MAGA

President Trump has been right about China for decades while the entire establishment got it wrong
By Steve Hilton

The big story is President Trump refusing to back down from China.
"We are right where we want to be with China. Remember, they broke the deal with us & tried to renegotiate," he tweeted on Sunday. 

"We will be taking in tens of billions of dollars in tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-tariffed countries."
Today the president is being applauded across the political spectrum for his tough approach. 

But remember it wasn't always like that.
During his administration, Clinton said, "Everything I have learned about China as president and before -- and everything I have learned about human nature in a half-century of living -- convinces me that we have a far greater chance of having a positive influence on China's actions if we welcome China to the world community instead of shutting it out."
Clinton's successor, George W. Bush put it like this: "Open trade is a force for freedom in China, a force for stability in Asia, and a force for prosperity in the United States. When we open trade, we open minds. We trade with China because trade is good policy for our economy, because trade is good policy for democracy, and because trade is good policy for our national security."
And Bush's successor, Barack Obama, said, "The United States welcomes the rise of a China that is peaceful, stable, prosperous, and a responsible player in global affairs."
We were told all this by everyone in the establishment, left and right. 

If we open up to China, if we give them the Olympics, if we only scold them gently behind closed doors -- because they hate losing face -- .if we do all that, China will behave.
What idiots! 

China never had good intentions. 

Since the late 1980s, its stated aim has been world domination, technologically and militarily. 

Their path to that was economic domination, achieved by hacking and stealing the West's technology and exploiting its own workers and the environment. 

The establishment idiots were too naive -- or too corrupted by Chinese cash -- to see it.

There was one lone voice, though, two decades ago, who said the following about China: 

"Our biggest long-term challenge will be China... The Clinton administration, like the Bush administration, follows a policy of "constructive engagement" with China. When China disappoints expectations and ignores lofty lectures, we issue a few condemnations, hammer out some meaningless resolution at the UN (if we can get it by China's UN delegation), and call upon them to comport themselves like citizens of the community of nations. Then we get back down to business as if nothing happened. How's this policy working? It isn't."

Guess who said this? 

Well, that was Donald Trump.
And in a 2010 interview with Larry King, he said, "If you look at what China is doing to our country, it's disgraceful ... They're making all of our products. We're not manufacturing anything. They're making all our products, and they're selling it to us. And then they're loaning us the money ... They take the money, then they loan it back to us. We should be fighting China."
And snooty establishment called Trump an ignoramus. 

He was right about China. 

The entire establishment got it wrong.
Now as president, Donald Trump is delivering exactly the tough stance he called for as a private citizen two decades ago, using tariffs as his chosen weapon. 

Because, of course, unlike diplomatic statements at the U.N., tariffs actually get the Chinese regime's attention.
But still, you have the same establishment geniuses who got China so wrong lining up against tariffs.
"If we push up tariffs, they push up tariffs, the whole global economy slows, U.S. economy slows, [and we] could be pushed into recession," said David Kelly, chief global strategist for J.P. Morgan, on CNBC.
"These tariffs are a terrible idea," said Sen. Ben Sasse on "CBS This Morning." 

"But they're not just a terrible idea this week or this month. But they're a terrible idea because it doesn't make sense of where we are in economic history."
"History shows imposing more tariffs hurts the global economy and hurts the U.S. economy," said Bob Pisani on MSNBC. 

"I don't think there are many people that would disagree with that on any kind of long-term basis."
Actually the facts "disagree with that," Mr. Smarty Pants.
Since the tariffs, America's economy has gone from strength to strength. 

Faster growth, lower unemployment, higher earnings -- all since the trade war that was going to wreck the economy.
But if you want to really understand the depths of elitist idiocy over trade, tariffs and China take a look at what Never Trumper David Frum said in an interview:
If what you think you’re doing in a trade dispute with China is protecting the industries of the 1950s, like dishwashers, you’re not going to get anything. Because what the United States cares about are the industries of the future. What we’re concerned about are the technologies, the 5G telephones, intellectual property, making sure that American moviemakers are not ripped off ...tomorrow’s industries. President Trump has no vision of tomorrow’s economy.

What a perfect articulation of arrogant coastal snobbery. 

"Oh, my dear! We don't want manufacturing. We want the industries of the future."
So, according to the establishment, we don't need washing machines now? 

What's David Frum going to do, shove his dirty underpants into his 5G laptop?
The big point here is that this whole story is not just about economics. 

We are literally in a battle to determine the value system that will dominate this century and perhaps the next one, too. 

Freedom or authoritarianism? Democracy or one party rule? 

Yes, the trade deficit matters. 

The loss of manufacturing even more. 

But we need to understand that China declared war on us many years ago.
As someone said to me, fighting back might mean sacrifices. But that is part of a proper war effort. 

But in any case, we can easily afford to fight China. 

To hear some people talk about it you'd think we're totally dependent on China. 

That is absolute rubbish. 

Our economy is huge, and thanks to President Trump's pro-enterprise agenda, is growing fast. Imports from China are just 2.7 percent of its total. 

Exports to China are a mere 0.9 percent. 

Over 96 percent of our economy is not trade with China. 

We could totally disengage from China, and we'd be absolutely fine.
By the way, for years that's what I've been arguing for -- a total economic boycott of China and sanctions on other countries who collaborate with this evil regime. 

Make the world choose. 

You can do business with America or the authoritarian dictators of Beijing, who oppress their own people, put millions of Muslims in concentration camps, and are rolling out a new and insidious colonialism around the world with their rapacious belt and road infrastructure program. 

Which side are you on, Britain? Canada? The EU? You choose.
We know which side Joe Biden is on. 

If he's the Democrats' candidate in 2020, China will be the defining issue on the ballot. 

Because Joe Biden has made his choice. He's with China.
"They're going to eat our lunch ... c'mon, man. They're good people... not competitors," he said recently.
Why is he saying this? 

Well, we told you two weeks ago. 

Joe Biden is compromised by China. 

He has taken billions of dollars from the Chinese government in the form of payments to his son's businesses. 

With "Joe China" in the White House, the policies of economic surrender and political appeasement would be back.
President Trump is the first western leader in 50 years to stand up to China. 

It could turn out to be the most important policy shift of the 21st century.

Rogue Nation

China's Spies Are Stealing EU Tech Secrets, Just As China And EU Agree Stronger Ties
By Zak Doffman

Il buono, il brutto, il cattivo.

On Tuesday, China and the European Union agreed to strengthen their trade relationship, enabling European companies and investors to gain easier and faster access to China. 

"Negotiations were difficult but ultimately fruitful," said EU Council President Donald Tusk. 

"We managed to agree on a joint statement which sets the direction for our partnership based on reciprocity."
Annual trade between the EU and China is valued at more than 575 billion euros. 

Only the United States is worth more to the EU, and for China, no other nation or trading bloc is larger than Europe. 

At the heart of the agreement is eliminating discriminatory requirements for foreign companies who will no longer be forced to transfer their technology.
The joint EU-China statement said that "China and the EU commit to building their economic relationship on openness, non-discrimination, and fair competition, ensuring a level playing field, transparency, and based on mutual benefits... Both sides underlined the importance of following international standards in intellectual property protection and enforcement."
Somewhat awkwardly, just two days later the Dutch newspaper Financieele Dagblad reported on the theft of trade secrets from chipmaker ASML by "high-ranking R&D employees of the company," claiming it was linked to the Chinese state. 

