CFIUS). In essence, the proposed bill broadens CFIUS’s mandate. According to a release from Cornyn’s office, it would “expand the CFIUS jurisdiction to include certain joint ventures, minority position investments, and real estate transactions near military bases or other sensitive national security facilities” and “update the Committee’s definition of ‘critical technologies”’ to include emerging technologies that could be essential for maintaining the U.S. technological advantage over countries that pose threats, such as China.” As my Yale colleague Rob Williams wrote at Lawfare, “At its core, FIRRMA is an effort to close the gaps in CFIUS that Congress fears China is exploiting.” It would also apply special scrutiny to deals involving “countries of special concern,” almost certain to include China.

#USChinaWeek1967
‘Harriman Foresees Talks By Soviet and U.S. on China’

“WASHINGTON, Nov. 4[, 1967] (UPI) — Ambassador at Large W. Averell Harriman predicted today that the Soviet Union will be ready one day to discuss with the United States ‘how we can both protect ourselves against China’s nuclear capabilities’ The 75-year-old statesman said in an interview that he thought the Kremlin was ‘very much concerned’ about Peking’s nuclear progress and that this was a principal reasonwhy the Soviet Union was anxious to get agreement on a treaty to prevent the spread of nuclear weapons. With such an agreement, he said, ‘We will be in the same boad and automatically be able to bring some kind of pressure on Peking.'”

(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, and he is based in Oakland, California.

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

Free Subscription to U.S.–China Week by clicking here or e-mailing me is open to all, and an archive of past editions appears at my long-running website on East Asia and the United States, Transpacifica.

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

U.S.–China Week: CFIUS revision, tech CEOs meet Xi, Aluminum duties, Trump trip (2017.10.30)

Welcome to Issue 118 of U.S.–China Week. I’m continuing with abbreviated editions of the newsletter during a very busy travel schedule over the next two months. Some editions may therefore be delayed or skipped. Of course, the big macro stories in U.S.–China relations are affected by the elite politics surrounding Xi Jinping in China and the evolving investigation into Donald Trump’s presidential campaign and its dealings with Russia. But here I stick to the hard, bilateral news blips that may otherwise be drowned out in the torrent of news.

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, and you can follow me on Twitter at @gwbstr. Please send your comments, quibbles, and suggestions to [email protected].

ROUND-UP

  • Trump congratulates Xi on ‘extraordinary elevation.’
    With Trump’s trip to Asia slated to begin Nov. 3, he tweeted that he congratulated Xi “on his extraordinary elevation.” A White House readout of the call did not include the congratulatory language. But the Xinhua readoutdid. The U.S. accounts of the call mentioned North Korea. China’s did not. In a Fox Business interview, Trump said, “People say we have the best relationship of any president-president, because he’s called president also … Now some people might call him the king of China. But he’s called president.”
  • ‘Trump’s China Trip to Broker Billions of Dollars in Energy Deals’ –Bloomberg
    “Representatives from about 40 companies are expected to accompany President Donald Trump on the first presidential trade mission to China Nov. 8-10 and sign deals for billions of dollars in U.S. investments. … Among the companies tentatively listed as working on China-related deals in conjunction with the trip, according to a government document obtained by Bloomberg News, are General Electric Co., Honeywell International Inc., Westinghouse Electric Co., Alaska Gasline Development Corp., the Boeing Co. and Qualcomm Inc. The companies represent a variety of sectors from life sciences to heavy machinery. Other companies that may have deals in progress, according to the document, include Cheniere Energy Inc., Terex Corp., Thermo Fisher Scientific Inc., Applied Materials Inc., Caterpillar Inc. and Blackstone Group.”
  • Amb. Cui Tiankai delays retirement for Trump visit –SCMP
    “Despite rumours he was about to step down and speculation about likely successors, ambassador Cui Tiankai, 65 this month, had been asked to postpone his retirement amid preparations for the Trump visit, diplomatic sources said.”
  • U.S. moves to impose antidumping duties against Chinese aluminum
    The Commerce Department announced “its affirmative preliminary determination in the antidumping duty (AD) investigation of imports of aluminum foil from” China. “Commerce is scheduled to announce its final determination on February 23, 2018.” See fact sheet. A Ministry of Commerce statement reported by Bloomberg said, “It not only hurts the interests of Chinese companies but also dents the seriousness and authority of multilateral rules.” Commerce Secretary Wilbur Ross reportedly spoke with Vice Premier Wang Yang the same day.
  • Zuckerberg, Musk, Cook among CEOs who met with Xi in Beijing
    At an annual meeting of Tsinghua University’s School of Economics and Management Advisory Board, Xi addressed assembled tech/business leaders including Facebook’s Mark Zuckerberg, Apple’s Tim Cook, Elon Musk of Space X and Tesla, Steven Schwarzman, Hank Paulson, and others, according to WSJand a participant. The showy part of their meeting made CCTV’s Xinwen Lianbo.
  • CFIUS revision bill reportedly coming this week
    From WSJ: “Two influential Republican lawmakers plan to unveil legislation as soon as next week that would ratchet up scrutiny of foreign investment, taking aim in particular at Chinese technology deals. The identical bills from Senate Majority Whip John Cornyn (R., Texas) and Rep. Robert Pittenger (R., N.C.), a prominent anti-China hawk, would broaden the authority of the Committee on Foreign Investment in the U.S. … One of the bill’s key provisions would broaden the types of transactions CFIUS vets to include joint ventures and other arrangements that require U.S. technology companies to provide intellectual property and support to a foreign person, according to a copy of the bill seen by the Journal.”

