Here are the reasons for President Trump's war with China

On Friday the US president ordered companies to halt business with the “enemy” Xi Jinping

By Dominic Rushe in New York

Even by President Trump’s standards his Twitter rant attacking China on Friday was extraordinary. 

In a series of outbursts President Trump “hereby ordered” US companies to stop doing business with China, accused the country of killing 100,000 Americans a year with imported fentanyl and stealing hundred of billions in intellectual property.
The attack marked a new low in Sino-US relations and looks certain to escalate a trade war already worrying investors, manufacturers and economists.
Not so long ago President Trump called Chinese dictator Xi Jinping “a good friend”. 

Now Xi is an “enemy”. 

How did we get here?

China, China, China
On the campaign trail President Trump railed against China, accusing it of pulling off “the greatest theft in the history of the world” and “raping” the US economy.

President Trump repeated the word China so often it spawned a viral video of him saying it over and over again. 

The attacks were a hit with voters and helped get him elected. 

He has continued lambasting China – to cheers – at rallies ever since.
His main beef? 

The trade deficit.

Trade deficit
The US imported a record $539.5bn in goods from China in 2018 and sold the Chinese $120.3bn in return. 

The difference between those two numbers – $419.2bn – is the trade deficit.
That deficit has been growing for years as manufacturing has shifted to low-cost China and it explains the hollowing out of US manufacturing.

For President Trump, and especially for his adviser Pr. Peter Navarro, who once described China as “the planet’s most efficient assassin”, trade deficits represent an existential threat to US jobs and national security. 

China makes up the largest part of the US trade deficit but those fears are also behind his disputes with the EU, Canada and Mexico.

His pro-Beijing detractors argue these deficit worries are hyperbole and a result of the US’s stronger economy, which allows consumers to buy goods at cheaper prices.
While it’s true that unemployment is at record lows and consumers continue to prop up the economy, manufacturing jobs have been lost and with them wage growth.
But it is not just deficits that concerns Trump.

Thieves
China has a deserved reputation for intellectual property theft. 

On Friday, President Trump estimated China robs the US of “hundreds of billions” a year in ideas.

In March, a CNBC poll found one in five US corporations had intellectual property stolen from them within the last year by China.
According to the Commission on the Theft of American Intellectual Property, the theft costs $600bn a year.

Beijing bucks
Like Tesla, Nio, a Chinese electric vehicle (EV) company, is suffering as subsidies for EVs are phased out. 

Unlike Tesla, Nio has Xi. 

China is pumping $1.5bn into the company to keep it on the road, the latest in a series of handouts that are unfair.
Cheap steel and aluminium, subsidized by the Chinese government, are the origins of this trade dispute. 

According to the White House, last year alone China dumped and unfairly subsidized goods including steel wheels, tool chests and cabinets and rubber bands on to the US market.

Currency manipulator
Earlier this month the US officially accused China of manipulating its currency “to gain unfair competitive advantage in international trade”.
It was the first time since 1994 that such a complaint has been made official and comes as the dollar has strengthened against world currencies. 

The dispute adds another layer of tension to a complex situation.
China disputed the charge accusing the US of “deliberately destroying international order” with “unilateralism and protectionism”.
The International Monetary Fund (IMF) is on China’s side, arguing the devaluation of the yuan is largely in line with worsening economic conditions in China.

What happens next?
The US has now slapped billions of dollars on tariffs on Chinese goods. 

China retaliated, again, on Friday with more levies on US goods. 

China’s economic growth has slowed to levels unseen since 1992; US economic forecasts have also been cut.

So far US consumers have not felt the pinch but JP Morgan estimates the average US household will end up paying $1,000 a year for goods if the latest set of tariffs go through.

The unanswerable question is whether any of this will sway President Trump. 

If the President continues to see a war with China as the necessary price to Make America Great Again, then the answer is probably no.

Chinese Golem

PRESIDENT TRUMP BLAMES OBAMA, BUSH, CLINTON FOR CHINA DEFICIT: ‘THEY CREATED A MONSTER’
BY DAVID BRENNAN 

President Donald Trump attacked the past three presidents for U.S. policy on China, accusing his predecessors of allowing China to become one of the most powerful monster in the world.
Speaking with Fox News’ Steve Hilton in an exclusive interview that aired on Sunday, the president said he would not allow China to become a superpower or eclipse the U.S. on his watch.
As the trade war between Washington and Beijing escalated, Trump showed no signs of tempering his pugnacious approach to a rising China, vowing once again to address what he considered were unfair trade practices that had left the U.S. with a huge trade deficit.
In the past, President Trump blamed Barack Obama—one of his favored targets.

But on Sunday, the president said America’s China strategy had been wrong for decades.
“They took advantage of us for many, many years,” he told Hilton. 

“And I blame us, I don’t blame them. I don’t blame Xi. I blame all of our presidents, and not just Obama. You go back a long way. You look at Clinton, Bush—everybody. They allowed this to happen, they created a monster… We rebuilt China because they get so much money.”
President Trump’s tough stance on China became one of the hallmarks of his presidency, and showed no sign of diminishing. 

Last week, tariffs on $200 billion worth of imports took hold, increasing duties from 10 percent to 25 percent. 

President Trump ordered U.S.Trade Representative Robert Lighthizer to begin the process of raising tariffs on essentially all remaining imports from China, valued at around $300 billion.
The last round of trade negotiation talks between U.S. and Chinese representatives ended with no breakthrough on May 10. 

