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International relations

Sudden trade deal between US and China could be new 'Nixon shock'

Japan must prepare for nightmare scenario of being left out of bilateral pact

BEIJING -- The Jin Jiang Hotel, a luxury hotel in Shanghai, has some intriguing stories to tell. When I recently stayed there, for the first time in 10 years, I found the interior modernized and more stylish than I remembered it.

But the gothic architecture of the building, built in the 1920s, retains its original appearance, which harks back to the old days of the vibrant metropolis.

The hotel was originally built as an upscale condominium for British residents in the city. After Communist China was founded in 1949, the building was remodeled into a hotel for dignitaries. Since then, it has passed through strange vicissitudes of fortune.

One of the hotel's regular customers was Mao Zedong, the founding father of the People's Republic. Mao was charmed by the hotel so much that he ordered the construction of a hall for important meetings and banquets in its garden. Named "Xiao Li Tang" in Chinese, the facility is known as the Grand Hall.

Mao could never have imagined the hall serving as the venue for an event marking the historic rapprochement between China and its main capitalist enemy, the U.S.

The historic and storied Grand Hall, one of the two main buildings of the Jin Jiang Hotel, with the Cathay Building in the background.

In February 1972, U.S. President Richard Nixon visited China and signed the Shanghai Communique with Chinese Premier Zhou Enlai at the Grand Hall, ending more than two decades of diplomatic estrangement between the two countries.

The prologue to the detente between Washington and Beijing inflicted a severe diplomatic trauma on Japan.

In July 1971, Henry Kissinger, as National Security Adviser for Nixon, secretly traveled to China and held talks with Zhou, paving the way for the president's surprise visit to the country. Immediately afterward, Nixon announced his own visit to China, which was made without informing Japan, America's key regional ally, in advance. The diplomatic drama came to be called the "Nixon shock" in Japan.

Before this radical shift in the global geopolitical landscape, few could have predicted that the U.S. and China, which had fought fiercely during the Korean War and traded verbal attacks for years, would shake hands on a deal to build better ties.

Panicked by the U.S. move, Japan, under Prime Minister Kakuei Tanaka, rushed to normalize its relationship with China in September 1972.

Nearly half a century since history was made in the Jin Jiang Hotel's Grand Hall, dark clouds are again gathering over the relations between the U.S. and China. This time, the two giants are getting embroiled in a bitter dispute over trade.

After the administration of U.S. President Donald Trump announced details of massive retaliatory tariffs on imports from China to penalize that country for trade practices that the administration claims involve stealing American companies' intellectual property, Beijing immediately hit back with a threat of similar scale of tariffs on a broad range of imports of American-made products.

These tit-for-tat trade actions have brought the two countries to the brink of an all-out trade war.

The Chinese media have criticized the Trump administration with alarmingly belligerent and inflammatory rhetoric, seemingly designed to raise hackles.

A recent editorial in the Global Times, a newspaper affiliated with the Chinese Communist Party, called for "crushing" the Trump administration's trade attack with the spirit of "Kang Mei Yuan Chao," a Korean War era slogan that means "Resist U.S. aggression and aid [North] Korea."

The opinion piece made it clear that China is ready to fight any war waged by the U.S. to the end, at any cost. The incendiary language to rally the people for the trade battle with the U.S. should not be seen as mere rhetoric.

Meanwhile, Chinese President Xi Jinping has restrained himself from criticizing the Trump administration.

Speaking at an international forum in Hainan Province in mid-April, Xi called for dialogue rather than confrontation, saying, "The Cold War mentality and zero-sum game are increasingly obsolete."

A rumor circulating in diplomatic circles may offer a clue to deciphering the policy implications of his speech. It says the U.S. has secretly proposed a bilateral free trade agreement to China.

Whether or not the rumor is true, there is little doubt that Washington and Beijing are engaged in active behind-the-scenes diplomatic maneuverings to avoid escalating the current spat into a full-fledged trade war.

Xi's remarks sound like a message to Trump indicating that China is ready to make certain concessions.

The rising tensions in Syria may work in favor of Beijing. Locked in a heated confrontation with Russia over the situation in Syria, the U.S. has many reasons to avoid another conflict with a leading power.

The Trump administration could move to strike a trade deal with China if Beijing offers concessions.

The nightmare scenario for Japan would be an agreement between the two countries designed to protect only their interests.

If Prime Minister Shinzo Abe is kept in the dark on such a move by Japan's principal ally and leading trade partner, Tokyo could find itself being hit by another Nixon shock.

Given Trump's notorious unpredictability, it should be clear that the Japanese government needs to make every effort to avoid being caught off guard.

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