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Gary Cohn Calls China ‘Ally,’ Dismisses Economic Aggression

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White House National Economic Council Director Gary Cohn described China as an “important ally” of the United States in an interview with Mike Allen of Axios on Wednesday — just days after President Donald Trump’s National Security Strategy described China as an adversarial “revisionist power.”

“Have your views on China changed while you have been in the administration?” Allen asked, alluding to Cohn’s differences of opinion with President Trump on issues such as Chinese currency manipulation.

“No,” Cohn replied to Allen.

“What will our posture with China be next year?” Allen asked.

“Look, we’re going to continue to work with China on geopolitical fronts,” said Cohn. “China is an important ally to us in the region.”

“But we’re also going to continue to work on our relationship with them on trade and trade balances, understanding that the Chinese economy is controlled at a central level, and many of their companies compete on unfair terms relative to our companies. That is not fair,” he continued.

“That said, we would love to, and want to, and need to, open 1.3 billion consumers to U.S. companies,” Cohn added. “So leveling the playing field—fair, open, free, reciprocal trade with China—is something where we want to go.”

“A year from now, will the U.S. be in a trade war?” Allen asked.

“No,” said Cohn.

He drew some chuckles from the audience with his next prediction, that he would still be working at the White House in three months despite holding these positions, adding that he saw his year in the Trump administration as the most “fascinating” year of his life and praising President Trump’s economic agenda.

Cohn’s view of China as an “important ally in the region” is considerably different from the portrait of an adversarial power seeking to undermine American strategic influence and economic power painted by President Trump’s National Security Strategy (NSS).

Granted that diplomacy demands referring to just about every country on Earth as a potential friend to America, if only they would cease whatever malicious policies they happen to be following, the NSS is still very clear about China’s status as an aggressor nation. For the benefit of those who think the Trump administration is somehow in thrall to Russia, nearly every warning about China in the NSS mentions Russia in the same sentence. For example: “China and Russia want to shape a world antithetical to U.S. values and interests.”

“China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor,” the NSS states.

The document goes on to lament China’s failure to liberalize as it grew richer and more powerful, criticize it for attacking the sovereignty of other nations, and warn it is keenly interested in exporting its authoritarian philosophy around the world. China is the first national security threat discussed in the NSS, followed by Russia, Iran, and Islamist terrorist groups.

The NSS sees China moving aggressively to undermine American influence across Asia, using “economic inducements and penalties, influence operations, and implied military threats to persuade other states to heed its political and security agenda.”

“Its efforts to build and militarize outposts in the South China Sea endanger the free flow of trade, threaten the sovereignty of nations, and undermine regional stability,” the NSS advises. “China presents its ambitions as mutually beneficial, but Chinese dominance risks diminishing the sovereignty of many states in the Indo-Pacific. States throughout the region are calling for sustained U.S. leadership in a collective response that upholds a regional order respectful of sovereignty and independence.”

That seems like a fairly clear warning not to regard China as an ally that just happens to have a few unfair trade policies.

The NSS also comments on the high cost of opening Chinese markets to American consumers, as Cohn recommended. After noting that “competitors such as China steal U.S. intellectual property valued at hundreds of billions of dollars” each year, the document warns that such theft is not always perpetrated by computer hackers. Instead, “some actors use largely legitimate, legal transfers and relationships to gain access to fields, experts, and trusted foundries that fill their capability gaps and erode America’s long-term competitive advantages.”

In other words, the cost of gaining access to China’s 1.3 billion consumers often includes surrendering American technological innovations and intellectual capital to the communist nation, imposing costs the American people will be paying long after short-term profits have been collected by international enterprises.

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