In my post “The Conundrum of China-North Korea Relations” the day before yesterday, I said that China satisfied US President Trump in yuan exchange rate, import tariffs and intellectual property as those are what China has already had intention to do, but has difficulties to be hard on North Korea.
I described in my post the kinship between Chinese and North Korean peoples.
Some believe that China benefits from the trouble created by North Korea’s nuclear and missile tests to the US, Japan and South Korea as the three form an iron triangle against China. However, China will be in great trouble if Trump has Japan and South Korea develop nuclear weapons to deal with North Korea and put China under direct threat of Japan and South Korea’s nuclear weapons; therefore, China has to stop North Korea’s nuclear and missile tests, especially when Trump has shown his desire in his phone call with Xi for win-win cooperation with China.
To please the US and put pressure on North Korea, China has recently announced that it would suspend import of North Korean coal, that accounts for $1.89 billion of the $2.5 billion in total Chinese imports from North Korea.
However, China does not want to punish North Korea too hard for fear of the collapse of North Korea’s Kim Jong-un regime.
Reuters says in its report “China wields stick with North Korea, but is still pushing for talks” yesterday that China fears that the collapse may give rise to flood of hundreds of thousands North Korean refugees into China.
In addition, “Beijing would also be concerned that U.S. and South Korean armed forces would move into North Korea and soon be on the Chinese border.”
That is why Chinese Foreign Minister Wang Yi said in Munich over the weekend that China had not given up hope for a new round of diplomacy with North Korea, even as he pledged support for UN sanctions.
Anyway, Trump must be satisfied. I hope that the win-win cooperation between the US and China will make both of them strong and prosperous perhaps at the expense of Japan. North Korea will also be happy about that as Kim Jong-un in fact wants good relations with the US. His nuclear and missile tests are but bargaining chips for improvement of relations with the US. However, North Korea hates Japan bitterly.
Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at http://www.reuters.com/article/us-china-northkorea-analysis-idUSKBN15Z11M.
In history, Korea used to be very close to China and was often protected by China. China fought Japan to protect Korea in the first Sino-Japanese War and suffered great losses in 1895.
Later, it defeated the US to prevent North Korea from being annexed by South Korea. However, North Korea’s Kim Dynasty has not been grateful. It has kept on developing nuclear weapons that threaten not only South Korea and Japan but also China.
At the beginning of Kim Jong-un’s reign, China tried to make him learn from China’s success of reform and opening up but Kim would not listen. On the contrary, Kim has imposed even more stringent control both politically and economically while keeping on development of nuclear weapons in spite of China’s opposition.
China is upset and has begun to cooperate with the US in imposing sanctions on North Korea, but it cannot go too far as it has to take care of North Korean people that Chinese people regard as their kin.
Lots of North Koreans joined Chinese Communist Party’s troops in resisting Japan and fighting Chinese Civil War. During Mao’s famine lots of Chinese fled to North Korea for survival as at that time North Korea was quite prosperous with substantial Soviet aids.
Now, Kim Dynasty’s famine has forced lots of North Koreans to flee to China for survival. There is arrangement between China and North Korea for repatriating those North Korean refugees, but Chinese people do not want to send their North Korean kin back to be killed or persecuted cruelly by the Kim Dynasty.
As a result, China cannot impose UN sanctions stringently. It has to provide North Korea with food and daily necessities. In order to get paid for Chinese goods, China has to buy coal and other minerals from North Korea in spite of the sanctions.
Now, US new president Trump has said that he has made a long satisfactory friendly phone call to Chinese President Xi Jinping. Obviously, Trump has got what he wants from Beijing.
First, Trump complains that China manipulates its currency yuan to keep its exchange rate low, but now China is in fact manipulating yuan to prevent it from falling; therefore, as a matter of fact, that is not a problem.
