1 Analyzing Trump’s picks for China-related foreign policy posts
In the week of Nov. 11, President-elect Donald Trump announced on social media his picks for several top positions. Media outlets also reported on possible Trump picks.
Trump’s official China-related picks
Marco Rubio — Secretary of State
Florida Senator Marco Rubio is the current vice chairman of the Senate Intelligence Committee and a member of the Senate Foreign Relations Committee. He is known for taking a tough line on the PRC, Iran, Cuba, and Venezuela, as well as being an anti-communist.
Rubio has been an outspoken critic of the CCP in the Senate. He called out the communist regime over its many human rights abuses, including in Xinjiang, Hong Kong, and the persecution of Falun Gong, and sponsored legislation pertaining to those issues. Rubio also introduced bills to counter the CCP threat and influence, and was sanctioned twice by the PRC as retaliation for U.S. measures against Chinese and Hong Kong officials over Hong Kong and Xinjiang matters (it is unclear how Beijing will handle Rubio’s travel ban if he is confirmed as Secretary of State). In May 2023, Rubio’s office released a report on the origins of the COVID-19 pandemic.
Rubio is a supporter of Taiwan. In August 2024, he wrote on X, “Communist China is not, and will never be, a friend to democratic nations. The International Community must continue to stand with Taiwan as they defend their sovereignty and freedom.”
Mike Waltz — National Security Advisor
Michael Waltz, a three-term Republican congressman from east-central Florida, has been chairman of the House Armed Services subcommittee on readiness and a member of the House Foreign Affairs Committee and the Permanent Select Committee on Intelligence. He was formerly a Green Beret and retired from the army as a lieutenant colonel after earning four Bronze Stars.
Waltz has been hawkish on China. In December 2021, Waltz wrote on X, “… I for one will fight to the end to ensure the United States and the free world do not one day bow to the Chinese Communist Party.” He also urged the U.S. to boycott the 2022 Winter Olympics in Beijing over the CCP’s involvement in the origin of COVID-19 and its persecution of the Muslim Uyghur population in Xinjiang.
On Nov. 2, 2024, Waltz argued in an essay co-written with Georgetown University professor Matthew Kroenig for The Economist that a second Trump administration should “act urgently to bring the conflicts in Ukraine and the Middle East to a swift conclusion, and finally focus strategic attention where it should be: countering the greater threat from the Chinese Communist Party.”
Pete Hegseth — Secretary of Defense
Pete Hegseth is a Fox News political commentator and a military veteran (two Bronze Stars) who served tours of duty in Afghanistan and Iraq.
Hegseth said in a television program in 2023 that China had a plan to “supplant” the U.S. culturally, financially, and technologically through leveraging their growing network of partners. He also said in an interview to promote his recent book that “China’s building an army specifically dedicated to defeating the United States of America” while the U.S. is “always a decade behind and fighting the last war.”
Hegseth noted in recent appearances that the PRC is the primary strategic concern for the U.S. and that Beijing was “specifically dedicated to defeating the United States of America.” He continued, “They have a full spectrum long-term view of not just regional but global domination.”
John Ratcliffe — CIA Director
John Ratcliffe is a former Congressman from Texas and a former Director of National Intelligence (DNI) during Trump’s first term. More recently, Ratcliffe was co-chair of the pro-Trump think-tank Center for American Security and advised the President-elect on national security policy during his 2024 campaign.
When Ratcliffe was serving as DNI, he published an article in The Wall Street Journal where he noted that “the People’s Republic of China poses the greatest threat to America today, and the greatest threat to democracy and freedom world-wide since World War II.” He added, “The intelligence is clear: Beijing intends to dominate the U.S. and the rest of the planet economically, militarily and technologically. Many of China’s major public initiatives and prominent companies offer only a layer of camouflage to the activities of the Chinese Communist Party.”
Tulsi Gabbard — Director of National Intelligence
Tulsi Gabbard was deployed as a soldier to Iraq and is a former Democrat who was a U.S. Representative for Hawaii. Gabbard endorsed Trump in August 2024 and joined his transition team along with Robert F. Kennedy Jr. In October, Gabbard announced that she was joining the Republican Party.