The newspaper said that it had found "indirect links with the Chinese Ministry of Science and Technology."

Devil and detail
ASML makes lithography systems, used to trace the circuitry of semiconductor chips. 

The insider theft took place at the company's premises in California, with files smuggled offsite on memory sticks. 

According to Financieele Dagblad, "the theft occurred under the direction of ASML's [Chinese owned] competitor XTAL."
XTAL "was able to process the stolen knowledge at breakneck speed, and a year later had already stolen large customers from ASML, including electronics giant Samsung. A California judge sentenced XTAL to damages of $223 million at the end of 2018, according to a verdict that has so far gone unnoticed, except on some legal blogs." 

After the award of damages against them, XTAL filed for bankruptcy a month later.
ASML first disclosed that there had been a breach back in 2015, but played down the impact and released almost no detail. 

According to Reuters, "the documents from the California Superior Court in Santa Clara show six former ASML employees, all with Chinese names, breached their employment contracts by sharing information on ASML software processes with XTAL, according to the report."

"FD research shows that XTAL's Chinese parent company Dongfang Jingyuan has links with the Chinese Ministry of Science and Technology. It receives state support for a project designed to strengthen the Chinese position on the chip market in areas where ASML is the world leader, according to a confidential report from Dongfang in the hands of this newspaper."
The theft was a serious setback for ASML, causing damage running into hundreds of millions of dollars and opening the door to a level of competition that the business had believed itself protected against. 

"The captured technology is a crucial building block within the ASML production process."

Handle with care
Financieele Dagblad also reports that AIVD, the Dutch intelligence agency "has been warning about Chinese corporate espionage in the Dutch high-tech sector for some time."
The situation shines a light on the challenge for high-tech firms like ASML seeking to operate in China's buoyant market while protecting the security of their solutions and intellectual property. ASML's fast-growing Chinese market accounts for almost $2 billion of sales. 

The company has engaged with senior Chinese officials and politicians in the past, as it seeks to strike the right set of relationships. 

The delicate balance will explain the lack of allegations coming from the company over the events. 

That said, "it is important that China shows that it takes this topic seriously and that it adds action to its words," said a company spokesperson.
And so China remains an enigma, how to access the world's second-largest economy safely, and how to play nice in the open when the media is filled daily with accusations of what is going on behind the scenes.
"EU and Chinese officials meeting in Brussels on Tuesday proclaimed their summit as a win-win."
Implementation, though, might take more work.

Rogue Nation

2019 Is a Sensitive Year for China. Xi Is Nervous.
By Chris Buckley

Pictures of Xi Jinping at an exhibition for the 40th anniversary of China’s reform and opening up, at the National Museum of China in Beijing last year.

BEIJING — Chinese dictator Xi Jinping abruptly summoned hundreds of officials to Beijing recently, forcing some to reschedule long-planned local assemblies.

The meeting seemed orchestrated to convey anxious urgency. 

The Communist Party, Xi told the officials, faces major risks on all fronts and must batten down the hatches.
Whether dealing with foreign policy, trade, unemployment, or property prices, he declared, officials would be held responsible if they slipped up and let dangers spiral into real threats.
“Globally, sources of turmoil and points of risk are multiplying,” he told the gathering in January at the Central Party School. 

At home, he added, “the party is at risk from indolence, incompetence and of becoming divorced from the public.”
The speech was one of Xi’s starkest warnings since he came to power in 2012, and has been echoed at hundreds of local party meetings nationwide.
It underscores how slowing growth and China’s grinding trade fight with the United States have magnified the party leadership’s chronic fears of social unrest. 

Trade talks in Washington between American and Chinese officials ended last week without an official agreement, although President Trump delayed a deadline to increase tariffs on Chinese goods, saying that negotiators were making progress.
“Beijing is confronting significant pressure from the international community over its political and business practices that only adds to its difficulties in dealing with its domestic issues,” said Elizabeth C. Economy, a senior fellow at the Council on Foreign Relations in New York who wrote “The Third Revolution,” a study of Xi.
There are no political challengers on the horizon who could pose an immediate threat to the Communist Party or Xi. 

But his remarks made clear that especially in 2019 — a year of politically sensitive anniversaries — the party would aggressively extinguish sparks that could ignite protests and turbulence.

An assembly line in Zhejiang Province. The economy is a major concern for China’s leadership.

A year ago, Xi triumphed at China’s national legislature, abolishing a term limit on his presidency, opening the way for another decade or longer as both president and party leader, and shaking up the government to become a more compliant tool of party power.
A year on, though, Xi’s speech and other official warnings show that triumphalism has receded. 

Xi also appeared keen to signal that if anything goes wrong, other officials will also shoulder responsibility, said several experts.
“It was about showing that the risks aren’t borne by just Xi Jinping, but go down to other members of the Politburo Standing Committee and down again from there,” said Wu Qiang, a political analyst in Beijing.
Xi’s warnings were more wide-ranging than his previous repeated calls about risk, experts said, and his defensiveness is likely to constrain policy changes this year. 

Even though President Trump’s negotiators want China to take big steps in reducing state controls on the economy, Xi appears to be in no mood for gambles, Wu said.
“The central leadership’s assessment of risks to China has officially expanded from the economy to every sphere,” Mr. Wu said. 

“This year will put policing and security to the forefront.”
The timing of the meeting was designed to reinforce Xi’s message, according to an online article from People’s Daily, the Communist Party’s official news outlet, noting that local legislatures’ scheduled meetings were forced to make way for it.
Xi made clear that the economy was a major concern, telling officials to beware of “black swans” and “gray rhinos” — investor jargon for surprise economic shocks and financial risks hiding in plain sight.
The economic risks to China include rising local government debt, Mr. Trump’s trade tariffs and international pushback against China’s technological expansion, most recently against Huawei, the telecommunications equipment maker.

Officers patrolling in 2017 near the Great Hall of the People. This year, said one analyst, “will put policing and security to the forefront.”

But Xi identified dangers that extended far beyond the economy, especially political risks like the party’s ability to keep young Chinese from slipping from its ideological orbit.
He demanded stricter controls on the Chinese internet — which is already thoroughly censored — and more indoctrination to “ensure that the youth generation become builders and inheritors of socialism.”
“Younger officials must go in guns blazing to take on these major struggles,” Xi told the officials, seated in rows like students taking notes.
Yet Xi’s demands for unyielding stability could backfire, experts say, as warnings of danger around every turn could smother the initiative and flexibility that Chinese officials need to defuse long-term economic and social dangers.
The demands for rigid order on so many fronts put local cadres in near impossible binds, they said: trying to prevent job losses while cutting debt and shutting inefficient “zombie” businesses; trying to buoy private investment while cracking down on pollution and bank credit; and proclaiming public confidence in the government while stifling complaints from the public.
“If everything is a risk, you can end up mitigating nothing,” said Jude Blanchette, an expert on Chinese policymaking at Crumpton Group in Virginia, which advises companies on investments.
China’s jumpiness can seem far-fetched, given the Communist Party’s daunting reach, the underlying strength of the economy and the extensive powers of the domestic security services.
But anxiety seems to run deep in Xi’s veins.
He is the son of a Communist revolutionary, and since coming to power he has hinted at worry that party power could easily slip away. 