Second, Xi must have promised to reduce the high import tariffs and the restriction of US investment in banking, insurance and other sectors. China promised to open those sectors when it joined WTO, but its state-owned enterprises in those sectors needed government protection with high tariffs and restriction of entry. Now, Xi Jinping has been carrying out a reform to open those state-monopolized sectors in order to introduce competition to improve the efficiency in those sectors. In addition, Chinese state-owned enterprises in those sectors have grown strong enough so that there is no need for state protection with high tariffs and entry restriction.
Third, as for Trump’s demand for better protection of intellectual property, China has grown past the stage of stealing foreign intellectual property and is now making great efforts to develop its own intellectual property. As a result, it has switched to stressing protection of China’s own fast-growing intellectual property. It now has to protect foreign intellectual property if it wants other countries to protect its own; therefore, that is not a problem for China either.
Relations between China and the US have indeed wormed up since the Trump-Xi phone call. There were first media reports that on February 17, US Secretary of State Rex Tillerson met Chinese Foreign Minister Wang Yi on the sidelines of G20 foreign minister meeting in Bonn. In its report “Rex Tillerson, Wang Yi in highest-level US-China meet under Donald Trump”, Firstpost quotes Mark Toner, acting US State Department spokesman, as saying, “Secretary Tillerson and Minister Wang noted the recent call between leaders and discussed efforts to advance bilateral cooperation while addressing differences in a constructive manner.” (Firstpost’s report can be viewed at http://www.firstpost.com/world/rex-tillerson-wang-yi-in-highest-level-us-china-meet-under-donald-trump-3288854.html.)
Then there is SCMP’s report today titled “New US Treasury Secretary Mnuchin makes phone calls to Chinese economic officials” on Mnuchin making separate calls to Liu He, the head of the office of the Central Leading Group on Financial and Economic Affairs; Zhou Xiaochuan, governor of the People’s Bank of China, and Finance Minister Xiao Jie.
SCMP quotes US Treasury Department’s statement as saying, “In each of these calls, Secretary Mnuchin underscored that he looked forward to fostering strong US-China engagement during his tenure. The secretary emphasised the importance of achieving a more balanced bilateral economic relationship going forward.” (SCMP’s report can be found at http://www.scmp.com/news/china/diplomacy-defence/article/2072060/new-us-treasury-secretary-mnuchin-makes-phone-calls.)
Now, it seems North Korea remains the most tricky problem that Trump asks Xi to deal with.
Firstpost quotes Toner as saying, “Secretary Tillerson also highlighted the increasing threat posed by North Korea’s nuclear and missile programs and urged China to use all available tools to moderate North Korea’s destabilising behaviour.”
Obviously, in his phone call, Trump also asked Xi to help control North Korea. North Korea’s Kim Jong-un must be paying great attention to Trump’s China policies. He guesses that China has promised Trump something regarding North Korea. He knows well that China is not satisfied with his reign, especially his nuclear and missile tests and suspects China has a plan to bring about a regime change in his country that will benefit both the US and China.
For regime change, Kim Jong-un’s half-brother Kim Jong-nam is a precious asset for China. When China has conducted a coup or military attack to bring down Kim Jong-un, his half-brother will be his best replacement for a new regime in his country. After all, Kim Jong-nam is his father’s eldest son with the best qualification to succeed his father. That might be the reason why soon after the telephone call, Kim Jong-nam was assassinated.
That is a conundrum in China-North Korea relations. If China has indeed a regime-change plan, Kim Jong-nam must be China’s very valuable asset. Why China has not sent agents to protect him in secret or at least employed some bodyguards for him. Moreover, China must not attempt to conduct regime change in another country as it regards non-interference in other countries’ internal affairs as its key diplomatic principle.
I would rather believe Kim Jong-un assassinated his half-brother due to his paranoia, which at least shows that he lives in constant fear of his powerful neighbor China.
Knowing that, China began to pressure him. Reuters says in its report “China to suspend all imports of coal from North Korea” that according to Chinese Ministry of Commerce China will ban imports of coal from North Korea from Feb. 19 to Dec. 31.