#USChinaWeek1967
‘U.S. Companies Active in Hong Kong’

“Geoffrey Archer, executive director of the Hong Kong Chamber of Commerce, said here last week that in the last 18 months, 150 United States companies had opened regional offices there. Since Communist disturbances in the territory began last April, Mr. Archer added, another 20 American companies have established Hong Kong branches, or are on the verge of opening them. … He evaluated Hong Kong as a strategic area for trade with Asian countries, including mainland China, and he expects no difficulties from the Peking Communist regime, particularly after recent evidence that the administration in Peking is determined to maintain the flow of trade and capital, which currently is worth about $1 billion a year. … The nonarrival of trains from the mainland with the customary cargoes of live animals and other foodstuffs was due, in his interpretation, to civil strife in Canton between pro-Maoist and anti-Maoist supporters, which delayed railway schedules. Despite later arrivals, he said, the shipments from the mainland have come in as usual and the situation is gradually being stabilized.'”

(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, and he is based in Oakland, California.

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

Free Subscription to U.S.–China Week by clicking here or e-mailing me is open to all, and an archive of past editions appears at my long-running website on East Asia and the United States, Transpacifica.

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

U.S.–China Week: Trump to China, Guo Wengui/MSS intrigue, FONOP, Tillerson revives “rules-based order” (2017.10.23)

Welcome to Issue 117 of U.S.–China Week. This issue covers two weeks since October 9, and therefore covers a lot of ground in round-up form. It’s also been a busy period of writing and publishing around here.

First, if you’re in Seattle tomorrow evening, you can catch me speaking as part of the National Committee on U.S.–China Relations China Town Hall from 4–6 p.m. (Details and RSVP here.) I’ll discuss U.S.–China relations and China’s cyberspace policies with the local audience, following a live-streamed Q&A with Obama administration National Security Adviser Amb. Susan Rice. If you’re not in Seattle check for a local event near you or tune in to the livestream with Rice at 7 p.m. EDT.

Second, you can watch our New America panel discussing Chinese digital policy and introducing the DigiChina blog, and read my latest piece there (with Samm Sacks and Paul Triolo), “Beyond the Worst-Case Assumptions on China’s Cybersecurity Law.”

Of course, the big news in China is the 19th Party Congress. I’ll wait until after it concludes to assess any early U.S.–China relations implications.

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, and you can follow me on Twitter at @gwbstr. Please send your comments, quibbles, and suggestions to [email protected].

