The Trump Syndrome

Wall Street is starting ‘to get religion’ on China trade like President Trump

• Steve Bannon says China’s attempts to forge a two-tier deal to end the yearlong trade war with the U.S. is “wishful thinking.”
• “Wall Street is starting to get religion like Trump.” Bannon refers to the tough talk earlier this week from Blackstone co-founder Stephen Schwarzman, who has extensive ties to China.

By Matthew J. Belvedere

Steve Bannon on the US-China trade war: ‘We have all the cards’

Wall Street is coming around to President Donald Trump’s view on how China has been unfairly protecting its economy to the detriment of the rest of the world, former White House chief strategist Steve Bannon told CNBC on Thursday.
“Wall Street is starting to get religion like Trump,” said Mr. Bannon, a longtime critic of China. “Schwarzman now has religion on CNBC.”
Mr. Bannon was referring to comments earlier this week by Stephen Schwarzman, the billionaire co-founder and chief of private equity powerhouse Blackstone who has extensive ties to China.
In an interview on “Squawk Box on Tuesday, Schwartzman said that Beijing knows it must change its trade and business practices. 

But he added that China is reluctant to do so because it would slow the robust growth it’s been able to achieve over decades by putting up economic barriers.
“The upper Midwest, this is why Donald Trump is president,” Mr. Bannon said said on “Squawk Box.” 

“People know that the factories and the jobs all went to China and the fentanyl an opioids came in, into this despair of not having jobs.”
Mr. Bannon also said China’s attempt to forge a two-tier deal to end the yearlong trade war with the U.S. is “wishful thinking.” 

Last week, Trump signaled he would consider an interim trade deal with China, even though he would prefer a full agreement.
“What they’re trying to do to a large extent is trying to game the system,” Mr. Bannon said.
“They are trying to box in Donald Trump. And I think Trump has been the force of stability here,” he added. 

“This is about shifting the supply chain back to the U.S.”
As U.S. and Chinese deputy trade negotiators get ready to resume face-to-face talks in Washington on Thursday, there’s a thought that Chinese officials want to address the trade disputes first, leaving tougher national security issues for later.
Mr. Bannon said a key focus in the 2020 presidential election will be China. 

Candidates who pressure Beijing and show they can navigate a trade deal will do better, he said.
In goodwill gestures ahead of higher-level trade talks next month, the U.S. delayed by two weeks tariff rate hikes that had been set to go into effect Oct. 1 and China exempted some U.S. products from additional levies. 

Both sides have imposed billions of dollars import tariffs on each other’s goods.

Criminal Company

Killing Huawei is more important than trade deal with China
By JUN MAI 

Former Trump strategist Steve Bannon said he talks to senior officials in the White House every day about wicked China.

Driving Huawei out of the United States and Europe is “10 times more important” than a trade deal with China, according to former White House chief strategist Steve Bannon.
He also said he would dedicate all his time to shutting Chinese companies out of U.S. capital markets.
The remark by Mr Bannon, a strong advocate of an all-encompassing war against China, came days after U.S. President Donald Trump signed an executive order effectively banning Huawei from the U.S. market and cutting off its vital components supply.
“Huawei is a massive national security issue to the West,” Mr Bannon said, in a phone interview on Saturday with the South China Morning Post. 

“The executive order is 10 times more important than walking away from the trade deal. Huawei is a major national security threat, not just to the US but to the rest of the world. We are going to shut it down.”
The U.S. ban on Huawei came as a shock to capital markets and the tech industry.
Jude Blanchette of the Crumpton Group, a business advisory and geopolitical risk firm based in the U.S., said that while there was “a broad consensus” in Washington on the security concerns over Huawei equipment, the president’s executive order had surprised the market.
“We’re entering uncharted territory where actions to defend against security risks cut at complex global supply chains,” Blanchette said.
But Mr Bannon is adamant that Huawei needs to be driven out of Western markets altogether, suggesting Trump made “a mistake” in lifting a similar sanction last July on ZTE — another Chinese telecommunications equipment maker.
The U.S. had imposed the ZTE ban on the grounds that it had broken the American sanctions on Iran. But, at Trump’s urging, the restrictions on ZTE were lifted after the Chinese company agreed to a number of terms and conditions for its future operations.
“During the trade talks’ early stage, Trump gave a waiver for ZTE, which was a mistake,” Mr Bannon said.
Mr Bannon, who was fired by Trump in August 2017, is also calling for shutting Chinese companies out of American capital markets.
“The next move we make is to cut off all the IPOs, unwind all the pension funds and insurance companies in the U.S. that provide capital to the Chinese Communist Party,” he said.
“We’ll see a big move on Wall Street to restrict access to capital markets to Chinese companies until [they agree to] this fundamental reform.”

In March this year Mr Bannon revived the cold war Committee on the Present Danger specifically to target China.

The CPD was first established in the early 1950s as a bulwark against the influence of communism in the U.S. 

The group disbanded after some leading members were drafted into the Dwight Eisenhower administration, but was reformed in 1976 by U.S. patriots to counter the Soviet Union during the cold war.
Without providing further details, Mr Bannon said he “talks to senior officials in the White House every day about China.” 

When asked if he meets Trump regularly, the right-wing populist said, “No, if I need to talk to him, I go through his lawyers.”
But he cited reports by The New York Times and POLITICO in the past couple of months which said Trump “liked Steve a lot."
“It is pretty well known I was the one who worked closest with President Trump,” Mr Bannon said. 

“I’m much farther to the right than President Trump on this [China]. And I pride myself with that. [I’m] the super hawk.”
Mr Bannon said the objective of what he called “an economic war” with China was to force Beijing to carry out fundamental reforms.
“I don’t think it’s going to be resolved quickly. This is the beginning of a very long and tough process,” he said.
“I have dedicated my life to this. This is what I do 24 hours a day. The pressure we are going to keep up will be relentless. We are not going to be quiet.”

American Quislings: Wall Street and corporate America are funding China’s fight with the US

Former White House chief strategist Steve Bannon and hedge fund manager Kyle Bass accused Wall Street of funding China’s war with the U.S.

By YENNEE LEE

CNBC’s exclusive interview with Steve Bannon and Kyle Bass

Former White House chief strategist Steve Bannon and hedge fund manager Kyle Bass have accused Wall Street and corporate America of funding China’s fight with the U.S.
Bannon and Bass are members of the Committee on the Present Danger: China.

It was launched to educate and inform American citizens and policymakers about the existential threats posed by China, according to the committee’s website.
“The entire operation of the Chinese Communist Party and what they’re running in China is being funded by Wall Street,” Bannon told CNBC’s Brian Sullivan on Thursday.
“Corporate America today is the lobbying arm of the Chinese Communist Party and Wall Street is the investor relations department,” he said, calling China “the most significant existential threat that we have ever faced.”

Hedge fund manager Kyle Bass.

Mr Bass — a known China bear, who is also the founder and chief investment officer of Hayman Capital Management — claimed that large American companies are the ones pushing U.S. President Donald Trump to conclude a trade deal with China.

“If you look behind the scenes, it is corporate America pushing Trump to do a deal. And it is the corporate American chieftains that have their biggest businesses, let’s say most growth, coming out of China. And China plays that card. They play it better than anybody else,” Mr Bass told CNBC’s Sullivan.

“They open a market to very specific people to basically court influence with that person and going... into the presidential office to actually change policy,” said Bass.

No hope of coexistence with China
The Committee on the Present Danger was first established in the 1950s to warn President Harry Truman’s administration of the influence of communism in the U.S. 

The committee’s latest focus on China is its fourth iteration.
In addition to Mr Bannon and Mr Bass, other members of the group include fervent supporters of President Trump, fellows from think tanks, and former defense and intelligence officials.

Huawei is a spy agency for the Chinese Communist Party

Under President Trump, Washington has taken a tougher stance on China compared to previous administrations. 

