May 17, 2019 Propaganda Intensifies Trade War With China The dwindling empires' main propaganda outlet, the New York Times, continues its anti-China campaign. It is now by blaming China's president for the failure of trade negotiations with the United States. How Xi’s Last-Minute Switch on U.S.-China Trade Deal Upended It: China’s leader, Xi Jinping, seemed confident three weeks ago that a yearlong trade war with the United States could soon subside, handing him a potent political victory. He even made a speech saying China would protect intellectual property, encourage foreign investment, and buy more goods and services from abroad — all changes the United States had been demanding as the countries tried to negotiate a deal. But just a week after that speech, Chinese negotiators sent the Americans a substantially rewritten draft agreement, prompting President Trump to accuse Beijing of reneging on terms that had been settled. As typical for U.S. propaganda the piece goes on to personifying the decision China made when confronted with overreaching U.S. demands. It is Xi personally, says the Times, who is to blame: In China’s top-down political system, where President Xi has amassed formidable power, ... ... it is clear that Mr. Xi misjudged ... Now Mr. Xi risks being backed into a corner, ... For Mr. Xi, such a move could be seen ... Mr. Xi’s frenetic schedule and highly centralized style of policymaking ... “No doubt Xi has tightened the overall policy atmosphere ... U.S. propaganda is always pointing to one person that solely cases everything and therefore deserves all the hate. It once was Saddam, Saddam , Saddam. Then Ghadaffi, Ghadaffi, Ghadaffi, Assad, Assad, Assad, Putin, Putin, Putin. Now it is Xi, Xi, Xi. In the real word hardly any person leading a state has as much power as such villainizing propaganda tries to make one believe. Countries have interests that define their policies through processes that are often incomprehensible to the cursory observer. Whatever face is at the top is only representing the layers below. It should be the task of the press to untangle and explain the processes instead of demonizing their representing face. So what really happened? The U.S. started a trade war with China by suddenly putting up high tariffs on Chinese products. China countered with tariffs on U.S. products, but was ready to negotiate a fair deal. The negotiations about an agreement were held in English in the United States. The U.S. provided a written draft. When that draft reached China and was translated to Chinese the relevant party and government institutions were aghast. The U.S. demanded that China changes several of its domestics laws. It essentially demanded a complete change of China's trade policies and, most infuriating, was unwilling to go back to the old tariff rates, even if China would comply. It wasn't Xi who rejected the uneven deal, it was the whole Chinese government. The draft agreement was corrected and sent back to the United States. Trump responded to China's unwillingness to his capitulation demand by further increasing tariffs and by threatening to increase them even more. The trade war will escalate from here and metastasize in other relations. Deep into the NYT piece, where the propaganda weakens and journalism sneaks in, we can learn all of this: Several sources said the changes were discussed with other Communist Party leaders, which brought into focus worries that the proposed deal could make Mr. Xi and the party look as if they were bowing to pressure.

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Mr. Xi may have belatedly concluded that changes to Chinese laws demanded by the United States would be an affront to national honor. Some said Mr. Xi might have felt he had to act after the clauses drew criticism from party leaders who had not been briefed earlier.

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[T]he administration sought changes to cybersecurity laws that China’s national security establishment saw as interference. These changes would require authorization from China’s national legislature. “These conditions that the Americans raised for an agreement, at least from the political point of view, are extremely difficult to accept,” said Cui Liru, a former president of China Institutes of Contemporary International Relations, a prominent state research group. “It is almost asking the change of China’s political system.”

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“It is very hard to think China will cave in or surrender to these pressures,” said Wang Yong, the director of the Center for International Political Economy at Peking University. “Public opinion definitely matters.” So it is not Xi, Xi, Xi. China is not a "top-down political system" and Xi has not "amassed formidable power". China's president Xi is not an absolute king. It isn't he who can make such far-reaching decisions. There is the party, the security establishment and the government apparatus. There are industry interests that need to be taken care of. There is last not least the national public opinion the system has to take into account. China does not want a trade war with the United States. But, unlike Trump and the NYT assume, it is likely China that will lose less from it than the U.S. will. As Ambassador Chas Freeman lays out at length, Trump's (anti-)China policy has no strategy. It is one of chaos and will have echos in many other fields: President Trump’s trade war with China has quickly metastasized into every other domain of Sino-American relations. Washington is now trying to dismantle China’s interdependence with the American economy, curb its role in global governance, counter its foreign investments, cripple its companies, block its technological advance, punish its many deviations from liberal ideology, contest its borders, map its defenses, and sustain the ability to penetrate those defenses at will. The message of hostility to China these efforts send is consistent and apparently comprehensive. Most Chinese believe it reflects an integrated U.S. view or strategy. It does not. There is no longer an orderly policy process in Washington to coordinate, moderate, or control policy formulation or implementation. Instead, a populist president has effectively declared open season on China. Currently each and every arm of U.S. policy is beating up China in any field it can. This hostility will soon become irreversible. China will response in kind and asymmetrically. It now restarts to buy oil from Iran. Ambassador Freeman sees no way how the U.S. could win the game. China has long prepared for this conflict. Consider Trump's recent move against the Chinese manufacturer Huawei: The White House issued an executive order Wednesday apparently aimed at banning Huawei’s equipment from U.S. telecom networks and information infrastructure. It then announced a more potent and immediate sanction that subjects the Chinese company to strict export controls. The order took effect Thursday and requires U.S. government approval for all purchases of U.S. microchips, software and other components globally by Huawei and 68 affiliated businesses. Huawei says that amounted to $11 billion in goods last year. Huawei currently uses U.S. made chips in many of its smartphones and networking products. But it has long expected the U.S. move and diligently prepared for it: Huawei's chipset subsidiary HiSilicon said on Friday it will use backup chips it has independently developed for years to cope with the ban from the United States. He Tingbo, president of HiSilicon, said in an internal letter to staff that Huawei has been preparing for a scenario of survival in extreme conditions when all the advanced chips and technology from the United States become unobtainable.

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"Today, a historic choice has to be made. Our backup plan will be put into official use," according to the letter. Soon U.S. chip companies will have lost all their sales to the second largest smartphone producer of the world. That loss will not be just temporarily, it will become permanent. At the same time Trump's tariffs on products from China will further hurt the U.S. economy. The voters already fear that: By an 11-point margin, voters think increased tariffs on Chinese imports will do more to hurt the economy than help it. The voters' hunch will soon be confirmed as Walmart and others announce that they will have to increase their prices. Economists also expect that the U.S. consumers will feel significant pain: “[T]he cost to an American family of three would be about $2,200 if Trump’s full package of 25% tariffs on $500 billion of merchandise imports from China is implemented. “In the case of the latest 15% additional tariffs on $200 billion, from 10% to 25%, that go into effect by the end of May … the direct cost is $30 billion and the likely indirect cost, through higher US producer prices, will be another $30 billion. Together, that’s $60 billion … about $550 per family.” China will absorb “no more than 5%” of the tariffs. Few other countries will join Trump's anti-China campaign. It will further isolate the United States. That is quite an achievement for the MAGA man. Some aspects of China's trade behavior can and should be criticized. But overall China sticks to the rules of the game, while the U.S. is now breaking these. It was not China that moved U.S. factories to its country. U.S. managers did that because the U.S. economic system is based on greed and not on the welfare of its citizens. There are much better ways to get China to change its trade behavior than by bullying and ever increasing tariffs and sanctions. Ambassador Freeman's recommendable essay provides some of these. Posted by b on May 17, 2019 at 18:30 UTC | Permalink Comments next page » next page »