How China can hurt Trump in a trade conflict

The starting point is grotesque: While Washington is provoking a trade war, Beijing mimics the champion of a liberal world trade order. But that will not stop China from becoming active itself.

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If the expanding trade dispute between the United States and the rest of the world in general, and China in particular, were not so worrying, one of the many anecdotes from the White House would make you smile tiredly. The new economic advisor to US President Donald Trump, Larry Kudlow, had suggested a “coalition of the willing” with the United States at the top, which should work together against unfair trade practices in China. Shaming the proposal is that Trump’s predecessor Barack Obama had pursued exactly that goal with the Trans-Pacific Partnership (TPP). His successor in the White House, however, resigned in one of his first acts, the coalition of the willing again. Trump could not have made a bigger present to the Chinese.

China is looking for the conversation

In China, however, there is growing concern about a trade conflict that could eventually turn into an economic-political “war”. The significance of the trade dossier for Beijing is shown by a number of events in recent weeks. First, with top diplomat Yang Jiechi and Xi Jinping’s economic policy advisor Liu He, now promoted to deputy prime minister, two were in Washington to investigate solutions to the conflict. Both, however, returned without results.

Subsequently, the 69-year-old Wang Qishan,who is considered an intimate connoisseur of the United States and had adopted in October of last year from active politics, back to day-to-day business. Last weekend, the National People’s Congress elected him, with just one vote against, the new deputy head of state – a hitherto purely representative office. However, Wang Qishan will not be satisfied with that. Rather, he should take care of the relations with the United States. It means that he will use Saturday’s three-day China Development Forum, which will also feature the heads of various US corporations, to hold initial talks. The tenor in Beijing is clear: There is no interest in a trade war, because there are only losers, said Chinese Prime Minister Li Keqiang at the conclusion of the National People’s Congress.

What a mixture of organizational chaos and economic clueless Liu Hemust have encountered in Washington , clarify two events. After returning to Beijing, for example, he still did not know who was the right person to talk to in the United States. In addition, his various interlocutors should have offered him that Washington would act leniently if China manages to reduce the bilateral trade surplus of $ 375 billion last year by $ 100 billion. In such proposals, Liu He, one of China’s most knowledgeable economists, who has been visiting US universities for a few years, may have stood to nothing.


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