In addition to issues surrounding trade, American intelligence chiefs expressed their distrust of Chinese tech giant Huawei and Chinese telecom company ZTE.
But the committee appeared to advocate a stronger take on rogue China compared to the Trump administration. 

In its guiding principles posted on its website, the committee said: “There is no hope of coexistence with China as long as the Communist Party governs the country.”
When asked if he would tell U.S. companies to stop doing business in China, Bannon replied: “No. What you do is you back President Trump.”
“We have a whole of government approach to really confront China on this economic war. This has never happened,” he added.

Friendship of the Willing

Steve Bannon and Guo Wengui Target a Common Enemy: China
By David Barboza

Stephen K. Bannon, the former strategist to President Trump, and Guo Wengui, who is wanted in China, have teamed up.

   
Just months after being pushed out of the White House, Stephen K. Bannon, President Trump’s former chief strategist, met with a Chinese billionaire at a suite in the luxurious Hays-Adams Hotel in Washington.
The billionaire, Guo Wengui, who is also known as Miles Kwok, was living in New York City and had landed on China’s most-wanted list, accused of bribery, fraud and money laundering. 

He was also a dissident and fierce critic of Beijing, seeking political asylum in the United States. And Mr. Bannon — increasingly obsessed with the China threat — was eager to talk about the Communist Party, corruption and American naval operations in the South China Sea.
Since their first discussion in October 2017, they have met dozens of times — in Dallas, on Mr. Guo’s yacht and, more often, at the billionaire’s $67.5 million apartment in the Sherry-Netherland Hotel, overlooking New York’s Central Park. 

The two shared a stage two weeks ago in Manhattan, at a news conference they organized to announce plans to set up a $100 million fund to investigate corruption and aid victims of Chinese government persecution.
“We both naturally despise the Chinese Communist Party,” Mr. Guo said in an interview last week, referring to Mr. Bannon. 

“That’s why we’ve become partners.”
It’s an unusual partnership between two political gadflies with a common, if overly grand, objective: bringing about the demise of the Chinese Communist Party.
One is an exiled businessman who has evidence of corruption at the highest levels of government in China. 

The other is a former Goldman Sachs banker who delights in lobbing political grenades at the “party of Davos,” a band of global "elites" that has undermined America’s interests at home and abroad.
As tensions between the United States and China grow, the two men are hoping to stoke them even further, by effectively calling for the overthrow of Beijing’s leadership. 

Mr. Guo is dipping into his fortune, while Mr. Bannon provides a strategy.
Mr. Bannon is, in effect, reprising the role of political provocateur he played before joining the Trump campaign in the summer of 2016. 

Back then, he was running the news site Breitbart, and helping promote books like “Clinton Cash,” which aimed to destroy Hillary Clinton’s White House bid.
In an interview in his hotel room two weeks ago, Mr. Bannon, 65, said the new China-related fund he will head, without pay, will gather evidence, share it with authorities — in the United States and elsewhere — and publish it in the media. 

The fund also targets Wall Street banks and law firms, which are complicit in China’s misdeeds.
The project, he says, is consistent with his populist and nationalist agenda. 

China’s reckless behavior is endangering the global economy, and sapping America’s strength.
“As a populist, this is outrageous,” Mr. Bannon said, noting that American financial institutions have helped back the worrisome global buying sprees of Chinese companies, with cash raised from ordinary people, including government pension funds. 

“The elites in this country have to be held accountable. We have to get the facts on the table.”
Mr. Guo, 50, insists that the fund offers a way to strike back at Beijing. 

China has pressed the Trump administration to extradite him so that he can face a raft of charges in China — allegations he strongly denies. 

Billions of dollars in assets he controlled have been frozen by Beijing. 

And Interpol, the pro-China police organization, has issued a warrant seeking his arrest. 

He now travels with a phalanx of security guards, saying he fears for his life.
The Chinese Embassy could not be reached for comment. 

But the Guo-Bannon alliance has alarmed Chinese "analysts", who view the two men as purveyors of conspiracy theories fueling anti-China sentiment.
For Mr. Bannon, the new effort plays to a longstanding and complicated interest in China. 

As a young naval officer in the 1970s, he patrolled the South China Sea. 

He also lived for a time in Shanghai, where he ran a small online gaming company. 

In recent years, he has come to view China as a military threat to the United States, and a fierce economic rival that refuses to play by the rules.
In helping elect Donald J. Trump, Mr. Bannon counseled him to take a tough line on China and step up trade pressure on Beijing. 

Mr. Trump obliged by tapping the Harvard-trained economist Peter Navarro, a longtime China critic known for his book “Death by China,” and Michael Pillsbury, a China expert at the Hudson Institute, as top trade advisers.

The effort has bristled Beijing’s stooges like Milos Zeman of the Czech Republic, right, who met with Xi Jinping in Prague in 2016.

It was during his time at the White House, Mr. Bannon says, that he first heard about Mr. Guo. 

The Chinese billionaire was living in New York, broadcasting accusations of high-level government corruption in China on Twitter and YouTube. 

By then, he had also applied for political asylum.
Alarmed by his social media campaign and his public denunciations of the Communist Party, Beijing began pressing the Trump administration to extradite Mr. Guo. 

Chinese investigators said he has ties to Ma Jian, a former spy chief now imprisoned in China on charges of bribery and abuse of power.
Inside the White House, there were disagreements over how to deal with Mr. Guo. 

Western businessmen, eager to cozy up to Beijing, lobbied President Trump to accede to China’s demands.
Mr. Bannon said he sided with those in the administration who opposed any handover, viewing Mr. Guo as a potentially valuable “intelligence asset.”
They met only after Mr. Bannon was forced out of the White House. 

Mr. Bannon says he received a call from Bill Gertz, a Washington journalist who has long been critical of China. 

Mr. Gertz told him that Mr. Guo was scheduled to give a talk in Washington at the Hudson Institute, a conservative think tank. 

The talk was canceled at the last minute.
Over lunch, Mr. Guo and Mr. Bannon discussed China’s military capabilities, as well as the financial implications of Beijing’s rule, including what impact the country’s mounting corporate debt might have on its economy. 

A friendship emerged.
“It was fantastic. He really impressed me,” Mr. Bannon said of his first meeting with Mr. Guo. 

“We talked about President Trump’s approach to China, and he went into corruption in the Chinese Communist Party.”
Mr. Bannon later introduced Mr. Guo to people in the hedge fund community, including J. Kyle Bass, who has soured on China and sought to profit by short-selling the Chinese currency.
As Mr. Bannon sharpened his critique of China’s rise, he also began meeting privately with some of America’s leading experts on China, to seek their counsel and outline his agenda. 

Few welcomed his remarks, according to people who attended some of the sessions. 

But more recently, his positions have gotten a warmer reception.
“The tectonic plates are shifting,” says Orville H. Schell, the director of the Center on U.S.-China Relations at the Asia Society. 

“Many analysts would have totally rejected him two years ago. But people are more sympathetic now that engagement with China has been defrocked.”

Mr. Schell adds, “On the China question, he’s no longer the skunk at the party.”
But Mr. Bannon is getting blowback from many Beijing’s stooges. 

On a trip abroad this year to drum up support for nationalist and populist leaders in Eastern and Central Europe, Mr. Bannon says, he was scolded for his positions on China by Milos Zeman, president of the Czech Republic and one of Beijing’s most zealous stooges in the region.
“He threw down on me hard,” Mr. Bannon says. 

“He said: ‘Tell Trump you didn’t learn from Hitler. You can’t fight on two fronts. You can’t take on radical Islam and China. You will end up in the bunker, like Hitler.”
A spokesman for Zeman said that he had challenged Mr. Bannon on American tariffs against China, and that the two men had parted ways in a very “cold atmosphere.”
Mr. Bannon is unbowed. 

