America’s Biggest Mis-judgement of the Cross Strait Relations | Zooming In China

Happy New Year everyone!  Welcome to Zooming In China Tea Time. I’m Simone Gao.

As the final days of 2021 draw to a close, the United States and Taiwan are no closer to clarity on the question of whether the US will militarily support Taiwan if China attacks. Despite ongoing threats from China and increasing displays of PLA military strength in the region, the US continues to cling to the Taiwan Relations Act as their guiding principle, a principle that is too ambiguous to be useful against the modern-day threat of Xi Jinping’s  regime.

Why might the US be resisting a formal change of policy toward Taiwan despite the advancing threat posed by China?  One reason may be found in Taiwan’s internal disputes over their current and desired relationship with Beijing and the impacts of those on US trade with Taiwan.

Taiwan’s minority party, the Kuomintang, supports deeper ties with China and, on December 18th, Taiwan had four referendums to a public vote, attempting a show of no confidence in the current government. Kuomingtang is the main author of these referendums.  If these referendums had passed, they could have provided a springboard for the party to make a comeback in important mayoral elections next year. While the referendums are non-binding, they send a strong signal to current administrations about the values and ideals of the people they serve.

The most contentious of those votes was whether to reinstate the ban on pork imports containing ractopamine, a common feed additive used by American pig farmers. The additive helps to reduce the fat content of the meat, and leaner meat means a greater profit per animal. Ractopamine has been deemed safe at appropriate levels by US officials and is widely used in animal feed in the United States, but products containing it have been banned in the European Union, China, Russia, and 157 countries.

Taiwan had a similar ban until 2012, when then-President Ma Ying-jeou began allowing beef with low levels of this additive to be imported from the United States. Then, on August 28, 2020, President Tsai Ing-wen announced an executive order that would allow the import of pork containing ractopamine beginning on January 1, 2021.

The public and parliamentary protests quickly followed. And in January 2021, as the imports began, small gold and yellow stickers began appearing at Taiwanese restaurants proclaiming that they served only Taiwanese pork. President Tsai’s reassurance that these products would be clearly labeled to allow citizens a choice in whether they consumed them seemed to do little to calm public fears. 

Public concerns seem to center on two issues: the potential impacts to the health of Taiwanese citizens and the impacts to Taiwanese pork farmers. Pork is an important domestic product for Taiwan, as it is a common staple in their cuisine. About 90 percent of pork is provided by local farmers, and they are part of a powerful agricultural lobby. 

Polling in advance of the referendum vote indicated that it was likely to pass, with 55.4% projected to vote in favor of reinstating the ban. However, on December 18th, that referendum, along with the three others, failed. 

This may have been due to low voter turnout, but it is equally likely that President Tsai’s recent arguments in favor of allowing the imports swayed public opinion. In particular, she pointed to the importance of developing an open trade agreement with their most important ally, the United States, at a time when China is increasing their aggression toward Taiwan. 

In response to the vote, Tsai told reporters that “Taiwan’s people want to go out into the world and are willing to actively participate in the international community.” She expressed hope that these results would strengthen her case to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

The controversy over meat imports containing ractopamine has been a consistent source of conflict between Taiwan and the United States. Initially, the controversy centered on Taiwan’s ban of American pork products. But the United States also believed that Taiwan repeatedly violated commitments to expand both their beef and pork markets. From 2006 to 2021, there were tensions in the Taiwan-US trade relations, including several cancellations of annual trade negotiations and failed bilateral trade agreements due to Taiwan’s unwillingness to fulfill its commitments. 

In a recent article published on the United News Network in Taiwan, the president of the US-Taiwan Chamber of Commerce Rupert Hammond Chambers wrote that since President Ma Ying-jeou opened Taiwan to American beef containing ractopamine, consumption has increased steadily, yet no Taiwanese have experiences health problems due to that consumption. It would be illogical to assume that American pork containing ractopamine is unsafe if American beef containing the same was found to be safe for consumption over the past decade. 

