Posts Tagged ‘Shinzo Abe’

Japan’s Abe trounces leadership challenger

September 20, 2018

Abe trounces leadership challenger

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© EPA

By Robin Harding in Tokyo

Shinzo Abe is on track to become Japan’s longest serving prime minister after defeating a leadership challenger in a landslide.

Mr Abe won 553 out of a possible 810 votes in the election for leadership of the ruling Liberal Democratic Party. He beat his rival, Shigeru Ishiba, by a margin of 69 per cent to 31 per cent.

Victory gives Mr Abe another three-year term as leader of the LDP. With lower house elections not due until 2021, Mr Abe can hope to stay as prime minister until the Tokyo Olympics of 2020 and beyond.

The robust margin of victory will give Mr Abe the political strength to continue his economic stimulus, known as Abenomics. He has also promised to raise Japan’s retirement age and pass a modest reform of the country’s pacifist constitution.

If Mr Abe remains as prime minister until November 20, 2019, he will overtake Taro Katsura to become the longest serving prime minister in Japanese history.

https://www.ft.com/content/298e76b4-bc94-11e8-94b2-17176fbf93f5

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China expands its control in South China Sea

September 17, 2018

As China consolidates its hold in South China Sea and wields its military, economic and diplomatic leverage, smaller countries see no credible option but to work with Beijing, even if that means furthering Chinese objectives. Manila, for example, seems willing to accede to Beijing’s demand for joint development of hydrocarbon resources in the Philippines’ own exclusive economic zone.

The plain fact is that U.S. inaction under successive administrations has allowed China to gain effective control over a strategic sea that is more than twice the size of the Gulf of Mexico and 50 percent bigger than the Mediterranean Sea. Australia’s Kevin Rudd, who is still fending off accusations that he was “a slavish pro-China prime minister,” has acknowledged that “Chinese policy has not yet been challenged in the South China Sea by the United States to any significant extent.”

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The U.S., even at the risk of fostering Philippine helplessness against Chinese expansionism, has refused to clarify whether its 1951 Mutual Defense Treaty with Manila would apply to an attack on Philippine troops or vessels in the South China Sea. This refusal stands in contrast to Washington’s commitment to the defense of the Japanese-administered but Chinese-claimed Senkaku Islands in the East China Sea. U.S. President Donald Trump, in his joint statement with Prime Minister Shinzo Abe in April, said that “Article 5 of the U.S.-Japan Treaty of Mutual Cooperation and Security covers the Senkaku Islands.”

In the South China Sea, China has astounded the world with the speed and scale of its creation of artificial islands and military infrastructure. The first Chinese dredger arrived in the region in December 2013. Less than five years later, China has largely completed building most of its forward military bases. It is now ramping up its military assets in the South China Sea.

Yet China has incurred no international costs for pushing its borders far out into international waters. In fact, China stepped up the expansion of its frontiers after an international arbitration tribunal invalidated its expansive claims in the South China Sea through a 2016 ruling in a case instituted by the Philippines.

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China says it has sovereignty over all the South China Sea north of its “nine dash line.” On July 12, 2016, the Permanent Court of Arbitration  in The Hague said this claim by China was not valid. But China and the Philippine government then chose to ignore international law. Vietnam has been unable to develop its own undersea oil due to China’s aggressive behavior.

U.S. Defense Secretary Jim Mattis recently called out China for its “intimidation and coercion” of smaller nations in the region. His criticism of the Chinese strategy in the South China Sea followed American action to disinvite China from this summer’s Rim of the Pacific maritime exercise, known as RIMPAC.

This might suggest that the U.S. is taking a tough line. In reality, America’s response to China’s expansionism in the South China Sea has remained muted. The U.S. has focused its concern merely on safeguarding freedom of navigation through the South China Sea.

In fact, the U.S. has refused to take sides in the territorial disputes between China and the other claimant-states in the South China Sea. The Trump administration stayed silent even when Chinese military threats forced Vietnam in March, for the second time in less than nine months, to halt oil and gas drilling on its own continental shelf.

The U.S. has similarly stayed neutral on disputes elsewhere between China and its neighbors. For example, President Barack Obama publicly said that “we don’t take a position on the sovereignty of the Senkaku Islands” and advised Tokyo and Beijing to sort out their dispute peacefully. This line has not changed under Trump, despite his reassurance that the Japan-U.S. security treaty covers the Senkakus.

Growing Asian anxieties over China have helped the U.S. to return to Asia’s center-stage by strengthening old alliances, such as with Japan, South Korea and Singapore, and building new strategic partnerships with India, Vietnam and Indonesia. It has also befriended the former pariah state of Myanmar.

Yet, despite this diplomatic windfall, the U.S. has been reluctant to draw a line on Beijing’s salami-style actions to change facts on the ground.

