Page 40 - Rethinking China Policy

Rethinking China Policy

Every one of these “crisis” have been used by the Beijing regime to make themselves indispensable, knowing
that the priesthood of “China experts” in the US and allied regimes will back China up and cause the US to
back down or sideline lower priority issues.

The priesthood of China experts has nowhere to go except Beijing, and cannot afford to appear to have no
influence.

Beijing is happy (after intense negotiation and hard bargaining) strike deals that appear to meet key US and
allied demands for the priesthood of China experts to deliver to Washington.

Beijing, in turn, can rely on the lack of consequences from the US when they fail to deliver on their
commitments, or to only deliver for a brief period (to make it look good), and then renege, confident that
Washington will have lost interest or focus on the issue.
With rapid turnover of Administration staff and the revolving door to and from K-Street lobbying firms,
Beijing can count on whoever playing “hardball” with them on one issue to be needing to be on Beijing’s
payroll, either directly or indirectly for US firms that have interest in China in due course.

At the same time, Beijing can by diktat, in the short and medium run, threaten US economic interests with highly
visible moves that impact iPhone sales, Boeing, American automakers, agricultural imports, or the old trick of
limiting or encouraging mass diversions of Chinese tourists and students studying abroad. Indeed, this explicit
threat was made along with President Xi’s call to President Elect Trump.

It is in this context that President Xi’s advocacy for “Free Trade” at the APEC meeting has to be understood.

Xi’s Beijing regime wants “free trade” where OECD nations that have a bona fide, legitimate monopoly of
power to open their markets to Chinese products under the existing regime.

However, there can be no expectation of reciprocity or expectations of fair dealing by the local Chinese
authorities to foreigners whose governments negotiated the deal with Beijing.

Post “deal”, the regime in Beijing that have little interest, let alone power to enforce terms Beijing agreed to,
and is happy to use the traditional tactics of bureaucratic delay, obfuscation, and use of formal dispute
settlement mechanisms to stall as long as possible — while other pressing issues move up the agenda.

Demands on Beijing to honor deals can be frustrated in any number of ways, ranging from “the next strategic
crisis”, to the facility with which Beijing can carry out “barbarian management” operations.

Chinese diplomats are competent at calculating the impact of their actions on particular constituencies;
estimate their impact on particular legislators in Congress or Administration officials, as any lobbyists.

They have watched how their counterparts from Taiwan played Congress and the Executive Branch, and
lobby State Governors and state houses over the decades, and have adopted the same tactics.

While there are extensive efforts to coordinate foreign policy between US and Allies, there is far less
coordination in economic policy beyond macro issues (e.g. currency valuations, trade balances, etc.) toward
China.

This opening is exploited by Chinese by salami slicing.

Slicing and dicing US and allied interests has been effective because the US and the closest allies do not
speak with one voice.
Second Line of Defense

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