If it is not truly a question of safety, then, what is the concern? It is a taking of sides, with the current Taiwanese leadership favoring a trade and military relationship with the United States and the opposition leadership looking to reunite with China.

Taiwan now has to decide whether to become an important member of the international trade community, establish deep trade relations with the United States, or to become part of China’s economic alliances. In January 2021, as Taiwan began allowing US imports of pork, the Taiwan Affairs Office of the Communist Party of China declared that meat products produced in Taiwan or transshipped through Taiwan would be strictly prohibited from being imported into China.

That announcement forced Taiwan to choose whether to move closer to the US or the CCP in trade, and Taiwan has now clearly made its decision, one that has significant impacts on national security. When I interviewed the highest-ranking official to have visited Taiwan in the last 40 years, former Undersecretary of State  Keith Krach, he mentioned the importance of Taiwan’s decision to begin importing American pork. 

After Taiwan’s decision to allow pork imports, the US immediately began to promote the free trade agreement with Taiwan. This is vital to the security of Taiwan today, because a free trade agreement would encourage American companies to invest in Taiwan which will, in turn, encourage other countries to make similar investments. Those investments add a layer of security to Taiwan. If countries all over the world make and maintain significant investments in Taiwan, they will readily oppose any attempt by the CCP to take Taiwan by force and will form an alliance to protect Taiwan against the CCP. With the ongoing tensions in the Taiwan Strait, this is a critical matter for Taiwan. 

The United States wants to protect Taiwan based on the ideals of protecting freedom and democracy as well as their own national security. But they need a meaningful and lasting commitment from Taiwan if they are to offer an unconditional and firm defense commitment. Through trade and investments, the US can help Taiwan join the international trade and security system and promote international investment in Taiwan. This is the most effective and least costly way to offer full defense protection of Taiwan. 

Those trade and defense commitments would also help prevent the confusion created by recent Biden administration comments and ambiguity by the US Department of Defense toward the conflicts in the Taiwan Strait. When asked on multiple occasions if the US would protect Taiwan against a CCP attack, Biden has firmly said yes. Immediately afterward, however, the White House spokesperson and Department of Defense spokesperson clarified that the US policy toward Taiwan has not changed and remains centered on the Taiwan Relations Act. That means the US’s goal is to help Taiwan maintain sufficient self-defense capabilities and they regard any non-peaceful means to resolve the Taiwan issue, including embargoes and boycotts, as a serious threat to the peace and security of the Western Pacific.

The language of this Act does not make clear whether the United States will use military force to defend Taiwan in the case of an invasion or attack by China. The ambiguity is a product of the historical context at the time it was enacted. At that time, the US was drawing in the CCP to jointly fight the Soviet Union, then seen as the greater US enemy. To establish diplomatic relations with the Chinese Communist Party, the US broke off their relations with the Republic of China, a move that was loudly contested by the opposition in America. To appease that opposition, the Taiwan Relations Act was created. This Act was a tactical strategy of rights and interests implemented by the US to achieve its strategic goal of fighting the Soviet Union. 

But this strategic approach also serves ideals since the US-Soviet Cold War was never a mere battle for hegemony, instead, it was a collision of two ideologies. This makes sense if we look at the difference between the Cold War and conquests of Eurasia by Alexander the Great or the Mongol Empire. Those ancient wars were entirely aimed at conquering and dominating another civilization while the US-Soviet Cold War was a confrontation between two concepts and two ideologies: Communism and liberal democracy.

The United States and the Soviet Union formed their respective camps and found allies to stand with them. Those allies allow them to expand their sphere of influence, but they also often lead to less-than-ideal partnerships in the name of overcoming a great evil empire or ideology. In the case of the US, that meant joining forces with the CCP to fight what they perceived to be a greater evil in the Soviet Union. 