He has agreed to serve as chairman of the Rule of Law Fund, the $100 million effort that Mr. Guo is financing. 

The fund plans to publicize its findings and offer financial support to businessmen, government officials and others who run afoul of the Chinese authorities — including those who flee overseas, like Mr. Guo himself.
Mr. Bannon has also joined Mr. Guo in targeting the HNA Group, the huge Chinese conglomerate that borrowed heavily and spent billions around the world, before debt and regulatory pressures forced the company to curb its global ambitions.
Until Twitter suspended his account late last year, Mr. Guo was waging an online war against HNA and its top executives. 

He claimed that the company was engaged in bribing top officials and their relatives, and has even spun theories about the death of the company’s co-chairman Wang Jian in an "accident" in France last summer. 

At their joint news conference last week, Mr. Bannon took the stage at the Pierre Hotel on Fifth Avenue in Manhattan to say, “Literally thousands of the best and brightest” in China have disappeared, been imprisoned or committed suicide under unusual circumstances and without due process.
“Today is about recklessness and accountability,” he added, noting that American financial institutions have close ties to political elites in Beijing. 

“Who profited off this? Who looked the other way?”

Wall Street Quislings

White House adviser Navarro warns Wall Street 'globalists' over China

By Katie Lobosco and Donna Borak

University of California at Irvine Economics Professor Peter Navarro arrives in the lobby of Trump Tower in New York, U.S., on Thursday, Jan. 5, 2017.

White House trade adviser Peter Navarro took a shot at Wall Street Friday, warning "globalist elites" against meddling with the Trump administration's policy on China.
Bankers are putting a "full court press" on the White House to make a deal that would end the escalating trade war between the two nations, Navarro said during a speech at the Center for Strategic and International Studies in Washington, DC.
"If and when there is a deal, it will be on President Donald J. Trump's terms -- not Wall Street terms," he said.
"If Wall Street is involved and continues to insinuate itself into these negotiations, there will be a stench around any deal that's consummated because it will have the imprimatur of Goldman Sachs and Wall Street," Navarro added.
Navarro, a former economics professor, accused billionaires and hedge fund managers of engaging in "shuttle diplomacy" between the United States and China, which he says weakens the President and his negotiating position.

His remarks come ahead of President Trump's expected meeting with Chinese dictator Xi Jinping at the G20 summit later this month in Argentina. 

The administration has sent mixed messages about whether the two are nearing a truce that would lift more than $250 billion in retaliatory tariffs on an array of goods ranging from chemical products and motors to luggage and hats.
The comments reflect the ongoing divisions inside the Trump administration between 'globalists' -- including those with Wall Street backgrounds like Treasury Secretary Steven Mnuchin and economic adviser Larry Kudlow -- and the patriots, who hew to the "America First" stance laid out during the campaign and early months of Trump's presidency by former chief strategist Steve Bannon.
"Wall Street is a very easy boogeyman to attack in situations like these," said Rufus Yerxa, a former US trade official who now leads the National Foreign Trade Council, in an interview with CNN. 

"But look, the concern about making sure that the US gets the right results in China without provoking a trade war comes from Main Street, and from the American companies that make things, produce jobs and export stuff."

Yerxa said his members, which include companies like Google, Walmart, Visa, General Electric and Caterpillar, have been offering input to the Trump administration wherever possible, but notes there's still "a bit of confusion" over which direction the White House may be going given ongoing internal discussions.
"We don't have any clear sense of where they are," said Yerxa, referring to any developing proposals. "A lot of the business community isn't being brought into details of that."
President Trump earlier this week promised a positive meeting with Xi.
"We'll have a good meeting and we're going to see what we can do," the President said at his Wednesday news conference following the midterm elections.
But fault lines between the US and China were on clear display Friday during a meeting between senior military officials, who challenged each other over the South China Sea, Taiwan, religious freedom and trade.
President Trump has made it a priority to take an aggressive stance against China for its unfair trade practices, including intellectual property theft and forced technology transfers. 

He's threatened to escalate the trade war further by taxing the remaining Chinese goods sold to the United States.
Many American manufacturers, farmers and lawmakers from both sides of the aisle say they appreciate the administration's efforts to change China's trade policies. 

But some argue the tariffs aren't the best way to address the issues. 

They pose a dilemma to US importers who must decide whether to absorb the higher cost of the goods or pass it on to consumers, and some exporters are hurting from China's retaliatory tariffs.

In his remarks Friday, Navarro also blamed Wall Street for the decline in manufacturing and the opioid crisis.
"If they want to do good, then spend their billions in Dayton, Ohio, in the factory towns of America where we need a rebirth of our manufacturing base and end to the opioid crisis -- which they helped create by off-shoring our production," he said.

Sina Delenda Est

Steve Bannon: China will blink in trade war with US
By Carleton English

Steve Bannon

Trade wars, while perhaps nerve-wracking, are winnable, according to former White House chief strategist Steve Bannon.
“How [the trade war] ends is in victory,” Bannon said Wednesday at a Manhattan investor conference. 

“Donald Trump is not going to back off this. The Chinese are going to blink.”
Earlier this month the US and China levied tariffs of $34 billion on each other’s goods, with the Trump administration then threatening more tariffs in response to China’s theft of US intellectual property.
“I think the No. 1 thing you’re going to see out of the trade war is the reorientation of the complete supply chain of Japan, Western Europe, the United States, and Southeast Asia,” Bannon added, noting that “the regime in China is in deep trouble.”
But for all his excitement over his former boss, Bannon conceded that he doesn’t speak directly with the president.
“I talk to guys in the White House all the time,” the 64-year-old said at the CNBC Institutional Investor Delivering Alpha Conference. 

“But with the president I make sure we go through lawyers.” 

Bannon said the ongoing Mueller investigation is why he leans on lawyers when reaching out to Trump.
Earlier at the conference, National Economic Council Director Larry Kudlow painted a rosy picture of the economy, saying: “There’s no recession in sight right now.”
Kudlow’s bullishness stems from the possibility of an unprecedented capital spending boom and the return of capital to US from Europe and China at levels unseen since the 1990s.
Those factors could contribute to GDP growth in excess of 4 percent for a quarter or two, Kudlow noted.
Kudlow’s remarks come as many from Wall Street to Washington have worried about a more volatile stock market and the brewing trade war between the US and China.
But when it comes to trade, the ball is now in Xi Jinping’s court to end the battle, Kudlow said, adding that his sources indicate that many in China want a deal to be made.

Australia on the front line of clash with China, says Steve Bannon

By Peter Hartcher

Australia, you didn't know it, but you've been at the very forefront of Donald Trump's project. 

"I think Australia is in a fight for the ages" that will decide whether the nations of the West can keep their sovereignty against Chinese intrusion, says Trump's former chief strategist, Steve Bannon, now a coach and adviser to populist movements worldwide.       
"Australia is at the forefront of the geopolitical contest of our time," he tells me in his first interview with an Australian media outlet. 

"What's playing out in Australia is more important than what's happening in the US and other places".
"If we continue on this path we're down, China will control all of the countries of South East Asia and they will control Australia," argues Bannon, the chief executive of Trump's victorious election campaign and the man credited with the creation of "Trumpism".
He says that China's advances in Australia persuaded him that the US had to act to defend itself against Beijing's economic advances.
And Trump took the first decisive action on this agenda on Friday night after months of threats and bluster. 

The President had promised to impose punitive US tariffs on imports from China unless Beijing made dramatic changes to its rules on trade and investment.
With negotiations failing, the first ever US tariffs aimed solely at China took effect at midnight on Friday, Washington time.

A 25 per cent import tax is now in place on aircraft parts and farm ploughs among a long list of US imports from China.

Trump eyes even higher tariffs as China trade war escalates

The value of imports subject to the new tariff is about $US34 billion, with the Trump administration considering applying it to a further $US16 billion worth, plus the possibility of much more to come if China doesn't capitulate. 

