Forget ‘Made in China 2025,’ China Is Desperate to Reach Deal on Trade

November 20, 2018 Updated: November 21, 2018

News Analysis

Two years ago, Beijing was flying high, and was well on its way to dominating the world. Or so it thought.

Sure, the newly elected U.S. president had talked tough on trade, but so had other presidents in the past. Beijing was sure that this political novice—this capitalist—would be easily put in his place.

Just like President Barack Obama before him, Chinese officials figured that President Donald Trump would quickly buckle under pressure from Wall Street, “K” Street, and the media as soon as he got in office. They would ensure that his threat of tariffs never materialized. After all, they had learned over the past quarter-century how easy it was to manipulate the American political system to their advantage.

Among themselves, China’s senior leaders sneeringly refer to our form of government as “moneybags democracy.” They themselves prefer bullets to ballots.

Had Hillary Clinton won, the moneybags approach might have worked. Who knows what concessions she might have made on trade once Beijing-connected Chinese businessmen began dropping huge chunks of change into her favorite foundation?

To forestall Trump’s tariffs, China, at first, thought to take a similar approach.

A Chinese company with close ties to the ruling elite offered to “invest” $400 million in the real estate firm of the then-president-elect’s son-in-law. Beijing must have been surprised when the offer was rejected out of hand.

Beijing saw another opening when “Little Rocket Man” began stirring up trouble on the Korean Peninsula. They rushed in with an offer to mediate, obviously hoping to win favor—or at least buy time—with the new president on trade. Instead, Trump met directly with Kim Jong Un in Singapore and the missiles stopped flying.

Still, the regime in Beijing was only just getting started, and mobilized thousands of unpaid lobbyists who stood on every Washington street corner chanting the mantra of “free trade.” But as cheap, subsidized Chinese-made goods continued to flood into the United States, Trump stayed focused on the bottom line.

China’s leaders also sought the help of their good friends on Wall Street, who have made billions servicing their investments. One of these even became the president’s chief economic advisor, and strongly advised his boss against tariffs. Trump not only went ahead with the first round of levies, but he also promised more to come unless China changed its ways.

With the November midterms approaching, trade negotiations were stalled. But instead of backing down, Red Emperor Xi Jinping decided to double-down. Since bribery and influence peddling hadn’t worked, it was time to administer—second-hand—a good, old-fashioned electoral drubbing to his U.S. adversary. He would teach Trump a political lesson by weakening his political base.

His advisors came up with the idea of imposing tariffs that targeted Trumpian states. While our initial round of tariffs on China was punitive—imposed as punishment on specific companies guilty of ripping off U.S. technology—China’s were overtly political. They targeted products from states such as Iowa, where Trump’s support was strong.

Beijing’s tariffs were, in other words, a tax on Trump’s political supporters that was deliberately intended to sway how they would vote in the upcoming elections. As such, it was a direct and brazen attack on U.S. democracy by a foreign power.

Take the tariff on soybeans, for example. Beijing hoped to sway Republican-leaning farmers against Trump, costing his party seats in Congress and thereby weakening his resolve. But American farmers, it turns out, are made of sterner stuff than that. The soybean tactic didn’t work for, well, beans. Across the 15 leading soybean-producing congressional districts in the U.S., the Republicans didn’t lose a single seat.

If anything, China’s blatant interference in our election strengthened this president’s resolve, especially as it became clear that its actions extended well beyond political tariffs.

For example, as the election approached, anti-tariff, anti-Trump propaganda poured out of Chinese-owned radio and television stations in the U.S. The Trump administration retaliated by telling them to register as foreign agents.

Paid advertising inserts even appeared in U.S. newspapers, such as the Des Moines Register, that attacked the president’s trade policy. One of the most dictatorial governments in the world was undermining our democracy by abusing one of our most cherished freedoms: freedom of the press.

Taken together, China’s attempt to interfere in our elections proved to be a major blunder. Beijing emptied out its bag of dirty tricks and only succeeded in calling unwanted attention to itself.

Politically, Trump came out of the midterms in a stronger political position than ever, at least when dealing with China is concerned. Even Sen. Chuck Schumer (D-N.Y.) and Rep. Nancy Pelosi (D-Calif.) now support getting tough with China.

As for the president’s resolve, it was never in doubt. Does anyone doubt that, unless China stops its predatory trade practices and buys more American goods, more tariffs are on the way in January?

While the U.S. economy has easily weathered the “tariff war,” the same cannot be said of China’s.

Consumer confidence is down, the currency is weakening, bankruptcies are rippling through the country. The stock market is tanking and companies are fleeing the country. As The Epoch Times has reported, Apple Inc.’s suppliers are already moving production to the friendlier—and tariff-free—climes of India, Vietnam, Mexico, and the Philippines.

Once those companies relocate to countries with less corruption and often lower wages, they aren’t coming back. As the Chinese economy continues to slow, the country faces a real danger of slipping into recession.

It wasn’t so long ago that Xi Jinping was bragging that his country was going “to dominate the hi-tech world by 2025.” Now, as Trump revealed during last week’s press conference, Beijing has offered to put the much-vaunted “China 2025” plan on ice.

Instead, Chinese senior officials, in a desperate effort to shore up business confidence, are insisting to anyone who will listen that “China is not Turkey.”

From China as No. 1 to China is not Turkey in less than two years is quick work, even for Trump.

China has finally, for the first time, put a written offer on the table.

At the G-20 summit in Buenos Aires on Nov. 30, Trump and Xi will meet to again talk trade. With levies of 25 percent looming in January, China’s leader faces a stark choice: trade fairly with the United States or suffer crippling tariffs.

Steven W. Mosher is president of the Population Research Institute and an internationally recognized authority on China. He is the author of “Bully of Asia: Why China’s Dream is the New Threat to World Order.” He is also the author of numerous books on China, among them “Broken Earth: The Rural Chinese,” “A Mother’s Ordeal: One Woman’s Fight Against China’s One-Child Policy,” and “Hegemon: China’s Plan to Dominate Asia and the World,” as well as several edited volumes and hundreds of scholarly articles, editorials, and opinion pieces.

 

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

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