[Hu Angang, an economist at the School of Public Policy and Management at Tsinghua University who advises the government, said that Mr. Trump’s decision could begin a vicious cycle that would hurt America’s reputation more than China’s economy.]
By
Steven Lee Myers
 |
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Delegates
listening to President Xi Jinping of China during the closing session
of
the National People’s Congress in Beijing on Tuesday.
Credit
Kevin Frayer/Getty Images
|
BEIJING
— For the better part of two
decades, China’s leaders have made the most of the global trade rules set by
the United States and others, seizing on opportunities to bolster their
nation’s economic rise while finessing American complaints that they were not
always playing fair.
Now, for the first time, China faces an
American president who is embracing protectionist measures, and that has
presented its leader, Xi Jinping, with an extraordinary challenge: Even as he
has elevated his status as the country’s “helmsman,” with a new mandate to rule
indefinitely, the United States is moving to treat China more seriously as a
strategic rival and to recast an economic relationship that has long bound the
two countries.
The punitive actions unveiled by President
Trump on Thursday — tariffs on $60 billion worth of Chinese goods and other
penalties, as well as new restrictions on Chinese investment in the United
States — put Mr. Xi on the spot, forcing him to consider retaliatory action. On
Friday, China said it was proposing additional tariffs on 128 American products
valued at $3 billion even as it called on Washington to resolve the dispute
through negotiations to “avoid damage to the broader picture of Chinese-U.S.
cooperation.”
The trade tensions could send a shudder
through the global economy and complicate Mr. Xi’s efforts to sustain China’s
rapid growth in the face of rising debt and an aging population.
Chinese leaders are judged in part on how
they manage relations with the United States, and a damaging trade war, if
handled poorly, might diminish Mr. Xi’s political standing and test the wisdom
of the highly centralized power structure that he has erected around himself.
If he retreats and offers significant concessions, however, Mr. Xi risks
looking weak and inviting criticism in a political system that has fanned
nationalist and anti-American sentiment.
Shi Yinhong, a professor of international
relations at Renmin University in Beijing, said that Chinese leaders had been
so successful over the years in deflecting criticism of the country’s trade
practices in the United States that they may have been slow to realize the
gravity of the confrontation brewing.
“People in the U.S. and China have for years
said the wolf is coming, the wolf is coming, but the wolf hasn’t come,” he
said. “This time, the wolf is coming. And how to deal with the wolf? I would
say that there is still no consensus.”
Analysts in Washington and Beijing say that
Mr. Xi will want to demonstrate resolve by standing up to Mr. Trump while
finding a way to steer the countries away from a broader confrontation that
could slow China’s rise and undermine its global ambitions.
“Xi’s done an excellent job walking the thin
line between Trump’s aggressive rhetoric and protecting his own strong
nationalist image,” said Cliff Kupchan, chairman of Eurasia Group, a
consultancy in Washington.
Referring to Mr. Xi and his advisers, he added:
“The question has always been how skilled are these guys as policymakers. Now
they are going to be tested. Can the ‘helmsman’ pull with both oars?”
Mr. Trump’s determination to carry out
pledges from his presidential campaign — in which he repeatedly accused China
of “raping” the United States and its workers — has frustrated Mr. Xi’s team.
They must now decide how to respond to a mercurial American president who heaps
praise on Mr. Xi personally even as he rails against a trade relationship that
they argue has benefited both nations — a view endorsed by Mr. Trump’s predecessors
and, until recently, by much of the American business establishment.
A major reason for Mr. Xi’s frustration,
analysts said, is that Beijing feels it has already made concessions to Mr.
Trump by tightening sanctions against North Korea over its nuclear program, and
at considerable cost to Chinese companies. Chinese officials had assumed that
would keep Mr. Trump from following through on his trade threats, as he had
suggested more than once.
When it became clear this year that
cooperation on North Korea would not be enough to placate trade hawks in the
Trump administration, Mr. Xi redoubled efforts to head off the tariffs,
dispatching his senior economic adviser, Liu He, to Washington last month.
