What are the key takeaways from China’s Two Sessions, and what’s being discussed at the Boao Forum on Hainan Island?

China recently concluded one of its most important political events of the year, known as the “Two Sessions,” where politicians from around the country voted on the appointment of new officials and changes to China’s government structure.

President Xi was re-elected to a second term as president. Wang Qishan, a close ally of Xi in his anti-corruption campaign, became China’s new vice president. Delegates also voted to remove term limits for both of these positions. New ministries were created in areas such as veteran’s affairs and natural resources, and other ministries dissolved. A new watchdog agency known as the National Supervisory Commission was created with wide-ranging powers to investigate state officials and public sector employees. The government also announced an 8.1 percent rise in military spending and a GDP growth target of 6.5 percent for 2018.

With these reforms and targets in place, Chinese officials are heading off to the first of four major diplomatic events China is hosting this year. The Boao Forum, held on the island of Hainan, China, is an annual international conference on Asian development. The themes of this year’s forum are innovation, an open Asia, and shared global prosperity. China-watchers will pay close attention to see how the plans laid out at the Two Sessions will be reflected at this year's Boao Forum. Stay tuned.

On March 8, President Trump signed orders on imposing stiff and sweeping new tariffs on imported steel and aluminum. You may have heard about “Section 301” and “Section 232” investigations into steel, aluminum imports and unfair trade practices. So what are they about and why has China been named?

In the past year, the U.S. government has opened several trade investigations that are targeted towards China. You may have heard about “Section 301” and “Section 232” investigations into steel, aluminum imports and unfair trade practices. So what are they about and why has China been named?

The administration is reviewing the results of three major investigations. The first, opened in April 2017 by the Department of Commerce, looks into whether steel imports are a threat to U.S. national security. The second, launched a week later, investigates whether aluminum imports are a similar threat.

How could metal imports affect United States national security? U.S. officials and industry stakeholders have accused China of deliberately over-producing steel and aluminum, leading to a flooded global market. This, they say, has led to the closure of steel and aluminum facilities in the United States. These metals are used in military supplies, such as tanks and aircraft.

The third investigation looks into the Chinese government’s practices related to technology. Some American companies have complained that Chinese businesses have violated intellectual property rules and forced American companies to transfer their technologies to Chinese partners in return for market access. The Chinese government has denied the existence of unfair trade policies, expressing “strong dissatisfaction” with the investigations.

President Trump was given final reports by the Commerce Department on these investigations in January. He could impose quotas, fines or tariffs as a response, such as those he applied recently on imported solar panels and washing machines, which will affect Chinese imports. This action was closely followed by the Chinese government’s decision to an open an investigation into U.S. imports of a grain called sorghum. Is this the start of a trade escalation between the U.S. and China?

Many are concerned that a trade war between the world’s two largest economies would hurt global growth. Cui Tiankai, the Chinese Ambassador to the U.S., said, “Protectionist measures under political and national security excuses will only lead to distortions in the market, missed economic opportunities and a weakening of one’s own competitiveness.” President Trump is expected to announce his response to the investigations soon.

Recalling an in-depth conversation more than a dozen years ago with John Mearsheimer, the author of The Tragedy of Great Power Politics, He Yafei says, “In the beginning if you pin each other on the board with a big “ENEMY”mark, then all your policy will follow in that direction, there is no doubt that the end will be tragic.”

In 2017, China called for the international community to make space for its voice, in particular the United States. Chinese political leaders said that China had no intention of competing with or replacing the United States, but that the U.S. should make peace with a China intent on a larger global role.

More on how China is adjusting its foreign policy to mirror its growing status on the global stage aspiring to become a new type of major power.

David Shambaugh: China’s Year of Diplomacy in 2017
https://www.chinausfocus.com/foreign-policy/chinas-active-year-of-diplomacy-in-2017

Wang Yi: A New Era of China’s Foreign Policy
https://www.chinausfocus.com/foreign-policy/chinas-diplomacy-breaking-new-ground

Wang Fan: The United States must Accept China
https://www.chinausfocus.com/foreign-policy/the-unites-states-must-accept-china

In the aftermath of President Trump’s Asia trip and China’s 19th Party Congress, it appears that the China-U.S. relationship will be led by two important new principles: President Xi’s “win-win cooperation,” and President Trump’s “deal-making,” which essentially amount to the same thing: a focus on more trade.

Source from 2017 Joint US-China Think Tank Reports.

A Relationship Transformed

The "special arrangements" such as Peking opera and dinning at the Forbidden Trump received in Beijing were aimed at making the US president feel at home and exposing him to more aspects of Chinese life so serious matters can be discussed in a more relaxed setting, according to He Yafei, former Chinese vice foreign minister.

Both Agree on Trade Benefits
The commercial relationship between the United States and China has grown enormously in breadth and depth over the past decades and has brought significant benefits to both countries, the Asia-Pacific region and the global economy.

Weighing Competition and Cooperation
China: The Chinese and U.S. economies are mutually dependent, with cooperation outweighing competition.
U.S.: The two economies appear less complementary and increasingly competitive.

Different Appeals
China: Constructively alleviate trade friction; Conclude talks on BIT; Strengthen cooperation in global infrastructure construction; Increase coordination and cooperation in macroeconomic policies.

Different Outlooks
American commercial policy toward China is most likely to shift toward more constrained or conditional cooperation. Reducing the extent of tensions will depend on how China responds to American concerns.