Special News Focus: US-China Tensions Rise

Special News Focus

US-China Tensions Rise

By The ICAS Team

May 29, 2020

Special News Focus: US-China Tensions Rise

China blasts Canada as US accomplice, as Meng Wenzhou loses bid for freedom
By Ian Young
South China Morning Post, May 27

A British Columbia Supreme Court judge ruled this week that the US charges of fraud against Huawei’s CFO Meng Wanzhou count as ‘double criminality’, meaning that Meng also committed a crime in Canada and will, therefore, be refused extradition. The Chinese embassy in Canada expressed on Twitter the ‘extreme dissatisfaction and firm opposition to this decision’ and accused the U.S. and Canada of abusing their bilateral extradition treaty and violating the rights of a Chinese citizen, Ms. Meng.

U.S. Officially Declares That Hong Kong Is No Longer Autonomous
By Jessica Donati
The Wall Street Journal, May 27 [Paywall]

U.S. Secretary of State Mike Pompeo declared in an official statement and certified to Congress that Hong Kong is no longer autonomous from China. The statement originates from the State Department’s obligation by the Hong Kong Policy Act to assess the autonomy of Hong Kong from China.

U.S. House backs bill to pressure China over Uighur rights
By Patricia Zengerle
Reuters, May 27

The U.S. House of Representatives on Wednesday (May 27) backed legislation calling on President Donald Trump’s administration to impose sanctions on Chinese officials responsible for the oppression of the country’s Uighur Muslim minority. The tally was 413 in favor and just one opposed. The bill calls for sanctions against those responsible for repression of Uighurs and other Muslim groups in China’s Xinjiang province. It singles out the region’s Communist Party secretary, Chen Quanguo, a member of China’s powerful Politburo, as responsible for “gross human rights violations” against them.

Trump says White House will ‘do something’ about Hong Kong issue by end of week
By Charley Lanyon
South China Morning Post, May 27

Following the passage of the Decision on establishing a new national security law for Hong Kong in Beijing, US senators proposed a bill allowing sanctions against anyone with a role in violating ‘China’s obligations to Hong Kong under the [Sino-British] Joint Declaration and the Basic Law,’ among others. President Trump commented that the U.S. will make an official statement on sanctions by the end of the week.

Delta and United Airlines caught up in rising US-China tensions
By Sherisse Pham, Steven Jiang and Noah Broder
CNN Business, May 25

Washington has accused Beijing of blocking American carriers from resuming flights to China, prompting US authorities to more heavily scrutinize Chinese airlines. In response, the Department of Transportation on Friday issued an order requiring Chinese airlines that fly to the United States to file flight schedules with the US government, including details about the type of equipment used, the frequency of each flight, specific airports served at each point, and arrival and departure times.

U.S.-China tensions will likely get worse ahead of November election, experts say
By Huileng Tan
CNBC, May 21

There will be a lot more action — both symbolic and substantive — from the Trump administration before voters cast their ballots in November, said Eswar Prasad, a professor at Cornell University. “The domestic political dynamics in both countries, I think, are going to be the key drivers here — in particular in the run up to the elections in November. Any negative consequences of tariffs or other economic sanctions against China are going to pale relative to the consequences of the pandemic on the U.S. economy,” said Prasad. “So I think for Trump it certainly makes sense to try to look tough on China and his base is probably going to respond positively.”

U.S.-China Feud Over Coronavirus Erupts at World Health Assembly
By Andrew Jacobs, Michael D. Shear and Edward Wong
The New York Times, May 18

A meeting of the World Health Organization that was supposed to chart a path for the world to combat the coronavirus pandemic instead on Monday turned into a showcase for the escalating tensions between China and the United States over the virus. China’s president pledged $2 billion to fight the virus and dispatch doctors and medical supplies to Africa and other countries in the developing world. But it was seen — particularly by American officials — as an attempt by China to forestall closer scrutiny of whether it hid information about the outbreak to the world.

