Superpower Showdown: History of the Trade Dispute

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Superpower Showdown is the tale of how relations between these superpowers have unraveled, darkening prospects for global peace and prosperity, as told by two Wall Street Journal reporters. Bob Davis is based in Washington, DC, while Lingling Wei is based in Beijing – or at least she was until she was expelled alongside nearly a dozen other American journalists just weeks before the release of the book, collateral damage in a relationship that is showing increasing strain. Davis and Wei spoke to the AmCham China Quarterly in June to discuss the expulsion, the trade war, and where both sides go from here.


Lingling, let’s start with your most recent journey. How many days have you been in the US?

Lingling Wei: I’ve been in New York for three weeks now. The one message I want to get across is this really is not in China’s interest to expel American journalists because of the Chinese government’s continued goals of opening up and liberalization. A lot of times, foreign investors and businesses look to media outlets like The Wall Street Journal, The New York Times, and The Washington Post for information about China. In terms of credibility and quality of information, the American press traditionally has served as a key channel to understand what’s going on in China. This is the time when [China] should welcome more foreign journalists to help people better understand their system and be more sympathetic to their situation or position. China should give reporters greater access as opposed to cutting them off.

It’s a big loss for our member companies and for many people in China as well. How can you successfully cover China from afar?

Bob Davis: I ran our coverage in Brussels and in Latin America. I was lucky enough to go to China and cover the economy there. The first thing I always say to reporters in whatever foreign setting is don’t try to cover Washington from afar. I also always tell the reporters in Washington to send [China-related articles] to the China bureau, otherwise, you’d just get a distorted view. It’s so easy to talk to a few economists and form a view, but it isn’t necessarily an informed one at all.

The two sides have talked about retaliatory measures for journalists. The current measures are obviously not having the desired effect in terms of keeping people on the ground. What should the US administration be doing in this particular area?

Bob Davis: I think it’s just a losing fight. There’s an old saying, “an eye for an eye, a tooth for a tooth” – and you wind up blind and toothless. The complaints the American press has with the Trump administration are legion and legitimate, but it’s nothing like dealing with the Chinese government, where there’s no tradition of freedom of the press and no tradition of having to answer to the public in a critical fashion. The way [the Chinese government] looks at it, it’s fine if there are no American journalists. It was just a bad strategy [from the US] and it’s working out terribly.

Lingling, you used the phrase “bomb ashes” in a recent piece for the Journal, which detailed the personal side of your enforced move to the US. Can you explain the history of that phrase and how it relates to you?

Lingling Wei: In Chinese, the words for bomb ashes are pao hui, which means collateral damage. Some of my friends in China called me that when they heard about my expulsion. I was devastated after hearing that I was getting kicked out of China because it meant I had to leave my parents. They’re both in their 70s and have taken pride in being connected to modern China’s revolutionary history. Even my parents found it hard to accept that I’d be expelled from China because I’m an American journalist. In the end, my family thought that I should pursue what I believe in. My parents’ generation didn’t even have a choice. Their whole life was about survival, from surviving the Cultural Revolution to other kinds of political upheaval in China. I at least had the choice to leave China and come back to New York. China will always be in me, and I’m going to try my hardest to do a good job covering it.  

Let’s move on to where we are today in the trade war. Bob, you’ve talked about the Trump tactic for not attacking President Xi personally. Why is that a key strategy and do you think it’s working from a US perspective?

Bob Davis: Trump looks at it in two ways. He’s The Art of the Deal guy, so he believes he can cut a deal with anyone. Firstly, the aim is not to attack [Xi] personally and try to cut a deal with him. Second, if you don’t attack President Xi, you’d be giving him political space if he was to concede. I don’t see any evidence that it’s working. I think the second part is pretty delusional; the Chinese leadership is sophisticated enough to see what’s going on and realistic enough to know that there’s no real friendships among leaders or, even if there are friendships, it’s the classic “countries have interests, they don’t have friends”, and I think the same goes for leaders.

Both countries have talked about their nationalist priorities in terms of the “China Dream” and “Make America Great Again.” Is it realistic to think that they can work together for mutual benefit? Or are both countries always going to try to get the upper hand in this trade war?

Bob Davis: The way things are going, it’s like a football game. Somebody wins, somebody loses. It doesn’t have to be that way. Clearly, the effort in the beginning was to find areas where both countries could work together. If anything, the China-WTO era [around 2001] was too naïve. I think Americans deluded themselves that economic rapprochement would lead to a political change. It seems naïve now, but that’s only with the benefit of hindsight. If you go back to the early 90s, the Soviet Union had collapsed, South Korea and Taiwan had shucked off dictatorships, the same thing was happening in Latin America, so why not think that China would be the next one to change? If anything, it was overly optimistic on the US side. But they’re now moving in a direction in which the sources of conflict far outweigh the sources of mutual cooperation.

