Author Archives: Graham Webster

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].

U.S.–China Week: A law enforcement and cybersecurity dialogue full of reiterations, looking beyond WTO at USTR (2017.10.09)

Welcome to Issue 115 of U.S.–China Week. This edition is slightly abbreviated as I prepare for a week of travel. Relatedly: If you are in Washington, D.C., next week, please consider coming down to New America on Tuesday, Oct. 17, from 1–2:30 p.m. for a discussion on “Digital China: What Are China’s Leaders & Scholars Saying About Their Plans for Cyberspace?” John Costello, Samm Sacks, Paul Triolo, Ian Wallace, and I will discuss what Chinese sources are saying and what we might expect to find out on the cyberspace policy front as China’s 19th Party Congress gets under way. RSVP here. Because of travel, next week’s newsletter will likely also be abbreviated or delayed.

Like it or not, the biggest story in U.S.–China relations remains the fact that the U.S. president is (perhaps not systematically, but still thoroughly) undermining his own administration’s diplomatic efforts with regard to North Korea. President Donald Trump tweeted: “Presidents and their administrations have been talking to North Korea for 25 years, agreements made and massive amounts of money paid hasn’t worked, agreements violated before the ink was dry, making fools of U.S. negotiators. Sorry, but only one thing will work!” The Republican chair of the Senate Foreign Relations Committee, Bob Corker, told NYT, “I know for a fact that every single day at the White House, it’s a situation of trying to contain him.” Trump’s reckless threats could put the United States “on the path to World War III,” Corker said. Corker, who is not running for reelection, seems to have concluded that speaking truth is more important than defending the head of his party. Let’s see if others join him.

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].

CYBERSPACE + LAW ENFORCEMENT
First ‘Law Enforcement and Cybersecurity Dialogue’ meets in Washington; immigration, cyberspace norms mentioned

Minister of Public Security and State Councilor Guo Shengkun visited Washington for the first “Law Enforcement and Cybersecurity Dialogue” (LE&CD per State and LECD per Justice). According to State, Deputy Secretary of State John Sullivan hosted the dialogue, which was co-chaired by Attorney General Jeff Sessions and Acting Secretary of Homeland Security Elaine Duke.

  • The Justice Department (English) and the Xinhua (Chinese) released lists of outcomes from the meeting.
  • In the first topic, described in the U.S. outcome list as “repatriation of foreign nationals with final orders of removal,” and in the Chinese list as “非法移民遣返” (illegal immigrant repatriation), the two sides seemed to reiterate a discussion that had been ongoing in the context of DHS-China dialogue. It’s interesting that the Chinese version seemed to reflect a Trump administration focus on undocumented immigrants, while the English used the legally distinct language of a “final order of removal.” (An non-citizen with a green card can be ordered removed, for instance, after certain types of criminal convictions.) The issue here, I believe, is that there is a backlog of Chinese citizens who have been ordered removed for various reasons but who remain in the United States awaiting Chinese government processing for their repatriation.
  • The related fourth topic is “Fugitives,” something that has been on the agendain the bilateral Joint Liaison Group on Law Enforcement Cooperation (JLG)—a channel that seems likely to have been folded into the new LE&CD.
  • On cybersecurity, we see essentially a reiteration of already existing understandings. From the U.S. English version: “Both sides will continue their implementation of the consensus reached by the Chinese and American Presidents in 2015 on U.S.-China cybersecurity cooperation, consisting of the five following points: (1) that timely responses should be provided to requests for information and assistance concerning malicious cyber activities; (2) that neither country’s government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to companies or commercial sectors; (3) to make common effort to further identify and promote appropriate norms of state behavior in cyberspace within the international community; (4) to maintain a high-level joint dialogue mechanism on fighting cybercrime and related issues; and (5) to enhance law enforcement communication on cyber security incidents and to mutually provide timely responses.”
  • WSJ reported that Sessions confronted the Chinese delegation over allegations that potentially China-linked hackers had targeted the Hudson Institute website. Hudson also postponed or cancelled an event with Guo Wengui, a Chinese billionaire whom the Chinese government views as a fugitive and has been circulating salacious but hard-to-verify allegations of high-level corruption in the Chinese Communist Party.
  • The State Department briefing on the day of the dialogue was overshadowed by the question of whether Secretary of State Rex Tillerson had called Trump a “moron,” so we don’t get more there.