To be sure, the Trump-led U.S. has stepped up the so-called freedom of navigation operations in the South China Sea. But these operations neither reassure the smaller states nor deter China, whose actions continue to violate the United Nations Convention on the Law of the Sea, or UNCLOS.

In the East China Sea, China established an air-defense identification zone (ADIZ) in 2013 covering territories, like the Senkakus, that it claims but does not control. This action set a dangerous precedent in international relations.

In the South China Sea, rather than openly declare an ADIZ, China will likely seek to enforce one by gradually establishing concentric circles of air control — but only after it has deployed sufficient military assets there and further consolidated its hold.

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It has already set up an interconnected array of radar, electronic-attack facilities, missile batteries and airfields on the disputed Spratly Islands. And by turning artificial islands into military bases, it has virtually established permanent aircraft carriers whose role extends to the Indian Ocean and the western Pacific.

China’s strategy poses a serious challenge to its neighbors, which face a deepening dilemma over how to deal with its creeping aggression.

The U.S., while seeking to protect its military freedom of navigation in the South China Sea, has effectively turned a blind eye to the broader Chinese assault on the freedom of the seas, including restricting the rights of other states to natural resources on their own continental shelves.

Unless the U.S. shifts its focus from freedom of navigation to freedom of the seas, China will have its way, including forcing its smaller neighbors to share their legitimate resources with it.

The Philippines, for example, is at serious risk of wilting under Chinese pressure. Prevented by Chinese military threats from tapping energy resources in an area of seabed known as Reed Bank, which is located close the Philippine coast, Manila seems willing to enter into a deal with Beijing to equally share the output from a joint gas project there.

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China has built seven military bases near the Philippines.

Under the international arbitration ruling, the Philippines have exclusive rights to Reed Bank. But with China trashing the ruling in the absence of an international enforcement mechanism, the message to Manila is that might makes right.

Left with no other option, Manila appears ready to offer Beijing half of the gas production, but no sovereign rights. The logic behind such a prospective offer is that any Western oil giant, if it developed Reed Bank, would take about 50 percent of the output as its share. So the choice is between a Western oil company like Exxon Mobil and a Chinese state-run giant, such as the China National Offshore Oil Corp.

But such a Philippine deal would encourage China to seek similar concessions with other claimant-states, effectively blocking out Western oil firms from the South China Sea.

Make no mistake: Chinese territorial and maritime revisionism has made the South China Sea the world’s most critical hot spot. In fact, the South China Sea has become central to the wider geopolitics, balance of power and maritime order.

Brahma Chellaney is a geostrategist and the author of nine books, including the award-winning “Water: Asia’s New Battleground.”

https://www.japantimes.co.jp/opinion/2018/09/17/commentary/world-commentary/china-expands-control-south-china-sea/#.W590m-hKhaQ

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Banners declaring the Philippines a province of China appeared in various parts of Metro Manila on July 12. Nobody has claimed responsibility for the apparent prank.(Contributed photo)

  (propaganda)

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Wang Yi

Image result for philippine flag, china flag

  (This is what China cares about what people think….)

(Why give away what you own?)

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Japanese Submarine Conducted Exercise in South China Sea Last Week

September 17, 2018

Submarine Kuroshio and three other ships participated in exercise on Sept. 13, in a challenge to China

Japanese Prime Minister Shinzo Abe in Tokyo on Friday. His government has taken steps to change the country’s defense posture.
Japanese Prime Minister Shinzo Abe in Tokyo on Friday. His government has taken steps to change the country’s defense posture. PHOTO:EUROPEAN PRESSPHOTO AGENCY
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TOKYO—A Japanese submarine held a military exercise in the South China Sea, Japan’s Defense Ministry said Monday, in a challenge to China, which has made broad territorial claims in the region.

The ministry said the exercise took place Sept. 13 and involved the Japanese submarine Kuroshio, as well as three Japanese destroyers and five Japanese aircraft.

A Defense Ministry official said Kuroshio was en route to visit Vietnamese naval forces at the Cam Ranh Bay naval base in Vietnam, the first time a Japanese submarine has gone there.

The ministry said it was the first time it had announced an exercise by a Japanese submarine in the South China Sea. The Asahi newspaper earlier reported the exercise.

China has stepped up activity in the South China Sea by building bases and deploying missiles. That is part of a broader push by President Xi Jinping to assert control over long-claimed territory and extend China’s defensive perimeter farther into the Pacific.

As much as a third of global trade passes annually through the 1.35 million square miles of ocean, which is also thought to be rich in natural resources including oil and natural gas. China says it has historical claims to almost the entire area and that it has the right to defend those claims.

Japan and the U.S. have raised concerns about the militarization of the South China Sea.