Perhaps, China has threatened to impose other sanctions to force Kim Jong-un to yield to its pressure. That is why according to Reuters’ report “China sees chance of six-party talks with North Korea”, Foreign Minister Wang Yi said on Feb. 17 China has not given up hope for a new round of diplomacy with North Korea to prevent Pyongyang making further advances in its weapons program in violation of U.N. resolutions. (Reuters’ two reports can respectively be viewed at http://www.reuters.com/article/us-china-coal-northkorea-idUSKBN15X09M and http://www.reuters.com/article/us-northkorea-missiles-china-idUSKBN15W272.
Article by Chan Kai Yee.
Japanese Prime Minister Shinzo Abe met Trump twice trying hard to persuade Trump to keep Obama’s policies to contain China by his pivot to Asia including deployment of 60% of US military in Asia and the establishment of TPP. Trump, however, gave Chinese President Xi Jinping a phone call hours before meeting Abe and has thus greatly improved US-China ties.
Abe was very much disappointed and was worrying that his visit would be regarded as a failure at home. Trump did not want to upset Abe so that he showed grand hospitality to Abe without giving him anything. On the contrary, he wants to get concessions from Japan in US trade with Japan to get what he can from TPP without giving Japan the concessions Obama made to Japan in order to make TPP acceptable to Japan. However, as Japan is US most important ally in Asia, Trump was trying hard to please Japan but had no real chance to do that satisfactorily.
Luckily, North Korea came out to help them. It unexpectedly conducted a missile test when Trump was treating Abe with a dinner.
Trump takes the opportunity to show how strongly he supports Japan in opposing North Korea by dealing with the emergency in the open. Abe was greatly satisfied, but in fact he has got nothing as Trump only showed what the US has always promised.
In Japan however, people are quite satisfied with the results of Abe’s visit. New York Times says in its report “Relief in Japan After Shinzo Abe’s Visit With Trump”, “Before the visit last week, some in the Japanese news media had gibed Mr. Abe for his apparent eagerness to foster a friendship with Mr. Trump, and some joked that the American president would take advantage of the Japanese leader during their bout of golf diplomacy at the president’s Mar-a-Lago resort in Florida. But in a Kyodo News poll taken after the meeting, 70 percent of the Japanese public said they were satisfied with the talks between the two leaders, and Mr. Abe’s approval ratings rose slightly from a month earlier to close to 62 percent.
In the US, those who did not understand Trump’s trick or did understand but wanted to use Trump’s move to attack him made hue and cry about Trump breaking national security norms in tackling the crisis. CNN is one of the lots of media that attacked Trump for that. It did so in its report “At Mar-a-Lago, Trump tackles crisis diplomacy at close range”.
Comment by Chan Kai Yee on CNN and New York Times’ reports, full text of which can respectively be viewed at http://edition.cnn.com/2017/02/12/politics/trump-shinzo-abe-mar-a-lago-north-korea/ and https://www.nytimes.com/2017/02/13/world/asia/trump-japan-shinzo-abe.html?_r=2
SCMP says in its report “China slaps record fine, jail term on hedge fund trader amid crackdown on ‘financial crocs’” today, “China’s courts have slapped a record fine and imposed a jail term on the country’s so-called hedge fund king after finding him guilty of insider trading and market manipulation, amid a state-directed campaign to crack down on financial malfeasance and bring ‘financial crocs’ to justice.”
Big moneys’ manipulation of the stock market has caused the market crash in 2015 resulting in serious losses to retail investors.
Xu Xiang, one of the culprits, whose hedge funds has 20 billion yuan assets was fined 11 billion yuan and put in jail for 5 and a half years. His and his two associates’ assets of 9.3 billion yuan have been confiscated by the State.
There is rumor that a Hong Kong tycoon was mysteriously brought to mainland China by suspected Chinese plain cloth police for his part in the speculation that caused the crash.
