Friday November 16, 2018

May 2018 News

April News | June News

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Chinese Bases in the South China Sea
U.S.-China Trade Issues
U.S. Accuses China of Laser Use in Djibouti
Dominican Republic Cuts Ties with Taiwan
Preparations for U.S.-North Korea Summit
Kim Jong Un and Xi Jinping Meet for Second Time
Burkina Faso Cuts Ties with Taiwan

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Chinese Bases in the South China Sea

On May 2, CNBC reported that the Chinese Navy had installed anti-ship missiles and surface-to-air missiles on several of its facilities in the South China Sea. Last month, China installed communications and radar jamming equipment on Fiery Cross Reef, one of three of the artificial islands that has an airstrip. A Chinese Defense Ministry spokesperson defended this move as “conducive to maintaining China’s sovereignty and security,” the Chinese state newspaper, the Global Times reported.

China often comes under fire for their building of military bases on reefs and shoals in this area. In 2016, the Permanent Court of Arbitration ruled against China regarding a territorial dispute with the Philippines in the South China Sea. China has not complied with that ruling, and continues to occupy several bases within the Sea. China classifies their presence on these far-flung, man-made islands as defensive, but continued militarization, and most recently, the installation of missile systems has caused many experts to question their intent.

Read More:

CNBC – China quietly installed defensive missile systems on strategic Spratly Islands in hotly contested South China Sea
Quartz –
China now has cruise missiles on what started as a “fishermen’s shelter” in the South China Sea
Reuters – China installs cruise missiles on South China Sea outposts: CNBC

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U.S.-China Trade Issues

A delegation of U.S. trade officials led by the Secretary of the Treasury, Steven Mnuchin, traveled to Beijing for talks with their Chinese counterparts led by Vice Premier Liu He. The talks lasted two days, May 3-4. As expected, little was accomplished, but the table is set for further negotiations which are expected to occur quarterly.

The U.S.’s main demands are a significant reduction of the trade deficit and tariffs, removing limits on U.S. investment in China, better intellectual property protections in China, and ceasing state sponsorship of certain high tech industries. China wants the U.S. to designate China as a market economy, to drop a complaint to the WTO about China’s alleged intellectual property (IP) theft, and to halt plans for placing tariffs on about $150 billion of Chinese exports to the U.S..

Update, May 16: Last month, the U.S. Commerce Department imposed a ban on American companies selling components to China’s ZTE Corporation in response to ZTE’s failure to punish company officials after violating U.S. sanctions. During trade talks in early May, China had asked U.S. officials to remove the ban. On May 6, it was reported that ZTE had applied to the U.S. Commerce Department to remove the ban on the grounds that the ban threatens the company’s survival. ZTE depends on the American technological components it imports, sending over $2.3 billion to American companies in 2017. On May 9, ZTE suspended all major operations for two weeks.

On May 13, President Trump tweeted: “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” This is a clear shift away from his more inflammatory rhetoric on balancing trade with China. Trump faced backlash from both Democrats and Republicans for promoting cooperation with China on this issue. Many critics cited national security concerns and continued intellectual property theft by Chinese companies.

Update, May 22: The U.S. and China are reportedly in talks to lift trade bans on ZTE. In exchange for the U.S. lifting the trade ban, ZTE would have to make changes to its leadership and management. In exchange, China may be offering to remove tariffs on U.S. agricultural goods, including soybeans, or reduce the trade deficit in an unspecified way.

Despite President Trump’s efforts to highlight the effects on ZTE’s American trade partners, his efforts to resolve the ban have received criticism from both Republicans and Democrats. In a bipartisan effort, the Senate Banking Committee passed an amendment on May 22 that limits the president’s power ease sanctions on ZTE. This amendment is attached to the bill that expands the power of the Committee on Foreign Investment in the U.S. (CFIUS).

On May 22, China’s Finance Ministry announced that the previously announced reduction of import duties on passenger cars will be put in place on July 1. President Xi Jinping first revealed the potential tariff reduction at the Boao Forum on April 10, but did not discuss specifics or timing. The tariff on passenger cars imported to China will be reduced from 25 percent to 15 percent. The tariffs on car parts will also be reduced to 6 percent.

Update, May 29: On May 29, the White House announced it will continue plans to put 25% tariffs on $50 billion of Chinese imports. This round of tariffs was originally announced in April. The final list of goods will be released by June 15 and the tax will be imposed soon after. The restrictions on Chinese investment in the U.S., also announced in April, will be revealed by June 30. The U.S. will also continue to pursue its trade case against Chinese IP theft in the World Trade Organization.