TRADE + INVESTMENT
Asst USTR: U.S. objections to Chinese trade and investment practices go beyond WTO; 301 investigation hearing Tues.

  • “A key challenge facing the United States — and other WTO members — is not only to hold China accountable for strict adherence to its WTO obligations, but also to find effective ways to address those government policies and practices that may violate the spirit of the WTO but nevertheless may not fall squarely within existing WTO disciplines,” Acting Assistant U.S. Trade Representative for China Affairs Terrence McCartin said at a hearing, according to Politico. (Reuters attributed virtually the same comment to Assistant USTR Edward Gresser, so one of the two probably goofed.)
  • Unless there has been a change, USTR’s hearing on the Section 301 investigation announced in August will take place tomorrow. You can view some public comment submissions, including from key industry groups and, for instance, Scott Kennedy of CSIS here (that is, if regulations.gov loads for you; it’s having trouble for me).

#USChinaWeek1967
‘Washington: Johnson, de Gaulle and Mao Tse-tung’

“By JAMES RESTON / WASHINGTON, Oct. 7[, 1967] — Three men now dominate political discussion in the world—President Johnson in the United States, General de Gaulle in Europe, and Mao Tse-tung in Asia. For the moment, what Johnson decides about the war in Vietnam, what de Gaulle thinks about the organization of Europe, and what Mao decides or thinks about the future of Asia command the attention and influence the course of world politics. But only for the moment. They are all in trouble with their own people. They dominate the news but not the deeper trends of history. On the surface they are decisive, but the tides are running against them. … The main issue of the coming generation is not Johnson, de Gaulle and Mao, not Vietnam or the glory of France or the little red book sayings of China’s aging political philosopher, but the maintenance of peace, the danger of racial war between the hungry agricultural nonwhite nations and the affluent industrial white nations, and the danger of war between the races and the classes in the United States and in Latin America. The question is how to get down to these basic issues.”

(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 undermines Tillerson on DPRK; WTO filing on data flows; WH China policy ‘under review’ (2017.10.02)

Welcome to Issue 115 of U.S.–China Week. 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].

THE PRESIDENT’S MEN?
After Tillerson in China says U.S. has ‘channels open’ to North Korea, Trump says ‘he is wasting his time’

Secretary of State Rex Tillerson said during a trip to Beijing that, with North Korea, “We ask, ‘Would you like to talk?’ We have lines of communications to Pyongyang—we’re not in a dark situation, a blackout. We have a couple, three channels open to Pyongyang.” An NYT report  continued: “‘We can talk to them,’ Mr. Tillerson said at the end of a long day of engaging China’s leadership. ‘We do talk to them.’ When asked whether those channels ran through China, he shook his head. ‘Directly,’ he said. ‘We have our own channels.'” Tillerson had met with President Xi Jinping, State Councilor Yang Jiechi, and Foreign Minister Wang Yi on an accelerated schedule following an aircraft-related delay in Japan. President Donald Trump, for his part, tweeted “I told Rex Tillerson, our wonderful Secretary of State, that he is wasting his time trying to negotiate with Little Rocket Man… …Save your energy Rex, we’ll do what has to be done!”

ANALYSIS: Tillerson may have said more than he intended to when he vaguely revealed the existence of “our own channels” between Washington and Pyongyang, or perhaps he was intentionally sending a deescalatory signal. But it’s clear that Trump undermined the credibility of any such channels through his public statement that Tillerson was “wasting his time” by trying to pursue talks. The president also undermined his emissaries across the government as they make statements from the banal to the strategically calculated. Should anyone take seriously even Tillerson’s pro forma statement while meeting Xi (video and text) that “President Trump is looking forward with great anticipation to the summit here in Beijing”? The talking point from the administration following Trump’s extraordinary undermining of his top diplomat—that this was “good cop, bad cop” posturing—is probably a fabrication. But it’s arguably even more alarming if the White House believes muddying the waters about the U.S. position regarding military conflict with North Korea is going to serve what they believe are U.S. interests.

