US – China Relations

The New York Times
Date: Dec. 12, 2018
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.CreditCreditThomas Peter/Reuters

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. She helps run a company, Huawei, at the center of a global race to dominate the next generation of telecommunications technology. And her arrest, widely viewed inside China as a direct affront, comes at a time of already pervasive suspicion among the Chinese public and leadership 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 borne, in part, out of a position of weakness. The country’s economy is in a sharp downturn, putting political pressure on President 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 delayed or rejected altogether.


Date: December 12, 2018
By: Nicole Gaouette, Donna Borak and David Shortell, CNN

Washington (CNN)China and the US are set to take action against each other as tensions escalate over trade, cyber hacking and espionage as US senior law enforcement officials identified Beijing as the most serious threat to US national security on Wednesday.

China’s methods of non-traditional espionage — including their use of ordinary Chinese expatriates instead of spies at universities and businesses, and intellectual property theft — were explained by officials from the FBI and departments of Justice and Homeland Security who briefed US lawmakers.

“As the United States proceeds a whole of society response to this threat, we must address the vulnerabilities within our system while preserving our values and the open, free and fair principles that have made us thrive,” E.W. Priestap, the FBI’s assistant director of counterintelligence told the Senate Judiciary Committee. “What hangs in the balance is not just the future of the United States, but the future of the world.”

A bargaining chip

Priestap and his colleagues testified hours after Secretary of State Mike Pompeo confirmed in an interview with Fox News that the US believes Beijing was behind the massive cyberattack on the Marriott hotel chain. The New York Times reported the assault was part of a broader Chinese operation that also targeted health insurers and the security clearance files of millions of Americans.

Those disclosures come a day after President Donald Trump told Reuters he would be willing to use a Chinese tech executive arrested for violating US sanctions on Iran as a bargaining chip in his trade war with Beijing, which for now is in a 90-day pause.
“If I think it’s good for what will be certainly the largest trade deal ever made — which is a very important thing — what’s good for national security — I would certainly intervene if I thought it was necessary,” Trump said in the interview.

US business executives have been bracing for further retaliation from China, which has called for the release of Meng Wanzhou, chief financial officer of Huawei and the daughter of the communications giant’s founder, following the detainment of a former Canadian diplomat on Tuesday. A Canadian judge granted Meng a $7.5 million bail, while she awaits extradition to the United States.

Retaliation planned

“The Huawei arrest was enormously unpopular in China and there is some retaliation planned for by security services. You’re likely to see more things like that in the next bit,” said a source familiar with ongoing trade negotiations, referring to the diplomat’s detainment.

The trade war is not just about manufacturing jobs. It’s the final battle between communism and capitalism.

Date: Dec 10, 2018
By: Kenneth RapozaSenior, Contributor

President Donald Trump (right) with China’s President Xi Jinping (left) during their bilateral meeting at the G20 Summit, on December 1, 2018 in Buenos Aires, Argentina. (AP Photo/Pablo Martinez Monsivais) ASSOCIATED PRESS

The trade war is not just about manufacturing jobs. It’s the final battle between communism and capitalism.

The number one and number two economies could not be more different. Besides the obvious differences in family life, social values and religious customs, the biggest divide is politics. Number One is a capitalist democracy. Number Two is somewhat of an economic Frankenstein, a little bit on the entrepreneurial capitalist side, with a whole lot of single-party Communism making sure everything goes according to plan.

Something’s got to give. Either China opens up more to be more like the U.S., or the U.S. closes more and—dare it be said—becomes more like China.

Since the election on Trump, the U.S. has become more like China insofar as it has increased the cost of trading with the United States. Once the freest market in the world to access, Trump’s America now comes with a price.

China, meanwhile, has responded not by opening its market more, but simply by promising to do so at some point, God only knows when. Xi Jinping retaliated against Trump’s tariffs by slapping duties on American farm goods and other items. Farm belts retaliated against Trump by voting anti-tariff Democrats into the House of Representatives in a blue wave in November. China has also been busy reducing tariffs on goods not Made in the USA, potentially setting the table for lost market share for some Americans in worst-case scenarios.    [FULL  STORY]

Here’s a vision of how things might look if Beijing decides to retaliate by leveraging its dominance of the supply chain for American companies.

Date: December 9, 2018
By: Tim Culpan

Imagine you’re a product engineer for a U.S. device brand based in China. You’ve had to submit your passport for annual visa renewal.

Without it, you can’t travel. And with heightened concerns over security and a crackdown on VPNs (which enable users to bypass Chinese censorship of the internet) your company has decreed that all sensitive product discussions be done in-person back at HQ. But that visa renewal is taking a long time and you’re stuck in Shanghai, with your product cycle being extended by the day.

