SINOWEEKLYPLUS

Seven reasons why China can’t withstand a trade war; what a US strike on Syria could mean for China

SinoInsight 1
The Trump administration is preparing to attack Syria in light of the Assad regime’s use of chemical weapons.

President Donald Trump tweeted on April 11 that missiles “will be coming” to Syria and suggested that Russia can’t stop them. On April 12, he tweeted that an attack on Syria “could be very soon or not so soon at all,” but didn’t dispute his earlier hint of an impending strike.

OUR TAKE
We believe that there is a high probability of a joint US-UK-France strike on Syria. Through the attack, Trump is signaling to Russia, China, and North Korea that America has great resolve in achieving its objectives. An attack would also affirm U.S. commitment and uncompromising stance on North Korea denuclearization and the Chinese regime’s trade issues.

The Trump administration also appears to have telegraphed its resolve on China through Hong Kong media. On April 11, two days after John Bolton took over as national security advisor, the South China Morning Post cited two former senior U.S. officials as saying that Bolton is “willing to risk a military conflict with China to achieve President Donald Trump’s goals for America.”

SinoInsight 2
On April 12, the Chinese authorities announced that the People’s Liberation Army Navy would carry out live-firing drills in the Taiwan Straits on April 18.

OUR TAKE
The Chinese Communist Party (CCP) is playing carrot and stick with Taiwan to warn against the island nation pushing for independence. However, we believe that the CCP won’t actually attack Taiwan given its current economic woes (see articles below) and renewed U.S.-Taiwan ties.

SinoInsight 3
Sun Zhengcai, the disgraced Chongqing Party secretary and Politburo member, went on trial in Tianjin on April 12. Sun, whom many observers believed to be Xi’s future successor, confessed that he “only had himself to blame” and “deserves to be punished” for taking bribes of $27 million.

In the days leading up to Sun’s trial, Chongqing officials published statements criticizing Sun and his predecessor Bo Xilai in the local state newspaper.

OUR TAKE
The reaction of Chongqing officials to the Sun Zhengcai trial suggests that incumbent Chongqing chief Chen Min’er has decided to fall in line with Xi Jinping. Before the 19th Party Congress, we analyzed that Chen wouldn’t be Xi’s designated successor as the Jiang faction appeared to have guided his career progression (Link 1, Link 2) . Also, Chen may be Chongqing Party secretary, but Xi is almost certainly scrutinizing his governance and actions to determine his loyalty.

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