Posts Tagged ‘China’s government agencies’

Trump Eyes China Sanctions While Seeking Its Help on North Korea

August 13, 2017

BEIJING — In a diplomatic gamble, President Trump is seeking to enlist China as a peacemaker in the bristling nuclear-edged dispute with North Korea at the very moment he plans to ratchet up conflict with Beijing over trade issues that have animated his political rise.

Mr. Trump spoke late Friday with his counterpart, President Xi Jinping of China, to press the Chinese to do more to rein in North Korea as it races toward development of long-range nuclear weapons that could reach the United States. Mr. Xi sought to lower the temperature after Mr. Trump’s vow to rain down “fire and fury” on North Korea, urging restraint and a political solution.

But the conversation came as Mr. Trump’s administration was preparing new trade action against China that could inflame the relationship. Mr. Trump plans to return to Washington on Monday to sign a memo determining whether China should be investigated for intellectual property violations, accusing Beijing of failing to curb the theft of trade secrets and rampant online and physical piracy and counterfeiting. An investigation would be intended to lead to retaliatory measures.

The White House had planned to take action on intellectual property earlier but held off as it successfully lobbied China to vote at the United Nations Security Council for additional sanctions on North Korea a week ago. Even now, the extra step of determining whether to start the investigation is less than trade hawks might have wanted, but softens the blow to China and gives Mr. Trump a cudgel to hold over it if he does not get the cooperation he wants.

While past presidents have tried at least ostensibly to keep security and economic issues on separate tracks in their dealings with China, Mr. Trump has explicitly linked the two, suggesting he would back off from a trade war against Beijing if it does more to pressure North Korea. “If China helps us, I feel a lot differently toward trade, a lot differently toward trade,” he told reporters on Thursday.

Mr. Trump has sought to leverage trade and North Korea with China for months, initially expressing optimism after hosting Mr. Xi at his Mar-a-Lago estate in Florida, only to later grow discouraged that Beijing was not following through. The effort has now reached a decisive point with the overt threats of American military action against North Korea — warnings clearly meant for Beijing’s ears.

China is widely seen as critical to any resolution to the nuclear crisis because of its outsize role as North Korea’s main economic benefactor. China accounts for as much as 90 percent of North Korea’s total trade and supplies most of its food and energy while serving as the primary purchaser of its minerals, seafood and garments.

But even though the effectiveness of the new United Nations sanctions depends largely on China’s willingness to enforce them, the Trump administration so far has failed to come up with enough incentives to compel China to do so, analysts said.

In their phone conversation on Friday night, Mr. Xi stressed that it was “very important” for the two leaders to maintain contact to find “an appropriate solution to the nuclear issue on the Korean Peninsula,” according to a statement carried in the Chinese state-run media. The language indicated China wants to push forward with a diplomatic proposal for North Korea that the Trump administration has brushed aside.

The Chinese statement urged the “relevant sides” — a reference to North Korea and the United States — to “avoid words and actions that exacerbate tensions.” It did not explicitly criticize North Korea, which issued its own searing rhetoric all week, including a threat against Guam, and did not draw a clear distinction between Washington and Pyongyang.

In its own account of the call, the White House emphasized points of concurrence. “President Trump and President Xi agreed North Korea must stop its provocative and escalatory behavior,” read a statement from the White House issued early Saturday morning. “The presidents also reiterated their mutual commitment to denuclearization of the Korean Peninsula.”

If Mr. Trump was trying to move Mr. Xi toward bolder action against the North, he did so while the Chinese leader is preoccupied with his own domestic political machinations, attending to a once-every-five-year political shake-up in the top ranks of the Communist Party.

Mr. Xi is believed to be at the beach resort at Beidaihe on the coast east of Beijing, where the leadership conducts a secretive retreat every summer, sometimes emerging casually dressed in open neck shirts and Windbreakers for photographs on the strip of sand along the beachfront.

