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TRADE WARS
Chinese activist questions arrest in Ivanka Trump factory probe
By Yanan WANG
Beijing (AFP) July 19, 2017


US seeks to smooth trade relations with China in talks
Washington (AFP) July 19, 2017 - After riding a wave of anti-trade feeling to the White House, the Trump administration is taking a more traditional approach to resolving issues with China: a formal structure of talks that makes gradual, sometimes glacial progress.

Expectations among trade experts are restrained that the first round of talks Wednesday will produce results on long-standing issues with Beijing, such as the massive trade deficit or global overproduction of steel and aluminum.

While President Donald Trump early on attacked China for unfair trade practices, his meeting with his Chinese counterpart Xi Jinping at his Florida resort in April prompted a change of rhetoric and launching a 100-day economic cooperation plan.

That led to specific but narrow achievements, including opening the Chinese market to US beef exports, and pledges to remove barriers to US credit card transactions and other financial services, including bond underwriting, that were to be concluded prior to the Wednesday meeting.

Meanwhile, Trump followed his two predecessors in launching a mechanism for regular talks to be led by Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross, along with China's Vice Premier Wang Yang.

It was rebranded as the US-China Comprehensive Economic Dialogue (CED), but, "It doesn't matter what you call it," said Jake Colvin, vice president of the National Foreign Trade Council.

The regular "high-level economic dialogue" can be a "useful vehicle for defusing tensions and working through disputes," he told AFP.

- 'Tweetable victories'? -

But some experts are skeptical the talks, however improved by narrowing the focus compared to the Obama administration's broader approach, will prompt China to open its market further.

The administration has picked the right topics, including overcapacity and high-tech issues in the Chinese market, but "it's not clear to me that this mechanism or any mechanism will be very effective," said Scott Kennedy, China expert at the Center for Strategic and International Studies in Washington.

The problem is the talks are "embedded within a very unclear foreign policy, a very unclear Asia policy or China policy."

"So what you have are organs of the body operating with no connection to the brain," he told AFP.

As a result, "the way the relationship is going right now works in China's favor to preserve the status quo, and takes pressure off of them" to make changes at a pace its trading partners want.

On the contrary, Kennedy warned, as long as there are "some in the Trump administration who are willing to accept tweetable victories," it is more likely "we will have an unproductive increase in tensions."

David Dollar and Ryan Hass of the Brookings Institution, who both advised former president Barack Obama on China policy, also said their expectations for the talks were "restrained."

The Trump administration "probably will continue the policy of the last two presidents -- cajoling China to open up more, but avoiding harsh measures that would impede the economic relationship," the pair said in a blog post Tuesday.

That will "relieve pressure on Beijing to make near-term concessions" and allows China to use processes like the talks "to lend the appearance of constructive engagement."

Trump's focus on reducing the bilateral trade deficit also is likely to prove a longer prospect, especially with China preparing for its Party Congress in the fall, and experts say it would be difficult for the talks to have any direct impact.

The US deficit with China in goods and services fell to $309.3 billion in 2016, but "the imbalance continues to widen," having grown five percent this year, Dollar said.

Labour activist Hua Haifeng had avoided legal trouble in his 14 years investigating companies in China, but that changed after he looked into a factory that made shoes for Ivanka Trump's brand.

Hua and two colleagues had worked undercover in factories that manufactured shoes for the brand of US President Donald Trump's daughter and other foreign firms when they were detained in May.

The 36-year-old activist and the two other men, who work for New York-based non-profit China Labor Watch (CLW), were accused of using "spying and other monitoring equipment".

The government has intensified a crackdown on human rights activists and lawyers in recent years.

But Hua told AFP he believes the factory's link to the Ivanka Trump brand may have been a "factor that attracted police interest", though he cannot confirm it.

"As for Ms. Ivanka and her family, I want to say that business activities should abide by business regulations, and not use a family's political resources for personal commercial gain," said Hua.

Hua, who was released on bail in June along with his colleagues, said he was interrogated on 16 occasions for up to three hours at a time. He was kept in a shared cell where he slept beside a urine bucket.

For the first week he was not given access to a lawyer, but the father of two said his conditions gradually improved as his wife paid the authorities to give him better food.

Li Qiang, CLW's founding director, said the case marks the first time activists have faced police trouble in the non-profit's 17-year history.

"But this is the first time we've investigated Ivanka Trump (suppliers), so it may very well be related to the brand," Li said.

- 'Respect the law' -

The activists had been probing two plants owned by major footwear producer Huajian Group -- one in the city of Dongguan in southern Guangdong province, the other in southern Jiangxi province's Ganzhou.

A CLW statement alleged that factory employees worked 15-hour days with minimal breaks and no overtime pay, among other labour abuses.

Collectively, the investigators worked undercover at the factories for several weeks between March and May.

Huajian Group did not respond to repeated requests for comment, but it has previously denied the allegations.

For her part, Ivanka Trump company president Abigail Klem said in a statement: "After discussions with our licensee, we have determined that Ivanka Trump brand products have not been produced at the factory in question since March."

But CLW said they found the Ivanka Trump company listed on Huajian's production schedules for May and June, along with several other prominent overseas fashion brands.

The investigators' arrest put a fresh spotlight on Chinese business activities linked to the US presidential family.

Ivanka Trump, who is a White House advisor, has taken a formal leave of absence from her fashion brand, announcing in January that she is no longer involved with the company's management or day-to-day operations.

Her husband, Jared Kushner, is also a top aide to the US president and his own family business has come under scrutiny over its financial dealings in China.

"I don't know much about (Ivanka Trump's) women's fashion brand, but any company or brand should respect the law and fulfil their responsibility towards society," Hua said.

The activist said the police in their questioning had been focused on a watch equipped with a camera, which was in a suitcase but had never been used.

He said he only took cellphone photos of the public areas surrounding Dongguan.

Hua worked in one factory for a day and was detained before he could go to another one.

- World's factory -

Hua and his fellow investigators have not been officially charged, nor has a trial date been set.

Authorities said the case was still being investigated and declined to provide additional information.

Hua, back home in central Hubei province, vowed to never stop doing labour rights work.

"China is the world's factory; our workers work for the entire world," he said. "In the decades since economic reform and opening up, the labour community has paid too much."

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