Write to Chieko Tsuneoka at chieko.Tsuneoka@dowjones.com and Peter Landers at peter.landers@wsj.com

https://www.wsj.com/articles/japanese-submarine-conducted-exercise-in-south-china-sea-last-week-1537158243

Putin proposes Russia, Japan agree historic peace deal

September 12, 2018

President Vladimir Putin suggested Wednesday Russia and Japan sign a peace deal “without any preconditions” by the end of the year, a historic proposal to try to solve a territorial dispute after decades of deadlock.

Putin’s sudden proposal came just two days after he said that the two countries’ territorial dispute was unlikely to be settled soon.

The dispute between Russia and Japan centres on the four southernmost islands in the Kuril chain which the Soviet Union occupied at the end of World War II in 1945 but are claimed by Japan.

© AFP | Putin and Abe met at the Eastern Economic Forum in Vladivostok

It has kept the two countries from signing a peace accord.

“We have been trying to solve the territorial dispute for 70 years. We’ve been holding talks for 70 years,” Putin said at an economic forum in the far eastern Russian city of Vladivostok attended by Japanese Prime Minister Shinzo Abe and Chinese leader Xi Jinping.

“Shinzo said: ‘let’s change our approaches.’ Let’s! Let’s conclude a peace agreement, not now but by year’s end without any preconditions,” Putin said, with the audience breaking into applause.

“It is not a joke,” Putin added, suggesting the two countries commit to solving the territorial dispute in the text of the agreement.

Putin said the conclusion of such a deal would create a better atmosphere and allow the two countries to “continue to solve all outstanding issues like friends.”

“It seems to me that this would facilitate the solution of all problems which we have not been able to solve during the past 70 years.”

The Japanese prime minister for his part said the two countries “have a duty to future generations.”

“Let us walk together mindful of the questions ‘If we don’t do it now, then when?’ And ‘if we don’t do it, then who will?'” Abe said, speaking before Putin. “We are both fully aware that it will not be easy.”

On Monday, Putin had seemed to pour cold water on suggestions that the dispute could be solved soon.

“It would be naive to think that it can be solved quickly,” Putin said after meeting Abe on the sidelines of the forum.

– ‘Putin trolls Abe’ –

But some diplomats said the proposal was a non-starter.

A former Russian deputy foreign minister, Georgy Kunadze, said he doubted that Putin wanted to solve the territorial problem in earnest.

“This is called trolling. Putin does not expect anything,” Kunadze told Echo of Moscow radio station.

He suggested Abe would never accept a deal that would be political suicide.

Putin and Abe have held numerous meetings over the past few years in a bid to solve the dispute over the islands known in Japan as the Northern Territories.

The two countries have launched various economic projects on the islands in areas such as the farming of fish and shellfish, wind-generated energy, and tourism.

Since last year, Tokyo and Moscow have also agreed on charter flights for Japanese former island inhabitants to visit family graves there.

Russian and Japanese foreign ministry officials said work on the future agreement would continue as usual.

“The government will continue its negotiations on the basic principle that we will sign a peace treaty after resolving the issue of the attribution of the Four Northern Islands,” Japan’s Chief Cabinet Secretary Yoshihide Suga told reporters.

“This stance hasn’t changed.”

In Moscow, deputy foreign minister Igor Morgulov told Russian news agencies that Putin’s announcement would not require any changes to the current format of negotiations.

The Kurils, which lie north of Japan’s Hokkaido island, have been controlled by Moscow since they were seized by Soviet troops in the dying days of World War II.

The four islands are known in Russian as Iturup, Shikotan, Habomai and Kunashir.

Putin’s predecessor, Dmitry Medvedev visited Kunashir in 2010, becoming the first Russian leader to do so and provoking fury in Tokyo.

bur-mp-gmo-as/am/wdb

AFP

Japan and China Find Common Ground in Trump’s Tariffs as Leaders Meet

September 12, 2018

Xi Jinping and Shinzo Abe say relations are warming

Shinzo Abe met with Xi Jinping met in Vladivostok, Russia, where both are attending an economic conference.
Shinzo Abe met with Xi Jinping met in Vladivostok, Russia, where both are attending an economic conference. PHOTO: SERGEI CHIRIKOV/EPA-EFE/REX/EPA/SHUTTERSTOCK
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The leaders of China and Japan met Wednesday for the first time since last year and said relations were warming, a development Tokyo officials attribute to the pressure both feel from President Trump.

“Japan-China relations have been moving in the direction of great improvement,” said Japanese Prime Minister Shinzo Abe after meeting Chinese President Xi Jinping in Vladivostok, Russia, where both are attending an economic conference.

Mr. Abe said he would visit China next month and reiterated that he hoped Mr. Xi would reciprocate with a visit to Japan, which would be the Chinese leader’s first since taking his position.

“The China-Japan relationship has moved onto the normal track with the joint effort of both sides and is facing important opportunities for reform and development,” Mr. Xi said to Mr. Abe at the beginning of the meeting.

