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Special News Update

The U.S. and China Reach Phase One Agreement

By The ICAS Team

January 22, 2020

President Donald J. Trump, joined by Chinese Vice Premier Liu He, sign the U.S. China Phase One Trade Agreement Wednesday, Jan. 15, 2020, in the East Room of the White House. (Official White House Photo by Shealah Craighead)

In the News

‘Donald Trump says he and China’s Xi Jinping ‘love each other, phase two trade talks to start ‘very shortly’
By Zhou Xin
South China Morning Post, January 21

“At the World Economic Forum (WEF) in Davos, Switzerland on Tuesday, President Trump commented on his very amicable relationship with President Xi that has ‘never, ever been better’ despite the ‘very rough patch.’ Trump also commented on how his administration, unlike the previous ones who failed in healing US-China relations, ‘confronted the problem head on’ and will continue to resolve issues with the phase two negotiations to start soon.”

China vice-premier says will continue to open up, prepared for all challenges
By Reuters
CNBC, January 21

“Chinese Vice-Premier Han Zheng spoke at the World Economic Forum in Davos on Tuesday that China is ‘well prepared to overcome all risks and challenges’ while opening up its economy to the world. He further states that ‘unilateral and protectionist practices which run counter to the global trend will lead nowhere…Despite the protectionist and unilateral moves by some countries, China will not stop opening up and we will not follow their footsteps to move in the opposite direction.’”

China virus prompts U.S. precautions as human-to-human transmission confirmed

CBS, January 20

“A day after the World Health Organization announced on Sunday that the deadly virus plaguing China could be transmitted between humans, a representative from China’s National Health Commission confirmed the danger. Subsequently, more than 100 officials from the Centers for Disease Control and Prevention have been stationed at airports in San Francisco, Los Angeles, and New York to prevent a massive outbreak. Health screenings are focused on passengers incoming from Wuhan, China, where the outbreak is suspected to have originated. In the last four days, the number of confirmed infections has quadrupled to 217, a couple of which are in Thailand, Japan, and South Korea.”

China will rely on market principles for increase of US imports, planner says
By Zack Budryk
The Hill, January 19

“China’s National Development and Reform Commission spokesperson Meng Wei spoke on Sunday that ‘Chinese firms will import U.S. agricultural products on the basis of consumer need and market forces.’”

U.S. Warship Transits Taiwan Strait less than a week after election
By Reuters
CNBC, January 17

“Last Saturday, China sailed its latest aircraft carrier called Shandong through the Taiwan Strait twice before Taiwan’s presidential election. This Thursday, a U.S. warship sailed through this ‘sensitive waterway.’ Taiwan’s defense ministry monitored this U.S. activity and said that it was an ‘ordinary mission.’”

U.S., China Sign Deal Easing Trade Tensions
By Bob Davis and Lingling Wei
The Wall Street Journal, January 15

“The U.S. and China signed the ‘Phase One’ trade deal in Washington D.C., at least temporarily easing tensions between the two countries. The trade agreement will lead to an increase in sales of U.S. imports to China, a greater access to financial markets of either countries, and stronger protections for intellectual property.”

Text of the Phase One Trade Agreement: (English) (Chinese Simplified)

Treasury to No Longer Designate China as Currency Manipulator
By Alan Rappeport
The New York Times, January 13

“The U.S. Department of the Treasury has decided to remove China’s designation as a currency manipulator which was set last August under guidance from President Trump.”

(DOT Press Release) (DOT January 2020 Report on China)

After US Strike on Soleimani, China and Russia Coordinate at UN
By Ankit Panda
The Diplomat, January 8

“Directly following a U.S. military strike against Iranian General Qasem Soleimani in Iraq, Chinese Foreign Minister Wang Yi and Russian Foreign Ministers Sergei Lavrov spoke over the phone to discuss ‘bilateral cooperation at the United Nations’ going forward. Wang stated in a Xinhua News Agency report that ‘China pays high attention’ to the U.S.-Iran conflict and Beijing staunchly opposes ‘military adventures.’ While Iranian Foreign Minister Javad Zarif was visiting Beijing a few days before the attack on Soleimani, Beijing categorized U.S. activity in Iran as ‘bullying.’”

