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Xi and Kim (Nikkei montage/AP/Reuters)
China up close

Xi distances himself from Kim Jong Un to focus on Trump

Chinese leader's top priority is trade deal with Washington

KATSUJI NAKAZAWA, Nikkei senior staff writer | China

TOKYO -- If the Hanoi summit between U.S. President Donald Trump and North Korean leader Kim Jong Un had gone according to plan, Chinese President Xi Jinping was supposed to welcome Kim to Beijing straight afterwards, sometime around the afternoon of March 4.

Kim would have had a big smile on his face, if the scenario had unfolded as the mandarins in Beijing and Pyongyang had envisioned it.

Instead, the special armored train carrying the desolate young leader headed straight back through China to the North Korean border without stopping in Beijing.

The collapse of the Hanoi summit had erased the China stop from the itinerary, and with it, the opportunity for Xi and Kim to discuss how to cope with the latest twist in U.S.-North Korean relations.

Before the U.S.-North Korean summit in Hanoi on February 27-28, Trump had said he was in "no rush whatsoever" on North Korean denuclearization, lowering expectations at home and abroad for the high-profile event.

North Korean leader Kim Jong Un and U.S. President Donald Trump walk past a pool in the Metropole hotel during the second North Korea-U.S. summit in Hanoi, Vietnam on Feb. 28.   © Reuters

At the same time, Trump continued to send positive messages about U.S.-North Korean ties, giving the impression that things were progressing smoothly. But in Hanoi, he abruptly walked away from the table.

How could Kim have completely misread the situation? As the train wended its way back, the finger-pointing had already begun - and Xi was backing away from his North Korean ally.

"It was dangerous for Xi to meet Kim at this juncture," one Chinese expert on international affairs explained. "Kim had taken a hard line against Trump and failed. Xi could have been partially blamed for the clash, as the 'backer' of North Korea. That would have had a negative effect on the U.S.-China trade talks."

Xi has held talks with Kim four times in the past year. A meeting in Beijing on the way back from Hanoi would have been their fifth. It is hardly surprising that the world believes China has significant influence on Kim's actions. 

Trump said so himself last year when he initially canceled plans for his first summit with Kim. The American leader was signaling his displeasure with Chinese maneuvering behind the scenes, a likely reason for North Korea taking a harder line at the time. Shortly before the cancellation, Kim had met Xi in the northeast Chinese city of Dalian.

Although Trump quickly reversed his decision and went on to hold a summit with Kim in Singapore, his distrust of China remained.

In the U.S., there has been a lingering suspicion that China is artfully pulling the strings behind the scenes to protect its interests over the Korean Peninsula, and is pressuring North Korea not to compromise with the Americans too easily.

Meeting Kim after the Hanoi summit would only have added fuel to such suspicions.

China also cannot afford to recognize North Korea as a "nuclear power." For Beijing, as a proud permanent member of the United Nations Security Council, there need only be one nuclear power in East Asia: China. 

Xi could of course embark on efforts to persuade Kim to give up his nuclear weapons as Trump wishes. But it is difficult to realize such a goal, given the delicate history of Sino-North Korean relations.

Kim has already formally invited Xi to make his first visit to North Korea. Given the delicate situation surrounding the U.S.-China trade negotiations, however, Xi must weigh carefully whether to make his visit to Pyongyang at this point.

China needs to bring the trade talks with Washington to a successful conclusion at almost any cost. This is Xi's top priority. A failure in this area would deal a serious blow to the Chinese economy, which is continuing to slow down.

People dance to celebrate the birth anniversary of former North Korean leader Kim Jong Il in Pyongyang on Feb. 16. Xi has been invited to visit Pyongyang but recent developments have made it difficult. (KCNA via Reuters)

At the annual session of the National People's Congress, China's parliament, which opened in the Great Hall of the People in Beijing on Tuesday, Premier Li Keqiang announced that China's economic growth target for 2019 would be between 6% and 6.5%, a reduction from the 2018 target of around 6.5%. Even that lower target looks an uphill struggle, given the current economic situation. 

