China's Leaders Are Divided Over Trade War With U.S. Various government factions want to take different tacks toward the trade war. Some argue for cutting a deal quickly to save the economy, while others call for a war of attrition with President Trump.
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China's Leaders Are Divided Over Trade War With U.S.

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China's Leaders Are Divided Over Trade War With U.S.

China's Leaders Are Divided Over Trade War With U.S.

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MARY LOUISE KELLY, HOST:

Now to how people in China view their country's trade dispute with the United States. NPR's Emily Feng has been talking to prominent Chinese academics and advisers. She found many of them are not sure the U.S. can be trusted. Here's her report from Beijing.

EMILY FENG, BYLINE: Tucked away off a highway intersection is a stately yellow mansion with a sweeping double staircase. In another era, it was the embassy for the Austro-Hungarian Empire. Today it houses a Ministry of Foreign Affairs think tank.

Can you introduce yourself?

RUAN ZONGZE: Well, my name is Ruan. I'm a senior fellow at China Institute of International Studies in Beijing.

FENG: I met Ruan Zongze just as trade tensions took a turn for the worse in July. President Trump had just tweeted he would impose more tariffs. China countered by dropping the value of its currency and slapping more tariffs on U.S. goods. The U.S. then raised existing tariffs. These tit for tat retaliations left trade agreements made only weeks earlier in tatters. Ruan says it has undermined trust because the U.S. keeps asking for more.

RUAN: Any time you set a bottom line, and it'll - can be very easily be broken.

FENG: And belief in China that the U.S. would uphold its side of a trade deal has plummeted.

RUAN: If we make a deal, can this deal really work or work for how long? Lot of questions.

FENG: These questions and doubts don't bode well for the 13th round of trade talks in September. The two countries were close to a deal in May - until the U.S. walked out, alleging China made sudden changes to the deal. In the months since, negotiators have been rebuilding trust in preparation for September. But with these new proposed tariffs on the table...

HE WEIWEN: It seems that the U.S. side is closing a door of talks. That's very dangerous.

FENG: He Weiwen is a trade expert and former commercial attache with the Chinese Foreign Ministry. If the U.S. plays hardball, he's of the view that China can bear the economic and political pressures of a prolonged trade war better and longer than the U.S. can.

HE: As to the - politically, I think China, of course, enjoys the vast advantages. We are highly centralized leadership, and we are unified in the country.

FENG: Others disagree, though. China's economy is growing at the slowest rate in three decades. And the fear is American tariffs are worsening the slowdown. Jin Canrong is with the Renmin University School of International Studies and one of China's most prominent foreign policy commentators.

(SOUNDBITE OF ARCHIVED RECORDING)

JIN CANRONG: (Through interpreter) China is afraid of its supply chains being broken. It's not a big deal if lower-end supply chains leave China. But if medium- and high-tech supply chains leave, that will be worrying.

FENG: Jin is speaking at a Shanghai gathering in late July and captured in a video that went viral in Chinese social media. He's explaining a long trade war could force high-tech manufacturing to leave China and boldly predicts a trade deal will be reached by this November.

(SOUNDBITE OF ARCHIVED RECORDING)

JIN: (Through interpreter) The U.S. is strong, and China is still weak. So we care more about stable relations.

FENG: But a growing school of thought now says China shouldn't even pursue a trade deal because the U.S. will simply find other ways to undermine China. The most prominent in this camp is Dai Xu, a senior colonel and professor at one of China's top military universities. Here's Dai speaking at a big military innovation forum earlier this year.

(SOUNDBITE OF ARCHIVED RECORDING)

DAI XU: (Through interpreter) The problem is that after an agreement is reached, the Americans will never give up on containing China. So this trade war is just a prelude.

FENG: Dai has popularized an approach called the protracted war. It's borrowed from Chairman Mao Zedong's writings about the civil war with Japan. The theory goes that, whether against Japan or the U.S., in a war for survival, China was outlast the enemy through guerrilla tactics and self-reliance.

(SOUNDBITE OF ARCHIVED RECORDING)

DAI: (Through interpreter) Trump's strategy on China is to take our money first and then take our lives. After the trade agreement is done, the second phase of the Sino-U.S. competition will begin.

FENG: The second phase, Dai says, being an arms race towards technology dominance.

Emily Feng, NPR News, Beijing.

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