U.S. and China Edge Closer to Cold War

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President Trump and Chinese President Xi Jinping at the Great Hall of the People in Beijing in November 2017.

President Trump and Chinese President Xi Jinping at the Great Hall of the People in Beijing in November 2017.


Photo:

Andy Wong/Associated Press

WASHINGTON—The Trump administration is moving deliberately to counter what the White House views as years of unbridled Chinese aggression, taking aim at military, political and economic targets in Beijing and signaling a new and potentially much colder era in U.S.-China relations.

In the first 18 months of the administration, ties between the world’s two biggest powers were defined by negotiations over how to restrain North Korea and ways to rebalance trade. Those high-profile endeavors masked White House preparations for a more hard-nosed stance with Beijing—a strategy now surfacing as China’s help with Pyongyang wanes and trade talks stall.

Interviews with senior White House officials and others in government make clear that recent volleys in what appears a new Cold War aren’t the exception to President Trump’s China policy. They are exactly what the administration wants—putting the spotlight on a meeting between Mr. Trump and Chinese President Xi Jinping at a multilateral summit planned for November.

Vice President Mike Pence last week gave a blistering speech on U.S.-China relations, saying “the United States has adopted a new approach to China” with the message to China: “This president will not back down.”

On Wednesday, the Treasury Department announced new rules targeting China that tighten national security reviews of foreign investment. On the same day, the Justice Department said it had brought a Chinese intelligence operative arrested in Belgium to the U.S. to face charges he conspired to steal trade secrets from GE Aviation and others. It was the first time prosecutors publicly identified someone in custody as a Chinese intelligence officer.

The Energy Department announced Thursday heightened controls on nuclear technology exports to China. The administration also signed off recently on Justice Department directives that force a pair of Chinese state media outlets to register as foreign agents.

The speed of the U.S. shift to a more confrontational China strategy has surprised many Chinese officials and sent Beijing scrambling to stabilize the relationship, with Washington the disrupter, analysts said.

“The U.S. is getting tougher and tougher, confronting China on all fronts,” said Zhu Feng, an expert on China-U.S. relations and international security at Nanjing University. “Beijing should be very coolheaded because does a new Cold War serve China’s interests? No.”

The U.S. moves represent an emphatic shift from a “constructive engagement” strategy that dates to the establishment of diplomatic ties in 1979. It was based on hopes China would slowly liberalize economically and politically.

Chinese President Xi Jinping, center, at a banquet on April 6, 2017, hosted by President Trump and first lady Melania Trump at the Mar-a-Lago resort in Palm Beach, Fla.

Chinese President Xi Jinping, center, at a banquet on April 6, 2017, hosted by President Trump and first lady Melania Trump at the Mar-a-Lago resort in Palm Beach, Fla.


Photo:

Lan Hongguang/Xinhua/Getty Images

Underpinning the change is the view that China has reversed course since Mr. Xi took over in 2012 and began recentralizing political and economic controls, pledging to build his nation into a great world power.

The more aggressive U.S. approach was forecast last December in the National Security Strategy that put China on par with North Korea, Iran and jihadist terrorist groups as the biggest U.S. threats. At the time, the strategy contrasted with Mr. Trump’s personal diplomacy.

Early in his term, Mr. Trump flattered Mr. Xi, talking up a holiday card he received before taking office and sharing “the most beautiful piece of chocolate cake” at their Mar-a-Lago dinner in the spring of 2017. He scotched a campaign promise to label China a currency manipulator, saying he didn’t want to jeopardize a potential ally against the threat from North Korea.

Since then, White House advisers have changed to a more hawkish crew. And Mr. Trump has seen that his personal and controversial gambits—extending a lifeline to China’s ZTE Corp., for instance—haven’t yielded enough in return. After a dozen phone calls with Mr. Xi, an exchange of letters and several face-to-face meetings, the tepid response from China has irritated the president, one senior administration official described, like death from a thousand cuts.

Beijing was infuriated by the U.S. decision last month to impose sanctions on a Chinese military agency—and its chief—for purchasing Russian SU-35 jet fighters and equipment related to its S-400 antiaircraft missile system, U.S. officials said.

