Steve Bannon declares trade war on China  – China’s latest top news

Jeremy Goldkorn’s selection of the top stories from China on August 17, 2017. Part of the daily SupChina newsletter, a convenient package of China’s business, political, and cultural news delivered to your inbox for free. Subscribe here.

There can be only one hegemon

Widely reviled White House chief strategist Steve Bannon phoned Robert Kuttner, co-founder and editor of the left-leaning American Prospect magazine, on August 15 and spoke his mind without asking to be off the record. Kuttner made notes.

Much of Bannon’s spiel was about China:

  • Bannon said: “We’re at economic war with China… It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. On Korea, they’re just tapping us along. It’s just a sideshow.”
  • He also said that the U.S. has to be “maniacally focused” on trade war with China: “If we continue to lose it, we’re five years away, I think, ten years at the most, of hitting an inflection point from which we’ll never be able to recover.”
  • Kuttner writes that “Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote,” so “Bannon saw no reason not to proceed with tough trade sanctions against China.”
  • Bannon also contradicted Trump’s recent threats to Kim Jong-un, saying: “There’s no military solution [to North Korea’s nuclear threats], forget it. Until somebody solves the part of the equation that shows me that ten million people in Seoul don’t die in the first 30 minutes from conventional weapons, I don’t know what you’re talking about, there’s no military solution here, they got us.”

Bannon plans to remove all Asian expertise from the State Department:

Bannon said he plans to remove Susan Thornton, acting head of East Asian and Pacific Affairs at the State Department, and is “changing out people at East Asian Defense” and “getting hawks in.”

  • Thornton is one of the few senior officials at the State Department with long experience in Asia, and was a recent guest on the Sinica Podcast.
  • In reaction to the Bannon interview, Robert Kapp — historian and former president at the U.S.-China Business Council — tweeted: “Tillerson must defend Susan Thornton, Acting DAS East Asia, if Bannon tries to throw her in shredder. If she is dumped, he must resign.”

Military talks in, Chinese acquisitions in U.S. out

In related news:

Chinese acquisitions in the U.S. plummet:

  • Caixin reports (paywall) that understaffing at the Committee on Foreign Investment in the United States (CFIUS) and growing American suspicion of Chinese acquisitions of “sensitive” technology are delaying Chinese dealmaking in America.  
  • Earlier in the month, Dealogic noted that “amid growing regulatory scrutiny of China outbound M&A targeting the U.S., volume has seen a 65% year-on-year decline in 2017 YTD. In comparison, such deals peaked at $65.2bn last year, with high-profile deals including HNA’s acquisition of 25% of Hilton Worldwide.”

But military relations seem positive:

  • On August 15, American Joint Chiefs of Staff chairman U.S. Marine Corps General Joe Dunford met the chief of China’s joint staff, General Fang Fenghui 房峰辉, in China, and signed a “joint strategic dialogue mechanism…intended for crisis mitigation.”
  • On August 17, Xinhua News Agency reported that President Xi Jinping met General Dunford at the Great Hall of the People in Beijing, and said the “relations between the two armed forces have made substantial steps forward.” The report says Xi “expects military relations would become a major stabilizing factor in Sino-U.S. ties.”
  • However, tensions remain. According to Reuters, one of the officials who met General Dunford told him that “wrong actions on the Taiwan issue, the United States deploying the THAAD system around China, U.S. ships and aircraft activities in the South China Sea, [and] the United States close-in surveillance in the sea and air near China have had a large, negative influence on bilateral military ties and mutual trust.”

A Chinese wedding and funeral band in Europe  

If the news in recent months has got you down, this might be cathartic: Turn up the volume and watch this eight-minute film of the Zhou Family Band playing its noisy music in cities across Europe.

Director Mu Qian 穆谦 also has a video of an ensemble of musicians from the Dolan people in Xinjiang, and a song by a Uyghur mäddah (religious storyteller).