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August 2018

During the past month, America’s trade war with China was far and away the single most important topic in China’s newspaper editorials, accounting for nearly half of the articles certain outlets published during August.  Ancillary topics such as the US-Turkey conflict and the implosion of the lira (triggered by US tariffs) as well as the increasing defence budget in the US also received significant media attention, tied to the larger topic US-China relations.

US-China Trade War

Chinese media coverage of the developing trade war with the US in the past month was comprehensive and surprisingly diverse, with views on the war diverging by media outlet.  The nationalistic Global Times took the most aggressive line, seeing in the trade war no less than the opening moves of a global struggle for mastery in the world: “This is not a regular trade war. Trump wants to establish his “America first” policy and the trade war is a head-on blow to the entire world.  For Beijing and Washington, the trade war is a process to redefine bilateral ties amid a changing global balance of power. During the process both countries’ trading power, comprehensive strength, will and cohesion will count.”  The article leaves no doubt as to whose is in the right in the conflict of course, accusing the US of attempting force vassalage on China: The redefinition of China-US relations will come sooner or later. Some American elites do not accept China’s prosperity, believing the US can strategically contain the rise of China. They are eager to show their capability and force China to be a US economic vassal just like Japan when it accepted the Plaza Accord.”

In another article, the Global Times defended the lopsided nature of the tariffs put in place by the two countries, arguing that China is playing a slow and patient game:  “The two numbers, $200 billion and $60 billion, don’t show an imbalanced interdependent economic relationship, but rather that Washington has lost its mind on trade while China retains its rationality. The US is trying to conclude the trade disputes swiftly, but China is prepared for a protracted war.”  The concept of preparing for a protracted war was a common theme in Chinese media coverage, which pointed to China’s long-term resilience and willingness to fight to the end as a rallying cry: “A trade war will bring temporary pain to China and will add more pressure to Beijing during the first round of disputes. However, China will show its resilience in trade and social cohesion…Throughout history, the US arrogantly initiated many wars that eventually ended up hurting itself. Washington’s arrogance this time is up against a major power…China has time to fight to the end. Time will prove that the US eventually makes a fool of itself.”

China Daily took a more conciliatory stance on the evolving trade war, painting it as futile and avoidable rather than as an inevitable clash of powers.  One editorial sought to highlight the harm the US would inflict on itself a trade war, focusing on America’s large services surpluses, which have been largely ignored in the US rhetoric of trade deficits with major exporters: “[M]uch of the collateral damage [of a trade war] will hit the US, however. Historically, advanced economies tend to enjoy service surpluses but goods deficits in trade, thanks to higher productivity and added value. And US-Chinese trade ties are no exception…As the ongoing trade conflict shifts from goods tariffs to non-tariff actions in services, China is likely to target US services…Ironically, Trump’s tariffs have the potential to undermine the US’ most important competitive advantage in the postwar era high-value, high-margin services, which range from the technology sector to the pharmaceutical sector.”  Although placing tariffs on high end US services would likely hurt China too, which is dependent on these for its own economy, the article does demonstrate that China is well aware of further arrows in its quiver to wage a trade war.  The article was not slow to point out that the same front could be opened in the other trade discussions the US was conducting: “By upping the stakes in its trade war, the Trump administration is endangering US services surpluses not just with China, but also with its other “deficit targets”. Trump’s dream is to defeat China in a trade war and then use that “demonstration effect” to force others the EU, Canada and Mexico, Japan and the Republic of Korea on their knees. That’s the White House’s ultimate goal: First to “shock and awe” its trade adversaries, and then to negotiate the best terms for the US “America First”.”