MEANWHILE: Chairman of the Joint Chiefs of Staff Gen. Joe Dunford said, “If I look out to 2025, and I look at the demographics and the economic situation, I think China probably poses the greatest threat to our nation.” And the new “U.S.–China Social and Cultural Dialogue”—an apparent repackaging of the U.S.–China Consultation on People-to-People Exchange that used to take place alongside the Strategic and Economic Dialogue—held its first meeting in Washington before Tillerson’s trip (U.S. readoutXinhua English). That leaves the “law enforcement and cybersecurity” dialogue as the only remaining “new” channel that hasn’t yet met since they were announced in April.

TRADE + INVESTMENT
White House China policy review said to focus on trade and economics; Ross returns from China trip; Long arm of CFIUS

Politico reported that “the White House is quietly conducting a comprehensive review of its approach toward China” at the initiative of the National Security Council and National Economic Council. Politico’s sources said the review was to focus on economic issues, with other possible focuses on Chinese investments and national security, industrial policy, cybersecurity, and national security–linked export restrictions. “The report is expected to include hundreds of policy options, ranging in severity,” Politico reported, suggesting that the review may not so much produce a strategy as prepare measures for possible implementation. News of the review came as Commerce Secretary Wilbur Ross returned from a preparatory trip to Beijing, where he met with Premier Li Keqiang, Vice Premier Wang Yang, and NDRC head He Lifeng, according to Reuters. Expressing his views after the China trip, Ross said, “The most important thing is better market access both for companies operating there physically and for companies exporting there.” “I don’t want to give the impression that we made any concessions on the trip,” Ross reportedly said. “We did not, nor did the Chinese side.”

ANALYSIS: While the Politico report on a China policy review is sketchy, it would be a fantastic waste of time to attempt a policy review on China that did not take seriously the Asia-Pacific regional security environment alongside the economic angles. Chinese officials will link the economic and the geopolitical, as will the ties that bind among allies and trade partners across the region. If U.S. strategists fail to make those links, their strategies will either fail or produce untold unintended consequences.

MEANWHILE: Chinese investors seeking to acquire a minority stake in a Europe-based mapping company were spurned by the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments for national security concerns. Though CFIUS is generally part of the story when a foreign entity would take a controlling stake, Bloomberg reported, “CFIUS reviews of minority investments aren’t unheard of. The panel last year decided to review China’s Tsinghua Unisplendour Corp.’s plan to buy a 15 percent stake in hard-drive maker Western Digital Corp. Western Digital terminated the deal after CFIUS decided it had jurisdiction over the transaction.” FT reported that the company in the mapping transaction was encouraged to apply directly to Trump.

CYBERSPACE + TECH
U.S. WTO filing targets Chinese draft measures and standard on cross-border data transfers, tying them to services trade

In a filing at the World Trade Organization, the U.S. government raised concerns about two documents the Chinese government has released that, if put into effect, would make more concrete some of the vague language of the Cybersecurity Law and the National Security Law. The U.S. filing argues that the two documents—Measures on the Security Assessment of Cross-Border Transfer of Personal Information and Important Data, and a draft standard on the same topic—”could have a significant adverse effect on the trade in services, including services supplied through a commercial presence and on a cross-border basis.” Later, the document charges: “the measures would impose special scrutiny, particular procedures, or bans on the cross-border transfer of expansive and loosely-defined categories of data. The result would be to discourage cross-border data transfers and to promote domestic processing and storage. The impact of the measures would fall disproportionately on foreign service suppliers operating in China.” The U.S. document concludes: “We request that China refrain from issuing or implementing final measures until such concerns are addressed.”

