China’s Korean War propaganda movie smashes box office record

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Hong Kong (CNN Business) A film glorifying the heroism of Chinese soldiers fighting American troops during the Korean War smashed box office records for China’s National Day holiday.

“The Battle at Lake Changjin” — commissioned by the Chinese government — has grossed an estimated 1.85 billion yuan ($287 million) since its release on Thursday, according to ticketing app Maoyan. It beat the previous record for the same Chinese holiday set by “My People, My Country,” which grossed more than 1.5 billion yuan ($233 million) over five days in 2019.

Movie goers passing in front of a poster for “The Battle At Lake Changjin” in a cinema in Wuhan, China.

“The Battle at Lake Changjin” was released at the start of the week-long holiday in China and was also timed to celebrate the 100th anniversary of the founding of the ruling Communist Party.

It tells the story of the brutal 1950 Battle of Chosin Reservoir in the Korean War. The Chinese side claims it as the most critical victory of the conflict, known in China as the “War to Resist American Aggression and Aid Korea.”

Co-directed by top Chinese and Hong Kong filmmakers Chen Kaige, Tsui Hark and Dante Lam, the film casts Wu Jing in a lead role. One of China’s most popular actors, Wu is best known for starring in and directing action flick " Wolf Warrior " in 2015 and its even more popular sequel in 2017.

U.S. Signals No Thaw in Trade Relations With China

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In the past month, the United States has announced a new deal to provide nuclear-powered submarines to Australia, an effort to push back on Beijing’s military modernization and its claims of territory in the South China Sea. Mr. Biden also met at the White House with the leaders of Japan, Australia and India, aiming to put the major democracies of the region in accord on how to deal with China’s influence and authoritarianism. And the United States and China are both seeking technological advantage, even if it means cutting off each other’s access to key goods.

China, having repressed dissent in Hong Kong and essentially wiped away its guarantees to Britain about keeping its hands off the territory for decades, is now regularly threatening Taiwan. The United States formally protested some of China’s actions on Sunday, after dozens of military aircraft flew on Friday and Saturday into Taiwan’s air defense identification zone, although not over the island itself. While U.S. officials do not expect Beijing to move against Taiwan, they are increasingly concerned about the possibility of an accidental conflict.

Trade was one area — along with climate — where mutual interest might steer the two countries to some agreements, even as they compete in other areas. But it is unclear whether they can find a way to reach an accord amid other tensions.

Mr. Trump’s deal halted the trade war, but it did not put an end to economic hostilities. China still maintains tariffs on 58.3 percent of its exports from the United States; the United States imposes tariffs on 66.4 percent of the products it brings in from China, according to Mr. Bown.

Some Biden officials, like many economists, have made clear that they see the tariffs as counterproductive and taking a toll on American consumers and manufacturers as well as Chinese businesses. Treasury Secretary Janet L. Yellen said in July that the China deal had “hurt American consumers.”

Asked if they would consider additional tariffs on China, officials said the Biden administration would not be taking any tools off the table. The administration planned to use the enforcement mechanism established in the trade deal, they said, which would allow the United States to resort to further tariffs if consultations were unsuccessful.

Biden campaigned against the trade war with China, but ending it is complicated

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Biden campaigned against the trade war with China, but ending it is complicated

Enlarge this image toggle caption Win McNamee/Getty Images Win McNamee/Getty Images

When President Biden was running for office, he described the steep tariffs on Chinese imports put in place by then-President Donald Trump as hurting U.S. consumers, farmers and manufacturers.

But nine months into his time in the White House, there has been no sign that Biden is preparing to quickly abandon the use of Trump’s signature tariffs.

After a lengthy review that has frustrated U.S. business groups, who say the tariffs have been an unfair burden, U.S. Trade Representative Katherine Tai plans to give a major speech on the U.S.-China trade relationship on Monday.

Tai is expected to lay out some of Biden’s initial steps to address the China trade policy dilemma: how to protect American workers and businesses from predatory trade practices without hurting the parts of the U.S. economy that rely on Chinese goods.

In an interview last week with Politico, Tai said the Trump tariffs have been effective at focusing attention on the issue. Tai told Politico the tariffs are “a tool for creating the kind of effective policies, and [are] something for us to build on and to use in terms of defending to the hilt the interests of the American economy, the American worker and American businesses and our farmers, too.”

‘It’s really hard to come up with an alternative’

When Trump launched his trade war with China in 2018, it was a sudden and significant departure from a philosophy of free trade and open markets that had dominated American trade politics for decades.

He imposed tariffs on about $360 billion worth of goods imported from China, a strategy intended to give the administration leverage to force China to come to the negotiating table. Former Trump officials said it ultimately led to a deal that pledged more protections for U.S. intellectual property.

Kelly Ann Shaw helped negotiate that deal, known as Phase One. The former deputy director of the National Economic Council said it’s easy to criticize tariffs but difficult to come up with a better option.

“Controversy over tariffs and their role in the economy and their role as a tool of economic statecraft have been debated in U.S. policy for 200 years,” she said. “Tariffs are an imperfect tool … but it’s really hard to come up with an alternative.”