Trump had put "America first".
China's Commerce Ministry said that Trump had launched "the largest trade war in economic history". 

It retaliated with tariffs on imports of American soybeans, cars and whiskey, among other products.
Steve Bannon, rather than resisting Beijng's rhetoric, embraces it: "We just started a war on Friday night." 

He was fired after the first seven months of the administration amid tensions in the White House, with Trump saying his former Svengali had "lost his mind" apparently because he'd made remarks critical of some of the Trump family.
Yet Bannon is a staunch defender of the President. 

American media have reported that they remain in regular contact; Bannon says they talk through their lawyers. 

With the Mueller investigation into the Trump campaign and suspected collusion with Russia, discretion is the better part of valour, it seems.
Bannon exults: "I can't emphasise Friday night enough -- it was the day that President Trump stood up for the American worker."

Bannon says that the tariffs are merely emblematic of a much grander confrontation with China: "It's not about tariffs and math, it's about bringing manufacturing jobs back from China, it's about the dignity of workers, self-worth and community.

"Why do you think states like Wisconsin and Michigan and Ohio and Iowa that haven't voted Republican in living memory voted for Donald Trump? Because of China."
Indeed, according to Bannon, "Trump's rise was predicated on two things -- the financial crisis in 2008 that lit a match on the populist movement, and the rise of China as it profited from the West while Western elites looked the other way" because the elites, too, were making money from China even as workers suffered layoffs as a result of China's industrial success.
But Australia's trade position is vastly different. 

While Trump bemoans America's enormous $US366 billion annual trade deficit with China, Australia earns a hefty annual surplus from the China trade.
In fact, Australia generated a surplus of $35.5 billion from its merchandise trade with China last year and a further $13 billion from its trade in services with China, according to recent Australian statistics.

So how could Australia be what Bannon describes as "the canary in the mineshaft"? 

Because, he says, the struggle is not about trade in itself but about domination by the Chinese Communist Party.
"Australia is an object lesson in what to avoid. People [in Australia] played by the rules. It came up gradually, and then it was there."
Chinese investment went into "natural resources, tech, then you have overseas Chinese putting money into politics and now you finally wake up", a reference to the bills now passed by the Parliament to curb foreign interference.
"And you wake up and you say, 'hold on -- who controls our economic base', because doesn't politics ultimately come off who controls the economic base?"
"Because of Australia's example, it will not happen here in the US," says Bannon. 

"It will not be allowed to happen. People are woke."
"You," he tells me, meaning Australia, "are the San Andreas fault between China and the West. These are the two great systems that have built up over 2000 years. You are the representative of Athens and the democratic Western tradition, and China is a Confucian totalitarian system.
"The South China Sea is very quickly going to become the front line. The South China Sea will be the focus of an intense global crisis."
The US and its allies must be resolute in defence of freedom of navigation against relentless Chinese advances, he urges.
And, while Bannon thinks of Australia as having fallen heavily under China's influence, he says Australia can recover because it has "the only people who can match the common sense, grit and determination year after year of the US".
It's a view Bannon developed as a frequent visitor to Australia as a naval officer with the US Pacific Fleet in the 1970s, though he's a touch out of date with 10 years since his last visit.
"I've said it many times, though I've never said it publicly, Australia and Italy are the centre of the two major political developments where the whole issue of the future of the nation state will be decided," according to Bannon.
Italy because it's the front line of the global "populist nationalist revolt", Australia as the civilisational front line against a Chinese Communist Party quest for dominance. 

"I watch it closely. Every day."

Insane Clown President

Bannon Condemns Mnuchin’s Trade Truce as China Giveaway

By Kevin Cirilli

Former Trump political strategist Steve Bannon condemned a weekend truce in the U.S. trade dispute with China as a capitulation, signaling dissatisfaction among Trump’s allies.
Bannon targeted Treasury Secretary Steven Mnuchin, a former Goldman Sachs Group Inc. banker, for his role in the trade talks. 

Donald Trump “changed the dynamic regarding China but in one weekend Secretary Mnuchin has given it away,” Bannon said in an interview.
The Trump administration said it would hold off on tariff threats after the two nations agreed to “substantially” reduce the U.S. merchandise trade deficit with China, which last year hit a record $375 billion. 

Beijing "promised" to “significantly” increase purchases of U.S. goods and services, but there was no dollar figure attached, despite White House assurances that China would cave to its demand for a $200 billion annual reduction in the trade gap.
Trump on Monday defended the negotiations. 

“China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products -- would be one of the best things to happen to our farmers in many years!” he said in a series of postings on Twitter. 

“On China, Barriers and Tariffs to come down for first time.”
“We’re putting the trade war on hold,” Mnuchin said Sunday after the two sides released a joint statement a day earlier. 

“Right now, we have agreed to put the tariffs on hold while we execute the framework.”
Bannon said the comment from Mnuchin, who took the lead in trade talks with Chinese vice premier Liu He, showed the Treasury secretary “misses the central point” of the economic competition.
“They’re in a trade war with us and it hasn’t stopped,” Bannon said. “Mnuchin has completely misread the geopolitical, military, and historical precedence and what Trump had done was finally put the Chinese on their back heels.”
A Treasury spokeswoman didn’t immediately answer a request for comment.
Bannon suggested Mnuchin’s views on trade were out of sync with Trump’s populist political base. He compared him to Hank Paulson, who espoused a pro-China agenda as Treasury secretary under George W. Bush.
Paulson encouraged Mnuchin to travel to Beijing for a first round to trade negotiations and Mnuchin in turn lobbied Trump to authorize the trip, said a person familiar with the matter.
“You might as well have Hank Paulson doing this,” said Bannon, who is traveling to Italy this week to meet with Matteo Salvini of the Northern League about the populist party’s electoral success.
Other Trump loyalists echoed Bannon. 

Dan DiMicco, a trade adviser for Trump’s campaign and transition, joined in the criticism.
“Chinese r laughing at us again,” he said in a tweet. 

“They have never delivered on 1 promise in the past. Appeasement is the devils friend. Now we get to export our natural resources like an island nation. Soil & Water via agriculture. Energy instead of value added Mfg products!”

BANNON LAYS GROUNDWORK FOR ECONOMIC WAR IN CHINA

The promise Bannon made as a White House adviser may soon become a reality.

BY TINA NGUYEN

“We’re at economic war with China,” Steve Bannon told The American Prospect just days before he left the White House. 

The interview, which presaged his return to Breitbart, appeared to suggest the broad contours of Bannon’s thesis regarding the complex power struggle currently taking place in East Asia. 

China, which shares a 900-mile border with North Korea, accounts for 90 percent of the country’s trade. 

The United States and South Korea, meanwhile, have been close allies since the Korean War. 

The cold war being waged across the DMZ on the Korean Peninsula remains, in may ways, a proxy between the U.S. and the People’s Republic, which have long been engaged in skirmishes over I.P. theft, price undercutting, and job exportation. 

“One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path,” Bannon opined to Robert Kuttner, who days before had compared his boss, Donald Trump, to the “arrogant fool” Kim Jong Un. 

“On Korea, they’re just tapping us along. It’s just a sideshow.”
Donald Trump entered the White House prepared to hold China accountable for what he saw as currency manipulation, among other economic maneuvers. 

But Trump hasn’t quite stood by his harsh rhetoric. 

But Bannon, who is now comfortably outside the confines of the West Wing, appears prepared to turn his anti-China war into reality, enlisting allies from Henry Kissinger to Hong Kong investment banks in his fight against Chinese trade practices. 

In an interview with Bloomberg’s Joshua Green, author of the recent magnum opus Devil’s Bargain, Bannon agreed with the common perception that China’s systematic intellectual-property theft was crippling the U.S. economy. 

