Trade War

Share this post
Trade War
dexter.substack.com

Trade War

Newsletter 26 - June 29, 2020

Dexter Roberts
Jun 30, 2020
Share this post
Trade War
dexter.substack.com

Welcome to the latest edition of Trade War. This week was another where politics and security trumped economics and business, with both the U.S. and India taking steps to sanction Chinese companies.

In the U.S., the Defense Department released a list of Chinese companies, including Huawei, that it said were linked to China’s military and thus pose a security risk, while India’s government has banned dozens of Chinese apps, including short video sensation TikTok, saying they could damage national sovereignty.

China, for its part, has warned the U.S. about political “red lines” that if crossed could jeopardize the trade deal.

Invoke emergency economic powers

As Bethany Allen-Ebrahimian of Axios and Zach Dorfman of Aspen Institute write: “The Defense Department has made public for the first time a list of twenty Chinese companies that are operating in the U.S. that are tied to the Chinese military,” including Huawei, Hangzhou Hikvision, China Railway Construction Corporation, and China Telecommunications Corporation.

Why does it matter? “President Trump has the authority to invoke emergency economic powers, including sanctions, against the 20 companies on the list,” they explain.

Twitter avatar for @BethanyAllenEbr
B. Allen-Ebrahimian @BethanyAllenEbr
Here is the list from the Pentagon. It includes Huawei, Hikvision, China Railway Construction Corporation, China State Shipbuilding Corporation, and others -- a total of 20 companies.
Image
8:11 PM ∙ Jun 24, 2020
170Likes114Retweets

Prejudicial to sovereignty and integrity

Meanwhile, in a surprise move, the Indian government announced on June 28 that it is banning 59 Chinese mobile apps “which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order,” tweets Tanvi Madan, senior fellow at the Brookings Institution.

Twitter avatar for @tanvi_madan
Tanvi Madan @tanvi_madan
In a significant move, the Indian govt, w/o naming China, has banned 59 [Chinese] mobile apps "which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order" [no. 1 on the list: #TikTok]
Image
Image
3:33 PM ∙ Jun 29, 2020
651Likes284Retweets

Big blow for China tech

The move could significantly hurt China’s tech companies “which have been looking to developing countries such as India to act as a counterweight to the U.S. for their expansion strategies,” tweets CNBC Beijing bureau chief Eunice Yoon, citing a Wall Street Journal article.

Twitter avatar for @onlyyoontv
Eunice Yoon @onlyyoontv
Potentially a big blow for #China tech firms which have been looking to developing countries such as #India to act as a counterweight to the U.S. for their expansion strategies.
wsj.comIndia Blocks Dozens of Chinese Apps, Including TikTok, Following Border ClashIndia banned dozens of the biggest Chinese mobile applications, including TikTok, in what it called a step toward ensuring safety and sovereignty of the country’s cyberspace.
5:02 PM ∙ Jun 29, 2020
17Likes7Retweets

611 million downloads in India

TikTok, for example, has seen about 30 percent of all downloads coming from India, tweets Dhruva Jaishankar, a director at the New Delhi-based Observer Research Foundation.

Twitter avatar for @d_jaishankar
Dhruva Jaishankar @d_jaishankar
A few interesting stats about Chinese apps in India: - TikTok: 611 million downloads in India (30% of total) - SHAREIt: 3rd most active app in India after WhatsApp and FB - UC Browser has 13% market share in India (2nd to Chrome at 75%)
pib.gov.inGovernment Bans 59 mobile apps which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public …The Ministry of Information Technology, invoking it’s power under section 69A of the Information Tec
4:56 PM ∙ Jun 29, 2020
338Likes139Retweets

Red lines shouldn’t be crossed

During the recent Hawaii meeting with U.S. Secretary of State Mike Pompeo, China’s top diplomat Yang Jiechi apparently delivered a warning: both sides had to “work together,” the Wall Street Journal reports, citing people familiar with the conversations.

“The U.S. side should refrain from going too far with meddling,” and “red lines shouldn’t be crossed,” a Chinese official warned the Wall Street Journal. China’s “red lines” here are seen as those it perceives as challenging its sovereignty over Hong Kong and claim to Taiwan.

“You can’t keep asking us to buy your stuff and at the same time keep beating up on us,” said Mei Xinyu, an analyst at a Chinese think tank. “That’s not how it works.”

Influence the new president

A revealing story from the Wall Street Journal’s Brian Spegele explains how Trump has been a big beneficiary of donations connected to the Chinese state. “Trump was a huge question mark for China when he took the White House. Then huge donations flowed to his re-election bid from a secretive network closely tied to Beijing,” tweets Spegele.

“The effort had early success in gaining access for those involved, helping them meet the president or top Republicans at fundraisers or at an internal GOP leadership meeting. It reveals how China seeks to build inroads into U.S. politics, gather information on U.S. leaders and if possible affect policy-making,” the Journal reports.

Twitter avatar for @BrianSpegele
Brian Spegele @BrianSpegele
Trump was a huge question mark for China when he took the White House. Then huge donations flowed to his re-election bid from a secretive network closely tied to Beijing. Grateful to the many people who helped me with this story.
wsj.comPolitical Donors Linked to China Won Access to Trump, GOPAfter the U.S. in 2016 elected a president little known in Beijing, hundreds of thousands of dollars in campaign contributions opened doors in Washington for Chinese nationals with high-level ties.
4:51 PM ∙ Jun 23, 2020
2,676Likes1,830Retweets

Australians trust in China declines precipitously

Meanwhile, Australians are losing trust in the Chinese government, a survey by the Sydney-based Lowy Institute shows. “Trust in China among Australians has more than halved amid diplomatic and trade disputes, with only 23% saying they trusted Beijing to act responsibly in the world compared to a 52% reading two years ago,” reports Reuters, citing the poll.

