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Karl W. Smith writes: When it comes to China, however, the president is doubling down. He has encouraged U.S. supply chains to move out of China and established subsidy programs to cushion farmers from the effects of a protracted trade war. Which leads to the long-term implications of this battle. A protracted trade war would almost guarantee a global realignment. Supply chains that run through both the U.S. and China would constantly be subject to disruptions, so global manufacturers would have to decide whether to pursue an America-centric or China-centric strategy. – Bloomberg
David Auerswald writes: China’s Arctic Policy puts forward an alternative governance narrative that plays to many Arctic countries’ focus on multilateralism in regional politics. In 2013, China agreed to abide by the jurisdictional rights of the Arctic states as a condition of being granted Arctic Council permanent observer status. That gave China a voice in Arctic Council working groups discussing issues like climate research, search and rescue coordination, and fisheries management. – War on the Rocks
Jon. B Alterman writes: China’s Middle East strategy, then, is not so much a single regional strategy as a portfolio of investments. China’s national ambitions in each country are narrowly focused on economic ties, and state-owned enterprises closely follow governmental priorities. The United States has seemingly comprehensive plans in almost every country but few resources, and a business community that follows profits wherever they can be found. – Center for Strategic and International Studies
 In a Washington Post op-ed, Marc Thiessen explains that President Trump didn’t start the current trade war. China did. Beijing has been waging economic warfare on the US for years — stealing intellectual property, forcing American companies to transfer technology as a price of doing business in China, and subsidizing state-owned enterprises to prevent US businesses from competing in dozens of sectors of the Chinese economy. The difference now is that Chinese leaders are facing a president who is willing to fight back. Continue here. Will the US and China ever reach a trade deal? Following the collapse of trade talks last week, Derek Scissors joined CNBC to explain that Trump’s tariff decision is tied to the timing of the G20 summit in June, where Trump will have the chance to talk to Xi Jinping. If the US were planning to pose these tariffs in the long term, the timing would be to allow American businesses to adjust. Instead, the timing is for the negotiations. Watch here. Last week, Zack Cooper joined “The Mike Schikman Show” to discuss US-China relations. Cooper notes that despite the attention on the trade war, policymakers are also concerned with China’s security situation, human rights abuses, and projects such as the Belt and Road Initiative. China uses economic coercion to change the foreign policy decisions of states in Asia and increasingly much further abroad. Listen here. Turkey grapples with big trade deficit with China Amid Washington’s trade war on China, Ankara is also grumbling about a massive trade gap with Beijing, but a number of factors stand in Turkey's way to resolve the deficit. Victor Davis Hanson: US-China Confrontation Will Define Global Order
via Hoover Daily Report The United States is at a crossroads with an increasingly aggressive China, which could define America’s security and the international order for decades to come, Hoover scholar Victor Davis Hanson says.
Sharpening the US-China trade debate
Reuters China trade is being argued in strings of tweets and seven-minute (if you’re lucky) TV segments. As a result, no one gets it quite right. Derek Scissors gives corrections of four important missteps in the debate.
Selling China Short
Stephen Roach says that three recent books reveal more about their authors’ assumptions than about where China is headed. CHINA STARTED THE TRADE WAR; THE HAN MASTERS MISREAD TRUMP & US DOMESTIC SUPPORT AGAINST CHINA5/13/2019
Trump didn’t start this trade war. China did.
Marc A. Thiessen | The Washington Post We should all be able to agree that China is an economic predator against which we need to fight back. Trump is using tariffs to force China to open its markets to free trade and competition.
Sharpening the US-China trade debate
Derek Scissors | AEIdeas China trade is being argued in strings of tweets and seven-minute (if you’re lucky) TV segments. As a result, no one gets it quite right. Here are corrections of four important missteps in the debate.
The Strategic Logic Behind the Trade War – Robert Kelly, National Interest
HOW CHINA SEEKS TO REFORM BELT ROAD INITIATIVE & RATING AGENCIES AND BOND MARKETS FOR CHINA5/13/2019 
The Second Belt and Road Summit
By Roie Yellinek, May 13, 2019 EXECUTIVE SUMMARY: On April 25-27, 2019, Chinese President Xi Jinping convened a second summit of leaders and representatives from around the world to discuss his signature program, the Belt and Road Initiative. Xi’s keynote address revealed his take on Beijing’s trade struggle with the US as well as his approach to the concerns of poorer countries that lie along the initiative’s route. Continue to full article ->
Follow the Money China Never Stopped Managing its TradeSo long as the bulk of China's imports from the United States (and many others) are bought by state firms, China has the ability to manage its trade. The management isn't new. What's new is Trump's implicit willingness to accept managed trade so long as the trade is managed in a way that is judged to help the United States.