An agreement was all but reached, but Beijing withdrew its support at the last moment. 

“We had a good deal, and at the end, they changed it,” he said. 

“And I said, that's OK, we're going to tariff their products, and we put a 25 percent tariff on their products.”
Speaking about Xi Jinping—who Trump had previously called a “friend”—the president said, “I told Xi, who's somebody I like a lot, but he's for China and I'm for us, right? But I told him, I said look, this can't be like a 50-50 deal, this has to be a deal—you are so far ahead from presidents that allowed you to get away.”
President Trump said he was committed to restraining the kind of economic growth that would see China’s economy surpass the U.S.'s and become the dominant global superpower. 

“Not going to happen,” President Trump said, “not going to happen with me.” 

Asked whether he thought that was Beijing’s ultimate goal, the president replied, “Why wouldn’t it be? I mean they’re very ambitious people, they’re very smart. They’re great people. It’s a great culture, an amazing culture.”
Later in the interview, the president said that China wanted “to take over the world.” 

Referring to the country’s Made in China 2025 project—seeking to move the nation toward producing high-value products and services—President Trump said he found it offensive that Xi would have such ambitions. 

“It was very insulting to me, because it’s not going to happen,” he told Hilton. 

“Not with me.”
“If Hillary Clinton became president, China would have been a much bigger economy than us by the end of her term,” he said, without any prompting him to talk about the defeated 2016 Democratic candidate.
A separate dispute over the Chinese tech firm Huawei added further fuel to the fire. 

The telecommunications company was at the forefront of developing 5G networks, but U.S. officials had warned that Huawei could serve as a Trojan horse for Beijing to tap vital communications networks in the west.
On Thursday, President Trump declared a national economic emergency over the issue and blacklisted the company, seeking to force all American firms to sever business ties with Huawei. 

The ban was having an effect, and on Sunday Google said it had suspended Huawei’s access to updates of its Android operating system, while chipmakers have cut supply lines.

A Weakened China Tries a Different Approach With the U.S.: Treading Lightly

Xi Jinping has begun lifting barriers to imports of American food, energy and cars — even as the United States maintains tariffs on $250 billion worth of Chinese goods.

By Keith Bradsher, Alan Rappeport and Glenn Thrush

Despite the offense China has taken at the arrest of a Huawei executive, a move requested by the Trump administration, Beijing’s response has been measured.

BEIJING — The recent arrest of a top Chinese tech executive at the Trump administration’s request seemed certain to provoke a geopolitical showdown pitting Beijing against Washington.
The detained executive is a daughter of one of China’s most admired business leaders. 

And her arrest, widely viewed inside China as a direct affront, comes at a time of already pervasive suspicion among the Chinese that the United States wants to block China’s rise through a trade war.
Yet seemingly against the odds, Beijing decided to take a measured response to the Huawei incident. The Chinese leadership has compartmentalized the situation as a law enforcement dispute while making concessions on trade to help defuse tensions.
China’s tempered approach is born, in part, out of a position of weakness. 

The country’s economy is in a sharp downturn, putting political pressure on Xi Jinping to reach a deal with President Trump. 

American officials recognize the leverage they now have, wielding tariffs to extract concessions that Beijing has long rejected.
In recent weeks, Xi, who in his tenure has challenged the United States’ global dominance more directly than any Chinese leader since Mao Zedong, has followed through on a series of deals that he struck with President Trump in Buenos Aires this month. 

He has begun lifting recently imposed barriers to imports of American food, energy and cars — even as the United States maintains tariffs on $250 billion worth of Chinese goods.
While the agreement was initially presented as a temporary truce in the trade war, both sides are pushing for a long-term deal that creates a framework for closer, more stable relations between the world’s two biggest economies. 

Vice Premier Liu He on Tuesday called the United States Trade Representative Robert E. Lighthizer and Treasury Secretary Steven Mnuchin to lay out an initial road map for negotiations, with the goal of face-to-face talks next month.
“The Chinese government really wants to negotiate a deal with the United States to calm down the conflict, not only because of economic difficulties right now in China but also for the sake of long-term relations with the United States,” said Tu Xinquan, the executive dean of the China Institute for World Trade Organization Studies in Beijing.
The trade truce, though, remains tenuous, and the negotiations could easily be derailed. 

While Beijing has made some overtures, it has not gone far enough to address some of the biggest sticking points like forced technology transfers and the trade deficit. 

And the Huawei situation could easily escalate, putting pressure at home on the Chinese dictator to act.

Meng Wanzhou, the chief financial officer of Huawei, was arrested in Canada. 

If nationalistic tempers flare, the relationship could suffer. 

In previous tense moments, a thaw has taken time.
When the United States accidentally bombed China’s embassy in Belgrade, Serbia, in 1999, the deaths of three Chinese citizens personalized the episode and triggered a wave of anger and indignation against the United States. 

The chill to Sino-American relations lasted for months, even though the Chinese leader at the time, Jiang Zemin, had previously taken a friendlier approach with the United States than Xi.
The Huawei executive, Meng Wanzhou, was arrested in Canada on Dec. 1 at the behest of American authorities, who claimed she deceived financial institutions and caused them to violate sanctions against Iran. 

“If Meng is extradited to America, then it will be difficult for the government to control the public’s anger,” Tu said.
President Trump and his top trade advisers were pleased by the tenor of his dinner with Xi in Buenos Aires. 

