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The Current Scenario: U.S. - China Trade War
The US-China trade talks are said to be close to reaching a phase one agreement. Trump has confirmed the information. For this elusive American President, Chinese sentiments can be described as mixed. Trump has been in power for nearly four years, and China's "Trump effect" is no less than that of the United States. In 2021, China's domestic politics and policies will be deeply imprinted by Trump's past policies. It will take time to rebuild the relationships between both countries, even under the new President Biden. Although China and the United States are very different in terms of political systems and have opposite values, in the fields of economy and technology, the past 40 years' development has resulted in the two countries becoming a symbiosis to some extent. Therefore, Trump's changes to China, first and foremost, are embodied in the economic aspect and mostly performed a vital part in boosting China's economic opening.
One of the changes: Promoting China's economic opening
Since the Hu Jintao period, the impetus for China's economic reform has gradually eroded, and the economic opening has to be promoted to a limited extent because of the promise of joining the WTO. After Xi Jinping came to power, although he launched an ambitious, comprehensive reform plan, he is more fond of the development and growth of state-owned enterprises, reforms have almost completely stopped, and opening up is strictly limited to the manufacturing industry and is conditional. As for the service sector, especially The financial industry is strictly forbidden to open to foreign capital. Foreign capital enters the insurance, securities, and banking industries. Joint ventures are possible, but holdings are not allowed, let alone sole proprietorship.
On the one hand, the Chinese government believes that the financial sector is the most sensitive and related to the rule of the Communist Party and cannot be let go of foreign capital control. On the other hand, it is also because state-owned enterprises dominate China's financial industry. The governance efficiency of state-owned enterprises is The low ones, if let go, are likely to be defeated by Western financial giants.
In 2019, China's economic liberalization's depth and extent were rare in the past ten years. In addition to specific manufacturing industries such as the automobile industry, allowing foreign ownership or sole investment, the banking, securities, and insurance sectors have also significantly been liberalized—the original restrictions on foreign investment. Most of them have been canceled, and the financial opening has become the most significant sign of China's economic opening in 2019. This situation's emergence is entirely due to the trade war initiated by the United States against China, especially President Trump's extreme pressure. It puts the Chinese economy under tremendous stress, and Xi Jinping has to use greater openness to absorb foreign investment. It is also used to meet Trump's requirements for U.S. companies to enter the Chinese market. Based on Xi Jinping's political conservativeness, Chinese society did not hope for the Chinese government to promote economic reform and open up before the trade war. At that time, people were concerned about whether China would shut down again in the name of self-reliance. After Trump commenced a trade war with China, even though people still lost confidence in reforms, Xi Jinping finally did not close the door of opening under pressure. This credit should be counted on Trump, the most significant "contributor" to China's economic opening.
Change 2: Strengthen Xi Jinping's power
Trump's changes to China's internal affairs are also manifested in the strengthening of Xi Jinping's totalitarian rule. On this point, the controversy will be more significant. After the two countries formally fought hard on the tariff issue in May 2018, the outside world believed that Xi Jinping would not listen to the mainstream opinions and dissuasion from the party and did not comply with the conditions put forward by the United States. Lampe's continuous increase in tariff rates and expansion of tariffs have seriously damaged China's economy. Xi is primarily responsible for this, and he has also left himself in a state of being enemies on all sides within the party, and his power and authority have been greatly reduced. This view may be somewhat close to the facts at the beginning of the trade war. However, as the U.S. use of the trade war to suppress China has become evident, especially the outbreak of the Huawei Meng Wanzhou incident, the party has realized that the trade war is not just a trade balance issue. , The intention behind the U.S. launch of the trade war is to contain China's development, so no matter what China makes concessions in trade negotiations, the U.S. will intensify and raise more and higher prices. After forming this consensus within the party, Xi Jinping's authority has been further consolidated because he can use internal party discipline to restrain high-level officials' different opinions on the trade war issue, emphasizing that the party must be united at this time and twisted together. A turning point in the strengthening of Xi's power was Xi's overthrow of the two countries' trade agreement in early May 2019. The Fourth Plenary Session even packaged Xi's set of governance strategies into the modernization of national governance, which will become the blueprint for China's rule for at least ten years in the future.
China has occupied an important position in the global value chain, and the status of this value chain is constantly improving
— Zhao Jinping
Change 3: Strengthen the CCP's image as a defender of national interests
Related to this, Trump's third change to China has caused the Chinese people to split, but the CCP's ruling foundation has not weakened but has been strengthened to a certain extent. Chinese society has been torn apart in the past ten years. Inside and outside the party, nationalism, liberalism, leftists, and rightists, reformers, and counter-reformers have been fiercely squeezing each other. The emergence of Trump has exacerbated this situation. When Trump first came to power, the Chinese people had great expectations of him, thinking that he could suppress the CCP and Xi Jinping's arrogance. Therefore, the people generally support him in fighting a trade war with China, especially among liberals, who have formed a group of "Trump fans." The faction does not oppose Trump's trade war because it will help Xi Jinping return to Deng Xiaoping's reform line. However, as the public sees that Trump's trade war with China is only for the benefit of the United States and himself, and does not care about China's human rights, and wants to suppress China and the CCP together, their disappointment towards Trump and the United States will increase. Although there are still some liberals who support Trump, nationalism has once again strengthened within the party and the general public, including the scientific and technological circles, especially the United States' support for violent protests in Hong Kong, allowing the CCP to portray itself as a defender of national interests.
Meanwhile, Zhao Jinping, an expert from the Development Research Think Tank of China, said China has a vast domestic market. In particular, China has about 400 million people classified as middle-income, which shows there's still immense potential for domestic demand.
"China has occupied an important position in the global value chain, and the status of this value chain is constantly improving," Zhao noted.
Generally speaking, the trade war initiated by Trump and the U.S. actions in Taiwan and the South China Sea have created external difficulties for China in the short term, especially in the economic aspect, which is very destructive to China, but because Xi Jinping seized this opportunity to strengthen He ruled and took the opportunity to raise China's opening up to a higher level, and in the process further aroused China's nationalist sentiments. Therefore, in the long run, as long as the CCP has overcome the current difficulties, Trump will treat China. The change may extend the life of the CCP's rule and form a long-term competitive relationship with the United States.
What is your take on the topic, please share your views in the comment section below.
Amarachi Nkwoada from Imo State, Nigerian on January 04, 2021:
I suggest breaking it up into paragraphs could help. Also lots of professional terms can be changed to everyday regular English. Well-done