Gabbard has long been vocal in her opposition to U.S. military intervention abroad. She is also against the U.S. adopting a confrontational approach towards China and Russia. In 2019, Gabbard urged Trump to end the “destructive trade war with China.” In 2021, she implored President Joe Biden in a Facebook post to “ratchet down the new Cold War with Russia and China, replacing the policy of confrontation with cooperation, so we can work together addressing issues affecting all of humanity, such as nuclear proliferation, climate change, pandemics, terrorism, and human trafficking.” In 2023, Gabbard reposted Ray Dalio’s LinkedIn post about how China and the U.S. are on the brink of war and calling for peaceful relations with the PRC.
Rumored Trump pick
Robert Lighthizer — Trade czar?
The Wall Street Journal reported on Nov. 12 that President-elect Donald Trump wants former U.S. Trade Representative Robert Lighthizer as his trade czar, citing people familiar with the matter.
As trade czar, Lighthizer would oversee trade policy across the administration, including at the Office of the U.S. Trade Representative and the Commerce Department, the people said. As the position would not require Senate confirmation, Lighthizer would be able to immediately start implementing Trump’s tariff proposals after the inauguration in January 2025.
The people said Lighthizer has not yet been offered the job, and Trump could still change his mind and offer him other top jobs such as Treasury Secretary, Commerce Secretary, or director of the National Economic Council.
Backdrop
Donald Trump is returning to the White House at a time when the Chinese economy is rapidly deteriorating and the international community’s wariness of the CCP is at an all-time high.
Our take
1. President-elect Trump’s top foreign policy picks indicate that he considers the CCP to be America’s number one strategic threat, and plans to continue and even expand upon his first term’s “tough on China” approach. This includes keeping current China tariffs and adding new ones, addressing the CCP’s threat to U.S. national security, curbing the PRC’s access to advanced technologies, deterring the PLA from invading Taiwan, and spotlighting gross human rights abuses in China.
The second Trump administration could also attempt to hold the PRC accountable for the COVID-19 outbreak and for breaking aspects of the trade agreement from Trump’s first term.
2. As Trump and several of his appointees have condemned communism and Marxist ideology, the second Trump administration could potentially engage in low-key and indirect ideological confrontation with the CCP. Ideological confrontation under Trump is likely to be more nuanced than the Biden administration’s “democracy versus autocracy” framework.
For instance, the second Trump administration could signal that it will respect the political systems of other countries and not push for regime change in authoritarian nations. Though the administration will stick to America’s “one-China” policy and support Taiwan without promoting “Taiwan independence,” U.S. officials could call attention to the contrast between the authoritarian mainland and the democratic system realized in Taiwan. Trump could also again criticize socialism and communism in addressing the United Nations General Assembly without naming the PRC.
3. The second Trump administration is likely to avoid unnecessary provocations with the PRC that could compel the CCP to aggression. This is because Donald Trump and several of his political allies whom he nominated to serve in the administration (Robert F. Kennedy Jr., Tulsi Gabbard, Elon Musk, etc.) are opposed to U.S. military interventionism and war in general.
Not wanting to provoke conflict with the PRC, however, does not mean that the second Trump administration will take a dovish approach to China. There is broad consensus in the U.S. and abroad about confronting the CCP threat and deterring the PLA from invading Taiwan and other acts of aggression. In getting tough on Communist China without being unduly provocative, the Trump administration is likely to resort to the “peace through strength” approach and other novel measures.
4. Of Trump’s official China-related picks, Marco Rubio, Mike Waltz, and John Ratcliffe stand the best chance of being confirmed by the Senate because they are considered to be “mainstream” appointees and are familiar to their colleagues in Congress.
Pete Hegseth and Tulsi Gabbard could run into difficulties during the confirmation process. Hegseth is considered to be an unknown quality with “insufficient” credentials. Gabbard is also considered to be “lacking” in intelligence experience and holds maverick political and geopolitical views.
2 Zhuhai car attack reflects intensifying social problems in China
Zhuhai ‘revenge against society’ car attack
Nov. 11
A 62-year-old man surnamed Fan drove his SUV into a large group of people exercising around a track at the Zhuhai Sports Center in Guangdong Province at 7:48 p.m. Beijing Time. According to a statement released the next day by the Zhuhai police, the man’s action killed at least 35 people and injured 43. The police said that their initial investigation found that Fan launched the attack because he was unhappy with the distribution of matrimonial assets after his divorce.