It seems that Chinese President Xi Jinping will strike hard on not only corrupt officials whether big or small (regarded by him as tigers and flies) but also financial crocodiles that hurt small retail investors. Such crocodiles will be punished even though they are not in China. Whether the Hong Kong tycoon has committed the crime of market manipulation or not, the severe punishment meted out to crocodiles and the rumor about the fate of the Hong Kong tycoon will have shocking deterrence to market manipulation.
Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at http://www.scmp.com/business/money/markets-investing/article/2070420/china-slaps-record-fine-jail-term-hedge-fund-trader
When US President Donald Trump and Japanese Prime Minister Shinzo Abe met the press after their meeting on February 10, Trump gave warm but abstract description of US-Japan friendship and alliance without any actual details.
People’s memory is still fresh about US President Donald Trump’s nominee for and later appointed Secretary of State Rex Tillerson’s hardline remarks on blocking China’s access to the artificial islands China has built in the South China Sea. They believe that as China will defend such access, a war between China and the US is unavoidable.
That is because media is fond of sensational news but fail to give emphasis in their reports later that in responses to US lawmakers’ following-up questions, Tillerson softened his language. He said that in the event of an unspecified “contingency” the United States and its allies “must be capable of limiting China’s access to and use of” those islands to pose a threat. (See Reuters’ report “New top U.S. diplomat plays central role in Trump’s China shift” on February 10.)
There is utterly no need to worry that Trump will fight a war with China.
People were surprised by Trump’s friendly long phone call hours before he met Japanese Prime Minister Shinzo Abe.
Reuters’ report “China gets an early win off Trump, but many battles remain” on February 11 gives the impression that Trump has lost face in giving Xi the concession on continuing US “one-China” policy. It forgets that Taiwan is but Trump’s bargaining chip to get concessions from China. As a shrewd businessman, Trump certainly will not give Xi anything if he can get nothing from Xi. That is why when he was asked by Takita of Japan’s Sankei Shimbun about his dissatisfaction with China in the news conference, he said that he had a very good, very very warm conversation with Xi.
He said, “As far as the currency devaluations, I’ve been complaining about that for a long time. And I believe that we will all eventually — and probably very much sooner than a lot of people understand or think — we will be all at a level playing field, because that’s the only way it’s fair.” Obviously, Trump has obtained in principle what he wants from Xi. He and Xi are to leave to their subordinates to decide the actual detailed trade measures for win-win cooperation between the US and China.
Abe, however, tried hard in the news conference to pit the US against China. He said in his initial speech, “Never should a state-owned company, backed by state capital, should not make any economic intervention. Free ride on intellectual property should not be condoned,” hinting that the US shall work with Japan to contain China.
He first ignored New York Times’ Daniel Halper’s question about TPP to avoid revealing his difference with Trump on TPP, but has to give a reply when Fox’s Blake Berman picked off again Danial’s question.
He said, “Now, for the free and fair common set of rules to be created for the free trade regime in the region, and that was the purpose of TPP, and that importance have not changed. I, myself, believe that.” He tried again to convince Trump that Trump shall continue Obama’s policy to use TPP to contain China.
Trump’s response is really interesting. He said that he thought his good relations with Xi “will also be very much of a benefit to Japan”.
How can win-win cooperation between China and the US benefit Japan? It will provide US goods with better access to Chinese markets so that Japan will lose market share to the US. China, on the other hand, will have better access to US technology to have sharper competition edges than Japan.
Trump and Xi will both be winner while Abe will be the only loser. That will be the benefit Abe will get.
Comment by Chan Kai Yee on Trump and Abe’s news conference.
By Ben Blanchard | BEIJING Sat Feb 11, 2017 | 1:34am EST
Combining public bluster with behind-the-scenes diplomacy, China wrested a concession from the United States as the two presidents spoke for the first time this week, but Beijing may not be able to derive much comfort from the win on U.S. policy toward Taiwan.
