World Politics

'You don't do these things prior to negotiations,' ex-diplomat says of US actions against China

Key Points
  • The Trump administration announced two actions against Chinese companies and officials just days ahead of a high-level trade meeting set to take place in Washington on Thursday and Friday.
  • "You don't do these things prior to negotiations. It does not set a good tone, that's tactically. Strategically, all these actions — I think — are causing the Chinese to wonder: 'What is the US' real motive here?'" Max Baucus, a former U.S. ambassador to China.
  • Another issue that could stall the U.S.-China trade negotiation is the ongoing protests in Hong Kong, said William Reinsch, senior advisor and Scholl Chair in international business at think tank Center for Strategic and International Studies.
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US blacklist doesn't set a good tone for trade talks: Ex-US ambassador

The latest U.S. actions against Chinese officials and companies don't "set a good tone" for an upcoming high-level trade talk, a former American ambassador to China said Wednesday.

The Trump administration on Tuesday placed visa restrictions on Chinese officials it "believed to be responsible for, or complicit in, the detention and abuse of" Muslim minorities in China's northwestern Xinjiang region. That followed a Monday move to blacklist 28 Chinese companies alleged to be involved in surveillance and detention of minority groups in China.

Both announcements came just days ahead of a high-level trade meeting set to take place in Washington on Thursday and Friday.

"You don't do these things prior to negotiations. It does not set a good tone, that's tactically. Strategically, all these actions — I think — are causing the Chinese to wonder: 'What is the US' real motive here?'" Max Baucus, former U.S. ambassador to China from February 2014 to January 2017, told CNBC's "Street Signs Asia."

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The timing of US actions against China couldn't be worse: DBS

Baucus, also a former Democratic senator from Montana, said the U.S. actions could simply be posturing ahead of the planned trade talks to get a better deal from China. But, "China will not be bluffed," he added.

Taimur Baig, chief economist at DBS Group Research, echoed that sentiment. "There are ways of putting pressure — back channel diplomacy, implicit threats and so on, but this is very explicit (and) very noisy," he told CNBC's "Street Signs Asia."

"The ... potential loss of face for the Chinese is massive. I can't imagine anybody rationally expecting a constructive outcome out of this," he added. Baig also said the timing of the U.S. move "could not be worse" and it would "definitely backfire."

Beijing, in response to the U.S. blacklist of Chinese firms, said it urges the U.S. to "stop interfering" in its internal affairs and suggested that it would retaliate against the American move.

Hong Kong protests has turned 'toxic'

Another issue that could stall the U.S.-China trade negotiation is the protests in Hong Kong, said William Reinsch, senior advisor and Scholl Chair in international business at think tank Center for Strategic and International Studies.

That's especially so if there's military intervention or violence "clearly supported" by China in Hong Kong, he told CNBC's "Squawk Box Asia" on Wednesday

"I think that would make it very difficult for the Americans to continue the negotiations. But we're not there yet and hopefully that won't happen," he added.

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Beijing will retaliate to the US blacklisting Chinese firms: CSIS

Hong Kong, a former British colony, returned to Chinese rule in 1997 and has been consumed by protests over a now withdrawn bill that would have enabled extradition to the mainland. Under the "one country, two systems" principle, the city's citizens enjoy some economic and legal freedoms that are not granted to their mainland counterparts.

The protests in Hong Kong, which have turned "toxic," could indeed worsen and "tempt" Beijing to take "aggressive action," said Baucus. The four months of mass demonstrations have increasingly become violent as police more frequently use force and anti-government protesters vandalize businesses deemed to be pro-Beijing.

"Hong Kong's changed, Hong Kong has lost its innocence, Hong Kong will never be the same again," he said.

Baucus added that the more protesters escalate the protests, "there will come a time Beijing will take pretty strong actions in order to maintain control. Beijing will do whatever is necessary to maintain control of Hong Kong."