The final stages of the political process to win Mr. Xi’s favor for a place on the standing committee of the party, now a seven-member body that makes the final decisions on the nation’s affairs, is underway among the resort’s villas and hotels, China’s political analysts said.

The selection will be unveiled at a national congress in Beijing sometime between September and November. Until then, almost all other matters, including foreign policy, are put on hold, the analysts said.

Still, the leadership has been vexed that the Trump administration has paid scant attention to China’s proposal for a “freeze for freeze” solution to North Korea. Described many times by China’s foreign minister, Wang Yi, the notion calls for North Korea to freeze its nuclear weapons and ballistic missile program at current levels in exchange for the United States drawing down military exercises off the Korean Peninsula.

So far, the United States has dismissed the proposal as a nonstarter. Instead, to China’s irritation, the United States is looking to increase missile defenses in South Korea. In some respects, though, Secretary of State Rex W. Tillerson has tried to please Beijing by pledging that Washington does not seek to overthrow the North Korean leader, and does not plan to send American troops north of the 38th parallel that divides North and South Korea.

Mr. Xi is said to be exasperated with Kim Jong-un, a leader much his junior, whom he openly disparaged during his meetings in Florida in April with Mr. Trump, American officials say. But despite the frustration with Mr. Kim, China still prefers to have what it considers a relatively stable North Korea under Mr. Kim rather than a collapsed state that could result in a united Korean Peninsula on its border, with American troops in control.

In rebuffing the “freeze for freeze” proposal, Washington has raised suspicions in Beijing about its true intentions, said Yun Sun, a China expert at the Stimson Center in Washington. Chinese leaders believe the United States sees its true rival as China, a mammoth economy, and not North Korea, one of the poorest countries on earth, Ms. Sun said. In this estimation, Washington is merely using North Korea to mount a military containment strategy around China, she said.

“The Chinese operate from the conviction that China remains and will always be the No. 1 strategic threat to the U.S., so the issue of North Korea will be used against China — through sanctions, provocations and everything else,” she said. China was also annoyed, Ms. Sun said, that the United States refuses to discuss a “grand bargain” or “end game” on the future of the Korean Peninsula. Of most interest to China, she said, is the future disposition of American forces in South Korea, now standing at 28,500 troops.

The phone conversation between Mr. Trump and Mr. Xi will be followed by a visit from the chairman of the Joint Chiefs of Staff, Gen. Joseph F. Dunford Jr., who is expected in Beijing on Monday. General Dunford will also visit South Korea and Japan.

The general’s visit, planned earlier this summer, is the first by a senior American official to Beijing since Mr. Tillerson met with Mr. Xi in March.

Much of the diplomacy between China and the United States has been conducted between Mr. Trump’s son-in-law, Jared Kushner, and the Chinese ambassador in Washington, Cui Tiankai. Those talks have concentrated on Mr. Cui’s efforts to stave off punishing trade tariffs against China that are gathering momentum in White House discussions.

During his two-day visit, General Dunford is likely to use the opportunity to drive home arguments for the Chinese to put more pressure on the Kim government, said Brian McKeon, who was a senior Pentagon official in the Obama administration.

A major point of dispute will likely be American plans to deploy more missile defenses in South Korea, he said. China vehemently opposes the Terminal High Altitude Area Defense system, or Thaad, that has already been deployed in South Korea, calling it a threat to its own security.

“I would expect that Dunford will make the usual request that they put more pressure on the regime to behave, and to recognize that Kim’s actions threatens our core interests, which means we will have to continue to take measures that Beijing doesn’t like, for example the deployment of Thaad,” Mr. McKeon said.

Trump Administration to Begin Probe of Alleged Chinese Technology Theft

August 13, 2017

Investigation of China’s government agencies is unrelated to North Korea nuclear crisis, officials say

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Updated Aug. 12, 2017 2:33 p.m. ET

WASHINGTON—The Trump administration announced plans Saturday to pressure China over alleged intellectual property theft, adding the threat of trade retaliation to an ongoing campaign seeking greater cooperation from Beijing in the North Korean nuclear crisis.

