Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
The POSTs (front webpages) are mainly 'cuttings' from reliable sources, updated continuously.
The PAGEs (see Tabs, above) attempt to make the information more meaningful by putting some structure to the information we have researched and assembled since 2006.
Media caption The billionaire financier and philanthropist has become a divisive figure in global politics in recent years
Billionaire philanthropist George Soros has launched a stinging attack on the “authoritarian rulers” of both the US and China.
He said President Donald Trump was a “conman and the ultimate narcissist” who had breached the limits of the US constitution.
And he said China’s President Xi Jinping was using technology to exert total control over Chinese life.
“The world would be a better place if they weren’t in power,” Mr Soros said.
Using his annual speech at the World Economic Forum, in Davos, the financier warned of a growing threat from populism and climate change, while pledging $1bn towards a new global university network to tackle intolerance.
But the businessman – who is a major donor to the US Democratic party – said Beijing and Washington posed the biggest threat to “open societies”.
“Both [leaders] try to extend the powers of their office to its limit and beyond.
“Trump is willing to sacrifice the national interests for his personal interests and he will do practically anything to win re-election.
“By contrast, Xi Jinping is eager to exploit Trump’s weaknesses and use artificial intelligence to achieve total control over his people.”
The White House was approached for comment.
Media caption Modi to Trump: “My honour to introduce you to my family”
Mr Soros also targeted Indian Prime Minister Narendra Modi, saying the Indian state was “imposing punitive measures on Kashmir, a semi-autonomous Muslim region, and threatening to deprive millions of Muslims of their citizenship”.
He was referring to two controversial decisions made by Mr Modi’s Hindu nationalist government.
The first was to strip the disputed Kashmir region of its semi-autonomous status and place it under virtual lockdown.
The second is the introduction and passage of a controversial citizenship law that critics say is discriminatory towards Muslims.
It seeks to fast-track Indian citizenship to non-Muslim minorities from three nearby Muslim-majority countries.
Media caption The Conspiracy Files: Why did Hungary’s PM turn on George Soros?
The US and China recently struck a deal to de-escalate a major trade war which has seen both sides impose tariffs on billions of dollars worth of exports.
But Mr Soros said President Xi’s had stifled China’s economy, while Mr Trump had “overheated” his.
“US stock markets are high but can’t be kept at boiling point for too long.”
Mr Soros, a Jew who survived Nazi occupation by forging identity documents, became infamous for his involvement in the devaluation of the British pound, known as Black Wednesday.
But it is his philanthropic and political activities that have made him a divisive figure in the US, Europe and beyond.
He has spent billions of his own money funding human rights projects and liberal democratic ventures around the world, and has become a frequent target for criticism by right-wing groups due to his support for liberal causes.
Much of the criticism aimed at him has been criticised as having anti-Semitic undertones.
The financier, who is a regular at the elite World Economic Forum, said his new university network would help promote “critical thinking” in an age of intolerance.
The move will be seen as a riposte to Hungarian President Victor Orban, who has repeatedly tried to shut down the Central European University, a private institution set up by Mr Soros in the country in 1971.
Mr Orban’s populist nationalist government claims Mr Soros has a secret plot to flood Hungary with migrants and destroy the nation, an accusation Mr Soros denies.
Mr Soros said the network would be “the most important and enduring project of my life and I should like to see it implemented while I am still around”.
According to the 2019 Global Diplomacy Index, released by the Lowy Institute in Australia on Wednesday, China has 276 embassies, consulates and other missions globally, surpassing the US with 273 missions. France was third on 267.
Bonnie Bley, the index report’s lead researcher, said that while a country’s total did not equate to diplomatic influence, “diplomatic infrastructure is still important”
“China’s newly held lead serves as a telling metric of national ambition and international priorities,” Bley said.
Beijing has 169 embassies or high commissions, while Washington has 168. However, China had 96 consulates while the US had 88, suggesting that Beijing’s diplomatic expansion was closely linked to its economic interests, she said.
Beijing bulks up diplomacy budget as China extends global reach
Renmin University international relations professor Shi Yinhong said China had close and growing trade and investment ties with many developing countries, especially those taking part in the Belt and Road Initiative, increasing the need for consulates.
“One of the consulates’ main goals is to serve the citizens and businesses located in those countries,” Shi said.
Beijing has also expanded its reach at Taipei’s expense. Since 2016, when the index was first published, Taiwan’s total number of embassies fell from 22 to 15, the biggest drop among the 61 places ranked.
