What the Big Man is thinking: On December 31, Xi Jinping delivered his annual New Year’s address to the nation. Xi mentioned the need for China to be “self-reliant” (CGTN):
“Through the years, the Chinese people have been self-reliant and worked diligently to create Chinese miracles that the world has marveled at.” “And now, looking forward, despite the complexities and difficulties we may face on the road ahead, we shall always closely rely on the people and stick to self-reliance and hard work.”
Xi has stressed “self-reliance” repeatedly since April 2018, often in the context of needing to be self-sufficient in “core technologies.” The self-reliance push was initiated in the wake of the US banning exports of critical technologies to Chinese telecommunications giant ZTE, a move that crippled the company (but was later reversed on the orders of President Trump).
The ZTE incident exposed just how reliant China is on foreign technology.
On the one hand, the self-reliance push makes the Chinese eager to strike a deal in order to preserve access to American technology, from which Chinese firms still need to learn if they are to become self-sufficient.
However, it also complicates an immediate trade deal, insofar as the US wants China to stop subsidizing Chinese companies in high-tech sectors – a non-starter for the Chinese.
CGTN: Full text: 2019 New Year Speech by President Xi Jinping