Xi Jinping's vision, outlined in 2020, focuses on making China indispensable in global supply chains. This is a response to trade tensions with the US, particularly following the Trump administration's trade war and the COVID-19 pandemic, which exposed global dependence on China for essential goods.
Rather than opening its economy as previously pledged, China opted for an assertive strategy. Instead of increasing purchases of American goods, China aimed to dominate the production and supply of crucial global necessities. This would deter any attempts to economically isolate or pressure China through tariffs or supply chain disruptions.
The central objective is to create a powerful deterrent by controlling vital global supply chains. This ensures that any action against China would have severe global consequences, effectively shielding the country from economic coercion.
Xi Jinping has been preparing for this moment for years.
In April 2020, long before President Trump launched a trade war that would shake the global economy, China’s top leader held a meeting with senior Communist Party officials and laid out his vision for turning the tables on the United States in a confrontation.
Tensions between his government and the first Trump administration had been simmering over an earlier round of tariffs and technology restrictions. Things got worse after the emergence of Covid, which ground global trade to a halt and exposed how much the United States, and the rest of the world, needed China for everything from surgical masks to pain medicines.
Faced with Washington’s concerns about the trade imbalance, China could have opened its economy to more foreign companies, as it had pledged to do decades ago. It could have bought more American airplanes, crude oil and soybeans, as its officials had promised Mr. Trump during trade talks. It could have stopped subsidizing factories and state-owned companies that made steel and solar panels so cheaply that many American manufacturers went out of business.
Instead, Mr. Xi chose an aggressive course of action.
Chinese leaders must “tighten international production chains’ dependence on our country, forming a powerful capacity to counter and deter foreign parties from artificially disrupting supplies” to China, Mr. Xi said in his speech to the Central Financial and Economic Affairs Commission in 2020.
Put simply: China should dominate supplies of things the world needs, to make its adversaries think twice about using tariffs or trying to cut China off.
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