China opened five new embassies – in El Salvador, Burkina Faso, Gambia, São Tomé and Príncipe and the Dominican Republic – countries that severed official diplomatic ties with Taiwan. This directly contributed to China’s lead over the US, the report said.
Beijing’s diplomatic expansion also comes as the US, under the administration of President Donald Trump, is taking an “America first” approach to foreign policy.
Sri Lanka rejects fears of China’s ‘debt-trap diplomacy’ in belt and road projects
Trump has sought to cut funding to the US State Department and the White House has not appointed US ambassadors for at least 17 countries, including Brazil and Egypt, according to the American Foreign Service Association.
“Even though the US has a strong diplomatic base but it is not so proactive any more. It has fewer consulates and fewer foreign service workers,” Shi said.
“For the long term, China is in a more advantageous position.”
But a country’s diplomatic ability and influence did not rest on the number of foreign service postings and the US still held more international diplomatic sway than China, he added.
Some of China’s biggest diplomatic missions include Islamabad in Pakistan, Washington and London.
BANGKOK (Reuters) – Leaders from China and Southeast Asia states called for swift agreement on what could become the world’s largest trade bloc at a regional summit on Sunday, but new demands from India left officials scrambling to salvage progress.
Hopes of finalising the Asia-wide Regional Comprehensive Economic Partnership (RCEP), which is backed by China, have been thrown into doubt at the summit of the Association of Southeast Asian Nations (ASEAN) in Bangkok, Thailand.
Summit host Thailand said late on Sunday that the deal could be signed by February 2020. Thailand had previously said it aimed to conclude negotiations by the end of the year.
New impetus to reach agreement has come from the U.S.-China trade war, which has helped knock regional economic growth to its lowest in five years.
“The early conclusion of RCEP negotiations will lay the foundation for East Asia’s economic integration,” said a statement from China’s foreign ministry after Premier Li Keqiang met Southeast Asian leaders.
But Indian Prime Minister Narendra Modi did not even mention the RCEP deal in opening remarks at a meeting with Southeast Asian leaders and instead spoke only of reviewing the existing trade agreement between ASEAN and India.
Nor did Modi mention the trade bloc, whose 16 countries would account for a third of global gross domestic product and nearly half the world’s population, in Twitter posts after meeting Thai and Indonesian leaders.
RELATED COVERAGE
Asia trade bloc deal possible by February 2020 – Thai spokeswoman
An Indian foreign ministry official later told a media briefing “Let’s take all the RCEP questions tomorrow.”
Southeast Asian countries had hoped at least a provisional agreement could be announced on Monday.
But India has been worried about a potential flood of Chinese imports. A person with knowledge of New Delhi’s negotiations said new demands were made last week “which are difficult to meet.”
TRADE WAR IMPACT
Negotiators were meeting into the evening on Sunday to try to come to an agreement, Thai government spokeswoman Narumon Pinyosinwat told reporters on Sunday.
“We don’t have a conclusion yet. Once there is one, it would be announced,” she said. “Commerce ministers are still discussing outstanding issues. The signing is expected around February next year.”
Thai Prime Minister Prayuth Chan-ocha told the formal opening of the ASEAN summit on Sunday that the 16 nations in the potential trade bloc ought to come to agreement this year to stimulate economic growth, trade and investment.
He highlighted the risks of “trade frictions” and “geo strategic competition” in the region.
Some countries have raised the possibility of moving ahead without India on forming a bloc that also included Japan, South Korea, Australia and New Zealand.
But Thai commerce minister Jurin Laksanawisit told Reuters on Sunday that India had not pulled out.
Another advantage for Southeast Asian countries from having relative heavyweight India in the trade pact would be less domination by China.
Longstanding rivals China and India, which fought a border war in 1962, clashed verbally in recent days over India’s decision to formally revoke the constitutional autonomy of the disputed Muslim majority state of Kashmir.
The U.S. decision to send a lower level delegation to the summits this year has raised regional concerns that it can no longer be relied on as a counterweight to China’s increasing regional might.
Instead of President Donald Trump or Vice President Mike Pence, the United States will be represented by Commerce Secretary Wilbur Ross and White House national security adviser Robert O’Brien.
At the summit, China’s Premier Li said China was ready to work with countries in the region for long term peace and stability in the South China Sea, where neighbours reject Beijing’s sweeping maritime claims.
WASHINGTON (Reuters) – U.S. President Donald Trump on Friday said he thinks a trade deal between the United States and China will be signed by the time the Asia-Pacific Economic Cooperation meetings take place in Chile on Nov. 16 and 17.
