A broad new U.S. confrontation against China?– China’s trade waiting game – Elections loom (2018.09.24)

Welcome to Transpacifica Issue 11. The U.S. news environment is as chaotic as I can ever remember, and foreign policy is generally an afterthought; even a north-south summit in Korea barely mustered a 36-hour news cycle.

Like it or not, however, U.S.–China relations is on the front pages most days, primarily for the drip of “trade war” moves and messaging, but also with heightening attention to the South China Sea and rightfully surging alarm and outrage about Chinese government abuses in Xinjiang. More on all of this below.

But first: Out today from New America’s DigiChina project is our translation of the new Cyberspace Administration of China (CAC) chief Zhuang Rongwen’s first big statement since taking the job—an essay in the Party journal Qiushi about keeping pace with technology in propaganda and public opinion work. Propaganda is one of CAC’s key roles, but Zhuang’s focus here and many of the particulars of his approach have implications for the newly elevated agency’s roles in other areas, including digital economy regulation and cybersecurity. Read it.

We also upgraded the monthly DigiChina Digest newsletter. A team of contributors now compiles and translates excerpts of items that don’t get our full translation and analysis treatment. Check out this first upgraded issue here, including coverage of Didi’s data-handling dilemmas, an excerpt from another minister’s Qiushi essay, and of course a link to subscribe. –Graham

As always: Please encourage friends and colleagues to subscribe to the Transpacifica newsletter; here is the web version of this message, 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]om.

Is the Trump administration readying a broader public fight with China?

The U.S. government is already deep in a confrontation with Chinese counterparts over trade, investment, and development policies. The items below could well be a series of coincidences, but I wonder whether they represent an ongoing surge in confrontational and competitive behavior from the U.S. side on a much broader agenda. Consider:

  • After a period of relative quiet regarding the South China Sea, the U.S. military has invited at least two journalists to fly along through the region in U.S. reconnaissance planes (CNNNYT). An earlier CNN fly-along featuring journalist Jim Sciutto, who had recently served a stint working at the U.S. Embassy in Beijing, came at a time when U.S. Pacific Command was rumored to be pushing the Obama administration for more action. To draw conclusions about intentions behind the stories, though, I would want to know whether reporters are constantly requesting this kind of access and only occasionally getting it, whether the military is reaching out, or whether CNN and NYT journalists simply had a similar idea around the same time. (Drop me a line if you have insights.)
  • Commerce Secretary Wilbur Ross is reportedly supporting a bill in Congress that would create an agency to invest up to $60 billion to compete with Chinese development initiativesFT reported.
  • The Justice Department ordered Xinhua and CGTN, the new international name for CCTV, to register as foreign agents. They join China DailyPeople’s Daily, and Xin Min Evening News among Chinese media registered under the Foreign Agents Registration Act, Bloomberg reported. The move comes with some reporting requirements, but it seems more symbolic than effective in dealing with party-state propaganda.
  • The administration has so far said little about the abuses in Xinjiang, but a State Department spokesperson said: “We’re deeply troubled by the worsening crackdown, not just on Uighurs, Kazakhs, other Muslims in that region of China. There are credible reports out there that many, many thousands have been detained in detention centers since April 2017, and the numbers are fairly significant from what we can tell so far. Some of those disproportionate controls on ethnic minorities – expressions of their cultural and also their religious entities – have the potential also to incite radicalization and the recruitment of violence.” The next day, a group of lawmakers sent the Commerce Department a letter advocating for sanctions, a measure that NYTreported was under consideration within the administration.
  • Finally, Axios reported that the administration is preparing an “administration-wide” set of confrontations with China. “Administration officials will call out China for its ‘malign activity’ in cyberattacks, election interference and industrial warfare (e.g., intellectual property theft), an administration source told” Axios. One official said, “We’re not just going to let Russia be the bogeyman. It’s Russia and China.”

Not one of these issues is new, and by no means is the U.S. government the only player here. In the South China Sea, in international influence efforts, in disregarding human rights obligations, and in framing the United States as a rival in many ways, the Chinese government is no innocent. Still, I believe it is more prudent than cynical to ask whether there might be a political design to a new surge of confrontations with China in the lead-up to an election where the administration’s relationship with Russia is among the core narratives. Given everything else on the agenda, does a focus on Chinese election interference seem natural or strategic? If it turns out later that I’m seeing patterns where none exist, mea culpa. Stay critical, and let me know what you think.

Trade confrontation cementing for the short term, but U.S. situation cloudy beyond the midterms

The U.S.–China tit-for-tat tariff dynamic advances unabated, with U.S. tariffs implemented as of today on Chinese goods representing $250 billion in value. (Bloomberg’s Pete Martin has tweeted the best visual I’ve seen summarizing the stages of tariffs implemented and expected.)

Chinese officials pulled out of anticipated talks between the two sides, and the Chinese government issued a white paper outlining its position and version of the facts (Xinhua English summaryChinese full text).

In the short term, I see little chance of either side backing off. The Chinese side has no good reason to cave in the face of pressure. Even if U.S. measures do in fact exert significant economic pain, this will take time. The U.S. side could potentially look for a quick deal to declare victory before the midterms, but time is short, talks were cancelled, and objectives remain unclear. More likely, the U.S. administration will publicize domestic measures to offset losses suffered by certain key industries.

In the medium term (say 1–2 years), the Chinese side’s calculus stands to remain stable: Backing down looks bad politically and may not undo much economic pain anyway. Meanwhile the task of becoming more technologically independent seems even more urgent, and economic transitions that require some pain can be helpfully blamed on the United States. Chinese officials’ success is far from assured, but caving to what Xinhua called “trade bullyism practices” would be hard to finesse, even given the Party’s formidable propaganda efforts. On the U.S. side, uncertainty is great. There is no national consensus about objectives or strategies. The Republican Party itself is split, and (assuming no intervening event leads to Trump’s ouster) the conclusion of the midterms will leave open the question of a primary challenge for the 2020 Republican nomination, not to mention the potential loss of Congressional control. If Chinese policymakers can manage some economic pain, they may find themselves facing a less disruptive United States in the coming months or few years—again, with a convenient scapegoat for economic hiccups along the way.

About Transpacifica

The Transpacifica newsletter is produced by me, Graham Webster, a senior fellow with Yale Law School’s Paul Tsai China Center and fellow with New America, where I am coordinating editor of the DigiChina project, working from a home base in California. The opinions expressed here are my own, and I reserve the right to change my mind. For three years and 131 issues after its founding in February 2015, this newsletter was known as U.S.-China Week. It now appears biweekly, delivered by free e-mail subscription.

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