“There have been 4,000 years of Chinese diplomatic history, all centered on ‘barbarian management,’ minus the last 150 years,” he told Green. 

“It’s always about making the barbarians a tributary state... Our tribute to China is our technology—that’s what it takes to enter their market, and [they’ve taken] $3.5 trillion worth over the last 10 years. We have to give them the basic essence of American capitalism: our innovation.”
It’s one thing for Bannon to talk up a trade war with China, but it’s another for him to be actively agitating for one. 

Earlier this month, Bannon spoke at a conference in Hong Kong, sponsored by a Chinese bank, in which he called the former British colony “the heart of the economic-nationalist movement [that] is standing up to China.” 

He also took several meetings with Cold War-era figures, including Kissinger, the Nixon-era secretary of state who opened the door to trade with China and has been enjoying lucrative consulting fees pretty much ever since, in which the two discussed the Committee on the Present Danger, a foreign-policy interest group. 

“They understood that you couldn’t do it from inside,” Bannon says. 

“You had to go outside and, like a fire bell in the night, wake up the American people.”
For now, Bannon does not have an ally in the White House, which is currently full of figures like Gary Cohn, Steve Mnuchin, Dina Powell, and other “globalists,” who present as unlikely stewards of Trump’s campaign promises. 

He also doesn’t have much of an ally in the American electorate. 

Bannon hopes that he and his allies can pressure Trump from the outside to keep to his China promises—a similar tactic he’s used in his other political activities, such as backing the populist Roy Moore against the Trump-endorsed Luther Strange in the recent Alabama Senate race. 

Now that Bannon has made his influence known, he told Green that he was ready to keep flexing his newfound political muscle, with the goal of getting populist, hard-line, anti-China candidates into Congress. 

“Every day we are going to be making China a huge part of the ’18 and ’20 elections,” he promised.

Xitler Chinazism

Steve Bannon compares China to 1930s Germany and says US must confront Beijing now
By Benjamin Haas in Hong Kong

Steve Bannon has compared China to 1930s Germany, warning the country could go down the same dark path if the US fails to challenge its rise.
“A hundred years from now, this is what they’ll remember — what we did to confront China on its rise to world domination,” Bannon told the New York Times.
“China right now is Germany in 1933,” he said. 

“It’s on the cusp. It could go one way or the other. The younger generation is ultranationalistic.”
Donald Trump’s former senior White House aide is preparing to kick off a global anti-China crusade and the former White House chief strategist has called himself a “street fighter”, setting his sights on his next opponent: China. 

Bannon is convinced the US and China are destined for open conflict and has lambasted the country on everything from trade to intellectual property to North Korea ahead of speech in Hong Kong on Tuesday.
“China’s model for the past 25 years, it’s based on investment and exports,” he said. 

“Who financed that? The American working class and middle class. You can’t understand Brexit or the 2016 events unless you understand that China exported their deflation, they exported their excess capacity.”
“It’s not sustainable,” Bannon added. 

“The reordering of the economic relationship is the central issue that has to be addressed, and only the US can address it.”
Bannon left his position at the White House last month and said he would be “going to war for Trump against his opponents”. 

During his short tenure at Trump’s side, Bannon wielded significant influence on immigration and tax reform efforts by pulling the president to the right, and he will now seek to shape policy on China.

He has returned to leading Breitbart news, a far right website popular among many Trump supporters.
Bannon will be speaking at a conference hosted by CLSA, a unit of Citic Securities, China’s largest state-owned brokerage, and his speech will focus on “American economic nationalism and the populist revolt and Asia,” according to a CLSA spokeswoman. 

“He’s the man of the moment.”
“Donald Trump, for 30 years, has singled out China as the biggest single problem we have on the world stage,” Bannon said in an interview on CBS just days before his Hong Kong speech.
“I want China to stop appropriating our technology. China, through forced technology transfer and through stealing our technology, is cutting out the beating heart of American innovation.
“We’re not at economic war with China, China is at economic war with us.”
He admonished officials in George W Bush’s administration for their trade policies, accusing them of being weak.
Bannon will now take his fight to Chinese soil, speaking to a room filled with investors who owe much of their fortunes to China’s economic rise. 

Past speakers at the conference include Bill Clinton, Al Gore and George Clooney.
Bannon also echoed Trump on US strategy in reining in North Korea’s nuclear program, saying China was the key in dealing with the isolated state.
“If you’re a great power, how come you can’t control the Frankenstein monster you created in North Korea?” he asked in the interview with the New York Times.
“The solution to Korea runs through Beijing and we have to engage Beijing,” Bannon said in the CBS interview. 

“[North Korea] is a client state of China.”
Bannon said the US should consider “doubling down” on efforts to pressure China to act through a host of measures including sanctions, restricting access to US capital markets and penalising Chinese financial institutions.
“We have tremendous leverage to force China,” he said.

Bannon previously lived in Shanghai where he ran an online gaming company, but returned to the US in 2008. 

He has long been convinced the US is headed for a major confrontation with China.
“We’re going to war in the South China Sea in five to 10 years,” he said in March 2016 on a Breitbart podcast. 

“There’s no doubt about that.
Bannon was encouraged when Trump, before he was sworn into office, spoke directly with Taiwan’s president on the phone, infuriating China. 

China considers the self-ruled island a breakaway province, and Trump later bowed to pressure from son-in-law Jared Kushner, telling Xi Jinping the US would honourthe “One China” principle.

Sina Delenda Est

Next Stop for the Steve Bannon Insurgency: China
By MARK LANDLER

Stephen K. Bannon, the former chief strategist to Trump, views China as the greatest threat to the United States. “A hundred years from now, this is what they’ll remember — what we did to confront China on its rise to world domination,” he said. 

WASHINGTON — Stephen K. Bannon has held court in the Capitol Hill townhouse of Breitbart Media since he packed up his West Wing office last month, meeting with conservative lawmakers, advocating hard-line policies on undocumented immigrants and waging gleeful war on those he considers traitors to the Trump cause.
Now Mr. Bannon is taking his insurgency abroad.
Next week, he plans to travel to Hong Kong to deliver a keynote address at an investor conference, where he will articulate his call for a much tougher American policy toward China. 

CLSA, the Hong Kong brokerage firm that invited Mr. Bannon, is owned by a politically connected Chinese investment bank, Citic Securities.
People close to Mr. Bannon said he met recently with Henry A. Kissinger, the elder statesman who opened a diplomatic channel to China in 1972, to exchange views about the relationship with Beijing. Mr. Bannon said he has read all his books, but none of that swayed him from his preference for confrontation over diplomacy.
The meeting and speech kicks off an effort by Mr. Bannon, who served as Trump’s chief strategist, to influence his former boss on China policy as much as he does on immigration, trade or tax policy. 

Given the lack of strong voices on China in the administration and the inconsistency in its approach, Mr. Bannon believes he can make a difference, though his record when he was inside the White House was mixed.
It is no accident that of all the foreign policy issues he could have chosen, Mr. Bannon gravitated to China, where he once lived and which he now views as the greatest threat to the United States.

“A hundred years from now, this is what they’ll remember — what we did to confront China on its rise to world domination,” he said in an interview, previewing the themes in his speech.
“China right now is Germany in 1933,” Mr. Bannon said. 

“It’s on the cusp. It could go one way or the other. The younger generation is ultranationalistic.”
Mr. Bannon’s combative views on China are no secret to those who listened to Breitbart radio show before the election. 

In March 2016 he declared, “We’re going to war in the South China Sea in five to 10 years.” 

Last month, he told Robert Kuttner, co-founder of the left-leaning journal The American Prospect, “We’re at economic war with China” — one of a number of impolitic observations that hastened his departure from the White House.
But now Mr. Bannon is going to present this worldview to an audience of Chinese investors. 