In another article China Daily took an even more passive stance on the trade war, arguing that it was a good opportunity for China to deepen its own reforms as a defensive measure, a departure from the typical line that China only ever acts of its own volition rather than through external pressure:  “ The trade war ignited by the United States poses a major risk to China’s external development…To render the US trade war ineffective, China has to deepen reform and opening-up so as to release the huge domestic demand potential, which in turn would help its economic transformation and upgrading. After that, it should make full use of the economic transformation and upgrading to consolidate its unique development advantages.”  The article goes on to make specific recommendations on how to best achieve this, unleashing further domestic demand on the one hand and deepening supply side reforms in services on the other hand.  And in a parting bit of unfettered optimism the article points to the positive impact this would have not just on China but on global economic recovery as well: “Amid the US’ protectionist moves, the deepening of market-oriented reform along with the expansion of domestic demand will not only help China better deal with trade frictions, but also be helpful to China’s development and global economic recovery in the medium and long term.”

The People’s Daily, official newspaper of the Communist Party of China, charted the middle ground on media assessment of the developing trade war, seeing it inevitable on the one hand but recognising that no likely winner will emerge. In an article emphasizing the former the author writes that: “China knows that the trade war is inevitable. The US is unwilling to see China develop and prosper and then surpass it; therefore, it devotes great efforts to maintain its long-time hegemony and the so-called strategic advantages. The US wants to profit from its economic and trade relations with China, and it wants more to contain China’s development…The Trump administration regards China as its “strategic competitor” which “threatens” the US in terms of geopolitics, strategic security, economy and trade and technology, as well as ideology. Its China policy, based on zero-sum mentality, will not change as China hopes it to. Therefore, China has to cast away illusions and resolutely respond to the US.”

In another article the authors initially take a more conciliatory line, pointing to the lose-lose nature of trade wars: “No winner will emerge from a trade war, and an escalated tension is unexpected by all the wise brains around the world. The lose-lose trade war, in which the US “is firing shots to the entire world, including to itself”, has aroused ever stronger objections from the US residents and businesses.”  However the article quickly transitions to attacking the US as a bully and hegemon employing dirty trade tricks to improve its negotiating position:  “Many countries, including China, have said no to the trade bully and hegemony by taking countermeasures and filing the US to the World Trade Organization (WTO)…The arrogant words and dirty trick before a negotiation are a traditional tactics the US use to add its chips in the game. It repeated the story in recent days again by on one hand threatening and pressuring China with trade protectionism, and on the other hand advertising through various ways that it will restart talks with China.”  The article concludes with view that China will remain firm and not compromise, a view that has yet to be borne out by facts given the ongoing negotiations underway: “Such double-faced tactics will not work on China, as the latter will never swallow the bitter pill of hurting its own core interests. Expecting China to make a compromise is doomed to be the biggest strategic misjudgement for the US.”

Turkish Crisis

The economic crisis in Turkey triggered by US tariffs also attracted significant attention in China’s print media, partially to vilify the US as a global bad actor beyond the US-China relationship and partially to call for closer cooperation between China and Turkey, another example of China picking up the slack left by America’s leadership retreat.  In one editorial the Global Times accused the US of backstabbing its erstwhile ally:  “Turkey is a crucial ally of the US in the Middle East as well as the only Islamic country in NATO. It is also the most industrialized and secularized Islamic country in the Middle East. No strategist would believe that the US has any reason to abandon Turkey. But Uncle Sam, which is now advocating “America first,” has changed its previous approach and is stabbing its ally Turkey in the back.” The article sought to place US actions into the broader context of America turning on its allies and no longer being a reliable partner. “The pattern of the Cold War has come apart and the value of allies is changing. While Washington wants to maintain its alliance system, it also wishes to dredge money from allies which the US once aided economically.  Trump slapping tariffs on Turkey is both a lesson for Ankara and a warning to other US allies: No one should place its own importance above the interests of the US. Given US strategic selfishness and mercilessness when turning against its allies, it is dangerous to rely too much on the country for its economy or its security.