Several areas of disagreement between the superpowers, including currency, trade, the South China Sea and North Korea, were not mentioned in public statements on Thursday’s telephone conversation between Presidents Xi Jinping and Donald Trump. In getting Trump to change course on the “one China” policy, Beijing may have overplayed its hand.
Trump had upset Beijing before he took office by taking a call from Taiwan President Tsai Ing-wen, then casting doubt on the “one China” policy, under which Washington acknowledges the Chinese position that there is only one China and Taiwan is part of it.
Trump changed tack and agreed to honor the “one China” policy during the call, prompting jubilation in China. Beijing had been working on diplomatic ways to engage Trump’s team and largely blaming Taiwan for stirring things up. [nL4N1FV21K]
Laying the foundation for that call had been the low-key engagement of China’s former ambassador to Washington and top diplomat, the urbane and fluent English-speaking Yang Jiechi, with Trump’s national security adviser Michael Flynn.
“China was pragmatic and patient. It made every effort to smooth out the relationship, and it paid off,” said Jia Qingguo, dean of the School of International Studies at Peking University, who has advised the government on foreign policy.
But China also made very clear Taiwan was not up for negotiation, unleashing state media to threaten war and punishment for U.S. firms if that bottom line was breached.
China has long described self-ruled Taiwan, claimed by Beijing as its sacred territory, as the most sensitive issue in Sino-U.S. relations.
Its military had become alarmed after the Trump-Tsai call and was considering strong measures to prevent the island from moving toward independence, sources with ties to senior military officers told Reuters in December. [nL4N1ES0VR]
A source familiar with China’s thinking on relations with the United States, speaking to Reuters last month, said China had actually not been too bothered with Trump’s Taiwan comments before he took office as he was not president then and was only expressing his personal view.
“If he continues with this once he becomes president then there’s no saying what we’ll do,” the source said.
TSAI’S CHILLED HEART
Despite the U.S. concession, military tensions remain.
On Saturday, the overseas edition of the ruling Communist Party’s People’s Daily placed a picture on its front page of Chinese warships about to embark on a new round of drills in the South China Sea, right next to an upbeat commentary about the Xi-Trump call.
The paper’s WeChat account took a harsher line, saying that with Trump getting back with the program on “one China”, Taiwan had better watch out.
“The heart of that Madame Tsai on the other side of the Taiwan Strait must at this moment be chilled to the core,” it said.
One senior Western diplomat said China had been redoubling its efforts to win over the Vatican, one of a handful of countries to retain official ties with Taiwan.
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Taiwan says it hopes for continued U.S. support, and one ruling Democratic Progressive Party official told Reuters that the “one China” policy had not affected previous U.S. arms sales to Taiwan, even as U.S. presidents’ commitment to the island have waxed and waned.
Xi has put great personal political capital into seeking a solution over Taiwan, an issue that has festered since 1949 when defeated Nationalist forces fled to the island after losing the civil war to the Communists. China has never renounced the use of force to bring Taiwan under its control.
But in its relations with Washington, the risk for Beijing remains that its diplomatic win over “one China” will be short lived, as Trump will not want to be seen as having caved in.
“What he’s shown the Chinese is he’s willing to touch the ‘third rail’ of U.S.-China relations,” said Dean Cheng, China expert at the conservative Heritage Foundation in Washington.
“Beijing can’t predict what he’ll do next – and he’s only been in office three weeks. What is he going to do on trade and other economic issues?”
U.S. officials said the affirmation of the “one China” policy was an effort to get the relationship back on track and moving forward. [nL1N1FV1RU]
But Trump’s change of tack may be seen by Beijing as a climbdown, said Tom Rafferty, the China Regional Manager for the Economist Intelligence Unit.
“Mr Trump is erratic and will not appreciate the suggestion that he has been weak.”
(Additional reporting by Michael Martina, and J.R. Wu in Taipei and Matt Spetalnick in Washington; Editing by Raju Gopalakrishnan)
Source: Reuters “China gets an early win off Trump, but many battles remain”
Note: This is Reuters report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.