Currently in the United States, the ideals of freedom and democracy, the bedrock of this nation, have not changed. But the strategic goals, however, have changed. The Soviet Union, the core rival in the Cold War period, has been replaced by the CCP who has now become enemy number one for the United States. The CCP today far exceeds the Soviet threat to the United States during the Cold War period. It is threatening the core value system and political order cultivated by Western civilization. Given that, we could see the Sino-US confrontation as a battle of ideals for the survival of civilization. 

Under such circumstances, the strategic goals have changed. How can the United States maintain its policy of appeasement to the CCP? The original reason for a half-hearted commitment to Taiwan was to appease the CCP. The need for that appeasement has now disappeared. What is currently in line with the national interests and ideals of the United States is to make every effort to weaken the CCP, and part of that effort must include uniting with the world in defense of Taiwan. 

President Biden was right when he repeatedly stated that if the CCP uses force, the US must match that force in defense of Taiwan. That would be the right decision, and I hope he is speaking the truth, despite the White House and Department of Defense later weakening and walking back those statements. 

During this dance of strategic ambiguity, the White House and Department of Defense also made the mistake of misjudging the genuine thinking of the CCP. The US has remained consistent in their opinion that as long as the status quo could be kept, as long as neither Taiwan nor China provoke each other, meaning the CCP should not attack Taiwan, but Taiwan should not declare independence either. Then peace could be achieved in the Taiwan strait forever. 

That’s not true. To China, keeping the status quo is equivalent to Taiwan’s de facto independence. For the CCP, there is just one acceptable option and that is cross-strait reunification. 

It is a wrong decision to hope that the two sides of the strait will continue to maintain the status quo. This hope will not be realized, and it will embolden the CCP to feel that the United States is not firm in defending Taiwan. If they are so emboldened, they are likely to take risks and attack Taiwan by force. The US should make the CCP understand that there is no ambiguity on Taiwan. The PLA’s military strength will never catch up with the United States. If they choose to attack Taiwan, the US and its allies WILL come to Taiwan’s defense and that day may be the beginning of the collapse of the Chinese Communist regime. The real solution to the crisis in the Taiwan Strait lies in dispelling the CCP’s desire to reunify with Taiwan.

That’s all for today. Thanks for watching Zooming In China. Please like, share, subscribe and donate to this program if you like my content. Happy new year to all of you. I will see you very soon again. 

How Did Xi Jinping Abandon the CCP’s Washington Back Channel? | Zooming In China Teatime

Hello, everyone. Welcome to Zooming In China Tea Time. I’m Simone Gao.

At a November 23rd gathering of the Boston College Chief Executives Club, Jaime Dimon, CEO of JPMorgan Chase Bank, revealed that while he was recently in Hong Kong, he “made a joke that the Communist Party is celebrating its 100th year. So is JPMorgan. And I’ll make you a bet we last longer.” This revelation came with his admission that “I can’t say that in China. They are probably listening anyway.” 

Whether the CCP was listening or not, the world was and JPMorgan’s government relations team and offices in China were scrambling to mitigate the damage within hours. That began with a public apology from Dimon who clarified that while he was “trying to emphasize the strength and longevity of our company,” he regretted and “should not have made that comment.” 

Through his spokesperson, Dimon added that “it’s never right to joke about or denigrate any group of people, whether it’s a country, its leadership, or any part of society and culture. Speaking in that way can take away from constructive and thoughtful dialogue in society, which is needed now more than ever.” His spokesperson added that Dimon “acknowledges he should not speak lightly or disrespectfully about another country and its leadership.” 

JPMorgan’s history is longer than that of the Chinese Communist Party. It was established as a U.S. corporation in 1895. In 1921, they opened their first branch in China, just as the Communist Party was being established. Dimon’s comments, then, may threaten that 100-year relationship, especially if this comment expresses his true belief that he is not optimistic about the future of the CCP and is only seeking to establish a good relationship with the current regime until its inevitable fall. 