Despite the White House moving forward with these measures, the trade negotiations between the U.S. and China continue. On June 2, U.S. Secretary of Commerce Wilbur Ross will be meeting with Chinese trade officials in Beijing.

On May 25, the Trump administration said it reached a deal to keep ZTE in business. If the deal is adhered to, ZTE will pay a large fine, hire American compliance officers, and make management changes in exchange for access to American products.

However, legislators are restricting the President’s ability to lessen restrictions on ZTE. In addition to the amendment passed in the Senate Banking Committee on May 22, the House passed a bill on May 24 barring the federal government from using ZTE products and “[preventing] the Defense Department from renewing contracts with vendors who do business with [ZTE]”. The amendment was attached to the 2019 National Defense Authorization Act which was passed by the House on a 351-66 vote.

April’s Trade Issues News | June’s Trade Issues News

Read More:

Bloomberg – China’s ZTE Ceases Major Operations After U.S. Trade Ban
Bloomberg – China Makes Massive Cut to Car Tariffs After Truce With Trump
Business Insider – Trump appears to backtrack on sanctions relief for Chinese tech giant ZTE amid escalating concerns
Financial Times –
US demands China cut trade deficit by $200bn
NPR –
U.S. Trade Team Leaves China Talks Without Any Big Breakthroughs
Reuters –
Trump praises China’s Xi as trade talks begin in Beijing
Reuters –
China’s ZTE paid over $2.3 billion to U.S. exporters last year, ZTE source says
Reuters –
Trump floats large fine, management changes for China’s ZTE
South China Morning Post – Donald Trump says US is playing ‘nice’ in trade talks with China because of his ‘great respect’ for Xi Jinping
Xinhua – China, U.S. reach agreements on some economic and trade issues

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U.S. Accuses China of Laser Use In Djibouti

On May 3, the Pentagon announced the U.S. had made a formal complaint to China about several incidents of U.S. pilots being irritated by high-powered lasers believed to be originating from a Chinese base in Djibouti. There have been about 10 incidents reported and two pilots suffered minor eye injuries. China’s Ministry of National Defense has refuted these claims. Chinese military observers believe that China may be using lasers to disrupt birds near runways or spying drones, effects on U.S. military personal would be unintentional.

China’s base in Djibouti was opened last year and is the first overseas Chinese military base. It is used as a resupply hub for peacekeeping and humanitarian missions as well as a training base.

Read More:

BBC – US accuses China of pointing lasers at its pilots from Djibouti base
South China Morning Post –
US warns airmen to beware of laser attacks near China’s military base in Djibouti
Washington Post – U.S. accuses China of directing blinding lasers at American military aircraft in Djibouti

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Dominican Republic Cuts Ties with Taiwan

On May 1, the Dominican Republic announced it is establishing ties with the People’s Republic of China, cutting diplomatic relations with Taiwan. This leaves Taiwan with only 19 countries that recognize it as an entity separate from China.

Taiwan accused China of offering the Dominican Republic investments and loans totaling $3.1 billion in order to convince the nation to switch ties. China and the Dominican Republic have refuted this claim.

Many expect the Vatican to become the next to switch allegiance. The Holy See and China have been negotiating the place of the Catholic Church in China over the past several months.

Read More:

New York Times – Taiwan’s Diplomatic Isolation Increases as Dominican Republic Recognizes China
Quartz – Taiwan now has diplomatic relations with fewer than 20 countries
Reuters – China media say Taiwan has sour grapes as another ally goes
Taipei Times –
China lures Dominican Republic
Xinhua –
China, Dominican Republic establish diplomatic ties

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Preparations for U.S.-North Korea Summit

On May 8, U.S. Secretary of State Mike Pompeo returned to North Korea to continue preparations for the upcoming summit between American and North Korean leaders. During this meeting, the date and location for the summit was arranged and the release of three American prisoners was negotiated. The three prisoners, Kim Dong-chul, Tony Kim, and Kim Hak-song, were held on charges of espionage or hostile acts against North Korea. This release is widely regarded as a great diplomatic success.

On May 10, President Trump announced the summit with North Korea will take place on June 12 in Singapore.

South Korea’s President Moon Jae-in will be meeting with President Trump in DC on May 22 to discuss the summit.

Update, May 22: On May 16, North Korea canceled high level meetings with South Korea and threatened to cancel the summit with President Trump. The North Korean Government claimed this was in response to joint military exercises between the U.S. and South Korea. Many analysts reported that North Korea uses backtracking on promises or agreements as a negotiating tactic. Experts also observed that the threat to cancel was likely motivated in part by Trump Administration officials continuing to tout the complete, verifiable, and irreversible denuclearization (CVID) of North Korea as the goal for negotiations.