The People’s Daily on the other hand did see the tactical rationale for US tariffs, seeing them as specific punishment for Turkey, rather than as a manifestation of the US’ global ‘America First’ ambitions: “Trump’s sanctions on Turkey are expression of dissatisfaction on the Erdogan administration’s getting far away from the western political system and values, as well as the North Atlantic Treaty Organization (NATO) since 2016.”  However, the article goes on to defend Turkey, effectively projecting its own objectives and intentions into the country: “The Erdogan administration doesn’t want to be a pawn in the game controlled by the US and the western world, or a so-called “second class” NATO country. What it seeks is to be a bridge linking the East and the West, find a development path that suits its country and become a respectable nation.”

A subsequent Global Times article took this thinking to its logical conclusion, arguing that China and Turkey should step up collaboration: “As an influential Middle East power, the strategic adjustment of Turkey’s diplomacy will impact the globe. …. China and Turkey have new opportunities to deepen cooperation, especially with respect to the Belt and Road initiative.” Given that Chinese media coverage of Turkey has been historically negative, the idea of deeper collaboration required further explaining, first by listing China’s traditional grievances: “Turkey has caused China the most trouble during the last 50 years. Ankara sent its Turkish Brigade to fight alongside the US in the Korean War, hauled the aircraft carrier Varyag through the Bosphorus Straits, and was inconsistent in buying China’s HQ-9 missile. It was playing tricks with China. What’s most unacceptable is that Turkey was adding fuel to the Xinjiang question. Some elements in Turkey encouraged separatist sentiment, helped some radicals from Xinjiang illicitly enter the Middle East, and made irresponsible remarks on the ethnic policy in Xinjiang.”…and then by sweeping them under the rug as either irrelevant or yesterday’s news: “China and Turkey have no major disputes. Pan-Turkism can’t survive in Turkey today. Turkey is facing realistic challenges, some of which are shared by China as well. Beijing should try to be partners with Ankara, as it is a beneficial choice.”

US Military Expansion

Finally, the US National Defense Authorization Act authorising a 2.3 percent military expenditure rise, becoming the most significant investment in the US military “in modern history,” also attracted Chinese media attention.  The Global Times saw this as a both futile and aggressive act on America’s part and wrote that “The act greatly expands the Pentagon’s power, probably making it the defense department which has the largest power in the world. Maybe only the Japanese military once owned such great power in history, and in this context, the US is being more militaristic. China acknowledges US military strength and would never initiate an attack on a US military base in the way the Japanese attacked Pearl Harbor. China will never challenge the US militarily. We believe that Russia and other countries regarded as “threats” by the US also think the same way.” At the core of the article’s criticism lies the accusation that the primary focus of US defense policy is the containment of China:  “It is an aggressive act that mentions the Taiwan Straits, the South China Sea, Chinese investment in the US and even Confucius Institutes…What Washington pursues is the destruction of China’s national security, not the protection of its own national security. If one of the act’s purposes is to contain China, then the US needs to defeat China in spirit and $716 billion would be far from enough.”

On the other hand, the publishing of the US annual review of Chinese military capabilities also sparked media criticism by the Global Times which sought to justify its own even more significant defense spending increases and capability pushes: “China will certainly develop its nuclear triad capability. Its nuclear deterrence serves not only as a cornerstone of China’s national security but also as a key balance to ensure world peace. The nuclear capability of a big country represents the nation’s military strength and its political strength.”  Any criticism of China’s military expansion was a sign of the guilt on the part of the criticizer: “The PLA will surely develop its air force with long-range strike capability. The Pentagon suspects that the PLA is training for strikes against US bases in the Pacific region. There are many other countries and targets within the radius of Chinese air force’s long-range operations, but none of them show signs of worry. Why is it that only the US bases in the Pacific are worried about PLA’s potential threat? The US’ guilty conscience is self-evident.”   Interestingly the article openly admitted that Taiwan was one of the top priorities of China’s military build-out, arguing that it provided leverage for China to negotiate successfully:  “Force…is the last resort of the mainland for solving the Taiwan question but also one of the top strategic tasks of the PLA in its capability building. The prerequisite for peaceful reunification of Taiwan is the mainland’s capability of using force to launch the action. Otherwise all wonderful wishes are reduced to empty talk.”

 

 

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