China Unleashes Nationalist Hounds in Trump Trade War: Balance of Power

(Bloomberg) --

President Donald Trump says he will meet Chinese counterpart Xi Jinping next month in Japan to talk about trade. But in the meantime their dangerous proxy war ramps up, and in China is taking a darker turn.

Both the U.S. and China need a deal for the sake of their economies, as their spat sends stocks sliding globally. Both leaders, however, cannot afford to be seen to be giving in.

Xi’s power – and that of the Communist Party – is anchored in his image as a strong leader who projects China’s economic and strategic power. Anything that calls that into question is unacceptable. With Chinese growth slowing, and risks at home rising, Xi more than ever needs to assert himself.

We’re seeing that in China’s state media, which has now swung into action after Trump slapped fresh tariffs on Chinese goods. State television proclaims China will “fight to the end if the U.S. wants to.” The official Xinhua News Agency went so far as to repost a strident editorial from a hyper-nationalist tabloid calling it a “people’s war,” using a term introduced by Mao Zedong in 1938 after Japanese troops invaded China.

The rhetoric is aimed at a domestic audience. But in this environment (and with a heightened political mood in the U.S. as election season draws closer), finding a way forward at the Group of 20 summit will be even harder, and incentives even lower, for Xi and Trump alike.

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--With assistance from Kathleen Hunter, Alan Crawford, Zoltan Simon and Anthony Halpin.

To contact the editor responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Karl Maier

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