In Shenzhen, where your devices are assembled, the factory has just been raided for the third time that month. Inspectors are looking for breaches of occupational health and safety. You’ve worked hard to keep things up to code, though the rules seems to shift constantly. Minor rust on a pipe at the back of the site was all the authorities needed to shut you down pending a fix. Your site manager can’t even find any mention of rust in the regulations, and that pipe is in no worse condition than the previous two scheduled inspections. Now it’s a problem and production is halted.    [FULL  STORY]

Real Clear Politics 
Date: December 10, 2018 
By: Ian Schwartz

HUGH HEWITT, HOST: Now Mr. Secretary, you also noted in your speech about the INF that there is no advantage, no reason the United State should continue to cede this crucial military advantage to the revisionist powers like China, talking about China’s new missile capability. In the ’60 campaign, John F. Kennedy scored Richard Nixon for a missile gap. Do we presently have a “hypersonics gap” with China?

MIKE POMPEO, SECRETARY OF STATE: Well, I don’t want to say much about gaps, because they have a long history of being misunderstood. Here’s what we can say with absolute certainty. The Chinese continue to build up their capabilities – their satellite capabilities, their hypersonic capabilities, their artificial intelligence capabilities, the capacity of the PLA to conduct operations not only in their territory but in a more expeditionary fashion. The United States has a duty to defend itself, and we need to make sure that we have the resources and the right set of leaders and capabilities so that we don’t find ourselves in a place two, five or fifteen years from now where we no longer maintain the capacity to keep America safe and secure against all threats, especially including the one that the Chinese are building.

HEWITT: Now how is, in fact, the Chinese action different in kind from that of Imperial Japan in their greater East Asia co-prosperity sphere? Are they acting as aggressively in these years as Japan did in the early 30s?

POMPEO: So they have taken actions that are very aggressive. And indeed, in some cases, they have misled us. You’ll recall that in the Rose Garden, President Xi confirmed that he would not militarize these, I’ll call them islands, but these outposts in the South China Sea, and then in fact did. And so we now know that the intention of China is to continue to build out, to continue to expand their capability. And President Trump and President Xi talked about this some when they were together in Buenos Aires, and we are determined to make sure that America is prepared across every battlefront. I didn’t mention cyber previously. Each of these battlefronts is a place the United States must be sure we maintain our capacity to be the premiere capability in the world.    [FULL  STORY]

Whether Trump’s meeting with Xi results in meaningful progress remains an open question: Our view

USA Today
Date: Dec. 9, 2018
By: The Editorial Board, USA TODAY

Customs officers open packages suspected of containing fentanyl or other illegal narcotics at the JFK airport.(Photo: Seth Harrison/The Journal News via USA TODAY Network)

Forget tariffs. Forget all the computers, toys and textiles that the Chinese export to America. China’s most consequential export here is fentanyl, the illicit drug killing people in this country at the rate of nearly 80 a day.

Fentanyl use in the USA has surged, pushing its death toll last year to 28,466  — nine times higher than in 2013 and a rise so steep that it has helped drive down the nation’s life expectancy.

And where is this illicit fentanyl originating? About 80 percent of the pure fentanylseized by U.S. authorities last fiscal year arrived from China, often through the mail.

Since the recent summit in Argentina of the Group of 20 industrial and emerging-market nations, President Donald Trump has boasted on Twitter that Chinese President Xi Jinping agreed to “criminalize the sale of deadly fentanyl” coming into the United States, a potential “game changer” in the battle against this mass killer.

OTHER VIEWS: Avoid blaming each other on fentanyl

Trump didn’t get it quite right. Fentanyl already is an illegal “controlled substance” in China. The Chinese Foreign Ministry said last week that it would add “all fentanyl-like substances” to its controlled substance list — a change that could be quite far-reaching. At the same time, China cautioned patience: “The relevant work is yet to be started.”

Fentanyl is a particularly insidious killer. It’s far more potent than heroin and more profitable for dealers because a kilo can be cut into so many more doses. It is often laced into heroin or pressed into fake pain pills by sellers who care nothing about accuracy, so users don’t know what they’re getting. Tiny variations in dosages can be fatal.     [FULL  STORY]

The news spooked investors with U.S. stocks plunging on fears of a flare-up in Chinese-U.S. tensions.

NBC News
Date: Dec. 6, 2018
By: Dawn Liu, Linda Givetash and Alexander Smith

BEIJING — China demanded the release of a senior executive at tech giant Huawei Technologies

Meng Wanzhou, executive board director of the Chinese technology giant Huawei, in Moscow, on Oct. 2, 2014.Alexander Bibik / Reuters

after she was detained in Canada on extradition charges to the U.S.