Soon after taking office, he said that the Soviet Union had fallen apart because Mikhail S. Gorbachev failed to lead like a “real man.”

A ceremony at Tiananmen Square in September. It is 30 years since student protests ended in a bloody crackdown around the square.

Since Xi, 65, abolished the term limit on his presidency last year, murmurs of discontent have risen among academics, businesspeople and former officials, despite censorship and the security police.
Chinese leaders’ worries have been magnified by what party journals warn is an increasingly hostile bloc of Western governments, led by the United States, that have pushed back against Chinese high-tech acquisitions, propaganda influence and the mass detentions in East Turkestan.
This year especially, Chinese officials worry that sensitive anniversaries could act as kindling, according to directives issued by local governments. 

It is 30 years since student protests for democratic change filled Beijing and other Chinese cities, ending in a bloody armed crackdown around Tiananmen Square that began late on June 3, 1989.
It is also 100 years since the watershed “May 4” patriotic student protests of 1919, 60 years since a failed uprising against Chinese rule in Tibet and 10 years since ethnic riots killed hundreds in East Turkestan, the western region where hundreds of thousands of Uighur Muslims have been detained in indoctrination camps.
The government is also preparing grand celebrations in October to commemorate 70 years since Mao founded the People’s Republic of China.
Since the January meeting, provinces, cities and towns have rolled out or freshened up plans to monitor and contain dangers. 

Officials from Hunan Province, for example, vowed to beat back debt owed by state-linked companies. 

Liu Jiayi, the party chief of Shandong Province in the east, also called for dealing with discontented former soldiers demanding better welfare.
Local governments have warned the police to redouble their vigilance against protests ahead of the “sensitive anniversary dates.” 

Small protests by Marxist students supporting striking workers in 2018 already resulted in detentions and warnings on university campuses in Beijing.
“Prevent social and economic risks evolving into political risks,” Chen Yixin, the secretary-general of the party’s law and order committee, said late last month. 

With the internet, he said, “a small incident can form into a vortex of public opinion.”

Rogue Nation

Everyone finally agrees China can't be allowed to take over the world
By James Jay Carafano

Oh my, how times have changed.
Huawei executives doing the perp walk. 

American universities shuttering Confucius Institutes. 

Voters in the Maldives, Sri Lanka and elsewhere rejecting leaders who have cozied up to China. Malaysia and others demanding better deals from Beijing or otherwise trying to dig their way out of the Chinese debt trap.
The days when people were OK with China taking over the world are coming to an end. 

Fast.
For years, supporters of Chinese policies argued that a rising China would grow to accept international norms and be a net contributor to global peace and prosperity. 

Meanwhile, critics made gloomy predictions that an increasingly powerful China would exert an increasingly destabilizing influence.
That argument is over.
Chinese telecom giant Huawei has become the posterchild for what’s wrong with China – and with good reason. 

Rather than act as a responsible global company from a responsible nation, Huawei has acted like a pirate on the high seas, abiding by no laws but its own. 

Now, the chickens are coming home to roost.
Headquartered in Shenzhen, Huawei Technologies Co. Ltd. describes itself as an “employee-owned” business, claiming that its approximately 80,000 employees hold almost 99 per cent of its stocks. However, the vast majority of those shares are controlled by a small group of people who enjoy close ties with the Chinese government and the Communist Party. 

Few people doubt that Huawei operates as an arm of the government, and U.S. intelligence agencies have warned American citizens not use the company’s products and services.
Meng Wanzhou, Hauwei’s chief financial officer, is under indictment for attempting to circumvent U.S. sanctions on Iran. 

She was arrested in December in Canada, and U.S. officials have now filed for extradition.
Separately, Huawei is also under indictment for engaging in illegal trading practices – mostly stealing stuff from T-Mobile. 

Stealing intellectual property from U.S. firms is nothing new for Chinese firms. 

Indeed, intellectual property theft is the centerpiece of the U.S. trade representative’s November report on Chinese business practices.
Oh, there are other charges as well, such as the Chinese government’s highly organized attempt to subvert international trade sanctions. 

But the trade report is replete with evidence that Huawei is not really a private company gone rogue. 

Rather, it appears to be just another corporate puppet on Beijing’s string, one deeply engaged in economic warfare.
But don’t blame the growing disenchantment with China on Huawei alone. 

It began two years ago, at the19th Chinese Communist Party Conference, when Xi Jinping laid out his expansive vision for China’s role in the global economy. 

His “Belt and Road Initiative” destined to encircle the world with Beijing’s golden tentacles; together with his expansive territorial claims, he surely caused the hearts of the party faithful to quicken.
But Xi also got the rest of the world rethinking the wisdom of handing China the keys to the global car.
Since then a great deal of research has been devoted to analyzing and illuminating China’s behavior. One notable report from Sharp Power explains how China manipulates information. 

Another, from the Center of International Private Enterprise, explains how China uses “corrosive capital” to undermine the rule of law and threaten democracy.
Today, countries that used to think of China as a benevolent checkbook are starting to question whether it was wise to turn over their telecom structure to a company that does the bidding of an aggressive foreign power with only its own interest at heart.
Now that China has the world’s attention, the question is: What’s next? 

This is no time for a new Cold War, but the Trump administration has been right to let China know that corrupt business practices and expansionist territorial claims will not go unchallenged. 

The U.S. can and must defend its interests for the long term.
The dust-up over Huawei aside, there’s a good chance the U.S. and China will cut a trade deal in the next 30 days. 

That would not be a bad thing. 

Even a limited deal, for a limited time, would show that Washington has Beijing’s attention, improve some market access for the U.S., and remove uncertainties from global markets.
As for dealing with rogue companies like Huawei, the U.S. should emphasize the necessity of abiding by the rule of law. 

Washington must not trade away criminal prosecutions in exchange for trade deals or other “concessions” from Beijing. 

When people break the law, they should be prosecuted for their crimes – not be used for negotiating “leverage.”
Similarly, per the Huawei/T-Mobile case, Chinese companies that steal trade secrets should be subject to the full range of legal punishments, including sanctions as well as criminal prosecutions.
Further, companies that knowingly use stolen intellectual property should be considered traffickers in stolen goods (a federal offense). 

Once convicted, they should be punished the way any company or individual would be for trafficking in stolen physical goods.
The world is wising up to Beijing’s “good guy” act. 

It’s time for China to pay the piper.

Rogue Nation

China’s massive attack on human rights and the rule of law continues
The Washington Post

Li Wenzu, the wife of imprisoned lawyer Wang Quanzhang, reacts before an interview at her home in Beijing on Monday. 

ON JULY 9, 2015, China launched its war on lawyers. 

Over the course of a few weeks, some 300 lawyers, legal assistants and other advocates for the rule of law were rounded up. 

One of the most prominent, Wang Quanzhang, disappeared into secret detention on Aug. 3, 2015; after being held incommunicado for nearly 3½ years, he was the last to go on trial. 

On Monday, he was sentenced to 4½ years in prison on charges of subversion, putting a punctuation mark on one of the principal means of repression used by Xi Jinping to consolidate power.
Since taking office six years ago, Xi has employed corruption investigations to purge rivals in the Communist Party; stepped up censorship of social media; and conducted a massive campaign against Muslims in the East Turkestan colony, hundreds of thousands of whom have been confined to concentration camps and forced to undergo “reeducation.” 

