Chinese Masochism

Surprise: Many Chinese Actually Like President Trump, And Hope For His Great Deal
President Trump is the biggest foreign star on Sina’s Weibo, the Chinese version of Twitter.
By Kenneth Rapoza

President Trump is a top draw on Weibo, China’s leading social network. Many Chinese like President Trump and understand his brand of nationalism. 

If you listen to the common Chinese citizen in Beijing and even in faraway places like Chengdu in Sichuan Province, they actually like President Trump and hope for the “great deal” he mentioned in an interview on Fox News Monday night.

Maybe “like” is too strong a word. 

They understand him. 

They seem to get his brand of nationalism. 

And they like his crass comments in the press. 

President Trump is the biggest foreign star on Sina’s Weibo, the Chinese version of Twitter. 

On Tuesday, President Trump was the 15th hottest topic overall on a day when populist novelist Louis Cha Leung-yung passed away and dominated Chinese socials. 

President Trump was the No. 1 non-Chinese story being shared on the massive social network because of his trade and immigration banter.

“I think that we will make a great deal with China,” President Trump told Laura Ingraham on Fox News yesterday before taking a swipe at China for helping dismantle much of the manufacturing labor in the country. 

He said he would like to make a deal before the end of the year, but said China was not ready for one.

More tariffs are in the works. 

Investors are warily moving from $250 billion in tariffs as a base-case scenario to tariffs on around $500 billion worth of goods.

President Trump is often the No. 1 trending foreign news on Sina’s Weibo social networking platform in China. His abrasiveness remains popular with many locals, despite his anti-China rhetoric. 

Word in China is that the U.S. is using the trade tariffs as a form of economic warfare. 

They believe the U.S. is behaving unilaterally. 

They prefer to settle things through the World Trade Organization, an organization which has done much to favor China and global corporations’ love for abundant, low-cost labor and lackluster regulations.

The official view in Beijing is that they are being victimized by President Trump. 

But much like President Trump, government officials from the Foreign Affairs ministry use similar language in saying they want a “great deal for two "great" peoples.”

For years, the U.S. China Business Council has pressured Washington to sign a bilateral trade agreement with Beijing. 

In a best-case scenario, President Trump’s end game is such a treaty. 

Meanwhile, U.S. companies on the ground largely feel like they are one step behind the Chinese and are forced to play by different rules. 

Companies have been willing to play by Beijing’s rules due to the size of the Chinese market, a market that continues to grow quickly and does not resemble anything in any other developing nation.

We are experiencing trade tensions, say the Chinese. 

Not a trade war.
America’s international trade has accelerated, and the deficit with China is not going down. 

Savvy exporters are switching numbers on U.S. Commerce Department trade codes that identify the product type in order to make it look like something else and avoid tariffs. 

Steel is coming into the country and being made to look like it is coming from Vietnam, for instance, trade sources told me on Tuesday.

Other workarounds are being employed, as well.
The U.S and China are the engines of global trade.
Total trade between them expanded 13.5% in the 12 months to August 31 versus 2016 to reach $4.16 trillion, according to Panjiva Research, the trade-data unit of S&P Global Market Intelligence. 

U.S. companies are building inventory to avoid imports in the event of a worsening trade war.
U.S. goods and services trade with China totaled an estimated $710.4 billion in 2017. 

Exports were $187.5 billion and imports were $522.9 billion, according to the Office of the U.S. Trade Representative. 

The U.S. goods and services trade deficit with China was $335.4 billion in 2017, but most of that is due to goods. 

China is the U.S.’ largest goods trading partner with $635.4 billion in total two-way trade last year. 

It will be even higher this year thanks to a stronger U.S. economy and inventory build.
Goods exports to China totaled $129.9 billion while goods imports totaled $505.5 billion, which is what President Trump wants to hit in full.
The trade deficit has been one of President Trump’s key reasons for going after China.

Containers sit stacked next to gantry cranes at the Yangshan Deep Water Port in Shanghai on July 10, 2018. China has the biggest ports in the world and has benefited greatly from globalization or, as China says, its “opening up.” 

