The Trump administration has set itself an ambitious agenda for a trade deal with China, essentially asking that the country restructure its economic model. But, since its state-led economic model is tied to its single-party political model, that’s highly unlikely to happen. Instead, speeches at this week’s National People’s Congress might offer a preview of what China might see as a path forward in negotiations.
Take Premier Li Keqiang’s opening speech to the National People’s Congress, for example. Over the past three years he spent much of his remarks to champion the Made In China 2025 initiative; this year, however, he didn’t mention it at all.
The reason behind such a change in messaging is likely U.S. dislike for a policy that it sees as a threat. And to be clear, that analysis from Washington isn’t wrong: A main aim of the initiative is to move development and production of key future technologies to China. That would grant Beijing control over technologies with military applications and displace the West as the dominant driver of innovation.
But simply dropping the name of a disliked program doesn’t change the ambition as Lingling Wei explains in the Wall Street Journal. Indeed, Li’s speech still managed to reference many of the same technologies included in Made in China 2025 and pledge to “work faster to make China strong in manufacturing.”
Similarly, the National People’s Congress is expected to rubber-stamp a new law on foreign investment Friday that is meant to address technology transfer, a key issue for the Trump administration. But that legislation alone would likely do little to cut down on the actual process of forcing foreign companies to hand over technology to gain access to China’s market.
For example, although China already has laws on the books that ostensibly protect intellectual property, there are still widespread problems with enforcement. Laws that look good on paper don’t necessarily translate to robust protections in reality. Vague language, loopholes, and protectionism, combined with a lack of independent courts, mean that it is no accident what is enforced and what isn’t.
As the Trump administration works to resolve its trade concerns with Beijing, it must not accept mere shifts in rhetoric, without robust enforcement or policy changes, as real progress. Instead, Trump should see the rhetoric for what it is: a recognition by Beijing of Washington’s anxieties and an attempt to mollify the U.S. He must have a realistic understanding of what China is willing to offer and, consequently, decide what he is willing to accept. Failure to grasp that could cause negotiations with Beijing to break down in a similar fashion to those with North Korea, leaving the U.S. in a costly and damaging trade war stalemate.
