Prof Zhang Jun

How Donald Trump misjudged China’s commitment to economic stability and incremental reform as a weakness

China has not deployed all its trade war weapons, not because it doesn’t have them, but because it sees stability as preferable both at home and abroad. Likewise, it would prefer gradual reform

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US President Donald Trump’s cordial relationship with Chinese officials, like Vice Premier Liu He (pictured) and President Xi Jinping has yet to resolve their deep divisions over trade. Photo: Bloomberg

Prof Zhang Jun

Published: 1:00am, 5 Jun 2019Updated: 1:03pm, 5 Jun 2019

Just when a US-China trade agreement appeared to be in sight, negotiators found themselves back at square one. The immediate reason for the disruption was China’s insistence on a substantially rewritten draft agreement that, according to US President Donald Trump’s administration, reneges on previously agreed terms.

But the cause of China’s changes to the draft – the reason behind its reluctance to meet US demands – lies in a fundamental miscalculation by the Trump administration.

Simply put, the US has been overplaying its hand. The agreement that China rewrote would have obliged the Chinese side to legislate some of the changes sought by the US, and it was negotiated amid an aggressive US campaign against the Chinese telecommunications giant Huawei.

That campaign has included adding the company to America’s trade blacklist, thereby cutting off its supply of critical technologies, and pushing allies to isolate the company as well.

While such actions will undoubtedly hurt Huawei, the company can eventually offset its losses by forging ties with other fast-growing Chinese tech companies. For the rest of the world, however, the Trump’s administration’s attacks on Huawei – and on China more generally – will have far-reaching consequences.