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Bob Davis and Lingling Wei are award-winning journalists at The Wall Street Journal, and authors of a new book, Superpower Showdown: How the Battle Between Trump and Xi Threatens a New Cold War, which was published this month by Harper Business. The book describes in great detail the battle that was touched off soon after President Trump took office. And it ends with the sudden expulsion of Wei, an American journalist, along with other American journalists, from China. What follows is a lightly edited Q&A.

Q: One of the curious things about your new book is that, in addition to being the tale of a high stakes trade war, you each have an interesting family background that, in some ways, made you the ideal partners to cover the trade war for The Wall Street Journal. Can you tell us a little about that?

Davis: Our two stories represent something about the U.S.-China relationship in a remarkable kind of way. In my case, my father was a luggage manufacturer in Brooklyn in the ’50s, ’60s and into the early ’70s at a time when New York had a big garment industry. He had a couple of floors in a factory building in Brooklyn, producing less expensive, soft-sided luggage. He did really well all through the ’60s. He even helped invent the fold-up suit bag, which was a modification of what the GIs had during World War II. As a teenager, I worked [in his factory] in the summers, which taught me, by the way, that the people who romanticize manufacturing have never actually worked in a factory. He had low-wage workers toiling on these ancient sewing machines. And then came the competition from Asia.

First it was Korea and Taiwan. His customers started to get luggage from Korea, but he never believed they could outcompete him. He got hit by that first wave of import competition, and it bankrupted him. I was in college at the time, at Syracuse University, and I had to come back to attend Queens College, because it was free. So this definitely hit our family, but it was years after I had become a Wall Street Journal reporter, covering trade, when it dawned on me. “Wow. I’m covering the stuff that bankrupted my family.” So [in writing this book] I thought it might be interesting for us to use a little of our family history. 

Lingling, you grew up in one of the country’s elite families, tied to the Communist Revolution and the Long March, right?

Wei: When we were first talking about this I thought his family history illustrated how a middle-class American family suffered from China’s rise and Asia’s rise. But I benefited from China’s rise. I was born in the 1970s into a military family in southeastern China. Every morning I would wake up to this loudspeaker, blaring songs from the revolutionary era. Songs like, “Unity is Strength.” Both my parents were Army officers. My mom was a medical doctor, and my dad was in charge of personnel issues. So I grew up in a very disciplined family, and the whole family took great pride in my grandfather’s connection to the modern Chinese revolutionary history. He had participated in the Long March and had spent 13 years with Chairman Mao. I was told by not just my family but some official accounts as well that of all the aides to Mao, my grandfather was with him for the longest time. Anyway, I grew up in this atmosphere, so I never thought that someday I’d be a journalist writing critical stories about the Chinese government. I really followed my mother’s dream of becoming a writer. She always wanted to be a war correspondent. So I went to Fudan University in Shanghai and started to get a taste of what journalism really was like. Of course, we took classes on Marxism and all that, but we also had many Fulbright Scholars who introduced us to some of the best work in American journalism. We could read The Wall Street Journal and The New York Times, and there was a brand new American Studies Center, funded by the Americans. 

Let me jump into my trade questions. What is this U.S.-China standoff really about? Is there a way to summarize it for people that really aren’t following the blow-by-blow action?

Davis: Trade fights have been going on for decades. As soon as the U.S. opened up to China and trade began, the U.S. side began complaining about cheap imports displacing American jobs, and this accelerated after China’s entrance into the World Trade Organization [in 2001]. There is the complaint on the U.S. side that the Chinese rip off U.S. intellectual property. In the beginning, it was that Chinese companies would use Microsoft Windows and not pay for it. On the low-tech side of things, it was that they would rip off furniture designs and then sell those goods in the U.S. There were long-standing complaints. 

But China was far behind the U.S., economically and technologically. This was the same sort of complaint you’d have about any low wage country. But what makes China different is that the country is so big; it has an enormous workforce that dwarfs competition we’ve had from elsewhere, such as Mexico. And as China grew and became more sophisticated and developed into an economic power, those fights continued. It wasn’t just a question of whether they were stealing IP — although that remains an issue — but there was pressure on U.S. companies to hand over technology, and claims that Chinese companies were getting subsidies. So I think what you’re seeing is a sort of classic fight between the incumbent power and the rising power play out in the economic and technological sphere.