Blog Post by Brad W. Setser  Neena Shenai writes: Facing pressure for political wins and fixated on trade deficits, the Trump administration may settle for compelling China to buy more US exports and agree to unenforceable changes to its economic model. If it chooses this path, the US will have created a managed trade framework with China — adopting a model out of China’s playbook — at the cost of its commitment to free market values and the international economic architecture. – Financial Times
A better approach to China trade
Derek Scissors | AEIdeas The Trump administration’s approach so far to trade talks with China is to push the Communist Party to do for us what we haven’t done for ourselves. The better alternative is to put the talks on hold and fix America's China policies.
William Alan Reinsch writes: In attempting to produce an agreement on a prescription—a course of action for dealing with China—the most frequent recommendation is that we ought to work together—form a coalition to meet the China challenge collectively rather than individually. There is wisdom in that; China has demonstrated in the past that it does not like to be an outlier, and consistent, sustained pressure from many sources at a high level can alter their behavior. – Center for Strategic and International Studies
THEFT, DUMPING AND SUBMERGED MARKETS: CHINA TACKLES HOW TO DOMINATE EUROPE'S BEST DEEP PORTS4/10/2019
‘Submerging markets’ pose global threat
Desmond Lachman | Official Monetary and Financial Institutions Forum
Collin Meisel and Jonathan D. Moyer write: While power transitions in and of themselves are contentious business, one can imagine the added drama injected by the Chinese Communist Party as it strives to maintain power — both internally and on the world stage — wary of seeing China return to its much lamented 19th century status as “the sick man of Asia.” To be sure, even as the nation declines, Chinese leaders will have extensive material capabilities and a vast network of relational influence at their disposal should a power struggle ensue. – War on the Rocks
Xi Jinping is winning the national security war
(The National Interest) America is underreacting to the challenges posed by Beijing.
Does China Have Feet of Clay?
By Joseph S. Nye, The Strategist (ASPI): "Chinese President Xi Jinping seems to be on a roll. He has sent a rocket to the dark side of the moon, built artificial islands on contested reefs in the South China Sea and enticed Italy to break ranks with its European partners and sign on to China’s Belt and Road Initiative."
Seth Cropsey writes: There is insufficient evidence to conclude that China is preparing to initiate hostilities against either Taiwan or Japan. But China’s rulers have not ruled out force to, as they put it, “reunify” Taiwan with the PRC. And practice drills that simulate military movements in an actual conflict are standard armed force tactics. They provide an aggressor with important information about a potential opponent’s intelligence skills, command and control, response times, and tactical dexterity. – Hudson Institute
At the heart of President Trump’s negotiations with China is a troubling contradiction: The United States wants to use the trade talks to encourage the country to adopt a more market-oriented economy. But a key element of a prospective deal may end up reinforcing the economic power of the Chinese state. – New York Times
For decades, Italy felt the brunt of the Chinese economic juggernaut that the United States argues poses a threat to the financial and political future of the West. China’s government-backed manufacturers, operating on a much larger scale with much cheaper costs, devoured small Italian companies producing machinery, textiles and pharmaceuticals. Chinese knockoffs infuriated its high-fashion brands. – New York Times 
Derek Scissors writes: The near-universal belief that the People’s Republic of China (PRC) has already passed or is soon to pass the US in size has multiple distinct flaws. These range from the gross—Chinese government statistics are unreliable—to the subtle—none of the ways economic size is measured are especially reliable. The policies of the two countries matter, especially whether China ever returns to the pro-market reform path. While evaluating the competing development models is contentious and complex, growth arithmetic is simple. – American Enterprise Institute
Sadanand Dhume writes: In my most recent Wall Street Journal column — read it here — I point out China’s double standards on Islam and Islamist terrorism. At home, Beijing persecutes members of the Uighur minority merely for practicing their faith. Overseas, China supports Masood Azhar, a hardened Pakistani jihadist blamed by the US, the UK, and other major Western democracies for fomenting terrorism against India. […] China’s apparent double-standard can be explained by a mixture of Communist Party amorality and realpolitik. – American Enterprise Institute
The true trade deficit and China
Derek Scissors | AEIdeas It’s true that continued economic expansion would make the deficit with the People's Republic of China smaller as a share of total US wealth. It’s also true that a bilateral trade deficit is a dubious measure of success or failure. The question is whether people who were convinced by 2016 candidate Donald Trump’s talk of the greatest theft in history, millions of jobs lost, and even rape will be convinced by the president insisting the trade deficit doesn't matter now. CHINA'S BOND MARKET STILL SOURCE OF FISCAL, MONETARY PROBLEMS & HOW CHINA LEADS GLOBAL INDICES3/23/2019  China To Continue Proactive Fiscal Policy: Chinese Finance Minister
with Michael Spence via CGTNLarger-scale tax and fee cuts to the tune of nearly two trillion yuan are planned this year to ensure all industries will pay less, while urban employers can contribute a maximum of 16 percent of earnings to cover the basic pension, down from the previous 20 percent, China's top financial officer said on Sunday.