Meanwhile, he has sought to stifle dissent by targeting the lawyers who defend human rights activists and religious believers or bring cases against local authorities for corruption.
Most of the lawyers and activists detained in what became known (for its July 9 date) as the 709 campaign were held for a few weeks; a number were later stripped of their licenses or driven out of business. 

But at least four besides Mr. Wang have been sentenced to prison. 

In August 2016, lawyer Zhou Shifeng and activist Hu Shigen were given terms of seven and 7½ years, respectively; in November 2017, lawyer Jiang Tianyong was sentenced to two years. 

The next month, human rights activist Wu Gan was handed an eight-year term.
Mr. Wang’s trial may have come last because of his refusal to buckle under pressure — including physical torture. 

While some lawyers signed confessions or publicly confessed to plotting against the government, Mr. Wang resisted to the end. 

When his closed trial was held on Dec. 26, he threw a wrench into the proceedings by firing his government-appointed lawyer.
His wife, Li Wenzu, bravely advocated on his behalf, speaking out about his treatment and shaving her head in protest of judges’ refusal to uphold Mr. Wang’s rights under Chinese law. 

She was prevented from attending his trial and denied visitation rights, along with seven lawyers appointed by the family. 

One of those lawyers, Yu Wensheng, has himself been detained incommunicado for more than a year, according to the group Chinese Human Rights Defenders.
The crackdown on lawyers has attracted some international attention and protests; the U.N. Working Group on Arbitrary Detention found that Mr. Wang was being held arbitrarily and called for his release. 

For the most part, the Trump administration has been silent, as it is on most human rights issues involving China.

But the State Department issued a statement Tuesday calling for Mr. Wang’s release and expressing concern about “the deteriorating situation for the rule of law, human rights, and fundamental freedoms in China.” 

While that’s not likely to influence Xi, the United States should be heard on cases such as this. 

The courageous Chinese lawyers still attempting to enforce the rule of law deserve the support of the democratic world.

Rogue Nation

Systematic aggression by Chinese against our people, our business and jobs has rendered them unworthy of our trust.
By Charles Wallace

Copper plates move along a conveyor at the Jinguan Copper smelter, operated by Tongling Nonferrous Metals Group Co., in Tongling, Anhui province, China, on Thursday, Jan. 17, 2019. On the heels of record refined copper output last year, China's No. 2 producer, Tongling, says it'll defy economic gloom and strive to churn out even more of the metal in 2019. 

Tyler Cowan, an economist whom I normally greatly admire, has come out with his diagnosis of what ails the US-China relationship. 

It’s not trade, he says, but a “lack of trust.”
This has to qualify as an understatement of epic proportions. 

Here are just a few issues of note:

1. After joining the World Trade Organization in 2000, China heavily subsidized state-owned companies in the steel sector with the goal of taking over the world steel industry. It largely succeeded, despite having neither raw materials or a cheap labor way of making steel. The major price advantage was that it gave their steel companies free electricity with which to price US and European steel companies out of the market, in direct violation of WTO rules.
2. China has been feverishly building man-made islands in the South China Sea with the goal of vastly expanding its territory and threatening any country that has the temerity to believe in international waters and the law of the sea. Just ask Malaysia, Taiwan, Vietnam and the Philippines if there is a "lack of trust" over the Spratly Islands.
3. Chinese drug factories are cranking out tons of cheap fentanyl, a drug 10 times more potent than heroin, and using the US mails to distribute them to dealers in the US. Does anyone really think that China, which after all is still a closely controlled police state, doesn’t know who is doing this and could easily stop them?
4. Chinese army hackers are stealing not military secrets from the US, but private company information and turning it over to Chinese firms so that they can achieve a commercial advantage over foreign competitors. Now, I’m sure the US military does try to penetrate China’s military secrets, at least I hope they do. But I seriously doubt that the National Security Agency is helping Apple by stealing plans for the next Xiaomi.
5. China’s industrial policy known as “Made in China 2025” contains a prescription for taking over the global chip industry in the same way it has seized the steel industry. State owned companies will be sent out to buy up every Western firm they can get their hands on. Is it any wonder that the new US committee looking at these purchases is taking a dim view of them?
6. China is depending on the thousands of Chinese engineers who trained at US universities, which really have never dealt with a systemized program of economic warfare before. US universities were friendly, open and helpful to their Chinese students, as they should be, but they will find that this knowledge is being turned against the US with the goal of destroying key US industries. Did anyone mention artificial intelligence research?

Faced with the laundry list of aggressive behavior, it just plain silly to call this a “lack of trust.”
To his credit President Trump has been very vocal about what China was trying to do and has put in place trade restrictions in an effort to force Beijing to accept international standards for trade and navigation in the oceans, for starters.
The measures have had some effect -- China’s economy has slowed dramatically, not entirely due to tariffs from the US, but the taxes have begun to bite.
While China is often described as a market economy, consider this: shortly after Beijing put retaliatory tariffs on soybeans, Chinese imports of US soybeans went nearly to zero. 

Was this in reaction to a 10% tax, or did the government spread the word that US soybeans were not to be imported. 

I suspect the latter, which demonstrates that the term market economy really doesn‘t apply to a one-party system with no respect for the rule of law.
So my answer to Professor Cowan: it’s not a lack of trust but systematic aggression by China against our people, our business and jobs that has rendered them unworthy of our trust.
I hope the current round of negotiations will help restore that trust by curbing that aggression, but I seriously doubt it.

Rogue Nation

China's arrest of innocent Canadians sends a chilling message to investors
By Elise von Scheel and Katie Simpson 

Canadian entrepreneur Michael Spavor, left, and former Canadian diplomat Michael Kovrig were taken into custody by Chinese authorities last month. 

China is sending the wrong message to the international investment community with its recent move to arrest and detain two Canadians on suspicion of endangering national security, says the employer of one of the detained men.
"I'm focused on getting him out and one thing I can say for sure, the one thing he wasn't doing is endangering China's national security," said Robert Malley, president and CEO of the International Crisis Group. 

Former Canadian diplomat Michael Kovrig was in China working for the Brussels-based think-tank when he was taken into custody by Chinese authorities last month.
"China's economy is facing some headwinds and so is going to want to attract businesspeople, is going to want to show it's open for normal business," Malley told CBC News. 

"Now is not the time to have a little asterisk near that 'Open for business' [sign] saying, 'Open for business, but you can't be sure what's going to happen to those of you who come here.'"
Kovrig and entrepreneur Michael Spavor were taken into custody separately in early December, shortly after Canadian officials arrested Meng Wanzhou, chief financial officer for Huawei Technologies. 

Meng was detained in Vancouver on Dec. 1 for extradition at the request of U.S. officials, who accuse Huawei — a leading global supplier of telecommuncations equipment — of using a Hong Kong shell company to sell equipment to Iran in violation of American sanctions.
Canadian officials were quick to push back against the detentions of Kovrig and Spavor. 

Foreign Affairs Minister Chrystia Freeland said the government is deeply concerned by the arbitrary detention of the two men.

Robert Malley, president and CEO of the International Crisis Group, shares his thoughts on the detention of his employee Michael Kovrig and the message China is sending. 

Malley said his company is working to secure his employee's freedom.
"Michael [Kovrig] was not doing anything that other people would not have been doing," he said.
Malley said Kovrig was in China to talk to officials and members of the diplomatic community about the situation on the Korean peninsula and China's investments in Africa.