The Chinese dictator was deeply engaged in the conversation, eager to convince the Americans that he was willing to go further in accommodating their grievances than any of his predecessors.
Along with the agreement in Buenos Aires, China’s leaders are also preparing a series of moves to open up the economy to more trade and foreign investment, an overhaul timed to the 40th anniversary later this month of the country’s initial post-Mao economic reforms. 

Such moves, like further tariff reductions, would provide Xi an opportunity to introduce market-friendly measures without seeming to give in to American pressure.
It’s unclear what will satisfy the administration — and more important, President Trump.
Mnuchin has pushed for an agreement that obtains some concessions quickly, in order to reduce the potential economic fallout of an intensified trade war. 

Trump, concerned about the volatility in the stock markets, wants to get a big deal done, while also avoiding anything drastic that would damage his relationship with Xi, according to several officials with direct knowledge.
But Trump’s economic advisers are also watching China with a high level of caution. 

Some, like Mr. Lighthizer, the top negotiator in the talks, are highly doubtful that China will do anything more than is necessary to remove the threat of new tariffs.
Beijing has a history of making promises it doesn’t keep. 

The recent moves by China would provide superficial wins for the Trump administration, without requiring Beijing to substantially change anything.

The FAW-Volkswagen plant in Foshan, Guangdong Province, China. Many multinational companies are reconsidering their reliance on the country.

China has expressed a willingness to cut tariffs on American cars to 15 percent, from 40 percent. 

But that’s what China already charges the rest of the world; the higher tariffs were merely a retaliatory measure imposed after the United States started a trade war. 

And China still maintains a 16 percent value-added tax that applies to all cars, including imported ones.
When China’s cabinet issued updated mandates on Monday for local governments, one of President Trump’s bugaboos was no longer on the list: Made in China 2025, a state policy to turn the country into a high-tech superpower. 

Instead the list outlined government backing for industrial upgrading and “technological transformation,” a more banal-sounding if similar plan.
David Malpass, Treasury’s under secretary for international affairs, said during a congressional hearing on Wednesday that the Trump administration would not accept promises from China without verification. 

“The proof is in the pudding,” said Mr. Malpass, who has engaged in midlevel negotiations with the Chinese. 

“There’s a desire within the discussions to have specificity, to have firm timelines and deadlines and enforceable kinds of conditions.”
Wilbur Ross, the Commerce secretary, said on CNBC on Wednesday that the Made in China initiative had provoked backlash from other countries but that he did not believe China was doing away with the program. 

“If you’ll search the recent clips, you’ll find they haven’t been talking that much about it,” Mr. Ross said. 

“That doesn’t mean they’ve dropped it.”
As the talks progress, China’s hand could ultimately be forced by economic weakness.
It’s hard to tell exactly how bad the economy has gotten in China. 

Economists regard Chinese data as unreliable, and Beijing keeps a tight grip on information. 

But some sectors, like real estate and cars, indicate the plunge is getting steeper with each passing month.
Car sales plummeted faster this autumn than during the global financial crisis, an abrupt downturn that auto industry leaders attribute to a crumbling of business and consumer confidence triggered mainly by the trade war. 

Many multinationals are reconsidering their heavy reliance now on China, endangering the country’s ability to attract plentiful foreign investment and know-how in such industries.
“Without Volkswagen, China would not be No. 1 in auto production today,” said David Li, a prominent Tsinghua University economist, at a conference that the university hosted on Sunday to review policy lessons from the last 40 years, since China opened up after the death of Mao.
The trade war, the sharp slowing of the economy and the prospect of diminishing foreign investment have also precipitated drops in China’s stock market and currency this year. 

Those, in turn, appear to have weakened Xi’s popularity, at least within the country’s political and economic elite in Beijing and Shanghai. 

Complaints about his management, very seldom heard six months ago, have become unusually common in private conversations.
For Xi, balancing those internal and external pressures will be critical as China enters the next phase of negotiations. 

Whatever additional leverage the United States enjoys in the current talks is predicated on the threat of tariffs, and Xi, like Chinese negotiators before him, still believes President Trump will blink, said Derek Scissors, a China scholar with the American Enterprise Institute in Washington.
The Huawei incident “doesn’t give Trump any additional leverage. The tariffs do, whether you think they are a good idea or not,” Mr. Scissors said. 

“And, based on what President Trump has done so far, the Chinese think that we ultimately chicken out just like we have done every other time.”

Chinese Masochism

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

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

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

Maybe “like” is too strong a word. 

They understand him. 

They seem to get his brand of nationalism. 

And they like his crass comments in the press. 

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

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

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

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

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

More tariffs are in the works. 

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

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

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

They believe the U.S. is behaving unilaterally. 

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

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

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

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

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

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

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

We are experiencing trade tensions, say the Chinese. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Art of the Capitulation

It’s been amateur hour on China negotiations

By Catherine Rampell

The Trump administration is supposed to be negotiating with China. 

But right now it more often seems to be negotiating with itself.
China knows what it wants out of these bilateral negotiations; the White House plainly does not. 

Trump officials have offered shifting and at times contradictory demands and objectives, further complicated by administration infighting, public turf wars, reversals, retractions and clumsy errors.
In short: Over here on Team USA, it’s been amateur hour.
On Friday, for instance, National Economic Council Director Larry Kudlow told reporters that China had offered to reduce the U.S. trade deficit by “at least” $200 billion.
That would be an astonishing figure, as it would comprise more than half of our entire goods deficit with China.
Not surprisingly, the Chinese foreign ministry spokesman flatly denied that China had offered this number. 