… Lingling were you about to add something?

Wei: This is also a clash between two very different systems. There were two watershed moments in this journey of the U.S.-China relationship that we illustrate in the book. One is the Global Financial Crisis [in 2008–2009]. That really provided an opening for the Chinese leadership to promote its own model. The second was Xi Jinping coming to power. So many people, myself included, have misread him or failed to anticipate what China would be like under him. He made it clear upon coming to power that he would focus his agenda on the “China Dream.” That was long before Trump was elected with his own slogan of “Make America Great Again.” And this “China Dream” is about creating a strong, unified China, and it put a great emphasis on China’s reemergence as a global power. The country would reclaim the status China had held for centuries. So that became the guiding principle for him over the past few years. Everything he did was centered on that guiding principle. So the tensions between the two really accelerated.

One of the things you write about in the book is that foreign and American business started to become disillusioned with China after 2012; that things got more difficult for them. China was less welcoming than it had been in earlier periods, when it was hungry for investment. Can you explain? 

Wei: In 2015, under Xi Jinping, the government launched its Made in China 2025 program. And even under [former president] Hu Jintao, there was a very ambitious industrial plan aimed at technological independence. So for years, the U.S. business community has felt that there were these [troubling] things happening. The Chinese market has grown more competitive; it’s become harder [for American firms] to make money in China. Ever since Xi came to power China’s method of acquiring U.S. technology has become more sophisticated. It’s not just outright theft. So there was a significant shift in the attitudes of the American business community towards China. You can see that in surveys conducted by American Chamber of Commerce in China. They now see under President Xi’s leadership, you have more emphasis on [China developing its own] technology. And that makes foreign businesses uncomfortable. They don’t like it but they have to do things to stay in the China market.

How did this “superpower showdown,” as your book is called, really evolve?  

Davis: The groundwork was laid long before [this administration came into office]. If you’re thinking about who focused on China, this is pure Trump. He’d been talking about this for a long time. In the 1980s, he’s this glamorous real estate developer, surrounded by beautiful models. He’s on Page Six of the New York Post and he’s looking to be taken more seriously. And one of the ways is to talk about trade and international economics. Back then, it was Japan. He went after Japan with almost the same language that he now uses with China; how they’re “ripping us off”; and how the people in power, whether it was a Democrat or Republican president, were being played. Keep in mind, it wasn’t unusual back then for a [prominent] businessman to talk that way. Lee Iacocca was famously known as a Japan basher. Some of the leading lights in the semiconductor industry, like Andy Grove of Intel and Bob Galvin at Motorola, and also Ross Perot. There were lots of CEOs who did that. But most of them have died or faded away. No one talks that way now; certainly not well-known CEOs. But Trump is younger, and this has been his go-to trade issue; it was always going to be a big part of his [presidential] campaign. And what [former White House chief strategist Steve] Bannon did was give it more of a shape and form. Bannon understood that Trump is kind of visceral, and he’s a great marketer; he’s a phenomenal marketer. Bannon also understood that China was a [major] trade issue, and that this was a symbolic issue about fairness and people being left behind. During the campaign, it became one of the main issues. So when Trump came into office, he was ready to take on China.

Is the dispute really about the gap in exports versus imports or the U.S. trade deficit, or can it encompass broader issues, like granting American firms greater access to China’s market? 

Davis: Well, granting greater access to U.S. companies, that’s harder to measure. But we can easily see how China sends a lot more goods to the U.S. [than the U.S. sends to China]. We may not know what kind of money American companies are earning by selling inside China, so when people frame it, they tend to think of it as exports/imports, even though it’s much broader. 

Of course, Trump is literally a mercantilist. For him, it is exports minus imports. When he talks about the trade deficit, that’s the way he looks at things. So the issue you’ve mentioned, about American investment into China’s domestic market and access to the market is very important, but that is definitely not Trump’s [emphasis]. He didn’t run a campaign aimed at helping corporate America; his campaign was aimed at [aiding] workers. 

How active has President Trump been in the trade negotiations?