His speech is likely to attract attention, if not raise eyebrows, at a forum where the past speakers have included Bill Clinton, Sarah Palin, Al Gore, Alan Greenspan and George Clooney. 

Among other things, Mr. Bannon will tell his audience that they made their wealth on the backs of American workers.
“China’s model for the past 25 years, it’s based on investment and exports,” he said. 

“Who financed that? The American working class and middle class. You can’t understand Brexit or the 2016 events unless you understand that China exported their deflation, they exported their excess capacity.”
“It’s not sustainable,” Mr. Bannon declared. 

“The reordering of the economic relationship is the central issue that has to be addressed, and only the U.S. can address it.”
Mr. Trump clearly shares that view. 

He made it a centerpiece of his campaign, and installed Mr. Bannon in an office near his, where he sought out like-minded economist Peter Navarro. 

But Mr. Bannon had as many setbacks as victories on China at the White House.
Shortly after Trump was elected, Mr. Bannon exulted when the president-elect threw in doubt America’s adherence to the “One China” policy. 

But he was undercut a month later when Trump, prodded by his son-in-law, Jared Kushner, told Xi Jinping that he would honor the policy.
Mr. Bannon poured his energy into engineering Trump’s trade agenda. 

He cheered when Trump ordered investigations of China’s theft of technology from American companies and its dumping of steel in the world market. 

But he fought constant rear-guard actions against pro-China advisers, who warned Trump not to start a trade war with China at the same time that he needed its cooperation in confronting North Korea.
Trump has suggested that he will go easier on trade if China steps up its pressure on Kim Jong-un. 

Mr. Bannon contends that this is a sucker’s bet: China is stringing along the United States and has no intention of exerting influence on its neighbor.
“If you’re a great power,” he asked, “how come you can’t control the Frankenstein monster you created in North Korea?”
Last weekend, Mr. Bannon said he was thrilled when Trump tweeted that the United States would consider halting trade “with any country that does business with North Korea.” 

The statement was aimed at China, which conducts the lion’s share of trade with the North.
But Trump has assiduously cultivated a relationship with Xi, and his willingness to confront him on this issue is not clear. 

After speaking by phone with the Chinese dictator on Wednesday, he told reporters, “I believe that Xi agrees with me 100 percent” on the threat posed by North Korea. 

There is no evidence, however, that China plans to support Mr. Trump’s call for a cutoff of oil supplies to the North.
For Mr. Bannon, who lived in Shanghai when he ran an online gaming company, the key to understanding China’s motives is to look at its history, specifically the Taiping Rebellion and the Cultural Revolution. 

“The whole thing is about control,” he said. 

“They think that by 2050 or 2075, they will be the hegemonic power.”
“We have to reassert ourselves because we have retreated,” he said. 

“We have to reassert ourselves as the real Asian power: economically, militarily, culturally, politically.”

Bannon exit a reminder of China’s success in ‘containing Trump’

By Tom Mitchell in Beijing

Steve Bannon, who has been fired as White House chief strategist

Shortly after Donald Trump met Xi Jinping for the first time at his Florida resort, a senior Chinese government official wondered aloud if the US president’s most important domestic political adviser really saw Beijing as an enemy, let alone the enemy. 
“But Steve Bannon spent years [working] at Goldman Sachs,” the official protested in a conversation with the Financial Times.
“He also reads widely and understands history. I don’t think he will be that radical.” 
Last week the ruling Chinese Communist party had its answer.
In what turned out to be his swansong interview just before he was fired, Mr Bannon said the US was engaged in a winner-take-all “economic war” with China.
He added that he fought “every day” with another Goldman Sachs alumnus, White House economic adviser Gary Cohn, and other administration figures who sought a more moderate approach towards dealing with America’s principal geopolitical rival. 
Mr Bannon’s abrupt departure is a reminder that Beijing’s strategy for “containing Trump” has so far been a successful one.
But it is also a strategy that has benefited greatly from that most precious of commodities — luck.  As it stands, Chinese officials cannot believe their luck, beginning with Mr Trump’s decision to abandon the Trans-Pacific Partnership trade agreement on his first full day in office. 
The TPP would have locked the US and China’s largest Asian trading partners in a formidable economic block from which Beijing was initially excluded.
In the likely event that the Chinese government later applied for TPP entry, Washington would have had its best opportunity to pry open the China market since Beijing asked to join the World Trade Organisation in the late 1990s. 
As one disappointed US diplomat told the FT earlier this year: “We threw away our best leverage over China on day one.” 
A People’s Liberation Army general was as gleeful as the diplomat was deflated.
In a video of an internal talk that leaked online, Jin Yi’nan called the TPP decision a “grand gift, although [Trump] does not know it”.
In the months that followed Mr Trump’s TPP decision, Chinese officials breathed easier and easier as one threat after another melted away.  
Trump did not discard the long-standing “One China” as suggested by his unprecedented December phone call with Taiwan’s president, Tsai Ing-wen. 
He did not declare, as promised on the campaign trail, China a “currency manipulator”. 
And the deadline for a “100-day” trade and investment negotiation begun in Florida passed last month without a meaningful agreement. 
While Trump’s administration has just launched a probe into alleged Chinese theft of intellectual property, it will probably drag on for at least one year.
As a result Beijing has achieved its first objective vis-à-vis Trump: to avoid any economic disruptions with its most important trading partner ahead of a Communist party congress this autumn that will mark the start of Xi’s second term in office. 
Trump has, in other words, thus thrown out his second best piece of leverage over Beijing.  
China must still navigate difficult trade and investment negotiations with a US commerce secretary, Wilbur Ross, and a US trade representative who both understand that the Chinese Communist party’s unique brand of “state capitalism” poses challenges that the WTO is not equipped to handle. 
In his confirmation hearing in June, USTR Robert Lighthizer demonstrated that he understood the perils of Chinese state capitalism as well as Hillary Clinton did.
Mrs Clinton sounded her own alarm on the subject in a series of detailed speeches while secretary of state, and would probably have been laser-focused on the issue had she defeated Trump in last year’s presidential election. 
But Beijing’s showdown with Mr Ross and Mr Lighthizer will run for a year at least.
Xi can live with that, especially when pitted against an American president whose competence and authority waste further away with each passing week.

Bannon exit provides only temporary relief to China

Bey Ben Bland in Hong Kong

The departure from the White House of Steve Bannon, one of China’s strongest critics within the Trump administration, is likely to provide only temporary relief to Beijing, China foreign policy analysts say.
Mr Bannon warned shortly before he was ousted on Friday that the US and China were locked in an existential battle for domination of the global economy, telling The American Prospect that the US should be “maniacally focused” on that “economic war” with China.
Despite the exit of one of US president Donald Trump’s most outspoken nationalist advisers, the Trump administration went ahead on Friday with the formal launch of an investigation into Chinese intellectual property theft.
The Global Times, a tabloid newspaper that is owned by the People’s Daily, the mouthpiece of the Chinese Communist party, argued in an editorial on Saturday that Mr Bannon’s “toxic legacy” when it comes to China should leave the White House with him.
But analysts argued that any respite would be temporary.
“It may be good for China in the short run but it won’t have a profound impact in the long run because he’s just one person and Trump has the final say,” said Chen Dingding, a professor of international relations at Jinan University in Guangzhou.
While some analysts have argued that Beijing can take advantage of Mr Trump’s transactional approach to politics and his diminution of the traditional foreign policy establishment, Chen said that the high turnover among the President’s staff made it very hard for China.
“Beijing does not prefer the personal approach, as it’s highly risky and unstable,” he said.
“The Chinese government would prefer to deal with institutions as they provide more certainty.” Ashley Townshend, an expert on China-US relations at the University of Sydney, said that even with Mr Bannon gone, many other Trump administration officials — including senior trade advisers Robert Lighthizer, Peter Navarro and Dennis Shea — are still pushing for aggressive measures to reduce the US trade deficit with China.
“If Beijing expects Trump’s Asia team to go soft in the wake of Bannon’s dismissal they will be sorely disappointed,” said Mr Townshend.
Some Chinese observers even argued that life could get tougher for Beijing without Mr Bannon in the White House because his isolationist views undermined Washington’s standing in Asia and enhanced China’s position as a result.
“It was his nationalist economic agenda that led to the death of the Trans-Pacific Partnership, which was a huge strategic gain for China, said Zhang Baohui, a professor of political science at Lingnan University in Hong Kong.
Beyond killing off the TPP, a 12-nation trade agreement promoted by the Obama administration and seen by many as creating a rival economic bloc to China, Zhang said that the nationalist approach promoted by Mr Bannon had undermined the international legitimacy of the US more generally.
If Trump’s foreign policy tilts back to its more “traditional roots” without Mr Bannon, Beijing would stand to lose, he warned.
“The odd reality could be that while the establishment types in the Trump administration may tone down economic conflicts with China, they may also up the ante on strategic, security, and diplomatic fronts,” he said.
The Chinese foreign ministry did not respond to a request for comment by the time of publication.