RELATED COVERAGE
China says will work with the U.S. to address each other’s core concerns
Chinese Vice Premier Liu He will provide Beijing’s perspective on the progress of the talks in a speech on Saturday, according to a tweet from editor-in-chief of the Global Times, a tabloid published by the People’s Daily of China’s ruling Communist Party.
“I think it will get signed quite easily, hopefully by the summit in Chile, where President Xi and I will both be,” Trump told reporters at the White House, without providing details.
“We’re working with China very well,” Trump also said.
The White House has announced that China agreed to buy up to $50 billion of U.S. farm products annually, as part of the first phase of a trade deal, although China seems slow to follow through.
The so-called phase 1 deal was unveiled at the White House last week during a visit by vice premier He as part of a bid to end a tit-for-tat trade war between Beijing and Washington that has roiled markets and hammered global growth. U.S. officials said a second phase of negotiations could address thornier issues like forced technology transfer and non-financial services issues.
Legal process under way, Beijing says after Foreign Minister Wang Yi tells United Nations China is committed to defending multilateralism
Any unilateral move to leave weapons control pact will have a ‘negative impact in various areas’, minister says in thinly veiled swipe at United States
China, the world’s fifth-largest weapons supplier, has signed up to a global arms control treaty. Photo: Simon Song
China said it has begun preparations to join an international arms control treaty that the United States has threatened to abandon, while also warning Washington against deploying missiles in the Asia-Pacific region.
Speaking at the United Nations General Assembly in New York on Friday, Chinese Foreign Minister Wang Yi said that signing up to the Arms Trade Treaty (ATT) was further evidence of Beijing’s commitment to defending multilateralism.
said in April that he intended to withdraw from the pact, which regulates the US$70 billion global trade in conventional arms.
The White House said at the time that the ATT “will only constrain responsible countries while allowing the irresponsible arms trade to continue”, as major arms exporters like Russia and China were not part of it.
Wang said on Friday that any unilateral move to leave the treaty would have a “negative impact in various areas”. He stopped short of naming the United States or its president.
China’s foreign ministry said in a statement on Saturday that it had begun the legal process of joining the treaty, adding that it attached great importance to the issues caused by the illegal sale and misuse of arms, and supported the aims of the ATT in seeking to regulate the international weapons trade.
Wang also spoke out against the possible deployment of ground-launched missiles in the Asia-Pacific region.
After withdrawing from the Intermediate-Range Nuclear Forces Treaty in August, the US said it was planning to deploy such weapons in Asia to counter any possible threat from China or Russia.
“[We] urge the country with the largest nuclear weapons to fulfil its special and prior responsibilities on nuclear disarmament,” Wang said, adding that “China will continue to participate in the international arms control process”.
Wang Yi spoke out against the possible deployment of ground-launched missiles in the Asia-Pacific region at the UN General Assembly in New York on Friday. Photo: AFP
According to figures released in May by the Stockholm International Peace Research Institute, the United States is the world’s largest arms exporter, supplying weapons worth 58 per cent more than those of its nearest competitor, Russia.
Together with France, Germany and China, the five nations accounted for 75 per cent of all weapons sold around the world between 2014 and last year, the institute said.
Although China is among the world’s big five arms suppliers, its sales – most of which go to Asia and Oceania – are dwarfed by those of the US, accounting for just 5.2 per cent of the 2014-18 total, compared to America’s 36 per cent.
Several major arms importers, including India, Australia, South Korea and Vietnam, refuse to buy arms from China for political reasons.
Beijing’s decision to join the ATT is in keeping with the image it has sought to present of China as a defender of multilateralism. The stance is also in sharp contrast to the US’ position under Trump, who has repeatedly scrapped multilateral trade agreements in favour of bilateral deals.
Since taking office in 2016, he has withdrawn the US from the Paris climate accord, the Iran nuclear deal and the Trans-Pacific Partnership.
Military observers said Beijing might seek to pressure on Washington to stay in the deal to try to maintain the strategic and military balance in the region.
Song Zhongping, a Hong Kong-based military affairs commentator, said Beijing might be trying to avoid misuse of conventional weapons.
“Beijing may want to press big exporters, such as the US and Russia, to join the deal because without proper regulations, the risk of illegal trade and misuse of conventional weapons could be running high,” he said.
“This could also threaten regional stability or even trigger unnecessary arms races.”
Adam Ni, a China specialist at Sydney’s Macquarie University, said the treaty would put some limits on the arms trade “but it would not mean that China would not be able to do deals. It will still be able to do [most deals]”.
Retired PLA colonel Yue Gang said the strategy could also improve China’s international reputation.