The arrest of Meng Wanzhou, chief financial officer and daughter of the company’s founder Ren Zhengfei, spooked investors with U.S. stocks tumbling on fears of a flare-up in Chinese-U.S. tensions.

She was arrested in Vancouver, British Columbia, on Dec. 1.

China’s Ministry of Foreign Affairs said officials have been contacted both in the U.S. and Canada to demand Meng’s release. Geng Shuang, a spokesman for the ministry, said her detention needed to be explained, and both countries had to “effectively protect the legitimate rights and interests of the person concerned.”

The Wall Street Journal reported earlier this year that U.S. authorities are investigating whether Huawei violated sanctions on Iran.    [FULL  STORY]

Date: December 6, 2018
Heard on All Things Considered
By: Scott Horsley

The arrest and possible extradition of a Chinese business executive highlights ongoing trade

National security adviser John Bolton
Alex Wong/Getty Images

tensions between the U.S. and China that national security adviser John Bolton says will be a major focus of negotiations over the next three months.

Those tensions contributed to another roller coaster day on Wall Street. The Dow Jones Industrial Average was down more than 700 points on Thursday, but recovered to close down less than 80 points. That followed a 799 point drop in the Dow on Tuesday.

Transcript: NPR’s Interview National Security Adviser John Bolton
Meng Wanzhou, chief financial officer at China’s Huawei Technologies, was arrested in Canada Saturday at the request of U.S. authorities and faces possible extradition to the United States. In an interview with NPR’s Steve Inskeep, Bolton declined to address the reasons for her arrest, but said the U.S. has long been concerned with what it views as her company’s theft of technological know-how.

“You should not turn a blind eye when states, as a matter of national policy, are stealing intellectual property from their competitors,” Bolton told NPR’s Morning Edition. “Huawei is one company we’ve been concerned about. There are others as well.”    [FULL  STORY]

Fentanyl seized at O’Hare International Airport in Chicago. United States officials cite China as the main source of illicit fentanyl brought into America.CreditJoshua Lott/Reuters

The New York Times
Date: Dec. 3, 2018 
By: Sui-Lee Wee

Fentanyl seized at O’Hare International Airport in Chicago. United States officials cite China as the main source of illicit fentanyl brought into America.CreditCreditJoshua Lott/Reuters

BEIJING — China vows to stem the supply of the powerful opioid fentanyl flowing into the United States. It pledges to target exports of fentanyl-related substances bound for the United States that are prohibited there, while sharing information with American law-enforcement authorities.

Such promises, echoed in the recent meeting between the countries’ presidents, ring familiar.

They first emerged in September 2016, when the Obama administration said China and the United States had agreed on “enhanced measures” meant to keep fentanyl from coming into the United States. But in its official statements or state media reports made at the time, the Chinese government never specified the steps it intended to take, and its follow-up has been patchy at best.

So when the Trump administration said on Saturday that President Xi Jinping of China had agreed to designate fentanyl as a controlled substance in “a wonderful humanitarian gesture,” analysts said there was little to cheer about.

“It’s in many ways all theater from the White House and very little serious substance,” said John Collins, executive director of the International Drug Policy Unit at the London School of Economics. “It seems to me the same story again.”    [FULL  STORY]

PLA vessels shift patrol patterns to take them closer to island
Beijing says reaction to US is to secure territorial sovereignty

South China Morning Post 
Date: 03 December, 2018
By: Lawrence Chung

Taiwan’s defence ministry confirmed on Monday that naval vessels from the mainland have stepped up patrols in the western part of the Taiwan Strait this year in what analysts say is a reaction to the increased number of US warships sent into the waters to test Beijing.

The ministry was responding to reports in the Taipei-based China Times on Sunday that “irregular” patrols by People’s Liberation Army Navy warships in the western side of the strait this year had become “routine”.

The ministry said the island’s forces had “effectively monitored the situations and movements around the Taiwan Strait by means of its air and naval mechanisms to ensure national security and regional stability”.

Beijing on ‘heightened alert’ as US Navy sails Taiwan Strait
Beijing, which considers Taiwan a wayward province awaiting reunification by force if necessary, has suspended official exchanges with Taipei since President Tsai Ing-wen took office on the island in 2016 and refused to accept the one-China principle, which Beijing insists as a political foundation for cross-strait relations.

To try to force Tsai to accept the principle, Beijing has stepped up its military posturing against Taipei with a series of exercises around the island, in addition to poaching five of its allies.

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