China and Japan share a common interest in seeking to persuade the Trump administration to refrain from tariffs. The White House is preparing to hit China with tariffs on $200 billion in Chinese goods, on top of the $50 billion in Chinese exports already facing 25% levies. Mr. Trump said last week that “there is another $267 billion ready to go on short notice if I want.”

Many of the made-in-China goods targeted by the U.S. contain Japanese parts, and some are made at factories owned by Japanese companies. In addition, Japan itself has been hit by U.S. tariffs on steel and aluminum, and Mr. Trump has threatened further action against Japanese cars and car parts.

Mr. Abe didn’t directly mention the U.S. or the tariffs but said he agreed with Mr. Xi that China and Japan, as the world’s second- and third-largest economies, had a responsibility to promote global prosperity.

The two countries still have major differences on regional security and dispute the ownership of Japanese-held islets in the East China Sea. Officials in Tokyo say tensions are likely to remain over the longer term but that in light of the U.S. tariffs, both find it beneficial for now to stress common ground.

Both leaders smiled for the cameras at their meeting Wednesday, their first since they met in Vietnam in November. The body language was warmer than their initial meeting in 2014, when Mr. Xi greeted Mr. Abe with a grim expression.

Asked in an August interview why Tokyo and Beijing were getting along better, Tadashi Maeda, head of the government-owned Japan Bank for International Cooperation, said, “Probably because of pressure by the Trump administration.” He said China recognized it “cannot have two enemies” at the same time.

Write to Peter Landers at peter.landers@wsj.com

https://www.wsj.com/articles/japan-and-china-find-common-ground-in-trumps-tariffs-as-leaders-meet-1536732536

Trade wars: China fears an emerging united front

September 11, 2018

Beijing welcomed American disputes with Tokyo and Brussels, but now faces isolation as the G7 allies begin to co-ordinate policy

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By Tom Mitchell in Beijing

As another fruitless round of China-US talks to avert a trade war wrapped up in Washington on August 23, foreign officials were arriving in the US capital for a potentially far more consequential meeting the next day. The occasion was an unusual trilateral forum that brings together trade officials from the US, EU and Japan.

Their mission: to combat the allegedly unfair trading practices by unspecified “third countries”.

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Chinese cranes set for export to the US © AFP

When US trade representative Robert Lighthizer and his EU and Japanese counterparts announced their initiative on the sidelines of last December’s World Trade Organization meeting in Buenos Aires, they did not single out any one country for fostering allegedly “unfair competitive conditions caused by large market-distorting subsidies and state-owned enterprises, forced technology transfer and local content requirements”.

But there was little doubt about the identity of the elephant in the room. As EU trade commissioner Cecilia Malmstrom said at the time: “There’s no secret that we think China is a big sinner here.”

The trilateral forum represents a potentially critical shift in the confrontation between Washington and Beijing. Chinese Communist party and government officials are confident they can cope with a full-scale trade war with the US, which increasingly feels like a foregone conclusion in Beijing. On Saturday, Chinese officials woke up to President Donald Trump’s threat to tax all Chinese exports to the US — worth more than $500bn last year — within months. On Sunday, they were greeted by a presidential tweet admonishing Apple to repatriate its China-based supply chain.

What really keeps them up at night, however, is a potential co-ordinated assault by the Trump administration, EU and Japan on their unique model of Chinese “state capitalism” that has been integral to the country’s economic success over the past 40 years.

In recent months the EU and Japan have joined forces with the US in WTO complaints against “forced technology transfers” in China through mandatory joint venture structures with local partners. “No country should require or pressure technology transfer from foreign companies to domestic companies through the use of joint venture requirements, foreign equity limitations, administrative review and licensing processes,” Mr Lighthizer, Ms Malmstrom and Hiroshige Seko, Japan’s minster for economy, trade and industry, said in a joint statement in May.

After a period when Mr Trump picked trade fights with any number of countries, Beijing worries that he has stumbled on to a more effective trade strategy that involves isolating China.

“These sorts of moves make the Chinese very nervous,” says Eswar Prasad, a former head of the IMF’s China division who now teaches at Cornell University.

In private conversations, Beijing officials say they could not believe their luck when the US president this year simultaneously initiated trade actions against China, the EU, Canada, Mexico, Japan and South Korea. Mr Trump’s initial scattergun approach took a lot of heat off Beijing, which is supported by Brussels and Tokyo in a WTO suit challenging US tariffs on imported steel and aluminium.

But since the now famous photo of Mr Trump squaring off against his G7 allies at their June summit in Ottawa, there have been signs that three of the world’s four largest trading powers may indeed combine forces to pressure China. In addition to Mr Lighthizer’s talks with Brussels and Tokyo, the Trump administration is working to solidify its recent trade truces with the EU and Mexico, and agree on a revamped Nafta pact with Canada.

