China’s New Strategy: Outlast Donald Trump by John Carney for Breitbart
China has embarked on a high-stakes strategy that makes it very unlikely to agree to a deal quelling trade tensions with the U.S. before the 2020 presidential elections, many investors and China watchers say.
The plan that appears to have emerged in Beijing is to keep trade talks going while avoiding any real reforms or enforceable deals until after the election, according to several reports. At that point, China could find itself facing a new administration that would likely be far easier to cut a deal with than President Donald Trump.
Under this scenario, China would tolerate the short-term economic pain inflicted by tariffs in order to preserve its long-term strategy of deploying predatory mercantilism in pursuit of global economic dominance.
“Many investors have expressed the view that China is prepared to accept an economic downturn (and thus a global economic downturn) to prevent President Trump’s reelection,” Naka Matsuzawa, Nomura’s chief rates strategist in Tokyo, wrote in a note on Wednesday.
China also hopes that trade tensions and its retaliation will hurt the U.S. economy, perhaps enough to tip the balance against Trump’s reelection.
“China’s leaders appear to have concluded that they won’t secure an acceptable trade deal with President Trump,” Nathaniel Taplin explained in a recent column for the Wall Street Journal. “What they can do is try to weather the next 18 months while inflicting maximum political damage—and hope a weakening U.S. economy delivers a new president.”
“Trump’s actions have seriously agitated the Chinese leadership, who now realize that there’s no chance of reaching a fair deal with the U.S.” for the foreseeable future, Shi Yinhong, an international relations professor at Beijing’s Renmin University, recently toldthe Wall Street Journal. “China is not just preparing for a protracted trade war, but also an escalating conflict.”