U.S.-China Trade Standoff May Be Initial Skirmish in Broader Economic War

The United States is increasingly wary of China’s emerging role in the global economy and the tactics it uses to get ahead, including state-sponsored hacking, acquisitions of high-tech companies in the United States and Europe, subsidies to crucial industries and discrimination against foreign companies.

The Trump administration has begun trying to limit China’s economic influence in the United States and abroad, warning about China’s ambitions in increasingly stark terms. Mike Pompeo, the secretary of state, compared China’s ambitions to Russia and Iran in a speech in London last Wednesday, saying Beijing poses “a new kind of challenge; an authoritarian regime that’s integrated economically into the West in ways that the Soviet Union never was.”

China, whose ambition is to dominate industries of the future, is pushing back. A column on Saturday in the Communist Party’s People’s Daily newspaper stated, “The United States is again waving the club of tariffs after misjudging China’s strength, capacity and will, further escalating trade friction between our two countries.”

The piece was written under the pen name Zhong Sheng — the “voice of China” — a name used when the paper publishes comments on foreign affairs that are authoritative.

Restraining China’s ambitions and methods is a tricky task — and there is concern that the Trump administration’s effort is creating a new red scare, fueling discrimination against China and its citizens that could ultimately hurt the United States. As many as 30 Chinese professors have had their visas to the United States canceled in the past year, or been put on administrative review, according to Chinese academics and their American counterparts.

“We’ve got decades of painful negotiating with China ahead,” said David Lampton, a China scholar at Stanford University. Mr. Lampton said a trade deal, if reached, would do little to resolve the bigger conflict. “It’s just a skirmish in an ongoing battle.”

.. While a trade deal could calm some tensions and establish more good will between the two nations, it is unlikely to achieve many of the ambitious goals that the administration has set for itself. Mr. Trump’s advisers, in particular the United States trade representative, Robert Lighthizer, have been focused on what the administration calls China’s practices of “economic aggression.”

But the administration has struggled to address the immensity of the problems in the text of a trade deal. People close to the talks say that the negotiators appear powerless to force any changes that aren’t in China’s interest.

Mr. Liu, who is leading China’s team in the trade negotiations, hinted at that uphill battle in a video statement released by the official Xinhua news agency.

Instead, a trade deal between the two countries seems more likely to bring change around the margins — tens of billions of dollars of soybean purchases, some tariffs lifted and changes to the text of Chinese laws or regulations that the country might ultimately disregard, particularly once another administration occupies the White House.

This is a decades-long endeavor,” said Robert Daly, the director of the Wilson Center’s Kissinger Institute on China and the United States. “This can’t be waved away over cake at Mar-a-Lago.”

The notion that the United States has one last shot to change China’s behavior is held by an array of people on both sides of the political spectrum. But it is an aggressive notion of American power to upend a rival system that has delivered prosperity for its people and put China on course to be the world’s largest economy.

Many in China see the United States as a declining power bent on enforcing its will on a world that no longer cowers before its hegemonic might. The troubles in American democracy and the long economic slump after 2008 persuaded many in China that its instincts to chart its own course were correct. In the eyes of many Chinese, their country is simply reclaiming its historic status as a dominant regional power in Asia.

It has also projected power across Asia, Africa and elsewhere while the United States has, on many fronts, retreated from its post-World War II commitment to the global order. But it has done so with little application of military force, in sharp contrast to what many in China see as American militarism.

Many in China have sought to avoid a trade conflict, which could have a larger impact on their economy than the United States’. But they have long thought the United States would have a difficult time accepting a true peer in economic, technology and military power, so consider the management of conflict with the United States to be an inevitable result of their own rise.

While the Trump administration accused China of breaking a trade deal, China’s resistance to the emerging terms stemmed from its belief that the United States was asking too much and offering too little in return. Many of the changes the United States seeks would limit what Chinese officials regard as a tried-and-true approach of using tens of billions of dollars from state-owned banks and government investment funds to turn previously small industries like car production or solar panel manufacturing into the largest industries of their kind in the world.