“Trust in our largest trading partner - China - has declined precipitously. Confidence in China’s leader Xi Jinping, has fallen even further,” wrote Lowy Institute executive director Michael Fullilove, Reuters reports.

Twitter avatar for @prchovanec
Patrick Chovanec @prchovanec
China has been damaging itself badly with the Australian public:
reuters.comTrust in China falls sharply among Australians, Lowy poll findsTrust in China among Australians has more than halved amid diplomatic and trade disputes, with only 23% saying they trusted Beijing to act responsibly in the world compared to a 52% reading two years ago, a major poll has found.
9:49 PM ∙ Jun 24, 2020
17Likes5Retweets

Josef Stalin’s successor

“As China grew richer and stronger, we believed, the Chinese Communist Party would liberalize to meet the rising democratic aspirations of its people,” said U.S. national security adviser Robert O’Brien in an extremely hard-hitting recent speech aimed directly at China’s top leadership. “Unfortunately, it turned out to be very naïve.”

“Let us be clear, the Chinese Communist Party is a Marxist-Leninist organization. The Party General Secretary Xi Jinping sees himself as Josef Stalin’s successor.”

Twitter avatar for @niubi
Bill Bishop @niubi
The Chinese Communist Party’s Ideology and Global Ambitions | The White House- transcript of O’Brien’s speech
whitehouse.govThe Chinese Communist Party’s Ideology and Global Ambitions | The White HouseRemarks delivered by National Security Advisor Robert C. O’Brien on June 24, 2020, in Phoenix, Arizona. Well, thank you Governor. That was an extraordinar
1:12 AM ∙ Jun 27, 2020
150Likes91Retweets

There is no ideological competition

Meanwhile, here’s an interesting counterpoint from China expert and longtime American diplomat Chas Freeman, who argues the opposite in an interview with The Wire China: that Beijing is not ideological at all, at least when it goes overseas.

“There is no ideological competition. Internationally, China is not attempting to export its system, which frankly, it has great trouble even defining for its own people. We [the U.S.] remain armed evangelists; we like to export our ideology.”

The U.S. has “sought in some ways to beat China back into underdevelopment. We object to its progress. We are trying to cut it off from foreign markets, whether in our opposition to the Belt and Road Initiative or through the attacks on Huawei, ZTE, and other Chinese technology companies,” Freeman says.

Twitter avatar for @thewirechina
The Wire China @thewirechina
“I worry about us. I'm not very concerned about the Chinese; they can take care of themselves. But the U.S. is not behaving wisely in the region.” — American diplomat Chas Freeman in this week’s Q&A:
thewirechina.comChas Freeman on Picking Fights the U.S. Can Win - The Wire China“I worry about us. I’m not very concerned about the Chinese; they can take care of themselves. But the U.S. is not behaving wisely in the region.”
5:06 PM ∙ Jun 29, 2020

Notable/In Depth

This chart on the lobster trade and blog from April, both from Council on Foreign Relations senior fellow Brad Setser, break down the intricacies of how Chinese tariffs do and don’t impact U.S. seafood sales.

Twitter avatar for @Brad_Setser
Brad Setser @Brad_Setser
Yes, I have a chart on lobster trade .... (updated version from a blog back in April; see cfr.org/blog/how-effec…)
Image
10:03 PM ∙ Jun 24, 2020
15Likes4Retweets

Beijing announced it will impose visa restrictions on Americans with “egregious conduct” on Hong Kong, a retaliatory move following Washington’s decision to restrict visas for Chinese officials who are seen to undermine the territory, the South China Morning reports.

Twitter avatar for @SCMPNews
SCMP News @SCMPNews
Mirroring the US’ move last week, Beijing will impose visa restrictions on Americans with “egregious conduct” on Hong Kong sc.mp/rcv1p
Image
9:05 PM ∙ Jun 29, 2020
15Likes11Retweets

Retire 'Taiwan reunifying with the mainland” and replace with it “being taken over,” is my contribution to the now indispensable POLITICO China Watcher’s weekly list of tired China narratives.

Twitter avatar for @dtiffroberts
Dexter Roberts @dtiffroberts
Retire: "Taiwan reunifying with the mainland." Replace with "Taiwan being taken over by the mainland..It has only ever been very loosely controlled by mainland China" My contribution to @dwertime's new weekly list of tired China narratives politi.co/3dsVhR3 via @politico
politi.coCanada, Covid, Kashmir — nothing to see here, says BeijingPOLITICO
4:33 AM ∙ Jun 26, 2020
23Likes6Retweets

essential reading

“Roberts’ book is the latest in an extensive literature highlighting the deep fractures in the Chinese economic model,” writes John West for the Lowy Institute’s “The Interpreter” in his kind review. The Myth of Chinese Capitalism “makes an important contribution to our understanding of China, and should be essential reading for all China-watchers.”

Twitter avatar for @LowyInstitute
The Lowy Institute @LowyInstitute
The CCP’s discriminatory hukou system is a great obstacle to changing from world’s factory to a service-driven economy. John West writes for The Interpreter.
bit.lyBook Review: What’s holding China’s economy back?The CCP’s discriminatory hukou system is a great obstacle to changing from world’s factory to a service-driven economy.
12:30 AM ∙ Jun 29, 2020
6Likes5Retweets
Share this post
Trade War
dexter.substack.com
Comments
TopNewCommunity

No posts

Ready for more?

© 2023 Dexter Roberts
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing