President Trump Accuses Chinese of Being Grand Champions of Currency Manipulation

President Trump frequently accused China of keeping its currency artificially low against the dollar to make Chinese exports cheaper, stealing American manufacturing jobs.
By Reuters

President Donald Trump declared China the "grand champions" of currency manipulation on Thursday, just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing's foreign exchange practices.
In an exclusive interview with Reuters, Trump said he has not "held back" in his assessment that China manipulates its yuan currency, despite not acting on a campaign promise to declare it a currency manipulator on his first day in office.
"Well they, I think they're grand champions at manipulation of currency. So I haven't held back," Trump said. 

"We'll see what happens."
During his presidential campaign Trump frequently accused China of keeping its currency artificially low against the dollar to make Chinese exports cheaper, stealing American manufacturing jobs.
But Treasury Secretary Stephen Mnuchin told CNBC on Thursday he was not ready to pass judgment on China's currency practices.
Asked if the U.S. Treasury was planning to name China a currency manipulator any time soon, Mnuchin said he would follow its normal process of analyzing the currency practices of major U.S. trading partners.
The Treasury is required to publish a report on these practices on April 15 and Oct. 15 each year.
"We have a process within Treasury where we go through and look at currency manipulation across the board. We'll go through that process. We'll do that as we have in the past," Mnuchin said in his first televised interview since formally taking over the department last week. "We're not making any judgments until we go continue that process."
A formal declaration that China or any other country manipulates its currency requires the U.S. Treasury to seek negotiations to resolve the situation, a process that could end in punitive tariffs on the offender's goods.
The U.S. Treasury designated Taiwan and South Korea as currency manipulators in 1988, the year that Congress enacted the currency review law. 

China was the last country to get the designation, in 1994.
The current situation is complicated because China's central bank has spent billions of dollars in foreign exchange reserves in the past year to prop up the yuan to counter capital outflows.

Trump's pronouncements about the yuan could also complicate matters for Mnuchin as he prepares for his first meeting next month with his Group of 20 finance minister counterparts in Baden Baden, Germany.

Chinese Aggressions

China Nears Completion of Militarizing Island Chain
By Joshua Fatzick

Chinese dredging vessels are purportedly seen in the waters around Mischief Reef in the disputed Spratly Islands in the South China Sea, May 21, 2015.

WASHINGTON — China is almost finished building military structures on its artificial islands in the South China Sea (SCS), Reuters reports, in a development that is sure to test the new Trump administration.

Unnamed U.S. officials told the news service construction is almost complete on nearly two dozen structures with retractable roofs designed to house long-range surface-to-air missiles on the Spratly Island chain.
The new development could be considered a military escalation on China’s part and could serve as an early test for Donald Trump, who took a hard line against China throughout his campaign.
“This is part of their effort to eventually control that first island chain in the SCS and assert their claim, even though they have been completely repudiated by the International Court of Appeals, The Hague, based on the Law of the Sea Treaty, of which they are a member,” Robert Manning, a senior fellow at the Atlantic Council, told VOA.
Brad Glosserman, executive director of the Hawaii-based security think tank Pacific Forum, told VOA this was another step in China’s recent attempts to further militarize the islands.
“Clearly, they are intending to build facilities that allow them to permanently store or deploy equipment of a military nature to these islands,” he said.
A report released by the Asia Maritime Transparency Initiative (AMTI) in December shows China has been building airstrips and anti-aircraft systems on the artificial islands since at least June of 2016.

An undated satellite image released by the Asian Maritime Transparency Initiative at Washington's Center for Strategic and International Studies shows construction of possible radar tower facilities in the Spratly Islands in the disputed South China Sea.

China's Defense Ministry issued a statement at the time, saying the construction was "mainly for civilian use."
The Trump administration has taken a strong stance against the militarization of the islands, with Secretary of State Rex Tillerson in January suggesting the United States block China from accessing the islands.
“We're going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed," he said during his confirmation hearing before the U.S. Senate.
White House Spokesman Sean Spicer backed Tillerson up when asked about the comments, saying the United States needed to “protect our interests” in the South China Sea.
“It's a question of if those islands are in fact in international waters and not part of China proper, then... we're going to make sure that we defend international territories from being taken over by one country," Spicer said during a press briefing last month.
While the artificial islands could become a serious test of the Trump administration’s foreign policy, the islands weren’t designed with that intention, Glosserman said.
“It constitutes a test for this president, just as it constitutes a test for any president, but this was not done specifically to challenge Mr. Trump,” he said. 

“This was a determination that the Chinese had made about what they wanted to do, and that therefore they are going to proceed. It becomes a challenge, but it was not designed as such.”

The Chinese Thief Crying about Theft

If China Wants To Prevent Trade Wars It Should Stop Waging Them
By Douglas Bulloch

A file photo of THAAD, an anti-missile defense rocket South Korea is planning to purchase from the U.S. this year.

The connection between politics and economics is often fraught. 

In the United Kingdom, for example, a putative takeover of a major UK multinational–Unilever–by an American conglomerate Kraft provoked a nationalist response. 

But there was much debate over whether the UK could, or indeed should, find some legally contentious way to frustrate the deal.
In China, clearly and obviously, it is different. 

In fact it is difficult to distinguish between economics and politics in China at all.

China's response to THAAD
Recently China has been responding to South Korea's intention to purchase the THAAD (Terminal High Altitude Area Defense) missile system from the U.S. with unusual vigor. 

Along with Russia, they have made their hostility very public, pronouncing it a threat to their interests, and demanding South Korea and the U.S. respect the "strategic balance" in the region by withdrawing the planned deployment.
Yet these diplomatic representations have not, so far, been enough to dissuade either South Korea or the U.S. 

Indeed Secretary of Defense James Mattis, on his first trip abroad in his new role, confirmed that the deployment will go ahead on schedule later this year.
Nor have China's efforts been limited to diplomatic overtures and high level threats. 

The country has gone so far as to stop flights from Korean airlines, ban the importation of electric vehicles with Samsung or LG batteries, and restrict imports of cosmetics, where Korean brands have a strong market presence. 

They have even prevented the broadcast of wildly popular South Korean soap operas, all in an effort to bring South Korea to heel.
In recent weeks this broader strategic issue has been brought into sharper focus by the crumbling of authority in South Korea, and the launch of an intermediate range missile by North Korea, thought by some to be Chinese in origin. 

But it is an instructive example of how China routinely interferes with normal trading relations in pursuit of political aims, and yet at the same time warns the U.S. against a looming trade war, declaring that such an outcome would not be in the interests of either country.

Using trade policy for political ends
Indeed, when China makes reference to the "ballast stone" and "propellor blade" of U.S.-China trade, it is worth comparing their desire to keep this relationship steady against China's record of trading relations with South Korea dating back (ostensibly anyway) thousands of years.
Although China has no qualms damaging South Korea's positive trade balance precisely in order to teach them a lesson for having the temerity to maintain a close security relationship with the U.S., the U.S. must not draw any conclusions about China's aggressive efforts against their own long standing security interests all the way from the Korean peninsula to the South China Sea. 

That would not be a "win win."
The difficulty for the U.S. is that using trade policy to pursue political ends is either conceived as a way of inducting developing countries into the wider–and importantly interdependent–world system or is much further along the ladder of policy escalation than it is for China. 

Sanctions against Russia followed the invasion and annexation of Crimea for example, and sanctions against Iran followed the repudiation of the Non-Proliferation agreement. 

China, on the other hand, resorts to punitive trade measures almost as a first step, particularly with countries which export extensively to China.

Disruptive and vexatious -- but also normal
Where there is no overt political reason, the U.S. tends to isolate trade disputes to questions of trade practice; dumping, IP violations, etc. 

Whereas China, being an authoritarian and centralized state is more than just a rule setter but directly manages most of the economy.
Investment decisions are made under state direction, facilitated by state banks, and conducted by state owned enterprises. 

Hurt the "feelings" of the Chinese people – as Norway apparently did when the the Nobel Peace Prize was awarded to a Chinese human rights campaigner – and China will simply close its markets to your main exports. (In Norway's case, salmon.) 

It is disruptive, and vexatious, but so normal as to have a name; "The Dalai Lama Effect" after another noted diplomatic sensitivity.
The simple fact of the matter is that for China, trade and investment are key levers of foreign policy and are routinely deployed at an instrumental level in the service of precise foreign policy objectives. 

Investments and market access are offered as sweeteners, and denial of market access and disruption to established patterns of trade is threatened as punishment. 

Anyone who wants to do business with China knows that conditions apply above and beyond price and quality.
Now China is faced with a U.S. President who also sees trade as a lever, and seems prepared to place the U.S.-China relationship in question. 

Furthermore, right across the East and Southeast Asian regions, Chinese and U.S. interests have rarely been so out of joint. 

It is worth noting that if the U.S. made the same connection between trade and foreign policy as China does routinely, relations would have long since broken down.
All of which leaves the distinct impression that if China was really sincere in its desire to avoid a trade war with its own largest export market, it might usefully consider not waging them in the first place.

Presidential Interests

Top Democrats demand answers on Trump’s China trademark
By AUSTIN WRIGHT
Sen. Dianne Feinstein has previously argued the trademark deal could violate the Constitution’s Emoluments Clause. 

Three senior Senate Democrats are seeking answers from the State Department on China’s decision to grant a trademark to the Trump Organization — a decision the senators say could violate the Constitution.
Sens. Ben Cardin of Maryland, Dianne Feinstein of California and Jack Reed of Rhode Island wrote to Secretary of State Rex Tillerson on Friday asking for more details on the trademark, which Donald Trump had been seeking for more than a decade but wasn’t granted until soon after being elected president.
Feinstein has previously argued the trademark deal could violate the Constitution’s Emoluments Clause, which bars government officials from accepting gifts and payments from foreign countries.
“The possibility that the government of China is seeking to win President Trump’s favor by granting him special treatment for his businesses is disturbing,” the three senators said in their letter. 

“As you may be aware, for more than a decade the Trump Organization sought to receive this trademark registration without success.”
A trademark for Trump’s brand in China, they write, “is a highly valuable commodity.” 

The senators add that Trump’s refusal to divest himself from his businesses means that he “continues to benefit directly from the financial success of the Trump Organization.”
They're asking Tillerson to provide answers to a number of questions, including information on discussions between Trump’s presidential transition team and China.
Cardin, Feinstein and Reed are the top Democrats on the Foreign Relations, Judiciary and Armed Services Committees, respectively.

DoD-paid Chinese Spies

DoD-funded school at center of federal probes over Chinese military ties
By Catherine Herridge, Pamela K. Browne, Cyd Upson

Spying for sex: J. Davidson Frame, right, salutes his wife, left, UMT president Yanping Chen Frame, who is holding a People's Liberation Army uniform.

Based just four miles from the Pentagon in northern Virginia is an innocuous-sounding online school for "management and technology" – which a Fox News investigation reveals has been at the center of multiple federal probes about its leadership's ties to the Chinese military and whether thousands of records from U.S. service members were compromised.
The University of Management and Technology in Rosslyn, Va., which opened in 1998, touts a campus in Beijing and “partnerships” with universities around the world. 

The U.S. taxpayer-funded school claims to have had 5,000 graduates in the last five years and to be "especially proud of our students stationed in US military bases around the globe."
However, there is another side to the school's leadership that drew the attention of the FBI, the Justice Department, the Pentagon, Immigration and Customs Enforcement, and the Naval Criminal Investigative Service (NCIS) since at least 2012 -- and perhaps as early as 2009.
In December 2012, the FBI made two very public raids of UMT and the northern Virginia home of university president Yanping Chen Frame and its academic dean, her husband J. Davidson Frame. Documents reviewed by Fox News show it was a counter-intelligence case, known as a "200d," one of the most highly sensitive categories for a federal probe.
Photos, exclusively obtained by Fox News, appear to show Chen as a young officer in the People's Liberation Army, the military wing of China's communist party. 

Another photo shows Frame saluting his wife, Chen, who is holding a uniform. 

Experts said it was a Chinese military colonel’s uniform.

Honey trap: This undated photo appears to show Yanping Chen Frame before she came to a U.S. graduate school.

Yet since those FBI raids, UMT has continued to collect more than $6 million from Defense Department tuition assistance programs as well as the Department of Veterans Affairs through the post-9/11 GI bill.
"It's a bad deal for the soldiers, and it's a bad deal for the taxpayer," Stephen Rhoads, a military veteran turned whistleblower who says he worked with the FBI on the case, told Fox News in an exclusive interview. 

"Nobody's getting what they paid for."
Rhoads said he worked at UMT recruiting vets when the FBI approached him in 2012 regarding the federal investigation. 

Emails and other documents reviewed by Fox News corroborate key elements of Rhoads' story.
"One of the first sentences she [Chen] ever threw out -- after she found out I was an Army officer, was, ‘Well … I was a colonel in the army,’" Rhoads explained. 

"During our first face-to-face encounter, absolutely ... she did not deny it."
Rhoads said he thought Chen meant the U.S. Army, and asked whether she trained in Texas. 

"She laughed and said, ‘Oh, no, I was in the Chinese army, you know.’”
Chen, 64, came to the United States in 1987 from Beijing on a non-immigrant visa with her daughter Lele Wang. 

The Chinese government funded Chen's research at George Washington University where she received a Ph.D. in Public Policy in 1999, the year after UMT was created.
While Rhoads says Chen was upfront about her Chinese military experience, he claimed she hid those ties on immigration applications. 

Fox News reviewed Chen's immigration records where she consistently denied ties to the Chinese or any foreign military. 

When asked, "Have you ever been a member of, or in any way affiliated with, the communist party or any other totalitarian regime?" Chen checked "no." 

She would later become a naturalized U.S. citizen.
While there are no U.S. laws preventing a naturalized citizen from running a school like UMT, the Fox News investigation found that Chen's ties to the Chinese military run deep.
Three outside experts consulted by Fox News confirmed the authenticity of the Chinese uniforms in the photos of Chen and Frame.
"If somebody was wearing that uniform, I would say that they were in the People's Liberation Army," Dennis Blasko, a leading Chinese military expert said, referring to the photo of what appears to be Chen in uniform.
Asked about the photo of Frame saluting his wife, Blasko observed, "This is a P.L.A. officer's uniform — active duty — from between 1987 and 2007 ... And from the epaulettes, we can see this -- three stars and two red stripes would be a full colonel."
Blasko emphasized that P.L.A. insignia can only be purchased with the permission of the Chinese military, and "you would have to have a certificate from your unit to buy [it.]"
Blasko, a West Point graduate who worked as a military attache in China, wrote "The Chinese Army Today: Tradition and Transformation for the 21st Century," one of the definitive books about the Chinese military.
In her George Washington University dissertation, Chen thanks her father, a P.L.A. general, who directed arms and technology development. 

"My father, General Chen Bin, gave me the inspiration to pursue this area of study," Chen wrote. 

"As former Chairman of COSTIND (1982-87), he was an important player in supporting and directing the (Chinese) space program."
In her 2012 FBI interview, Chen denied she ever was a colonel in the P.L.A., emphasizing she had worked as a doctor in the Chinese space program. 

Chen said it was a “civilian agency.” 

The interview summary suggests federal agents challenged Chen’s characterization. 

Outside experts told Fox News the Chinese civilian and military space programs are intertwined.
While Chen's immigration application is more than a decade old, and past the five-year statute of limitations, there may be a "continuation” of fraud, according to Ray Fournier who worked with the State Department's office of diplomatic security for more than 20 years. 

Fournier, an expert on visa and passport fraud, worked for the Joint Terrorism Task Force in San Diego, where his investigative work led to an arrest warrant for the American-born cleric Anwar Awlaki, who was later killed by the CIA.
Fournier said, "If she has marked ‘no’ on the petition, but if in fact, the answer is yes … then we have a false statement. And where that comes into play, most assuredly, is in the arena of passport fraud. It is this application." 

With each renewal of Chen's U.S. passport, Fournier said, investigators should determine whether the falsehood was repeated. 

"These are issues of inadmissibility," he said.
While going through the immigration process, Chen was also launching what would become a multi-million-dollar online academy. 

But that academy's work would eventually attract the attention of federal investigators, who questioned whether students’ records were remotely accessed from China.
Before the 2012 raid, Chen's daughter Lele Wang who also works at UMT, told the FBI that "'Contractors' in the UMT Beijing Office have [administrator] privileges" to access the student database.
Rhoads said UMT recruited service members who provided their military history when they enrolled. 

"It got uploaded into an O-drive, they called it ... their personal military bio, you know, where they were trained, how they were trained, how long, that could be remotely accessed."
Rhoads said Chen had a particular interest in Ohio's Wright-Patterson Air Force Base, which is a research and technology hub.
And there was more. 

"She wanted me to go out to these remote reserve and National Guard centers, you know … in small-town America and start gettin' U.S. soldiers from those centers. Get their information, basically. Who's out there in the woods? How many units we got?"
Rhoads recalled to Fox News that he was instructed by the FBI to tell Chen that he was going to testify before a Virginia grand jury. 

"They wanted to, I guess see how … she would react."
At the time, Rhoads said Chen had no idea he was working with the bureau.
He said, "Well, at this point, she didn't know I was working for them at all. And she's like, ‘Oh, you don't tell them anything. We don't know each other. You don't … know what you don't know,’ was her buzz phrase. ‘You don't -- you don't know I was a colonel in the P.L.A. They'll never have proof to say that’."
Emails obtained by Fox News show Rhoads and at least one FBI agent alerted the Defense Department, but another Memorandum of Understanding (MOU) was signed in 2014 through 2019 allowing UMT to collect millions in federal taxpayer aid.
An FBI agent in one email exchange wrote, "I let my management and the AUSAs [assistant U.S. attorneys] know about her renewal with DoD. Incredible."
Asked about the renewal, as well as whether DoD personnel were warned and additional steps were taken to vet UMT, the DoD chief for Voluntary Education Assistance, Dawn Bilodeau, referred questions to Pentagon spokesperson Laura Ochoa. 

In an email, Ochoa said, "In light of reports regarding University of Management and Technology (UMT), the Department is reviewing the DoD MOU signed between the institution and the DoD for compliance."
No one has been charged with any crime in connection with the investigation. 

Sources told Fox News that Assistant U.S. Attorney for the Eastern District of Virginia James P. Gilllis got the case, but there was a disagreement with the FBI over how to proceed, based on the case law and the extent to which sources and methods would be revealed.
Neither the FBI nor a spokesman for Gillis would comment to Fox News but separately, a spokesman for NCIS said they cannot comment on an "ongoing investigation." 

A FOIA request filed by Fox News Senior Executive Producer Pamela Browne confirmed an NCIS investigative file for UMT.
Fox News made repeated requests by phone and via email for interviews with Yanping Chen and J. Davidson Frame. 

After Chen’s daughter said they were too busy to prepare and traveling out of town, Fox News went to their offices in Rosslyn, Va.
A school representative, who would not identify himself, confirmed Chen and Frame were in the office that day, but after learning Fox News was at the front desk, the couple refused to come out. 

Fox News’ questions covered how UMT was run, Chen's military ties, whether service members' records are secure, and how millions in taxpayer dollars are spent.
Fox News also sent a series of questions to the Chinese embassy in Washington, D.C., but there was no immediate response.
According to UMT, nearly 20,000 students have studied there, while 10,710 have earned degrees.

CHINA’S NORTH KOREA PROBLEM

By Hannah Beech
North Korea’s Supreme Leader Kim Jong-un may have ordered the assassination of his half brother Kim Jong-nam, shown here in a South Korean news report.

For more than a decade, Kim Jong-nam, the exiled half brother of North Korea’s Supreme Leader Kim Jong-un, lived in Beijing and Macau under the protection of the Chinese state. 

But, on February 13th, he looked to be travelling alone when two dark-haired women approached him at Malaysia’s Kuala Lumpur International Airport. 

In what appears to be leaked CCTV footage, one of the women approaches Kim in the check-in area, while the other rushes up from behind and seems to wipe her hands across his face. 

After the assassins stroll away in opposite directions, Kim is shown, alone, approaching airline personnel and miming the mysterious ambush. 

Soon after, a direct descendant of North Korea’s ruling dynasty was dead.
Kim’s assassination, which the South Korean government called a “terrorist act” carried out by the North Korean regime, shocked China’s leadership. (Malaysian police have implicated several North Koreans in the killing and want to question a diplomat at the North Korean embassy in Kuala Lumpur.) 

In recent months, when Kim stepped out in Macau, the semiautonomous Chinese casino town, where he spent much of his time, he could be seen without a security detail, but he was nonetheless China’s main—if politically blemished—North Korean asset. (Kim went into exile after he was stopped at the Tokyo airport, in 2001, while trying to sneak into Japan with a forged passport from the Dominican Republic. He claimed that he was trying to visit Tokyo Disneyland.) 

The suggestion that his younger half brother—known as “Fatty Kim the Third” in Mandarin—had ordered the assassination strained at the bonds between the People’s Republic of China and the Democratic People’s Republic of Korea, or the D.P.R.K.

This was not the first hit on a pro-China relative of the Supreme Leader. 

In late 2013, Kim Jong-un’s uncle Jang Song-taek, who had tried to reinvigorate the North Korean economy through market reforms advised by the Chinese, was executed. 

Jang’s offenses included “half-heartedly clapping” when his nephew received a military promotion. 

China, uniquely among the world’s powers, has continued to offer its assistance to North Korea. 

It’s a big-brother relationship that goes back to the first half of the twentieth century, when revolutionaries in both places were experimenting with communism; it was only because Mao Zedong dispatched more than a million Chinese troops to fight in the Korean War that Kim’s grandfather Kim Il-sung kept control of the northern half of the Korean peninsula. 

But the reign of Kim Jong-un has caused consternation. 

“Beijing’s patience is running out,” Zhu Feng, a foreign-policy adviser and a professor at Nanjing University, in eastern China, said. 

“The Kim regime has done absolutely nothing that is good for China’s national interest.”
The day before the assassination, North Korea thumbed its nose at its lone ally, firing a medium-long-range missile into the Sea of Japan, shortly before Donald Trump sat down for dinner with Prime Minister Shinzo Abe, of Japan. 

China has made it clear that it doesn’t appreciate North Korea’s nuclear ambitions. 

Yet, since taking power, five years ago, Kim has overseen three nuclear tests, one more than his father unleashed during seventeen years in power, and, over the past two years, has launched more test missiles than at any point in North Korean history. 

He has made no secret of his goal of perfecting an intercontinental ballistic missile that can reach the U.S. mainland.
Trump has accused China of enabling North Korea’s unpredictable ruler. 

Beijing has “total control over North Korea,” the U.S. President said in an interview last month with “Fox & Friends.” 

“China should solve that problem. And if they don’t solve the problem we should make trade very difficult for China.” 

Last Friday, U.S. Secretary of State Rex Tillerson urged his Chinese counterpart, Foreign Minister Wang Yi, to “use all available tools to moderate North Korea’s destabilizing behavior,” according to a State Department readout.
China and North Korea were once so close that Mao, whose elder son died on Korean soil during the Korean War, likened the relationship to an anatomical embrace between “lips and teeth.” 

Kim Jong-il, the current Supreme Leader’s father, travelled to China seven times between 2000 and 2011, even when he was ailing and near death. 

By contrast, the younger Kim has not met Xi Jinping since taking power. 

“Xi Jinping does not trust Kim Jong-un at all,” Wu Qiang, a political scientist at Tsinghua University, in Beijing, told me. 

The aversion appears to be mutual, with Kim sharing his grandfather’s suspicion of the giant neighbor that long relegated Korea to tributary-state status.

“This is about Kim establishing his power and legitimacy,” John Delury, an expert on North Korea at Yonsei University, in Seoul, said. 

“Kim is a young leader of a nationalist regime, and the onus is on him to avoid kissing Xi’s ring, so he can prove that he’s not a pawn of Beijing.”
China does have significant leverage over North Korea, as it remains the D.P.R.K.’s economic lifeline, piping in the oil needed to keep the workers’ paradise operational. 

Shutting off that spigot could be catastrophic, even for a regime that has proven more than willing to sacrifice millions of its citizens to continue the Kim dynastic rule. 

For China, the prospect of economic collapse in the North, and with it the fall of the Kim family, brings a potential security nightmare to its border: a unified Korea led by the South, which currently hosts tens of thousands of American soldiers.
“The Chinese are deeply frustrated and want to do something, but they get stuck when they look at the options,” said Paul Haenle, the director of the Carnegie-Tsinghua Center for Global Policy, in Beijing, and a former White House representative at the stalled six-party talks, which were aimed at curtailing North Korea’s nuclear program. 

“If they put economic pressure on the North and it implodes, they lose the buffer zone and refugees flood in. If they apply political pressure, then China could become the enemy,” at least in Kim Jong-un’s eyes, “and then the missiles that were directed at the U.S. and its allies are suddenly pointed at them.”

On Saturday, China announced Beijing was suspending all imports of North Korean coal for the rest of the year. 

In effect, North Korea’s total exports were being slashed by around forty per cent. 

Last year, even as Beijing promised to implement United Nations sanctions punishing North Korea for its nuclear program, Chinese imports of North Korean coal actually increased year-over-year, due to a loophole that allowed for trade for “livelihood” purposes. 

The new embargo may have been meant as a signal directed as much at Washington as at Pyongyang. “The Chinese are sick of hearing that they’re the only ones with leverage, so the effect of the coal ban is to say, “O.K., we’ve done it, now it’s your turn to deal with them,” Delury, the expert in Seoul, said. 

“It’s almost as if the Chinese want the Americans to own the North Korea problem.”
Ultimately, geography and ideology guarantee that North Korea is China’s problem, even if Beijing wishes it were otherwise. 

“There is no issue that divides China’s foreign-policy community more than the D.P.R.K.,” Zhu, of Nanjing University, said. 

Reprimanding a wayward little brother is one thing; abandoning him altogether is quite another. 

But, with every one of Kim’s provocations, Zhu and some others in the Chinese foreign-policy establishment have reached a stark conclusion—one that Beijing’s traditionalists worry demeans the memory of the hundreds of thousands of Chinese soldiers estimated to have died defending North Korea. 

“Regime change and unification of the Korean peninsula is inevitable,” Zhu said. 

“We all know it’s going to happen sooner or later. The question is: Will China choose to be on the right side of history?”

Calamity Donald

Trump is not the only figure in his administration to stake out a bold position on China, and then retreat meekly. 

BY BRAHMA CHELLANEY

NEW DELHI – Over the last eight years, as China’s posturing in Asia became increasingly aggressive, many criticized Barack Obama for failing to stand up to the Asian giant. 

It was on Obama’s watch, after all, that China captured the disputed Scarborough Shoal from the Philippines and built seven artificial islands in the South China Sea, on which it then deployed heavy weapons — all without incurring any international costs.
Many expect Obama’s tough-talking successor, Donald Trump, to change all of this. 

He is not off to a good start.
During the campaign, Trump threatened to retaliate against China for “raping” America on trade, to impose massive tariffs on Chinese imports, and to label China a currency manipulator on “day one.” Soon after his victory, Trump took a congratulatory phone call from the president of Taiwan, thereby breaking with nearly 40 years of diplomatic orthodoxy. 

Trump then took the matter a step further, publicly suggesting that he would use the “one-China” policy as a bargaining chip in bilateral negotiations over contentious economic and security issues — from import taxes to North Korea.
But Trump backed down. 

Xi Jinping made it clear that he would not so much as talk to Trump on the phone without assurance that the U.S. president would pledge fidelity to the one-China policy. 

The call happened, and Trump did exactly what Xi wanted, ostensibly without extracting anything in return. 

As China now perceives Trump to be all bark and no bite, he will undoubtedly find it harder to secure concessions from China on trade and security issues.
Trump is not the only figure in his administration to stake out a bold position on China, and then retreat meekly. 

During his Senate confirmation process as secretary of state, Rex Tillerson declared that the U.S. should “send China a clear signal” by denying it access to its artificial islands in the South China Sea. China’s expansionism in the region, Tillerson asserted, was “akin to Russia’s taking Crimea” from Ukraine — an implicit criticism of Obama for allowing the two developments.
But Tillerson, like his new boss, soon backed down. 

The U.S., he now claims, merely needs to be “capable” of restricting China’s access to the South China Sea islands in the event of a contingency.
And yet China’s behavior merits stronger U.S. action now. 

The country is attempting to upend the status quo not only in the South China Sea but also in the East China Sea and the Himalayas. 

It is working to create a large sphere of influence through its “One Belt, One Road” initiative. 

And it is re-engineering transboundary river flows. All of this is intended to achieve Chinese leaders’ goal of re-establishing the country’s mythical “Middle Kingdom” status.
Flawed U.S. policy has opened the way for these efforts, in part by helping to turn China into an export juggernaut. 

The problem isn’t that China has a strong economy, but rather that it abuses free trade rules to subsidize its exports and impede imports, in order to shield domestic jobs and industry. 

Today, China sells $4 worth of goods to the U.S. for every $1 in imports.
Just as the U.S. inadvertently saddled the world with the jihadi scourge by training Afghan mujahedeen — the anti-Soviet fighting force out of which al-Qaida evolved — it unintentionally created a rules-violating monster by aiding China’s economic rise. 

And it sustained its China-friendly trade policy even as China’s abuses became bolder and more obvious.
It is ironic that China, which has quietly waged a trade war for years, has responded to Trump’s threats to impose punitive tariffs by warning — notably, at this year’s World Economic Forum Annual Meeting in Davos — of the risks of protectionism and trade wars. 

But not everyone is falling for China’s story. 

A growing number of countries are recognizing that reciprocity should guide their relations with China.
Trump himself may yet challenge China. 

When he agreed to abide by the one-China policy, he said that he had done so at Xi’s request, suggesting that his commitment to the policy should not be taken for granted.
Moreover, even without defying the one-China policy, Trump has ample room to apply pressure.

He could start by highlighting increasing Chinese repression in Tibet. 

He could also expand political, commercial and military contacts with Taiwan, where the one-China policy has had the paradoxical effect of deepening people’s sense of national identity and strengthening their determination to maintain autonomy.
In any case, as China continues to pursue its hegemonic ambitions, Trump will have little choice but to pivot toward Asia — substantively, not just rhetorically, as Obama did. 

To constrain China and bring stability to Asia, he will have to work closely with friends. 

His efforts to establish a personal connection with Prime Minister Shinzo Abe — the first foreign leader he hosted at Mar-a-Lago, his “winter White House” — and the high priority his administration is assigning to relations with India and South Korea are positive signs.
By failing to provide strategic heft to his Asia pivot, Obama left it unhinged. 

Trump has the opportunity — and the responsibility — to change this. 

If he doesn’t, China will continue to challenge U.S. allies and interests, with serious potential consequences for Asia and the world.