There is much at stake. JPMorgan currently touts a $20 billion business in China with hopes to expand their market share. Those hopes were strengthened early in 2021 when JPMorgan was granted approval by Chinese regulators to fully own their China securities ventures. Executives at JPMorgan are considering more licensing requests, but they will need to maintain good standing in the country to have those approved. 

While the international attention to his comments may be new, comments of this kind are not new from Dimon. He is a well-known voice on Wall Street who has been openly critical of a number of countries at times, including the U.S. But comments about the potential instability of China came first in his 66-page letter to shareholders earlier this year. In that letter, Dimon wrote that while China has done a “highly effective job” with economic development over the past 40 years, the next 40 years will require China to deal with their diminishing resources, income inequality and corruption. 

While Dimon did not address the CCP directly, he did mention that only 100 million people in China “effectively participate” in the nation’s single party system. With a total population of 1.4 billion, that leaves China with the lowest participation level of any developed nation. 

“China’s recent success definitely has its leadership feeling confident,” wrote Dimon in the shareholder’s letter. “Growing middle classes almost always demand political power, which helps explain why autocratic leadership almost always falters in a larger, more complex economy.”

Some of the strain between the CCP and JPMorgan may have come from Xi Jinping’s recent marginalization of veteran leaders in domestic business and U.S. relations. According to a November 22nd report published by Nikkei News, before the 20th National Congress of the Communist Party of China, Xi Jinping was dismissive of the performance of Chinese political and business leaders closest to the United States, including Wang Qishan, Jack Ma, and others. All of those receiving Xi’s rebuke belong to one organization: the Tsinghua School of Economics and Management Advisory Committee. This is a significant reversal of Xi’s attitude when he took over as the party’s general secretary in 2012. At that time, Xi paid special attention to this advisory committee because of the elite individuals who comprised it. 

Who is involved in this advisory committee? The chairman is Tim Cook, president of Apple, and the vice chairman is Qiu Yong, president of Tsinghua University. 

Honorary members include the former president of BP and current chairman of Net Zero, the Lord Browne of Madingley as well as former U.S. Secretary of the Treasury and former chairman of Goldman Sachs, Henry M. Paulson, Jr. 

Former president and CEO of Wal-Mart, H. Lee Scott, Jr. and Wang Qishan, Vice President of the People’s Republic of China, are also involved.

While there are many members listed, some notable companies represented by a member on this advisory committee include General Motors, British Petroleum, Siemens, Dell Computer, Sony, Tesla, BMW, Microsoft, Coca-Cola, Facebook, and other chairmen, presidents, or CEOs of the world’s largest companies. There are also top leaders of the world’s largest financial companies such as Goldman Sachs, JPMorgan Chase, Flower Group, BlackRock Group, Zurich Insurance Group, and more. Jamie Dimon, CEO of JPMorgan, is on this advisory committee. 

Deans of other elite educational institutions like Harvard Business School, Penn Wharton Business School, Stanford Business School, MIT School of Management, and others are involved as are notable Nobel Prize winners in economics. 

Members from China include Beijing Mayor, Chen Jining; former chairman of China Development Bank, Chen Yuan; Foxconn’s Guo Taiming; Alibaba’s Jack Ma; Vice Premier Liu He; People’s Bank of China Party Secretary Guo Shuqing; Baidu founder Li Yanhong and so on.

What does this expansive list of names reveal? First, the importance of the committee based on the credentials of its members. Every business member on this committee is seated in a prominent position at a Fortune 500 company. In addition, all Western members come from the industries of business and academia, and most of them come from the United States. At least half of China’s members are current high-ranking government officials, including the deputy prime minister in charge of the economy, the governor of the Central Bank, and others. 

This makes clear that the Tsinghua School of Economics and Management Advisory Committee is not a private organization. It is an informal channel for the CCP to communicate with Washington through Wall Street and multinational companies in order to influence Washington’s policies on China. 