ANALYSIS: In June, two colleagues and I translated an essay on these issues by Yanqing Hong, a Peking University researcher who also plays a direct role in formulating Chinese policy in these areas. It’s still well worth a read. Perhaps the most interesting element of the U.S. document is that it does propose alternative methods to achieve some of China’s data security goals: “Many less burdensome options exist to achieve privacy objectives, including compliance with international cross-border privacy frameworks, such as the APEC Cross-Border Privacy Rules System endorsed by China; contractual agreements between network operators and third party recipients; and third-party accreditation.” Asking China to simply not implement its own solution is unlikely to succeed, however. More realistic is a gradual increase in clarity about what activities are to be covered and not covered by various parts of the emerging data protection regime—and lobbying could have real effect in that creeping clarity. As China’s cyberspace regulatory regime develops rapidly, it’s worth noting that foreign firms aren’t the only ones operating under uncertain conditions. Chinese companies too are subject to shifting regulatory winds—just not as much the headwinds at the border.

#USChinaWeek1967
‘U.S. Urged to Back Peking Seat in U.N.’

“WASHINGTON, Sept. 25[, 1967] — Communist China’s test explosion of a hydrogen bomb this summer makes it more urgent than ever for the United States to support its membership in the United Nations, a panel of influential businessmen, scholars and former government officials said today. The panel issued a report recommending membership in the United Nations General Assembly for both Communist China and Nationalist China and, if Peking accepted this arrangement, giving China’s Security Council seat to the Communist regime. The 26-member group, sponsored by the United Nations Association of the United States of America, is headed by Robert V. Roosa, a former Under Secretary of the Treasury, and Frederick S. Beebe, chairman of Newsweek, Ink., and the Washington Post Company. … Charles W. Yost, former deputy chief of the American delegation to the United Nations and a panel member, asserted that the absence of the Peking regime had ‘handicapped’ the international organization dealing with such vital issues as arms control and the Vietnam war. ‘No one thinks it’s going to be easy to even extend the invitation or to bring Peking in on acceptable terms, or even to live with them once they are in,’ said Mr. Yost. ‘Nevertheless, the importance outweighs the difficulties.'”

(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: Bannon’s Beijing, Trump and Kim, ‘cyber superpower’ strategy (2017.09.25)

Welcome to Issue 114 of U.S.–China Week. At New America today, Elsa Kania, Samm Sacks, Paul Triolo, and I are out with a translation of an important recent essay in Qiushi (PDF version here) on the official rhetoric and strategies for increasing the Chinese government’s power in cyberspace. It’s mostly candy for China tech policy watchers, but it is the best up-to-date one-stop summary of China’s strategies you’ll find, and it also contains significant signaling on the U.S.–China cyberspace dialogue processes. The authors, from a previously unknown unit of the Cyberspace Administration of China, say China should “work with U.S. Internet companies and think tanks to strengthen joint activities and successfully conduct China-U.S. Internet forums and high-level China-U.S. expert meetings on international cyberspace rules, etc.” They also call for work with Russia, Europe, and Belt and Road states. This comes as U.S.–China cyberspace dialogue is stretched across several different channels and at a time when U.S. policy on online issues is murky. In a short introduction, Paul Triolo and I anticipate that President Xi Jinping and colleagues will further push China’s leadership role in global Internet governance.

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].

THE PRESIDENT’S MEN?
Former Trump strategist Steve Bannnon meets Wang Qishan in Beijing—let’s all speculate

Steve Bannon, President Donald Trump’s former top strategist until he was removed following a China-directed interview with the liberal American Prospect, made comments in Hong Kong last week that appeared more attention-seeking than newsworthy. This week it emerged in FT reporting that Bannon then went to Beijing and met Politburo member and anti-corruption chief Wang Qishan. That’s newsworthy.

Wang Qishan had supposedly initiated the meeting in early September, FT later reported, and Bannon also hoped he might meet President Xi Jinping, which apparently did not happen. NYT reported that former Goldman Sachs president and Brookings Institution board co-chair John Thornton “helped arrange” the Bannon-Wang meeting.

Numerous observers want this news to tell us something—about Bannon’s continued influence, about Wang Qishan’s chances of remaining in the Party leadership after the 19th Party Congress next month, or about the trajectory of U.S.–China relations leading up to Trump’s November visit.