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Wei Jianjun, chairman of Great Wall Motor Co, is is also reassessing its plans to export to the US is reassessing plans to export to the US © Bloomberg

Many are sceptical that the US president will succeed in training his fire on China alone. “For that to happen, Trump would have to behave in a very different way,” says one senior European banker. “The Europeans don’t trust him — and they shouldn’t.” His recent threat to leave the WTO, the banker notes, is an example of the kind of erratic behaviour that could rupture any alliance with the EU and Japan, which prefer to work through the multilateral trading body.

Mr Trump’s frenetic summer trade talks with the EU, China, Mexico and Canada have nonetheless added to the pressures building on President Xi Jinping, who a year ago was coasting towards a Chinese Communist party congress that confirmed his status as the country’s most powerful leader.

“In 2017 the mood in Beijing was, ‘everything is going great’,” says one person who has met Liu He, Mr Xi’s economic tsar, and other top Chinese officials in recent weeks. “This spring they thought Trump’s tariff threats were a road bump. Now they know it’s not a road bump and even if Trump dies tomorrow, this problem is not going away. They also realise they have trade problems with Europe.”

When European Commission president Jean-Claude Juncker travelled to Beijing for a bilateral summit in July, he bluntly told premier Li Keqiang that he shared many of Mr Trump and Mr Lighthizer’s concerns about Chinese state capitalism. “His message to Li was we don’t necessarily like Trump’s methods, but it’s not like he’s imagining all this stuff,” says one person who sat in on a meeting between the two men.

For its part, Tokyo has been pleasantly surprised by a Beijing-initiated rapprochement over the past year. According to one Japanese official, a recent spate of Chinese overtures are all “thanks to Trump”. The official adds: “Trump’s trade policies have been influencing China’s diplomatic stance.”

But while prime minister Shinzo Abe is happy to seize on any opportunity to reduce tensions with Beijing, he is far more concerned about maintaining good relations with his US military ally. “China wants us to join their straightforward criticism of Trump’s trade policies, which we are of course very concerned about,” the official adds. “But we are also basically in total agreement with Trump’s viewpoints regarding market access and other [trade and investment] issues in China.”

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Fruit products being processed for export from Anhui province © AP

Whether the Chinese leadership is ultimately confronted by the US alone, or by the US, EU and Japan, is important for Beijing, especially as it continues a campaign against risky financial practices that have slowed investment and economic growth. Yet the Chinese have also begun to conclude that there is much more to Mr Trump’s trade threats than empty bluster.

Mr Xi and Mr Liu have already been caught off guard. After more than a year of playing down the risks, the two men finally woke up in May to the fact that Mr Trump’s repeated threats to penalise China for alleged intellectual property theft and other unfair trade practices were not theatre. That month the US president contradicted his Treasury secretary Steven Mnuchin, who said a trade war between the two countries had been put “on hold”, by announcing his decision to impose punitive tariffs on $34bn-worth of Chinese industrial exports in early July.

Mr Trump is now poised to authorise a third round of tariffs that will take the total value of affected Chinese goods to $250bn — about half of Beijing’s total annual exports to the US. “The Chinese should be worried about Trump,” says Steve Bannon, Mr Trump’s former political adviser. “They’ve never had to confront anything like this.”

An increasing number of officials and analysts in Beijing now agree with Mr Bannon, seeing the escalating trade war as just the leading edge of a larger effort by the US to “contain” China. “The risk of China and the US sliding into a new cold war is increasing,” says Tu Xinquan, a professor at Beijing’s University of International Business and Economics. “It will be a nightmare for China, the US and the world.”

Wang Chong at the Charhar Institute, a Beijing-based think-tank, says China’s current problem in the US is not just related to Mr Trump: “Both the Republican and Democratic parties have reached a consensus that they should try to curb China’s development.”

In a series of authoritative articles in party-controlled publications, Chinese officials have recently warned that the country faces a new era of “strategic containment” orchestrated by the US.

“In the wake of the US defining China as a ‘strategic competitor’, Sino-US relations will undergo a profound readjustment,” Long Guoqiang, vice-president of the State Council’s Development Research Centre, wrote in an August 29 article in the People’s Daily. “In the past, the Soviet Union and Japan were hampered by the US. With the rapid development of China’s economy and comprehensive national strength, the US has fully turned its attention on China.”

“It’s getting more and more obvious that the Trump administration is determined to contain China,” adds Shi Yinhong, a foreign affairs expert at Renmin University in Beijing. “I think the next round of tariffs is inevitable. The trade war will last for quite a long time.”

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Liu He, China’s vice-premier and Xi Jinping’s economic tsar © Bloomberg

A few days after Mr Long’s article appeared, an unsigned commentary in Qiu Shi, a Communist party journal whose title translates as Seeking Truth, also accused the US of seeking to “curb the development of developing countries, especially China”.