Wrong message, wrong time
Malley said he wouldn't comment on whether China is a safe destination for business travelers, but argued the Chinese are playing this situation badly.
"This is not the message they want to be sending," he said, adding that if the two men were to be released soon, it would send a reassuring signal to the international business community.
According to Statistics Canada, Canada imported $45.4 billion in goods and services from China in 2017, while exporting $28.8 billion to China.
While Freeland wouldn't say whether the Canadians' detentions look like retaliation for Meng's arrest, she said it would be "highly inappropriate" if that were the case.

Rogue Nation

China has not altered predatory trade practices
BBC News

The Trump administration has accused China of not changing its unfair practices, inflaming a trade dispute between the world's two largest economies.
In an update to a March report, the US said China had failed to alter its unreasonable practices.
The US has, along with other countries, long criticised Beijing over its trade policies.
The move raises tensions ahead of a high-stakes leaders meeting this month.
US President Donald Trump and Chinese dictator Xi Jinping are due to meet on the sidelines of the G20 summit in Argentina. 

Their meeting will be closely watched for any progress on resolving the bitter trade dispute.

'Strengthened monitoring'
"China has not fundamentally altered its unfair, unreasonable, and market-distorting practices," US Trade Representative (USTR) Robert Lighthizer said in a statement on Tuesday.
The findings are part of an investigation into Beijing's intellectual property and technology transfer practices, which has prompted tariffs on billions of dollars worth of Chinese goods.
Mr Lighthizer said the updated report was part of the Trump administration's "strengthened monitoring and enforcement effort".I
The report said despite the relaxation of some foreign ownership restrictions, "the Chinese have persisted in using foreign investment restrictions to require or pressure the transfer of technology from US companies to Chinese entities".
So far, the US has imposed three rounds of tariffs on Chinese goods, totalling more than $250bn (£195.5bn).
Beijing has struck back. 

It's accused the US of starting "the largest trade war in economic history" and imposed tariffs on $110bn worth of American goods.
For the first time in its history, an Asian economic summit last weekend failed to conclude with a joint leaders statement because of US-China divisions over trade.
At the meeting, US Vice-President Mike Pence said he was prepared to "more than double" the tariffs imposed on Chinese goods.

Rogue Nation

China hoped for a sharp power win at APEC, instead Xi Jinping left dissatisfied
By John Lee

With the presidents of the United States and Russia staying home, it seemed Chinese dictator Xi Jinping would dominate this weekend at the Asia-Pacific Economic Cooperation (APEC) summit and increase his country's influence in the Pacific.
China has already lent at least $1.3 billion to the Pacific Islands and about $590 million alone to the summit's host, Papua New Guinea (PNG). 

And to coincide with the PNG visit, Beijing promised $4 billion of finance to build PNG's first national road network, one of several gestures for which China secured effusive praise from Pacific Island countries including Samoa, Vanuatu, the Cook Islands, Tonga, Niue, Fiji and the President of the Federated States of Micronesia.
But nevertheless, Xi left PNG dissatisfied and disgruntled.
Xi Jinping says no one wins in 'cold war,' but Pence won't back down

For the first time in APEC's 25-year history, PNG was forced to end the summit with leaders failing to agree on a communique. 

And Beijing was also left embarrassed by reports of four Chinese officials being unceremoniously banished from the office of PNG Foreign Minister Rimbink Pato after trying to influence his statement.
For China, the trade summit should have been a public relations victory -- but it was turned into partial defeat when Chinese officials barred most reporters from participant countries and other international outlets from the forum and instead only allowed Chinese state-owned media journalists, citing space and security concerns according to Reuters.

Concerted and coordinated push back by the US and its allies
Of more enduring consequence than diplomatic embarrassment, is the concerted and coordinated push back by the US and its allies -- such as Japan and Australia -- which was done in a very public way. 

Earlier this month, Australia announced a $2.2 billion "step-up to the Pacific" -- which includes an Australian Infrastructure Financing Facility and an export credit agency to help Australian companies invest in the region.
Then on Saturday, the Trilateral Partnership countries of the US, Japan and Australia released a joint statement declaring together they would identify infrastructure projects for development and financing. 

Pointedly, these projects would adhere to "international standards and principles for development, including openness, transparency, and fiscal sustainability." 

That approach, it said, would "help to meet the region's genuine needs while avoiding unsustainable debt burdens for the nations of the region."
US Vice President Mike Pence was even more blunt during his speech at the APEC summit.

Taking a swipe at China, he said that the US "offers a better option" and "does not drown partners in a sea of debt... coerce" them or "compromise" their independence.
To indicate that the US and allied powers were serious about using economic and military means to counter Chinese influence, Pence announced over the weekend the US will join with Australia and PNG to redevelop and create a joint naval base on Manus Island. 

"We will work with these two nations to protect sovereignty and maritime rights in the Pacific Islands," he said.

Public distaste for 'sharp power' on show
Previously, in August, it was reported that China could be given the contract to redevelop a port on Manus Island. 

A military facility on Manus Island is of high strategic significance -- this is a deep-water port capable of hosting aircraft carriers and hundreds of naval vessels.
As one of the most important bases for the US fleet in the Pacific theater during World War II, it will be a second line of defence should China's People's Liberation Army Navy successfully break out of the so-called First Island Chain, a line of archipelagos that cover the Kuril Islands, Japan, Taiwan, northern Philippines and Borneo, and the Malay Peninsula.
But even if the reports about Chinese involvement in the Manus Island port are untrue, Beijing would be alarmed at the prospect of American and Australian military assets in PNG to counter any Chinese naval breakout.

As far as Beijing is concerned, the weekend was the time to showcase China's emergence as a benign superpower in the South Pacific. 

Instead, public distaste for and rebuke of its 'sharp power' was on show.
Xi defended China's trade practices and denied that its Belt and Road Initiative contained hidden geo-political and other sinister motivations. 

And no matter how adamantly he did so, it was not a conversation that Xi intended to have when he first landed in Port Moresby.
And it has not ended.
The more China offers economic largesse and inducements, the more it will need to reassure the recipient and the world that it is not laying a 'debt trap' or seeking to buy influence.
The weekend was supposed to be China's moment in the sun during this most important regional economic meeting. 

Instead, it became obvious to all that Beijing's ambitions are as feared and resisted by at least as many countries, as welcomed by others.

Rogue Nation

More Evidence Points to China as Source of Ozone-Depleting Gas

By Chris Buckley

A refrigerator factory in Shandong Province, China. Officials in Beijing have vowed to crack down on rogue factories. 

BEIJING — An environmental group says it has new evidence showing that China is behind the resurgence of a banned industrial gas that not only destroys the planet’s protective ozone layer but also contributes to global warming.
The gas, trichlorofluoromethane, or CFC-11, is supposed to be phased out worldwide under the Montreal Protocol, the global agreement to protect the ozone layer. 

In May, however, scientists published research showing that CFC-11 levels in the atmosphere had begun falling more slowly. 

Their findings suggested significant new emissions of the gas, most likely from East Asia.
Evidence then uncovered by The New York Times and the Environmental Investigation Agency pointed to rogue factories in China as a likely major source.
Now, the E.I.A. has prepared a report that it says bolsters the finding that Chinese factories are behind the return of CFC-11.
Independent laboratory tests “clearly confirm the use of CFC-11 in three enterprises” in China, the agency said in the report. 

