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In the lead-up and aftermath of President Trump’s meeting with Chinese Communist Party General Secretary Xi Jinping, a few themes emerged in official Chinese state media and other outlets of state propaganda. The bottom line is that the Chinese Communist Party (CCP) views the current Sino-US trade tensions as an attempt by the US to slow Chinese growth. In response, the CCP’s strategy is to wait out the trade negotiations because it believes that US businesses and consumers cannot prosper without growing economic relations with Beijing.
First, Chinese state media describes US trade concerns about China as “unfounded” and intended to “suppress China’s fundamental interests through trade frictions.” According to the Ministry of Foreign Affairs, the US has yet to show “evidence” of Chinese intellectual property theft or forced technology transfers — including that of Huawei’s infringement on US national security. The main point of this is not only to protect the reputation of Chinese businesses, but also to paint the US as a country that interferes in other countries’ development (in contrast to China). This fits into a longstanding CCP narrative about US hegemony, Cold War mentality, and containment.
To counter this perceived containment, Chinese media stresses to domestic audiences that the trade war is an opportunity for China to prove that it can not only weather the current storm, but also thrive afterwards. The CCP has long stated that it wants to move up the high-tech value chain. According to official Chinese media, current trade tensions thus present an opportunity for China to “no longer rely on the environment, resources and cheap labor to promote economic development” but instead focus on innovation and the high-tech industries. For example, state media reports that China’s semiconductor industry will “come out stronger” from a US crackdown and that the CCP has “the levers and the country resilience” to come out of a trade war in better shape than the United States. In short, the CCP is arguing that China has developed on its own and will continue to, with or without the United States, even if it has to undertake short term losses to do so.
Second, the CCP believes it will prevail by waiting: it argues that the tariffs ultimately hurt the US more than China, and that US businesses and consumers do not want tariffs on Chinese goods. In a white paper released by the State Council Information Office, the CCP highlighted that the tariffs would lead to increased price hikes in the US and that the US would have a hard time finding alternate suppliers, while China could easily find other markets. Moreover, the Ministry of Foreign Affairs and Chinese state media have also stressed that domestic US opposition to tariffs is increasing. This points to a belief that, eventually, US public opinion will eventually force Trump’s hand to cut a deal.
These themes are in some contradiction: there is a techno-nationalist cry of “we can do it all ourselves” paired with reassurance to the Chinese people that the US will come back (suggesting that they cannot, in fact, do it all themselves). On technology and innovation, Beijing knows that it is far behind in legal and regulatory structures, as well as in talent. This is part of the reason Xi stresses the need to ease up on Huawei, a company that the CCP is relying on not just for telecommunications, but as a gateway into new so-called “breakthrough” industries. Huawei may not be able to play the role Beijing wishes it could absent critical US technology.
As to whether Beijing is correct that the US will eventually realize the “error of it ways” and return to a growing economic relationship, Beijing has probably miscalculated. Just as it did not foresee the multi-dimensional pushback it has faced over the last few years, the CCP may have miscalculated the current appetite in the US to diminish the relationship with China.
The bottom line is that the Chinese Communist Party views the current Sino-US trade tensions as an attempt by the US to slow Chinese growth. In response, the CCP’s strategy is to wait out the trade negotiations because it believes that US businesses and consumers cannot prosper without growing economic relations with Beijing.
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