China Macro Reporter
1. Trump & Kim Hangin' in Hanoi

<table class="nl_card" id="19apr1001"><tbody><tr><td><table class="multi-block"><tbody><tr><td class="embed-responsive embed-responsive-16by9"><iframe class="embed-responsive-item" src=""></iframe></td></tr></tbody></table><p class="caption">Ian Bremmer's GZERO</p><p class="excerpt">'It's so nice to just hang out. You know just chill.' Donald Trump</p></td></tr><tr><td class="nl-post"><p><strong>This from the 'Puppet Regime'</strong> of Ian Bremmer's <a href="" target="_blank">GZERO</a>. More on that below.</p><p><strong>KIM:</strong> 'Oh, hey, check out what I look like with a<br>puppy face on Snapchat.'</p><p><strong>TRUMP</strong>: 'I think the cat one suits you better.'</p></td></tr></tbody></table>

2. Trade war: 'U.S. policy has changed because China has changed'

<table class="nl_card" id="19apr1002"><tbody><tr><td><table class="multi-block"><tbody><tr><td class="embed-responsive embed-responsive-16by9"><iframe class="embed-responsive-item" src=""></iframe></td></tr></tbody></table><p class="caption">Council on Foreign Relations</p><p class="excerpt">U.S. policy has changed because China has changed</p></td></tr><tr><td class="nl-post"><p><strong>China's 'Third Revolution'.</strong> Xi Jinping has shed Deng Xiaoping's revolution, just as Deng shed Mao's.</p><ul><li><strong>Argues Elizabeth Economy</strong> of the Council on Foreign Relations and one of the most astute observers of China in her excellent <em><a href="" target="_blank">The Third Revolution: Xi Jinping and the New Chinese State</a></em> and in many interviews, <a href="" target="_blank">like this one</a>, and short papers.</li></ul><p><strong>Liz applies</strong> her analytical framework to the U.S.-China trade war in her essay, <a href="" target="_blank">'Trade: Parade of Broken Promises.'</a></p><ul><li><strong>Here are some</strong> of her comments (<a href="" target="_blank">read the full essay</a> - great stuff).</li></ul><p><strong>'The traditional dynamics</strong> of the U.S.-China trade relationship changed dramatically with the selection of Xi Jinping as General Secretary of the Communist Party in October 2012 (and then president in March 2013), and the election of U.S. President Donald Trump in November 2016. Each has played a critical role':</p><ul><li><strong>'Trump initiated</strong> the tariff war.'</li><li><strong>'Xi created</strong> the business environment in China that provided support in the United States for Trump’s change in approach'.</li></ul><p><strong>'Yet the current period</strong> is marked by two significant differences from any previous time in the bilateral relationship between the U.S. and China.'</p><p><strong>'First,</strong> Chinese intentions and capabilities have changed. Xi’s desire to rejuvenate the great Chinese nation is not simply about the continued transformation of China into an economic powerhouse. It includes four ambitious goals':</p><ol><li><strong>'realizing sovereignty</strong> claims in the South China Sea, Hong Kong, and eventually Taiwan';</li><li><strong>'replacing the United States</strong> as the dominant power in the Asia Pacific';</li><li><strong>'shaping the system of global governance</strong> on issues such as human rights and Internet sovereignty in ways that conflict with U.S. values and priorities'; and</li><li><strong>'serving as an alternative model</strong> to market democracies for still developing countries.'</li></ol><p><strong>'Second</strong>, in response to Xi’s initiatives, the United States now considers China a strategic competitor.'</p><p><strong>'As one of China’s own leading scholars</strong> of U.S.-China relations, Wang Jisi, commented in an October 2018 interview:'</p><table class="intable"><tr><td class="intable-border"><p><strong>“[F]or over 200 years,</strong> the United States has never changed its strategic goals for its relationship with China: free flow of goods and capital, and free flow of information and values. Chinese have always had reservations or imposed boycotts to oppose these two goals. We should criticize and have reason to criticize the United States, but we should realize that China’s own actions have changed Sino-US relations and US perceptions of China.”</p><p><strong>“If we are looking for the cause</strong>, it was the change in Chinese policy that led to adjustments in US policy towards China.”</p></td></tr></table><p><strong>'U.S. policy</strong> has changed because China changed,' concludes Liz Economy.</p><p><strong>The Chinese might respond</strong> that of course China has changed. After thousands of years of feudalism and more than a century of humiliation by foreign powers, China has indeed stood up.</p><ul><li><strong>China is regaining</strong> its previous status as (at times past) the world's largest economy and hegemon, at least, of Asia.</li><li><strong>In China's way:</strong> the United States.</li></ul><p><strong>And, whether or not</strong> U.S. policy changed because China changed begs the question: What would U.S. policy toward China look like if Hillary Clinton - not Donald Trump -had become president?</p></td></tr></tbody></table>

3. China’s leaders should study James Bond films

<table class="nl_card" id="19apr1003"><tbody><tr><td><table class="multi-block"><tbody><tr><td class="bg-holder"><a href="" target="_blank"><img src="" alt="CHINADebate"></a></td></tr></tbody></table><p class="caption">The Economist</p><p class="excerpt">Revealing one’s master plan too early can be dangerous</p></td></tr><tr><td class="nl-post"><p><strong>In China,</strong> I'm known as 'Da Bao' 大宝 - big baby, big treasure.</p><ul><li><strong>But, those Chinese</strong> who know my CIA background call me 'Ling Ling Qi' 零零七 - 007.</li><li><strong>BTW,</strong> I am often asked if the Public Security Bureau knows about my time as a CIA case officer in the China Operations Branch.</li><li><strong>The answer</strong> is they have always known: I used to work with <a href="" target="_blank">Larry Wu-tai Chin</a>, China's mole in the CIA.</li></ul><p><strong>So after I read</strong><a href="" target="_blank">'China’s leaders should study James Bond films,'</a> I especially wanted to pass it on.</p><p><strong>'By the time Chinese censors</strong> finally allowed a James Bond film to be shown in a mainland cinema, in 2007, the franchise was more than four decades old.'</p><ul><li><strong>'Only thanks</strong> to rampant piracy were Chinese familiar with the British spy, commonly referred to by his codename, <em>Ling ling qi</em>.'</li></ul><p><strong>'Chinese leaders</strong> would do well to study a plot device beloved in the early films: the moment when a ruthless genius explains his plans for world domination to a captive Bond, believing him moments from death'.</p><ul><li><strong>'With the reliability</strong> of a well-tuned Aston Martin, the bragging turns out to be ill-timed.'</li><li><strong>'Within moments</strong> Bond is free, the villain’s lair ablaze and his schemes thwarted.'</li></ul><p><strong>'Today in the real world,</strong> China faces unusual resistance to its bid for a front seat as a global power.'</p><ul><li><strong>'Surprisingly often,</strong> China’s woes stem from what film critics might term Bond-villain blunders, involving premature admissions of ambition.'</li></ul><p><strong>'Certainly China</strong> has broken with the dictum of the early 1990s, coined by the then-supreme leader, Deng Xiaoping, that China should “hide its capacities and bide its time”.'</p><ul><li><strong>'In truth China</strong> is now too big to hide.'</li><li><strong>'It has always mixed bursts</strong> of assertiveness with promises to open markets and protect foreign firms.'</li><li><strong>'What is new</strong> is that this China is impatient.'</li></ul><p><em>read the rest <a href="" target="_blank">here</a>.</em></p></td></tr></tbody></table>

4. The best explanation of Xi's view on China's private sector – beat it into submission

<table class="nl_card" id="19apr1004"><tbody><tr><td><table class="multi-block"><tbody><tr><td class="bg-holder"><a href="" target="_blank"><img src="" alt="CHINADebate"></a></td></tr></tbody></table><p class="caption">FT</p><p class="excerpt">For Mr Xi, the non-state sector serves one purpose: to deliver on his core task of making one-party rule sustainable.</p></td></tr><tr><td class="nl-post"><p><strong>What is Xi Jinping's</strong> real attitude about China's private sector?</p><ul><li><strong>'The attitude of Mr Xi</strong> to the private sector remains rather unclear, to put it mildly,' <a href="" target="_blank">writes Martin Wolf in the Financial Times</a>.</li><li><strong>'I think it is clear enough,'</strong> responds Kerry Brown, the Director of the Lau China Institute, King’s College London, <a href="" target="_blank">in a letter to the FT</a>.</li></ul><p><strong>Here</strong> is their point/counterpoint.</p><table class="intable"><tr><td class="intable-border"><h3><a href="" target="_blank">POINT: Martin Wolf</a></h3><p><strong>From his comments</strong> on the private sector.</p><ul><li><strong>‘Of even greater importance,</strong> insisted some of those I met [in China], is renewed official enthusiasm for the private sector.’</li><li><strong>‘In a speech</strong> given in December 2018, President Xi Jinping not only paid tribute to Deng Xiaoping, author of China’s policy of “reform and opening up”, but promised to support the private sector.’</li><li>‘<strong>In his report,</strong> Mr Li referred to the private activities 20 times.’</li><li><strong>‘He stressed</strong> the need to “ease funding shortages faced by private enterprises”, “encourage private actors to engage in innovation” and “attract more private capital into projects in key areas”.’</li></ul><p><strong>‘Yet we do also</strong> need to challenge this optimistic perspective on the present and future prospects of the Chinese economy.’</p><ul><li><strong>[about the private sector]</strong> ‘Third, the attitude of Mr Xi to the private sector remains rather unclear, to put it mildly.’</li><li><strong>‘He is surrounded</strong> by people who do believe in the essential role of the private sector.’</li><li><strong>‘But</strong> does he?’</li><li><strong>‘Most of the time</strong>, he seems to put rather greater faith in state-owned enterprises.'</li><li><strong>‘So long</strong> as that is the case, it may be difficult to reignite, let alone sustain, confidence within the private sector.’</li></ul></td></tr></table><table class="intable"><tr><td class="intable-border"><h3><a href="" target="_blank">COUNTERPOINT: Kerry Brown</a></h3><p><strong>'Martin Wolf</strong>, in <a href="" target="_blank">“The Chinese economy is stabilising”</a> (April 3), says the attitude of current Chinese president Xi Jinping towards the private sector is unclear.</p><ul><li><strong>'I think</strong> it is clear enough.'</li><li><strong>'For him</strong>, as for any Communist party leader of his generation in socialist market China, the private sector as it is configured in the west does not and cannot exist.'</li><li><strong>'A non-state sector,</strong> however, can — and has done since the early days of opening up and reform after 1978.'</li></ul><p>'<strong>Seen purely economically,</strong> on the surface Mr Xi does seem to have an ambiguous attitude towards non-state companies.'</p><ul><li><strong>'The party’s 2013 plenum statement</strong> typified this, saying on page one that the market was utterly necessary for reform, and then saying on the next page that the state still played a commanding role.'</li><li><strong>'But all this shows</strong> is the way in which leaders in China separate the political from the economic, and will always defend the dominance of the former.'</li><li><strong>'In the economic domain,</strong> for sure, the market and non-state companies as a source of growth are a good thing for a ruling party that needs this growth to maintain its monopoly on power.'</li><li><strong>'In the political domain,</strong> however, non-state business actors take the same rank in the pecking order as everyone else — firmly under party edict and party rules. In this space, the free market that reigns elsewhere vanishes without trace.'</li><li><strong>'This is because</strong> they are in the end two wholly different spaces.'</li></ul><p><strong>'For Mr Xi,</strong> the non-state sector serves one purpose: to deliver on his core task of making one-party rule sustainable.'</p><ul><li><strong>'Like other sections in society,</strong> it was disciplined through the anti-corruption struggle from the start of Mr Xi’s reign, and it's more problematic actors who may have had inappropriate political ambitions were removed.'</li><li><strong>'Now, reformed and more trustworthy,</strong> it can continue contributing to the party’s grand tasks — on the party’s terms.'</li></ul><p><strong>'In this agile balancing</strong> between politics and economics, the Communist party in Beijing shows how you really can have your cake and eat it — as long as you make sure you do the having in the economic space, and the eating in the political!'</p></td></tr></table></td></tr></tbody></table>

5. Heads Up | Watch GZERO World with Ian Bremmer – terrific!

<table class="nl_card" id="19apr1005"><tbody><tr><td><table class="multi-block"><tbody><tr><td class="embed-responsive embed-responsive-16by9"><iframe class="embed-responsive-item" src=""></iframe></td></tr></tbody></table><p class="caption">GZERO World with Ian Bremmer</p><p class="excerpt">See global leaders in a different light on GZERO World with Ian Bremmer</p></td></tr><tr><td class="nl-post"><p><strong>I like</strong> short videos. I like Ian Bremmer. I'm pretty fond of puppets. Hence, I like <a href="" target="_blank">GZERO</a>.</p><p><strong>Ian Bremmer</strong> is sort of the <a href="" target="_blank">Zelig</a> of international affairs experts.</p><ul><li><strong>If there</strong> is a meeting of world leaders and intellectuals, Ian is there.</li><li><strong>If news shows</strong> need serious commentary - rather than talking heads' blather - about a world event, Ian is there.</li><li><strong>He is</strong> President & Founder of the Eurasia Group, 'the world's leading political risk analysis firm,' and a Stanford PhD.</li></ul><p><strong>Ian is also</strong> founder of <a href="" target="_blank">GZERO Media</a>, where he 'explains international events' and 'sits down for in-depth conversations with newsmakers and thought leaders.'</p><ul><li><strong>From his</strong> 'In 60 Seconds' to 3-minute interviews to 25 minute full episodes.</li><li><strong>And, then there</strong> is The Puppet Regime': Donald Trump, Angela Merkel, Kim Jong Un, Nancy Pelosi, and others - the source of <a href="" target="_blank">'Trump & Kim Hangin' in Hanoi.'</a></li></ul><p>Here are the links:<br><a href="" target="_blank">GZERO Media</a><br><a href="" target="_blank">GZERO YouTube Channel</a></p><p>Let me know what you think.</p></td></tr></tbody></table>

6. April 2019 Trade Bulletin

<table class="nl_card" id="19apr1006"><tbody><tr><td><table class="multi-block"><tbody><tr><td class="pdf-container"><iframe src=";embedded=true" style="width:100%; height:500px;border:none;"></iframe></td></tr></tbody></table><p class="caption"><a href="" target="_blank">open in a new window</a></p><p class="excerpt">Congress' 'U.S.-China Economic and Security Review Commission'</p></td></tr><tr><td class="nl-post"><p><strong>Each month</strong> Congress' U.S.-China Economic and Security Review Commission publishes the 'Economics and Trade Bulletin.'</p><p><strong>You can read</strong> the April edition <a href="" target="_blank">here</a>.</p><p><strong>And here</strong> are the April edition's highlights:</p><ul><li><strong>Bilateral trade:</strong> In January 2019, U.S. exports of goods to China fell 27.5 percent year-on-year to $7.1 billion—a record-setting decline; the monthly U.S. trade deficit in goods with China totaled $34.5 billion.</li><li><strong>Bilateral policy issues:</strong> On March 6, Huawei sued the U.S. government, alleging it had been unlawfully and incorrectly banned from U.S. government procurement.</li><li><strong>Policy trends in China’s economy:</strong> The Chinese government set an annual GDP growth target of between 6 and 6.5 percent in 2019 amid slowing global economic growth projections and ongoing trade tensions with the United States; China’s new Foreign Investment Law aims to address U.S. concerns about intellectual property theft and forced technology transfers; observers expressed concern the law will serve as window dressing and not result in meaningful change.</li><li><strong>In focus</strong> – China-EU relations: Intra-EU divisions on display amid President Xi’s trip to Europe; the European Commission labeled China a “systemic rival” and France tried to apply greater pressure on Chinese trade and technology policies, while Italy endorsed China’s Belt and Road Initiative.</li></ul></td></tr></tbody></table>