China responded to the sanctions by lodging a formal complaint with the U.S. ambassador, ordering the return of its navy chief from a visit to Washington, and refusing permission for a U.S. Navy ship to port in Hong Kong.

Chinese foreign minister Wang Yi, speaking recently at the Council on Foreign Relations, said growing U.S. fears that China would seek global hegemony was a serious strategic misjudgment.

“Where this ends is a trade deal,” a senior administration official said. “Xi is starting to look at this and say, ‘Wow, Trump is doing the things he said he’s going to do,’ and realize that he has to get to work.’”

Chinese foreign minister Wang Yi speaks during a United Nations Security Council briefing on the U.N. General Assembly last month in New York City.

Chinese foreign minister Wang Yi speaks during a United Nations Security Council briefing on the U.N. General Assembly last month in New York City.


Photo:

Evan Vucci/Associated Press
Hard lessons

The November meeting between Messrs. Trump and Xi may help soothe tensions on trade but there appears little prospect the new U.S. stance will soften. There is a souring on China across Washington, even in groups that have long promoted stronger U.S.-China relations.

Many in the business community, for instance, have favored a “grow-together” policy with China, with the hope it would open the world’s second biggest economy to American companies. That optimism has turned to distrust, largely over China’s aggressive focus on acquiring U.S. technology.

The U.S. Chamber of Commerce has criticized China’s theft of intellectual property from American businesses, including with a scathing report on Beijing’s Made in China 2025 policy, a blueprint for turning China into a global manufacturing leader.

At the Pentagon, military brass have historically sought a relationship with their Chinese counterparts that would survive political mood swings. Even there, senior officials say they have reached their limit.

Efforts to build the U.S.-China military relationship by showing off American capabilities have been exploited by the Chinese. Gen. Joe Dunford, the chairman of the Joint Chiefs of Staff, came away even more clear-eyed about that after a trip to Beijing last year to establish a formal military communication mechanism: An aide’s tablet, left in a hotel room, had been tampered with, souring the U.S. military establishment on doing business with China.

U.S. Gen. Joe Dunford, center right, chairman of the Joint Chiefs of Staff, joins  Chief of the General Staff of the Chinese People's Liberation Army, Gen. Fang Fenghui, left, during ceremonies last year in Beijing.

U.S. Gen. Joe Dunford, center right, chairman of the Joint Chiefs of Staff, joins Chief of the General Staff of the Chinese People’s Liberation Army, Gen. Fang Fenghui, left, during ceremonies last year in Beijing.


Photo:

Andrew Harnik/Associated Press

This month, a Beijing trip by Defense Secretary Jim Mattis, already stalled over a failure to agree on goals for the meeting, was canceled after a Chinese destroyer nearly clipped a U.S. Navy vessel in the South China Sea.

Mr. Trump first displayed an antagonistic posture toward China on the presidential campaign trail, referring to it as the enemy.

“I beat the people from China—I win against China,” Mr. Trump said at a campaign rally in 2015 in Bluffton, South Carolina. “You can win against China if you’re smart. But our people don’t have a clue. We give state dinners to the heads of China. I said, ‘Why are you doing state dinners for them? They’re ripping us left and right. Just take them to

McDonald’s

and go back to the negotiating table.’ Seriously. It’s true.”

The view caught on with his voters. Among Republicans who identify as Trump supporters, just 4% agreed that China was an ally, while 86% said it was an adversary, according to a Wall Street Journal/NBC News poll in April.

Plans for a tough approach to China were contemplated by the Trump administration shortly after the inauguration. Then came the diversions: North Korea launched missiles and tested rocket engines five times in the first 100 days. Trade disputes erupted not just with China, but also with the European Union, Canada and Mexico.

There also were calls for a more conciliatory approach to Beijing in those early days. Then-Iowa Gov. Terry Branstad asked Mr. Trump to tone down heated rhetoric because of significant trade between China and the farmers in his state. Mr. Branstad was selected to be the U.S. ambassador to China.

Henry Kissinger, the former secretary of state, met with Mr. Xi after the presidential election and returned saying that Mr. Trump shouldn’t be held to his campaign promises. Mr. Kissinger delivered a warm message from China’s leader to the president-elect.

