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Is China Ready to Capitulate? Do Not Rush to Conclusions, Carefully Consider Each Proposal and Prepare a Big Stick, Experts Advise
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Is China Ready to Capitulate? Do Not Rush to Conclusions, Carefully Consider Each Proposal and Prepare a Big Stick, Experts Advise

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BEIJING, CHINA – February 14, 2019

The US-Chinese trade war goes beyond US-Chinese relations. It is global, both in terms of its impact on the world economy and global markets and because of the fundamental processes underlying the crisis.

The latest round of negotiations on this topic is being held in Beijing. The talks were preceded by Liu, Mnuchin and US Trade Representative Robert Lighthizer.

The negotiations began with President Trump considering pushing back the March 1 deadline for an agreement to stave off higher tariffs by 60 days, Bloomberg reported, citing people familiar with the matter.

Trump had already said he would consider pushing back the deadline if the two sides were close to making a deal. He and Chinese President Xi Jinping agreed to a 90-day tariffs truce in December, but Trump has said he could see himself “letting that slide for a little while,” referring to the looming deadline, after which US tariffs on $200 billion of Chinese imports are scheduled to increase from 10 to 25 percent.

“But generally speaking, I’m not inclined to do that,” he added.

China’s President Xi Jinping “is scheduled to meet” key members of the US trade talks delegation, including US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin, in Beijing on Friday, according to the South China Morning Post.

The very fact of such a meeting indicates that the negotiations have moved from a dead point and are in the process of completion.

“Looking forward to discussions today,” Mnuchin was quoted by Reuters as saying, without elaborating, as he left his hotel on Thursday morning.

The switching of positions was a show of respect to each other, according to a social media account affiliated with Chinese state media.

The state-run tabloid Global Times said in an editorial late on Wednesday that although Washington had started the trade war, it “was now more willing to reach an agreement.”

“China will never harm its fundamental interests,” the paper said. “The policy has been tested by the trade war and we have seen the change in Washington’s attitude.”

Meanwhile a group of prominent American China-watchers and former US officials has supported a tougher approach against Beijing, they said the present US strategy was “defective” in various aspects including the economy and security.

A task force led by Orville Schell of the Asia Society’s Centre on US-China Relations and former US deputy assistant secretary of state Susan Shirk, who is now with the University of California San Diego’s 21st Century China Centre released a report on Tuesday in which they warned that “purely defensive actions” or even decoupling the two economies would threaten American interests in the long run.

“The Chinese government's recent policies and actions are increasingly at odds with the interests and values of the United States,” Shirk said in a panel discussion in New York on Wednesday. “This is not just [because of] China's growing strength, but it's the matter of the specific choices China's decision makers have made over the past decade.

“Chinese mercantilism [and its] zero-sum policies have advantaged Chinese firms at the expense of International competitors in order to build their national strength, especially their very lavishly funded state-led effort to build China into a high-tech superpower,” she said.

“That means publicly calling out China's unfair ideological and certain policies and pushing harder against them,” Shirk said. “The Trump administration did that part right.”

The report said “purely defensive actions” against China had their place, including “trade and investment curbs, antidumping and countervailing duty enforcement actions, export controls and potential restrictions on Chinese nationals coming to the US for study or work.”

To pressure China to comply with global norms, the task force suggested bolstering American strengths, building an international coalition with allies like Japan and Europe and overhauling international institutions to address China’s global rise.

“[The US should] work with like-minded countries in a multilateral effort to change World Trade Organisation rules that have proven inadequate to address China’s problematic practices and the issues created by new technologies and technology-enabled services,” the report said.

The inadequate moves included efforts to prohibit China’s data localization requirements, source code disclosure requirements and other restraints on cross-border digital commerce, it said.

On the technological front, the panelists sounded a note of caution on America’s attempt to decouple its tech cooperation with China.

“There are security implications in some of the competition, in particularly 5G telecommunications and artificial intelligence,” said Thomas J. Christensen, director of the China and the World Program at Columbia University and a member of the task force.

“That type of competition shouldn't spread to all sectors of technology or non-technological sectors.”

“Decoupling is unrealistic,” Christensen said at the panel in New York. “We have to do more than just complain. We need to develop our own.”

The group also suggested that instead of focusing on trade deficits, the President’s administration should concentrate “its greatest energies on those aspects of trade that will be increasingly important to Americans in the future, including digital trade and services, intellectual property, and data protection.”

On the security front, the task force argued that Washington’s measures so far “have not been sufficient to maintain the gap between US and Chinese capabilities that would be necessary to assure the security of the American position in Asia and the security of US allies in perpetuity.”

The US should go beyond its present strategy of conducting freedom of navigation operations, to have exercises in the South China Sea and East China Sea that “would serve to remind China, as well as US allies, that the US military has unique joint war-fighting capabilities, and that the US leadership has the necessary will to use them to overcome aggression.”

“Allies should be encouraged to develop cruise and ballistic missile capabilities to defend US air bases located in host nations,” the report said.

The report, “Course Correction: Toward an Effective and Sustainable China Policy,” also included recommendations to counter China’s rise in global governance, its increasingly aggressive policy on Taiwan as well as its human rights violations.

Author: USA Really