More than just a trade war, US in skirmises with China over IT, trade and 'national security'

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American economist Jeffrey D. Sachs says Canada is doing the Trump administration's bidding in its handling of the Huawei case. To read more: https://www.cbc.ca/1.4947966


Nobody is supposed to win any war, and the US is anxiously proving that true in skirmishes with China over IT, trade and ‘national security’.

CHINA will not have Ivanka Trump arrested if she were to transit through Hong Kong airport, even now.

Beijing does not have the intent or capacity for that – nor the recklessness required for it, particularly in the throes of a trade war.

But US authorities had Sabrina Meng Wanzhou arrested while transiting through Vancouver airport. Ivanka and Sabrina are prominent businesswomen, but there are also differences between them. Ivanka is the daughter of President Donald Trump. In China and elsewhere, Sabrina is the daughter of modern China and its historic rise.

Critics of Sabrina’s arrest call it a kidnapping. The charges against her are unclear, the intent lacks transparency, and the action itself is unprecedented even for US double standards and a maverick president.

British politician George Galloway condemned Sabrina’s arrest as piracy, a death wish and an act of war. Prof Jeffrey Sachs calls it almost an act of war on China’s business world exposing Washington’s “supreme hypocrisy.” He finds the official pretext lacking credibility. Sachs says that in the past nine years alone, the US penalised 25 other companies from almost as many countries for violating unilateral US sanctions on doing business in third, fourth or fifth countries.

Yet in all these cases the US held the company responsible rather than an individual officer of the company. The case against Huawei had taken an unprecedented and disturbing character from the start.

Jack Ma says the trade war itself is only part of the complicated and now troubling relationship between the US and China. It is so messy that he sees any resolution only in another 20 years.

At one level, today’s US phobia about doing business with China relates to what Washington calls security concerns. Huawei founder and Sabrina’s father Ren Zhengfei was reportedly an elected official of the Communist Party of China (CPC) in 1982.

What would that mean for Ma of Alibaba, confirmed only two weeks ago as a current card-carrying member of the CPC? Nobody outside Washington seems too bothered.

Business, especially international trade, is supposed to be above petty political differences in a very diverse world. But apparently, pettiness matters in a trade war scenario veering towards a cold war. The trade war mindset and the persecution of Huawei are situated within global superpower and geopolitical rivalry between the world’s two biggest economies.

China is still a developing country despite its many achievements, and is determined to press ahead with more growth to develop its poorer regions. Huawei is in the forefront of this national resurgence.

The US remains the world’s technology leader and sole superpower – and intends to stay that way. Since a hyper-competitive international environment does not always favour it, it has resolved to block any challenge while complaining about trade with China.

Owing to China’s population size, significant GDP growth per capita would mean development on a massive scale. And because of reliance on international markets and global supply chains, connectivity makes infrastructure and IT vital.

The current US position on China consists of the phobias and manias of senior administration officials around Trump.

Among the most prominent is economics hawk Prof Peter Navarro, head of the White House National Trade Council. The author of Death By China was conspicuously left out of Trump’s cordial visit to China last year.

Since then, Navarro has moved closer to the Oval Office. So have other hawks circling China.

John Bolton is a Bush-era neo-conservative savouring entry into Trump’s inner circle. That did not happen in the first year, but now he is National Security Adviser. Bolton is notorious as instigator of the Iraq invasion. Now he has focused his foreign aggression on a trade war, indicating he had more to do with Sabrina’s arrest than Trump himself.

US Trade Representative Robert Lighthizer is another hawk eager to target Beijing. He regards China as a “trade threat” and has grown personally close to Trump.

The Economist called US Commerce Secretary Wilbur Ross a protectionist, and he has submitted to the hawkish trend against China. His shares in some China companies are no longer an issue, especially after he has turned his China experience to serve US nationalist interests.

Yet for all their devices, the attack on China by targeting Huawei will not dampen – much less stop – China’s rise. It will teach China to be more vigilant about trade partners, steel it for future pitfalls, and redouble its efforts to grow stronger.

Already there are signs of Sabrina’s arrest being counter-productive, with other forms of blowback against US interests virtually assured.

First, Beijing’s support for Chinese firms like Huawei operating internationally will grow. Even greater state-industry collaboration in China’s national interests, particularly when abroad, can be expected.

Second, China’s corporate sector will offer even greater support for the Government and the CPC in return. As this happens at multiple levels, China’s international competitiveness can only heighten.

Third, public support in China for Chinese companies has also grown, fuelling the rise of Chinese nationalism. Even before Sabrina’s arrest, a nationwide survey found majorities in 300 Chinese cities would boycott US companies.

