BEIJING — The trade war isn’t about trade. The trade war is about the United States trying to contain China and counteract its rise. That’s the increasingly common theory percolating in Beijing these days, as President Trump slaps another, even bigger round of tariffs on Chinese goods.
Washington might see this as straightforward economic rebalancing. But Beijing looks at it in the wider context of Trump’s relative friendliness toward Taiwan, the prospect of U.S. sanctions over its treatment of Uighur Muslims and the American decision to exclude China from Pacific Rim military exercises this year. Taken together, there is a strong whiff of conspiracy.
“The United States’ intention to disrupt China’s development process has been thoroughly exposed,” the state People’s Daily reported in the lead-up to Trump’s decision to slap tariffs on an additional $200 billion worth of Chinese goods. It said that Stephen K. Bannon, previously a top adviser to the U.S. president, once claimed that the United States needed only five years “to defeat China economically.”
The fact that the sanctions were imposed on the anniversary of Japan’s 1931 invasion of northern China — which many Chinese see as an unofficial day of national humiliation — only rubbed salt into the wound.
Those who were attacking China’s style of capitalism were doing so “to create public opinion to curb the development of emerging countries, especially China’s development,” Qiushi, the influential publication of Central Committee of the Communist Party of China, said in a recent commentary.
By trying to “distort, smear and slander China’s socialist market economic system,” these critics were trying to shake public confidence in it “and ultimately thwart China’s development,” it said.
These assertions in state media are a reflection of an increasingly common sentiment in the Chinese capital, where President Xi Jinping’s government has been trying to figure out what, exactly, Trump is playing at.
“There are lots of theories about the U.S.’s motivations behind the trade war,” said Cheng Xiaohe, a professor of international studies at Renmin University in Beijing. “Some say the U.S. is trying to stop China from catching up in the high-tech field or that the U.S. wants to prevent China from rising, and some say Trump wants to boost the GOP’s chances in the midterms. I think it’s all those things together.”
Those who say Trump wants to contain China are opposed to making concessions in the trade war, said Bonnie S. Glaser, director of the China Power Project at the Center for Strategic and International Studies.
That was immediately evident when Beijing signaled it would not be backing down. China announced it would retaliate with tariffs on $60 billion of U.S. goods, and both sets of tariffs went into effect Monday.
Trump’s actions were “threatening China’s economic interests and security,” the Commerce Ministry said after last week’s announcement of more tariffs, hinting at the theory that this was about more than trade deficits.
Although China’s once-booming growth rates have slowed markedly in recent years, it is still on track to overtake the United States as the world’s largest economy sometime around 2030, according to a raft of respected researchers.
But China stands accused of using unfair trading practices, such as dumping, industrial subsidies and forced technology transfer, to help get to No. 1.
When Trump became president and started attacking China for enjoying a trade surplus with the United States that hit $375 billion last year, Beijing didn’t think he was serious, said Paul T. Haenle, a former China adviser on the Bush and Obama National Security Councils and now director of the Carnegie-Tsinghua Center in Beijing.
“Early on, the Chinese had a very simple narrative that all this trade stuff was about Trump’s short-term political objectives, about getting a tweetable victory,” he said. “Now, they’re at the other end of the spectrum. Now it’s all about the U.S. trying to block China’s rise.”
To sustain this theory, Beijing points to evidence such as the United States’ exclusion of China from the Hawaii-based Rim of the Pacific exercises, the world’s largest set of international maritime war games, this year as punishment for its expansion in the South China Sea. Beijing also has criticized the revival of the “Quad” dialogue involving the United States, Japan, Australia and India as a way of trying to contain it.
Then there is the Taiwan Travel Act that Trump signed in March, encouraging more dialogue between U.S. and Taiwanese officials. Beijing views Taiwan as a renegade breakaway province that should be brought back into China.
Plus American officials have raised the prospect of imposing sanctions on Chinese senior officials and companies linked to allegations of human rights abuses against Muslims in western China.
Now come reports that the Department of Justice has ordered the state-run Xinhua News Agency and China Global Television to register in the United States as foreign agents.
“This is giving them a sense that the Americans are out to get them,” said Michael Kovrig, China analyst for the International Crisis Group. “For China, the economy and security are inextricably linked.”
It was a refrain that Abigail Grace, who served as a China specialist on Trump’s National Security Council until earlier this year, heard nonstop on a visit to Beijing this month. “Everyone I met with said that because the trade dispute was not a one-off quick win, then it must be part of a larger strategy,” said Grace, who is now at the Center for a New American Security in Washington.
Xi’s government is focusing on the United States’ actions in the region and seeing a containment strategy but without acknowledging their own actions, such as the recent military exercises with Russia and China’s expansion in the South China Sea.
“So instead of them realizing that it’s their own ambitions that have changed, it’s far easier for them to say that it’s the U.S. that has changed,” Grace said. “It’s a convenient fiction that Beijing wants to believe, and they’re trying to spin it this way to their own people.”
Haenle of the Carnegie-Tsinghua Center agreed that the containment theory was “a very convenient narrative” because it doesn’t require China to accept any responsibility for the situation. “It’s all about China as victim,” he said.
Indeed, there has been no discussion or acknowledgment of the fact that China might have had something to do with creating the situation, analysts say. The Trump administration — and other governments — have complained about China’s industrial policies, including restrictions on market access and forced technology transfers.
They are issues that China has hinted at in the past.
Not long after becoming president in 2013, Xi laid out a vision for economic reform that, if implemented, would go some way to redressing the imbalances that these governments have protested.
Those changes included giving markets a “decisive role” in the allocation of resources in the economy, reforming the tax system and changes to the legal system.
Then, this year at the Boao Forum, sometimes called China’s Davos, Xi presented himself as a champion of the global economy. “Ours is a nation that has courageously engaged in self-revolution and self-reform . . . and kept overcoming systematic obstacles,” he said. China would lower tariffs on cars and safeguard the intellectual property of foreign companies, he said.
But it has made precious little progress on any of these goals. Trump might just help Beijing focus its mind.
“Now Trump has gotten China’s attention,” said Haenle. “The administration is talking more and more about structural issues, and I think there is a huge amount of support within the U.S. and around the world for pressuring China on these issues — and even China knows it needs to change.”
But for now, China is standing firm and refusing to be cowed by Trump, even as it runs out of options for responding — a direct consequence of importing from the United States much less than it exports to the country.
China would continue to thrive, the People’s Daily said in the recent commentary. With “Comrade Xi Jinping” and “the scientific guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” the country would have the confidence “to overcome all difficulties and obstacles.”