Xi Jinping’s Trade Conundrum

Why the Chinese Leader Isn’t About to Back Down

Trump and Xi meet at the Great Hall of the People in Beijing in November 2017  Damir Sagolj / REUTERS

A month after American and Chinese negotiators failed to seal what was supposed to be a “slam dunk” of a trade deal, observers on both sides of the Pacific are still scratching their heads over what went wrong. But in Washington and Beijing, leaders already appear to be gearing up for a longer-term struggle, making a true deal—one that resets rapidly deteriorating bilateral ties—increasingly elusive.

In the U.S. news media, most commentators have blamed China for the recent effort’s collapse. At the last minute, this analysis suggests, China reneged on terms that U.S. Trade Representative Robert Lighthizer and his Chinese counterpart, Vice Premier Liu He, had painstakingly hammered out over 11 rounds of tough, often heated negotiations. Among the many competing hypotheses for China’s seemingly abrupt about-face, one has gained particular credence, and that is that unidentified “hawks” or “vested interests” in the Politburo of the Chinese Communist Party (CCP) rejected the concessions that Liu—and by extension his boss, Chinese President Xi Jinping—made in the negotiations. But this notion is simply absurd.

In his nearly seven years in office, Xi has relentlessly centralized decision-making authority in his hands. He has manipulated the military, the security services, and the CCP’s propaganda machine to silence his opponents and effectively coup-proof his rule. Doing so has allowed him to pursue an assertive style of Chinese statecraft, one less awestruck by American power than in the past. In a revealing moment on a recent trip to Jiangxi Province, he invoked the spirit of the Long March, the almost mythical retreat of the Chinese Red Army that preceded its triumph, to declare that every generation of the CCP leadership must face its own revolutionary test. The coming struggle with the United States, he implied, is the test that the current generation must weather under his stewardship.

Against this backdrop, the idea that hard-line underlings could have pulled Xi’s policy toward the United States off course isn’t

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