ROUND-UP

  • President Donald Trump will travel to China Nov. 8–10. His trip will first take him to U.S. Pacific Command in Honolulu, Japan, and South Korea—and China will be followed by Vietnam for APEC meetings and the Philippines for ASEAN meetings. Defense Secretary Jim Mattis is on travel to the Philippines, Thailand, and South Korea this week. Administration officials previewing Trump’s Asia trip listed North Korea and forced technology transfer as key topics for the China leg.
  • WSJ reports that Trump considered acceeding to a Chinese request to deport dissident/fugitive Guo Wengui. The must-read story includes accounts of U.S. officials confronting Ministry of State Security personnel at New York’s Penn Station and JFK airport for conducting official business in violation of their visa status. “The U.S. Attorney’s office in Brooklyn prepared charges alleging visa fraud and extortion, according to people familiar with the matter. … Prosecutors were still scrambling to secure final signoff from Washington to go ahead with the planned arrests at the airport.” Interagency indecision then reportedly resulted in agents confiscating the Chinese officials’ phones but allowing them to depart. There’s much, much more. Read it.
  • Politico meanwhile reported on the Chinese government capture of a suspected CIA officer in January 2016. And Xinhua reported that the Chinese government transferred a fugitive sought by the U.S. government to U.S. authorities following the recent bilateral Law Enforcement and Cybersecurity Dialogue.
  • Secretary of State Rex Tillerson pushed the international “rules-based order” in China reference during a speech on India ties: “China’s provocative actions in the South China Sea directly challenge the international law and norms that the United States and India both stand for. The United States seeks constructive relations with China, but we will not shrink from China’s challenges to the rules-based order and where China subverts the sovereignty of neighboring countries and disadvantages the U.S. and our friends.”
  • The Justice Department indicted two Chinese citizens in China who accused of “conspiring to distribute large quantities of fentanyl and fentanyl analogues into the United States,” Reuters reported. And McClatchy reported on a surge in Chinese citizens being caught in illegal marijuana growing operations in Colorado and California.
  • U.S. officials told Reuters a U.S. Navy ship sailed near the Paracel Islands in the South China Sea to challenge “excessive maritime claims.” The ship did not pass within 12 nautical miles of the islands, according to reports. Foreign Ministry Spokesperson Hua Chunying said the ship had entered the islands’ “territorial sea” (“领海“) and harmed China’s sovereignty and security interests (“损害中国主权和安全利益”). Mattis told the Washington Free Beacon, “We stay strictly in accordance with international law, so there’s no violation of anyone’s sovereignty.” It appears likely this voyage was a freedom of navigation operation (FONOP) targeting the straight baselines China has declared around the Paracels.
  • Tesla reached a deal with Shanghai to build a car factory in the city’s free-trade zoneWSJ reported.
  • Technode summarized a report by IT Juzi and Tencent on comparative strengths in AI from the United States and China.
  • SCMP: “Intel leads US$100m funding round for Chinese AI start-up Horizon Robotics” and “US chip giant Qualcomm partners with Chinese tech firm to create smart-car lab
  • Senators Ted Cruz and Patrick Leahy wrote Apple’s CEO over the removal of VPN apps from the China App Store.
  • Recorded Future report: “U.S. Lags Behind Chinese [in Cybersecurity] Vulnerability Reporting

#USChinaWeek1967
‘China Peril Cited: “Mortal Danger” Seen if Nation Reneges on Asian Pacts’

“WASHINGTON, Oct. 12[, 1967] — Secretary of State Dean Rusk, replying forcefully to Congressional critics, warned today that for the United States to abandon its treaty pledges to South Vietnam and the rest of Southeast Asia would ‘subject this country to mortal danger.’ Mr. Rusk’s usual calm tone was missing during a 55-minute news conference. He argued that American national interest was at stake in Vietnam because Communist China posed a threat to non-Communist Asia nations for the next decade. He depicted a precarious balance in the future between a billion Chinese, armed with nuclear weapons, and a billion non-Communist Asians looking to the United States for help in checking Peking.’If any who would be our adversary should suppose that our treaties are a bluff, or will be abandoned if the going gets tough,’ Mr. Rusk said in an opening statement, ‘the result could be catastrophe for all mankind.’ … ‘I have heard the word “credibility” injected into our domestic debate,’ Mr. Rusk said. ‘Let me say, as solemnly as I can, that those who would place in question the credibility of the pledged word of the United States under our mutual security treaties would subject this nation to mortal danger.’ … He said that Washington was ‘not picking out Peking as some sort of special enemy. Peking has nominated itself by proclaiming a militant doctrine of world revolution, and doing something about it.'”

(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, and he is based in Oakland, California.

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

Free Subscription to U.S.–China Week by clicking here or e-mailing me is open to all, and an archive of past editions appears at my long-running website on East Asia and the United States, Transpacifica.

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