And the next day, when the White House released its joint communique with China on the negotiations, the statement mentioned only “a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China.”
No actual figures were included, certainly not $200 billion.
So how did Kudlow respond when confronted with these developments?
On ABC’s “This Week,” he denied that he’d ever touted an agreement on the $200 billion figure, saying that it was just “a number that interests the president a lot.”
This is hardly the only time the administration has been confused about the facts, or its own position.
On Sunday, Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer offered somewhat mixed messages on what was expected to happen with tariffs going forward. Mnuchin said the United States was “putting the trade war on hold”; Lighthizer emphasized that tariffs remain on the table.
In Beijing earlier this month, divisions between the free-trader and protectionist wings of the U.S. delegation exploded, with the White House trade adviser Peter Navarro shouting and cursing at Mnuchin after being excluded from a meeting.
Trump himself is not exactly helping to make the administration’s message more coherent.
A month ago, the Commerce Department imposed harsh penalties on Chinese telecom giant ZTE, which U.S. officials determined had not complied with a previous settlement over illicit sales to Iran and North Korea. 

Trump’s FBI director, the nation’s top counterintelligence official and the Defense Department have likewise warned that ZTE phones may pose a cybersecurity threat.
But then this past week, Trump bizarrely declared that he was hoping to reverse these U.S. actions. “Too many jobs in China lost,” Trump tweeted. 

“Commerce Department has been instructed to get it done!”
In subsequent days, Trump and his underlings have offered muddled and at times contradictory guidance about the motivation behind this change of heart, and what actual policy adjustments it might entail.
More broadly, this administration often doesn’t seem to realize that its stated goals regarding China are at some level schizophrenic, if not mutually exclusive.
The administration has said it wants better investment terms for U.S. companies in China, for instance, which means that U.S. multinational companies would be more likely to move more of their supply chains to China. 

It would also lead more capital to flow from the United States to China. 

As the Financial Times’s Lucy Hornby points out, these developments would be at odds with Trump’s goal of reducing our goods trade deficit with China.
So why can’t the administration get its act together? 

Why do officials keep publicly undermining themselves and their colleagues?
At core, the problem is that Trump’s trade agenda is deeply confused, which enables cacophony and cattiness.
During the 2016 election, Trump was obsessed with the idea that our trade deals were “unfair,” part of his broader campaign message attempting to scapegoat foreigners for all the nation’s ills.
Trump’s evidence was that we had a big trade deficit, which meant we were “losing.” 

All Trump understood was that voters liked the story he was telling. 

So rather than taking the time to learn about our actual complaints regarding China’s trade policy (primarily, intellectual property theft), or how we could deal with them (through multilateral pressure, such as the Trans-Pacific Partnership that Trump killed), Trump fixated on deficits. 

The part of the story that sold with the public.
Meanwhile, the people in charge of executing Trump’s trade policy became prisoners of Trump’s fairy tale, doomed to try to solve a problem that doesn’t exist rather than the one that does.

U.S. Intelligence Sees China's Military Expanding Bases Globally

• China has world’s fastest-modernizing military after U.S.
• Officials share insights on China’s ambitions, activities

By Nafeesa Syeed

China’s first overseas military base in the small African country of Djibouti is “probably the first of many” the country intends to build around the world, which could bring its interests into conflict with the U.S., according to American intelligence officials.
“China has the fastest-modernizing military in the world next to the United States,” according to insights provided Thursday by U.S. intelligence officials, who asked not to be identified discussing the information. 

That will create “new areas of intersection -- and potentially conflicting -- security interests between China and the United States and other countries abroad,” according to the officials.

The opening ceremony of China’s new military base in Djibouti on Aug. 1.

The People’s Liberation Army announced the establishment of a logistics support base in Djibouti in July, saying it would back up China’s military’s naval escort, peacekeeping and humanitarian missions in Africa and western Asia as well as military exercises and emergency evacuation.
As part of China’s expanding military and economic clout, the country is taking a stronger stance on territorial claims in the South China Sea, relations with Taiwan and in promoting its “One Belt, One Road” trade initiative. 

Where Chinese interests conflict with the U.S., Beijing is actively seeking to undermine U.S. influence.
The rare comments on how U.S. intelligence agencies view China’s ambitions come as Xi Jinping seeks to consolidate support at this month’s Communist Party Congress, held once every five years. Donald Trump plans to visit China next month and, while the two countries have found areas of cooperation, including over United Nations sanctions against North Korea, they have unresolved disagreements over trade, Beijing’s territorial claims and Syria’s civil war.

Steel Dispute
Commerce Secretary Wilbur Ross, visiting Beijing last month, stressed his intent to cut the U.S. trade deficit with the world’s largest exporter through “increased exports of high-value U.S. goods and services to China and improved market access.” 

Ross also announced a probe into China’s stainless steel flanges for unfair subsidies, the latest move after the U.S. trade representative opened an investigation into China’s intellectual property practices.

Wilbur Ross

Chinese leaders see the U.S.-led world order, most notably the U.S. alliance network and promotion of U.S. values worldwide, as constraining China’s rise and are attempting to reshape the world order to better suit Chinese preferences and growing clout.
Ahead of the Communist Party Congress, officials in Beijing have increased control of domestic dissent.

The world’s second-largest economy is on track to reach its 6.5 percent annual growth target, the officials said. 

