Trade War

Newsletter 159 - April 9, 2023

Welcome to the 159th edition of Trade War.

First a note: As many of you may have heard, Twitter has been making life difficult for Substack, apparently in retaliation to the newsletter platform company’s plans to launch a potential rival called “Substack Notes.” I’ve been given access to the Beta, and so far, really like what I see. More on that later.

Twitter has for now made it impossible in most cases to embed Tweets in newsletters using Substack (most of those you see below were put into this newsletter before Twitter made its move) as well as limited, at least for a time, the ability of Twitter users to ‘like’ or retweet posts that contain a Substack URL. So much for Musk’s claims of being a free speech advocate!

Here is what Substack has to say on the embedding issue:

• “Twitter has unexpectedly restricted access to embedding tweets in Substack posts. Our team is working to resolve this issue as soon as possible.”

It’s unclear whether or not this issue will soon be resolved.

Regardless, that’s not stopping the China news.

So on to that ~

French president Macron visits China and gets royal treatment but no breakthrough on Russia and Ukraine. Beijing sanctions two organizations who hosted Taiwan president Tsai Ing-wen during her recent visit to the U.S. and starts military exercises against the island.

Corruption agency continues crackdown on financial sector. China’s ‘golden shares’ get attention in Washington. And U.S. criticizes China for making life difficult for American companies.

Two Takes on China:

“While Washington is working to ‘friend-shore’ in pursuit of more resilient supply chains, and Beijing similarly is promoting self-reliance to reduce dependence on the West for critical inputs, there is no serious policy discussion . . . about full-scale economic decoupling" — Ryan Hass

“Both China and the United States have decided that in high-technology areas—at least those portions of them that are critical for national security and critical for the future of our two economies—we are going to go our separate ways. We are going to decouple.” — Stephen J. Hadley

Macron gets ‘pomp and pageantry’ from China

French president Emmanuel Macron has ended a three-day visit to China distinguished by business deals, military engagement, and pomp and pageantry, writes the South China Morning Post’s Finbarr Bermingham.

Macron signed deals expanding business for French firms operating in wind power, nuclear energy, pork and cosmetics. And a sweeping 51-point joint agreement signed on the last day of Macron’s visit said that France and China will work together on 5G technology and “deepen exchanges” between the People’s Liberation Army and French military in the Asia Pacific.

As for the pomp and pageantry, Macron got that when he was treated to tea by Xi Jinping, in a garden in Guangzhou.

“A clip posted by state media showed the two watching a musician play an ancient tune on a guqin, a seven-string Chinese instrument. Macron was pictured asking his host about the music, who explained that it was a thousand-year old piece about soul mates,” writes Bermingham.

Meanwhile, European Commission chief Ursula von der Leyen, who accompanied Macron to China but delivered a much tougher message than the French president, talking of the necessity of “de-risking” EU and China relations, got a very different welcome.

“This bonhomie and the lavish welcome afforded Macron was in stark contrast to the icy atmosphere sensed during fellow traveller Ursula von der Leyen’s 48 hours in Beijing,” writes Bermingham.

“The good-bad cop approach was always going to lead to different outcomes, but I guess Xi treated von der Leyen in a way that made it a bit humiliating,” said one French official.

Macron is “on board” with von der Leyen’s on de-risking, “but he struggles with staying on message and not making it about him, sadly,” the official added.

“Chinese leader Xi Jinping and French President Emmanuel Macron stroll through the Pine Garden in Guangzhou on Friday.” Photo: Xinhua

‘Long live the friendship between China and France!’

“From Beijing to Guangzhou, I have met students who are learning our language, enthusiastic and dynamic young people, entrepreneurs keen to innovate, and artists inspired by France. There is so much for us to do together. Long live the friendship between China and France!” tweeted Macron.

Emmanuel Macron @EmmanuelMacron

From Beijing to Guangzhou, I have met students who are learning our language, enthusiastic and dynamic young people, entrepreneurs keen to innovate, and artists inspired by France. There is so much for us to do together. Long live the friendship between China and France!

Xi isn’t ‘hiding his hand’

Macron’s visit certainly didn’t disappoint Beijing.

“Through multiple allusions to the need to “reinvent an international order of peace and stability,” Mr. Macron appeared to inch France closer to the Chinese view that the world is undergoing “changes that haven’t happened in 100 years,” as Mr. Xi put it at the end of a warm visit to Moscow last month,” writes the New York Times’ Roger Cohen.

Macron’s multiple references, along with Xi’s, to a “multipolar world” also matched with Beijing’s (and Moscow’s) argument that a U.S.-dominated world is objectionable and one whose time has passed.

What did Macron get from his visit? Other than business deals plus being treated like royalty in the finest tradition of Beijing wowing foreign visitors who come from afar, with the aim of winning them over to China’s cause through flattering their egos, it wasn’t so clear.

“A vague undertaking from Mr. Xi that he would speak to President Volodymyr Zelensky of Ukraine at some unspecified date. Mr. Xi made no commitment whatsoever to pressuring President Vladimir V. Putin of Russia to end the war,” writes Cohen.

With Macron, there is a history behind his latest attempt to cut a global peace deal.

“A little over a year ago, a couple of weeks before the war in Ukraine started, Mr. Macron traveled to Moscow to meet Mr. Putin at either end of a very long table in the Kremlin. On the flight back, around a much smaller table, he told journalists he believed he had secured undertakings from Mr. Putin not to send the 130,000 Russian troops then amassed at the border into Ukraine. Mr. Putin’s words proved worthless,” reports the Times.

During his visit to China, Macron was “notably reticent” on Taiwan, saying he saw no sign that Beijing would “overreact,” nor did he think it appropriate “to mix everything up.” And the final communiqué of Macron’s visit pledged France’s commitment to the “One China” policy, no doubt pleasing Beijing.

Just hours after Macron left on Saturday, Beijing began three days of military drills around Taiwan in response to the recent visit by Taiwan’s president Tsai Ing-wen to New York, where she accepted a global leadership award from the Hudson Institute, and to California, where she met House Speaker Kevin McCarthy at the Reagan Library outside Los Angeles.

Macron is acting “as if China was still reforming and opening up,” says Institut Montaigne’s François Godement. “At this point, you cannot say that Xi Jinping is hiding his hand.”

“Dictators have their own power and their own ambitions, and they won’t get mollified by a discussion with our dear president because their national interests and their personal interests are of a higher degree,” says Nadège Rolland, a distinguished fellow at the National Bureau of Asian Research who previously worked in the French defense ministry.

Charlie Brown and the football

“The Charlie Brown of international politics with every dictator he meets playing the role of Lucy,” says one comment on Twitter.

Lucy, of course, repeatedly pulls the football away from Charlie Brown just before he can successfully kick it; perhaps in this analogy, Beijing repeatedly convinces naive visitors of its intent to change policies and attitudes some outside China may find objectionable but that clearly matter to the party, and then ultimately disappoints.

[What you see below is a screenshot, not a clickable link - thanks Mr. “Free Speech” Musk.]

‘Basically zero’

“Analysts said the European leaders were unlikely to convince Xi to drop his personal backing of Putin or China’s economic support of Russia. Dexter Roberts, a senior fellow with the Atlantic Council, a Washington think-tank, said the possibility of any real shift in the near future in both how Xi views Putin and in how the Chinese Communist party leadership views Russia was “basically zero”.”

“Xi Jinping and other top leaders genuinely feel sympathy for Russia. They believe Putin has his back pushed against the wall by Nato expanding. They very much see a parallel . . . with the US presence in the Indo-Pacific,” Roberts said.