And the Chinese view some of the Trump administration’s demands as infringing on their sovereignty and giving America too much power over their economy — including requiring the country to codify changes through legislation in the National People’s Congress. To the increasingly nationalistic public in China, the American requests are reminiscent of 19th century history of unequal treaties forced on the country by foreign powers.

Mr. Trump on Saturday suggested China was simply delaying a deal in the hopes that a Democrat would win election in 2020 and continued his pugilistic approach, saying “the deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!”

In the United States, China’s unwillingness to bow to America’s demands is uniting lawmakers like the Democratic Senate leader, Chuck Schumer of New York, and Senator Marco Rubio, Republican of Florida.

That is a significant shift from the prevailing view in the United States since the death of Mao Zedong in 1976 that close economic engagement with China would produce an increasingly democratic country that would be closely tied to an international economic order founded mainly on Western liberal ideals.

That has not happened.

China has indeed grown in prosperity, leaping into the ranks of what the World Bank defines as upper-middle income countries. Its economy is now bigger than any other country except the United States. Its manufacturing sector is now bigger than those of the United States, Germany and South Korea combined.

But in the last five years, China has veered toward increasingly repressive authoritarianism at home and a rapid military buildup. The State Department estimates that Beijing has put 800,000 to two million Muslims in hastily built internment camps ringed with barbed wire in northwestern China. The Chinese government has built an archipelago of air bases on artificial islands in the South China Sea in between Vietnam, Malaysia, Indonesia and the Philippines. And China now has the world’s largest navy and has conducted

China has indeed grown in prosperity, leaping into the ranks of what the World Bank defines as upper-middle income countries. Its economy is now bigger than any other country except the United States. Its manufacturing sector is now bigger than those of the United States, Germany and South Korea combined.

But in the last five years, China has veered toward increasingly repressive authoritarianism at home and a rapid military buildup. The State Department estimates that Beijing has put 800,000 to two million Muslims in hastily built internment camps ringed with barbed wire in northwestern China. The Chinese government has built an archipelago of air bases on artificial islands in the South China Sea in between Vietnam, Malaysia, Indonesia and the Philippines. And China now has the world’s largest navy and has conducted military exercises as far away as East Africa and the Baltic Sea.

On the economic front, the competition is even fiercer. Trump administration officials warn that China is trying to dominate the global 5G infrastructure that will be the basis for future mobile communications and is competing to set other technological standards that will determine which global companies win.

China is extending low-cost loans and building infrastructure around the globe through its One Belt, One Road program, which critics warn is making poorer countries beholden to China. It is out-investing the United States in some high-tech industries, and is gaining dominance in certain segments, like mobile payment, new energy vehicles and areas of artificial intelligence.

While American companies have long hankered for access to China’s growing market, their position has begun to shift as they see China’s practices and treatment of foreign companies. A survey released by the American Chamber of Commerce in China in February showed that the majority of its members favored retaining tariffs on Chinese goods while trade negotiations continued.

China’s own experts say that the Beijing leadership has been caught off guard by the pace of change in American perceptions of Sino-American relations.

“Even if there is some kind of agreement between Xi and Trump, in the long run the strategic bilateral relationship is already in trouble,” said Zhang Jian, a professor in the School of Government at Peking University. “There is no coming back, even if there is a deal.”

What Was the Chinese Woman Arrested at Mar-a-Lago Really Up To? A Former Spy Helps Us Figure It Out.

Want to know whether she’s a bumbling Chinese spook or an innocent tourist who loves her hi-tech devices?

.. Is Chinese intelligence attempting to infiltrate Mar-a-Lago? The answer to that is almost certainly yes. And so is every other foreign intelligence service. That’s just business as usual.