The country is fueling that growth, in part, by seeking deeper technology "collaboration" with U.S. companies.

Bannon’s Warning
Former Trump adviser Stephen Bannon has called the transfer of U.S. technology to China “the single biggest economic and business issue of our time,” adding that “if we don’t get our situation sorted with China, we’ll be destroyed economically.”
The U.S. intelligence officials suggested China’s government is aware of the threat that perception poses to its ambitions.
“Beijing is trying to downplay concerns that this state-led technology acquisition drive creates an unlevel playing field, forces technology transfer to China, limits foreign companies’ access to the Chinese market, and is a threat to U.S. and other countries’ economic strength.”

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.

World's Stupidest President

Trump's New China Deal May Increase U.S. Trade Deficit
By Gordon G. Chang

Thursday, the U.S. Commerce Department announced the U.S. had reached a trade deal with Beijing. “The first real breakthrough that we’ve had with China in decades” is how Commerce Secretary Wilbur Ross described the agreement to Neil Cavuto of Fox Business on Friday.
The new pact could be a “breakthrough,” but it may not constitute progress, at least from the U.S. perspective. 

On the contrary, it might actually increase America’s bulging trade deficit with China.
Last year, that deficit in both goods and services was, according to the Commerce Department, $309.8 billion.
Technically, the new agreement incorporates the “initial results” of the Trump administration’s “100-day action plan” on trade. 

The concept of the plan was announced at the conclusion of the meeting between the American and Chinese presidents at the beginning of last month at Mar-a-Lago.
Under the 10-point plan announced Thursday, Beijing agreed to allow U.S. beef into the country by July 16, the 100th day of the 100-day plan.
Beijing promised to expeditiously process eight U.S. biotechnology product applications.
Foreign businesses from July 16 will be allowed to provide credit ratings, and Beijing will process licenses for credit investigations.
Beijing agreed, by July 16, to issue rules to allow U.S.-owned credit card companies “to begin the licensing process.” 

The agreement calls for Beijing by July 16 to issue to two qualified U.S. financial institutions licenses for bond underwriting and settlement.
Unfortunately, a number of Beijing’s promises in the 10-point plan are essentially pledges not to do something that it should not have been doing in the first place. 

Take the much-publicized agreement on U.S. beef. 

China in 2003 imposed a ban on all U.S. beef because of an isolated case in Washington state of bovine spongiform encephalopathy—mad cow—disease, and, without justification, effectively kept the prohibition in place.
Similarly, China’s credit card promise is essentially a pledge not to continually violate its World Trade Organization obligations. 

Beijing lost a 2012 case on the subject.
What did Ross get that will really benefit the U.S.? 

The beef promise is important, and so may be the promise on credit ratings and investigations. 

With the general tightening of liquidity by the Chinese central bank, creditworthiness has become a pressing issue.
The other promises, however, look like chaff. 

The credit card opening should in theory benefit Visa and MasterCard, but no one thinks either of these giants will make substantial inroads against China’s UnionPay, which by now has grabbed an almost complete monopoly.
With bond defaults beginning to ripple throughout China, it’s not the right time for any institution to underwrite such obligations except perhaps those for the largest state issuers, where the margins are already razor-thin and the business is already locked-up. 

It’s unlikely that any foreign business will make money in Chinese bond underwriting this decade.
It’s not clear, at least at this point, what expedited consideration of biotech applications will mean.
Ross says the deal will increase access to the Chinese market for American liquefied natural gas, but that is not true. 

Perhaps he is talking about undocumented side agreements, but the 10-point plan includes no LNG promise by Beijing. 

On the other side of the ledger, China clearly gained much. 

Washington by July 16 agreed to issue a proposed rule to allow imports of Chinese cooked poultry. Moreover, the Trump administration opened up the U.S. bank market to Chinese institutions, promising to consider their applications on the same basis as others.
In these areas, Chinese players have competitive advantages. 

Therefore, don’t be surprised when Americans begin eating chicken from the world’s No. 1 source of avian flu and start getting cheap credit cards—and cheap credit—from Chinese banks.
It is telling that, on these two important promises of access for Chinese poultry and Chinese banks, Beijing did not agree to reciprocal promises of access for American competitors in China.
“This will help us to bring down the deficit for sure,” Secretary Ross told the media, talking about the 10-point plan. 

“You watch, and you’ll see.”
We will watch because there is nothing “for sure” about trade deficit reduction. 

Ross told Cavuto that things are different this time, that “there’s a new relationship pattern being struck between China and ourselves.” 

“We’re developing personal relationships and personal relationships in Asia in general and in China in particular are of the utmost importance,” he told the Fox Business anchor. 

They’re more important than contracts, Ross assured us.
I hope he’s right about the power of personal relationships because his plan does not address what is fundamentally wrong with the U.S.-China trade relationship. 

Fox News Channel’s Jenna Lee on Friday asked Secretary Ross the most pertinent question, whether the announced plan was a “temporary fix” or a “structural change.”
Ross in response suggested the plan addresses the big issues, and then he told her the administration’s vision is to have agreements with a “one-year time horizon” and then “longer-term deals.” 

There are hundreds of matters to work on, perhaps more than 500, he said to the Washington Post and others.
Washington, D.C.-based trade expert Alan Tonelson is not impressed with the administration’s general approach of tackling the trade deficit issue-by-issue. 

“History clearly teaches that meaningfully opening the markets of determined mercantilist countries like China is virtually impossible using conventional trade diplomacy,” he told me on Saturday. 

