China is desperate to repair its relationship with the United States.
Within a month, Beijing has sent two high-level officials on diplomatic visits to the U.S. to talk trade and make amends.
On Feb. 8, State Councillor and top diplomat Yang Jiechi visited the U.S. and met with President Donald Trump and State Secretary Rex Tillerson.
Just weeks later, from Feb. 27 to March 3, Liu He, a close ally of Chinese leader Xi Jinping who is slated to be appointed vice-premier, will be visiting. Liu is Xi’s top economic adviser.
Liu will be missing out on a critical Chinese Communist Party (CCP) meeting known as the third plenary session. It goes to show how urgent Beijing perceives the situation to be.
After the Trump administration called out China for its unfair trade policies publicly, it has taken up action, including by investigating intellectual property theft by the Chinese regime, slapping tariffs on imported solar panels—most of which are produced in China—and proposing tariffs on steel imports from China and 11 other countries.
Trade tensions have reached a new high.
And just a few days ago, Politico reported that current White House trade adviser and known China hawk Peter Navarro will become a direct adviser to the president, which will give him more say over the administration’s trade agenda.
The CCP’s own media, Xiake Dao, an online publication affiliated with People’s Daily, stated that sending two high officials to the U.S. in so short a time period is “practically unprecedented in history.”
Who Loses in a Trade War?
After all, the Chinese regime stands to lose big if an all-out trade war were to occur. The U.S. has a massive trade deficit with China—topping $375 billion in 2017, according to data from the U.S. Census Bureau—but Beijing needs the U.S. trade to survive.
As research firm Geopolitical Futures detailed in a report, “China would feel the impact of U.S. protectionist measures more than the U.S. would feel any economic retaliation China has at its disposal.”
If the U.S. were to stop importing from China completely, about 15 million Chinese workers would stand to lose their jobs.
On the other hand, the U.S. could source China’s goods from elsewhere or produce them domestically. As The Epoch Times business editor Valentin Schmid explained in an article published in Jan. 2017, it would be more difficult or expensive for the U.S. to do so, but “this is a nuisance compared to the impact of leaving 15 million Chinese people unemployed.”
As for the possibility of China retaliating with tariffs on American goods, the Geopolitical Futures report noted that the last time that happened in 2009, things didn’t go well for China. When then-U.S. President Barack Obama imposed a 35 percent tariff on Chinese tires, the U.S. was able to find suppliers in other countries, but scores of Chinese tire factories shut down and others had to slash prices to stay competitive, according to the report.
China retaliated with tariffs on American chicken meat, but U.S. poultry exports actually increased.
Switching Up Diplomats
And so, Beijing is planning a reshuffle of its top diplomats in order to better deal with the Trump administration, according to a Reuters report on Feb. 27.
Sources familiar to the reshuffle told Reuters that Wang Qishan, a confidant of Xi who was instrumental in helping him get rid of factional enemies through a sweeping anti-corruption campaign, is likely to become vice-chair with a portfolio focused on ties with Washington.
“Wang Qishan is a heavyweight. And the Americans respect him,” a source with ties to the CCP leadership told Reuters. “Hopefully he will be able to temper American hostility.”
Meanwhile, current Foreign Minister Wang Yi would replace Yang Jiechi as top diplomat.
Song Tao, current head of the International Liaison Department, would step up to the foreign minister role.
The sources said the personnel selection had not been finalized yet and could change. When the CCP formally announces the appointments during its March “Lianghui” meetings, perhaps it will become clearer how Beijing plans to handle Sino-Americans ties.
Fang Xiao contributed to this report.