China opens up oil and gas exploration, production for foreign, domestic firms
By Chen Aizhu and Muyu Xu
Reuters, January 8

“Starting this May, in an effort to expand its domestic energy self-reliance, China will allow foreign companies to independently take part in oil and gas exploration. According to a representative, the market reform was sparked by ‘growing energy security concerns’ since China now imports 70% of the crude oil it refines and almost 50% of its natural gas consumption.”

What’s Next for Kim Jong Un and Donald Trump? U.S., China and Russia React to North Korea’s New Warning
By Tom O’Connor
Newsweek, January 3

“Instead of a New Year’s speech, this year North Korean supreme leader Kim Jong Un held a top-level committee meeting to deliver a new strategic vision for Pyongyang. Announced by North Korea’s Central News Agency on December 31, the report on his remarks condemns Washington’s inflexibility in establishing a denuclearization trade deal by the year-end deadline. He also stated that North Korea would be introducing new strategic weapons and nuclear policies in the ‘near future’ and no longer accepts commitments that were ultimately only upheld by Pyongyang.”

“In response, U.S. President Trump restated their mutual friendship and reminded the world that Kim has signed a ‘contract’ on denuclearization. Other U.S. representatives expressed hope that Kim will choose peace since Washington has been fulfilling its promises with Pyongyang, but is prepared to fight if necessary.”

6G: The New Frontier – if the world can figure out how to use it
By Albert Han
South China Morning Post, January 3

“From South Korea to China, tech-savvy users had their first taste of 5G’s lightning-fast internet speeds just months ago. While the network promises a future of self-driving cars and data-fuelled cities, tech companies and research facilities in China and around the world are already looking into 6G, the next generation of internet networks.”

Huawei Attacks Wall Street Journal for Report on $75bn China State Aid
By Kieran Corcoran
Business Insider, December 26

“Huawei was outraged over The Wall Street Journal’s article titled ‘State Support Helped Fuel Huawei’s Global Rise’ the day after it was published. The article stated that the Chinese government has provided as much as $75 billion to help fuel Huawei Technologies Co.’s rise. Huawei responded by saying that ‘The Wall Street Journal relied on ‘false information’ for its reporting and characterized it as part of a pattern of ‘disingenuous’ reporting on their company.’”

“The Tech giant did not explain which information provided was false. In its rebuttal against the offensive article, Huawei downplayed the significance of state support in its success. It instead cited very large expenditure on research and development, which it said far outstripped its rivals. Huawei did not deny that the Chinese government’s help, however, explained that the company did not receive any special assistance differing from what other companies are also able to access.”

China’s Top Quantum Scientist Has Ties to the Country’s Defense Companies
By Jeanne Whalen
The Washington Post, December 26

“The head of China’s quantum-technology program has links to Chinese defense contractors, even as he and his team maintain research ties with Western universities, according to documents identified by a U.S. security company.”

China Slams US Defense Act Over Trade Restrictions
By Associated Foreign Press
Voice of America, December 26

“A week after the United States signed the National Defense Authorization Act (NDAA), Chinese commerce ministry spokesman Gao Feng released an official statement saying that China ‘firmly opposes’ the trade restrictions included in this new law which prevents the purchase of buses and railcars from China with US federal funds. ‘The act is expected to dent the financial bottom lines of two Chinese companies: the state-owned CRRC Corp., which produces railcars, and BYD Motors, which sells electric buses.’”

China’s Yuan is Getting a Little Stronger
By Laura He
CNN, December 25

“The daily reference rate of the yuan (RMB) increased to about 6.98 yuan per US dollar (USD) the day after Christmas, marking a new high since early August. Furthermore, the value of the yuan ‘has rebounded about 1.5% against the dollar since mid-December.’”

“In August 2019, China suddenly allowed a devaluation of the currency, which briefly shocked the global markets. That move came after the U.S. announced plans on adding a tax to Chinese exports and ‘was interpreted at the time as a sign that Beijing could have prepared to deploy its currency as a weapon in the trade war.’”