Since Xi came to power in the autumn of 2012, the Chinese economy has been on a slowing trend despite some ups and downs. The trajectory became very clear from last year.

The much touted "Xi Jinping new era" has had little, if anything, to show in terms of economic achievements which benefit the Chinese people.

Fortunately, Chinese stocks have risen sharply since February amid optimism about the U.S.-China trade negotiations following Trump's remarks, with the benchmark Shanghai Composite Index recovering above the 3,000 mark in early March.

The best-case scenario for Xi is to convince Trump to roll back the punitive American import tariffs at a summit, and then tout the resulting agreement as his own personal achievement.

Doing so would be fitting for the "centralized, unified leadership" he wields in the Communist Party's Central Committee, and the top-down decision-making which has been such a feature of Xi's "new era."

A retail store in Shanghai. Xi has little to show in terms of economic achievement since coming to power in 2012. (Photo by Sanmiao)

At the same time, Xi cannot afford to sit down for a summit with Trump until key issues are resolved. Despite consolidating power in his hands, Xi Jinping is not Kim Jong Un. The Chinese Communist Party, on paper at least, still has a collective leadership. Xi cannot make decisions alone.

Furthermore, if Xi fails to reach a final trade deal with Trump through direct negotiations, he will certainly be held responsible within the party.

"I'm never afraid to walk from a deal," Trump told a news conference following his failed meeting with Kim in Hanoi. "And I would do that with China, too, if it didn't work out," he added.

As a seasoned businessman, Trump is good at hiding his cards and Beijing is having a hard time assessing his strategy.

Xi is reportedly planning to visit the U.S. around March 27 for a summit with Trump. With that date fast approaching, and his mind on the trade talks, the Chinese leader has little interest in the National People's Congress going on in Beijing until March 15. 

The rubber-stamp parliament will enact a new foreign investment law that will ensure fair treatment of foreign companies, one of the key U.S. demands. But no serious discussion is expected on sensitive issues such as possible Chinese concessions to the U.S. in the trade talks.

In this April 2017 photo, Trump, left, and Xi walk together at Mar-a-Lago in Palm Beach, Florida. The two leaders are scheduled to meet there again soon to finalize a trade deal.   © Reuters

On China's social media, there has been chatter about how and why the U.S. shifted to an anti-China stance and how the Chinese people missed that change.

"Even the opposing Republican Party and the Democratic Party in the U.S. have formed a united front, hyping up the threat from China and seeing China as an enemy. This situation will not change easily," one post read. 

The post advocated the need for China to "bide its time" and be patient, in the same way as former supreme leader Deng Xiaoping advocated a policy for Beijing's foreign policy of "tao guang yang hui (conceal ambitions and hide claws)," something inherited by successive Chinese leaders but abandoned by Xi.

To be sure, Premier Li did not refer to the "Made in China 2025" plan in his March 5 speech. The plan is a blueprint for making China's key industries of the future into global champions, and is something which the Trump administration wants retracted.

Needless to say, China will not withdraw the plan. But Beijing is feeling frustrated by the current situation as it claims it has the right to develop its economy as it pleases.

China is now treading carefully over the North Korea issue, as well as avoiding provoking the U.S. at any cost at this highly sensitive time for bilateral ties. For example, Beijing has refrained recently from making its usual biting criticism of the U.S. over the detention of Meng Wanzhou, the chief financial officer of Huawei Technologies.

China's position is very clear. All roads lead to Mar-a-Lago, where the Xi-Trump summit is expected to take place later this month. 

Katsuji Nakazawa is a Tokyo-based senior staff writer and editorial writer at Nikkei. He has spent seven years in China as a correspondent and later as China bureau chief. He is the 2014 recipient of the Vaughn-Ueda International Journalist prize for international reporting.

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