The High Costs of the New Cold War
By Minxin Pei, The Strategist (ASPI): “It’s convenient to call the escalating geopolitical contest between the United States and China a ‘new cold war’. But that description should not be allowed to obscure the obvious, though not yet sufficiently understood, reality that this new competition will differ radically from the Cold War between the U.S. and the Soviet Union."
Weifeng Zhong and Julian TszKin Chan write: The slowdown of China’s economic growth has little to do with the trade war. It’s a consequence of China’s development model that took shape during Former President Hu Jintao’s administration. The structural issues on which America is demanding change are essential components of this model, and there’s no sign that China will deviate from it anytime soon. We make these claims not as China watchers—although we are—but as developers of a machine learning algorithm that’s able to analyze the Chinese government’s agenda and predict its future direction. – The China Business Review
Will China fold on structural issues? An algorithm says not any time soon.
Weifeng Zhong and Julian TszKin Chan | China Business Review
Testimony: The future of the US-China relationship
Oriana Skylar Mastro | Senate Committee on Foreign Relations If Washington is unwilling to stand up to China as the most powerful nation in the world, it cannot expect anyone else to do so.
BY DAVID P. GOLDMAN ASIA TIMES, CHINESE FINANCIALS SOAR
Can the Chinese dream ever be realized? A long-read Q&A with George Magnus
James Pethokoukis | AEIdeas
China's Quiet Central Banking Revolution
Miao Yanliang welcomes the Chinese central bank's more open communication and increasingly flexible exchange-rate regime.
At stake is China’s avowed goal of establishing itself as a global superpower with influence over a network of allies to balance U.S. influence. China is pouring billions into global efforts such as Xi’s Belt and Road Initiative to forge stronger links with countries around the world. But China’s increasingly strident diplomatic approach could do more harm than good. – Bloomberg
 Nathaniel Taplin writes: Beijing and President Trump appear near to a trade deal: China buys a lot more U.S. stuff, gives some ground on auto-industry protections and intellectual property, and mostly ignores other U.S. complaints. What would that mean in practice? Mainly, a boost to already-competitive U.S. industries like natural gas, agriculture and autos—and a big hit to other major exporting nations. – Wall Street Journal US Trade Representative Robert Lighthizer’s testimony to House Ways and Means last week indicated that the US would give China yet another pass. Any US-China deal is only worthwhile with strong enforcement. And this is even truer for President Trump. Find out why here. The US-China economic relationship: A comprehensive approach
Neena Shenai | Joshua P. Meltzer The US-China economic relationship has reached a critical juncture. Over the past year, the US has imposed tariffs on $250 billion worth of Chinese imports, and China has retaliated with similar tariffs. In a joint AEI-Brookings Institution policy brief, authors Neena Shenai and Joshua Meltzer argue that the US should work with China to find a long-term solution for a trade deal. Shenai and Meltzer propose a deal that addresses the issues at hand in a free-market manner and strengthens the multilateral global trading system and rule of law that the US has championed in the post–World War II era. Read the full report here and related products here.
Tom Rogan writes: China’s regime knows it is caught between a rock of authoritarian necessity and a hard place of its own foreign policy. Put simply, Xi knows his power model requires both authoritarianism at home and seizure of market access abroad, but the two are coming into conflict in the eyes of democratic nations, and Xi finds himself stuck. Again, he cannot alter China’s political identity without sacrificing the Communist Party’s total domestic power, but neither can he give up on the means of his ambition for global hegemony: stealing and securing unfair market domination and militarizing the Indo-Pacific. – Washington Examiner
The US-China economic relationship: A comprehensive approach
Neena Shenai and Joshua P. Meltzer | The Brookings Institution The US-China economic relationship has reached a critical juncture. The US should work with China to agree on long-term solutions for a trade deal that addresses the real issues at hand in a free-market manner and strengthens the multilateral global trading system and rule of law that the US has championed in the post–World War II era.
New Jaw-Jaw: The Geo-Economic Challenge of China’s Belt and Road Initiative by Nadège Rolland and Brad Carson
China trade: The US fails on enforcement, again
Derek Scissors | AEIdeas If President Trump wants to say his (eventual) deal solves the ugly problems he rightly pointed out in 2015–16, it will need much stronger enforcement than meeting after meeting and a chance of proportional action.
The Militarization of Xi Jinping's China
"Recovering" Areas They Never Have Ruled by Gordon G. Chang
A currency straitjacket for China
Desmond Lachman | InsideSources In slapping import tariffs on China and attempting to force China into a currency straitjacket, the Trump administration seems to be overlooking that China is the world’s second-largest economy and has for many years now been the world’s major engine of economic growth. |
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