The New Messiah

Steve Bannon has got a good point on China
By Heather Long 

President Trump's right-hand guy Steve Bannon has been called everything from a “mastermind” to a “racist, anti-Semite.” 

Regardless of what you think of Bannon, he just made a very good point about China.
“To me, the economic war with China is everything. We have to be maniacally focused on that,” Bannon told the American Prospect in a jaw-dropping interview that covered everything from urinating on yourself to North Korea. 

“If we continue to lose it, we're five years away, I think, 10 years at the most, of hitting an inflection point from which we'll never be able to recover.”
Many experts across the political spectrum say Bannon is right: China is beating up America economically, and neither the U.S. government nor U.S. businesses have done much about it for years.
“It's a weird day when I agree with Steve Bannon, but he's right on this,” says Jennifer Harris, a China expert at the Council on Foreign Relations and a former top staffer in Obama's State Department. 

“Going back to George W. Bush, America's policy toward China has been to ask nicely. That has not panned out well.”
Trump often points to the United States' $310 billion trade deficit with China last year as the ultimate sign of a “bad deal.” 

But that's not the real problem. 

The deficit is happening mainly because Americans are shoppers, not savers. 

People in the United States buy a lot of stuff, and that's unlikely to change.
The real issue is that the Chinese are pirating American ideas and technologies. 

In the 1990s and early 2000s, people were worried about China illegally copying movies, music and books. 

The stakes are a lot higher now as the world's top economies compete on groundbreaking technologies in cloud computing, robotics, artificial intelligence and gene editing. 

Whoever controls these technologies will dominate global business — and more.
“When historians look back at this period of history, they are not going to wonder why the Chinese were stealing U.S. intellectual property or business practices, they are going to wonder why the U.S. didn't defend itself,” says Gordon Chang, an expert on the Chinese economy and author of “The Coming Collapse of China.” 

He thinks Bannon is wise to hit China now. 

The Communist Party of China is gathering for its big conference this fall that happens only once every five years. 

Xi Jinping has a lot to lose if tensions flare with the United States.
Since the 1990s, the mantra in corporate America and the White House has been that America needs to cozy up to China. 

CEOs were salivating at getting access to the largest market on the planet: 1.4 billion Chinese. 

But it hasn't worked out like executives dreamed. 

China has deftly put up barrier after barrier to make it hard for American companies to sell in China. 

In the meantime, Chinese firms have profited and are now buying up American companies — everything from W Hotels to Silicon Valley startups. 

A Pentagon report this spring warned that China is pumping billions into hot Silicon Valley companies that are working on cutting-edge military equipment.
“China is limiting market access for U.S. companies in China, yet the Chinese wanted unfettered access to America,” says Evan Medeiros, an Asian strategist at the Eurasia Group who served as Obama's top adviser on the Asia-Pacific region. 

“We need to rethink China's very substantial access to investment in the U.S.” 

Direct Chinese investment in the U.S. is up nearly fourfold in the past two years.
Bannon has a battle plan, and he's already unleashing it. 

On Monday, the Trump administration launched an investigation into whether China is hijacking American business ideas under Section 301 of the 1974 Trade Act. 

At the moment, China forces U.S. companies doing business there to "share” their technology because they have to do a joint venture in order to operate in China. 

The Section 301 move is in its early stages — an initial fact-finding phase — but Bannon made it clear that he plans to push this along.
“We're going to run the tables on these guys,” he said in the interview. 

And he is prepared to do even more. 

He also mentioned bringing a lot more complaints against China for steel and aluminum dumping. On the campaign trail, Trump frequently threatened to slap massive tariffs as high as 45 percent on goods coming from China to the United States. 

CEOs hated the idea. 

It would raise costs on American consumers, they argued. 

Bannon isn't going that far. 

Instead, he's targeting his actions to go after the deeper IP issues and how China subsidizes many of its companies to give them a leg up against foreign competition. 

It would be a real wake up call to the Chinese, experts say.
“We're looking at the most serious U.S. trade action against China probably ever since China opened up,” says Derek Scissors, a China scholar at the right-leaning American Enterprise Institute who helped advise the Trump administration on the recent Section 301 move. 

Scissors has been calling for years for Chinese firms that have stolen U.S. intellectual property to be banned from doing business in the United States.
Bannon's right to take the China threat seriously, but he's also been pushing policies that would be hugely detrimental to America's competition with China. 

First and foremost: Immigration, the process by which America attracts the people who come up with so many of the great ideas that America has and China wants. 

Trump's recent proposal to cut legal immigration in half is being read around the world as a “You're not welcome here” sign. 

That's not going to help America win the global talent wars.
“Creating new IP in the United States is more important than keeping IP from China,” wrote James Andrew Lewis, a senior vice president at the Center for Strategic and International Studies, in a blog post this month.
Perhaps the most surprising part of Bannon's interview this week was when he called North Korea a “sideshow.” 

Trump had tried to do a deal with China: If Chinese leaders could contain North Korea's weapons program, then Trump was ready to look the other way on trade. 

Bannon thinks that's a huge mistake — and so do a lot of people on both sides of the political aisle.
“I think Trump is making a strategic miscalculation. You need to tell the Chinese that both of these issues are important and both need to be addressed on their own,” Medeiros says.
Whether Bannon can put his ideas into practice is another question, as there are vested interests in at least parts of the status quo. 

The biggest obstacle Bannon faces in his quest to go after China is what he calls the “Wall Street lobby.” 

Trump's top economic advisers — Gary Cohn at the National Economic Council and Treasury Secretary Steve Mnuchin — are former Goldman Sachs executives who don't want a trade war with China.

Scissors saw the tensions firsthand. 

He described a lot of "flipping around" on what to do.
Former Obama administration staffers such as Harris and Medeiros saw similar tensions play out in their time. 

They say the business community talks out of both sides of its mouth on China. 

CEOs complain that the Chinese government is restricting business opportunities, but when the U.S. government prepares to act, CEOs warn of a “parade of horribles” like trade wars and even a recession. 

Harris thinks it's overblown.
“I'm actually skeptical that China will retaliate, especially ahead of the party congress this year,” she says. 

The business community made the same huff and puff before the U.S. put sanctions on Russia. 

“We all woke up the next day, and European banks didn't fail and the stock market continued to go gangbusters.”
Bannon just might be able to get Trump to do what the Bush and Obama administration failed at on China. 

That is, if he can stay in the White House long enough to make it happen.

