Perhaps nowhere outside America\u2019s heartland is Donald Trump given more credit than in Beijing.<\/p>\n
In government offices and think tanks, universities and state-run newsrooms, there is an urgent debate underway about what many here see as the hidden motive for Washington\u2019s escalating trade war against President Xi Jinping\u2019s government: A grand strategy, devised and led by Trump, to thwart China\u2019s rise as a global power.<\/p>\n
\u201cThe Trump administration has made it clear that containing China\u2019s development is a deeper reason behind the tariff actions,\u201d said He Weiwen, a former commerce ministry official and now a senior fellow at the Center for China and Globalization, an independent research group filled with former bureaucrats.<\/p>\n
These sentiments were echoed by many of the more than two dozen current and former government officials, business executives, state-affiliated researchers, diplomats and state-run media editors interviewed for this article. Most requested anonymity to speak their minds about sensitive matters.<\/p>\n
A common suspicion ran through the conversations — that the tariffs are just a small part of Trump\u2019s plan to prevent China from overtaking the U.S. as the world\u2019s largest economy. Several people expressed concern that the two nations may be heading into a long struggle for global dominance that recalls the last century\u2019s rivalry between the U.S. and Soviet Union.<\/p>\n
\u201cThe trade war has prompted thinking in China on whether a new cold war has begun,\u201d said An Gang, a senior research fellow at the Pangoal Institution, an independent research group in Beijing whose experts include former government officials. The dispute, he says, \u201cnow has military and strategic implications\u201d — reflecting concern among some in Beijing that tensions could spill over into Taiwan, the South China Sea and North Korea.<\/p>\n
The general pessimism is a major shift among China\u2019s elite, many of whom had initially welcomed the rise of a U.S. president viewed as a transactional pragmatist who would cut a deal to narrow a $375 billion trade deficit for the right price. Now, with tariffs<\/a> on $34 billion of goods already in effect and duties on another $216 billion in the pipeline, a majority saw no quick fix to a problem that is starting to rattle the country\u2019s top leaders.<\/p>\n The turning point came a few months ago, when Trump put a stop to a deal for China to buy more energy and agricultural goods to narrow the trade deficit. Not only did that insult Xi, China\u2019s all-powerful leader who had sent a personal emissary to Washington for the negotiations, but it crystallized a view in Beijing that Trump won\u2019t quit until he thwarts China\u2019s rise once and for all.<\/p>\n \u201cDonald Trump is a smart negotiator who has accumulated abundant experience in doing business for many years — and also from the show \u2018The Apprentice,\u2019\u201d said Wang Huiyao, an adviser to China\u2019s cabinet and founder of the Center for China and Globalization, whose advisory council is stacked with former lawmakers. While \u201cChina is open to negotiations,\u201d he said, Trump\u2019s pressure tactics \u201cwill only arouse Chinese nationalism, which will be counterproductive.\u201d<\/p>\n The ramifications of that are now rippling through a society that has embraced America\u2019s consumer culture — Big Macs, Bentley cars and Chanel handbags are ubiquitous in Beijing — even as it retains a one-party political system that champions large state enterprises and has little tolerance for dissent.<\/p>\n The trade war is leading to some soul searching in Beijing. Discussions quickly turn to the sustainability of China\u2019s state-centered economy and the leadership of Xi, who can rule the country indefinitely after he led a successful effort earlier this year to repeal presidential term limits.<\/p>\n The hushed debate centers over the wisdom of Xi\u2019s goals for rapid growth and his decision to announce China\u2019s ambitions to the world. This was a dramatic shift from former leader Deng Xiaoping\u2019s famous dictum, \u201cHide your strength, bide your time.\u2019\u2019 Critics of Xi say policies like Made in China 2025 (a plan to dominate industries such as aircraft, new energy vehicles and biotechnology) and the Belt and Road Initiative (a mechanism to finance infrastructure investments around the globe) raised alarm in the West, and prompted the U.S. to target China before it could build critical technologies.<\/p>\n This was seen by how swiftly Trump could bring down ZTE Corp., China\u2019s second-largest telecommunications equipment maker. In April, his administration prohibited the company from buying essential components from American suppliers after it violated laws banning the sale of U.S. technology to Iran. The move prompted ZTE to cease major operating activities until Trump came to the rescue and helped engineer a settlement.<\/p>\n Although ZTE is now back up and running, the episode showed China just how dependent the nation is on the U.S. for high-end know-how. It has also highlighted wider efforts to block Chinese firms from acquiring tech companies by the Committee on Foreign Investment in the United States, which reviews deals on national security grounds. All in all it amounts to \u201chigh-tech containment\u201d of China, said Shi Yinhong, a foreign affairs adviser to the State Council and director of Renmin University\u2019s Center on American Studies in Beijing.<\/p>\n The U.S., of course, sees things differently. Officials have repeatedly said they don\u2019t want to prevent China from growing, they just want to stop it from breaking the rules and stealing intellectual property — allegations that officials in Beijing repeatedly deny.<\/p>\n The Pentagon recently named China and Russia as two U.S. rivals actively seeking to \u201cco-opt or replace the free and open order that has enabled global security and prosperity since World War II.