Fourth, public support for the Chinese state and the CPC continues to accumulate. Whenever the national interest is threatened, all sectors close ranks against the common foe.

Fifth, the action against Huawei has provoked China and triggered its people’s national pride. The extent to which this will multiply is still uncertain, but a clear sense of it is evident in social media.

Sixth, international support for China and its campaign for free trade are set to grow. This involves more than just companies fearful of similar actions for violating US sanctions, since the US has alienated itself from even its allies.

Seventh, the Chinese diaspora in Canada has come out in support of Sabrina and other unfortunate Chinese nationals caught in such a situation. It has become more than just a national or criminal matter.

Eighth, Chinese Americans may also feel the racist pinch of US policy and act similarly. Will they then become suspects to their own Government?

Malaysian entrepreneur and Harvard MBA Tan Hock Eng’s Singapore-based Broadcom was supposed to take over California-based Quallcom in the biggest IT deal in the world. But in March this year the US scrapped the deal in the name of “national security interests.” To many ethnic Chinese that was a racist move.

Ninth, while some countries may sympathise with China over Huawei, others may just be put off by the US action and attitude. The result would be a net loss for US standing and prestige.

To provoke a rising China and get away with it requires consistently deft handling and masterful strategies. Both are lacking in Washington.

Trump has not been focused enough to even make senior administration appointments after two years. Melania Trump has also been pressuring her husband to dismiss the Deputy National Security Adviser.

The departure of senior staff has already been peaking on its own, many for personal reasons. Then Robert Mueller’s continuing investigations and indictments will add further to the dismissals.

All this is what comes of a “trade war” that is about more than just trade, involving more than any conventional notion of war.

Behind The Headlines

By Bunn Nagara, a Senior Fellow at ISIS Malaysia.





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Bigger thriller in Manila: Asean point man to deal with China

Point man: Asean has designated Manila its ‘leader’ in dealings with China, but can the moody Duterte, here shown bonding with Xi on a visit to Beijing in 2016, clinch a an agreement from China for the regional association? — AP

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NOW that the quartet of Asean-related summits is over for the year, so should the niggling criticisms. At least they should – more important matters are at hand.

Over the week Singapore hosted the 2nd RCEP (Regional Comprehensive Economic Partnership) Summit, the 13th East Asia Summit, the 21st Asean Plus Three Summit, and – not least – the 33rd Asean Summit.

These summits were held because it was time they were, and Singapore hosted them because it was its turn. But criticisms were not far behind.

US President Donald Trump was a no-show, and so was Chinese President Xi Jinping. Vice-President Mike Pence and Prime Minister Li Keqiang attended instead.

Trump was criticised for his absence, which allegedly “left the region wide open” for Xi’s China to make further inroads here. That complaint was limited only by Xi’s own absence.

Philippine President Rodrigo Duterte was also criticised for not attending an “informal breakfast summit” between Asean and Australian leaders.

His said it was only an informal event, and it was over breakfast which he did not eat.

A casual observer may be forgiven for sensing that there must be more important developments than these scheduled rounds of handshakes and photo opportunities. There are.

One of these begins in two days: Xi’s state visit to the Philippines, following the scheduled 30th Apec Summit in Papua New Guinea.

Duterte had made three visits to China as President, inviting Xi to visit Manila each time. This will be Xi’s first state visit, coming upon the third invitation to him.

There will be handshakes and photo opportunities too, but the substance and symbolism now may be more than the recent multiple summits in Singapore and Papua New Guinea.

The Philippines has been vocal about rival claims to territory in the South China Sea. The previous The region is generally unsettled by China’s recent occupation and construction of islands, with Vietnam remaining most disturbed. Duterte’s critics have also blamed him for being soft on Beijing.

However, Xi’s visit is expected to be smooth with an emphasis on the positives. These include mutual interests deemed to be larger than interminable disputes over distant rocks and islets.

Last year Chinese Vice-Premier Wang Yang visited Manila for four days amid more audible protests over territory such as Benham Rise. Yet the visit proceeded unhindered.

This time it is President Xi himself, for a state visit of only two days, with no particular complaint against China outstanding. It will also be after one full year of China having become the Philippines’ main trading partner.

For both sides the focus will be quite intense on specific projects backed by Chinese assistance. Duterte left the merrymaking in Papua New Guinea early to return home to prepare for Xi’s arrival.

For China, it would demonstrate to the region how it can cooperate with even a country locked in dispute with it to mutual benefit. This gains added significance when it is the Philippines, historically a US ally.