From ‘Respect’ to ‘Sick and Twisted’: How Coronavirus Hit U.S.-China Ties
By Chris Buckley and Steven Lee Myers
The New York Times, May 17 [Paywall]

The bitter recriminations have plunged relations between China and the United States to a nadir, with warnings in both countries that the bad blood threatens to draw them into a new kind of Cold War. The clash with the United States over the pandemic is fanning broader tensions on trade, technology, espionage and other fronts — disputes that could intensify as President Trump makes his contest with Beijing a theme of his re-election campaign.

‘After the pandemic, the international political landscape will totally change,’ Wu Shicun, president of the National Institute for South China Sea Studies, said in a telephone interview. ‘The confrontation between China and the United States — in terms of trade, technology, the Taiwan issue, the South China Sea issue — will be a bigger problem.’

Trump on China: ‘We could cut off the whole relationship’
FOX Business, May 14

President Trump told FOX Business in an interview that the U.S. ‘could cut off the whole relationship’ with China as a way to seek compensation from China over Beijing’s handling of the coronavirus. According to Trump, the U.S. would ‘save $500 billion if you cut off the whole relationship’ with China. Washington has already cut investment ties between U.S. federal retirement funds and Chinese equities.

In Other News

US warship again challenges China’s South China Sea claims
By Ryan Browne
CNN, May 28

The US Navy once again challenged Chinese claims in the South China Sea on May 28, sailing the Arleigh Burke-class guided missile destroyer USS Mustin near the Paracel Islands. The Mustin passed within 12 nautical miles of Woody Island and Pyramid Rock in the island chain, a US Navy official said. “On May 28 (local time), USS Mustin (DDG 89) asserted navigational rights and freedoms in the Paracel Islands, consistent with international law,” Lt. Anthony Junco, a spokesperson for the US Navy’s 7th Fleet, said in a statement.

U.S.-China tensions are flaring on a new front: the financial markets
By Weizhen Tan
CNBC, May 22

On Wednesday, the U.S. Senate passed legislation that requires foreign companies to prove that ‘they are not owned or controlled by a foreign government.’ This bill could restrict Chinese—and any other foreign nations’—companies’ listings on U.S. stock market exchanges and has already caused Chinese tech giant Alibaba dropped more than 2%.

Trump threatens permanent freeze on WHO funding without ‘major’ reforms within 30 days
By Brett Samuels
The Hill, May 18

The president, in a letter to WHO Director-General Tedros Adhanom Ghebreyesus, levied a series of allegations that the global health entity overlooked or ignored various warning signs about the coronavirus and criticized its stance toward China during the pandemic. The U.S. accounted for roughly 20 percent of the WHO’s total budget in the past two years, significantly more than other countries. That has been a particular point of tension for Trump, who has long been skeptical of outsized U.S. contributions to international organizations.

U.S. moves to cut Huawei off from global chip suppliers as China eyes retaliation
By David Shepardson, Karen Freifeld and Alexandra Alper
Reuters, May 15

The Trump administration on Friday (May 15) moved to block global chip supplies to blacklisted telecoms equipment giant Huawei Technologies, spurring fears of Chinese retaliation and hammering shares of U.S. producers of chipmaking equipment. The reaction from China was swift, with a report on Friday by China’s Global Times saying Beijing was ready to put U.S. companies on an “unreliable entity list,” as part of countermeasures in response to the new limits on Huawei.

Trump weighs crackdown on China stocks—but warns it may backfire
By Kellie Mejdrich
Politico, May 14

Trump said in an interview aired on FOX Thursday that he was looking “very strongly” at forcing the Chinese companies that list their shares in the U.S. to comply with American accounting rules. Yet in the interview, Trump also underscored the ambivalence that many American officials feel about confronting China: He suggested that he doesn’t want to threaten to de-list Chinese companies that don’t comply with U.S. regulations if it spurs them to flee to a competing foreign stock exchange.