Davis: Well, first of all, think of any [U.S.] president when it comes to trade negotiations. If you look at it from that point of view, he’s probably more involved than any president has ever been. The only one who might come close was Bill Clinton, but in a different way. He was looking to liberalize trade. [Keep in mind], there are mind-numbing particulars [to any trade agreement]. You wouldn’t expect a president to be that involved. But [as I said earlier] Trump is more involved than probably any other president has been. It’s one reason he has had, let’s just call them “hawks and doves” — the [Treasury Secretary Steve] Mnuchin wing (which is dovish) and the [U.S. Trade Rep. Robert] Lighthizer wing (which is hawkish). Both are involved and he basically doesn’t trust either of them. He wants to see the best deal he can get, and then render his own judgment. What does Trump care about? He cares about exports versus imports. So he cares about the trade deficit. But virtually everyone in that administration understands that you can’t move the trade deficit very much by trade policy. It’s affected by other things. But the way you can make sense is if they buy more stuff; if they import more. Well, that’s what Trump cares about. And Lighthizer would try to bring it around to the broader issues of subsidies and intellectual property. But for Trump, this is where his heart was.

Behind the trade disputes are some of the world’s biggest corporations, American and Chinese. How much corporate lobbying took place behind the scenes?

Davis: Let me take the U.S. side. This is an administration that works hand-in-glove with business, whether it’s on the tax bill or on regulation. They even hire lobbyists for cabinet positions. And yet when it comes to trade, and in particular trade with China, [the corporate lobbyists and interest groups] had surprisingly little influence. But they did set the agenda in two ways. First, when it came to the intellectual property discussions, the businesses helped a lot behind the scenes in giving the administration the details. [The Trump administration] needed to know how to structure the things they asked of China. You can see it in sections of the so-called Section 301 report, with the material on intellectual property. The report was essentially a declaration of a trade war. As I remember it, the U.S. Chamber of Commerce was cited in it something like 50 times. And the administration got enormous input from U.S. businesses, including the U.S. China Business Council, which is an organization of big China boosters and investors and probably the most dovish organization out there.

On the other hand, when it came to the tactics the administration chose, which was one tariff after another and threat after threat, they had very little influence. [American CEOs and big corporations] were largely messenger boys; they’d send messages to the Chinese [government] and get information back from the Chinese to try to influence [the negotiations]. The biggest names they had were people like Steve Schwarzman of Blackstone, who speaks regularly with the president. He could also talk about the impact of all this on the stock market. Trump cared a lot about what was happening in the market.

Do the U.S. businessmen really shuttle between Beijing and Washington carrying messages? Is that normal?

Davis: American business executives have long acted as intermediaries between the two capitals. Henry Kissinger, acting as a consultant, made a post-government career out of it. That’s only one role they play. Usually they act as advisers too. The Trump team didn’t use them nearly as regularly in that way as previous administrations. 

Lingling, on the China side, are there Chinese companies that can lobby the Chinese government to influence the trade deals?

Wei: There was intense lobbying throughout the process from Chinese companies. I’ll give you one example. Over the years, China had promised to liberalize the financial sector, including banking, insurance and the securities business. But it wasn’t until the signing of phase one of the deal where you saw meaningful steps. That was because of intense lobbying [by Chinese firms against opening the market to foreign entrants], especially the big, state-owned insurance companies. China has an aging population and that means there’s huge potential in the insurance market. China’s market is dominated by just a few companies, like PICC. Now, there’s [this push] to open up the area to U.S. firms like AIG and Chubb. That would allow American firms to take a bite out of that market. Earlier in the trade war, in early 2018, I was talking to one of my key sources and he told me how big of a pushback they had encountered from insurance firms [in China], the big state insurers. [Meanwhile] on the banking side, the pushback was more modest because the big four or five Chinese banks are already so dominant. 

Another important area for the trade negotiations has been technology. In the later stages of the trade negotiations, cloud computing started to emerge as the area where the Chinese side showed some willingness to make concessions. The Commerce Ministry and MIIT [the Ministry of Industry and Information Technology] consulted with big tech companies like Alibaba about cloud computing. That’s a huge and growing market. And so the homegrown Chinese firms have been involved in [discussions with Beijing about] how much [China] can give up to the foreign firms, or the Americans.

