China is bracing for a long trade war with the U.S. which could last at least 15 years, in tune with Beijing’s push to emerge as the world’s leading economy by 2035.
On Friday, China made it explicit that it was prepared for a long haul, after U.S. President Trump indicated a 10% tariff hike on Chinese goods worth $300 billion from September 1.
Taking a hard line
At a Foreign Ministry press briefing on Friday, spokesperson Hua Chunying slammed Washington for backtracking from the “consensus” reached in Osaka on not raising further duties, between Chinese President Xi Jinping and U.S President Donald Trump on the sidelines of the G20 summit.
“It is a serious violation of the consensus reached by the Chinese and U.S. Presidents in Osaka and runs counter to the right direction. It will not be helpful for resolving the issues. China deplores and firmly opposes that,” the spokesperson warned.
Ms. Hua further asserted that in case the U.S. enforced additional tariffs, “China will have to take necessary countermeasures to uphold its core interests and the fundamental interests of the Chinese people. The U.S. will be responsible for all related consequences.”
The Chinese side also made it plain that the latest decision had cast doubts on whether the next round of trade talks will take place at all in September, as earlier scheduled. “China does not accept any maximum pressure, threat or blackmail,” Ms. Hua stressed. China’s hard line on trade negotiations, with little prospects of an early resolution, signals Beijing’s intent to play the long game with the U.S, which is likely to last long after Mr. Trump’s exit from the presidency.
China’s intent to dig in for a lengthy back-and-forth has been glaring in the past few months. On May 22, China’s State Council Information Office fielded Zhang Yansheng, the chief researcher at the China Center for International Economic Exchanges. During a media conference, Mr. Zhang predicted that China and the U.S. will simultaneously “negotiate” and “fight” till 2035. That year is significant, because it aligns with declared goal, spelt out during the 19th party congress in 2017, of China achieving “socialist modernisation”.
Analysts say that the term implies China’s intent to emerge superior to the U.S., both economically and technologically, in the next 15 1/2 years.
With no limits set on longevity of Mr. Xi’s term in office, it is likely that he will have a much longer time to achieve his goals than Mr. Trump, who will be out of office by January 2025, even if he wins the presidency for a second term next year.
President Xi has already signaled that there will be many ups- and- downs, including tactical compromises on the way, when he implicitly compared the trade war with China’s Long March. The Long March had many highs and lows before the Communist Party of China (CPC), led by Mao Zedong, triumphed over the Kuomintang in the Chinese civil war, in 1949. On May 20, Mr. Xi visited Jiangxi province, the starting point of the Long March, in 1934. While laying a floral basket at a monument in Yudu County — the starting point of the Long March — he announced that China had embarked on a “new Long March” to surmount "major challenges at home and abroad." Incidentally, accompanied with chief trade negotiator Liu He, he also visited a plant producing Rare Earths, which could be leveraged in the trade war with Washington.
In early May, the Chinese government sent back to Washington a draft trade deal based on intensive rounds of preceding negotiations. From 150 pages, the returned draft had been slashed to 105, removing segments, elated to intrusive inspections to ensure compliance with Intellectual Property Rights (IPR) as well removal of subsidy to State owned Enterprises (SoE) — the heart of China’s economic miracle.
In China’s elite circles, the U.S. draft was compared to “unequal treaties” that imperial China had signed with western powers. In 1842 China had signed the Treaty of Nanking with Britain, ending the first opium war. In 1895, the Treaty of Shimonoseki was signed ending the first Sino-Japanese war. Both treaties have been seen as markers exemplifying the beginning of a “century of humiliation,” which ended in 1949, with the emergence of the PRC.
