U.S.-CHINA DEAL AT G-20 PROMPTS FEARS

The Washington Times Weekly - - Geopolitics -

China spe­cial­ists in and out of gov­ern­ment are in­creas­ingly wor­ried that Pres­i­dent Trump will make ma­jor con­ces­sions to China dur­ing the Group of 20 eco­nomic sum­mit in Ar­gentina this week.

The con­cerns were am­pli­fied by com­ments by Larry Kud­low, di­rec­tor of the Na­tional Eco­nomic Coun­cil, who said Mr. Trump be­lieves there is a good chance a deal will be reached on the trade war with the Chi­nese.

The main fear is that China will make prom­ises to curb in­tel­lec­tual prop­erty theft and other un­fair trade prac­tices in ex­change for the U.S. pres­i­dent’s eas­ing of tar­iffs on Chi­nese ex­ports.

Many China hawks say any prom­ises from Bei­jing will be worth­less. They note sev­eral cases of Chi­nese du­plic­ity: Pres­i­dent Xi Jin­ping’s prom­ises not to mil­i­ta­rize dis­puted is­lands in the South China Sea; fuel trans­fers in vi­o­la­tion of U.N. sanc­tions against North Korea; and Mr. Xi’s 2015 prom­ise to halt the prac­tice of gov­ern­ment eco­nomic cy­beres­pi­onage.

The last un­ful­filled prom­ise was bol­stered by an up­dated re­port by U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer. “This up­date shows that China has not fun­da­men­tally al­tered its un­fair, un­rea­son­able and mar­ket-dis­tort­ing prac­tices that were the sub­ject of the March 2018 re­port on our Sec­tion 301 in­ves­ti­ga­tion.” Mr. Lighthizer said.

The March re­port ac­cused China of en­gag­ing in mas­sive theft of U.S. in­tel­lec­tual prop­erty as part of a mul­ti­year strate­gic pro­gram.

Mr. Kud­low said Mr. Xi is en­ter­ing the meet­ing with Mr. Trump from a weaker po­si­tion. While the U.S. econ­omy is hum­ming, China is “in a slump” eco­nom­i­cally, he said.

“The pres­i­dent said there’s a good pos­si­bil­ity that we can make a deal, and he is open to it,” he told re­porters at the White House.

How­ever, the White House eco­nomic ad­viser added that be­fore a deal can be reached, the Chi­nese must agree to greater “fair­ness and rec­i­proc­ity” on trade. That will in­clude re­solv­ing is­sues re­lated to China’s in­tel­lec­tual prop­erty theft, forced tech­nol­ogy trans­fers from U.S. com­pa­nies, a re­duc­tion in trade bar­ri­ers and ad­dress­ing U.S. con­cerns re­gard­ing state own­er­ship for Chi­nese com­pa­nies over­seas.

Mr. Kud­low noted that if Mr. Xi does not give in on these is­sues, the pres­i­dent is “per­fectly happy” to keep the cur­rent $200 bil­lion in tar­iffs and in­crease tar­iffs by an­other $267 bil­lion in the com­ing months. “That’s not a cer­tainty, but that’s the sched­ule,” he said.

Other U.S. gov­ern­ment sources say Mr. Xi is be­com­ing in­creas­ingly des­per­ate to end U.S. tar­iffs that are hav­ing a harsh ef­fect on the world’s sec­ond­largest econ­omy.

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