US President Donald Trump and Indian Prime Minister Narendra Modi exchanged warm words of friendship in Texas at a rare mass rally for a foreign leader.
Around 50,000 people gathered for what Mr Trump called a “profoundly historic event” on Sunday in Houston.
The “Howdy, Modi!” event was billed as one of the largest ever receptions of a foreign leader in the US.
Mr Modi, however, may face a frostier reception at the UN General Assembly.
He is likely to face criticism over tensions in Indian-administered Kashmir, which he stripped of its special status last month, promising to restore the region to its “past glory”.
The region has been in lockdown for more than a month with thousands of activists, politicians and business leaders detained.
Trade talks and the UN General Assembly are on the Indian prime minister’s agenda during his week-long visit to the United States.
Pakistani Prime Minister Imran Khan, who has been the most vocal international leader to oppose India’s Kashmir move, is also in the US for the UN conference. Like Mr Modi, he will have a one-on-one meeting with Mr Trump on the sidelines of the summit.
A 90-minute show, featuring 400 performers, warmed up the crowd before Mr Modi and Mr Trump shared the stage.
“I’m so thrilled to be here in Texas with one of America’s greatest, most devoted and most loyal friends, Prime Minister Modi of India,” Mr Trump told the crowd.
Image copyright GETTY IMAGESImage caption Narendra Modi and Donald Trump leave the stage holding hands at Houston’s NRG Stadium
In his speech, Mr Modi said India has a “true friend” in the White House, describing Mr Trump as “warm, friendly, accessible, energetic and full of wit”.
“From CEO to commander-in-chief, from boardrooms to the Oval Office, from studios to the global stage… he has left a lasting impact everywhere,” Mr Modi said.
Personal-touch diplomacy played to perfection
Brajesh Upadhyay, BBC News, Houston
This was exactly the kind of crowd size and energy President Trump loves at his rallies.
Only here the chants were for Indian Prime Minister Narendra Modi and Mr Trump was the superstar invited to the party. But the crowd did not disappoint him either and greeted him with chants of “USA!”, most heard at Trump rallies.
The personal-touch diplomacy with Mr Modi’s trademark bear hugs was played to perfection.
This rally has been called a win-win for both the leaders. For President Trump, it was a chance to court Indian-Americans for the 2020 presidential election race where Texas could emerge as a battleground state. For Mr Modi, a PR triumph and picture with the president of the United States may help him shrug off the criticism over his recent strong-arm policies at home.
Houston’s NRG Stadium, where the event was hosted, was the first stop for Mr Modi, whose Hindu nationalist Bharatiya Janata Party (BJP) won a landslide victory in this year’s Indian elections.
Greeted by a standing ovation, Mr Trump used his speech to heap praise on Mr Modi, who he said was doing a “truly exceptional job for India” and its people.
Mr Trump also paid tribute to the Indian-American community, telling them “we are truly proud to have you as Americans”.
The US has a population of about 4 million Indians who are seen as an increasingly important vote bank in the country.
Apart from Mr Trump, organisers also invited Democrats to the event – House Majority Leader Steny Hoyer was among those who spoke.
The 2010 US census shows that Texas is home to the fourth-largest Indian-American population in the country after California, New York and New Jersey.
Analysis of voting patterns shows the community tends overwhelmingly to support the Democrat party.
Image copyright GETTY IMAGESImage caption The event, dubbed “Howdy, Modi!”, was attended by an estimated 50,000 people
No stranger to nationalist rhetoric himself, Mr Trump compared security at the US-Mexico border to the tensions between India and Pakistan in the tinderbox Kashmir region.
“Both India and US also understand that to keep our communities safe, we must protect our borders,” Trump said.
Image copyright GETTY IMAGESImage caption Donald Trump described Narendra Modi as one of America’s most “loyal friends”
In India, the rally was closely watched, with most mainstream media outlets running live news updates of what was transpiring on stage.
The event had been making headlines for days before as well.
On Twitter, many people shared instant analysis and opinions of what was taking place on the stage with the sentiment being overwhelmingly positive. Many praised Mr Modi for what they saw as his statesmanship and diplomatic acumen with a lot of praise coming in for the US president as well.
ANKARA (Reuters) – Turkey sees opportunity to boost trade with the United States amid Washington’s trade war with Beijing, the Turkish trade minister said on Tuesday, reinforcing an ambitious goal of quadrupling the bilateral trade to $100 billion (81.1 billion pounds) a year.
“We have determined that the issues between the U.S. and China will create a significant opportunity for trade in various sectors,” Trade Minister Ruhsar Pekcan told a joint press conference with U.S. Secretary of Commerce Wilbur Ross.
