Economy & Business

Decoding China’s Responses to Trump’s Trade Sanctions

Chinese president Xi Jinping (Marko Djurica/Reuters)
A guide for interpreting their true meaning

In the run-up to President Trump’s long-anticipated announcement of tough new actions against China’s mercantilist trade and economic policies, top Chinese officials launched a public-relations blitz to discredit anything the U.S. might do to hold China to account. Their strategy has been to position China as the aggrieved party by claiming the mantle of rationality, global integration, and fairness. Chinese officials evidently believe that in appearing to take the high road they have an opportunity not only to undercut worldwide support for the U.S. actions, but also to sow seeds of dissension and doubt in the U.S. body politic. But it is important to understand China’s PR blitz for what it really is: an audacious spin campaign that elides the truth about China’s long record of subverting global trade rules and fleecing competitors to gain economic advantage. And the reality is that China is not justified in taking any retaliatory actions in response to the Trump administration’s 301 investigation; China has long been failing to live up to its trade commitments. The only justifiable response from Chinese policymakers is to desist from their rampant innovation-mercantilist practices.

Nevertheless, for those following developments as they continue to unfold in the press, here is a guide for interpreting the true meaning of official statements from the Chinese government.


Statement: “China will never seek its development at the cost of sacrificing other nations’ interests, and its development will pose no threat to any other country.” (President Xi Jinping, March 21, 2018)

Translation: China will seek global leadership in all advanced technology industries, and to the extent we can do that by reducing foreign competitive advantage that is icing on the cake.


Statement: “No one will emerge a winner from a trade war.” (Premier Li Keqiang, March 20, 2018)

Translation: We have been engaging in a cold trade war with America for more than 15 years, and we are winning. If you respond, then we might stop winning, and we don’t want that.


Statement: “What we hope is for us to act rationally instead of being led by emotions.” (Premier Li, March 20, 2018)

Translation: Wait. Please don’t take action against our unfair actions.


Statement: Beijing will “open even wider” to imports and investment. (Premier Li Keqiang, March 20, 2018)

Translation: Beijing will not open even wider to imports and investment. In fact, we might impose even more market-access barriers.


Statement: “China will remain a responsible long-term investor [in U.S. government bonds].” (Premier Li Keqiang, March 20, 2018)

Translation: There is no way we will stop buying U.S. T-bills. If we didn’t recycle our massive trade surplus into U.S. debt, our currency would rise and our trade surplus would disappear.


Statement: We plan to “further bring down overall tariffs,” with “zero tariffs for drugs, especially much-needed anti-cancer drugs.” (Premier Li Keqiang, March 20, 2018)

Translation: Our tariffs are much higher than U.S. tariffs and will remain so, but rather than continuing to raise the price of life-saving drugs, we will bring down tariffs on a few of them.


Statement: We plan to “fully open the manufacturing sector” to foreign competitors. (Premier Li Keqiang, March 20, 2018)

Translation: When pigs fly.


Statement: “There will be no mandatory requirement for technology transfers, and intellectual-property rights will be better protected.” (Premier Li Keqiang, March 20, 2018)

Translation: There never has been and never will be an official Chinese law mandating tech transfer as the price of accessing our market. But if foreign companies don’t turn over valuable technology, we will continue to make life miserable for them. And in the meantime, we will make sure to protect Chinese IP better so we can bring more IP cases against foreign companies.


Statement: “A large trade deficit is not something we want to see. What we want to see is balanced trade; otherwise this kind of trade will not be sustainable.” (Premier Li Keqiang, March 20, 2018)

Translation: We don’t care that much about the trade deficit anymore. We are happy to import more of your soybeans, timber, and minerals. We just want to dominate the advanced-technology industries you now hold the lead in.


Statement: “We believe these [steps to allow us to buy U.S. defense technology] will bring opportunities for American companies, too.” (Premier Li Keqiang, March 20, 2018)

Translation: We’d end our trade surplus with you if you would just sell us supercomputers, advanced computer chips, and advanced lasers (which we would then use to build up our military even more), and that would be a “win-win” because some U.S. companies would make profits.


Statement: Further opening up the Chinese market “will naturally be a step-by-step process.” (Premier Li Keqiang, March 20, 2018)

Translation: Don’t call us, we’ll call you.


Statement: “I want to emphasize that opening needs to be a two-way track, just as it takes paddling on both sides for a boat to move forward.” (Premier Li Keqiang, March 20, 2018)

Translation: Sell us your most advanced technology and let us buy up your advanced-technology companies.


Statement: China will “resolutely defend” its interests. (Commerce Minister Zhong Shan, March 19, 2018)

Translation: China will “resolutely defend” its interests.


Statement: “Let the sunshine of a community with a shared future for humanity illuminate the world!” (President Xi Jinping, March 21, 2018)

Translation: We want to dominate the world.

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