That mission ended, however, in a humiliating
snub. Though Mr. Liu was acting as Mr. Xi’s personal envoy, Mr. Trump declined
to meet him. Instead, the White House announced tariffs on steel and aluminum
imports, including from China, on the first day of his visit. In another sign
of Mr. Xi’s trust in him, Mr. Liu was promoted last week to vice premier
overseeing the economy.
Michael Pillsbury, director of the Center for
Chinese Strategy at the Hudson Institute in Washington, said Mr. Xi had turned
to respected veterans of diplomacy with the United States by elevating Mr. Liu,
who studied at Seton Hall and Harvard, and Wang Qishan, the new vice president,
who has longstanding ties with Wall Street.
He noted, however, that they had become Mr.
Xi’s point men on the relationship at a moment when their experience may be a
poor guide to Washington, just as two decades of bipartisan American support
for deeper trade with China is crumbling in favor of a more protectionist,
“America First” approach.
“They’re having a hard time adjusting to the
new owners,” said Mr. Pillsbury, who served as an adviser to the Trump
campaign.
China has warned that it will retaliate,
tit-for-tat, against tariffs and other measures. Even before the announcement
of punitive measures in Washington on Thursday, the Ministry of Commerce in
Beijing issued a statement sharply criticizing the Trump administration.
“We firmly oppose the unilateralism and trade
protectionism of the United States,” it said. “China will absolutely not sit
back and watch as its legal rights and interests get hurt.”
Hu Xijin, the editor in chief of Global
Times, a state newspaper with a nationalist bent, signaled that the government
would begin by raising barriers to American agricultural products, practically
taunting American soybean farmers. “Soybeans of Brazil, Argentina and Russia
are good alternatives,” he wrote on Twitter.
He added that while a trade war would benefit
no one, “China is far more resilient than the U.S. to the pain.”
In the past, the Chinese government has
succeeded in blunting American complaints about its trade policies — and over
the giant trade imbalance between the two countries — by enlisting the support
of big business in the United States to head off calls for punitive measures
while making relatively small concessions and dangling the prospect of further
action.
In a news conference this week, Premier Li
Keqiang struck a familiar, conciliatory tone, defending the global trading
system and promising to take additional steps to open China’s economy to
American services and products.
“What we hope is that cool heads and rational
actions will prevail, instead of emotions or impulses holding sway,” he said.
Such words might have led to negotiations in
the past, but Mr. Trump appears less interested in negotiations than the
Chinese leadership is.
It is also unclear what exactly the Chinese
government could do to mollify the Trump administration. Two people briefed on
bilateral discussions said Chinese officials had asked for a to-do list they
could work with, but the administration has not provided one.
Mr. Xi has made clear that he envisions China
as a leading power on the world stage, able to dictate terms as the United
States did for decades. And some of his supporters have argued that Mr. Trump’s
policies — especially his willingness to break with longstanding allies in Asia
on trade — have presented China with an opportunity to make great strides
toward that goal.
But a trade war that hurts the Chinese
economy could slow Mr. Xi’s agenda and roil Chinese politics in unpredictable
ways.
Mr. Pillsbury, the author of “The
Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global
Superpower,” said there was a divide in the Chinese political establishment
that mirrored the split in the United States between “globalists,” who favor
trade and a rules-based international order, and “nationalists,” who argue that
those things are sapping American strength.
In China, he argued, a major confrontation
over trade would be likely to strengthen those who believe the United States is
seeking to block China’s rise.
Hu Angang, an economist at the School of
Public Policy and Management at Tsinghua University who advises the government,
said that Mr. Trump’s decision could begin a vicious cycle that would hurt
America’s reputation more than China’s economy.
“I think Trump is not professional; he
doesn’t understand the global situation,” he said.
Mr. Hu added that China may be replacing the
United States, with Mr. Xi picking up the banner of global cooperation on
trade, climate and other issues that Mr. Trump’s predecessors had carried.
“After 40 years of being students, learning
from our teacher,” he said, “now it is the time for the teacher to learn from
its students.”
Follow Steven Lee Myers on Twitter:
@stevenleemyers.
Chris Buckley contributed reporting, and
Olivia Mitchell Ryan contributed research.