Lingling, you talked about Liu He caring about China’s global reputation. But there is a contrasting view that the domestic audience is far more important and that China doesn’t really care what the rest of the world thinks. How do you weigh up those two sides?

Lingling Wei: The trade war has definitely stirred up hardline sentiment in China. The Communist Party leadership’s top priority is to maintain and strengthen the Party’s rule of the country. There’s also a global component to Xi’s “China Dream” policies. He obviously continues to want China to develop economically, but the “China Dream” agenda is broader than that. It also focuses on developing China as a strong nation militarily, technologically, and geopolitically.

There’s this vicious cycle of the US pressuring China, leading to growing anti-American sentiment in China, and that further feeds into this hardline stance among Chinese leaders that China should never be pressured and won’t cave under pressure. I think the Chinese leadership also needs to take a step back from this rhetorical fight and determine exactly what kind of relationship they want to have with the United States. Right now, the trust on both sides is non-existent.

Bob, you’ve compared this trade war to a baseball game, poised at 3-3 in the bottom of the 17th inning. So, who scored the runs so far, and how many innings are we going?!

Bob Davis: Well, I can’t say I worked out the metaphor quite to that degree! But in a baseball game, you never know how many innings you go, right? It was more the idea that this has just gone on and on and on, with no particular end in sight.

Do you see the US continuing this offensive against China, both before and after the elections?

Bob Davis: Well certainly before the election, without a doubt. The only thing that’s a restraining influence on Trump is that he wants to take credit for the Phase One deal. Until the election, there will be a lot of China-bashing. What will hold things together is this amazing irony that the point of contention – the trade arena – has now become the very thin glue holding this relationship together. After the election, I do think that the two countries will move in a direction that’s separating or derailing. I think there would be a difference if Biden is elected. He’s bound to try to put out feelers to at least tamp down the hostility. But, he might be forced by Democrats in Congress to take the issues of human rights, environment, labor standards, and Taiwan more seriously.

In the book, you chart out the whole history of how we got to this point in time. There have been some pretty memorable moments throughout the history of US-China relations. Where does this current period fit into that overall history?

Bob Davis: I think it’s a huge moment. That’s one of the reasons we wrote the book. This is a gathering storm; it wouldn’t be fair to blame it only on Trump. We had generally been on a path of engagement, even though it was weakening, and now it’s moving to a point where we’re moving in opposite directions. I think it’s enormously important.

Lingling Wei: I agree. We tried to document China’s rise since the reform era of Deng Xiaoping. Over the years, China has accomplished one of the biggest economic miracles in the world. But a mature world power doesn’t just celebrate its successes, it should also reflect on things to improve. In today’s China, there’s this desire to have its voice heard throughout the world and be recognized in other parts of the world, especially the US. If China takes actions that fall in line with the changing needs of the Chinese public, China will get recognized.

Chinese society has changed fundamentally over the past four decades. There’s a growing middle class that is increasingly unsatisfied with reading state media and wants their rights and their property to be protected. That’s a fundamental shift in society that’s really challenging the leadership’s skills and capabilities to keep the story of China’s rise going for the next couple of decades. They have come a long way, but I think the biggest issue for the Party going forward is balancing its own need to stay in control with the changing needs of the public.

How do you see the trade war affecting the foreign business ecosystem in China moving forwards? Is a Phase Two deal just a dream at this stage?

Bob Davis: There won’t be a Phase Two deal anytime soon. The US is happy enough to be able to trumpet Phase One, and the issue is, will that survive? I think, politically, it’s better to promise [Phase Two] in the next administration, as opposed to getting stuck in a grinding negotiation. There could be a Phase Two agreement in the next administration, but I don’t see any interest in it from Beijing at all.

Lingling Wei: The issues that should be included in Phase Two are really issues that the Chinese side has been resisting to address throughout this trade war. Structural issues like industrial policy and SOE reform are really bumping up against the Party’s own interests. There’s a higher bar for reform now, so that’s a big question mark in terms of any incentives on the Chinese side to have a Phase Two dialogue.

You talked about the commercial side of the relationship being the glue holding everything together at the moment. What do you think AmCham China should be doing to try to maintain that stickiness?

Lingling Wei: I really feel for you guys, because I suspect most of your members still want to remain in China. Keep engaging with them and keep engaging with the Chinese authorities. Try to make the authorities see that some of the measures and demands you are asking for are actually in China’s interests. That’s probably the only piece of advice I would give, and I’m sure you’re already doing that.


Superpower Showdown: How the Battle Between Trump and Xi Threatens a New Cold War stems from hundreds of interviews with government and business officials conducted by Bob Davis and Lingling Wei in both nations over the seven years they have worked together for The Wall Street Journal. It was published by Harper Business on June 9, 2020.

To download the full Quarterly, click here.