Beijing finds a common strategy on trade frictions and Hong Kong: Blame the U.S.

Domestic News

If you are following U.S.-China relations or the Hong Kong protests closely, we would recommend reading two Foreign Ministry Q&As this week that revolved around those issues.

Foreign Ministry statements don’t always contain much detail beyond boilerplate, but this week they were more specific, and unusually unrestrained in attacking the U.S. The kind of language — intensely conspiratorial on Hong Kong, highly nationalistic on the trade war — being used now is becoming the “new normal” from Beijing, even as reckless nationalism risks becoming official U.S. policy toward China.

On July 30, spokeswoman Huá Chūnyíng 华春莹 elaborated on the official reasoning for why Beijing blames the U.S. for “fanning the fires” of protest in Hong Kong:

I think Mr. Pompeo obviously failed to put himself in a right position. I’m afraid he still regards himself as the CIA chief. He said the recent violent incidents in Hong Kong are appropriate because, as you all know, they are somehow the work of the US.

Let us think about what has happened. According to public reports, at the end of February and the beginning of March, the then US Consul-General in Hong Kong blatantly criticized the Hong Kong SAR government’s bill amendment and the “one country, two systems” principle and interfered in Hong Kong affairs. In March, US Vice President Mike Pence met with Hong Kong opposition lobbyists. In May, Pompeo met with Hong Kong opposition and made irresponsible remarks on the amendment matter. In June, Speaker of the US House of Representatives Nancy Pelosi even called the demonstrations in Hong Kong “a beautiful sight to behold”. Some members of US Congress once again proposed the Hong Kong Human Rights and Democracy Act. In July, Pence, Pompeo and Bolton met with opposition personnel. In the scenes revealed on media, we saw some American faces among the violent demonstrators in Hong Kong. We even saw the national flag of the US on some occasions. We all have this question: what role has the US played in Hong Kong recently? The US owes the world an explanation.

As with any good conspiracy, it comes with baffling logical flaws — for example, what qualifies an “American face” versus a Hong Kong one?

Today, Hua elaborated on China’s reaction to the new tariffs:

If the US indeed imposes new tariffs, China will have to take necessary countermeasures to uphold its core interests and the fundamental interests of the Chinese people. The US will be responsible for all related consequences

Not long ago, during their meeting in Osaka, the Chinese and US Presidents agreed to restart trade consultations on the basis of equality and mutual respect with no new tariffs to be imposed by the US side. Though we still recall those words vividly, soon after the conclusion of the latest round of consultations in Shanghai, the US announced the imposition of new tariffs. It clearly runs counter to the leaders’ consensus and the correct direction. This again shows the world how flip-flopping the US can be.

As we repeatedly said, a trade war will only hurt both sides. Resorting to a trade war to settle its domestic problems, the US is in fact drinking poison to quench its thirst… American families should not be a pawn in this trade war. The tariffs will hit US consumers far harder than Chinese manufacturers.

I’d like to re-emphasize that China does not accept any maximum pressure, threat or blackmail. On major issues concerning our principles, we won’t back down even a little bit. China’s position on China-US trade talks is consistent as always. If the US wants to talk, our door is wide open. But if it insists on a trade war, we will fight to the end with firm resolve. Now the ball is in the US court. It needs to demonstrate good faith. The world is watching.

Jane Perlez at the New York Times quotes several analysts who see the increasingly unrestrained anti-American rhetoric from Beijing as part of a broader strategy:

“Blaming the U.S. for the trouble in Hong Kong signals a deliberate policy decision rather than an instinctive reaction,” said Minxin Pei, a professor of government at Claremont McKenna College in California. “It is highly unlikely that the use of such shrill rhetoric has not received endorsement from the top leadership.”

Beyond the specific issues of Hong Kong and trade, Mr. Pei said, the Chinese government is trying to construct a “meganarrative” that portrays the United States as the “principal antagonist intent on not only thwarting China’s rise with the trade war but also fomenting trouble within Chinese borders.”


Further strikes and protests

Trump repeats the Party line

  • Trump calls Hong Kong protests ‘riots,’ adopting China rhetoric / Bloomberg (porous paywall
    Trump: “Something is probably happening with Hong Kong, because when you look at, you know, what’s going on, they’ve had riots for a long period of time…Somebody said that at some point they’re going to want to stop that. But that’s between Hong Kong and that’s between China, because Hong Kong is a part of China.”

A 21-minute documentary on the Yuen Long attacks


“Being tough on China is the right way to be” 

That’s a quote from Chuck Schumer, the top Democratic senator in the U.S. Congress, who expressed his support for Trump’s trade war escalation, per the New York Post. Being “tough on China” will likely continue to have high bipartisan support through 2020: When asked by Axios, all Democratic presidential candidates who staked out a position were also highly critical of China, and were also all indecisive about removing Trump’s tariffs if they were elected.

How might China retaliate to more tariffs?

  • China’s Trump trade retaliation options include soybeans, Boeing / Bloomberg (porous paywall)
    “As a first step, China could reinstate the tariff on U.S. cars that it lifted as a goodwill gesture earlier in the talks, or raise the amount on goods that have already been taxed.”
  • China wants to hit back at Trump. Its own economy stands in the way. / NYT (porous paywall)
    “There are several things China could do. It could call for a boycott of American goods or stop buying Boeing planes. It could devalue its currency, which would in effect partially nullify American tariffs. It could make life much harder for American business and executives in China, or it could exercise its power over key parts of the global supply chain, like its dominance over key manufacturing minerals called rare earths.”
  • China faces limited options for retaliating against latest U.S. threat / WSJ (paywall)
    “Easy targets—according to business executives and analysts—include canceling planes from BoeingCo. , which has orders from Chinese airlines for 478 of the 737 MAX passenger jets that have been grounded world-wide after two crashes. Delivery company FedEx Corp. is already under investigation by Chinese authorities—and pilloried in state media—for mishandling packages destined for telecom gear-maker Huawei Technologies Co.”
  • What’s Trump’s plan with the latest tariffs on China? / Foreign Policy (porous paywall)
    Derek Scissors, an economist at the American Enterprise Institute, says that China doubling down on its “unreliable entity list” is still unlikely even with the next step in tariffs. Only if the additional $300 billion of Chinese imports is taxed at a higher rate than 10 percent does he expect China to “bring out the big guns and go after the big firms in China.”

Great power competition: Now with an arms race and paranoia about academic exchange

The United States on Friday terminated a major treaty of the Cold War, the Intermediate Nuclear Forces agreement, and it is already planning to start testing a new class of missiles later this summer.

But the new missiles are unlikely to be deployed to counter the treaty’s other nuclear power, Russia, which the United States has said for years was in violation of the accord. Instead, the first deployments are likely to be intended to counter China, which has amassed an imposing missile arsenal and is now seen as a much more formidable long-term strategic rival than Russia.

The moves by Washington have elicited concern that the United States may be on the precipice of a new arms race, especially because the one major remaining arms control treaty with Russia, a far larger one called New START, appears on life support, unlikely to be renewed when it expires in less than two years.

American graduates of the prestigious Yenching Academy, a one- to two-year master’s degree program housed at Beijing’s elite Peking University, are being approached and questioned by the FBI about the time they spent in China. In the last two years, at least five Yenching graduates have been approached by agents to gather intelligence on the program and to ascertain whether they have been co-opted by Chinese espionage efforts.