China likes to point out that President Trump misleads on the trade gap. 

They say that the services trade is growing with the U.S. and China has a deficit there. 

But last year, trade in services—exports and imports both—totaled around $75 billion. 

Services exports to China hit $57.6 billion, leading to a services trade surplus with China of $40.2 billion last year compared to a goods trade deficit of more than $370 billion. 

The two are light years apart.
Despite the relatively mousey approach to President Trump, China continues to retaliate, and Beijing plans to to retaliate further if President Trump imposes more duties.
China could shift to export controls and currency devaluation. 

This last option is less likely as it would violate their agreements with the International Monetary Fund. 

The Chinese yuan is part of the IMF’s Special Drawing Rights currency basket along with the major free-floating currencies of the advanced economies.

Some investment banks worry that China’s central bank will adopt a competitive monetary devaluation policy in retaliation to tariffs on all Chinese exports to the U.S. 

BNP Paribas estimates that full-blown tariffs would knock as much as 0.4 percentage points off U.S. GDP growth with the possibility of a sharp correction in the stock market. 

A one percentage point decline is plausible in China.
President Trump’s “America First” campaign prioritizes protecting domestic labor related to trade, investment, intellectual property and core infrastructure (think ports).
On the other side of the Pacific Ocean, Xi Jinping’s Made in China 2025 policy emphasizes domestic content of core materials (think high-tech properties and robotics), and developing advanced systems such as 5G telecom. 

Gone are the days when China made your Happy Meal toys and there were sew-and-stitch factories for Nike and Ralph Lauren.
The risks to the baseline scenario of no full-blown tariffs are about 50-50 at this point, BNP Paribas economists led by Bricklin Dwyer in New York and chief China strategist Xingdong Chen in Paris wrote in a ten-page report titled “The Long Haul, published on October 15.
A potential meeting between President Trump and Xi at the G20 Summit in Buenos Aires next month could help restore some trust. 

The perception that the two leaders are still “friends,” as Trump claims, could either give investors hope for a “great deal” or have them shelve the idea for a while longer.

China's Masochistic Fifth Column

President Trump's actions silence Chinese American supporters in Southern California
By GRACE WYLER
As a presidential candidate, Donald Trump drew support from many Chinese Americans, including Chinese-language media. But following the president's decision to take a call from China rival Taiwan, and tweets disparaging Beijing, many supporters have gone silent.

Before last year’s presidential election, Chinese-language media in Southern California were surprisingly abuzz with news and commentary voicing support for Republican nominee Donald Trump.
Now, those voices are silent.
A December phone call from the Taiwanese government that was accepted by Trump, plus the president’s choice of a vigorous China hawk to head a new foreign trade council and lots of post-election tweets disparaging the Chinese communists are casting a pall on one of Southern California’s most important foreign relationships – with China.
That, in turn, could sting financially and culturally. 

Any big change with China has the potential to alter everything from commercial projects in downtown Los Angeles to new neighborhoods in places like Irvine and Moreno Valley to enrollment at UCLA, UC Riverside and USC.
For now, the mood for many Chinese Americans – who supported Trump – is cautious.
“We try to block the bad stuff Trump says about China,” said David Wang, a 33-year-old Diamond Bar resident who founded Chinese Americans for Trump and serves on Trump’s Asian American advisory board.
“To be honest, I think he’s just testing the waters.”
That last idea was widely held just a few weeks ago.

DOUBLE LOYALTY
Before the election, while polling showed Asian Americans generally favored Democrat Hillary Clinton – and as Trump used China as a foil in his stump speeches and in national debates – his brash style and positions on issues like education and immigration nevertheless galvanized support from people in the Chinese and Taiwanese enclaves of places like the San Gabriel Valley and Orange County.
His Chinese American fans were often loud. 

They offered public support at his rallies and flooded the popular Chinese messaging app WeChat with pro-Trump discourse. 

That, in turn, captured attention in Southern California’s vibrant Chinese-language media, which include several newspapers and websites.
“Before the election ... there were newspaper articles saying that he would be good for China. 