It plans to submit the work this week in Quito, Ecuador, where delegates from nearly 200 countries are attending a Montreal Protocol meeting on the status of efforts to repair the ozone layer.
Avipsa Mahapatra, head of the climate change campaign at the E.I.A., said the Chinese authorities should make thorough regulatory changes that make underground CFC-11 production impossible. “Simply clamping down a few enterprises without systemic changes could mean that similar illegal enterprises pop up in other regions,” she said in an email.
But definitive answers and solutions to the problem of CFC-11 appear to be some way off.
Chinese officials have said they have already acted vigorously to close rogue chemical makers. 

They have also asserted that the CFC-11 emissions in question are too large to be solely from those operations.

Scientists have said that they need more time and data to pin down the causes of the CFC-11 resurgence.
“When it comes to definitive answers, I think we have to first emphasize that this mystery has yet to be solved,” said Keith Weller, a spokesman for the United Nations Environment Program, which helps organize the ozone layer talks.
The CFC-11 mystery has wide implications. 

The ozone layer has been healing, but the return of a banned substance is an alarming breach in one of the world’s most effective environmental pacts and could slow the layer’s recovery.
CFC-11 is also a potent greenhouse gas. 

If it is leaking directly into the atmosphere from factories, even more gas may be held in the products made in those factories — for example, in insulation foam — and may enter the atmosphere when those products are eventually destroyed.
Scientists discovered decades ago that CFC-11 and other manufactured chemicals used as refrigerants and aerosols and in the production of insulating foams were destroying the ozone layer, which shields humans, crops and animals from the most damaging solar rays.
In 1987, countries agreed on the Montreal Protocol to phase out such gases, steadily replacing them with ever safer substitutes. 

The protocol has been praised as a model environmental initiative.
The Chinese government has said it will investigate and stamp out any illicit production off CFC-11, and Chinese industrial associations have vowed that their businesses will not use the chemical.
Officials announced last month that the police had broken up an illegal CFC-11 plant in Henan, a rural heartland province, and found more 30 metric tons of the chemical on the site, according to an official report.
A spokesman for the Chinese Ministry of Ecology and Environment, Liu Youbin, told a news conference on Wednesday that inspectors had checked 1,172 businesses over recent months and found evidence of CFC-11 in only 10.
“If it was just those small, illegal roaming producers, the volume could not be that much,” Chen Liang, an official with the ministry who oversees international cooperation, including in ozone layer policy, said in an interview.
Mr. Weller also said the estimated new emissions of CFC-11, in the order of roughly 13,000 metric tons per year, appeared to be too great to come from illegal production alone.
Yet Chen also said there were daunting barriers to regulating China’s vast numbers of chemical and foam-making businesses. 

By his count, there were about 3,000 businesses in the foam sector. 

But the numbers of scattered, under-the-radar plants could be much higher.
Furthermore, Chen said, local inspectors across China can lack the equipment to quickly measure levels of CFC-11 or the chemicals used to make it. 

Fly-by-night chemical producers were hard to uncover and punish, he added.
“After they finish up production, everyone leaves,” Mr. Chen said. 

“This is very difficult to attack.”
CFC-11 was also once widely used as a refrigerant for fridges and air-conditioners, and Chen said that the pickup in CFC-11 might come from leakage when appliances were improperly scrapped. 

But an expert panel that advises Montreal Protocol member governments has assembled numbers that put into doubt the assertion that leakage can explain the persistent CFC-11, at least on its own.
The panel noted that it would take the destruction of 13 million large fridges a year to account for 13,000 tons of CFC-11 released in the atmosphere. 

China, where fridges tend to be smaller, disposes of about 1.5 million of them a year, the panel said.
The delegates meeting in Ecuador will receive a new United Nations assessment of the health of the ozone layer that confirms the resurgence of CFC-11 emissions, and some are likely to press China for more answers. 

But scientists have said it will take longer before they can confidently track down the source or sources of the pollution.
In September, a team of scientists published research confirming that China has been emitting unaccountably high volumes of carbon tetrachloride, an ozone-destroying chemical with uses that include the production of CFC-11. 

But Mark Lunt, a researcher at the University of Edinburgh who was a co-author of the study, stressed it was too early to identify the precise sources of the carbon tetrachloride and say if there was a link with making CFC-11.
The team of scientists would soon submit a research paper on CFC-11, Mr. Lunt said. 

Other efforts to study the resurgence of CFC-11 are also afoot.
“There’s a huge variety of questions we need to answer,” Paul A. Newman, chief scientist for earth sciences at NASA’s Goddard Space Flight Center, said in a telephone interview. 

“I just think there’s a real lack of information at this point.”

Interpol tragicomedy

China and the Case of the Interpol Chief
The New York Times

China has yet to give any details of the corruption charges against Meng Hongwei, the president of Interpol, who disappeared on a visit home and was later said to have been arrested. 

Whatever the charges are, they are almost certainly not the real reason for his fate. 

In China, the law is what the Communist Party says it is — more precisely, what Xi Jinping says it is. 

And when an official of Meng’s global stature is nabbed, it’s a political decision — even if, coincidentally, he was corrupt, as is often the case in China.
Meng understood the rules of that game. 

He had been a vice minister of public security in a police state and had played a role in many operations, including Operation Fox Hunt, which tried to bring Chinese officials and businesspeople suspected of corruption back from abroad. 

His former boss, Zhou Yongkang, was imprisoned for life on corruption charges in 2015. 

Meng’s last WhatsApp message to his wife was an emoji of a knife, which she understood to mean he was in danger.
Interpol has asked Beijing for an explanation for Meng’s detention but has taken no further action. 

The agency issued a statement on Sunday that it had accepted his resignation as president “with immediate effect” and named a replacement.

Whatever else he was, Meng was the president of Interpol, a venerable international organization based in France that facilitates cooperation among police forces from its 192 member countries. 

The position of president is largely ceremonial — a secretary general, currently Jürgen Stock of Germany, runs day-to-day operations. 

But the selection of a Chinese official for the post was a major feather in China’s cap, proudly hailed by Xi a year ago as evidence that China “abided by international rules.”
The crude arrest of Meng proclaims the opposite. 

China’s behavior puts it more closely in a league with Russia, another nation whose authoritarian leader is convinced that his country is due global respect and deference by virtue of its wealth and might, and not its actions. 

Tellingly, both China and Russia have brazenly tried to use Interpol to pursue political foes. 

China put out a “red notice,” in effect a wanted alert, for Dolkun Isa, a self-exiled activist for the rights of China’s beleaguered Uighur minority. 

Russia tried to use Interpol to catch Bill Browder, a hedge-fund manager turned anti-Vladimir Putin campaigner, among other political gadflies. 

In these cases, Interpol has properly refused to cooperate.
It is possible that Meng’s failure to pursue the Isa warrant fed Xi’s anger. 

According to The Economist, a Ministry of Public Security statement condemning Meng’s alleged wrongdoings also stressed the need for “absolute loyalty” and for “resolute support” for the country’s leader.
What Meng did to join the lengthening list of officials purged by Xi may never be fully known outside the Communist hierarchy. 

What is known, and deeply troubling, is how brazenly China is prepared to wage its internal power struggles without any regard for procedures, appearances or international norms.

