Tag Archives: coercion

Taiwan leader rejects China’s ‘one country, two systems’ offer

By Yimou Lee

TAIPEI (Reuters) – Taiwan’s president rejected on Thursday a “one country, two systems” formula that Beijing has suggested could be used to unify the island and the mainland, saying such an arrangement had set Hong Kong “on the edge of disorder”.

President Tsai Ing-wen also vowed in a National Day speech to defend Taiwan’s sovereignty, saying her government would safeguard freedom and democracy as Beijing ramps up pressure on the self-ruled island it considers a wayward province.

Tsai, who is seeking re-election in January amid criticism of her policy towards China, referred to the arrangement for the return of the former British colony of Hong Kong to Chinese rule in 1997 as a failure.

Hong Kong has been hit by months of anti-government protests triggered by widespread resentment of what many city residents see as relentless efforts by Beijing to exert control of their city despite the promises of autonomy.

China has proposed that Taiwan be brought under Chinese rule under a similar arrangement, but Tsai said Beijing’s policies towards the island were a danger to regional stability.

“China is still threatening to impose its ‘one country, two systems’ model for Taiwan. Their diplomatic offensives and military coercion pose a serious challenge to regional stability and peace,” Tsai said.

“When freedom and democracy are challenged, and when the Republic of China’s existence and development are threatened, we must stand up and defend ourselves,” Tsai said, referring to Taiwan by its official name.

“The overwhelming consensus among Taiwan’s 23 million people is our rejection of ‘one country, two systems,’ regardless of party affiliation or political position.”

Taiwan’s National Day, marking the anniversary of the start of a 1911 uprising that led to the end of dynastic rule in China and the founding of a republic, was celebrated in Taipei with singing, dancing and parades.

Cold War hostility between the island and the mainland had eased over the past decade or so as both sides focused more on expanding business ties, but relations have cooled considerably since Tsai took office in 2016.

China suspects Tsai and her independence-leaning Democratic Progressive Party of pushing for the island’s formal independence, and this year threatened it with war if there was any such move.

Tsai denies seeking independence and reiterated that she would not unilaterally change the status quo with China.

FLASHPOINT

Despite her assurances, Beijing has stepped up pressure on the island to seek “reunification” and backed up its warnings by flying regular bomber patrols around it.

Beijing also says Taiwan does not have the right to state-to-state relations and is keen to isolate it diplomatically.

Seven countries have severed diplomatic ties with the Taiwan and switched allegiance to Beijing since Tsai coming to power. It now has formal diplomatic ties with just 15 nations.

But Tsai said Taiwan was undaunted.

“The determination of the Taiwanese people to embrace the world has never wavered,” she said, adding that Taiwan must work with “like-minded countries” to ensure peace and stability across the Taiwan Strait.

Tsai said under her watch Taiwan has boosted its combat capabilities with the purchase of advanced weapons and development of home-made aircraft.

Taiwan unveiled its largest defense spending increase in more than a decade in August, aiming to purchase more advanced weapons from overseas.

The island has long been a flashpoint in the U.S.-China relationship.

In July, the United States approved the sale of an $2.2 billion worth of weapons to Taiwan, angering Beijing.

The United States has no formal ties with Taiwan but is bound by law to help provide it with the means to defend itself.

(Reporting by Yimou Lee; Editing by Clarence Fernandez, Robeert Birsel)

Explainer: What’s at stake in U.S.-China trade talks

U.S. Treasury Secretary Steven Mnuchin, second from left, U.S. Trade Representative Robert Lighthizer, third from left, and Chinese Vice Premier and lead trade negotiator Liu He, second from right, pose for a photo before the opening session of trade negotiations at the Diaoyutai State Guesthouse in Beijing, Thursday, Feb. 14, 2019. Mark Schiefelbein/Pool via REUTERS

WASHINGTON (Reuters) – U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin are in Beijing this week as Chinese and American negotiators try to hammer out a trade deal to ease a trade war and avert an increase in U.S. tariffs on Chinese goods scheduled for March 2.

The governments of the world’s two largest economies have been locked in a tit-for-tat tariff battle for months as Washington presses Beijing to address long-standing concerns over Chinese practices and policies around industrial subsidies, market access and intellectual property rights protections.

Here is a look at the key issues in the talks and their implications:

WHAT ARE WASHINGTON AND BEIJING FIGHTING ABOUT?

After years of steadily rising U.S. trade deficits with China and U.S. complaints that Beijing has systematically obtained American intellectual property and trade secrets through coercion and outright theft, the Trump administration last year demanded fundamental changes to China’s economic model to allow U.S. companies to compete on a more level playing field. These include an end to policies that Washington claims effectively force U.S. companies to transfer their technologies to Chinese partners and full protection for American intellectual property rights.

