China’s Philosopher King Grapples With a Trade War
WHY YOU SHOULD CARE
Because China is still trying to figure out Donald Trump.
Wang Qishan is known for regaling his visitors with erudite references to books such as Alexis de Tocqueville’s 19th-century treatises on American democracy and the French Revolution. So this spring foreign dignitaries granted audiences with China’s vice president were surprised when he referred to rather more pedestrian fare.
Wang, 70, told overseas visitors that he understood supporters of U.S. President Donald Trump in part because he had recently seen Three Billboards Outside Ebbing, Missouri, the acclaimed Hollywood movie set in a fictional rural town, which would — if it really existed — have voted for the U.S. president by a wide margin.
This was one of a number of recent instances when Wang has struck visitors as oddly out of touch, and occasionally more arrogant than charming. He was also — after playing an outsize role in Chinese finance and politics for a quarter of a century — curiously invisible during his first six months as vice president.
A group of U.S. business figures opposed to Trump’s tariffs were taken aback by how cocky and incurious Wang appeared.
For five years Wang was the ruthless head of President Xi Jinping’s anti-corruption campaign. The two men are “princeling” members of prominent political families — Xi by birth and Wang by marriage — and rose in parallel up the ranks of the Chinese Communist Party. Wang served in a series of financial posts that cemented his reputation as one of the party’s best crisis managers. He also worked closely with top Wall Street banks on a number of Chinese financial restructuring and state bank initial public offerings.
Wang’s surprise appointment to the vice presidency in March, despite his having passed the traditional retirement age for top party leaders, was widely interpreted as a sign that he would play a high-profile role in international affairs, with a focus on the United States.
Instead he largely disappeared. Even as trade tension with the U.S. erupted in April, Wang only surfaced for anodyne public appearances. Meanwhile it was Vice Premier Liu He, Xi’s most trusted economic adviser, who ended up doing all the heavy lifting on U.S. relations this year as China’s lead trade negotiator.
Last week, however, Wang stepped back into the spotlight. On the eve of Trump’s decision to impose punitive tariffs on more than half of all Chinese imports, the vice president met two delegations whose members included former U.S. Cabinet official Robert Rubin and prominent Wall Street financiers, among others.
Both meetings, according to participants and people briefed on the sessions, were dominated by one subject — China-U.S. relations and possible ways to defuse the world’s worst trade war since the 1930s.
“He is coming out of the shadows,” says Chris Johnson, an Asian affairs expert at the Center for Strategic and International Studies and a former CIA China analyst. “He was supposed to be ‘the guy’ on the China-U.S. portfolio but seemed to be dodging it.”
Wang struck a conciliatory tone at the meetings last week, telling top executives from Goldman Sachs, Blackstone and other U.S. financial firms on Monday that neither China nor America “needs to prevail over the other.”
The softer messages contrasted with spring meetings at which Wang often lectured U.S. business executives and foreign diplomats. “He was in history professor mode,” says one Asian diplomat who attended a small group meeting with Wang in April. “His message was that it is important to choose sides carefully in the ebb and flow of history,” adds the diplomat, whose colleagues interpreted the comments as a warning not to ally themselves too closely with the U.S.
At another April meeting with a delegation led by David Lidington, the U.K.’s Cabinet Office minister, Wang’s guests politely expressed support for economic reforms that had just been announced by Xi’s administration. Their host surprised them with a sharp warning that China would reform on its own terms, while pointedly reminding them of the British Empire’s aggression during the “opium wars” against the Qing dynasty.
A month later, as China-U.S. trade tensions were escalating, a group of U.S. business figures opposed to Trump’s tariffs were taken aback by how cocky and incurious Wang appeared. “He was philosopher king Wang and they were all his students in an extended lecture,” says one person briefed on the meeting. “There was a lot of ‘we know you better than you know us’ and not a single question for this group of senior U.S. executives who are about as plugged in as it gets in Washington. He felt like he had it all figured out.”
Wang, Xi and Liu would soon learn that they did not have it all figured out — and especially not Trump, who is now likely to announce his intention to place punitive tariffs on all Chinese exports to the U.S., which totaled more than $500 billion last year.
Wang’s choice of company this past week suggests that he is still struggling to come to grips with the U.S. president. His hastily arranged meeting with old friends from Wall Street seemed particularly desperate, given their demonstrated inability over recent months to dissuade Trump from pushing ahead with his trade war. But it appears that China’s vice president does not know where else to turn, other than the movies.
Tom Mitchell is the Financial Time’s Beijing bureau chief.
OZY partners with the U.K.'s Financial Times to bring you premium analysis and features. © The Financial Times Limited 2020.