Jared Kushner, the president’s son-in-law and senior adviser, helped set up Mr. Trump’s trip to Beijing last year, and emphasized the importance of the relationship between the two countries. Treasury Secretary Steven Mnuchin portrayed himself to the president and the Chinese as someone who could bridge the divide. Gary Cohn, the top national economic adviser, argued against imposing tariffs on China.

Treasury Secretary Steven Mnuchin, left, and Chinese Vice Premier Wang Yang last year in Washington, D.C.

Treasury Secretary Steven Mnuchin, left, and Chinese Vice Premier Wang Yang last year in Washington, D.C.


Photo:

brendan smialowski/Agence France-Presse/Getty Images
‘Unleashed’

Mr. Mnuchin’s efforts to act as a mediator have since yielded few results, reducing his influence over China policy and showing that negotiations with Beijing would be tougher than anticipated, people familiar with the matter said. Mr. Cohn is now gone, and Mr. Kushner has turned his focus elsewhere.

That has given way to more hawkish aides, including White House chief of staff John Kelly, a military veteran. His view of China, like Gen. Dunford’s, was hardened by experience, according to a person familiar with the matter.

During Mr. Trump’s visit to Beijing last fall, Mr. Kelly got into a physical altercation with a Chinese official who was seeking access to the nuclear football, the briefcase that includes the president’s mobile nuclear-missile command center. Mr. Kelly told colleagues that he refused to accept an apology, and he would only accept one if a senior Chinese official came to Washington and offered contrition while standing under a U.S. flag.

White House Chief of Staff John Kelly, center, Terry Branstad, U.S. ambassador to China, right, and President Trump during a meeting with China’s President Xi Jinping last  year in Beijing.

White House Chief of Staff John Kelly, center, Terry Branstad, U.S. ambassador to China, right, and President Trump during a meeting with China’s President Xi Jinping last year in Beijing.


Photo:

jonathan ernst/Reuters

Peter Navarro, the president’s trade adviser, is a longtime China hawk and compiled a report this summer for Mr. Trump that showed how China’s economic aggression threatens the U.S. technology sector. He has been distributing a book to administration officials titled, “The Hundred-year Marathon: China’s Secret Strategy to Replace America As the Global Superpower.”

John Bolton, the new national security adviser, has long advocated for a tough approach to China. According to a senior administration official, Mr. Bolton has “unleashed” Matthew Pottinger, chief Asia adviser for the White House, to push for stronger China policies.

The views of Mr. Pottinger, a former U.S. Marine and former reporter for The Wall Street Journal, were reflected in the National Security Strategy that last year put China in the same threat category as North Korea and Iran. He helped oversee a research project detailing ways Beijing uses money to influence U.S. think tanks, universities and local governments.

Mr. Pottinger said at an event last month at the Chinese embassy in Washington that the White House had updated its China policy to clearly acknowledge the rivalry between the two nations. “For us in the United States,” he said, “competition is not a four-letter word.”

Looking ahead, U.S. officials expect continued pressure on China. A plan to punish private companies that help Beijing’s expansion in the South China Sea was discussed early in the administration but shelved. That type of sanction is being reviewed again.

White House officials said they expected more information would be declassified from the intelligence community’s study on China’s influence on U.S. elections and cyberspace. And the Commerce Department is set to tighten export controls, aimed at preventing U.S. surveillance technology from being used to suppress China’s Muslim Uighur minority.

The White House also expects to release a report in about a month reviewing U.S. foreign assistance. It will take aim at China and, at least indirectly, the country’s so-called Belt-and Road infrastructure development program, a senior administration official said.

Mr. Pence has criticized some of the related projects in the program, saying they leave nations buried in debt. “We seek a relationship grounded in fairness, reciprocity, and respect for sovereignty,” he said in his speech last week. “And we have taken strong and swift action to achieve that goal.”

Write to Michael C. Bender at Mike.Bender@wsj.com, Gordon Lubold at Gordon.Lubold@wsj.com and Jeremy Page at jeremy.page@wsj.com