There were groups of Chinese people for Trump who bought billboards,” said Long Liu, a San Gabriel lawyer whose firm primarily serves clients in Southern California’s ethnic Chinese community.
“It had an impact,” Liu added. 

“There were a lot of Chinese people who ended up voting for Trump.”
But since Trump’s surprise victory – and more specifically, since he accepted a congratulatory phone call from the president of Taiwan in early December – the president’s Chinese American supporters have largely gone silent.
“After the phone call, it was like all of those people, all of those articles, magically disappeared,” Liu said.
“No one talks about him anymore.”
The silence is not surprising.
In addition to taking the phone call from Taiwan, the president has doubled down on the anti-Chinese rhetoric he campaigned on, making it clear his administration will take aggressive steps to curtail Chinese-U.S. trade.
Trump has so frequently insulted the Chinese communists on Twitter that China’s state news agency demanded this week that the president stops using the microblogging platform to conduct foreign policy.
And last month, Trump appointed UC Irvine economist Peter Navarro, a brilliant critic of China’s economic policies, to head a newly created White House council tasked with overseeing global trade.
For Trump’s Chinese American supporters, many of whom are first-generation immigrants from mainland China, the president’s aggressive posturing toward China has come as a surprise and injected a degree of uncertainty about the candidate whom they rallied around during the campaign.
“Being Chinese American, you are always in the awkward position of deciding who you are loyal to,” said Wang.

UNPRECEDENTED ENGAGEMENT
Trump also is inspiring unprecedented engagement in a community that has often seemed indifferent to American politics.
“This is an issue that will impact everyone in every community,” said Yulan Chung, who runs the South Coast Chinese Cultural Association and Irvine Chinese School in Orange County.
“Everyone is trying to figure out what’s going on and what (the Trump administration) stands for.
“This is a country of immigrants,” Chung added.
“But everyone wants to protect their own interests.”
Increasingly, the interests of Chinese Americans and Chinese investors are entwined.
China has replaced Mexico as the country sending the most immigrants to California – including 33,000 in 2015, according to federal data.
China also is the leading source of foreign students at California’s public colleges.
California is a top destination for Chinese foreign investment, taking in $25.5 billion between 2000 and 2016, according to the Rhodium Group, which tracks global economic trends.
“There’s a lot at stake when it comes to California’s engagement with China,“ said Karthick Ramakrishnan, a public policy professor at UC Riverside who directs the National Asian American Survey.
“Everyone is in a state of uncertainty now, waiting to see what Trump will do on trade, on immigration, on foreign policy.”
Trump’s recent remarks on China, Ramakrishnan added, have “heightened that policy uncertainty.“
“A lot of people who didn’t take Trump’s anti-China rhetoric seriously during the campaign have been sort of rudely awakened.“

SOUTHERN CALIFORNIA EFFECT
Any policies the Trump administration pursues are likely to have an outsize effect in Southern California, and particularly in Los Angeles County.
The county is home to the largest ethnic Chinese population in the country – 421,665, according to census data – much of which is centered in the San Gabriel Valley.
Chinese communities are also growing in Orange County and the Inland region, according to U.S. census data. (Based in part on immigration from China, Irvine recently became the largest city in the mainland United States with a plurality of Asians.)
Chinese investment and tourism also are a major driver of economic growth, specifically in Los Angeles, with Chinese investors spearheading several downtown real estate development projects.
“There are lots of people in California who are making money off of our relationship with China,” said Jerrold Green, president of the Pacific Council on International Policy.
Trump’s administration could put that relationship in jeopardy, Green added, particularly in light of his hard-line stance on issues like immigration and trade.
Still, for now at least, many others believe changes in U.S.-China relations under Trump aren’t likely to affect the flow of people and money from China to California.
“There’s a fundamental confidence among Chinese Americans that the U.S. is stable, politically and socially,” said Yong Chen, a history professor at UC Irvine.
“The road to a better relationship between the two countries will be more bumpy, because it’s so uncertain. But it won’t stop people from wanting to live and study here.”