No bargaining chip too big

Access Archive

1.  No bargaining chip too big: techno-trade war talks resume 

CNBC reports that “U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke to Chinese Vice Premier Liú Hè 刘鹤 and Commerce Minister Zhōng Shān 钟山” on July 9, marking the official resumption of negotiations in the now more than one year long U.S.-China techno trade war. 

  • Zhong is “an old colleague of Xi from the Zhejiang days,” SCMP reporter Jun Mai notes, and “was not a core member of China’s negotiating team before.” 

  • Zhong was vice-governor of Zhejiang Province at the same time that Xí Jìnpíng 习近平 held a variety of leadership positions in the region. 

  • The implied closer watch of Xi could indicate that Liu will have less leeway to make concessions towards market reforms encoded in legal changes than he did in the last round, which by some accounts sank the previous tentative trade deal

  • Trump is determined to keep up his dealmaking brand as the next round of talks gets underway, and has taken several steps to try to ensure Beijing stays at the table: 

    • One: A limited reprieve for Huawei. Commerce Secretary Wilbur Ross confirmed yesterday that licenses for some U.S. to sell to Huawei were in the works. 

    • Two: Softened criticism on human rights. Vice President Mike Pence has continued to delay a speech on human rights in China that was originally slated to coincide with the 30th anniversary of June Fourth, and Treasury Secretary Steven Mnuchin has reportedly held up sanctions on Chinese officials over the abuses of Uyghurs in Xinjiang. 

    • Three: Softened criticism on Hong Kong. The FT reports (porous paywall): 

    Donald Trump told Chinese president Xi Jinping last month that the US would tone down criticism of Beijing’s approach to Hong Kong following massive protests in the territory in order to revive trade talks with China.

    The US president made the commitment when the two leaders met at the G20 summit in Osaka, according to several people familiar with the meeting. One person said Mr Trump made a similar pledge in a phone call with Mr Xi ahead of the G20 summit… 

    Following the Trump-Xi meeting, the state department told Kurt Tong, the departing US consul general in Hong Kong, to remove several critical comments about China from his final speech in the Asian financial hub. Mr Tong had told people he would give a speech about Hong Kong that would mention the erosion of freedoms by China in the territory, but the veteran diplomat was forced to water down the July 2 address.

    In other words, no bargaining chip is too big — the survival of one of China’s largest technology companies, for instance — or too morally valuable — like the rights of millions of ethnic minority Muslims, or eroding promised freedoms of the residents of a Special Administrative Region — for Donald Trump, when dealing with China. 

    Other techno trade war related news today:

    The world’s largest supplier of consumer goods says China’s factories are getting “urgent and desperate” as worried U.S. retailers accelerate a move out of the country amid heightened trade tensions.

    China will see more factory shutdowns as the trade war that’s roiled the global supply chain exacerbates an exodus, said Spencer Fung, chief executive officer of Li & Fung Ltd. The company, which designs, sources and transports consumer goods from Asia for some of the world’s biggest retailers including Walmart and Nike, is being pushed by American clients to shift production out of China.

    —Lucas Niewenhuis

    2. Xinjiang: Joint letter at UN signed by 22 countries, but not U.S.

    Reuters reports that “Nearly two dozen countries have called on China to halt its mass detention of ethnic Uighurs in the Xinjiang region, the first such joint move on the issue at the U.N. Human Rights Council”:

    The unprecedented letter to the president of the forum, dated July 8, was signed by the ambassadors of 22 countries. Australia, Canada and Japan were among them, along with European countries including Britain, France, Germany and Switzerland, but not the United States which quit the forum a year ago.

    It fell short of a formal statement being read out at the Council or a resolution submitted for a vote, as sought by activists. This was due to governments’ fears of a potential political and economic backlash from China, diplomats said.

    Other Xinjiang-related reports today:

    —Lucas Niewenhuis

    —–

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    —Jeremy Goldkorn, Editor-in-Chief


    BUSINESS AND TECHNOLOGY:

    • The internet and technology landscape
      China Internet Report / SCMP
      “China has emerged on the world stage with a host of global tech companies that are innovative and competitive. And increasingly, their successes are being studied and replicated in other markets. This report, informed by on-the-ground reporting by the South China Morning Post and Abacus, offers insights into China’s tech trailblazers and the big important trends shaping the world’s biggest internet community.”

    • Fraud case in asset management
      Exclusive: Camsing Global becomes focus of fraud probe / Caixin (paywall)

    A fraud investigation into the founder of a private conglomerate has sparked quarrels between financial institutions and e-commerce giants JD.com and Suning.com over their roles in a fundraising scandal.

    Leading Chinese wealth manager Noah Holdings Ltd. said 3.4 billion yuan ($490 million) of asset management products backed by entertainment-to-health care conglomerate Camsing Global’s accounts receivables from JD.com were in danger of default. But JD.com said it is “unaware” of the matter.

    Similar debates arose between Yunnan International Trust Co. and Suning involving products that raised more than 1 billion yuan for Camsing Global backed by pending payments from Suning.

    SCIENCE, HEALTH, AND THE ENVIRONMENT: 

    POLITICS AND CURRENT AFFAIRS:

    China’s state television broadcaster has hired a former director of the UK media watchdog that is investigating the Beijing-controlled group over allegations that it aired forced confessions.

    The move could help China Global Television Network’s battle to avoid being stripped of its UK licence and to preserve its ambition of breaking into Europe’s news market.

    With the 70th anniversary of the People’s Republic approaching on Oct. 1, the state propaganda machine is in full swing to make sure that the message permeates throughout society, including into corporate boardrooms. Huge amounts of time and energy have been spent trying to divine the meaning of, and act in accordance with, Xi’s sacred pronouncements.

    SOCIETY AND CULTURE:


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