Lastly, we wrote about the “AnKe Project.” That’s a very ambitious policy designed to purge Chinese government agencies, as well as telecommunications companies and power grids, of foreign hardware or software. The design and the implementation of that policy has involved lots of Chinese companies. And, by the end of 2019, more than 180 Chinese tech firms like Huawei had joined that program, helping the government figure out exactly how [China] should go about doing this. So throughout the process, Chinese companies, especially state-owned and national champions like Huawei, were involved in the process [of advising] the government on what can [China] give to the Americans, and what are the areas [China] should hold its ground.

Why didn’t we hear anything about Facebook or Google or Twitter gaining access? They have been pretty effectively blocked from the China market, essentially banned. Were they ever a part of the trade negotiations?

Wei: As part of the cloud computing negotiations, there were some discussions about cross-border data transfer. But I do not think the American side specifically talked about things such as that China should dismantle the Great Firewall or it should allow the U.S. media companies to operate more freely in China. Earlier in Xi’s rule, probably in 2013 or 2014, there were lots of rumors about China potentially allowing Facebook to come in. That was the period when some people were still hopeful [that the U.S. companies might be allowed access]. But those things all faded away.

One of my favorite parts of the book is the description of how China viewed the U.S. trade proposal and how there was a debate involving members of the Politburo Standing Committee [the CCP’s top leadership], including your findings on how each of the seven members voted. I suspect Lingling somehow found that. How did you get that? 

Wei: So I started nosing around about whether there would be any big meeting that took place before China signed the [trade] deal [with the Trump administration]. I started reaching out to my sources. And [I found that] even though Xi has gained so much power [in China], he could not just unilaterally decide on a deal. Yes, China’s system is very rigid, and some things you can’t change overnight, especially when it comes to [dealing with] the U.S. Someone could very rapidly be labeled as a traitor, right? And a leader could have any number of enemies attempting to take him down.

It’s a remarkable bit of reporting. And how does one get inside Zhongnanhai [the Chinese leadership compound]?

Wei: Well, thank you. Obviously, if I didn’t feel confident enough I wouldn’t have written that or published it. One of the most difficult things about covering China is getting as close to the action as possible. Some things are impossible, like interviewing Xi Jinping. But there are people that the government seeks advice from during the entire process, people in Zhongnanhai or close to Zhongnanhai. That’s why that piece of information is not based on just one source, but multiple sources.

How does the Chinese government get its message out to journalists?

Wei: They’re not as sophisticated in their approach to the media as the American government is, for sure. My advantage is that, being in China, when we were writing the book, I had already been in China for almost 10 years. I had accumulated quite a number of sources who were in the position to know. And there were moments where the Chinese side or certain people on the China side really wanted to get their view out. For example, in the tech transfer chapter [the Chinese government] felt really mystified by the American accusation. I was able to learn from the Chinese side that the whole joint venture concept and tech transfer was actually proposed by this GM CEO, on his trip to China back in the late ’70s. Also, Wang Qishan once remarked to a group of American CEOs that “we’ve had this for many years. Why [are you complaining] now? Why are you making this such a big deal now?” That was one of the crucial things for the Chinese side. They wanted to make sure that readers know the Chinese side of the story.

Why did the Trump administration back off on ZTE, which seems to be part of this trade dispute and why haven’t they backed off on Huawei? 

Davis: So on ZTE, it goes back as it should to the President. He’s the one making the decisions. And once again, he’s a mercantilist. He cares about selling things to China and the jobs that are created by doing that. So let’s start with ZTE. This was a second order issue. There was a phone call arranged [between President Trump and] Xi Jinping. For Xi Jinping, this was a top priority; to get the Americans to back off [ZTE]. And [Xi Jinping] had his talking points, which were, “It’s important. The company had screwed up and was willing to make amends. And there’s a lot of American jobs [tied to ZTE] here too.” And after that conversation, Trump essentially repeated Xi Jinping’s talking points, point by point.

