Trump China Expert Echoes Reagan on Xi Speech “Trust, But Verify”

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Mr Xi, speaking at the Boao Forum for Asia in Hainan province, said China would take measures to dramatically widen market access for foreign investors, raise the foreign ownership limit in the automobile sector and protect the intellectual property of foreign firms. Additionally, China has filed a WTO complaint challenging U.S. President Donald Trump’s tariff hike on imported steel and aluminum. According to the WTO, they’ve requested 60 days of consultations and if that fails, the next step could be for Beijing to request a ruling from a panel of trade experts.

Dr. Michael Pillsbury – longtime China expert who advises the Trump administration on matters related to China and author of The New York Times bestselling book: The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower, notes the following:

  • President Xi’s speech was remarkably designed to conciliate Trump and avert an all out trade war. 
  • Xi laid out five important concessions including tariffs and imports, IPR protection, attractive investment environment, market access, free trade ports with Chinese characteristics – but the U.S. cannot Reagan’s famous warning ‘TRUST BUT VERIFY.’
  • Xi dropped the hot rhetoric of the past week that Chinese will “find to the end” to maintain their trade restrictions – but today, Xi did not mention the threat other lower level officials made to places tariffs on US soybeans and other US exports to China. Instead, he offered new areas for American investment in China that were previously closed. 
  • Chinese experts have said the U.S. 301 section investigation report “misunderstood” the “Made in China 2025” strategy, a plan to upgrade the manufacturing sector.
  • Chinese experts at the conference before Xi spoke also denied their plan called “Made in China 2025” is a real strategy, and claim it is just a “blueprint” to guide the country’s advanced industrial manufacturing and it’s not compulsory policy — meaning that the United States should not treat it as a source of concern.
  • The White House report last month accused China of forced technology transfer of U.S. companies via requirements for joint-ventures and shareholding shares. Now, the Chinese government claims it has no restrictive rules forcing US firms to transfer their trade secrets.
  • Zhang Yalin, a member of the National Manufacturing Strategy Advisory Committee (NMSAC) denies any forced technology transforms from American companies. He added that technology transfers to China by some foreign companies are essentiality a usage approval rather than the change of ownership, motivated by enterprise’s pursuit of profits. That practice had enabled foreign companies to increase revenues through expanded application market.
  • Huang Qunhui, head of the Institute of Industrial Economics of the Chinese Academy of Social Science, said the United States has also placed restrictions over foreign investors, such as blocking the market access of Chinese telecommunications manufacturing giant Huawei. The “Made in China 2025” strategy does not go against any world trade rules, and the United States is simply trying to contain China with false accusations, said Huang.

Dr. Michael Pillsbury was an adviser to the Trump transition team and for more than 40 years, Dr. Pillsbury worked on U.S. government’s China policy, as an FBI and CIA advisor, at the RAND Corporation, as head of planning in Ronald Reagan’s Defense Department, as Donald Rumsfeld’s top China analyst and translator, and in the Pentagon under President Obama. His work on Chinese deception won him the Director’s Award for Excellence from the CIA. Currently, Dr. Pillsbury is the director of the Center on Chinese Strategy at the Hudson Institute, and he frequently appears on FOX, CNN, PBS, and in the Wall Street Journal to comment on foreign policy and China. See his profile in the WSJ. Most recently, he authored the New York Times bestselling book The Hundred-Year Marathon:China’s Secret Strategy to Replace America as the Global Superpower.

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