\u201d Last month, U.S. Secretary of State Michael Pompeo obliquely criticized China for wooing developing countries with cheap financing for infrastructure projects, saying the U.S. believes in \u201cstrategic partnerships, not strategic dependency.\u201d<\/p>\n \u201cWith American companies, citizens around the world know that what you see is what you get: honest contracts, honest terms and no need for off-the-books nonsense,\u201d Pompeo said in a speech before he attended a regional security forum in Singapore. Another advantage of the U.S., he said, is that \u201cwe will help them keep their people free from coercion or great power domination.\u201d<\/p>\n Across the political spectrum in China, from reformers to nationalists, there\u2019s a growing consensus that the nation needs to open up more to foreign business, better protect intellectual property and create a more level playing field. The confrontation with the U.S. was \u201cdue in large part to China doing nothing for many years\u201d to reduce the surplus, widen market access and ease state control, according to Shi from Renmin University. \u201cChina faces a new, uncertain situation and needs to undergo review and adjustment,\u201d he said. \u201cWe didn\u2019t consider other nations\u2019 feelings in our strategic great leap forward.\u201d<\/p>\n Yet sentiments like these are tempered by a reluctance to be seen as bending to Trump\u2019s demands. Several people said that at first they viewed the U.S. tariffs as not all bad if they prompted the government to make long overdue adjustments in China\u2019s approach to doing business with the West. But as the trade war, and the war of words, has escalated, many of these same people are now digging in against the U.S., saying China won\u2019t be bullied.<\/p>\n Apart from some criticism<\/a> from academics and grumbling from unnamed officials, so far there\u2019s little visible sign from China\u2019s opaque government that the trade war has impacted Xi\u2019s ability to control the levers of money and power. If Xi and his ministers are themselves suffering any doubts, it\u2019s not reflected in the official press. The People\u2019s Daily newspaper — the main mouthpiece of the Communist Party — recently confronted critics who say it was a mistake for China to be so public with its global goals.<\/p>\n \u201cSuch a heavyweight cannot be hidden by taking a \u2018low key\u2019 approach,\u201d the paper said in a commentary last week, \u201cjust like an elephant cannot conceal its body behind a small tree.\u201d<\/p>\n Beijing has signaled a willingness to strike a deal that narrows the trade deficit. But policy advisers see little room to budge on some of Trump\u2019s other demands, including an end to subsidies for strategic industries, a stop to forced technology transfer and more competition for state-owned enterprises. Those stipulations — shared widely by both Republicans and Democrats alike — are seen as posing an existential threat to the Communist Party, whose legitimacy to rule hinges on its ability to improve livelihoods.<\/p>\n Trump has tried to portray China as an adversary on the ropes, with a falling stock market, sliding currency and slowing economy. It\u2019s certainly true that the U.S. economy is far stronger than China\u2019s. But in Beijing, there is general confidence that in a test of wills between the two presidents, it\u2019s Xi — who doesn\u2019t have to worry about elections or the wrath of special interest groups — who can endure more pain.<\/p>\n China has also hinted there are ways to turn up the pressure on Trump, if necessary. Tariffs on automobiles, semiconductors and Boeing airplanes aren\u2019t off the table, according to Wei Jianguo, a former vice commerce minister and now vice director of China Center for International Economic Exchanges, a group with a mission to \u201cimprove China\u2019s soft power.\u201d While China is dependent on U.S. chips to make high-performance mobile devices and can\u2019t completely cut ties with Boeing, it served as the second-largest market for American-made cars after Canada.<\/p>\n \u201cIf you want to hit Trump hard, give him a right hook so he remembers the pain,\u201d Wei said.<\/p>\n The instinct to fight back comes naturally to China. The \u201cCentury of Humiliation\u2019\u2019 that followed the Opium Wars in the mid-1800s — in which foreign powers forced China to open its markets and provide access to strategic ports — is etched on the national psyche and used in Communist Party propaganda to spur nationalism.<\/p>\n Nearly everyone interviewed in Beijing was looking ahead to the mid-term elections in the U.S. to see where things go next. While Standard Bank predicted on Aug. 15 that Trump would look to cut a deal before then to ride a stock-market surge to victory, the consensus in China saw a higher chance of a deal if the Republicans get walloped, as polls predict. China announced on Thursday that lower-level<\/a> talks were set to resume later this month.<\/p>\n \u201cWe\u2019re talking to China, they very much want to talk,\u201d Trump said Thursday at a cabinet meeting at the White House. \u201cThey just are not able to give us an agreement that is acceptable, so we\u2019re not going to do any deal until we get one that\u2019s fair to our country.”<\/p>\n Next to nobody is betting on a quick resolution. While Trump could tactically shift course at any time — similar to what he\u2019s done with Nafta, the European Union and North Korea — with China he\u2019s persistently ignored opportunities to lower tensions.<\/p>\n \u201cThe U.S. and China are now in the most dangerous period in the past 40 years,\u201d said Lu Xiang, an expert in relations between the countries at the government-run Chinese Academy of Social Sciences. \u201cMr. Trump put a knife on our neck. We will never surrender.\u201d<\/p>\n <\/p>\n\u2018Smart Negotiator\u2019<\/h3>\n
Xi Criticism<\/h3>\n
\u2018Off-The-Books Nonsense\u2019<\/h3>\n
\u2018Most Dangerous Period\u2019<\/h3>\n