Economic War

Steve Bannon: 'The economic war with China is everything'
By Tom Mitchell in Beijing

The US and China are engaged in an economic war from which there will be only one winner, Steve Bannon, the White House strategist, has warned in a stinging attack on Washington’s principal geopolitical rival.
In an impromptu and wide-ranging interview published online on Thursday morning Beijing time by The American Prospect, a left-leaning US magazine, Mr Bannon also said he was working to place anti-China hawks in key positions at the defence and state departments, and that there was “no military solution” to the North Korean nuclear crisis.
 “We’re at economic war with China,” Mr Bannon said.
“One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. “The economic war with China is everything and we have to be maniacally focused on that,” said the presidential adviser.
“If we continue to lose it, we’re five years away, I think, 10 years at the most, of hitting an inflection point from which we’ll never be able to recover.”
Robert Kuttner, co-editor of The American Prospect, said Mr Bannon had phoned him on Tuesday, the same day that Donald Trump returned to his initial assessment that “both sides” had been to blame for the clashes between white supremacists and anti-Nazi protesters in Charlottesville, Virginia.
Mr Bannon, a leading figure in the “alt-right” movement before joining Mr Trump’s campaign, has been embroiled in a power struggle with HR McMaster, the president’s national security adviser. Blamed by more centrist White House officials for a stream of leaks against his foes within the administration, he was increasingly isolated before the events of last weekend.
The pressure on him has increased in the wake of the Charlottesville protests.
Mr Trump was equivocal about his adviser’s future at Tuesday’s press conference, saying “he is not a racist”, while adding ”but we’ll see what happens with Mr Bannon”.
During the call to Mr Kuttner, Mr Bannon dismissed the neo-Nazi movement in the US as a clownish “fringe element”.
“I think the media plays it up too much and we gotta help crush it,” he said.
“These guys are a collection of clowns.”
His comments will confirm Beijing’s worst fears about him.
Since Mr Trump assumed office, Chinese officials have lobbied more pro-China administration figures and Jared Kushner, the president’s son-in-law, and Ivanka Trump, his daughter, in an attempt to ease bilateral tensions.
So far the strategy has worked.
Mr Trump has backed off from threats to abandon Washington’s longstanding “One China” policy, to declare China a “currency manipulator” and to launch punitive trade actions against the world’s second-largest economy, especially if Beijing did not pressure North Korea to abandon its nuclear and missile development programmes.
According to Mr Bannon, North Korea was a “sideshow” in the context of a winner-takes-all competition between the world’s two largest economies and the US should not let up on trade issues in return for Beijing’s help in pressuring Pyongyang.
“There’s no military solution [to North Korea’s nuclear threats], forget it,” he said.
“Until somebody solves the part of the equation that shows me that 10m people in Seoul don’t die in the first 30 minutes from conventional weapons . . . they got us.”
On Monday Mr Trump announced that he would study unfair Chinese trade and investment practices in a probe that could take a year to conclude. 
But Mr Bannon promised to go on the offensive against China, saying he was fighting “every day” against the Treasury department, headed by Steven Mnuchin, and Gary Cohn, economic adviser.
He was working at “getting hawks in” at the defence and state departments, adding that his bureaucratic rivals were “wetting themselves”.
“We’re going to run the tables [on China],” Mr Bannon said.
“We’ve come to the conclusion that they’re [engaged] in an economic war and they’re crushing us.”

Presidential Circus

Trump backtracks on China, won't label it a currency manipulator
By Evelyn Cheng

Confirming a reversal on tough China talk, Donald Trump told The Wall Street Journal Wednesday that he will not label the Asian country a currency manipulator in a report due this week.
"They're not currency manipulators," Trump said in the interview.
The president also said putting the label on China now could jeopardize U.S. talks with Beijing on the North Korean threat, according to the Journal.
What the White House is doing is "they're going back to a very traditional China policy which is a disappointment to many of their hardcore supporters," said Gordon Chang, author of "The Coming Collapse of China." 

"There's going to be political punishment."
Trump "will be punished by autocrats in Beijing," Chang said. 

"He's showing weakness."
Slapping the label on China had been one of Trump's key campaign promises. 

He also appointed China hawks such as Peter Navarro to key positions on trade, and, until recently, favored Steve Bannon and his nationalist stance.
Now, advisors who appear to have a less protectionist viewpoint such as Gary Cohn, director of the U.S. National Economic Council and former president of Goldman Sachs, seem to have more sway over Trump.
In the Treasury Department's most recent review in October, China met only one of three criteria set down by the United States before it can label the communist country a currency manipulator. 

The Treasury is expected to update the report this month.
"The question now is whether getting Chinese cooperation on North Korea has become so important that the administration is willing to accept token gestures from China that reduce the trade deficit but do nothing to address the breadth and depth of Chinese industrial policy," said Scott Kennedy, a China expert at the Center for Strategic and International Studies.

How will China be destroyed?

Experts: US would go into war with China with 'unparalleled violence'
By Jon Sharman

President Donald Trump with Steve Bannon, former executive of Breitbart News and the President's chief strategist 

China has accused Donald Trump's administration of putting regional stability in East Asia at risk following remarks by the President's defense secretary that a U.S. commitment to defend Japanese territory applies to Japan's Senkaku Islands.
Widespread alarm over how the region could shape geopolitical tensions was raised following the revelation that Steve Bannon, the chief strategist in Trump's White House, said he believed the US would go to war with China within five to 10 years during a radio broadcast in 2016.
While the prospect remains relatively remote, experts have told The Independent they believe such a conflict would potentially end "life as we know it on Earth".
The United States would win because sending China's untested forces against the might of America's military would be like pitching farmers against Achilles and his warriors, said one, but even a conventional military victory would be a Chinese disaster. 

It would create a power vacuum inside defeated China "the like of which we can't imagine".

Mr Bannon said war would erupt in the South China Sea in "five to 10 years". 

He said: "They’re taking their sandbars and making basically stationary aircraft carriers and putting missiles on those. They come here to the United States in front of our face—and you understand how important face is—and say it’s an ancient territorial sea."
The US and China have been engaged in a back-and-forth dispute over military build-up and territorial claims in the region for some years. 

In December the US said it would base its deadliest fighter jets in Australia, and days later China seized an unmanned US Navy drone.
It followed a diplomatic spat around President Trump's congratulatory phone call with Taiwan's President Tsai Ing-wen, which broke with decades of US policy. 

President Trump has been forthright about China's influence, blaming it for the loss of American jobs.
The war of words recently heated up when a Chinese military official was quoted as saying talk of war with the US under President Trump "are not just slogans, they are becoming a practical reality".
Trevor McCrisken, associate professor of politics and international studies at the University of Warwick, said that if war broke out "we would be looking, I would imagine, at World War Three".
He said: "I really do think that would be the end of life as we know it on Earth.
"The likelihood of nuclear exchange between the two principals involved is high."
Dr Peter Roberts, director of military sciences at the Royal United Services Institute, said: "America would take military losses. They would lose thousands and thousands [of personnel]. But China would be utterly defeated. If America goes to war, it wages war in its totality. They would go to this with unparalleled violence and energy."

The US has an "overall competitive edge" partly due to technological superiority, Dr Roberts said, but also because the four branches of its military—Army, Navy, Marine Corps and Air Force—are trained to work closely together. 

"It's demonstrated how it can use all those arms to deliver military victory," he said.
In contrast, China's services operate "individually" and also have less, and less recent, combat experience compared to their American counterparts. 

"There's a huge difference between someone who's been in combat before, and someone who hasn't," Dr Roberts said, comparing the potential confrontation to one between Greek hero Achilles and farmers recruited from the fields.
Kerry Brown, professor of Chinese studies and director of King's College London's Lau China Institute, said: "US naval superiority is massive. And if we are talking just military, then for sure, a conflict right beside China would hurt China more than the US.
"It would, of course, totally upend supply routes, however, and probably cause a global recession."
Professor Brown added: "We have to expect this war of words to simply get worse. The best outcome is that the two sides ultimately compromise—China acts more responsibly, and stops its adventurism. The worst outcome would be a real conflict."