Information circulating on Chinese social media suggested that the death toll could have exceeded one hundred people, with the victims mainly comprising members of a grassroots walking and fitness group.
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In recent years, there have been multiple cases of drivers indiscriminately ramming pedestrians in so-called “revenge against society” (報復社會) incidents.
Nov. 12
Xi Jinping and PRC premier Li Qiang issued “important directives” condemning the Zhuhai car attack. They described the attack as “extremely heinous” and called for all-out efforts to treat the injured, bring the perpetrator to justice in accordance with the law, and prevent similar extreme incidents from recurring.
Guangdong Party secretary Huang Kunming instructed local officials to “effectively advance special governance for social conflicts, as well as meticulously handle and resolve disputes related to marriage and family, neighborhood issues, legal and litigation matters, rural and land-related conflicts, mass financial concerns, and property disputes.”
Huang also urged communities across Zhuhai to strengthen their security forces and launch comprehensive safety inspections. The inspections are to focus on groups such as the “four withouts” and the “five losses” to preemptively identify and intervene in potential psychological and social conflicts.
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The “four withouts” refers to individuals who are without a spouse, children, employment, or stable income. The “five losses” refer to individuals who have experienced failed investments, life disappointments, strained relationships, psychological imbalance, and mental health issues.
Nov. 13
Information circulating on Chinese social media noted that security checks were being carried out in Zhuhai at local government offices, large shopping centers, and parking lots at entertainment venues. The information added that stone pillars or bollards had been placed at the entrances of major malls to prevent vehicles from crashing in, and Zhuhai was reportedly seeing a stone barrier shortage.
‘Bike revolution’ continues to brew
Nov. 13
A video titled, “Confessions of a Cycling College Student” (一位騎行大學生的自白)highlighting the collective struggles faced by the current generation of university students made the rounds online.
The college student said in the video: “If we had the money to buy motorbikes or cars, we would never choose to ride those shared bikes. Ninety percent of us college students, 90 percent of young people, and 90 percent of families are very poor. We’re so poor that we can’t afford to travel during vacations, so poor that we can’t afford social activities, so poor that we can’t afford to go abroad or participate in expensive sports, and so poor that we end up cycling over 50 kilometers in the middle of the night just to have a basket of soup dumplings.”
The student added, “Most of us will graduate and end up with a salary of just over 3,000 yuan, drifting through life aimlessly. I don’t want to reach old age and have nothing worth remembering. Right now, we are vibrant and young. We will never be younger than we are today, so we must do these things today.”
Nov. 15
Bike sharing platforms Meituan Bike and Hellobike announced that they were suspending operations in Zhengzhou City where the “Night Ride Army” trend began, with the operation resumption date to be announced later.
Backdrop
Bumper college graduations
On Nov. 14, the PRC Ministry of Education and Ministry of Human Resources and Social Security held a joint meeting to outline employment and entrepreneurship plans for the 2025 cohort of university graduates.
The meeting shared data showing that the number of graduates from general higher education institutions is expected to reach 12.22 million in 2025, an increase of 430,000 compared to 2023. The 2025 projected figure is also nearly 40 percent higher than the over 8.7 million university graduates in the 2020 cohort. Meanwhile, the expected number of graduates in the 2024 cohort is projected at 11.79 million.
Stocks and deposits data
1. Over 1,700 stocks (32 percent of all stocks) in the A-shares market fell back to levels seen in September when markets closed on Nov. 15. Of those stocks, nearly 390 saw price declines exceeding 20 percent at some point during intra-day trading.
The Shanghai Composite Index fell by 5.77 percent from Oct. 8 (after the PRC National Day holiday week) to Nov. 15, and closed below the 3,400-point mark on Nov. 14 and Nov. 15. The net outflow of main funds from the Shanghai and Shenzhen markets during the aforementioned period was 1.89 trillion yuan, with retail investors taking over the shares.
2. People’s Bank of China data for October showed that household deposits dropped by 570 billion yuan, a significant decrease. Also, deposits in non-bank financial institutions increased by 1.08 trillion yuan.
3. 3. The National Bureau of Statistics released data on Nov. 15 showing that new home prices fell by 5.9 percent in October 2024, after a 5.8 percent drop in the previous month. This was the 16th consecutive month of declines and the biggest drop in nine years.