Perhaps Zhang’s pool excuse was a quick and casual line to pass through the first security perimeter without many questions. Did she actually have a better cover story, or maybe a verifiable true story, she was able to present under more intense questioning? Zhang reportedly underwent four-and-a-half hours of questioning by the Secret Service. How did this go? What explanation did she give for her visit to Mar-a-Lago in this high-stakes setting? Did her explanation fit with answers she gave when applying for a visa to enter the country? Zhang reportedly previously traveled to the United States, in 2016 and 2017. Does her explanation for those trips match information she gave when applying for a visa, and how do those trips fit with her current itinerary and actions?

If Zhang isn’t a spy, or up to other nefarious things, why is it that she “lies to everyone,” as the prosecutor said in court? Could she simply be confused or did she communicate poorly because English is not her native language? Investigators, particularly those who questioned her, know better than we do about Zhang’s command of English. The Miami Heraldreported that she “appeared to speak English” to a lawyer in court and she took notes during the hearing, but a translator was also present.

How would Zhang have operated inside Mar-a-Lago?

The president’s vacation abode is a target-rich environment. There are the obvious marks: The president and his inner circle. But those people are hard to access. Better targets might be the multitudes of people at Mar-a-Lago who aren’t in the president’s inner circle but who have access to those who are and can influence and glean information from them.

A casual observer could also gather a load of information simply by being present at Mar-a-Lago.

  • Who is there?
  • Who is trying to get access and influence people? Who interacts with whom?
  • What activities do they participate in?
  • What schedule do they follow?

This could help a foreign intelligence service target people for recruitment as assets. It could also tell a foreign intelligence service what other countries are running operations there and which individuals they are targeting using what methods. This is important counterintelligence information for any spy agency, a window into other countries’ priorities and how close they are to achieving them.

It’s also possible Zhang wanted to observe the security situation at the resort, laying the groundwork for some future operation. She might have witnessed how Secret Service and resort security worked (or didn’t work) together and how freely Trump and his people move around, to determine what kind of access might be available.

Even without taking some deep cover, clandestine action, simply being present at Mar-a-Lago provides a wealth of information to anyone who is looking.

Or, maybe Zhang just wanted a glimpse of the president?

What’s with all the cash?

In some cases, espionage is a cash business. Spies often pay assets for information, and cold, hard cash is an easy way to pay people while hiding the source of the funds. Perhaps the Chinese government already has assets at Mar-a-Lago—among the staff, for example—and Zhang was there to pay them.

But Zhang’s more than $8,000 worth of cash (in U.S. and Chinese currency) was found in her hotel room at the Colony Hotel about two miles from Mar-a-Lago, not on her person. Unless she planned to enter the resort a second time, it seems very unlikely she was there to pay an asset for information.

Some tourists do indeed travel with loads of cash. Although Zhang has a Wells Fargo account in the United States that she could have accessed. And that account raises new questions. When and why did she set up this account and how has she used it in the past? Is her use of this bank account consistent with the investor and consulting business she claims to run? Or did she set it up years ago in an attempt to build her cover story while laying the groundwork for an intelligence operation? Investigators will try to find answers to those questions.

But an intelligence officer might also have multiple phones and SIM cards. Good spies follow the “one phone, one operation” rule. That is, they don’t call different assets using the same phone, because then they become linked, and key in any intelligence operation is to keep information compartmented. Much like you don’t want to send private texts on your work phone, you don’t want communications with multiple assets on a single device.

There is also the question of what kinds of phones these are. Are they burner phones, which are pay-as-you-go and not registered to an individual and therefore not easily traceable back to the purchaser and user? A spy would most likely use a burner phone. Or, maybe she was delivering burner phones to assets inside the resort to make communication easier? Or are these regular phones, registered in Zhang’s name or her company’s name? Investigators will certainly run traces on the phones and SIM cards to see if they link to anyone of interest or if they suggest a strange pattern of behavior, such as communicating with someone in a way that is meant to hide the contact.

Thumb drives are pretty normal in business, but malware isn’t. The fact that the first thumb drive Secret Service looked at had malware on it does not look good for Zhang.
It’s possible that a spy would want to use malware to destroy a network at the resort. But a foreign intelligence service would more likely be interested in using it to gather useful information. There is very little chance (if any) that Zhang could have gotten the malware anywhere near a government computer. But to slip a program into the resort’s network that would allow an intelligence service to see guest lists, schedules and itineraries, room assignments, and who is coming and going? Yes, that would be of interest.

