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.