Even people who are critical of China’s trade and economic policies agree that such official interpretations of Mr Trump’s ultimate goal are probably correct. They say the only trade deal he would probably accept from China is one Mr Xi could not possibly offer, because it would include concessions on how the party manages everything from industrial policy to state-owned enterprises and China’s currency. Others argue Mr Trump’s ideal outcome is in fact no deal at all, so he can implement long-term tariffs on all Chinese exports to the US in a bid to bring about a radical overhaul of global supply chains.

“People in the administration now understand that Trump may be flexible on so much stuff, but the hill he’s willing to die on is China,” says Mr Bannon. “Trump’s focus is shifting the supply chains out of China.”

In one indication that this strategy may be working, on August 31 Ford announced that it was cancelling plans to export China-made Focus vehicles to the US from next year. The vehicles would have been subject to a 25 per cent tariff on Chinese car exports imposed by the Trump administration in August. Great Wall, China’s most successful domestic SUV manufacturer, is also reassessing its plans to export to the US.

“The US national security establishment has rightly identified China as a strategic competitor,” says another person who advises Chinese policymakers. “Their strategy is to contain China through trade.”

The enthusiasm with which Mr Trump has slapped tariffs on Chinese exports this summer has, contrary to the tough rhetoric of official party publications, contributed to a sense of unease among officials who have their hands full with difficult financial reforms.

In such circumstances a trade war with the US is unwelcome but also viewed as unavoidable — at least in the short term — by an increasing number of officials and their advisers in Beijing.

For the time being, they believe all they can do is to try to limit the inevitable damage. “We had hoped that the escalating trade war would force US companies to talk sense into Trump but it’s not working,” says Prof Tu. “So we need to reconsider our retaliatory measures, which shouldn’t be too aggressive. If Trump wants to be a mad man, then so be it.”

Additional reporting by Xinning Liu in Beijing and Robin Harding in Tokyo

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Corporate ties US executives call for a change in China’s mindset

A deterioration in its traditionally friendly relationship with US corporate leaders and Wall Street financiers is adding to Beijing’s sense of isolation. While US business is strongly opposed to President Donald Trump’s tariffs, they are equally frustrated by the market access barriers and other restrictions they face in China.

According to two people briefed on the last round of Sino-US trade talks in August, Treasury undersecretary David Malpass referred his Chinese counterparts to an opinion piece by former AIG chairman Hank Greenberg in the Wall Street Journal.

Mr Greenberg, a longtime friend of Chinese vice-president Wang Qishan, wrote that “discriminatory treatment of foreigners is embedded in the Chinese bureaucracy — in government policies, in regulatory procedures laden with obstacles and delays, in structural impediments such as turnover in government agencies resulting from forced early retirements, and in the mindset of Chinese officials”.

“This all needs to change,” Mr Greenberg. “China cannot expect to continue receiving favourable trade and investment terms in foreign markets when it is unwilling to reciprocate . . . The US is right to press to level the playing field.”

The Chinese trade delegation, led by commerce vice-minister Wang Shouwen, did not react well to such critiques during a meeting with US business executives.

“The executives talked about their concerns but Wang Shouwen only said two things: US industry needs to stop ‘exaggerating’ its issues with China because it’s just making everything worse; and China is going to accelerate economic and financial reforms not because of international pressure but because of its own domestic policy goals,” said one person briefed on the meeting.

https://www.ft.com/content/ee361e2e-b283-11e8-8d14-6f049d06439c

Next stop in Trump’s trade crusade: Japan

September 7, 2018

US President Donald Trump remains focused on reducing the American trade deficit, and Japan may be the next target. An American newspaper cites the president as saying he wants to make Tokyo “pay” for its surpluses.

    
Konjunktur in Japan (Picture alliance/dpa/F. Robichon/EPA)

China, the European Union, Canada and Mexico — US President Donald Trump is waging his trade war on many fronts, with the likelihood of Japan becoming the next battleground rising, according to US business daily The Wall Street Journal (WSJ).

In a column written by WSJ Assistant Editor James Freeman on Thursday, the author said that Trump saw a “problem” with Japan’s $68.8 billion (€59.1 billion) trade surplus in 2017, which is not expected to come down significantly this year.

Freeman wrote he had a conversation with the president in which Trump had thanked him for his positive comments on the US economy, and was generally praising America’s “good relations” with the Asian country.

“Of course that will end as soon as I tell them how much they have to pay,” Freeman then cited Trump as saying.

Upon the news, the Japanese currency immediately firmed in late New York trading on speculation that Trump may soon target the world’s third-largest economy in its drive to lower the American trade deficits with key partners.

Read more: US tariffs plan for car imports rankles EU, Japan, China

Trump’s remarks come as a bit of a surprise because he was previously seen as maintaining a cordial personal relationship with Japan’s Prime Minister Shinzo Abe, fostered during numerous meetings and rounds of golf.

China remains prime target

The American trade gap with Japan is still massive, but has narrowed from a record of $73.3 billion five years ago. In the year to the end of July it fell further to about $40 billion.