“Their governments have created economy-wide systems of protection, and they operate these systems through powerful, secretive bureaucracies that curb imports with informal decisions that are difficult for outsiders even to identify, much less litigate against.” 

These counties can accede to foreign demands and remove certain barriers from time to time, Tonelson notes, “but they remain fully capable of replacing them with others.”
He’s right. 

China over the last decade has been progressively closing off its market, and this trend is now proceeding faster than ever under current supremo Xi Jinping.
No one expected Ross in 34 days to overcome China’s intractable trade posture, but he’s the one who raised expectations with his optimistic assessments Thursday and Friday. 

Now, everyone will be watching monthly trade deficit numbers, as he invited us to do.
Beijing certainly will be watching. 

Chinese official media call the 10-point deal an “early harvest,” and they are right. 

It looks like an early harvest for China.

Trump’s not so great deal with China

By Peter Morici

Trump’s recent summit with Xi Jinping was only modestly successful. 

The hard reality is that on both security and economic issues, the United States and China are rivals — not partners — and much tougher days lie ahead.
Trump and Xi reached no substantive agreement to curb North Korea’s nuclear program and on trade, the two leaders initiated a 100-day review process whose ultimate objective is unclear.
For several decades, China accomplished double-digit growth by exporting consumer goods to western markets while keeping its economy tightly controlled. 

It imposes high tariffs and administrative barriers to imports, compels western companies to manufacture in China and transfer technology in order to access its markets, aggressively subsidizes domestic firms, and dumps products abroad in industries plagued by excess capacity.
The United States absorbed the brunt of this onslaught. 

The $310 billion U.S. trade deficit with China has shuttered factories, left millions discouraged and permanently unemployed, and imposes slower growth and huge foreign debt.
Manufacturing has been hardest hit and that curtails U.S. investments in new technology — both on the factory floor and in next-generation products such as industrial robots. 

Without addressing the bilateral trade deficit, Trump cannot deliver 3 percent to 4 percent growth.
As rising wages challenge manufacturers in Chinese coastal cities, the Communist Party must demonstrate it can still deliver significant growth. 

Beijing is becoming more, not less, protectionist and is targeting high-technology activities that strike at the heart of American prosperity, subsidizing startups and buying western businesses. 

It is tightening its authoritarian grip through control of the Internet and a social credit rating system that monitors personal activities to allocate access to jobs, housing and the like.
Those tactics violate World Trade Organization rules and western democratic norms, but Beijing has no desire to conform to western expectations of a communist state transitioning into an open, pluralistic society. 

Rather, it offers state-directed capitalism and authoritarian governance to developing nations as a superior model to what the United States and European democracies offer.
As menacing, China is using wealth amassed from huge trade surpluses to substantially build up naval and air power, assert sovereignty over neutral waters in the South China Sea, and project soft power in the Pacific and elsewhere through its Asian Infrastructure Investment Bank and other projects.
Obama did not heed U.S. defense leaders’ advice to more forcefully challenge China’s militarization of the South China Sea and North Korea, and Chinese muscle and money have encouraged key U.S. allies, the Philippines and Malaysia, to shift their favor toward Beijing.
Trump faces the unenviable task of persuading Beijing to constrain Pyongyang’s nuclear ambitions while pushing back on its illegitimate claims in the South China Sea and redressing the bilateral trade deficit.
By failing to cooperate on North Korea, Beijing has skillfully diverted American attention from the latter challenges. 

The Mar-a-Largo discussions did little to substantively address China’s provocations in the Pacific and for several decades, Beijing has tied up American presidents in endless economic dialogues and dead-end negotiations.
The 100-day process initiated in Mar-a-Largo sounds like a rehash of the Strategic and Economic Dialogue, which accomplished little during the Obama years.
Addressing China’s challenges will require Americans to rebuild the military — either though higher taxes or reduced government spending on other priorities — as Trump’s budget recommends.
On trade, either the United States obtains from China a blueprint with enforceable benchmarks to reduce and ultimately eliminate the trade deficit or the United States should impose such an arrangement unilaterally.
Abruptly imposing a 45 percent tariff would unnecessarily disrupt both the Chinese and U.S. economies. 

However, initially applying a 10 percent levy — or equivalent tax on the conversion of dollars into yuan, which would also impact on investment into China — and then increasing it by 10 percent every six months would go a long way toward persuading Beijing to curtail its mercantilist practices. 

At the very least, it would adequately insulate the U.S. economy while American businesses adjust to scaled-back bilateral commerce.
Those are tough measures — and Americans would likely pay more for toasters and T-shirts at Wal-Mart — but the benefits of putting millions of Americans back to work and restoring growth would far outweigh those costs.

Robert Lighthizer vs. China’s unfair trade practices

“To attack a problem as large as our trade deficit with China, U.S. officials must be prepared to consider very aggressive positions at the W.T.O.” -- Robert Lighthizer 

By KEITH BRADSHER

A container port in Qingdao, China, in December. China consistently sells $4 worth of goods to the United States for each $1 of imports. 

SHANGHAI — As a top trade official, he limited the Japanese cars and steel coming into the United States. 

He halted talks with China on a deal that would encourage investment between the two countries. 