Hold your horses. Bannon as Trump’s trusted backchannel to Beijing? It’s at least as likely that he’s trying to pass himself off as such as it is to be true. (Recall Henry Kissinger’s trip to Beijing, coinciding with a Trump call with Taiwanese President Tsai Ing-wen that Kissinger probably didn’t see coming.) A Bannon meeting signaling Wang’s career durability? Let’s see what meetings he takes after the Party Congress before extrapolating. Bannon’s “economic war with China” message betwixt the two leaders? Any Bannon role must be viewed in the context of official ties such as Ross’ visit this week, and taking into account that China’s leaders will discount any statement of Trump administration preferences as potentially temporary.

KOREAN PENINSULA
Trump’s ‘Rocket Man’ rhetoric, U.S. jet fly-bys, and debate over whether the United States is at war with North Korea

In his address to the United Nations, Trump said, “The United States has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea. Rocket Man is on a suicide mission for himself and for his regime.” Kim Jong-un responded with an unusual direct attack on Trump, calling him a “dotard.” The U.S. military reportedly flew military aircraft near North Korea. The North Korean foreign minister said to reporters: “Since the United States declared war on our country, we will have every right to make countermeasures, including the right to shoot down United States strategic bombers even when they are not inside the airspace border of our country.” The White House spokesperson then said “We have not declared war on North Korea.” There were plenty of Trump tweets and little discernible strategic cohesion behind them.

ANALYSIS: As Trump emissaries visit Beijing in preparation for his visit there in November (as Commerce Secretary Wilbur Ross was reportedly doing today), consider how the Chinese government’s representatives might be guessing at the relevance, authoritativeness, or permanence of U.S. official statements—given what they know about the immoderate, changing, and uncoordinated nature of the volatile U.S. president’s statements on a matter so grave as reviving the Korean War with nuclear weapons on both sides. If China’s government had the power to single-handedly solve the Korean Peninsula dilemma, one has to imagine current conditions would make doing so an appealing option.

TRADE + INVESTMENT

  • China has blocked WhatsApp almost completely as of the weekend, NYTreported.
  • The U.S. International Trade Commission “found that low-cost, imported solar panels from China and other countries have hurt two domestic manufacturers. They are Georgia-based Suniva and Oregon-based SolarWorld,” NPR reported. “China’s Ministry of Commerce called on the United States to “exercise caution” on trade restrictions and rejected the US International Trade Commission’s ruling on Friday that the cheap [solar panel] imports were responsible for the woes of the two companies,” SCMP reported.
  • A Chinese group that was stopped by Donald Trump from buying a US chip-maker last week has announced a £550m takeover of British chip designer Imagination Technologies,” The Guardian reported.
  • WSJ reported on a $9 billion Chinese effort to gather DNA samples and conduct related research through 2030, with this interesting tidbit for data protection watchers: “Scientists collecting data for the Chinese government haven’t been told where to upload it. Instead, universities are squeezing genetic information—each human’s genetic code takes up gigabytes of storage—on to their own servers.”
  • AP reported on a four-month crackdown on intellectual property violations, which it identified as “an effort to mollify foreign companies ahead of a visit to Beijing by U.S. President Donald Trump.”
  • National roll-out for China’s “negative list for foreign investment…will be adopted nationwide as early as 2018,” Xinhua reported.

#USChinaWeek1967
‘[Long Island] Man Describes Detention by China’

“HONG KONG, Sept. 20[, 1967] — A yachtsman from Baldwin, L.I., described today how he was at first almost ‘scared to death’ and later almost ‘bored to death’ during a month-long enforced stay in Communist China. He is David J. Steele, 39 years old, who has been supplying manager for Esso Petroleum Company in Saigon for the last four years. Although he was subjected to intensive interrogation during the first week of his detention, Mr. Steele was treated reasonably well by the Chinese and appeared in good health as he discussed his detention at a news conference here today. Mr. Steele sailed for Hong Kong early last month in a 32 1/2-foot trimaran that he built himself in Saigon. On Aug. 17 near Hainan he was intercepted by fishing trawlers. Mr. Steele was forced to board a Chinese trawler and his craft was taken in tow. It later turned over and sank. He was later taken to Canton and arrived by train yesterday.”

(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].