By comparison, the US trade deficit with China was $36.8 billion just for the month of July this year, hitting an all-time high on an increase of 10 percent. With the European Union, the gap even widened 50 percent month-on-month to $17.6 billion.

Read more: US trade deficit surges, hits all-time highs with China and EU

Trump has had Beijing in his crosshairs ever since he took office, and has applied increasing pressure to try to convince the country to change its policies, allow more imports and reduce the $335 billion annual trade deficit.

Washington looks set to unleash another wave of punitive tariffs against China as a deadline on public comment on taxes to the tune of $200 billion expired on Thursday. That would take the total goods targeted to $250 billion out of about $500 billion worth of imports from China each year.

China’s Commerce Ministry has already announced it is readying countermeasures, including tariffs on $60 billion of US imports. China so far has retaliated dollar-for-dollar with tariffs of its own on US goods, but since it imports less than $200 billion a year from the US, it has run out of room to match Trump’s tariffs.

Executive ire

Meanwhile, American corporations are getting increasingly worried about Trump’s crusade on trade, and demanding exclusions from the tariffs.

Read more: Trump’s tariffs: When does a trade spat become an actual trade war?

On Friday, US technology companies Cisco, Dell, Hewlett Packard Enterprise and Juniper Networks issued a last-ditch appeal to the Trump administration to protect key products from being included on a list of the new China tariffs.

In a joint letter to US Trade Representative (USTR) Robert Lighthizer, the four companies claimed that tariffs on networking equipment would increase prices for consumers and delay investments.

“If USTR were to impose a 10-25 percent additional duty, it would cause broad, disproportionate economic harm to US interests, including our companies and US workers, our customers, US consumers, and broader US economic and strategic priorities,” the letter said.

The list of products subject to higher tariffs includes a wide range of components and finished products that are key to cloud computing data centers. Prices are set to rise for servers, routers and switches, which handle data processing and communication. Other components expected to be hit are motherboards and memory modules, which are imported by big US hardware makers, as well as cloud computing companies such as Google, Amazon and Facebook, which assemble machines for their own data centers.

The executives’ joint statement marks a departure from the approach taken by most large US companies, few of whose leaders have spoken out directly against the administration’s trade policy despite harboring concerns about its impact on their businesses.

uhe/mds (Reuters, dpa, AFP)

Trump suggests trade battle with Japan, Wall Street Journal column says

September 7, 2018

U.S. President Donald Trump has suggested to The Wall Street Journal that he will take on Japan next in his fight to cut trade deficits with trading partners, according to a column carried on the paper’s online edition Thursday.

Citing a phone call he received from Trump, James Freeman, a columnist for the paper, wrote that the president “described his good relations with the Japanese leadership but then added: ‘Of course that will end as soon as I tell them how much they have to pay.’ “

Trade is likely to be a major topic when Trump meets Prime Minister Shinzo Abe around Sept. 25 on the sidelines of the U.N. General Assembly.

Image may contain: 2 people, people sitting and suit

U.S. President Donald Trump shakes hands with Prime Minister Shinzo Abe while posing for photographs before a joint news conference in the Oval Office of the White House, February, 2017 in Washington. | POOL/ VIA BLOOMBERG

Even if Trump wraps up negotiations with Canada, Mexico and Europe, “the trade uncertainty won’t necessarily end,” Freeman wrote. “It seems that he is still bothered by the terms of U.S. trade with Japan.”

During the call, he wrote, the president sounded “still very focused on eliminating trade deficits with America’s trading partners,” in line with his “America First” agenda.

The Trump administration has pushed Japan to further open its automobile and agriculture markets as part of efforts to reduce the chronic U.S. trade deficit.

The column drew measured reactions from Japan. Deputy Prime Minister Taro Aso told reporters in Tokyo on Friday, “I don’t know President Trump’s relationship with The Wall Street Journal nor whether he actually said that.”

“We both have to do our part” to realize a fair trade relationship, added Aso, who doubles as finance minister.

Toshimitsu Motegi, the minister in charge of trade talks with U.S. Trade Representative Robert Lighthizer, said he is aiming for an arrangement that benefits both Japan and the United States.

https://www.japantimes.co.jp/news/2018/09/07/business/trump-suggests-trade-battle-japan-wall-street-journal-column-says/#.W5IWM-hKhaQ

Chinese president Xi to attend Russia regional summit, North Korea’s Kim invited

September 7, 2018

Chinese President Xi Jinping will attend a regional summit in Russia next week, officials said Friday, joining the prime ministers of Japan and South Korea at a gathering to which North Korean leader Kim Jong Un was invited.

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Russian President Vladimir Putin has invited Kim to participate in the September 11-13 Eastern Economic Forum in Vladivostok.