For the Philippines, there is a host of projects and programmes on Duterte’s wish list requiring Chinese aid. They span his ambitious 9-trillion peso (RM717bil) “Build, Build, Build” infrastructure plan covering all three regions of the Philippines: Luzon, Visayas and Mindanao.

These come under the Six-Year Development Program (SYDP) signed last year with China as a framework for the Philippines’ “Golden Age of Infrastructure.” It is to be Duterte’s legacy for his country.

The 75 projects include a water pump and irrigation scheme, a dam, a north-south railway, a highway, bridges, a park and a rehabilitated power plant. Economic growth is projected to outpace debt.

Duterte is clear-minded enough to know that only China is able and willing to provide the assistance needed. No other country or combination of countries is in a position to do so.

There are also plans for more Chinese business investments, as well as a framework agreement for joint oil and gas explorations at sea. The latter are understood to cover some disputed areas, with China agreeing to only a 40% share of recoverable deposits.

Countries in dispute over territory and the reserves found therein tend to shy from joint exploration, as legally this may imply recognition of the other disputing party’s claim.

But since this condition applies equally to both parties, the Philippines may be confident that China would also be obliged to acknowledge the Philippine claim. Can there be a lesson here for other Asean countries with claims to the South China Sea?

To ensure the success of Xi’s visit, there had been a positive build-up of Philippines-China relations in recent months. Xi’s state visit in turn is envisaged to lead to even better bilateral relations.

Last August, joint simulated naval exercises were held in Singapore among Asean countries and China without US participation. Manila defended that decision by saying that the “tabletop” drill was meant only for neighbouring countries in the region.

Now as Xi prepares for his visit, the US Pacific Fleet is reportedly readying a series of naval operations as a “show of force” in the South China Sea and the Taiwan Straits. In response to China’s stated concern, the Philippines said it will have no part in those operations.Xi’s visit is important not just for the Philippines but also Asean, which had designated Manila the “point man” in dealings with China. Can Duterte clinch an agreement from China for Asean?

Manila had said that a legally binding Code of Conduct (CoC) in the South China Sea was on the agenda, but Singapore Prime Minister Lee Hsien Loong said it may take another three years.

If China really wants to prove its goodwill in Manila, Xi could suggest it may happen considerably sooner.

The last Chinese President to make a state visit to the Philippines was Hu Jintao in 2005. That occasion also marked the 30th anniversary of bilateral relations, which is as auspicious a time as any.

This Tuesday’s visit by Xi will be the first Chinese state visit in 13 years. That is an auspicious number in Chinese, but not so in Western culture.

Will it be auspicious for the Philippines, the only Christian-majority country in the region once colonised by Spain and then the US? Duterte’s original style of leadership may yet make the difference.

By Behind The Headlines Bunn Nagara

Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.

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First among equals: Putin and Xi had an official meeting before the Shanghai Cooperation Organisation summit in Qingdao. Sloppy US policies have helped to build a growing China-Russia alliance for a full decade now.- AFP

THE week that was ended with a significant non-Western event often ignored or misunderstood by the West: the latest Shanghai Cooperation Organisation (SCO) summit.

The 18th annual SCO summit in the Chinese port city of Qingdao this weekend is only the fourth held in China. Beijing is relaxed about its role in a growing organisation of eight member countries, six Dialogue Partners and four observer nations – a confidence that suggests considerable clout.

China and Russia are the two hulking members of a group that boasts formal parity, being the conspicuous “firsts among equals.” And as two consecutive US administrations unwittingly drive these giants closer than ever before strategically, Western attention is led astray.

Western reports track President Putin’s travel to Qingdao and the diplomatic niceties exchanged there. At the same time, Western commentators are tempted to dismiss the summit as yet another futile talkfest.

Both approaches are wrong or misplaced. While Xi-Putin exchanges may not be the highlight of this year’s SCO summit, neither are they insignificant.

Sloppy US policies helped to build a growing China-Russia alliance for a full decade now. This is evident enough from the meeting rooms of the UN Security Council to the battlefields of Syria to the South China Sea and the Baltics.

The latest SCO summit reaffirms the trend but adds only marginally to it by way of atmospherics. There are more important developments visible at, if not represented by, the Qingdao summit.

It is the first SCO summit at which both India and Pakistan arrive as full members.

Beginning as the Shanghai Five in the mid-1990s, the SCO has grown steadily and now incorporates three giants – China, Russia and India – in the great Eurasian land mass where both the US and the EU have scant inputs.

With Pakistan coming in at the same time as India as an equal partner, the SCO should be free from any sub-regional turbulence within South Asia.

Turkey is also an SCO Dialogue Partner whose interest in full membership is not without broader implications for the West.

