U.S. President Donald Trump. (Photographer: Olivier Douliery/Pool via Bloomberg)

Trump Respects China's Xi More Than Other Leaders, Bannon Says

(Bloomberg) -- President Donald Trump respects Chinese President Xi Jinping more than any other foreign leader, his former chief strategist Stephen Bannon said in a speech in Hong Kong in which he also warned that China must cease what he described as economic warfare against the U.S.

“The relationship they have is very strong, and I don’t think there’s a world leader that President Trump respects more than the president of China,” Bannon said.

The speech, to financial professionals at a forum organized by CLSA, an overseas unit of China’s biggest state-owned brokerage, Citic Securities Co., was closed to the press. Six people who attended Bannon’s remarks described what he said.

“Everybody talks about this trade war that’s coming. I think we can avoid a trade war,” Bannon said. “But to avoid the trade war we’re going to have to deal with the economic war against America.”

China must allow more U.S. access to its markets and stop requiring what he called “forced technology transfer” by U.S. companies seeking to do business in the country, Bannon said.

“But there’s great affinity between our two countries,” he added, citing their World War II alliance.

Trade Fights

Since leaving the White House in August and returning to the conservative news outlet Breitbart News, Bannon, 63, has cast himself as a defender of the nationalist agenda Trump advocated on the campaign trail. Bannon has cited his pursuit of a harder line against China as a source of tension with other administration officials including National Economic Council Director Gary Cohn.

“The most acrimonious, vitriolic, nastiest debates inside the White House, in the Roosevelt Room and in the Oval Office, were about trade,” Bannon said in his speech, according to an attendee. He described a wing comprising himself, Commerce Secretary Wilbur Ross, White House trade adviser Peter Navarro and U.S. Trade Representative Robert Lighthizer in opposition to “globalists” that he didn’t name.

“Really good guys,” he said of his opponents. “They just have a very different opinion of the world.”

Bannon, who declared the Trump presidency “over” upon his departure, has emerged as one of the administration’s most pointed critics.

In an interview with CBS News that aired Sunday, Bannon called Trump’s May decision to fire former FBI Director James Comey the biggest mistake “maybe in modern political history.” He also said the president risked the Republican majority in the House of Representatives if he pushed Congress to legalize immigrants brought to the U.S. unlawfully as children.

China Tensions

The prospect of tensions between the U.S. and China -- the world’s two largest economies -- has become a concern for investors after Trump regularly bashed his nation’s largest trading partner on the campaign trail for what he said were unfair policies. The relationship has also been strained as Trump and Chinese President Xi Jinping struggle to find common ground on North Korea’s nuclear program.

But in his speech, Bannon appeared to attempt to package his doctrine of American economic nationalism as compatible with -- or even modeled on -- what he called “mercantilist” systems in China, Japan and South Korea. The U.S. should be similarly protective of its industries and jobs, he said.

“These are very difficult issues. They go to the hearts of two different systems, the mercantilist system that the Chinese have and the open-market free trade system,” Bannon said. “We as economic nationalists are trying to change that. We’re not free traders. We think it’s a radical idea, and it’s a radical idea that’s actually worked to the detriment of our country.’’

Trump, who has linked U.S. trade policy with China’s efforts to restrain Pyongyang, asked his top trade official to investigate Chinese theft of U.S. intellectual property last month. China backed U.S. proposals for new sanctions against North Korea in the United Nations on Monday, but only after the U.S. dropped a demand for a ban on oil imports.

Bannon isn’t the first controversial figure to address the CLSA forum, which is attended by hundreds of asset managers each year. Edward Snowden spoke via satellite in 2015 and Sarah Palin appeared eight years ago.