Chinese President Xi Jinping will attend a regional economic summit in Russia next week hosted by President Vladimir Putin. (AFP)

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Kim has not confirmed his attendance, but his participation would mark another major step in his efforts to bring Pyongyang out of international isolation over its nuclear weapons program.

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At a press briefing to announce Xi’s visit, Chinese officials would not comment on whether Xi planned to meet with other leaders during the summit.

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“Should we have any proposals from other countries, China will positively consider” them, assistant foreign minister Zhang Hanhui told reporters.

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Kim and Xi met three times in China this year as the two countries seek to repair relations frayed by North Korea’s nuclear activities and Beijing’s backing of United Nations sanctions against its Cold War-era ally.

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Xi is sending the head of China’s rubber-stamp legislature, Li Zhanshu, to Pyongyang this weekend to attend celebrations marking North Korea’s 70th anniversary, ending speculation that the Chinese president would use the occasion to make his first official trip to the neighboring country.

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In the latest chapter in the roller-coaster diplomacy over North Korea, US President Donald Trump signaled on Thursday that negotiations on denuclearization remain alive after weeks of an apparent deadlock.

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Xi will be in Vladivostok on Tuesday and Wednesday. It will be the first time that a Chinese leader participates in the annual economic forum hosted by Russia.

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Japanese Prime Minister Shinzo Abe and South Korean premier Lee Nak-yeon are expected to attend the summit.

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Relations between China and Japan soured in 2012 over a territorial dispute, but have begun to warm.

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In recent months, the two sides have been negotiating an exchange of top level visits.

AFP

US trade war and Japan push raise prospects for China-backed Asia free-trade deal

September 3, 2018

Beijing urgently needs to get an agreement to help weather Washington’s tariffs, analyst says

South China Morning Post
Monday, 03 September, 2018, 3:21pm
Japanese Prime Minister Shinzo Abe says Japan’s relationship with China has returned to a “normal track”. Photo: Kyodo

The US trade war and a thaw in ties between China and Japan are raising prospects for the world’s biggest regional free-trade deal, analysts said on Sunday after trade negotiators voiced high hopes of reaching a broad agreement in November.

Singaporean Trade and Industry Minister Chan Chun Sing said trade negotiators from 16 likely signatories of the China-backed Regional Comprehensive Economic Partnership, or RCEP, agreed on key elements of the deal at a meeting in Singapore last week, and a broad agreement was likely when leaders of the countries met in the city state in November.

“We are looking for that broad agreement, that milestone to be achieved, or what we call substantial conclusion, when the leaders meet at the end of the year,” Chan said on Saturday.

Singapore’s Trade and Industry Minister Chan Chun Sing says a braod agreement on the RCEP could be reached in November. Photo: Xinhua

The 16-nation pact, involving 10 Asean members as well as China, Japan, Australia, India, New Zealand and South Korea, would cover about half the world’s population and a third of its GDP.

It has been under negotiation for years but a deal has yet to be reached.

Expectations of an agreement rose on Sunday when the Sankei newspaper quoted Japanese Prime Minister Shinzo Abe as saying Japan’s relationship with China had returned to a “normal track”.

“Premier Li Keqiang visited Japan in May and the Japan-China relationship has completely returned to a normal track,” Abe told the Sankei newspaper.

Huo Jianguo, a former director of a research institute under China’s Ministry of Commerce, said China urgently needed a breakthrough in the RCEP as it looked to the region for economic opportunities to help it weather its tit-for-tat trade war with Washington.

“China has to take the initiative in the forming a new international trade order,” Huo said. “The RCEP negotiations have dragged on for too long and China can’t afford another year of delay.”

Negotiations have stumbled over just how much each country should be prepared to open up its markets to outside goods, services and investment. Some countries like Japan are demanding a high level of opening up but others like are India resistant.

But Huo said interim arrangements could allow for gradual opening and the priority now was to reach a deal.

Analysts said any progress on a deal would depend on cooperation between China and Japan, the world’s second- and third-biggest economies.

“Japan used to be passive but now it has become much more proactive about the RCEP,” said Jiang Ruiping, a Japanese studies expert at China Foreign Affairs University.

Jiang said the US withdrawal from the Trans-Pacific Partnership (TPP), the completion of the Japan-European Union trade agreement and Japan’s own need for a regional free trade accord had pushed Tokyo to shift its attention to the China-backed plan.

Japanese Prime Minister Shinzo Abe has called for a swift agreement on the RCEP. Photo: Kyodo

Japan is a member of the TPP, a US-led trade pact that Washington withdrew from in 2017.

In July, Abe pushed for a swift agreement on the RCEP.

“As we are faced with concerns of the rise of protectionism in the world, all of us in Asia must unite,” he said.

Meanwhile, new life has been breathed into the China-Japan relationship, with Japan more willing to work with China on Beijing’s agenda.

“One area the better China-Japan relationship can work together in is regional trade cooperation,” Jiang said.