China Plans New Push to Revamp State Firms Starting Next Year
By Yinan Zhao
Bloomberg, December 25

“China’s policy makers will unveil a three-year action plan in early 2020 on the reform of state enterprises, with an aim to improve the performance of the sector and create world-class champions, according to state-owned newspapers.”

China Calls on US to Take ‘Concrete Steps’ with North Korea
By Hira Humayun and Stella Ko
CNN, December 25

“In a year-end interview with People’s Daily, Beijing called on the United States to make meaningful progress on fulfilling the agreement set between U.S. President Donald Trump and North Korean leader Kim Jong Un at their Singapore summit in 2018. On behalf of Beijing, Chinese Foreign Minister Wang Yi encouraged Washington and Pyongyang to ‘work out a feasible roadmap’ to establish peace towards ‘realizing complete denuclearization on the Peninsula.’ He linked recent tensions between the two countries on the failure of the June 2018 summit, saying that the resulting joint statement was not ‘effectively implemented’ and that the ‘legitimate concerns of the DPRK have not been taken seriously or addressed.’”

China’s Imports of U.S. Soy Surge to Highest in About 2 Years
By Shuping Niu
Bloomberg, December 24

“China’s imports of U.S. soybeans rose to the highest in 20 months in November after more American cargoes cleared customs ahead of the signing of a partial trade deal in January.”

Chinese Ambassador Says Xinjiang ‘Trainees’ Have Graduated in Rare Press Conference
By Ben Westcott and Hilary Whiteman
CNN, December 19

“The Chinese ambassador to Australia, Cheng Jingye, defended Beijing at a press conference stating that Chinese human rights violations accusations of ‘one million people had been detained in Xinjiang as ‘fake news.’ The Ambassador restated Beijing’s stance on this center:  ‘the massive centers were not ‘detention camps’ but vocational training schools that offered deradicalization programs.’ He also said that ‘trainees’ have graduated.”

U.S. Secretly Expelled Chinese Officials Suspected of Spying After Breach of Military Base
By Edward Wong and Julian E. Barnes
The New York Times, December 15

“The American government secretly expelled two Chinese Embassy officials this fall after they drove on to a sensitive military base in Virginia, according to people with knowledge of the episode. The expulsions appear to be the first of Chinese diplomats suspected of espionage in more than 30 years.”

Articles and Analysis

The end of Xi Jinping’s Taiwan dream
By Ishaan Tharoor
The Washington Post, January 14

“About a year ago, Chinese President Xi Jinping fired a warning shot across the straits. Taiwan, he said, “must and will be” reunited with China. Xi addressed the island’s democratically elected leadership, insisting that “independence will only bring hardship” and that unification with the mainland was “an inevitable requirement for the great rejuvenation of the Chinese people.””

A Smarter U.S. Strategy for China in Four Steps
By Michael D. Swaine
Carnegie Endowment for International Peace, January 8

“If they win in the 2020 U.S. presidential elections, could the Democrats improve the mangled relationship between the United States and China? Here is a playbook for a better approach.”

“The Trump administration has been pushing an exceedingly tough stance on China for some time, painting Beijing as a revisionist, authoritarian power hell-bent on subverting the U.S.-led liberal global order. There is no doubt that the United States must respond more effectively to China’s domestic repression and disruptive international behavior. But the administration’s simplistic, hostile rhetoric and policies have thus far produced very limited returns. Indeed, in some ways they have undermined U.S. interests.”

“Domestic and foreign criticisms of current U.S.-China policy have recently led senior U.S. officials to moderate their harsh rhetoric, by denying that Washington seeks to contain China or decouple it from the global economy. But the Trump administration’s still largely antagonistic approach (backed by many in Congress) contradicts this new rhetoric, which seems more designed to mollify critics than give credible signals of policy change.”