By Ben Blanchard and Steve Holland | BEIJING/WASHINGTON Fri Feb 10, 2017 | 12:52am EST
U.S. President Donald Trump agreed to honor the longstanding “One China” policy during a phone call with Chinese President Xi Jinping, taking steps to improve ties after angering Beijing by talking to the leader of Taiwan.
Trump further unnerved Beijing over the self-ruled island in December saying the United States did not necessarily have to stick to the policy. The United States has acknowledged the Chinese position that there is only one China and that Taiwan is part of China.
A White House statement said Trump and Xi had a lengthy phone conversation on Thursday night Washington time.
“President Trump agreed, at the request of President Xi, to honor our ‘One China’ policy,” the statement said.
The two leaders had not spoken by telephone since Trump took office on Jan. 20.
Diplomatic sources in Beijing say China had been nervous about Xi being left humiliated in the event a call with Trump went wrong and the details were leaked to the media.
Last week, U.S. ties with staunch ally Australia became strained after the Washington Post published details about an acrimonious phone call between Trump and Prime Minister Malcolm Turnbull.
The two sides also signaled that with the “One China” issue resolved, they could have more normal relations.
“Representatives of the United States and China will engage in discussions and negotiations on various issues of mutual interest,” the statement said.
In a separate statement read out on Chinese state television, Xi said China appreciated Trump’s upholding of the “One China” policy.
“I believe that the United States and China are cooperative partners, and through joint efforts we can push bilateral relations to a historic new high,” the statement cited Xi as saying.
“The development of China and the United States absolutely can complement each other and advance together. Both sides absolutely can become very good cooperative partners,” Xi said.
China wants cooperation with the United States on trade, investment, technology, energy and infrastructure, as well as strengthening coordination on international matters to jointly protect global peace and stability, Xi said.
“China is proactively dedicated to harmonious coexistence with all countries in the world,” he added.
The White House described the call as “extremely cordial” with both leaders expressing best wishes to their peoples.
“They also extended invitations to meet in their respective countries. President Trump and President Xi look forward to further talks with very successful outcomes,” the White House statement said.
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The call came hours before Trump plays host to Japanese Prime Minister Shinzo Abe.
China has repeatedly said it has smooth contacts with the Trump team. The Foreign Ministry in Beijing said last week the two countries were remaining “in close touch”.
That contact has been led by China’s top diplomat, State Councillor Yang Jiechi, who outranks the foreign minister.
Yang told Michael Flynn, Trump’s National Security Advisor, last week that China hopes it can work with the United States to manage and control disputes and sensitive problems.
No issue is more sensitive to Beijing than Taiwan.
The United States switched diplomatic recognition from Taiwan to China in 1979, but is also Taiwan’s biggest ally and arms supplier and is bound by legislation to help the island defend itself.
China has claimed sovereignty over Taiwan since 1949, when Mao Zedong’s Communist forces won the Chinese civil war and Chiang Kai-shek’s Nationalists fled to the island. China has vowed to bring Taiwan under its rule, by force if necessary.
There was little or no mention in either country’s statements of other contentious issues – trade and the disputed South China Sea – and neither matter has gone away.
A U.S. official told Reuters on Thursday that a U.S. Navy P-3 plane and a Chinese military aircraft came close to each other over the South China Sea, though the Navy believes the incident was inadvertent.
China on Friday reported an initial trade surplus of $51.35 billion for January, more than $21 billion of which was with the United States.
Trump broke the ice with Xi earlier in the week in a letter offering belated greetings for last month’s Lunar New Year, a move broadly praised by Chinese state media as a positive sign.
In a front page commentary, the overseas edition of the People’s Daily said the letter was an opening to help manage friction.
“There’s a saying in China – good food is worth waiting for.”
(Editing by Lincoln Feast)
Source: Reuters “Trump backs “One China” policy in call with China’s Xi”
Note: This is Reuters report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.