Is Zhang just one part of a larger spy scheme?

What the heck is the “United Nations Chinese Friendship Association”? This is perhaps the most intriguing part of Zhang’s story.

Zhang explained that she was at Mar-a-Lago to attend a “United Nations Friendship Event” and that she had been invited by a Chinese friend named “Charles.” As the Miami Herald reports, a Chinese national named Charles Lee promotes events at Mar-a-Lago through his United Nations Chinese Friendship Association, which has no actual ties to the United Nations. No such event was scheduled at Mar-a-Lago that day, however.

By the way, Li “Cindy” Yang, the owner of a massage parlor that has been caught up in a sex trafficking sting who possibly sold access to Trump, promoted many of the same events as Charles Lee. (A spokeswoman for Yang told the Herald she has done nothing wrong.)

Is Zhang a private individual who, like others, used the association to get into Mar-a-Lago to help her business? Or is Zhang an isolated case of Chinese intelligence using the association for the same purpose? Or worse, is the Chinese government using the “friendship association” and its travel packages to funnel spies into Mar-a-Lago (and perhaps elsewhere)?

In China, an App About Xi Is Impossible to Ignore — Even if You Try

Communist Party members using the Study the Great Nation app during a weekly meeting in Beijing in February. Tens of millions of Chinese are now using the app, often under pressure from the government.

CHANGSHA, China — Inside a fishing gear store on a busy city street, the owner sits behind a counter, furiously tapping a smartphone to improve his score on an app that has nothing to do with rods, reels and bait.

The owner, Jiang Shuiqiu, a 35-year-old army veteran, has a different obsession: earning points on Study the Great Nation, a new app devoted to promoting President Xi Jinping and the ruling Communist Party — a kind of high-tech equivalent of Mao’s Little Red Book. Mr. Jiang spends several hours daily on the app, checking news about Mr. Xi and brushing up on socialist theories.

Tens of millions of Chinese workers, students and civil servants are now using Study the Great Nation, often under pressure from the government. It is part of a sweeping effort by Mr. Xi to strengthen ideological control in the digital age and reassert the party’s primacy, as Mao once did, as the center of Chinese life.

While many people have embraced the app as a form of patriotism, others see it as a burden imposed by overzealous officials and another sign of a growing personality cult around Mr. Xi, perhaps China’s most powerful leader since Mao’s time.

“He is using new media to fortify loyalty toward him,” said Wu Qiang, a political analyst in Beijing. He likened Study the Great Nation to the little booklet of Mao quotations that was widely circulated during the chaotic and violent Cultural Revolution.

Since its debut this year, Study the Great Nation has become the most downloaded app on Apple’s digital storefront in China, with the state news media saying it has more than 100 million registered users — a reach that would be the envy of any new app’s creators.

But those numbers are driven largely by the party, which ordered thousands of officials across China to ensure that the app penetrates the daily routines of as many citizens as possible, whether they like it or not.

Schools are shaming students with low app scores. Government offices are holding study sessions and forcing workers who fall behind to write reports criticizing themselves. Private companies, hoping to curry favor with party officials, are ranking employees based on their use of the app and awarding top performers the title of “star learner.”

Many employers now require workers to submit daily screenshots documenting how many points they have earned.

Propaganda is ubiquitous in China, but experts say Study the Great Nation is different because the government is forcing people to use it and punishing those who cheat or fall behind.

The app allows users to Watching a video about his recent visit to France, for example, earns one point. Getting a perfect score on a quiz about his economic policies earns 10.

The app comes as Mr. Xi, who rose to power in 2012, is leading a broader crackdown on free speech in China, imprisoning scores of activistslawyers and intellectuals, and imposing new restrictions on the news media. Mr. Xi has spoken frequently about what he calls the need to guard against online threats. He has warned that the party could lose its grip on power if it does not master digital media.

