Trump freaks out the Chinese communists

Via Reuters:

A growing trade war with the United States is causing rifts within China’s Communist Party, with some critics saying that an overly nationalistic Chinese stance may have hardened the U.S. position, according to four sources close to the government.

President Xi Jinping still has a firm grip on power, but an unusual surge of criticism about economic policy and how the government has handled the trade war has revealed rare cracks in the ruling Communist Party.

A backlash is being felt at the highest levels of the government, possibly hitting a close aide to Xi, his ideology chief and strategist Wang Huning, according to two sources familiar with discussions in leadership circles.

A prominent and influential academic whose views have found favor in some party quarters has also come under attack for his strident views on Chinese power.

Wang, who was the architect of the “China Dream”, Xi’s vision for China to become a strong and prosperous nation, has been taken to task by the Chinese leader for crafting an excessively nationalistic image for the country, which has only provoked the United States, the sources said.

…There is a growing feeling within the Chinese government that the outlook for China has “become grim”, according to a government policy advisor, following the deterioration in relations between China and the United States over trade. The advisor requested anonymity.

Those feelings are also shared by other influential voices.

“Many economists and intellectuals are upset about China’s trade war policies,” an academic at a Chinese policy think tank told Reuters, speaking on condition of anonymity due to the sensitivity of the issue. “The overarching view is that China’s current stance has been too hard-line and the leadership has clearly misjudged the situation.”

Quite right. China has completely botched this. It simply needed to accept that it had been caught with its hand in the trade cookie jar. Then it could have done any number of deals to swiftly and hugely boost US imports, especially around oil and gas. That would have given Trump his quick win and let China off the hook for another decade as it kept quietly rising.

Instead it dramatically overplayed its hand and has given the US the opportunity to turn a trade war into economic war that will cost it permanently. This has already forced China back to the very dying economic model of debt-fueled over-investment that it is trying to escape.

The unrivaled Chinese technocracy appears to have been overthrown by the blunders of the nationalist dictator.


  1. Will be really “interesting” to see what happens next. I’m not feeling very relaxed or comfortable right now.

    • Wino ShinyfaceMEMBER

      yes, and as always, its the face saving culture that hurts them, even in small scale business transactions, Xi can’t back down, so he’ll take it all down with him

    • I’ve said it before and will probably keep saying it – most conflicts over trade eventually lead to genuine physical conflict.

      • Spot on. And it will be fought over Australia is my miserable prediction. Hope we are both wrong!

  2. As I said a while ago.
    Dictatorships are brittle.

    This is starting to play out similar to my expectations from weeks-months ago. (some posted here)

    I think the US has a game plan.

    Should I link to some of my prior thoughts?

  3. Normally I don’t agree with MB’s geopolitics views but on this one I think exactly same. I just can’t believe how naïve and silly Chinese are. They should have done what you prescribed.
    Unless they do have a game plan or an angle we don’t see.. who knows. Right now it looks like Xi is on shaky ground and his opponents are piling pressure on him. Talking about self inflicted pain.

    • Ronin8317MEMBER

      People who become Emperor tend to acquire the a fatal disease of hubris as well.

      Deng Xiaoping once said China must “keep a low profile and grow your capability” (韬光养晦). Xi Jinping is doing exactly the opposite, and China is not ready to challenge the US for at least another 50 years.

    • I think you are underestimating the significance of the ‘honour’ culture in Asia here. Although Trump’s right about China playing unfair on several trade/competition issues (e.g. forcibly giving up Intellectual Property Rights for foreign companies setting up base in China), the way he tries to solve the issue – by acting like a cowboy – is deeply insulting to the Chinese leadership and thereby even threatening their standing among their people.

      Chinese culture views itself as far superior to anything else, so letting Trump’s threats go unanswered would be the equivalent of the Chinese leadership emasculating themselves – they simply can’t do that without destroying their standing in their own society.

      • It’s not like they haven’t had a few subtler hints over the years to get their house in order & to save their all encompassing face. They chose to ignore it. I’m glad you fingered honour…… had they been aware of any it would’ve been sorted a decade ago. Now they’re probably going to get their face rubbed in their own goobers by another representative of greed & ambition. For good or bad he calls a spade a spade without talking behind his hand at least.

    • Not sure anyone said who is winning. What we do know is the developed world has lost by shutting down most of its manufacturing. Germany the only dude standing. Genious policymakers. Thats why for centuries that country stands tall.
      As for Chinese thinking they are superior, in my travels, every culture I came across felt they were superior so its not unique to Chinese.

  4. The CPC is an evil organisation. The sooner it is consigned to the scrap heap of history and a vibrant Chinese democracy emerges the better for everyone, especially those in their gulag and “re-education” camps.

  5. Why would CCP members be talking to foreign press in this way? Their government isn’t like the Westminster system, they don’t have freedom of speech and they do control their image tightly. Where is the friggin gain in risking pissing off the CCP just to blab?

    I’d be wary of any quotes coming out of senior Chinese government. Planting stories isn’t exactly a new concept. For all we know this came from Xi, goading Trump to overstep because he thinks he has the Chinese ‘on the ropes’.

    • Source of the remarks comes from anonymous in Taiwan. This story was planted in Reuters and then carried by CNN – its definitely propaganda.

      • Even StevenMEMBER

        I am skeptical you can be so definitive on this Brutus “definitely propaganda”.

  6. “..China seems to be winning the trade war..”

    If China wants to “win” the trade war the smartest thing they can do is reduce their trade surplus with the US as fast as possible and if they want to replace that lost surplus, run it with someone who lacks the spine to say no.

    Someone like Australia! – though they may need a few more chumps to make up for the loss of the surplus with the US.

    All they need to do is buy less from Australia and more from the US.

    Its not as though Australia will actually do anything to reduce its imports from China. We have plenty of land and assets to sell China in exchange.

    To do otherwise would be racist.

    Of course China could also hurry up and rebalance their economy so it is less dependent on exports for employment etc. But that would involve shifting more income to households and no doubt some well connected people like building fixed assets and may object.

  7. MontagueCapulet

    The approach that President Xi Jinping has taken would have worked fine with President Obama or President Bush. It’s a continuation of what worked well in the past. The miscalculation is thinking President Trump would follow the same policy of pretending the CCP isn’t a potential threat to American interests.
    I don’t think Trump is acting in isolation, I think he represents the interests of factions within the military-industrial complex who believe China has reached the point where it is a serious rival to the USA and needs to be contained.