Rogue Nation

Chinese Leaders Leverage Media To Shape How The World Perceives China
By ANTHONY KUHN

The front page of the Communist Party's flagship newspaper the People's Daily (center) and other papers are seen one day after the unveiling of the new Politburo Standing Committee in Beijing last year.

"A thousand newspapers with the same front page" is how the Chinese have for decades described the enforced uniformity of the country's state-controlled media.
Now, one face increasingly dominates those front pages. 

It belongs to Chinese dictator Xi Jinping, who has gone to extraordinary lengths to control the narrative about China.
"The party controls the media, and of course, that means it controls the message," says University of Hong Kong media expert David Bandurski. 

"And basically, Xi Jinping is the message."
That message has gotten mixed results. 

Often, it's what China says, not what it does, that makes the deepest impression. 

Nevertheless, it is a prime example of how shaping the world's perceptions of their country has climbed toward the top of the Chinese leadership's agenda.
The trend is evident, for example, at the China Daily, the country's top English-language newspaper, by circulation.
"Our motto used to be, 'Let China go out into the world; let the world understand China,' " says Bridget, a China Daily journalist. 

"Now it's: 'Report on China; influence the world.'"
Bridget is one of several of the paper's journalists who spoke on the condition that they be identified only by their English first names, because they weren't authorized to speak to foreign reporters.
Another, named Gary, explains that no matter what's going on, Xi is always at the top of the news.
In fact, he says, that's a rule at the government's mobile news app, which China Daily runs.
"News of Xi Jinping always comes first, and Li Keqiang always comes second," he says. 

"That's not to say that they make news every day. But even if they don't, their news stays in the top two positions."
Another journalist, Miranda, says news about Xi is edited with extreme caution.
"If we can possibly avoid using his name, we do," she says, "because an error in an article related to Xi would have very serious consequences."
For the past two decades, Xi's predecessors appeared as stiff and colorless apparatchiks, aloof from the common folk. 

By contrast, Xi has cultivated a more three-dimensional image — of a forceful, visionary leader, who is also a down-to-earth man of the people.
One minute, state media trumpet Xi's achievements in building China into an economic powerhouse. The next, they show him holding an umbrella for his wife, Peng Liyuan. 

Coverage goes into intimate detail about Xi's youth in the hardscrabble northwest of the country.
Some of Xi's earthy aphorisms have flooded social media and become popular mantras in Chinese society, such as: "We've gotta just roll up our sleeves and get down to work."
China Daily journalist Miranda says some of it seems to work on a domestic audience.
"The elder generation in my family and my classmates all have pictures of Xi and Peng on their walls," she observes.
But behind the celebrity-style coverage and crafting of Internet memes, Xi's use of the media has helped him to consolidate his political power to a degree not seen in China for decades.
Xi has "used social media accounts under his control to create a collective, subliminal message," argues independent analyst Wu Qiang.
The narrative conveyed through state media, Wu continues, presented the public with a fait accompli: that Xi had succeeded in erasing presidential term limits from the constitution, allowing him, in theory at least, to rule indefinitely. 

Censors then scrubbed any trace of opposition to Xi's move from the Internet.
The University of Hong Kong's Bandurski contends that the media's obsessive focus on Xi, meanwhile, is displacing or erasing other important news, contributing to an information vacuum about China, just when the world can least afford it.
But, Liu Xiaoying, a media scholar at Communication University of China in Beijing, argues that China needs to focus on a main character to tell its story effectively and that Xi is that character.
China began taking its image-building very seriously well before Xi became president. 

Liu traces it back to the 2008 Beijing Olympics.
He says that many Chinese felt that foreign media criticism of their pollution and human rights record spoiled their moment in the world spotlight.
"We felt our ability to transmit our views was inadequate," Liu explains. "We were unable to speak up."
Since then, China has poured billions of dollars into its state-run media, hiring journalists and public relations firms.
For example, the official Xinhua News Agency expanded its overseas bureaus from 100 a decade ago to about 180 as of 2015.
State broadcaster China Radio International, meanwhile, has grown to include coverage in 61 languages and puts out 2,700 hours of programming a day, according to the CRI website.
The message to these audiences, says Bandurski, is that China's rise is a boon to all nations.
The state-run media portray the country as a provider of public services and solutions to global problems.
"This is all about China's position in the world, in a sense, China's rightful position in the world, a kind of return to centrality for China," Bandurski says. 

"And this is all tied up with this important foreign policy of the Belt and Road."
More than 70 countries have signed on to participate in Xi's signature policy, aimed at building infrastructure, ports and roads linking the world to China.
Of course, China is hardly alone in its focus on its leader and his policies.
Maria Repnikova, a media expert at Georgia State University, says Xi has a lot in common with other leaders, from Russia's Vladimir Putin to Turkey's Recep Tayyip Erdogan.
All of them, she says, use media to portray themselves as political strongmen and to put out nationalist and populist messages.
"There's kind of the highlight on the leader himself," Repnikova notes, "his style, his personality, humor, and the communication through various channels," including personal social media accounts.
This summer, though, Xi's messaging seemed to run into resistance. 

This became apparent when authorities temporarily pulled a triumphal-sounding documentary called Amazing China. 

The film credited Xi with transforming China into a global leader in technology.
But critics took to state media to blast the movie for exaggerating China's technical prowess, when in fact, they pointed out, China remains highly reliant on the United States for high-tech products.
Analyst Wu says such propaganda may have made Chinese officials overconfident that they could win a trade war against the U.S.
"China's leaders exaggerated the country's soft power so much so that they believed their own propaganda," he scoffs. 

"It took the trade war with the U.S. to poke a hole in their illusion."
Repnikova argues that China's story, and its example of high-speed economic growth, has found more receptive audiences in many developing countries.
"We should think about the broader picture, that many countries would still probably continue to see China as this strong global actor, and potential partner and investor," she says.
But Wu notes that China is having a harder time coming up with ideas that appeal to Western audiences.
That's partly because, Wu says, the Communist Party has publicly rejected universal values, which it argues don't fit China.
Xi "publicly opposes everything from civil society to freedom and democracy. That gives him very little room to express himself," he adds.
If China has alternatives to what the West considers universal values, it hasn't been clear about what they are. 

China's centuries of political and philosophical traditions might contain some answers, but Beijing hasn't bothered to revive or explain them.
Western governments, meanwhile, have recently become more vigilant of Chinese state media as extensions of Beijing's political influence.
The U.S. Justice Department last month ordered Xinhua and the China Global Television Network to register as foreign agents.

Rogue Nation

Backlash against China jeopardizes its free ride
By BRAHMA CHELLANEY 

On a recent official visit to China, Malaysian Prime Minister Mahathir Mohamad criticized his host country’s use of major infrastructure projects – and difficult-to-repay loans – to assert its influence over smaller countries. 

While Mahathir’s warnings in Beijing against “a new version of colonialism” stood out for their boldness, they reflect a broader pushback against China’s mercantilist trade, investment and lending practices.
Since 2013, under the umbrella of its Belt and Road Initiative, China has been funding and implementing large infrastructure projects in countries around the world, in order to help align their interests with its own, gain a political foothold in strategic locations, and export its industrial surpluses. 

By keeping bidding on BRI projects closed and opaque, China often massively inflates their value, leaving countries struggling to repay their debts.
Once countries become ensnared in China’s debt traps, they can end up being forced into even worse deals to compensate their creditor for lack of repayment. 