“There is no national security without internet security,” Mr. Xi said in a speech this year. “If we cannot succeed on the internet, we will not be able to maintain power in the long run.”

David Bandurski, co-director of the China Media Project, said the app was a way for Mr. Xi to ensure that Chinese families are invested in the life of the party at a time when many dismiss propaganda as stilted and irrelevant.

“Loyalty to the party,” Mr. Bandurski said, “means loyalty to Xi Jinping.”

Study the Great Nation in some ways harkens back to the Mao era, when the chairman’s portrait hung in living rooms and families studied his words feverishly. While Mr. Xi cannot yet match Mao’s grandeur, he has borrowed from Mao’s playbook in his quest to be seen as a singular, transformative force.

The app features a television series called “Xi Time” and Mr. Xi’s quotations on topics like building a strong military and achieving a “Chinese dream” of prosperity and strength. The app recommends stories about Mr. Xi on its home screen and sends push notifications highlighting “golden sentences” from his latest speeches. Even the Chinese name for the app is a play on Mr. Xi’s name.

The app, which also offers lighter fare about traditional Chinese culture, history and geography, presents a censored version of current events. Topics such as China’s mass detention of Muslims are not included.

.. Not everyone is as enthusiastic. In interviews, students and workers complained that superiors publicly chastised them for low scores. Others said bosses threatened to deduct pay or withhold bonuses if they did not use the app more frequently. They did not want to provide their names for fear of punishment, but some have complained online.

Critics say Mr. Xi is intruding into the private lives of Chinese citizens in a way the party has typically avoided since the Mao era. The app makes the party’s messages difficult to ignore, awarding points only when an article has been read completely and a video has been watched for at least three minutes.

“You cannot divert attention away from it,” said Haiqing Yu, a professor who studies Chinese media at RMIT University in Australia. “It’s a kind of digital surveillance. It brings the digital dictatorship to a new level.”

The app, which was developed by the party’s Propaganda Department and the technology giant Alibaba, is available on the Apple app store as well as Android app stores in China. The Propaganda Department keeps user data.

It is unclear how closely the government tracks users of Study the Great Nation, but the app requires people to provide a mobile number to register and a national identification number to access videoconference and chat features.

Given the pressures to use the app, a cheating industry involving at least a dozen products has flourished. A man who listed his contact information in an online advertisement for cheating software said in an interview that many of his more than 1,000 customers saw the app as a burden imposed by bosses. He declined to provide his name for fear of retribution.

The government has moved swiftly to prosecute cheating and limit criticism of the app. The police in the southeastern province of Jiangxi last month detained a man who sold cheating software for about $13. The police said the man was running an illegal business.

The state-run news media teems with glowing reviews of the app, including stories about diligent hospital workers and kindergarten teachers who open Study the Great Nation as soon as they awaken, even before they drink water or go to the bathroom.

The app has inspired videos by prison guards, raps by children and adulatory song-and-dance routines by power plant workers. Some party members have suggested the app can be used as a dating tool to screen potential mates (“If you see a guy on the subway using the app,” says one cartoon, “you should marry him”).

In Changsha, which coincidentally is an hour’s drive from Mao’s childhood home, the local news media has lauded Mr. Jiang, the owner of the fishing gear store, for his high scores. He and his wife sometimes answer questions on the app together at dinner, alongside their 9-year-old son.

Mr. Jiang said his military training had inspired him to devote himself fully to Study the Great Nation. By using the app, he said, he has grown even more patriotic.

“President Xi has a dream of great renaissance,” he said. “When young people are strong, the nation is strong.”

The “China” shock

David Autor, professor of economics at MIT, did not take an economics class until he was 28. But in the years since he has produced groundbreaking work on the effects on American workers of China’s extraordinary rise. Economists had generally assumed that the negative effects for rich-country workers of trade with poorer countries would not be of much consequence. A series of papers that Mr Autor wrote with collaborators painted a very different picture