Anti-China Crusade

President Trump and Europe must work together to confront China
By Josh Rogin

World leaders take part in a working session on the second day of the Group of 7 summit in Biarritz, France, on Sunday. 

BIARRITZ, France — The clear imperative for the Western world to come together and confront China’s rising internal repression and external economic aggression should have been enough to overshadow any differences between strained allies at this weekend’s Group of 7 meetings. 

But no such luck.
The members of the G-7 — which includes the United States, France, Britain, Germany, Italy, Canada and Japan — created this multilateral mechanism to bring to bear their joint economic power on the solution of great challenges. 

China’s economic expansion, fueled by various unfair trade practices and directly linked to the Chinese Communist Party’s political and strategic objectives, is unquestionably the free world’s greatest test.
But with blame assignable to both the Trump administration and European members of this once-vaunted group, the best anyone hopes for this weekend in this scenic French retreat is that the G-7 summit won’t devolve into another diplomatic disaster akin to what took place in Canada last year.
President Trump hammered home his criticisms of China’s economic aggression before he even got on the plane, ordering U.S. companies to start looking for ways to leave China, raising tariffs on Chinese goods and calling out Beijing on its rampant intellectual property theft.
On Friday, President Trump referred to his confrontation with China over its economic aggression as “more important than anything else right now — just about — that we’re working on.”
Here in France, most media reports focused on President Trump’s offhand remark that he has had “second thoughts” on everything, including his trade war with China. 

But President Trump was not expressing regret or signaling a change in policy. 

In the same series of questions, he said about the trade war: “It has to happen.”
The president is escalating pressure on China even though that puts his economic accomplishments at risk. 

Make no mistake, he’s committed to seeing this through.
President Trump’s confused messaging is counterproductive. 

But his basic thrust is on point. 

China must change its predatory economic and industrial policies, by persuasion or pressure. 

If the Chinese government won’t play by basic international rules, Western free-market democracies will have no choice but to defend themselves through disengagement and decoupling that will undoubtedly have negative collateral economic consequences.
Any honest analysis must acknowledge that the Chinese government has not yet changed its behavior and that therefore President Trump’s strategy has not yet worked. 

But it’s obvious the chances of success would rise dramatically if European allies were on board.
Yet despite the fact that Europe faces the exact same threat from China’s economic aggression, European leaders here in Biarritz are saying that the onus for ending the trade war is on Washington, not Beijing.
French Emmanuel Macron said he wanted to persuade G-7 leaders (meaning President Trump) to “avoid this trade war” and reduce tensions. 

British Boris Johnson said he didn’t like tariffs and wanted “trade peace.” 

European Council Donald Tusk warned that President Trump’s use of tariffs “as a political instrument” could cause a global recession. 

None of them mentioned China’s role in the dispute or its resolution.
President Trump could blunt criticism of his China tariffs by backing off his concurrent tariff threats on our allies. 

The administration should focus on persuading European countries to join the pressure campaign against China, which is the real trade priority.
Privately, many European officials hope their countries’ stagnant economies might benefit from the U.S.-China fight, as companies from third countries pick up the business American companies leave behind. 

Also, European countries that want money from China’s One Belt, One Road initiative don’t want to anger the Chinese Communist Party before their checks clear.
A more diplomatically savvy Trump administration might point out to Europeans that China’s economic aggression comes at the expense of Europe’s own goals and interests, including confronting climate change, promoting sustainable development and protecting free markets.
The Trump administration also needs to offer European countries more real alternatives to Chinese development funds, which almost always come with political strings, corruption and ecological consequences.
According to White House read-outs, Trump discussed Hong Kong and the technology giant Huawei with his G-7 counterparts. 

What’s missing is a Trump administration explanation of how China’s crackdown on dissent and its predatory economic expansion are two parts of the same Chinese Communist Party strategy, namely to undermine and eventually supplant the free and open international order the United States and European economies depend on.
The bottom line is that President Trump and Europe must make up and find a way to get along, at least for the next year and maybe for four more years after that. 

There will be no joint statement at this year’s G-7 because there’s no consensus on what the G-7 stands for. 

But China’s economic aggression is exactly the kind of generational challenge the G-7 was designed to confront.

Italian Horse

Italy is playing with fire when it comes to China

• Italy is to be the first major European economy to join China’s Belt and Road Initiative
• The move exacerbates tensions between Italy and its neighbors.
• France wants a coordinated, united approach to China.

By Holly Ellyatt

Italian Premier Giuseppe Conte meets Chinese dictator Xi Jinping before to sign trade agreements on Belt and Road Initiative, on March 23, 2019 in Rome, Italy.

Italy’s decision to be the first major European economy to join China’s massive investment and infrastructure project, the Belt and Road Initiative (BRI), can only exacerbate tensions between Italy and its neighbors.
On Saturday, Xi Jinping and the Italian government signed a non-binding agreement for Italy to join China’s trade route and inked a total of 29 deals worth 2.5 billion euros ($2.8 billion) across an array of sectors. Italy hopes the project will boost its sluggish economy but the deal raised more than just eyebrows in Europe and the U.S. with officials criticizing the move.
The BRI is something of a 21st century Silk Road with the sea and land route stretching from Asia, the Middle East, Africa and now into Europe — with Italy being the first Group of Seven (G-7) country to sign up to the global infrastructure and development project.
China sees the BRI as a way to export more of its goods to lucrative markets; its critics see the initiative as a vanity project that increases indebtedness among its participating countries. 

The BRI gives Chinese companies unfettered access to other markets and economies, but that its own is still largely closed to foreign investment.
At the heart of concerns is that the BRI is seen as a way for China to spread its geopolitical influence — an acute concern for a Europe increasingly uncertain of its place in the world.
As such, Italy’s latest move has been seen as undermining Europe’s ability to compete with China’s economic might. 

Italy’s bilateral deal with China also came a day after French President Emmanuel Macron called for a coordinated European approach to the superpower.
Italy’s anti-establishment coalition government has already clashed with Brussels over immigration and its spending plans. 

Its deal with China is likely to be another source of tension.
“It’s clear that this does undermine Europe’s and the West’s ability to stand up to China,” Federico Santi, senior Europe analyst at Eurasia Group, told CNBC Tuesday. 

“This will be another source of friction between Italy and Europe which, ultimately, will be to the detriment of Italy itself,” he added, although he noted that the terms of the agreement between Italy and China remained to be seen.
Italy and China have played down concerns. 

Italy’s Deputy Prime Minister Luigi Di Maio told CNBC that the accord was “nothing to worry about” and Xi tried to assuage concerns in Europe too, saying on Tuesday during a visit to France that “cooperation is bigger than competition between China and Europe.”
Other EU leaders like French President Emmanuel Macron are keen for the EU to have a tougher approach to China and stress the need for reciprocal commercial ties. 

On Tuesday, Macron said while he wants the EU to deepen its ties with China, there must be a united European front when it comes to the superpower.
To emphasize this point, he invited German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker for talks with Xi in Paris on Tuesday. 

There, Macron urged China to “respect the unity of the European Union and the values it carries in the world.” 

Juncker stressed that European companies should find “the same degree of openness in the China market as Chinese ones find in Europe.”
Merkel, for her part, said that Europeans wanted to take part in the Belt and Road Initiative but that “must lead to a certain reciprocity, and we are still wrangling over that bit.”
As Macron said in Brussels last week, “the time of European naïveté is ended” as he called for the EU. For many years we had an uncoordinated approach and China took advantage of our divisions.”
With Italy pursuing its own deal with China regardless of its neighbors’ concerns, China could be able to make the most of those divisions again.