(Originally published by South China Morning Post on 11 December 2018.)
Former Hong Kong official Patrick Ho Chi-ping was arrested at JFK airport in New York and is now in a Manhattan jail on a fraud conviction for trying to bribe African officials for a Chinese energy company.
Sabrina Meng Wanzhou, chief financial officer of China’s largest telecom equipment maker, Huawei, is facing extradition to the US from Vancouver, Canada, in a headline-grabbing disruption of her flight from Hong Kong to Mexico.
It would be an understatement to say that all of these actions initiated by the United States Justice Department, occurring roughly over the past year, will complicate the delicate ceasefire in the US-China trade war.
But those who wish to draw quick conclusions should consider the important differences between the administration of US President Donald Trump, who started the trade war in July, and the US Justice Department, which has been an object of Trump’s scorn since he took office last year.
The Justice Department’s actions against Ho, Xu and Meng represent just some of the countless efforts to uphold principles that have guided Washington’s global-institution building for decades.
Many in Washington see the Justice Department’s orders and convictions as part of a sincere effort to rid the world of corruption, uphold fair business practices, and check the influence of authoritarian governments. But others will call the department’s collective actions a racist, imperialist crusade to arrest the decline of American influence.
This debate will rage on now that Meng’s predicament has the world’s attention. But it is important to be aware that it won’t just be Americans versus Chinese.
As a self-proclaimed expert in the “art of the deal”, Trump is fond of brass-tacks negotiations, and this proclivity requires bargaining chips. So we should expect Meng, Xu or Ho, or perhaps all three of them, to become pawns in the US-China stand-off over the trade imbalance and market access, regardless of how much the Justice Department wants convictions and is seeking to keep a distance from geopolitics.
Trump has already shown his willingness to trade away Washington’s principles in exchange for an expeditious deal.
ZTE, another Chinese telecom equipment giant, was found to have violated US sanctions on Iran. Trump allowed the company to get away with a fine and a US-court-appointed monitor, out of concern about “Too many jobs in China lost”. That explanation, which baffled everyone accustomed to the president’s diatribes against China’s stealing of US jobs, was a clumsy cover up of his use of ZTE as a bargaining chip.
Meanwhile, Reuters has turned up evidence that ZTE is violating US sanctions on Venezuela by building a surveillance system for the Venezuelan government. According to Reuters, ZTE has helped set up a database that allows the Venezuelan government to monitor its citizens, and install data units manufactured by US IT company Dell Technologies.
Clearly, for the US president, the art of the deal trumps the enforcement of Washington’s sanctions.
Many senior lawmakers in Washington, including those within the ruling Republican Party, have shown their willingness to break with the president over his tendency to ignore Washington’s strategic, long-term principles in favour of negotiating-table victories.
Therefore, expect the trials of Meng and Xu, as well as the continued incarceration of Ho, to be beset by internecine warfare in Washington, and buffeted by the winds of US-China relations. And, as all this plays out, Trump might emerge as a closer ally of China’s President Xi Jinping than of members of his own party.