Turkey has considerable military strength and is also a member of Nato, hosting its Allied Land Command and a US air base in Izmir. However, Ankara’s years-long effort to join the EU has been snubbed by Brussels.

Turkish President Recep Tayyip Erdogan has famously mulled over choosing between the EU and the SCO, reportedly preferring the latter. How would the West find a Nato member joining a non-Western group led by Russia and China?

Deep-seated discomfort would be a mild way to put a reaction in Brussels and Washington. To US policymakers, Turkey is a strategic country because of its location as well as its status as a prominent Muslim country.

Both China and Russia have sounded positive about Turkey’s prospective membership of the SCO. Nonetheless, SCO members share an understanding of sorts that Turkey may have to forego its Nato membership before SCO membership can be entertained.

However, Beijing and Moscow may be less concerned than Washington and Brussels about Turkey’s SCO membership with its Nato credentials intact. That immediately makes Turkey more comfortable to be in SCO company.

Turkey has already received what amounts to special treatment within the SCO that no other Dialogue Partner has enjoyed. Last year it was elected as Chair of the SCO’s Energy Club, a position previously enjoyed only by full members.

Erdogan has called the SCO “more powerful” than the EU, particularly in a time of Brexit. Bahrain and Qatar seek full SCO membership; Iraq, Israel, Maldives, Ukraine and Vietnam want to be Dialogue Partners; and Armenia, Azerbaijan, Bangladesh, Egypt, Nepal, Sri Lanka and Syria want Observer status.

Iran already has SCO Observer status and had applied for full membership in 2008. Following the easing of UN sanctions on Tehran, China declared its support for Iran’s membership bid in 2016.

The recent US pullout from the Joint Comprehensive Plan of Action (“Iran nuclear deal”) has further prodded Tehran to “look East.” These days that means China and a China-led SCO.

Iran already trades heavily with China with myriad deals in multiple sectors. Mutual interests abound, far exceeding the basic relationship of oil and gas sales to China.

As Europe treads carefully, mindful of possible new sanctions on Iran following the US cop out, cash-rich Chinese firms take up the slack. US policy is also pushing Iran, among others, closer to China.

In preparing for Prime Minister Modi’s arrival in Qingdao on Friday, Indian Ambassador Gautam Bambawale said both countries were determined to work in close partnership and would never be split apart.

This echoed two main points already shared by Indian and Chinese leaders – that their countries are partners in development and progress, and what they have in common are greater than their differences.

All of this seems set to undo the Quadrilateral Security Dialogue (Quad) that groups the US with Japan, Australia and India, all boasting a democratic system in common in a joint strategic encirclement of China. But India’s relations with China have been on the upswing for half a year now.

The day before Modi arrived in Qingdao, a Quad meeting in Singapore closed on Friday with India expressing differences with the other members. Its Ambassador to Russia Pankaj Saran said the Quad was not the same as its hopes for an inclusive “Indo-Pacific region” (IPR) that did not target any country.

He added that India wanted closer ties with Russia as well in an IPR. Just a fortnight before, Russia’s recent Ambassador to the US Sergei Kislyak said President Trump also wanted closer ties with Russia.

That was only a small part of the roller-coaster ride of international diplomacy in the first half of 2018.

In January Trump condemned the Taliban for a spate of attacks in Afghanistan, vowing that all talks with them were off. Until then, top US diplomats were carefully planning negotiations with the Taliban.

In March, US officials blasted Russia for allegedly arming the Taliban, which Moscow denied. The following month Nato voiced support for Afghan President Ashraf Ghani’s efforts to talk with the Taliban to “save the country.”

Meanwhile Trump’s ramparts of trade barriers in the direction of a trade war would decimate allies from East Asia to Europe. French President Emmanuel Macron expressed a European position in reaching out to China on climate and security issues.

By March the EU had dug in, preparing for the worst of US trade barriers while vowing retaliation. The WTO also warned Washington that it was veering towards a trade war with tariffs on steel and aluminium.

In April, China’s new Defence Minister Gen. Wei Fenghe arrived in Moscow for talks with his Russian counterpart Sergei Shoigu. Wei rubbed it in for Washington, publicly announcing that his visit was to show the US the high level of strategic cooperation between China and Russia.

Two days later the Foreign Ministers of China and Russia expressed similar sentiments. They championed negotiations and sticking to pledges while weighing in against the unilateralism of a unipolar power.

Where China has the SCO, Russia has the Eurasian Economic Union (EAEU).

If any discomfort is felt in Washington, it is from acting as a unipolar power in an increasingly multipolar world.

Source: Behind the headlines by Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.



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