Enlarge this image toggle caption Frederic J. Brown/AFP via Getty Images Frederic J. Brown/AFP via Getty Images

Chamber: tariffs hurt U.S. consumers, manufacturers

Biden has made countering China a centerpiece of his foreign and domestic policy, often complaining that better policies are needed to ensure the United States can better compete with the economic powerhouse.

As the Biden administration’s review of the tariffs dragged on, frustration from business groups has grown.

Last month, more than 30 business associations sent a letter to the administration complaining the tariffs are “costly and burdensome.”

“We were never in favor of these tariffs. We thought they imposed a tax on American consumers and, of course, American manufacturers,” said Myron Brilliant, head of the international affairs division at the U.S. Chamber of Commerce. “But we think it’s probably not realistic in the context of where the U.S.-China relations sit today to see all the tariffs removed at one time.”

Economists have largely panned the tariffs, too. A recent paper from the National Bureau of Economic Research confirmed that “U.S. consumers of imported goods have borne the brunt of the tariffs through higher prices.” And critics say this is even more of a challenge at a time of high inflation.

But Chad Bown, a senior fellow at the Peterson Institute for International Economics in Washington, said economic arguments don’t carry much weight in what is essentially a political argument.

“Arguing the merits of economic costs is sort of like shouting at windmills because it’s not only about economic costs and efficiency anymore, it’s about national security. It’s about supply chain resilience and public health,” Bown said.

“I’ve sort of accepted that politically [tariffs] may be impossible to get rid of. There’s no going back,” said Bown, adding he hopes the Biden administration may look at a more judicious use of tariffs, if it decides to continue using them.

Trump strategy failed to change Chinese practices

Critics also complain the Trump strategy has failed to change Chinese trade practices. Under the Phase One deal, which is set to expire at the end of 2021, China pledged to purchase an additional $200 billion of U.S. exports. But it has so far fallen about 30% to 40% short of that promise, said Bown, who has been tracking the results of the deal.

“Even with the Phase One agreement, China did not commit to make tremendous amounts of change of the kinds that we’re worried about with its economy, state-owned enterprises, its economic system,” said Bown. “I just don’t think that the United States going at it alone through tariffs is going to induce that kind of change.”

The deal also did not address one of the thorniest issues: subsidies. “The single biggest complaint that the United States has about what China has done is that it’s captured all of this market share and created these huge, huge companies on the backs of government subsidies that are provided to Chinese companies,” said Jennifer Hillman, a senior fellow for trade and international political economy at the Council on Foreign Relations.

A big question for Biden is whether he lets the Phase One deal expire at the end of the year, or whether he tries to renegotiate it. Another complicating factor: the Biden administration’s desire to work with China on climate. “China has made it very clear … if you want cooperation on climate change, we want you to lift the tariffs or we want more cooperation on tariffs,” Hillman said.

Enlarge this image toggle caption Nicholas Kamm/AFP via Getty Images Nicholas Kamm/AFP via Getty Images

Go it alone, or work with allies?

And so the key question is , how does the U.S. government convince China to change?

Biden and his team say they cannot do it alone and they have been trying to work with allies. The assumption is that when the United States joins with other democracies, its economic clout grows, and China cannot afford to ignore such a large chunk of the global economy.

During the G-7 summit earlier this year, Biden pushed his European counterparts to adopt a tougher stance with China and single out Beijing for its “non-market economic practices.”

But some countries remain cautious. Shaw, who joined law firm Hogan Lovells after she left the Trump administration, said the idea of working with Western allies to collectively combat China is only effective if the allies go along with the solution too.

“What we’ve seen more often than not is while they may be with us in terms of the substance of the issues, they’ve made their own calculated decision that they don’t want to come out as strong against China,” said Shaw.

And yet some say that’s precisely because of the unilateral tariff actions the United States took.

“The Phase One deal and these tariffs are in so many ways pushing away our allies and our partners at the time when we need them most,” said Hillman, who also previously served as a judge in the World Trade Organization.

Enlarge this image toggle caption Greg Baker/AFP via Getty Images Greg Baker/AFP via Getty Images

The politics are harder now

Geopolitics and domestics have changed dramatically since the last time a Democrat was in the White House, and that makes a crafting a new trade vision a challenge for Biden.

China under Xi Jinping has become more authoritarian and assertive, and as a result, U.S. national security concerns and economic interests have become more intertwined.

American attitudes have also shifted. Polling from the Pew Research Center finds that more than three quarters of Americans have an unfavorable view of China.

“That negative perception of China among the American public has really shot up in the last few years,” said Anna Ashton, vice president of government affairs at the U.S.-China Business Council, a trade association representing American companies that do business with China. “I don’t think that there is popular tolerance for going back to just the way it used to be.”

Being tough on China is now a widely accepted bipartisan stance. Earlier this year, the Senate — in a rare moment of bipartisanship — passed a bill that would invest $250 billion in science and technology aimed at boosting U.S. competition with China.

Experts say rolling back tariffs could be interpreted as being weak on Beijing.

“I do think that politically it will be very difficult for the Biden administration to remove any tariffs without meaningful concessions from China,” Shaw said.