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China watchers in US debate 'strategic competitor' label Donald Trump has pinned on Beijing

Prominent China policy analysts clashed on Tuesday in New York over Washington's portrayal of the country as a strategic competitor, a designation that has defined US President Donald Trump's hard-line approach to Beijing since he started a bilateral trade war last year.

"Does anybody bother to point out that Chinese payments of royalties have increased from US$10 billion 10 years ago to US$30 billion now?" asked Stephen Orlins, president of the National Committee on US-China Relations, referring to revenues US companies make from their China operations.

At an event hosted by the Council on Foreign Relations (CFR), Orlins debated Elizabeth Economy, CFR's director of Asia studies, and Ely Ratner, director of studies at the Centre for a New American Security and former State Department official. The discussion was moderated by New York Times columnist Nicholas Kristof.

Orlins said allegations that China was primarily responsible for the loss of millions of American jobs and corporate revenue were "misstatements" that China watchers have not corrected.

In October, US Vice-President Mike Pence issued what some analysts called the harshest rebuke of China ever by a US administration, when he said Beijing's pressure on self-ruled Taiwan to reunify with the mainland and its loans to embattled Venezuelan President Nicolas Maduro, among other geo-strategic initiatives, threatened American security.

Those actions "are only a few of the ways that China has sought to advance its strategic interests across the world, with growing intensity and sophistication", Pence said in a speech at the Hudson Institute, a Washington think tank. "Yet previous administrations all but ignored China's actions. And in many cases, they abetted them. But those days are over.

"Under President Trump's leadership, the United States of America has been defending our interests with renewed American strength," Pence said, pointing out that Trump had recently authorised "the largest increase in our national defence since the days of Ronald Reagan " $716 billion to extend the strength of the American military to every domain".

Orlins blamed Chinese President Xi Jinping's government for moves that have alienated American policy analysts who have advised against confrontation with Beijing. Such moves include an industrial policy meant to produce domestic champions in the technology sector and a law that makes it more difficult for foreign NGOs to operate in China.

"Part of the reason we're not seeing the pushback is that Chinese policies have systematically alienated all of the constituencies that used to be pro-constructive engagement," Orlins said. "The business community is sick and tired of the promises, which are empty.

Don't forget the successes of US-China engagement amid today's rivalry

"The academic community is tired of the impingements on academic freedom. The NGO community has seen an NGO law that has been terrible for NGOs in China. The constituencies that used to be pro-engagement are not standing up to these exaggerations and misstatements about China."

China's law on management of foreign NGOs, which came into effect in 2017, subjects the organisations to government scrutiny with stringent registration and reporting requirements and gives the police broad powers to question their workers, inspect their offices, look into their documents and even seal off their premises and assets.

Economy used the plight of foreign NGOs as an example of the need to treat China as a strategic competitor.

China-US relations at an 'impasse' after Pence's wholesale criticism

"The assessment [of China] right now is not, frankly, that exaggerated or overblown," said Economy, whose book The Third Revolution: Xi Jinping and the New Chinese State was recently published.

"You can't say that, after the passage of the law on the management of foreign NGOs, the number of foreign NGOs [in China] did not drop from over 7,000 to about 400-something," she said.

"There are facts on the ground, and that's what we should be dealing with. You can present royalty figures and I can present IP theft figures. Go to China, seek truth from facts on the ground, and then respond accordingly."

Last week, Republican Senator Marco Rubio proposed legislation that would restrict and tax Chinese investment in the United States to counter Beijing's "Made in China 2025" (MIC2025) industrial modernisation programme, which includes direct subsidies for domestic companies developing advanced semiconductors.

At the same time, an influential group of former top policymakers co-chaired by Susan Shirk, a former deputy secretary of state in the Clinton administration, presented a report urging a "course correction" for the bilateral relationship.

"We believe that we need to have more pressure and accept more friction in the relationship," Shirk said, introducing the report. "We need to publicly call out China for its unfair ideological and assertive policies ... we need to push back harder against them, and the Trump administration has definitely got that part right.

US senator seeks to counter 'Made in China 2025' amid worry from experts

"The Chinese government has adopted mercantilist, zero-sum policies that advantage Chinese firms at the expense of international competitors and they're doing this to build their national strength, including their military strength and this huge state-funded effort to make China into a hi-tech superpower is at the centre of that policy," she said.

China's treatment of foreign companies operating in the country, including policies that force them to transfer technology to their local partners in exchange for market access, is a key point of contention in the trade talks.

A Chinese delegation led by Vice-Premier Liu He is expected to arrive in Washington on Tuesday. "Principal-level meetings" led by US Trade Representative Robert Lighthizer are scheduled for Thursday.

This article originally appeared on the South China Morning Post (SCMP).

Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.

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