Aides said President Donald Trump will sign a directive Monday ordering his trade representative to start a formal probe into whether Chinese government agencies and companies were unfairly acquiring valuable patents and licenses from U.S. firms, either through outright theft, or by pressuring Americans to turn over their inventions as the price of entry into China’s market.

“Such theft not only damages American companies, but can threaten our national security,” a senior administration official said in a Saturday morning briefing for reporters.

Officials at the briefing stressed that while they were casting a spotlight on what they consider a major irritant in bilateral commercial relations, they weren’t rushing into action. They said Monday’s directive would launch a study into whether a formal trade investigation was warranted, and that probe would take a year or more. They declined to discuss what sorts of penalties the U.S. might impose against China, saying that question was “premature.”

The administration made the announcement a day after Mr. Trump held a phone call with Chinese President Xi Jinping to discuss escalating tensions over North Korea’s rapidly advancing nuclear weapons program. Mr. Trump has repeatedly said he would cut Beijing slack over trade issues if he felt the Chinese were being helpful in reining in Pyongyang.

The Wall Street Journal reported earlier in the month that a new trade investigation over China’s alleged forced technology transfers was in the works and had been planned for an early August announcement. But that was delayed until after an Aug. 5 U.N. Security Council vote imposing new financial penalties on North Korea, which China supported.

Asked if Mr. Trump discussed the pending trade investigation with Mr. Xi on Friday, an official pointed to the official White House summary of the call, which didn’t mention trade issues.

The White House aides said the new trade probe wasn’t tied to the administration’s North Korea strategy, despite the president’s earlier linkage of the subjects. “These are totally unrelated events,” one official said. “Trade is trade. National security is national security.”

Write to Jacob Schlesinger at jacob.schlesinger@wsj.com

WASHINGTON — The Trump administration announced plans Saturday to pressure China over alleged intellectual property theft, adding the threat of trade retaliation to an ongoing campaign seeking greater cooperation from Beijing in the North Korean nuclear crisis.

Aides said President Donald Trump will sign a directive Monday ordering his trade representative to start a formal probe into whether Chinese government agencies and companies were unfairly acquiring valuable patents and licenses from U.S. firms, either through outright theft, or by pressuring Americans to turn over their inventions as the price of entry into China’s market.

“Such theft not only damages American companies, but can threaten our national security,” a senior administration official said in a Saturday morning briefing for reporters.

Officials at the briefing stressed that while they were casting a spotlight on what they consider a major irritant in bilateral commercial relations, they weren’t rushing into action. They said Monday’s directive would launch a study into whether a formal trade investigation was warranted, and that probe would take a year or more. They declined to discuss what sorts of penalties the U.S. might impose against China, saying that question was “premature.”

The administration made the announcement a day after Mr. Trump held a phone call with Chinese President Xi Jinping to discuss escalating tensions over North Korea’s rapidly advancing nuclear weapons program. Mr. Trump has repeatedly said he would cut Beijing slack over trade issues if he felt the Chinese were being helpful in reining in Pyongyang.

The Wall Street Journal reported earlier in the month that a new trade investigation over China’s alleged forced technology transfers was in the works and had been planned for an early August announcement. But that was delayed until after an Aug. 5 U.N. Security Council vote imposing new financial penalties on North Korea, which China supported.

Asked if Mr. Trump discussed the pending trade investigation with Mr. Xi on Friday, an official pointed to the official White House summary of the call, which didn’t mention trade issues.

The White House aides said the new trade probe wasn’t tied to the administration’s North Korea strategy, despite the president’s earlier linkage of the subjects. “These are totally unrelated events,” one official said. “Trade is trade. National security is national security.”

The new probe does signal a bit of a hardening shift in Trump administration’s China trade policy, as it is the first White House trade directive aimed directly at Beijing. During the 2016 presidential campaign, Mr. Trump regularly blasted the U.S.’s $347 billion trade deficit with China, and vowed to take swift, drastic retaliation if he were elected, from across-the-board tariffs to branding Beijing a “currency manipulator.”