I would say [the decision came down to] two reasons. One, the way Trump looks at his offensive against China is that, “We don’t attack Xi Jinping personally.” He never does. Never. Literally not once. This is his “I’m Mr. Art of the Deal, and I can cut a deal with anybody.” Part of it is the administration’s view, which may be naive or whatever, but their view that if Xi Jinping wanted to back off [something], that if you don’t attack him personally, he could always blame somebody else, some lower level person who led him astray. So, in any event, [Trump] doesn’t attack Xi Jinping. He wants to have Xi Jinping on his side. Xi Jinping makes a powerful argument that there are a lot of American jobs at stake here. Trump buys it, basically. To him, the overall relationship and the trade issues are more important than this particular company. And he sticks with it. For a guy who will often change his mind under pressure. I mean, he stayed with it, despite a lot of criticism, not just from Democrats but from Republicans. Then you get to Huawei, which is similar in a lot of ways. But the issues are a lot bigger. [For instance], it’s a much bigger company. There are also more national security issues. People in national security are telling him that Huawei is acting as a spy for the Chinese government. That wasn’t the accusation about ZTE. There’s also more focus on it by the American side, by [Trump’s] advisors. In addition, [after his decision on] ZTE took place, he’d been criticized for it. I think he [also] looked at Huawei as a card to play in the trade negotiations. 

What happened with Huawei?

Davis: They have certainly blocked Huawei in the United States. It’s off limits now. They’ve done their best to blunt Huawei’s ability to sell to third countries, with not very much success. And then they have put them on various blacklists, which have done largely nothing to stop them. And so the question becomes, is that on purpose, or because of incompetence? It’s possible what’s going on here is that the bark is worse than the bite; and the administration knows that the measures they’re putting on Huawei are less effective and won’t actually kill the company. That’s one way to look at it. I really haven’t decided which view is accurate. Incompetence is probably the safer bet.

Lingling, how is this trade dispute playing back in China? Do you have a sense of how the public sees it?

Wei: The public’s views of this trade war evolved. Initially, a lot of people [in China], especially market oriented liberal thinkers, were cheering Trump on because they figured that was a good way to push the leadership to make needed changes to the economic system. They were pinning so much hope on him thinking that especially after the [China] stock market crash in 2015 and 2016, that a lot of market measures were dialed back; that the government really hit the pause button on economic liberalization. So initially in the trade war people thought that was actually good for China. There was a lot of support [for Trump pressure on Beijing] in China. Then, as things moved along you had the offensive against ZTE. Well, ZTE was considered a joke in China. Nobody showed much sympathy towards ZTE because it was so audacious what they did. But later on, when it came to the offensive against Huawei, well this was really a national treasure; this was not just for the government. The Chinese people felt proud of this company. “Look at how much they have done!” Even my family felt like, “It’s only one company. Why is the U.S. trying to bring down this one company?” So that really changed a lot of people’s thinking on the trade war.

Then you had the collapse of the talks in early 2019. Trump said China broke its word. That really also hurt a lot of people’s feelings. I have a couple friends who were involved in the negotiations, and they were very pro market reform. They wanted the deal to materialize and they were beside themselves, like, “How can you just toss it out like that.” So later on during negotiations, Chinese soured on the trade war. [They began to believe] it’s really about bringing China down. It’s really that the U.S. is afraid of China’s rise. But obviously, the [Chinese government] propaganda played a big role. Early in the trade negotiations, the media wasn’t even allowed to cover the trade war. The netizens cleverly came up with a way to refer to the trade war. In Chinese, trade war is “maoyi zhan” 贸易战. So [online, to bypass the internet censors] they used [the similar sounding Chinese term] “mao yizhan” 毛衣战, which means “sweater war” [laughs]

That could have been the title of your book!

Wei: Right. And then after the collapse of the deal, the negotiations in early May, the Politburo made this unanimous decision. They said, “OK, let’s hit it hard, just completely ramp up the propaganda machine, day in and day out.”

What’s the results so far of this trade war? Are there any winners? Has it been terrible for both sides? What’s the score?

Davis: Nobody’s won. It’s three, three in the bottom of the 17th inning. Yes, there were some gains from the American perspective in terms of intellectual property and promises on agricultural purchases, but at what cost? Over two years, you have had threats and a degradation of the [U.S.-China] relationship, and it has only gotten worse because of Covid-19 and Hong Kong. The U.S. has only gained a few things.