Our take
1. Rapid and continuous economic deterioration in China in recent years appears to be the main factor behind the rise in acts of “revenge against society,” the “bike revolution,” and growing social instability on the mainland.
Economic decline, and particularly the continuous falling of real estate prices, has greatly reduced the wealth of the Chinese people and caused widespread unemployment. Mounting economic hardship has led to a rise in those in the “four withouts” and “five losses” groups, with a corresponding increase in violent societal incidents. Concurrently, local governments under fiscal strain have ramped up their extraction from individuals and businesses, including charging higher rates for public services, hiking traffic fees, and “deep-sea fishing” style law enforcement. Such measures have further damaged the business environment in China, resulting in more business closures, higher unemployment, and the emergence of a vicious cycle of social problems.
Xi Jinping’s domestic and foreign policies are the primary causes accelerating China’s economic deterioration and intensifying social tensions. The rise of “Wolf Warrior” diplomacy near the end of Xi’s first term and during President-elect Donald Trump’s first administration led to a worsening of Sino-U.S. tensions and China’s relations with many countries. The aggressive approach to foreign affairs attracted sanctions, tariffs, and prompted the relocation of supply chains out from China, which in turn contributed to economic decline. In 2019, the Xi leadership introduced the “three red lines” policy to rein in the property sector, which ended up seriously affecting China Evergrande, the leading developer at the time, and bursting the real estate bubble. Finally, Xi’s “zero-COVID” policy during the pandemic years severely damaged the economy and created many social problems.
2. The “Confessions of a Cycling College Student” video highlights the young generation’s sense of hopelessness about their prospects. This gloomy attitude, as well as having fewer things to lose or get attached to, could give young Chinese more reasons to participate in social upheaval. The projected graduation of over 12 million college students in 2025 is going to worsen the unemployment situation in China and will lay the groundwork for the rise of social movements (like the “Night Ride Army”) that have the potential to become political.
The CCP authorities are expected to step up authoritarian controls to rein in rising social instability. However, tightening controls also creates an even more suffocating social environment. The heady mixture of immense social pressure, larger cohorts of graduating students, rising youth unemployment, and growing pessimism about the future could push young Chinese to become more anti-government and actively fight for freedom.
3. The CCP is likely to have more problems with rising social instability as the Chinese people who rushed into the stock markets in recent weeks find that they cannot extricate their funds without suffering losses. Many retail investors snapped up stocks in anticipation of a “bull” market after Beijing introduced economic support measures at the end of September. However, the market has not been able to sustain the post-“stimulus” high, partly because investors have figured out that the economic support measures may not be effective and partly due to expectations of tough times ahead for China with Trump winning a second term.
Chinese economist Hong Hao told mainland media that about 3 to 4 trillion yuan is stuck in the markets after small investors rushed into the market from late October to early November to take advantage of the rally. This is partly reflected in central bank data showing household deposits falling by 570 billion yuan, with a sizable portion of those funds flowing into the markets, as well as retail net inflows into the Shanghai and Shenzhen indexes reaching 1.89 trillion yuan between Oct. 8 to Nov. 15.
When retail investors, and especially those with leveraged loans, are burnt as the market trends downward, China could see more cases of “revenge against society” and even anti-government protests.
4. Economic and social problems in the PRC are likely to worsen going forward with the return of Donald Trump to the White House and the increased possibility of comprehensive tariff hikes on Chinese goods.
Exports are currently the only “engine” of China’s “troika” of growth drivers that is performing. The U.S. is a major market for Chinese goods and a significant source of China’s trade surplus. PRC customs data shows that in 2023, China’s exports to the U.S. amounted to $500 billion, or 14.8 percent of total exports, while China’s trade surplus with the U.S. ($336.1 billion) represented 40.8 percent of the total.
China’s exports will take a hit should the second Trump administration proceed to raise or add new tariffs. Declining exports would force Chinese companies to either lower prices or export at a loss to stay in business. The economic strain on Chinese companies would lead to more business failures, increased unemployment, and the expansion of socially disadvantaged groups (i.e. the “four withouts” and “five losses”). This would in turn fuel and exacerbate the trend of social problems in China, causing serious headaches for the already embattled CCP.