And he tried to give American exporters an edge with special tax breaks.
When it comes to problems troubling working-class Americans and manufacturers, Robert Lighthizer, President Donald J. Trump’s nominee for trade representative, has historically blamed the United States’ trading partners, advocating aggressive retaliation for widespread abuses of free-trade rules.
It is a philosophy that he developed in the 1980s as a deputy United States trade representative and fine-tuned in the decades-long career that followed as the main trade lawyer for the American steel industry. 

Now he appears ready to train that focus sharply on China.
“It seems clear that the U.S. manufacturing crisis is related to our trade with China,” Mr. Lighthizer said in testimony to a congressional commission in 2010.
Over the years, Mr. Lighthizer has consistently taken the position that foreign countries are subsidizing their exporters while quietly but systematically blocking imports to protect jobs in their own countries. 

His answer is to pursue a long list of trade measures limiting America’s imports — even if those actions may be barely permissible, if at all, under World Trade Organization rules.
“To attack a problem as large as our trade deficit with China, U.S. officials must be prepared, at a minimum, to consider very aggressive positions at the W.T.O.,” he said.
The choice of Mr. Lighthizer leaves China in a difficult spot. 

He is part of a group of Trump trade appointees with close links to exactly the kinds of metal-bashing old-economy industries in which China faces the greatest overcapacity, and the toughest choices about how to close factories and lay off workers. 

Restrictions on exports to the United States will make those choices even harder for China.
Wilbur Ross, the billionaire investor who is Mr. Trump’s choice to become commerce secretary, made large chunks of his fortune in steel and auto parts, two huge industries that in China are ramping up exports. 

Peter Navarro, the head of the new White House office overseeing trade and industrial policy, is a brilliant critic of globalization who said that American purchases of imported goods at Walmart are helping China pay for nuclear-tipped missiles aimed at the United States.
The timing is bad for China.
The Chinese economy is slowing despite vast amounts of fiscal and monetary stimulus. Big manufacturers in most industries are struggling with overcapacity, pushing them to sell goods overseas at cut-rate, even money-losing prices, just to cover their operating costs. 

Mr. Lighthizer has argued for years that the United States should keep out goods made with government subsidies or sold below the full cost of making them.

DOCUMENT

What Trump’s Nominee for Trade Representative Has Said About China and the W.T.O.

We annotated testimony that Robert Lighthizer gave to Congress in 2010 about China, the W.T.O. and trade with the United States.

“Trump naming him makes me worry the U.S. will carry out more rigid measures on trade and investment,” said Wei Jianguo, a former vice minister of commerce.
Exports are important for China. 

It consistently sells $4 worth of goods to the United States for each $1 of imports. 

That mismatch has produced a bilateral trade surplus for China equal to about 3 percent of the country’s entire economy, creating tens of millions of jobs.
The benefits to China from that surplus have been increasing rapidly in the past few years. 

Many exporters have stopped importing components and switched to increasingly capable local suppliers for everything from high-quality steel to advanced computer chips. 

Multinationals have moved entire supply chains to China, and transferred the technology to run them.
Many Democrats and many economists have also become increasingly disenchanted with the effect on American workers and the American economy. 

The Obama administration filed a long series of trade cases at the W.T.O. against China, although they involved fairly narrow policies and limited categories of goods. 

It has been preparing more, filing the latest trade case on Thursday over Chinese subsidies to aluminum producers.
If Mr. Trump goes even further in that direction, Mr. Lighthizer will bring a long background in such actions.
When he was in the Reagan administration, Mr. Lighthizer was the deputy United States trade representative overseeing industrial policy in old-economy industries like cars and steel. 

Since then, Mr. Lighthizer has mainly been filing anti-subsidy and anti-dumping trade cases against imports on behalf of the American steel industry.
“He’s the best negotiator I’ve ever worked with on policies involving trade or tax policy,” said Timothy Regan, Mr. Lighthizer’s chief of staff in the Reagan administration and now the senior vice president of global government affairs at Corning.
Mr. Lighthizer led successful efforts in the 1980s to force Japan to accept curbs on exports of cars and steel to the United States. 

Both were bold moves, particularly given that President Reagan at times espoused free trade. 

But when the W.T.O. was created the next decade, member nations agreed, with a few exceptions, to renounce imposing such export limits on other countries.
The auto industry could be ripe for action again. 

China is an enormous exporter of auto parts to the United States. 

Under Obama, trade tensions over automotive trade have already risen, and the Obama administration has won two W.T.O. cases. 

The cases forced China to abandon certain anti-dumping and anti-subsidy taxes on American autos and to dismantle a few, fairly narrow subsidies.

Barges in China with ore to be used in the manufacturing of steel. Robert Lighthizer, the Trump administration’s choice for trade representative, had a decades-long career as the main trade lawyer for the American steel industry. 

“He was squarely in the trade talks with Japan,” said He Weiwen, a former commerce ministry official who is now a senior fellow at the Center for China and Globalization, an influential Beijing research group, “so maybe Donald Trump wants him to do something similar on China.”
The intersection of tax and trade is a specialty of Mr. Lighthizer, who was an architect of a Reagan administration initiative to cut corporate taxes for exporters. 

He was previously chief of staff at the Senate Finance Committee, overseeing tax policy.
In the Reagan administration, he pushed the limits of what is permissible under international trade rules. 

His plan allowed many American exporters to reduce their taxes by setting up overseas companies to manage their foreign sales. 

But the W.T.O. eventually torpedoed the effort after a challenge by the European Union in the late 1990s.
Republicans now appear to be taking a similar — albeit more ambitious — tack. 

