Category Archives: U.S.–China Week

U.S.–China Week: U.S. strategy calls China ‘revisionist power’ and ‘competitor’; drumbeat of China-focused trade moves (2017.12.18)

Welcome to Issue 121 of U.S.–China Week. I’m back in Oakland after a busy trip to Beijing, Shanghai, and Wuzhen, Zhejiang, where I had the chance to attend the Chinese government’s World Internet Conference. This edition covers the new National Security Strategy and a gathering tide of trade and investment action by the U.S. government, but first:

  • Before the Wuzhen show, the New America DigiChina team and our CSIS colleague Samm Sacks published “China’s Cybersecurity Law One Year On: An Evolving and Interlocking Framework“—our effort to summarize what has already emerged and what’s still a work in progress a year after the law’s text was released and six months after it officially took effect.
  • After the Wuzhen show, we observed that a (to us) crucial speech by new Politburo Standing Committee Member Wang Huning at the conference had not been published in full. Based on audio, we transcribed and translated the speech, which goes into some detail on cyberspace policy, including cross-border data flows. This New America post by Rogier Creemers, Paul Triolo, Jennifer Meng, and myself.
  • Happy news: U.S.–China Week was listed in “SupChina Sources 2017,” which provides a great compilation of resources on China and the world from the folks who bring us SupChina and the Sinica podcast. Congrats to the many colleagues and subscribers out there who were also recognized.

After today, U.S.–China Week is going on winter vacation, both to take time off for the holidays and to plan for this project’s future. I commit to being back with you by February 9, the third anniversary of the first “beta” edition. Thanks for reading, writing, and arguing—and see you in 2018!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].

SIGNALS
Trump ‘National Security Strategy’ positions China, Russia as ‘revisionist powers’; Official won’t say Trump has read it

The White House today released a new National Security Strategy, Trump’s first and the first since Obama’s last document in 2015. Here at Transpacifica, I excerpted the main sections having to do with U.S.–China relations and made some comments. I’ll mention a few here, but the most important thing to keep in mind is that this document may not reflect the behavior of the president. Indeed, a spokesperson for the National Security Council told CNN: “I can’t say that [Trump] has read every line and every word” of the big-splash new document. This fact is of a kind with broader Trump administration policymaking: Bureaucrats working with a variety of agendas and at varying levels of professionalism may produce visions, but execution at the presidential level is subject to Trump’s own erratic style. Professional bureaucratic counterparts in other capitals, and certainly in Beijing, are left without reliable signals except to say that a remarkably less friendly framing of U.S.–China relations made it past final approvals to be introduced by a Trump speech.

The strategy, whatever its strategic weight, signals attention to intellectual property and the U.S. “National Security Innovation Base (NSIB),” introduced in this document in a paragraph that begins, “Every year, Competitors such as China steal U.S. intellectual property valued at hundreds of billions of dollars.” This plays into the trade and investment developments below—and it reflects the rather Beijing-compatible Trump administration argument that “economic security is national security”—a phrase highlighted in today’s strategy.

At the most basic level, China is highlighted as one of “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.”

Perhaps the broadest statement of explicit separation from past China policy is this: “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.”

Paired with the observation that “great power competition has returned,” it’s hard to conclude that the drafters envision substantial cooperation with China. Add to that the apparently imminent U.S. actions against China on trade issues, and U.S.–China relations appear to be in for much more friction. The grand caveat is at the top of the U.S. government; I’m not going to make confident predictions of where the Trump administration or the president’s own inclinations will go—especially when I’m stepping away from the newsletter for several weeks.

Much more to digest in my fuller jottings on China-relevant passages.

TRADE TIDES

  • U.S. charges three Chinese for hacking U.S. firms, and reports link their cybersecurity firm to the Chinese government
    Three Chinese hackers working for a company known as Boyusec were charged for hacking three companies and taking “trade secrets,” “proprietary commercial data,” and “proprietary and confidential economic analyses, findings and opinions” from three separate firms.

    The U.S. government announcement included the phrase “commercial advantage” in its headline, and the indictment noted that one of the alleged victims’ geographic positioning technologies “had no military applications”—both clear call-outs to the Obama-Xi statements of Sept. 2015 that, as Obama put it, neither government would “conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information for commercial advantage.”

    Though the U.S. releases did not tie the hackers or Boyusec to the Chinese government, security researchers had previously identified Boyusec as the entity behind a hacking group known as APT3 and linked Boyusec to China’s Ministry of State Security. Josh Chin of WSJ reported that Boyusec dissolved in the weeks before the announcement and that U.S. officials got “no meaningful response” when they reached out to the Chinese government on this case before going public.

    My Yale colleague Rob Williams and Harvard’s Jack Goldsmith argued that the indictment “suggests that China is either violating the 2015 deal or exploiting its ambiguities and thus exposing the norm against commercial cybertheft as weak.” If Boyusec was indeed acting on behalf of the MSS, that much seems clear.

  • U.S. formally opposes granting China market economy status at WTO
    Reuters reported: “The United States has formally told the World Trade Organization (WTO) that it opposes granting China market economy status, a position that if upheld would allow Washington to maintain high anti-dumping duties on Chinese goods. The statement of opposition, made public on [Nov. 30], was submitted as a third-party brief in support of the European Union in a dispute with China that could have major repercussions for the trade body’s future. The U.S. and EU argue that the state’s pervasive role in the Chinese economy, including rampant granting of subsidies, mean that domestic prices are deeply distorted and not market-determined.” A Xinhua commentary said the U.S. position was “in reckless disregard of the relevant WTO rules.”
  • U.S. probe into Chinese aluminum marks first ‘self-initiated’ action against major partner in decades
    FT reported: “The move to ‘self-initiate’ an anti-dumping investigation into imports of aluminium sheeting from China marks the first time since 1985 that the US Commerce Department has launched its own investigation without a formal request from industry. The last case was brought by the Reagan administration against Japanese semiconductor imports and came at a time of high trade tensions. A parallel investigation launched on Tuesday into illegal subsidies given to the Chinese sheet industry marks the first time since a 1991 Canadian lumber case that the Commerce Department has self-initiated a probe into subsidies.” China’s Ministry of Commerce reportedly expressed “strong dissatisfaction.”
  • USTR’s 301 investigation report circulating
    Politico reported: “Two sources told Morning Trade that USTR has completed a draft report that is now being shared with the interagency committee overseeing the investigation. A USTR spokeswoman wouldn’t comment on the report’s status, but said it has not gone to the White House and declined to provide any update on when it would be released.”
  • Treasury official: New ‘Comprehensive Economic Dialogue’ is ‘stalled’; Branstad: No U.S. decision on future of BIT talks
    FT reported that David Malpass, under secretary of treasury for international affairs, said the new Comprehensive Economic Dialogue was at least temporarily defunkt. “China is not moving in a market-oriented direction so for now the CED is stalled,” FT quoted him as saying. “There is not a dialogue on restarting the CED.” / U.S. Ambassador to China Terry Branstand said that, on earlier talks for a U.S.–China bilateral investment treaty that had been progressing quietly through the end of the Obama administration, “the administration has not made the decision whether to go forward.”

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: 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].