“We have expressed to the U.S. side our readiness to provide goods,” she said.
Pekcan added that trade and investment would be the main topic when U.S. President Donald Trump and Turkish counterpart Tayyip Erdogan meet during the United Nations General Assembly later this month in New York.
On Saturday, Turkey asked the United States to lift trade barriers during talks aimed at sharply increasing bilateral commerce.
Washington and Ankara’s goal of $100 billion in trade a year comes despite the prospect of U.S. sanctions over Turkey’s purchase of Russian S-400 missile defence systems. The United States says trade with Turkey totalled $24 billion in 2017, with the U.S. surplus standing at $1.5 billion.
The White House said in May it was ending a preferential trade agreement with Turkey, saying Turkey’s level of economic development meant it was no longer eligible for the support.
US president likely had Beijing ‘on his mind’ when he made his audacious offer, diplomat says
Proposal ‘could be interpreted as a very clear signal’ to China and Denmark that the US sees Greenland as part of an exclusive strategic zone, academic says
China has been building closer ties with Greenland in recent years. Photo: Reuters
US President Donald Trump’s eyebrow-raising idea to buy Greenland from Denmark last month epitomised what analysts say is Washington’s fear of the growing interplay of Chinese money, Russian aggression and Arctic political division.
Of all the countries involved in the region, Denmark is feeling the most heat, and not just because Trump recently cancelled a trip and called its Prime Minister Mette Frederikse “nasty” for describing his plan to buy the world’s largest island “absurd”.
Over the past few years, both of Denmark’s self-ruled governments – Greenland and the Faroe Islands – have increasingly turned to China for commercial deals, adding weight to Beijing’s growing strategic influence in the vast area that forms the common backyard of Europe, North America and Russia.
Russia seeks Chinese support in developing Arctic shipping routes
Greenland is of particular concern to the White House and the Pentagon as it is home to the US Thule Air Force Base, located far above the polar circle and which served as the first line of defence during the cold war.
Nowadays, the island is also strategically important for the US ballistic missile early warning system, as the shortest route from Europe to North America goes via the ice-cloaked, resource-rich territory.
“Though it’s difficult to tell the motivations of President Trump, he likely had China on his mind with his Greenland offer,” said a Beijing-based diplomat, who asked not to be named.
The US was likely to step up its presence in Greenland in the future, the person said.
In May, US Secretary of State Mike Pompeo accused China and Russia of introducing a strategic power struggle into the Arctic region and described Beijing’s behaviour there as aggressive.
When Greenland signalled an interest in engaging a Chinese state-owned company to build two airports in 2017 – the island’s prime minister flew to Beijing to appeal for financial backing – Copenhagen stepped in amid US pressure, reluctantly agreeing to finance the projects from the public coffers.
Denmark’s reluctance stems from a long-standing mistrust between Copenhagen and Greenland, as the island’s quest for economic development is viewed by the Danes as an attempt to shore up capital to push for a future independence movement.
“There is no doubt that the US foreign and security policy community is becoming far more interested in Greenland as a strategic asset,” said Andreas Bøje Forsby, a researcher at the University of Copenhagen’s Nordic Institute of Asian Studies.
“Proposing to buy Greenland could be interpreted as a very clear signal to both China and Denmark that Greenland is part of an exclusive American strategic zone,” he said.
Danish Prime Minister Mette Frederikse described Donald Trump’s plan to buy Greenland as “absurd”. Photo: Reuters
The government of the Faroe Islands – an archipelago located between Scotland, Norway and Iceland – has a similar readiness to engage with China but for a different purpose.
Unlike Greenland, there are no immediate political movements calling for independence from Denmark, making its overall relationship with Copenhagen more amiable.
This month, the Faroese government will open a liaison office in Beijing, located within the Danish embassy.
“Our top priority is to have a free-trade agreement with China,” Sigmundur Isfeld, the first head of the Faroe Islands’ representation to Beijing, said.
US defence report flags China’s expanding military reach in the Arctic
With Norway – a key competitor of the Faroes in the fishing and export industries – eyeing a similar arrangement with China, the time was ripe to clinch a deal, he said.
“It is a challenge for us … we need to get in the game.”
Although part of Denmark, the Faroe Islands are not part of the European Union and therefore have to form separate trade agreements with other countries.
“For example, there is an EU-Japan economic partnership agreement. It covers all EU nations, but it does not cover the Faroe Islands,” Isfeld said.