“U.S. President Donald Trump’s failings on China should give his Democratic challengers an opening. Yet, despite grumbling about Trump’s corrosive tactics, the Democratic field has seemingly bought into how he has portrayed China. The American people and U.S. partners abroad deserve better: a more realistic, effective way to juggle competition and cooperation with Beijing that actually  reflects what China is, where the relationship stands, and where it should go.”

“Here are four steps to a more effective approach to China: 1) Restore the home field advantage; 2) Be tough yet smart; 3) Understand what you’re dealing with-a rival like no other; 4) Get on the same sheet of music.”

Don’t be fooled by the trade deal between America and China
The Economist, January 2

“Though America and China are due to sign a “phase one” deal that trims tariffs on January 15th, the world’s most important relationship is at its most perilous juncture since Richard Nixon and Mao Zedong re-established links five decades ago. The roots of the superpower splits go back 20 years when China joined the WTO, reformers dreamed that it would smooth its integration into an American-led world order.Now it turns into a bleaker form of dictatorship under President Xi and views America with distrust and scorn.”

China’s Second Aircraft Carrier: A Sign of PLA Naval Muscle?
By Rajeswari Pillai Rajagopalan
The Diplomat, December 26

“On December 17, China commissioned into service its first home-built aircraft carrier, Shandong, at the Sanya naval base in Hainan, with President Xi Jinping presiding over the commissioning ceremony. The commissioning of the aircraft carrier is significant. This is China’s second aircraft carrier, and an important addition to China’s power projection capabilities. It is also noteworthy because it displays China’s capability to develop aircraft carriers indigenously.”

The United States Needs a Strategy for Artificial Intelligence
By Martijn Rasser
Foreign Policy, December 24

“In the coming years, artificial intelligence will dramatically affect every aspect of human life. AI—the technologies that simulate intelligent behavior in machines—will change how we process, understand, and analyze information; it will make some jobs obsolete, transform most others, and create whole new industries; it will change how we teach, grow our food, and treat our sick. The technology will also change how we wage war. For all of these reasons, leadership in AI, more than any other emerging technology, will confer economic, political, and military strength in this century—and that is why it is essential for the United States to get it right.”

Past Events

Impacts and Implications of the 2020 Taiwan general elections
Event by Brookings Institute, January 16

Examining Xinjiang: Past, present, and future
Event bu Brooking Institute, January 16

The Taiwan Elections and What the Results Mean for China and the U.S.
Event by DACOR, January 15

Japan’s Indo-Pacific Strategy in the Emerging U.S.-China Rivalry
Event by Embassy of Japan, Japan Information & Culture Center, January 14

Taiwan Elections: Implications for Washington & Beijing
Event by Wilson Center, January 13

Assessing the Results of Taiwan’s Election
Event by Heritage Foundation, January 13

China 2049: Economic challenges and global power
Event by Brookings Institute, January 10

The Army’s Strategy in the Indo-Pacific
Event by Brookings Institute, January 10

Second Annual Ocean Security Forum
Event by the Center for Strategic and International Studies, January 7

China’s Human Rights Abuses in Xinjiang and the U.S. Response
Event by the Hudson Institute, December 18

U.S. Defense Priorities and Policies: A Conversation With Secretary Mark T. Esper
Event by the Council on Foreign Relations, December 13

U.S. Naval Surveillance in the Era of Great Power Competition
Event by the Hudson Institute, December 13

The Chinese Threat to America’s Industrial and High-Tech Future: The Case for a U.S. Industrial Policy
Event by the Hudson Institute, December 12 

A Speech by Assistant Secretary of State for East Asian and Pacific Affairs David R. Stilwell
Event by the Center for Strategic and International Studies, December 12

Upcoming Events

China’s Vision of Victory
Event by The Institute of World Politics, January 22

Asia Forecast 2020
Event by Center for Strategic and International Studies, January 22

Deep Decarbonization Pathways
Event by Center for Strategic and International Studies, January 23

Maritime Security Dialogue: An Update on the Second Fleet at Full Operational Capability
Event by Center for Strategic and International Studies, February 4

Looking North: Conference on Security in the Arctic
Event by Atlantic Council, February 6