This July 19, 2020 article examines President Donald Trump’s May 29, 2020 speech in the White House Rose Garden on United States policy toward China.
It addresses withdrawal from the World Health Organization, restrictions involving students and researchers connected to China’s military, action against industrial espionage and intellectual-property theft, scrutiny of Chinese companies listed on American financial markets, and sanctions and the removal of Hong Kong’s preferential treatment following China’s national security legislation.

2020-07-19
The following continues from the preceding chapter.
Trump’s Historic Speech
The speech delivered by President Trump in the White House Rose Garden on the day after the National People’s Congress closed will surely be remembered in the future as a “historic speech.”
The Trump administration had previously set out the fundamentals of its China policy in two “Pence speeches,” delivered on October 4, 2018, and October 24, 2019.
This speech, however, was groundbreaking in that it decisively established an era of confrontation between the United States and China.
Unless Japan understands the following four principal points of the speech, its diplomacy will take the wrong path.

Sanctions over the Enactment of the National Security Law
President Trump instructed his administration to revoke Hong Kong’s “most-favoured-nation treatment.”
The United States had imposed high tariffs on China during the United States–China trade war, while Hong Kong remained subject to normal tariffs because of its preferential treatment.
Chinese companies had therefore been able to use Hong Kong as a loophole when exporting to the United States.
Patented technologies that the United States prohibited China from using were also available to Hong Kong companies.
The cancellation of Hong Kong’s preferential treatment meant that Chinese companies could no longer use Hong Kong as a loophole.
In the worst case, the United States might even prohibit all dollar transactions involving Chinese and Hong Kong financial institutions.
An inability to conduct transactions in dollars would mean complete decoupling from the world economy, as in the case of North Korea.
Sanctions against individuals were also possible.
Although the details of those sanctions were not explained in the speech, possible measures included prohibiting government officials who had suppressed Hong Kong’s freedom from entering the United States and freezing or confiscating assets they held in the United States.
Chinese government officials were reported to have transferred considerable assets overseas and to possess extensive assets in the United States.
Such measures would inflict serious damage upon them.
To be continued.

Withdrawal from the WHO
President Trump stated that China had concealed the Wuhan virus problem and mishandled its response, thereby spreading the damage throughout the world.
He pointed out that China had not only failed to fulfil its reporting obligations to the World Health Organization but had also applied pressure to the WHO and led the world in the wrong direction.
The United States had contributed more than ten times as much money as China.
Nevertheless, it had become clear that the WHO was under Chinese control and would not implement the reforms sought by the United States.
President Trump therefore declared, “As of today, the United States will withdraw from the WHO.”
Another noteworthy point was that President Trump clearly used the expression “Wuhan Virus” while China was attempting to deny the fact that the virus had spread from Wuhan.

Removing China from Supply Chains and Eradicating Industrial Espionage
In the Chinese dictatorship, there is no clear distinction between the military and the civilian sector.
China continues to use overseas students and researchers to steal intellectual property from foreign countries through integrated military-civilian activity.
The Trump administration therefore announced a policy of completely excluding students and researchers connected to the People’s Liberation Army.
The Department of Justice and the FBI also decided to investigate intellectual-property theft, industrial espionage, hacking and similar crimes thoroughly and to prosecute those responsible.

Expelling Chinese Companies from Financial Markets
At the beginning of his speech, President Trump stated:
“For decades, China has exploited the American economy on a scale without historical precedent.
Through trade with China, hundreds of billions of dollars in wealth have been lost every year, and this tendency was particularly pronounced under the administration that preceded ours—the Obama administration.”
Chinese law does not require Chinese companies to disclose accounting reports, or balance sheets, while listing in the United States requires the disclosure of transparent financial statements.
Many Chinese companies have gained listings in American markets by falsifying their balance sheets.
Alibaba, the largest Chinese company listed in the United States, is no exception.
Why were Chinese companies that did not satisfy American listing standards allowed to enter American markets?
The reason was that the administrations of Bill Clinton, George W. Bush and Barack Obama left unchecked the wrongdoing of Wall Street financial interests seeking to profit from the China boom.
China obtained enormous quantities of dollars through unlawful listings and bond sales and grew into a major economic power.
President Trump instructed the President’s Working Group on Financial Markets to investigate whether listed Chinese companies were operating in accordance with American law.
China would no longer be able to raise funds in American financial markets.
The United States stated that it would protect investors and demand fairness and transparency.
This was an entirely correct policy.
Pension funds, which constitute the assets of the people, are managed through investment.
When part of a pension fund is invested in Chinese companies and misused, the valuable assets of the American people contribute to strengthening the economic and military power of an enemy country.
Furthermore, the outlook for the Chinese economy was already far from bright because of the Wuhan virus.
Investing in Chinese companies at that time also risked producing straightforward investment losses.
Investment in China therefore had to be avoided for two separate reasons.