Trade between Greenland and China totalled US$126 million in 2108. Photo: AFP
China, for its part, has sought to exert its economic and cultural influence on the Faroes, which has a population of about 52,000 people.
, the embattled Chinese telecoms giant, has been working with the islands’ main telecoms provider for four years and is said to be finalising a plan for 5G upgrades across the archipelago.
Beijing also helped fund a project for a Chinese-Faroese dictionary.
With a population of about 56,000 people, Greenland is one of China’s smallest trading partners. In the first seven months of 2019, trade between the two was US$126 million, with Chinese imports of fish accounting for the bulk of the total.
The Greenland government’s annual political and economic report for 2019 said that strong demand for metals from China had contributed to mineral and mining projects in the country, though China’s transition to a less mineral-intensive economy could spell trouble for the future of the sector.
The island’s gross domestic product is expected to grow by 3 per cent this year, according to the report, with seafood – principally cod, halibut and prawns – set to continue to be its chief export.
The end of the Arctic as we know it
China’s attempts in recent years to expand its involvement in Greenland have run into roadblocks.
In 2016, a Chinese mining company expressed interest in taking over an abandoned marine station in Grønnedal, an offer that the Danish government turned down the following year. A Chinese state-owned construction company had also offered to build airports in Greenland, but withdrew its offer this year.
Also this year, China expanded its involvement in exporting from Kvanefjeld, one of the world’s largest deposits of rare earths and uranium, by creating a joint venture to process and export the resources.
Beijing has made clear its strategic ambitions in the region. Early last year, it unveiled its Polar Silk Road strategy, plotting the course for its future development goals in the region – including scientific, commercial, environmental preservation and resource extraction efforts.
It also aligned its Arctic interests with its Belt and Road Initiative. Chinese companies are encouraged to invest in building infrastructure along the routes and conduct commercial trial voyages to gauge feasibility.
Putin boasts of nuclear icebreaker fleet as he outlines Arctic expansion plans
Anders Rasmussen, a former Danish prime minister and erstwhile Nato secretary general, said in an article published in Atlantic magazine last month that with melting ice caps opening the Arctic Sea to shipping, Arctic sea lanes “will likely become another flashpoint of renewed competition among the great powers as climate change alters our world”.
It was a situation he said he found “regrettable, but inevitable”.
“Both China and Russia are interested in getting a foothold in Greenland, to expand their influence in the Arctic region,” Rasmussen said. “Instead of being a source of contention,
Greenland should serve to highlight how many interests the United States and Denmark have in common.”
WASHINGTON/NEW YORK (Reuters) – The Trump administration on Wednesday took aim at China’s Huawei Technologies Co Ltd, banning the firm from buying vital U.S. technology without special approval and effectively barring its equipment from U.S. telecom networks on national security grounds.
Taken together, the two moves threaten Huawei’s ability to continue to sell many products because of its reliance on American suppliers, and represents a significant escalation in the U.S. government’s worldwide campaign against the company.
The steps also come at a delicate time in relations between China and the United States as the world’s two largest economies ratchet up tariffs in a battle over what U.S. officials call China’s unfair trade practices.
Washington believes the handsets and network equipment for telecommunications companies made by Huawei could be used by the Chinese state to spy on Americans.
Huawei, which has repeatedly denied the allegations, said in a statement that “restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger; instead, this will only serve to limit the U.S. to inferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deployment.”
“In addition, unreasonable restrictions will infringe upon Huawei’s rights and raise other serious legal issues.”
The ban on U.S. suppliers, which appears similar to one on Huawei rival ZTE Corp. last year, could hit the shares of Huawei’s biggest U.S. suppliers, including chipmakers Qualcomm Inc and Broadcom Inc (AVGO.O).
In the first action taken on Wednesday, President Donald Trump signed a long-awaited executive order declaring a national emergency and barring U.S. companies from using telecommunications equipment made by firms posing a national security risk.
The order invoked the International Emergency Economic Powers Act, which gives the president the authority to regulate commerce in response to a national emergency that threatens the United States. It directs the Commerce Department, working with other government agencies, to draw up an enforcement plan by October.
Members of Congress said Trump’s order was squarely aimed at Chinese companies like Huawei, which generated $93 billion in revenue last year and is seen as a national champion in China.
“China’s main export is espionage, and the distinction between the Chinese Communist Party and Chinese ‘private-sector’ businesses like Huawei is imaginary,” Republican Senator Ben Sasse said.
ENTITY LIST
Soon after the White House announced the order had been signed, the Commerce Department said it had added Huawei and 70 affiliates to its so-called Entity List – a move that bans the telecom giant from buying parts and components from U.S. companies without U.S. government approval.
