China kowtows to Donald Trump over trade

China kowtows to Donald Trump over trade

Xi Jinping has blinked first in the battle of the superpowers. It’s because he fears the president, says an influential US aide

China is making “extraordinary concessions” to America in the dramatic trade war between the two superpowers, according to one of President Donald Trump’s key advisers.

A lifelong China obsessive, Michael Pillsbury has worked as a CIA spy, fed information about the Soviets to Henry Kissinger and developed defence strategy for Ronald Reagan. The 73-year-old is now director of Chinese strategy at the Hudson Institute, a think tank.

Pillsbury has become known as Trump’s China muse and been brought into the president’s inner circle to develop strategy for the standoff with President Xi Jinping.

Last week, China started buying American soya beans for the first time since the trade war began in July. It also confirmed it would temporarily reduce tariffs on American cars.

“China has made about four major concessions in recent weeks,” Pillsbury told The Sunday Times. “They’ve increased penalties for intellectual property theft. And they’re backing down over Made in China 2025 [a plan to make China a dominant producer of high-tech goods]. I’m feeling optimistic.”

He added: “The Chinese see Trump as a worthy opponent. But instead of saying, ‘All right, we’re scared of President Trump’, they come up with a whole new explanation for these changes in policy.”

As the president was preparing for his high-stakes showdown with Xi at the G20 in Buenos Aires, Pillsbury was called into the Oval Office to offer his advice.

“I told the president to see it as though it was a real estate deal in New York,” he said. “They are looking for the minimum price and for the minimum concessions that they have to make.”

At the G20, Trump and Xi agreed a 90-day pause in the trade war. Tariffs will not rise during this window as the world’s two biggest economies seek to hammer out a workable deal.

The fragile peace was imperilled, though, by the arrest of Meng Wanzhou, a top executive at the technology giant Huawei, for allegedly violating American sanctions on Iran. She was seized in Canada on the day Trump and Xi sat down in Argentina and is awaiting possible extradition to America. The daughter of Huawei’s founder, Ren Zhengfei, Meng is admired in China and her arrest has set off a diplomatic firestorm, with Canada trapped in the middle.

China has described Meng’s detention as “unreasonable, merciless and very evil”. Two prominent  Canadians in China, one a former diplomat, have been arrested in apparent Retaliation.

On Wednesday, Trump waded into the Huawei row by saying he would consider halting the prosecution as a bargaining chip in the trade negotiations with China. This added to perceptions in China that Meng’s arrest was a political stunt.

It also rattled the Canadians. “It is very important for Canada that extradition agreements are not used for political purposes,” said the country’s foreign minister, Chrystia Freeland, on Friday.

Pillsbury believes Meng should be prosecuted if there is convincing evidence she broke US law. “This would be a good example of the rule of law being applied to a Chinese company in a positive way,” he said.

Huawei is the world’s second-largest producer of smartphones behind Samsung, having passed Apple. Meng’s arrest is a focal point for the stand-off between America and China, which is dominated by concerns over intellectual property theft, cyber-warfare and China’s road map to

global technological dominance.

“The use of deception and fraud is considered justifiable by the Chinese, because they believe that first the British, then the French, then us and, worst of all, the Japanese have oppressed and humiliated China and blocked their path to economic development,” said Pillsbury. “President Xi wants to make China great again.”

Pillsbury’s book, The Hundred-Year Marathon, argues that China is halfway through executing a secret century-long strategic plan to replace America as the global superpower, and that America must develop a counter-strategy before it is too late. He believes “panda-huggers” in Washington have been slow to recognise the danger posed by China.

When it was released four years ago, many in America’s foreign policy establishment considered it alarmist and conspiratorial. Now it is required reading at the highest levels of the Trump administration.

Pillsbury believes Trump sees in him a kindred spirit: “He recognises a fellow author with similar concerns.”Pillsbury is heartened that the consensus, which has been relatively favourable towards China, has shifted towards his more hawkish view. On Thursday, Trump’s national security adviser, John Bolton, announced a major shift in American policy towards Africa, aimed at countering massive Chinese investment there. Pillsbury believes America needs to assemble a coalition of like-minded powers, including Japan and India, to help contain China. “At its most basic, this is an American effort to preserve our primacy, against a challenge by someone who is not playing by the rules,” he said. “It’s not calling for their extermination, it’s not an ideological confrontation and it’s certainly not a nuclear arms race.”

Other experts are less optimistic about Trump’s policy and argue that China’s trade concessions are mostly cosmetic. “This administration has more of an attitude than a strategy,” said Graham Allison, author of Destined for War: Can America and China Escape Thucydides’s Trap? “It is not informed by any coherent, strategic thinking, which is dangerous because you’re stumbling off without a clear plan.”

Dean Cheng, a China expert at the Heritage Foundation, points to the disruptive timing of the Huawei arrest as an example of poor planning leading to a potentially dangerous crisis. “The First World War taught us that a crisis can develop a momentum of its own,” he said. “But the Chinese didn’t fight in that war. They believe crises can be controlled.

Xi: I’ve defeated corruption

President Xi Jinping has proclaimed “overwhelming victory” against corruption in the Communist . Party.Xi, who has been accused of purging his party under the guise of a six-year anti-corruption campaign, made the announcement to the politburo, the party’s decision-making body, on Friday. China’s powerful bribery watchdogs have punished 406,000 people this year

 

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