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Chinese and US capital markets: For once, ‘leveling the playing field’ is not a protectionist cover
Claude Barfield | AEIdeas Recently introduced legislation would force foreign companies to delist from American stock exchanges unless they come into compliance with US accounting practices within three years.  HOW TARIFFS HELP US Continue here. More countries are joining the BRI in name, but the overall extent of activity is shrinking. Learn more here. The ‘Xi Doctrine’: Proclaiming and Rationalizing China’s Aggression By Bradley A. Thayer & Lianchao Han, The National Interest: "The United States must respond to China’s belligerence with greater strength, adamantine determination, and more vigorous diplomatic and military measures." For most of the last six years, Xi Jinping has been largely free to define the terms of his rule. But with challenges piling up from the U.S. trade war to mass protests in Hong Kong, his presidency is increasingly being dictated by events. – Bloomberg Salvatore Babones writes: Given Beijing’s bluster, it can be easy to forget that China is still a relatively poor country with a GDP per capita less than one-sixth the U.S. level. Compared to the America’s, China’s economy is relatively inefficient and undifferentiated, and its markets are poorly developed. The simple fact is that China needs the United States more than the United States needs China. In itself, that’s no reason to start a trade war. But if the trade war really does heat up, there’s little doubt who will win. – Foreign Policy Since he took power seven years ago, President Xi Jinping has faced a growing din of foreign condemnation over his government’s human rights record, a trade war that has sapped China’s strength and now, for a second time, mass protests in the streets of Hong Kong. – New York Times Xinjiang and the Belt and Road Initiative
By Rebecca Warren, Strategy Bridge: "Since Deng Xiaoping’s Reform and Opening-Up policies, China has modernised to a startling extent. However, this growth has been uneven and has caused severe inequality across the country. China’s Belt and Road Initiative (BRI) is often seen as promoting China’s influence across the world, but this is not its only purpose."
Time For New Trade Tactics With China: Data Sheet
quoting Raghuram Rajan via Fortune Eleven long months ago, at Fortune’s Brainstorm Tech conference in Aspen, Colo., New York Times columnist Thomas Friedman cogently explained how a rational, effective president of the United States would handle a trade dispute with China. He’d sign the Trans-Pacific Partnership trade deal, bring European allies into the agreement, and then negotiate quietly with the Chinese in a way that would save them embarrassment. WEST AFRICA & CHINESE CREDIT EXPLODES, WHAT CAN US DO ABOUT RARE METALS AND CHINESE RESENTMENT6/8/2019  Dean Cheng writes: Whether it was confidence due to his growing domestic strength, a belief that the balance of economic power in the U.S.-China relationship had already shifted, or a concern about appearing weak in front of Trump, Xi seems to have reached the conclusion that China, under his leadership, can successfully challenge the United States. This appears to have been a dangerous miscalculation. Xi may soon find that a perfect storm of agricultural problems, internal unhappiness, and his own chosen hard line on the trade war could undermine the domestic power he has worked so hard to consolidate. – War on the Rocks
Gerald F. Seib writes: American negotiators are trying to force the Chinese to make systemic changes in their system, particularly in the dominance of state-owned businesses and the ability of the government to extract technology and intellectual property from the business sector. But such components of the Chinese system no longer appear to be simply temporary structures as China matures, but rather pieces of the new model. – Wall Street Journal
Peter Morici writes: It is time to join the commercial cold war on China. The United States must fully implement the sanctions against Huawei and other technology pirates, implement a system of auction quotas that limit imports from China to the value of exports to China, and develop aggressive national strategies within advanced computing, space exploration, and artificial intelligence that ensure national survival. The real danger lies not from Beijing but rather in pressures from members of Congress who are not willing to accept higher prices for clothing and gadgets and lost farm exports and pass up the opportunity to make those an issue for 2020. – The Hill
VIETNAM IS WINNING THE US LED CHINESE TRADE WAR & CHINA HAS ALREADY LOST RARE EARTH MINERALS BATTLE6/1/2019
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
Huawei and the U.S.-China Supply Chain Wars: The Contradictions of a Decoupling Strategy
by Darren Lim and Victor Ferguson 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
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US-CHINA TRADE WAR EXAMINED
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THE CHINA DIGEST
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