But the early months of Mr. Trump’s presidency have seen a considerably softer tone toward China over trade. He quickly dropped the campaign-trail threats, and during a genial April summit with Mr. Xi at his Mar-a-Lago Florida resort, the two countries launched a new “comprehensive economic dialogue” aimed at resolving bilateral commercial disputes amicably. A month later, China announced some modest market-opening moves, like ending a 14-year ban on U.S. beef imports, and Commerce Secretary Wilbur Ross declared economic ties between the world’s two largest economies were “hitting a new high.”

But the first round of economic dialogue talks in mid-July were tense and ended up with no agreements. Officials said Saturday that impasse was one factor behind the decision to launch the new trade review.

In focusing on China’s voracious appetite for American intellectual property, the Trump administration responding to a longstanding complaint by Western trade groups, who say the country’s industrial policies effectively force foreign companies in sectors such as autos to transfer technology to stay in the market.

Beijing has been emboldened by the growing strength of its own companies to make more demands of foreign firms, industry executives say, and the government is careful to keep regulations vague. U.S. high-tech companies have struck a string of investments and technology-sharing agreements in software, semiconductors and other areas in the past couple of years, often under pressure from officials in closed-door meetings.

China’s government rejects assertions that it forces foreign companies to transfer technology or permits infringement of intellectual property. Premier Li Keqiang denied it was using industrial policies to strong-arm foreign companies into turning over technology, telling a World Economic Forum meeting in Dalian in June that “such cooperation is voluntary and helps companies expand in the Chinese market and even in third countries.”

While many U.S. companies and policy makers agree Chinese forced technology transfer is a problem, they also say it is difficult to figure out a solution.

One challenge is that many U.S. firms are reluctant to lodge formal complaints, making it difficult for trade officials to make their case.

“An important question going forward will be whether U.S. companies and trade associations who have highlighted the problem will actually come forward and assist our government in the investigation,” said Michael Wessel, a member of the congressional U.S.-China Economic and Security Review Commission. Or, he added, “whether they will hide the facts fearful that our government won’t follow through, that the Chinese will retaliate against their interests or that they’ll have to admit what’s happened to their critical assets.”

Another question is just what remedy the U.S. government might pursue if it felt it had a case. Options might include imposing new limits on technologies that U.S. firms could license to China, or imposing new limits on Chinese investment in the U.S. But those would likely draw complaints from U.S. firms, and may contradict other policy goals. Mr. Trump personally touted China’s Foxconn Technology Group’s announcement in July to build a new display panel factory in Wisconsin.

The new China probe also marks a noticeable change in the process for how the Trump administration is processing trade policies, and suggests that a newly more organized and measured way to proceed with those complaints may be emerging.

Earlier Trump trade threats were made seeking swift action, and were done without broad consultation from stakeholders, drew widespread concern from business groups and lawmakers. Among them, an April promise to impose new steel and aluminum tariffs by June — a plan that remains stalled amid resistance. Mr. Trump also in April threatened to pull out of the North American Free Trade Agreement, but backed down after intense lobbying from allies, business groups, lawmakers and his own aides. He instead agreed to renegotiate the pact with Canada and Mexico, a process that begins Wednesday.

In choosing the China trade probe, Mr. Trump is targeting an area that business groups and Republican and Democratic lawmakers have identified as a concern. His aides Saturday also stressed that in contrast with the rushed earlier attempts at handling trade matters, they were setting no deadline and that any investigation would closely follow intricate procedures, including discussions with Beijing.

Before making any decisions on an investigation, the trade representative “would consult with the appropriate advisory committees,” one official said, and “if the investigation is instituted, we would consult with China. We would give interested parties the opportunity to comment. There would likely be a hearing. And these investigations can take as much as a year before we reach a conclusion.”

Eva Dou in Beijing contributed to this article.

Write to Jacob Schlesinger at jacob.schlesinger@wsj.com

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