The recent market failure of Luckin Coffee provided clear examples of the consequences for investors of Chinese companies’ refusal to give the Public Company Accounting Oversight Board access to their audits. The Institute for China-American Studies, a Washington-based nonprofit funded by a foundation in China, had this to say: “Companies from both countries need to abide by the relevant regulations, and financial regulations, of the other side,” said Sourabh Gupta, a resident senior fellow at the institute, in an email.

Articles and Analysis

Trump’s ‘Blame China’ Re-Election Strategy Might Seriously Backfire
By Chris Dolan
Newsweek, May 22

“Amid the COVID-19 pandemic, President Donald Trump is engaging in a familiar strategy of deflecting blame for domestic problems, namely the collapsing economy and massive job losses, to a foreign rival in China. This is far from the first time a president has employed this strategy, but not all have done so successfully. In fact, history suggests it might seriously backfire.”

“The temptation to compare 2020 to 1932 is certainly strong. The unemployment rate skyrocketed from 3.5 percent in February to 14.7 percent in April, and the International Monetary Fund estimated that the U.S. economy could contract by 5.9 percent in 2020—the worst contraction since the Great Depression….But, given the economic parallels, 2020 is shaping up to be more like the 1992 election. In the 1980s and early 1990s, the U.S. blamed Japan for unfair competition in the auto industry. George H.W. Bush did this in 1992, blaming unfair Japanese trade practices for the 1990-91 recession and for how he spent too much time on foreign affairs. His strategy played right into Democratic hands, and Bill Clinton was elected in 1992.”

“But this re-election strategy is incredibly risky. Very few Americans vote for president based on foreign policy issues or international relations….Trump’s intense focus on China is a response to polls showing him as increasingly vulnerable and falling behind his Democratic opponent, Joe Biden, in key swing states. Also, Democrats have improved their chances in congressional races. And the number of Americans concerned about COVID-19 infection has risen since earlier in the year.”

Destined for conflict? Xi Jinping, Donald Trump and the Thucydides trap
By Shi Jiangtao
South China Morning Post, May 21

“While observers generally agree that an all-out war between the nuclear-armed nations is improbable, there are potential risks for a limited military conflict. The sharp decline in relations with the US in recent months and its possible consequences are expected to loom large at the two sessions, according to Gu Su, a political scientist at Nanjing University. Given the widespread public interest in these contentious topics, Xi and other top leaders may need to weigh in personally and set the tone for the national debate, especially on the future of China and US relations, he said.”

Europe is abandoning Trump on the world stage as it turns away from the US toward China
By Adam Bienkov
BusinessInsider, May 20

“Recent polling suggests Europeans are turning away from the US under President Donald Trump’s leadership and public opinion toward America has declined in major European countries since the start of the coronavirus pandemic.”

“This shift is apparent in a series of recent opinion polls that found European sentiment toward the US to be in decline since the start of the coronavirus pandemic. New polling published in Germany this week found that an overwhelming majority of Germans said they had a worse opinion of the US because of the pandemic. The survey found that 76% of Germans said their view of the US had deteriorated because of the pandemic, compared with 36% who said the same of China.”

“Europe’s reluctance to criticize China may be due in part to the increasing economic dominance of Beijing….This shift is also seen in the behavior of European governments, which appear increasingly willing to ignore Trump’s threats about forging closer ties with China….What is clear is that with the global economy heading for a deep recession, European governments, public institutions, and companies are increasingly turning toward China for support and investment.”

China’s ‘Wolf Warrior’ Diplomats Are Ready to Fight
By Chen Han Wong and Chao Deng
Wall Street Journal, May 19 [Paywall]

“Beijing’s envoy in Paris promised a fight with France should China’s interests be threatened, then engaged in a public spat with his host country over the coronavirus pandemic. The Chinese embassy in Sri Lanka boasted of China’s handling of the pandemic to an activist on Twitter who had fewer than 30 followers. Beijing canceled a nationwide tour by the Prague Philharmonic Orchestra after a tussle with the city’s mayor over Taiwan.”