Most notably, last December, Sri Lanka was compelled to transfer the Chinese-built strategic port of Hambantota to China on a 99-year, colonial-style lease, because it could longer afford its debt payments.
Sri Lanka’s experience was a wake-up call for other countries with outsize debts to China. 

Fearing that they, too, could lose strategic assets, they are now attempting to scrap, scale back, or renegotiate their deals. 

Mahathir, who previously cleared the way for Chinese investment in Malaysia, ended his trip to Beijing by canceling Chinese projects worth almost US$23 billion.
Countries as diverse as Bangladesh, Hungary and Tanzania have also canceled or scaled back BRI projects. 

Myanmar, hoping to secure needed infrastructure without becoming caught up in a Chinese debt trap, has used the threat of cancellation to negotiate a reduction in the cost of its planned Kyaukpyu port from $7.3 billion to $1.3 billion.
Even China’s closest partners are now wary of the BRI. 

In Pakistan, which has long worked with China to contain India and is the largest recipient of BRI financing, the new military-backed government has sought to review or renegotiate projects in response to a worsening debt crisis. 

In Cambodia, another leading recipient of Chinese loans, fears of in effect becoming a Chinese colony are on the rise.
The backlash against China can be seen elsewhere, too. 

The recent annual Pacific Islands Forum meeting was one of the most contentious in its history. Chinese policies in the region, together with the Chinese delegation leader’s behavior at the event itself, drove the president of Nauru – the world’s smallest republic, with just 11,000 inhabitants – to condemn China’s “arrogant” presence in the South Pacific. 

China cannot, he declared, “dictate things to us.”
When it comes to trade, US President Donald Trump’s escalating trade war with China is grabbing headlines, but President Trump is far from alone in criticizing China. 

With policies ranging from export subsidies and non-tariff barriers to intellectual-property piracy and tilting the domestic market in favor of Chinese companies, China represents, in the words of Harvard University’s Graham Allison, the “most protectionist, mercantilist, and predatory major economy in the world.”
As the largest merchandise exporter in the world, China is many countries’ biggest trading partner. Beijing has leveraged this role by employing trade to punish those that refuse to toe its line, including by imposing import bans on specific products, halting strategic exports (such as rare-earth minerals), cutting off tourism from China, and encouraging domestic consumer boycotts or protests against foreign businesses.
The fact is that China has grown strong and rich by flouting international trade rules. 

But now its chickens are coming home to roost, with a growing number of countries imposing anti-dumping or punitive duties on Chinese goods. 

And as countries worry about China bending them to its will by luring them into debt traps, it is no longer smooth sailing for the BRI.
Beyond Trump’s tariffs, the European Union has filed a complaint with the World Trade Organization about China’s practices of forcing technology transfer as a condition of market access. 

China’s export subsidies and other trade-distorting practices are set to encounter greater international resistance. 

Under WTO rules, countries may impose tariffs on subsidized goods from overseas that harm domestic industries.
Now, Chinese dictator Xi Jinping finds himself not only defending the BRI, his signature foreign-policy initiative, but also confronting domestic criticism, however muted, for flaunting China’s global ambitions and thereby inviting a US-led international backlash. 

Xi has discarded one of former Chinese strongman Deng Xiaoping’s most famous dicta: “Hide your strength, bide your time.” 

Instead, Xi has chosen to pursue an unabashedly aggressive strategy that has many asking whether China is emerging as a new kind of imperialist power.
International trade has afforded China enormous benefits, enabling the country to become the world’s second-largest economy, while lifting hundreds of millions of people out of poverty. 

The country cannot afford to lose those benefits to an international backlash against its unfair trade and investment practices.
China’s reliance on large trade surpluses and foreign-exchange reserves to fund the expansion of its global footprint makes it all the more vulnerable to the current pushback. 

In fact, even if China shifts its strategy and adheres to international rules, its trade surplus and foreign-currency reserves will be affected. 

In short, whichever path it chooses, China’s free ride could be coming to an end.

No Country for Predatory China

Doors Slam Shut for China Deals Around the World
Tighter rules for CFIUS are echoed in great scrutiny from Europe to Australia.

By Nisha Gopalan
Ant Financial’s Alipay: Rolling in Japan, but MoneyGram was off limits.
Doors are slamming shut in the developed world not just to Chinese investment in technology but potentially to a wave of acquisitions with a tech element, as diverse as smart heaters and robotic lawnmowers.
President Donald Trump last week signed an update to legislation for the Committee on Foreign Investment in the U.S. that broadened the inter-agency vetting committee group’s scope to encompass even minority and passive investments in three areas: Critical technology, infrastructure, and businesses that handle personal data. 

This tightening of the rules has been happening for some time, but it’s now explicit.
Just ask Jack Ma, who earlier this year had to abandon Ant Financial’s bid for MoneyGram International Inc. amid CFIUS concerns that malicious China could obtain data on U.S. military personnel who use the payments service. 

Or Broadcom Ltd., whose $117 billion bid for Qualcomm Inc. was rejected by Trump after the committee worried that the deal, and the inevitable post-merger cost-cutting, would give China’s Huawei Technologies Co. a tech leg-up.
But there’s more to this CFIUS update.
In the past, “notifications to CFIUS were voluntary, at least until CFIUS came knocking,” said Rod Hunter, a Washington-based trade partner at Baker & McKenzie LLP. 

Now, an acquirer planning to invest in anything remotely “smart” in the U.S. stands to be investigated.
Ambiguity abounds: What kinds of “personal data” are vulnerable in a world where pretty much every company must seek to monetize such information to get ahead? 

If all information is critical infrastructure, can any Chinese incursion come in under the radar? 

Would Haier Group Corp.’s purchase of General Electric Co.’s home-appliance business a couple of years ago – partly to leverage the American company’s smart-home technology – get the green light now?
China’s challenges aren’t limited to U.S., or to similar stances in Australia and Canada. 

Europe, the favored destination of late, is getting a lot tougher.
This month, Chancellor Angela Merkel’s government vetoed for the first time a possible Chinese takeover of a German company, blocking the bid for a machine-tool manufacturer, Leifeld Metal Spinning AG. 

Berlin is still reeling from the outcry sparked two years ago by Midea Group Co.’s purchase of Kuka AG, a robotics firm, and wants to lower the threshold at which it screens non-European Union acquisitions from the current 25 percent. 

Even the U.K., keen to cultivate China as Brexit looms, is proposing removing thresholds for small takeover targets, minority stakes, or even the acquisition of intellectual property.
That's not to say Beijing will have to give up all of its Made in China 2025 ambitions. 

As my colleague Noah Smith has written, joint ventures are still a way to acquire coveted technology. 

And when all else fails, China can wave its own antitrust stick. 

You can blame the current trade spat, but it’s hard not to connect President Trump’s veto of Broadcom-Qualcomm with the U.S. chipmaker’s failure to win Chinese approval of its pursuit of NXP Semiconductors NV this summer.
The fact remains that China doesn’t have a lot of options for bringing in the technology it needs. 

That puts Beijing on the back foot, under pressure to play fair and open its market to the rest of the world.
China has already promised to permit investment its financial sector, after decades of complaints from Wall Street, and now is making it easier for foreign buyers to take strategic stakes in domestically listed companies in many industries. 

That may eventually be seen as the kind of reciprocal treatment Western governments want. 

For now, though, the world’s doors are shutting to Chinese investments.