U.S. officials told Reuters the decision would make it difficult, if not impossible, for Huawei, the largest telecommunications equipment producer in the world, to sell some products because of its reliance on U.S. suppliers. It will take effect in the coming days.
Commerce Secretary Wilbur Ross said in a statement Trump backed the decision that will “prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests.”
With Huawei on the Entity List, U.S. suppliers will need to apply for licenses to provide the Chinese company with anything subject to U.S. export control regulations. Obtaining such licenses will be difficult because they will have to show the transfer of items will not harm U.S. national security, said John Larkin, a former export control officer in Beijing for the Commerce Department.
The United States in January unsealed a 13-count indictment against Huawei accusing the company and its chief financial officer of conspiring to defraud global financial institutions by misrepresenting Huawei’s relationship with a suspected front company that operated in Iran.
The indictment was unsealed a month after CFO Meng Wanzhou was arrested in Canada on a U.S. warrant for her role in the alleged fraud. Meng, who maintains her innocence, is fighting extradition.
5G NETWORKS
Reuters reported on Tuesday that Trump was expected to sign his long-awaited executive order this week. The order does not specifically name any country or company, but U.S. officials have previously labeled Huawei a “threat”.
The United States has been actively pushing other countries not to use the Chinese company’s equipment in next-generation 5G networks that it calls “untrustworthy.” In August, Trump signed a bill that barred the U.S. government from using equipment from Huawei and another Chinese provider, ZTE Corp.
ZTE was added to the Commerce Department’s Entity List in March 2016 over allegations it organised an elaborate scheme to hide its re-export of U.S. items to sanctioned countries in violation of U.S. law.
The restrictions prevented suppliers from providing ZTE with U.S. equipment, potentially freezing the company’s supply chain, but the restrictions were suspended in a series of temporary reprieves, allowing the company to maintain ties to U.S. suppliers until it agreed to a plea deal a year later.
The status of Huawei and ZTE has taken on new urgency as U.S. wireless carriers rollout 5G networks.
While the big wireless companies have already cut ties with Huawei, small rural carriers continue to rely on both Huawei and ZTE switches and other equipment because they tend to be cheaper. Trump’s order applies to future purchases and does not address existing hardware, officials said Wednesday.
The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters.
In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.
U.S. President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion (153 billion pounds) worth of Chinese goods from 10 to 25 percent on Friday – timed to land in the middle of a scheduled visit by China’s Vice Premier Liu He to Washington to continue trade talks.
The stripping of binding legal language from the draft struck directly at the highest priority of U.S. Trade Representative Robert Lighthizer – who views changes to Chinese laws as essential to verifying compliance after years of what U.S. officials have called empty reform promises.
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Explainer – How U.S.-China talks differ from any other trade deal
Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions – such as those imposed on North Korea or Iran – than a typical trade deal.
“This undermines the core architecture of the deal,” said a Washington-based source with knowledge of the talks.
“PROCESS OF NEGOTIATION”
Spokespeople for the White House, the U.S. Trade Representative and the U.S. Treasury Department did not immediately respond to requests for comment.
Chinese Foreign Ministry spokesman Geng Shuang told a briefing on Wednesday that working out disagreements over trade was a “process of negotiation” and that China was not “avoiding problems”.
Geng referred specific questions on the trade talks to the Commerce Ministry, which did not respond immediately to faxed questions from Reuters.
Lighthizer and U.S. Treasury Secretary Steven Mnuchin were taken aback at the extent of the changes in the draft. The two cabinet officials on Monday told reporters that Chinese backtracking had prompted Trump’s tariff order but did not provide details on the depth and breadth of the revisions.
Liu last week told Lighthizer and Mnuchin that they needed to trust China to fulfil its pledges through administrative and regulatory changes, two of the sources said. Both Mnuchin and Lighthizer considered that unacceptable, given China’s history of failing to fulfil reform pledges.
One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because “China got greedy”.
“China reneged on a dozen things, if not more … The talks were so bad that the real surprise is that it took Trump until Sunday to blow up,” the source said.
“After 20 years of having their way with the U.S., China still appears to be miscalculating with this administration.”
FURTHER TALKS THIS WEEK
The rapid deterioration of negotiations rattled global stock markets, bonds and commodities this week. Until Sunday, markets had priced in the expectation that officials from the two countries were close to striking a deal.
Investors and analysts questioned whether Trump’s tweet was a negotiating ploy to wring more concessions from China. The sources told Reuters the extent of the setbacks in the revised text were serious and that Trump’s response was not merely a negotiating strategy.