North Korea is also uneasy about the U.S. potentially using the disarmament of Libya as a model for North Korean disarmament. The statement released by the North Korean government referenced the potential use of a Libyan Model directly. In 2003 Libya, then ruled by Muammar Gaddafi, signed a treaty with the U.S. to disarm its nuclear program in return for an end to U.S. sanctions on Libya. Some believe that NATO would not have intervened during the Arab Spring, and Gaddafi would not have been overthrown, if Libya had not given up its nuclear program. North Korean leaders believe their nuclear program is necessary for the continuation of their regime. Comparisons to Libya’s denuclearization are thus very concerning for North Korean leaders.

President Trump and South Korean President Moon Jae-in met in Washington DC on May 22 to discuss the upcoming summit. During this meeting, President Trump said there is a “substantial chance” the summit will be delayed.

Update, May 24: On May 24, President Trump released a letter to North Korean leader Kim Jong-un canceling the summit on June 12. The letter cited recent “tremendous anger and open hostility” in statements made by North Korean officials as the reason for the cancelation. One statement, from Choe Son Hui, a vice minister in North Korea’s Ministry of Foreign Affairs, called remarks made by Vice President Mike Pence “ignorant and stupid” and called him a “political dummy.”

Update, May 29: Despite canceling the summit with North Korea on May 24, President Trump reassured the public on May 25 that the summit could still happen and reported the two sides were still communicating with each other. On May 26, in a quickly arranged meeting, President Moon Jae-In met with North Korean leader Kim Jong-un. President Moon later reported that Kim is still committed to the upcoming summit. The two sides will meet again on June 1 to continue peace discussions and arrange visits for separated families.

On May 27, President Trump confirmed U.S. officials were in North Korea to continue making arrangements for the summit. Kim Yong Chol, a former head of North Korea’s military intelligence, will be arriving in New York City on May 30 to meet with U.S. officials.

April’s U.S.-North Korea Summit News | June’s U.S.-North Korea Summit News

Read More:

BBC – Trump-Kim Jong-un summit set for Singapore on 12 June
CNN – Trump announces North Korea summit will be in Singapore
Financial TimesTrump says North Korea summit could still happen
The Guardian – Trump confirms US negotiators in North Korea for summit talks
New York Times –
North Korea Frees American Prisoners, Lifting Hurdle to Nuclear Talks
New York Times – 
Trump Pulls Out of North Korea Summit Meeting with Kim Jong-un
NPR –
High-Ranking North Korean Official Is Traveling To New York
Reuters –
Pompeo arrives in North Korea; Trump cites hope for detainees
ReutersTrump casts doubt on planned summit with North Korean leader
Washington PostWho’s to blame for the hiccup in North Korea talks? South Koreans say Bolton.

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Kim Jong Un and Xi Jinping Meet for Second Time

From May 7 to May 8, North Korean leader Kim Jong-un met with President Xi Jinping in northern China. Although Kim traveled by armored train for March’s visit, this time the North Korean leader arrived by plane in Dalian, China. The two leaders discussed the denuclearization of the Korean Peninsula. While North Korea will be meeting with the U.S. and South Korea to discuss denuclearization next month, China will likely be involved in any final decisions or arrangements.

China may be concerned that North Korea will become closer to Washington than Beijing if the U.S.-North Korea summit is successful. Over the past few months, China and North Korea have been working to stabilize and improve their relations and a repeat visit from Kim so soon after the first is a good indication the relationship is warming.

Read More:

New York TimesKim’s Second Surprise Visit to China Heightens Diplomatic Drama
South China Morning PostKim Jong-un’s second meeting with Xi Jinping shows China is key to denuclearising North Korea, US analysts say
XinhuaXi Jinping, Kim Jong Un hold talks in Dalian

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Burkina Faso Cuts Ties With Taiwan

On May 24, Burkina Faso announced it broke ties with Taiwan. This is the second diplomatic break Taiwan has suffered this month, leaving them with only 18 diplomatic allies. Taiwan again accused China of using “dollar diplomacy” to bribe smaller, less developed nations away from Taiwan.

The Vatican and China are reportedly still in talks to resume diplomatic relations.

Read More:

Reuters Taiwan says will ‘not cower’ as loses second ally in a month amid China pressure
Taipei TimesBurkina Faso severs ties
XinhuaChina appreciates Burkina Faso’s decision to cut diplomatic ties with Taiwan

 

Page Updated: May 29
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