Despatch from Beijing International

Smoke and mirrors in the trade war

US President Donald Trump (L) and China's President Xi Jinping leave a business leaders event at the Great Hall of the People in Beijing on November 9, 2017.   | Photo Credit: AFP

China and the U.S. are escalating their game of smoke and mirrors ahead of the G-20 summit, where Chinese President Xi Jinping and his U.S. counterpart Donald Trump are expected to meet. The leaders could sign a truce deal in the scalding trade war between the world’s two largest economies. But a breakthrough to end the ongoing tariff warfare is unlikely.

As the countdown for the Buenos Aires conclave began, China seemed to offer an olive branch. President Xi called President Trump, apparently to break the cycle of animosity that had spilled over from the arena of trade to the geopolitical turf. Taiwan, the frictions in the South China Sea and China’s alleged internment of around 1 million Uyghur dissidents were grabbing headlines.

So when Mr. Xi dialed his U.S. counterpart’s number, the call appeared timely — perhaps necessary — to douse the many fires that had been lit around bilateral ties. Mr. Trump expectedly took to Twitter to raise expectations about his meeting with Mr. Xi. “Just had a long and very good conversation with President XiJinping. We talked about many subjects, with a heavy emphasis on Trade. Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina. Also had good discussion on North Korea!”

But before a sense of optimism could settle in and calm jittery nerves in chanceries and the markets, a barrage of confidence-sapping statements were let loose.

U.S. Vice-President Mike Pence’s attack on China’s trade practices and the BRI connectivity initiative at the APEC summit in Papua New Guinea has taken bilateral relationship to a new low.

It all peaked in balmy Papua New Guinea, the jewel in the Pacific Ocean, where leaders of the 21-nation Asia Pacific Economic Cooperation (APEC) grouping had converged. At a China-built convention centre in Port Moresby, Mr. Xi and U.S. Vice-President Mike Pence famously traded barbs. “As the President (Trump) has added, China has ‘tremendous barriers’; they have ‘tremendous tariffs’; and, as we all know, their country engages in quotas, forced technology transfer, intellectual property theft, industrial subsidies on an unprecedented scale,” Mr. Pence said. He also attacked Mr. Xi’s signature Belt and Road Initiative (BRI) which, he asserted, had engulfed developing nations in a debt trap.

New low

Anticipating Mr. Pence’s line of assault, Mr. Xi, who spoke earlier, lauded the BRI as a “sunshine avenue where China shares opportunities with the world to seek common development”. The encounter quickly brought ties between the two nations to a seemingly new low. For the first time in its history, APEC was unable to issue a customary joint statement because of differences over language between the U.S. and Chinese delegations. Both Mr. Xi and Mr. Pence left before the curtains could be formally drawn on the summit.

Chinese state-media went ballistic following the bitter back-and-forth at the venue. A commentary on the website of China Global Television Network (CGTN) read: “As the late Chinese leader Mao Zedong said, in the eyes of the Chinese people, the American imperialists look powerful and scary but unable to withstand the wind and the rain, they are nothing but a paper tiger.”

But at a time when hopes for a trade ceasefire at Buenos Aires were fading, military diplomacy has come to the fore. The aircraft carrier, USS Ronald Reagan, has steamed into Hong Kong on a goodwill visit. China’s state-run tabloid Global Times welcomed the ship’s presence, which it said “signals that the Chinese and U.S. militaries have stabilised relations...”

The game of psychological one-upmanship is likely to go down to the wire before the G-20 meets on November 30.

Atul Aneja works for The Hindu and is based in Beijing.

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Printable version | Oct 11, 2021 11:56:12 AM |

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