Chinese negotiators said they couldn’t touch the laws, said one of the government sources, calling the changes “major.”
Changing any law in China requires a unique set of processes that can’t be navigated quickly, said a Chinese official familiar with the talks. The official disputed the assertion that China was backtracking on its promises, adding that U.S. demands were becoming more “harsh” and the path to a deal more “narrow” as the negotiations drag on.
Liu is set to arrive in Washington on Thursday for two days of talks that just last week were widely seen as pivotal – a possible last round before a historic trade deal. Now, U.S. officials have little hope that Liu will come bearing any offer that can get talks back on track, said two of the sources.
To avert escalation, some of the sources said, Liu would have to scrap China’s proposed text changes and agree to make new laws. China would also have to move further towards the U.S. position on other sticking points, such as demands for curbs on Chinese industrial subsidies and a streamlined approval process for genetically engineered U.S. crops.
The administration said the latest tariff escalation would take effect at 12:01 a.m. Friday (0401 GMT), hiking levees on Chinese products such as internet modems and routers, printed circuit boards, vacuum cleaners and furniture.
The Chinese reversal may give China hawks in the Trump administration, including Lighthizer, an opening to take a harder stance.
Mnuchin – who has been more open to a deal with improved market access, and at times clashed with Lighthizer – appeared in sync with Lighthizer in describing the changes to reporters on Monday, while still leaving open the possibility that new tariffs could be averted with a deal.
Trump’s tweets left no room for backing down, and Lighthizer made it clear that, despite continuing talks, “come Friday, there will be tariffs in place.”
CHINDIA ALERT: You'll be living in their world, very soon 
China set to join Arms Trade Treaty that Donald Trump threatened to abandon
China said it has begun preparations to join an international arms control treaty that the United States has threatened to abandon, while also warning Washington against deploying missiles in the Asia-Pacific region.
Speaking at the United Nations General Assembly in New York on Friday, Chinese Foreign Minister Wang Yi said that signing up to the Arms Trade Treaty (ATT) was further evidence of Beijing’s commitment to defending multilateralism.
said in April that he intended to withdraw from the pact, which regulates the US$70 billion global trade in conventional arms.
The White House said at the time that the ATT “will only constrain responsible countries while allowing the irresponsible arms trade to continue”, as major arms exporters like Russia and China were not part of it.
Wang said on Friday that any unilateral move to leave the treaty would have a “negative impact in various areas”. He stopped short of naming the United States or its president.
China’s foreign ministry said in a statement on Saturday that it had begun the legal process of joining the treaty, adding that it attached great importance to the issues caused by the illegal sale and misuse of arms, and supported the aims of the ATT in seeking to regulate the international weapons trade.
Wang also spoke out against the possible deployment of ground-launched missiles in the Asia-Pacific region.
According to figures released in May by the Stockholm International Peace Research Institute, the United States is the world’s largest arms exporter, supplying weapons worth 58 per cent more than those of its nearest competitor, Russia.
Together with France, Germany and China, the five nations accounted for 75 per cent of all weapons sold around the world between 2014 and last year, the institute said.
Although China is among the world’s big five arms suppliers, its sales – most of which go to Asia and Oceania – are dwarfed by those of the US, accounting for just 5.2 per cent of the 2014-18 total, compared to America’s 36 per cent.
Several major arms importers, including India, Australia, South Korea and Vietnam, refuse to buy arms from China for political reasons.
Beijing’s decision to join the ATT is in keeping with the image it has sought to present of China as a defender of multilateralism. The stance is also in sharp contrast to the US’ position under Trump, who has repeatedly scrapped multilateral trade agreements in favour of bilateral deals.
Since taking office in 2016, he has withdrawn the US from the Paris climate accord, the Iran nuclear deal and the Trans-Pacific Partnership.
Military observers said Beijing might seek to pressure on Washington to stay in the deal to try to maintain the strategic and military balance in the region.
Song Zhongping, a Hong Kong-based military affairs commentator, said Beijing might be trying to avoid misuse of conventional weapons.
“Beijing may want to press big exporters, such as the US and Russia, to join the deal because without proper regulations, the risk of illegal trade and misuse of conventional weapons could be running high,” he said.
“This could also threaten regional stability or even trigger unnecessary arms races.”
Adam Ni, a China specialist at Sydney’s Macquarie University, said the treaty would put some limits on the arms trade “but it would not mean that China would not be able to do deals. It will still be able to do [most deals]”.
Retired PLA colonel Yue Gang said the strategy could also improve China’s international reputation.
Source: SCMP
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