MNI ANALYSIS: China: You Are With Us, Or Against History

--As U.S. Trade Rhetoric Stepped Up, China Fires Back 

     BEIJING (MNI) - As the U.S. ups the rhetoric on coming trade issues, there

are growing voices in China suggesting a direct conflict with the States is

certain, and that China will come out ahead.

     On Thursday, in a regular briefing by the Ministry of Commerce, spokesman

Gao Feng took what was most likely a vetted question from Xinhua News Agency.

The government reporter sought comments on recent U.S. trade salvos against

China, including punitive tariffs against its solar panels and a critical speech

in Davos by Commerce Secretary Wilbur Ross.

     At the World Economic Forum, Ross talked up the possibility of trade wars

with China on the sticky issue of intellectual property violations. 

"Does that mean (Ross's words) the trade war between China and the United States

is on the verge of breaking out?" the reporter asked. "Is it well prepared for

dealing with trade wars?" 

     One can assume the reporter wouldn't have been allowed the question if the

answer was a negative.

     "China's economy has entered a new era of high-quality growth," Gao said.

Translated: China is no longer a large sweatshop that stitches T-shirts and

assembles toys, so it has a bigger-and-bigger stick. 

     At the same time, Gao tossed the carrot: "We are willing to share the

opportunity with all other economies."

     --TRUMP DISRUPTIONS

     For the last year, much like the rest of world's leaders, Chinese policy

makers have been confounded by the Trump administration's approach toward trade

that threatens to upend decades-old rules.

     But unlike the many nations that either mocked or shunned Trump, China's

one-party government has shown concerted discipline and planning.

China has on one hand tactfully avoided immediate confrontations while amassing

strategic capacity enough to unseat the world's only superpower. More and more,

China unsubtly signals that its stick is getting bigger.

     It was on display this week as the world grew uneasy over the likely

confrontation between the globe's two largest economies, pitted under the

spotlight of the most prestigious annual gathering of the global elites in

Davos.

     Cooperation between the two countries is the right option, Gao said. But

China will "adopt all appropriate measures to resolutely defend its legitimate

rights and interests" against the unilateralist and protectionist practices.

     Other mandarins are dangling more carrots, hoping they could raise some

dissent from the fractured U.S. business interest groups. 

While the U.S. Chamber of Commerce has been increasingly frustrated by unstated

barriers in doing business with China, the reality is that interest groups, such

as the powerful agricultural lobbyists, will ensure there won't be a concerted

effort to stand up to China, the biggest buyer of crops.

     Liu He, the man described as the economic brain of Xi, sought to entice

global elites in Davos, saying China will roll out new reform and opening

measures, with some "exceeding expectation of the international community."

     As China's state media touted, this year marks the 40th Anniversary of its

opening up to the global economy, and, given it's a promise from its most

esteemed economic czar, China may think that should excite at least some foreign

players as they jostle for access to the $13-trillion-and-growing economy.

     Among China's two English-language mouthpieces, the China Daily usually

projects a voice of moderation relative to the often bombastic Global Times. But

sometimes it too doesn't hold back. 

     "Treating China as an adversary will not make the U.S. feel great again, it

will only feed the paranoia and insecurity that prevents it from coming to terms

with the trends of the times," the daily said in one editorial. 

     "Leaders and investors bullish on China will be on the right side of

history," it said in another.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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