They are exploring how to raise corporate taxes for importers and use the extra revenue to reduce taxes for all other companies.
China, as the biggest exporter to the United States, would face a major blow. 

But it would also affect American retailers, electronics companies and other multinationals that depend on supplies from anywhere overseas.
A big obstacle for Republicans is whether the W.T.O. would declare such a tax to be a trade barrier. China and Europe effectively penalize imports by imposing a type of national sales tax, an approach the W.T.O. has approved. 

It is a steep 17 percent in China.
But House Republicans, leery of imposing any new national taxes, want to change existing corporate tax laws instead. 

W.T.O. rules discourage, although they do not necessarily prohibit, modifying corporate taxes in ways that penalize imports.
The W.T.O. review process, though, is lengthy. 

So Mr. Lighthizer and Congress could well go ahead with the tax plan, lightening the tax burden for American manufacturers as well as inflicting plenty of damage on China and the global supply chain.
And the W.T.O.’s response — if it found the plan invalid — would not have much heft. 

Mostly, the global trade group could authorize Beijing to impose trade restrictions on the United States’ much smaller exports to China.
That prospect does not scare Mr. Lighthizer very much, as he made clear in his 2010 testimony.
“W.T.O. commitments are not religious obligations,” Mr. Lighthizer said, and violations “are not subject to coercion by some W.T.O. police force.”

The right man in the right place

‘Death by China’ author Peter Navarro to lead new White House National Trade Council
By Demetri Sevastopulo and Shawn Donnan in Washington

Professor Peter Navarro

Donald Trump plans to create a National Trade Council inside the White House to oversee industrial policy and is appointing one of the architects of the populist economic message to run the new group.
Mr Trump has chosen Peter Navarro, a Harvard-trained economist, to head the NTC, his transition team announced on Wednesday in news reported first by the Financial Times. 

The author of books such as Death by China and Crouching Tiger: What China’s Militarism Means for the World has for years warned that the US is engaged in an economic war with China and should adopt a more aggressive stance — a message that the president-elect sold to voters across the US during his campaign.
“I read one of Peter’s books on America’s trade problems years ago and was impressed by the clarity of his arguments and thoroughness of his research,” Mr Trump said. 

“He has presciently documented the harms inflicted by globalism on American workers, and laid out a path forward to restore our middle class.”
The Trump transition team described Mr Navarro as a “visionary economist” who would “develop trade policies that shrink our trade deficit, expand our growth, and help stop the exodus of jobs from our shores”. 

His appointment is the second restructuring of trade policy that will see Mr Trump attempt to follow through on his focus to resurrect manufacturing, and create more industrial jobs, in the American economy.
The FT reported earlier this month that Mr Trump had tapped Wilbur Ross, a billionaire investor who has been nominated as secretary of commerce, to oversee his trade policy, creating a new inter-agency process that would cut the influence of the US Trade Representative, the office which has for years negotiated trade deals.
Mr Trump has yet to nominate his candidate for USTR, which traditionally sits in the president’s executive office, and the transition team has said it is still discussing internally how the role would fit with its broader trade agenda.
The Trump team said the NTC would focus on boosting manufacturing and also lead a “Buy America, Hire America” programme that would boost job creation in areas such as infrastructure and defence. 

It will work in tandem with three other offices in the White House: the National Security Council, the National Economic Council and the Domestic Policy Council.
They added that it would mark the first time there was an office dedicated to manufacturing inside the White House, in a strong signal that Mr Trump plans to follow through on the promises that he made on the campaign trail.
“We were a great team during the campaign, and we will be a great team during the administration,” said Mr Ross, who co-authored a white paper filling out the Trump economic policy with Mr Navarro during the campaign. 

It called for a focus on reducing the US trade deficit and boosting manufacturing, arguing both would help restore economic growth to a historical average of around 3.5 per cent per year.
Mr Trump has moved quickly to name a cabinet and team of top advisers that leans heavily on people with business and military experience and that mostly eschews people with executive experience in Washington.
The move to create the new office is likely to be seen as controversial by pro-China economists, many in the business community and pro-trade Republicans. 

It also raises questions about the role of the National Economic Council in a Trump White House. The NEC was established to perform similar functions by Bill Clinton following his 1992 election and Mr Trump has picked a heavy-hitter — former Goldman Sachs executive Gary Cohn — to head it.

Targeting the trade deficit is seen by some economists as likely to lead to protectionist trade policies. It may also be complicated by Mr Trump’s plans for an increase in spending and rising interest rates, both of which have already yielded a surge in the dollar that is likely to make US exports less competitive and lead to a larger trade deficit. 

Separately, Mr Trump on Wednesday named investor Carl Icahn to serve as a special adviser on regulatory reform.
The president-elect is also considering naming Matthew Pottinger, a former US marine who served in Iraq and Afghanistan, as his top Asia adviser in the White House, in what would amount to another appointment of a top official with a military background.
Mr Pottinger, a former Wall Street Journal correspondent in China who became a marine after the 9/11 terror attacks, is the frontrunner for the top Asia role, according to three people familiar with the deliberations. 

Mr Pottinger, a Chinese speaker, would advise Michael Flynn, the retired army general selected as national security adviser. 

Mr Pottinger served at the same time in Afghanistan as Mr Flynn and was one of the co-authors of a paper that the retired general wrote on the problems with the US intelligence apparatus.
“Matthew Pottinger is a member of our transition support element. He is being considered but no decision has been made,” said Jason Miller, spokesman for Mr Trump.