the arrest of Meng Wanzhou, Director financial Ciera from Huawei Technologies Co., generated a debate in China over whether to continue trade negotiations or link the two issues and retaliate.
Conversations with seven Chinese officials from five government agencies, which asked not to be identified, revealed a divide between those who focus on the economy and those who are responsible for national security. The first group sees the need to maintain the two separate subjects, while the second wants to act more forcefully against United States.
Officials worried about the economy have warned that a collapse in trade negotiations would harm China more than the arrest of the Executive of Huawei. Trump has threatened to increase to 25 percent tariffs on $200,000 billion in Chinese products if no one gets to an agreement within 90 days. In the worst cases, which implements a tax of 25 percent on all Chinese products, economic growth in 2019 could fall about 1.5 percentage points to 5 percent, below the forecast of 6.6 for this year , according to Bloomberg Economics.
“The arrest of the Financial Director of Huawei is not an accidental incident and bleaker the trade talks, but both sides will work hard to avoid this bad influence”, said Wei Jianguo, exviceministro of Commerce and current Vice President China International Center for economic exchanges. “Negotiation between U.S. and Chinese working groups going well, and in fact much better than expected people from outside”.
“Century of humiliation” bureaucrats who are more involved with national security on the other hand, see things differently. In his view, Xi gave too and ended up looking weak in the eyes of the public. The arrest of the Executive of Huawei was just another tactic for US to have a greater influence, they say, and China should fight back with measures that harm U.S. companies.
An official mentioned to be personally angry because Huawei is a national pride for the Chinese people, and keep the topic separate from the trade talks would be difficult even if the top leaders would like. Even before the talks, an official evoked the Qing dynasty associated with a “century of humiliation”, when China lost territories such as Hong Kong to foreign powers.
Chinese officials have reason to worry about a public reaction. In the 1990s, Prime Minister Zhu Rongji was criticized by an increasingly nationalist population after returning empty-handed from trade talks with the management of Clinton. During the 2000s, the officials of the Ministry of Foreign Affairs of China recalled having received tablets of calcium by mail from angry members of the public, urging them to strengthen their vertebral columns to the slights of Japan and the USA “Weak leadership” “the arrest of Ms. Meng threatens to make China’s leadership look weak to secure the release not only of a citizen, but a high Executive and daughter of one of the business icons of China” said Michael Hirson, director for Asia of the Eurasia Group and ex of the Treasury of United States ‘nationalist sentiment will make it more difficult for Beijing to offer concessions to Trump”.
At least publicly, China is keeping the separate topics. On Thursday, the spokesman of the Ministry of Commerce Gao Feng told reporters that China is implementing the agreements reached with U.S. on agriculture, automotive and energy. “In the next 90 days will work in accordance with the timetable and the roadmap” to negotiate in areas of mutual benefit, he said.
Then, on Friday, the spokesman of the Ministry of Foreign Affairs Geng Shuang dismissed concerns that China would take retaliation against U.S. companies. “China always protects the rights and legal interests of foreigners in China, but they must also respect all laws and Chinese regulations,” said Geng.
‘Great gift’ is not clear whether China will take a more fervent stance now that Xi returned to Beijing. For several days after meeting with Trump, the bureaucracy was stuck waiting for his return, without knowing exactly what was decided during the meeting with Trump in Argentina.
And although it is not known if Xi was aware of the arrest of Meng on December 1 until it was publicly announced, much of the Chinese bureaucracy was unaware of the fact. When the news broke out Thursday in Beijing, shocked trade officials called the Embassy in Canada to try to get more details, according to a person aware of the facts.
While China assesses how to respond, at least there is one positive aspect: helps China seem sincere in the world in its willingness to resolve the trade war. He may say that he is trying to solve the problem, but USA has a strategy rooted interrupted the rise of China as a global power, an issue that the State media was treated Friday.
“The arrest of Huawei gives to China’s leaders a great gift,” said Barry Naughton, Professor of the University of California at San Diego who studies China. “It makes super plausible narrative that have been trying to promote all the time: ‘US simply cannot withstand our ascent, cannot withstand losing their domain, not can treat anyone as an equal'”.