China's Strategic Trade, Soft Power Gains Undermine US Position

Key Quotes

"We've basically come full circle at the end of this trade war, right? We are back to status quo ante. We're basically in the same position, more or less, where we were with China a year ago. And I think what the Chinese have successfully done over time is whittle down the conversation with the Trump administration so that we are talking instead about the trade imbalances instead of over China's overcapacity, never mind the whole suite of security issues like South China Sea and Taiwan."

John Zin argues that China has effectively managed the trade war narrative with the Trump administration. Zin explains that China has shifted the focus from critical issues like overcapacity and security concerns to more manageable topics such as trade imbalances. This strategic redirection, according to Zin, has placed China in a more advantageous position in its discussions with the U.S. administration.

"The relationship was at a relative high point for this period over the last 10 years or so of more overt and intense competition, right? The two presidents met in Peru and, uh, so, you know, our two countries cannot let any of this competition veer into conflict. There was, you know, some limited cooperation underway on issues like fentanyl, which of course is a concern of the Trump administration."

John Zin describes the state of U.S.-China relations prior to the Trump administration's return. Zin highlights that the relationship was characterized by significant competition but also maintained a level of cooperation on critical issues like fentanyl. This period, according to Zin, demonstrated that areas of agreement could still be found between the two nations despite their broader competitive stance.

"And what we saw from the Chinese side was not just responding, I think, more briskly than they had responded earlier in the administration, but more substantively as well. And I think what they were trying to do was gear up for the return of the Trump administration and for Trump 2.0."

John Zin observes China's reaction to the Biden administration's actions, particularly regarding export controls. Zin notes that China's responses became more rapid and substantial as the administration tightened controls on advanced semiconductors. According to Zin, this heightened responsiveness was a strategic move by China to prepare for the anticipated return of a Trump administration.

"Yeah, I think their primary objective was to get the Trump administration to back off. And I think what China really wants from us is for us to get out of their way and to not slow down their own growth and development."

John Zin explains China's main goal concerning the Trump administration. Zin states that China's primary objective was to have the Trump administration reduce its pressure and interference. According to Zin, China's fundamental desire is for the U.S. to allow its economic growth and development to proceed unimpeded.

"And what was really striking to me talking to both, you know, senior Chinese officials and to the business community across China is that they seemed emotionally prepared for this. There wasn't really kind of the anger or anxiety that I had expected to see and feel."

John Zin shares his observations from China during the imposition of tariffs. Zin found it striking that both senior Chinese officials and the business community appeared emotionally prepared for the tariffs. According to Zin, this lack of expected anger or anxiety suggested a level of resilience or pre-existing strategy within China to handle such economic measures.

"So I've kind of narrowed it down to two really important things. One is that a lot of the creators behind these things are in their late 30s or early 40s. And they're people that went to university in China just as the education system was changing, that a lot more students were going to school at the time. And crucially, it's a time when the internet was relatively free. It was quite easy to get online and look at foreign websites. So it's a group of people that had access to a lot of foreign ideas. I think they absorbed a lot of foreign culture. That's one thing."

Don Weinland identifies a key factor behind China's emerging cultural exports. Weinland points to the creators, who are often in their late 30s or early 40s, having experienced a period of educational expansion and relatively free internet access during their university years. Weinland explains that this allowed them to absorb foreign ideas and culture, contributing to their creative output.