Nobody’s won. It’s three, three in the bottom of the 17th inning. Yes, there were some gains from the American perspective in terms of intellectual property and promises on agricultural purchases, but at what cost?

How has China lost in the trade war?

Wei: The trade war hurt China’s economy significantly. The phase one deal was supposed to buy China some time and buy some peace for the relationship. Then came the pandemic. Basically each side has been hurt. On many occasions, President Xi has told foreign leaders that there are a thousand reasons to get the China-U.S. relationship right, and not one reason to spoil it. That explains why China made that phase one deal. On the U.S. side, many people don’t think the deals are worth much; [they doubt] the purchasing targets can ever be reached. But on the Chinese side, people are not happy either because they felt like China made too many concessions. But [Beijing] needed that deal, to at least put this aside for a moment and move on. But obviously the pandemic happened, and the relationship strained further. The hardliners gained; the vested interest groups in China that don’t want changes to the system gained.

Bob, do you want to revise your score to negative 3 to negative 3? Have both sides lost and Covid-19 has destroyed this agreement?

Davis: I can’t imagine the Chinese making the targets. It seems inconceivable, almost impossible because [the targets] are so ambitious and the Chinese have never ramped up to spending on the level that is envisioned in the plan. And, now there’s less demand in China because they’ve been hurt by the pandemic like everybody else.

I’ll end with two personal questions. In the middle of your excellent reporting on the trade deal, the office of the U.S. Trade Representative put out a statement identifying each of you by name and criticizing your reporting on one aspect of the trade deal, saying you relied on anonymous sources. Can you address this?

Davis: When I was working with Lingling in China, we got a denunciation from the Chinese government about a story we wrote on the Central Bank there. I’m sure Lingling collected many others. My son said, you should print them both out and frame them both.

Finally, Lingling, this remarkable story has turned into a book, but also in your expulsion from China as an American citizen working for The Wall Street Journal. It seems so improbable, seeing that you were born into a military family that has ties to a veteran of the Long March. This is a terrible thing for any American journalist who now has to leave, including my former colleagues at The New York Times. But you were born and grew up in China…

Wei: Yes, it is extremely painful. I could bend your ears for the entire day about what I think, but I’ll keep it short. During this period, I experienced so many different emotions. Initially, it was pure fear and a sense of helplessness. You know, for the longest time, I thought of myself as an example of how people in China could benefit from a close relationship between the two world powers, the U.S. and China. I was fortunate to be able to attend New York University to study journalism, and then practice with one of the best newspapers, the Journal. I got my American citizenship back in late 2010. I cried when a Chinese visa officer took away my red Chinese passport and cut off its top right corner. Then when she was reviewing my application for a visa, she said, “Oh, we’ve never seen an application like yours before,” basically referring to my Chinese background. But at that time, I was both sad and very proud. I was able to benefit so much from this close relationship between the U.S. and China. Then, fast forward to the time I was being expelled along with my colleagues at the Journal and your great former colleagues from The [New York] Times and The [Washington] Post, and all of a sudden I have become what some people in China called the “bomb ashes” of this intensifying political crossfire. Bomb ashes [cannon fodder] in Chinese is “pao hui” 炮灰. This was quite a turn for me personally in my life. It just broke my heart that I had to leave my aging parents, and take my son, who’s only six years old. This is a huge disruption to his life and for my career. My dream job has always been to practice independent journalism in China. So it’s a heartbreaking experience, but it is what it is.

Bob was one of my first phone calls when the government announced that expulsion order, and I told Bob that I was thinking about quitting to remain in China with my parents. And Bob played an instrumental role, along with my family, in convincing me not to make rash decisions. In the end, as my mom told me, it’s just like my grandfather: he did what he believed in. He believed in communism. He believed in serving the Party and helping build the new China. “You should do what you really believe in,” my mom told me. For their generation, it was a quest just to survive. Just, you know, forget about dreams, they were happy that they could just have a life without wars, without upheavals in their lives. But for me, I am lucky enough I have a choice. I have the choice of packing up and coming back to New York.

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