This is the trade conflict that Xi Jinping is waiting for

Xi Jinping has been preparing for this time for years.

In April 2020, long before President Trump launched a trade war that would shake the world economy, the senior Chinas leader held a meeting with senior communist party officials and explained his vision of turning tables in the United States in a confrontation.

Tensions between his government and the first Trump administration had simmered a previous series of tariffs and technological restrictions. Things got worse after the emergence of Covid, who animates world trade and exposed how the United States and the rest of the world need China for everything, from surgical masks to pain relievers.

Faced with Washingtons concerns about commercial imbalance, China could have opened its economy to more foreign companies because it had committed to do so ago. He could have bought more American, crude oil and soy planes because his officials had promised Trump during commercial negotiations. He could have stopped subsidizing factories and public companies that made steel and solar panels so dear that many American manufacturers have gone bankrupt.

Instead, Mr. XI chose an aggressive line of conduct.

Chinese leaders must tighten international production channels of dependence in our country, forming a powerful ability to counter and dissuade foreign parties from artificially disturbing supplies in China, Xi said in his speech to the Central Commission for Financial and Economic Affairs in 2020.

In simple terms: China should dominate the supplies of things that the world needs, to make your opponents think twice to use prices or try to cut China.

XI has increased exports and deepened the position of Chinas as the basis of the world for manufacturing, partly by directing the state -controlled commercial banking system to give an additional 2 dollar billions to industrial borrowers in the past four years, according to data from the Central Bank of Chinas. He also introduced new weapons of economic war in the country's arsenal: export controls, anti -marital laws and black lists for hitting American companies.

Thus, when Trump's current administration slapped enormous prices on Chinese products, China was able to go to the offensive. In addition to retaliation with his own taxes, he imposed export restrictions on a wide range of minerals and critical magnets, whose global supply had cornered. These minerals are essential to assemble everything, from cars and drones to robots and missiles.

In the United States, the imminent threat of empty store shelves and higher consumer prices put pressure on Trump administration. The prices of certain critical minerals have tripled since China unveiled its borders, according to Argus Media, a research company on London raw materials.

It is a question of turning the lever effect so that the world depends on China, and China depends on anyone. This is a reversal of what was so irritated, namely that China depended so much on the West, said Kirsten Asdal, former intelligence advisor to the US Defense Ministry who is now heading a consulting company focused on China, Asdal Advisory.

China is always based on the West for many advanced technologies such as high-end semiconductors and plane engines. But his desire to arm the supply chain can be one of the most sudden examples of how Mr. Xi redefines the ChinaS relationship with the world and calls into question the supremacy of the United States like no Chinese leader before him.

Choose the world to choose

Even if they are now starting talks which, according to American officials, aim to defuse tensions, the two nations seem to take place on a competition without restraint, in particular on crucial technologies that will shape the future, like artificial intelligence.

Their rivalry can start to blink from the world of competing spheres of influence. The United States pushing other countries to restrict trade with China and warn Beijing that it will punish the nations that do it, the pressure of choosing the sides is mounted.

China will use all the tools at its disposal to cause pain and impose costs in the United States and to any country that aligns with America, said Evan Medeiros, professor of Asian studies at the University of Georgetown who was advisor in Asia by President Barack Obama.

The whole world, continued Mr. Medeiros, is about to learn the answer to a very important question: to what extent have we filed for trade with China and how much does it go for us?

Already, the Trump administration has shown that it cannot completely break trade links with Beijing. He exempted Chinese smartphones, semiconductors and other electronics of some of his prices. Trump also fell asleep on car manufacturers. China has also discreetly indicated that it could exclude certain semiconductors, vital drugs and other health care products from its 125% tariffs on American products.

However, the price dam hits the heart of the Chinese growth engine. Exports were one of the only light points of a seriously weakened economy by a real estate crisis and consumer confidence. If the trade war takes place, this could lead to millions of lost jobs in China, analysts believe.

Never kneel!