WHAT’S AT STAKE?

At the most basic level, a dominant position in future high-technology industries, according to the U.S. Trade Representative’s office. China is determined to upgrade its industrial base in 10 strategic sectors by 2025, including aerospace, robotics, semiconductors, artificial intelligence and new-energy vehicles. U.S. officials say they do not have a problem with China moving up the technology ladder, but they do not want it to happen with stolen or unfairly obtained American know-how. They argue that China’s massive support for state-owned enterprises is leading to overproduction, making it hard for U.S. companies to compete on a market-driven basis.

HOW DOES BEIJING VIEW THESE COMPLAINTS?

Chinese officials generally view the U.S. actions as a broad effort to thwart the Asian country’s inevitable rise to a dominant position in the global economy. They deny that China requires or coerces technology transfers, saying that any such actions are commercial transactions between American and Chinese firms. At the same time, China is looking to make a deal with President Donald Trump to ease U.S. tariffs on Chinese goods and to directly reduce the trade imbalance between the world’s two largest economies through increased purchases of U.S. goods, including soybeans and energy. Beijing has also taken some steps to open up to more imports, including lowering tariffs on imported cars and allowing foreign companies in some sectors to own a majority of their operations in China.

WHAT ACTIONS HAS THE UNITED STATES TAKEN?

Trump has imposed punitive tariffs on $250 billion worth of imported goods from China so far – a 25 percent duty on $50 billion worth of machinery, semiconductors and other technology-related products, and 10 percent tariffs on a broader, $200 billion range of goods that includes many chemicals, building materials, furniture and some consumer electronics. Thus far, Trump has spared many consumer goods, including cellphones, computers, clothing and footwear from tariffs. But if no deal is reached by March 2, the United States is scheduled to raise tariffs on the $200 billion in goods from China to 25 percent from 10 percent. Trump said on Wednesday that a delay was possible.

HAS CHINA RETALIATED?

Yes. China has imposed tariffs of 25 percent on $50 billion worth of U.S. goods, including soybeans, beef, pork, seafood, whiskey, ethanol and motor vehicles. Beijing also has imposed tariffs of 5 percent to 10 percent on another $60 billion worth of U.S. goods, including liquefied natural gas, chemicals, frozen vegetables and food ingredients. So far, Beijing has spared imports of U.S. commercial aircraft largely made by Boeing Co. Since Trump and Chinese President Xi Jinping agreed in December to pursue the current round of talks, China has also suspended tariffs on U.S.-made autos and has resumed some purchases of U.S. soybeans.

WHAT HAS HAPPENED IN THE TALKS SO FAR?

China has pledged to make its industrial subsidy programs compliant with World Trade Organization rules and nondistortive to markets, but has offered no details on how it will achieve this, sources told Reuters. It’s unclear if that will be enough to satisfy U.S. negotiators, but that indicates China may be willing to address those American concerns.

The two sides seemed far apart on industrial subsidies and forced technology transfer when they met in late January, though they indicated some progress had been made around intellectual property rights issues.

A key U.S. demand is creating a mechanism for regular reviews of China’s progress on following through on any reform pledges that it makes, a plan that would maintain a perpetual threat of U.S. tariffs.

China has also offered to make purchases of over $1 trillion worth of goods over the next six years, including of agricultural and energy products as well as industrial goods.

WILL U.S. OFFICIALS ACCEPT A DEAL BASED MAINLY ON PURCHASES?

Trump has been optimistic about a deal, saying on Wednesday that the talks were going “very well”. But he indicated in his State of the Union address on Feb. 5 that big spending by China on American goods would not be enough for a deal. Any new trade deal with China “must include real, structural change to end unfair trade practices, reduce our chronic trade deficit and protect American jobs,” he said in the address.

The president’s advisers say he will not soften his demands that China make structural reforms on intellectual property and related issues. The United States rebuffed some initial offers by China last spring to increase purchases of U.S. goods, choosing instead to proceed with tariffs.

WHAT ARE POSSIBLE OUTCOMES OF THIS WEEK’S TALKS?

The two sides could report some progress toward a deal and may extend the March 2 deadline to keep negotiating, as often happened during talks last year to replace the North American Free Trade Agreement, or NAFTA. A stalemate on core structural issues would be viewed as a negative sign, and investors would brace for higher tariffs. Trade negotiations often go down to the wire, so a final outcome is not likely before the end of February, and any agreement will need the approval of Trump and Xi. The two presidents have no meeting planned before the March deadline.

(Reporting by David Lawder; Additional reporting by Chris Prentice; Editing by Jonathan Oatis)