Because of the power of that channel, and because he himself came from Tsinghua University, Xi Jinping attached great importance to this organization when he took office. Shortly after he took office in October of 2013, Xi personally met and spoke with 22 overseas members of the advisory committee at the Diaoyutai State Guesthouse. Reports make clear that Xi’s rhetoric at that time emphasized the need to comprehensively deepen reforms and learn from Western management experience. That is far from what Xi is saying today. (

The last time this committee played an active role in Sino-U.S. relations was four years ago, in 2017. According to Nikkei News, Trump visited China in November 2017. Just a few days before Trump’s visit, Xi Jinping invited members of the Tsinghua University Advisory Committee to the Great Hall of the People for a meeting. This is not a coincidence. Xi Jinping had hoped to highlight his tight connections with these Western business elites in order to pressure Trump into side-stepping a trade war with China. 

At that time, the world was concerned about the possibility of a direct trade conflict between China and the United States, and Xi Jinping was using his Tsinghua channel to amplify his voice and tried to avoid a trade war. At the meeting, Xi said that China was advancing comprehensive reforms with unprecedented determination and intensity through opening up. Xi claimed that China was not only a beneficiary of economic globalization but also a contributor; that China’s development is an opportunity for the world. Xi argued that China’s opening up was not about winning or losing but rather about cooperation and a win-win. He also quoted a Chinese saying that even if a business deal could not be reached, good relationships and trust should remain.  He also said China does not engage in overlord clauses and does not try to take advantage of others. He claimed that China would continue to introduce a series of measures that would expand its opening up.

All of this was a show, for the United States and for Trump. A long, winding way of saying don’t fight a trade war with me and I promise China would continue to open up and all the wrongs would be corrected gradually. 

Those words went to a powerful audience including Henry Paulson, Secretary of the Treasury during the Bush administration; Stephen Schwarzman, CEO of the Blackstone Group; Apple CEO Tim Cook; and Mark Zuckerberg of Facebook. Reports of the meeting suggest that each of these leaders had an opportunity to share their opinions and that all highly praised Xi Jinping’s policies. Given the political and economic power of those in that room, a great deal of pressure was put on Trump.

As a result, the Sino-U.S. trade war was not officially launched in 2017. Instead, China and the United States reached an agreement for China to purchase US$250 billion in goods from U.S. companies.

But this was a trade war delayed, not a trade war averted. Trump did ultimately launch a trade war with China, despite these American business elites and their collective persuasive power. The Wall Street-led China policy, which had been tried and tested before, did not work well for Trump. Because of that, the relationship between Xi Jinping and this committee should have changed. 

Instead, China attempted the same strategy a second time. A report in November 2018 said that Liu He, Vice Premier of the People’s Republic of China, came to the United States to negotiate with the U.S. trade delegation. Prior to those negotiations, he met again with a group of American business leaders. mostly from Wall Street. Guests at the meeting held in a hotel near the White House included Larry Fink, CEO of BlackRock; David Solomon, the second in command at Goldman Sachs; and Jamie Dimon of JPMorgan Chase, among others. Many of the attendees were members of Tsinghua’s advisory committee. Liu He stressed once again that China would open up their financial markets. 

A few days after this gathering, Liu He presented China’s position to the United States, including the same promise to open up the financial industry in China. But the Trump administration rejected China’s proposal, believing that the proposal was too narrow. After all, Trump was not a representative of the wall street interests. So despite a well-worn strategy that had so often worked in years and administrations past, this time Liu He returned to China without success.

Trump pressed on, using tariffs to push China to the negotiating table time and time again. At the end of 2019, Xi Jinping and Trump skipped the strategizing with Wall Street and went personally to the negotiating table at the G20 meeting in Argentina. Xi negotiated with Trump point-by-point, making many promised concessions along the way with a commitment to implement those changes immediately. True to form, however, when Liu He came to the U.S. to implement the terms, Xi Jinping withdrew his prior commitment at the last moment and the Chinese delegation returned, again without success.