Xi said for years that the United States is determined to thwart Chinas, and the trade war seems to have validated its warnings.

It seems more inclined than ever to flex the Chinese muscles, say analysts, considering commercial struggle as a test of its authority as the most powerful Chinese leader from Mao Zedong. And its strategy reflects its perception that China is not lower than the United States.

When he came to power in 2012, Mr. Xi undertook to continue the great renewal of the Chinese nation. This ambition is at the heart of the myth created around M. XI: that it is a transformative figure restoring the glory of Chinas, reversing a century of humiliation by foreign powers.

To achieve his goals, Mr. XI changed the rules to allow himself to remain indefinitely in power. He made national security a priority of all companies. He has paid money into strategic industries, such as semiconductors, who, according to him, will help China better compete with the United States.

China has expanded its domination in the lithium-ion batteries used to supply electric vehicles, advanced robots for manufacturing, solar panels and wind turbines. Experts say that China also catches up with the United States in artificial intelligence, considered to be the battle front of the next industrial revolution.

Xi has also tightened his grip on a large Chinese propaganda apparatus, which has accelerated in recent weeks to reach the public for a prolonged struggle. The Ministry of Foreign Affairs posted a video About the trade conflict on social media entitled Never on his knees!

The trade war is the ultimate validation that the Western hostile forces are trying to contain, eliminate and surround China, said Asdal. XI says we have to be man and strong enough to retaliate.

Even if Mr. Xi ends up going back first, he could run a tactical retirement as a victory over Mr. Trump.

This concentration of authority allows the Chinese leader to make undisputed radical political decisions and to overthrow the CAP A recent article For the magazine Foreign Affairs.

Costs for China

It is not clear that Mr. XIS 'long-term strategy will make China strong enough to overcome the United States as a superpower. The emphasis on critical technologies and economic autonomy has aggravated friction with business partners from China, and this has a cost for many Chinese households.

American leaders said that if China extended its economic ties to the West, it would gradually evolve towards political liberalization and a complete embrace of the free markets. But China has progressed in its own terms, mixing its authoritarian system with single party with capitalism and richer without losing political control.

XI doubled this model, leading more capital to companies and public banks to ensure that the Communist Party had even more saying about the leadership of the economy. Entrepreneurs once had spaces to develop, but under Mr. Xi, officials dictate which industries thrive and who go bankrupt. A more open economy, driven by market demand and not the political mandate, could have extended the ranks and influence of Chinese companies and consumers of the middle class.

But that could have made a challenge for the control of the parties on the company.

This is not an economy that the statist government wishes, and that is why under-consumption has long been recognized as a problem, even at the highest level of the government, said Yasheng Huang, an expert in the Chinese economy of Massachusetts Institute of Technology School of Management of Management. But there were no comparable reforms, he added.

Experts have long argued that social protection spending would make the Chinese economy more balanced and less vulnerable to the West. Chinese economists have urged the government to invest in hospitals and pensions and to help the hundreds of millions of rural migrants living in the city are qualified for urban advantages. These steps are considered crucial to encourage ordinary Chinese citizens to save less and spend more, contributing more to the growth of countries.

Some experts wonder even if Mr. Xi should challenge the United States so aggressively, rather than following the famous saying of a first leader, Deng Xiaoping: Hide your strength, wait for your time.

China has become so ambitious without reaching superpower status, said Shen Dingli, a researcher based in Shanghai who focuses on American-Chinese ties.

Mr. Shen cited extended claims from Beijing to the Sea of ​​Southern China; The erosion of Hong Kongs' autonomy; And the flow of Chinese exports that makes it difficult for other countries to compete in trade. Together, they alienated a large part of the world, contributing to what is equivalent to a calculation for Mr. XI.

China once had a favorable external environment for development as a nation, but it has deteriorated, said Shen. It is very regrettable.

Daisuke Wakabayashi Seoul contributed reports and Berry Wang And Joy Dong from Hong Kong.