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China Prepares a Hard-Line Stance on Trump’s Trade Demands

China is not ready to discuss a mandatory $100 billion reduction in the annual deficit, as the administration has suggested.

A senior Chinese government official said that Beijing is unwilling to negotiate with the United States on any curbs on China’s industrial policy, which includes large-scale government assistance to favored industries in advanced-technology manufacturing. China perceives the American demands for curbs on industrial policy as an attempt to stop China’s economic development and technological progress, the senior Chinese official said.

Germany and other countries also have industrial policies, and the United States has not objected to them, he added. American and European officials have argued that those policies elsewhere are much narrower and less ambitious.

China Prepares a Hard-Line Stance on Trump’s Trade Demands
China Prepares a Hard-Line Stance on Trump’s Trade Demands

Other participants in the seminar said that the United States had misunderstood China’s industrial policy, known as Made in China 2025. They expressed hope that it might be possible to resolve bilateral differences by explaining the program better and making very small tweaks to it — a stance that still may not appease the Trump administration.

The Chinese government is not simply throwing money, land and other resources to favored industries like robotics, artificial intelligence, semiconductors and aircraft manufacturing, they said. China is engaged instead, they contended, in a carefully thought-out program that measures potential profits for each dollar of investment. So China’s program bears some resemblance, they said, to private sector investment programs in the West.

One subject was repeatedly and conspicuously avoided by all officials throughout the seminar, even when advisers occasionally speculated about it: whether China might someday try to link trade disputes to national security issues.

China has been deeply involved in international pressure on North Korea to give up its nuclear weapons and ballistic missiles, an issue of high importance to the Trump administration. Beijing also wants to some day assert control of Taiwan, a self-governing democracy that Beijing regards as a renegade territory.

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