The situation of the Sino-US trade war was already clear when the US President Donald Trump announced the first tariffs on billion worth of imports. But Chinese President Xi Jinping did not care and was determined to fight, with the threat of “high quality weapons”. When Trump announced tariffs on 0 billion of Chinese imports, the Europeans secretly smiled — they looked as if they were hesitating, yet obtained big business orders. When Trump said that he would not hesitate to tariff all the 0 billions of imports from China, almost everyone within the Chinese Communist leadership could not sit still anymore.
By then, Xi Jinping had lost this war and was unable to turn around. Whether he will end his leadership in accordance with the Hua Guofeng model, or in accordance with the Gang of Four model, or even in accordance with the Liu Shaoqi model, is the issue that most people are discussing and remains still uncertain now. If Xi issues a self-criticism and admits his crime now, he may still be able to save his life and that of his family. But if he persists to the end, he may die without a place for proper burial.
So where did he lose? Some people say that he lost by judging the situation in the wrong way. Some people say that he wrongfully judged Trump’s determination. Both are correct but these are not his root mistakes. His fundamental mistake is to judge himself wrongfully. He has too much confidence and self-righteousness, yet lacks the necessary strength. One step after another, he stepped into the trap he set.
Does he not know that his own propaganda department is bragging? It seems that he doesn’t know, thus he brags the so-called “self-confidence”, and even thinks that the time is mature to be the emperor. He even thought that the dealing with American politicians for many years was a constant magic weapon, which was enough to underestimate the dissatisfaction of the American and European people. He really thought that democracy is a fake and money can solve all problems. As a result, this self-confidence of the nouveau riche deceived himself and caused China to fall into a situation that is difficult to solve.
He would rather stay close to the villains and far from the gentlemen with his human weakness of liking to be flattered. This let him believe the rotten ideas of his mentally retarded advisors, and claim his retaliation means of “high quality weapons” in full confidence to express his determination of fighting against Trump. What happens then?
Xi’s first “high quality weapon” was to unite the Europeans against the Americans. To this end, Xi Jinping, the Chinese Premier Li Keqiang, and others spread large business orders to Europe, with both threats and lures by promises of gains. However, a couple of days ago, the Europeans Union agreed with Trump to work towards zero tariffs, even with Japan and other major Western economies. This is a smack over Xi’s head.
Xi’s second “high quality weapon” was to concentrate his force on Trump’s farmer voters in the Midwest, thus forcing Trump to yield. However, most farmers in the Midwest still retain their support for Trump even if they may suffer losses. Recently, Trump gave them billion in compensation. This trick of Xi was completely unsuccessful.
Xi’s third “high quality weapon” was to get American companies in China to come back to lobby the American people and politicians, and to claim that the tariffs would hurt the American people. A large number of paid scholars and experts have indeed said the same, but with no effect. What the American public saw was decreased food prices with cheap consumer goods supplemented by other countries. The Americans are not disturbed and their economy is growing strongly. The American society is indifferent, and the credibility of those paid scholars has declined. This is a case when Xi Jinping threw the shaft after the hatchet.
Xi’s fourth “high quality weapon” was to depreciate Chinese currency to counter the US tariffs. This is probably the most stinky move. This inflation first hurts the people in China, and it also leads to capital outflows and investment stagnation. This hurts the already troubled Chinese economy and adds to the burden on the Chinese who already have difficulty to live. This is a typical case of officials forcing civil opposition.
Will these tricks really offset Trump’s tariff war? That would assume a reaction of a kindergartener. Trump can raise the tariff at the same rate any time, and even without the need of approval from the US Congress. Europeans are relatively smarter and already include the proportion of China’s manipulation of currency in their tariffs. Collectively, they put an average of about 50% tariff on Chinese imports, which eliminates the trouble of increasing a tariff every time. So Xi’s trick is like what the gangsters in Tianjin would do: put red-burning briquettes on their laps, hoping this action of self-harming will scare the others. It is a pity that Westerners are not afraid of the rebellion of the Chinese, as it does not harm the interests of Westerners.
Finally, let us predict the outcome. At the time of the billion tariff, if the conditions of the negotiations were equal, what China would lose would be the trade surplus. But now, it is necessary for the Chinese Communist regime to lose its own lawlessness in China. Or we could say that the reform of the judicial system is the minimum condition. Otherwise, no other conditions can be safeguarded.
By Wei Jingsheng