We don’t know what happened in China at that time. However, I believe that was an important turning point for Xi Jinping. Xi was not inclined to close the country as soon as he came to power, and he did not have any clear, fixed ideas on governing the country at that time. His early ideas on governing the country were dismantled by domestic and international tensions. It’s possible that he was put under pressure by other CCP elites who felt he made too many concessions to the American government. 

So, Xi has started a steady march toward closing the country, a march that will inevitably lead to a confrontation with the West. And he is using the coronavirus pandemic, and his claimed success at handling it, to suggest that the CCP’s totalitarian rule has advantages over Western democracy. What Xi claims about success in diagnosing, treating and containing the coronavirus cannot be trusted. The numbers are unbelievable by any standard. Still, Xi is using them to claim that China is institutionally and economically superior to the West, giving him the false sense that he has the strength to compete with and even overcome the Western world, a notion that has now made the Tsinghua School of Economics and Management Advisory Committee seem disposable to him. He doesn’t need a secret route to persuade the U.S. if he believes he can beat the U.S.

It is not just external factors that have swayed that decision, though. The Nikkei News report also cited the breakdown of Xi Jinping’s relationship with Chinese members of the committee in the past year. These members include Jack Ma, Wang Qishan, and Chen Yuan, the former president of the China Open Bank. Chen Yuan’s close assistant is currently under investigation. People around Wang Qishan were also investigated one by one. At the same time, Xi Jinping is still investigating 25 financial institutions, including large state-owned banks. The report said that this is also weakening Wang Qishan’s power as a veteran in the financial field.

Although Xi Jinping has alienated this think tank as a whole, some overseas members of this committee still hope to have a good relationship with the current regime of the Chinese Communist Party. The Blackstone Group has been a good friend of the CCP from the beginning, and BlackRock has argued for continued and aggressive investments in China and has endorsed the future of the Chinese economy. 

Xi Jinping will not oppose them doing so. What Xi wants is not a completely closed society. What he wants is Wall Street forces that will bend to his will and accept his ways as the right ways. China still needs foreign capital and global markets, but Xi needs them to operate under his control. But if that was his desire, he destroyed it through his string of suppressions on the corporate and economic environment of China. His crackdowns on Jack Ma, Didi, Tencent and others and his attacks on the platform economy have caused an irreparable break between Xi and this committee. 

Fundamentally speaking, this is a battle of routes. Earlier, I introduced several important members of this committee, but I have not introduced the most important person. He is the founder of the committee and the honorary chairman, Zhu Rongji. Zhu was the premier of China during the Jiang Zemin era. He founded this advisory committee in 2000, which opened the way for the top CCP to use American business elites to influence Washington’s China policy. Zhu Rongji was Wang Qishan’s boss.

Wang Qishan is one of the first CCP officials who knew how to navigate Wall Street. In 1996, Wang listed China’s state-owned banks on the New York Stock Exchange with the help of those on Wall Street, a move he made while working under Zhu Rongji. Both he and Zhu belonged to the reformists. Wang believed according to the book Red Roulette that China’s state-owned enterprises would one day be privatized and that they should prepare for that day by preparing the money to purchase those companies.

Since the era of Zhu Rongji, whether it is the CCP or the Western financial leaders and multinational corporations, they are all participants in and beneficiaries of economic globalization. As such, they can get along well. But Xi Jinping’s current trend of encirclement and suppression in China has prevented him from fully participating in the feast of globalization. 

That’s all for today. Thanks for watching Zooming In China Tea Time. Please like, share, subscribe and donate to this program if you like my content. Also, head over to my membership site at You can get video/audio formats of my shows, full transcripts, in-depth reports and extra interviews available only to members. Just $5 a month or $50 a year. Please check it out.