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China’s Xi Calls for ‘New Long March’ as U.S. Tensions Rise

Bloomberg News
China’s Xi Calls for ‘New Long March’ as U.S. Tensions Rise

(Bloomberg) -- China’s President Xi Jinping called on citizens to join a “new Long March," a phrase he has used before to characterize achieving progress despite hardship, as the U.S. weighs stronger restrictions on Chinese technology companies amid a deepening trade war.

Xi made the remarks on Monday while leaving the Long March memorial garden in Jiangxi Province, according to a video clip released by state television. The site marks the starting point of a lengthy migration from 1934 by the Communist Party’s military after setbacks that forced it to join with troops in northwest China.

"We came to the starting point of the Long March to experience the Red Army’s departure at that time," Xi said to a cheering crowd as he departed. "It’s a new Long March now, and we must start all over again."

While the comments have historical significance, Xi last March also called the push to turn party proposals into reality a "new Long March" and state-run Xinhua News Agency defined the phrase as the realization of the Chinese dream in a story on Wednesday. Yet, the timing of the clip -- released one day after Xi actually made the remarks -- and the decision to air only one line could be read as rallying the nation for what is set to be prolonged conflict with the U.S.

Xi’s trip to Jiangxi came after talks between Beijing and Washington stalled, with U.S. President Donald Trump accusing China of backing out of a deal that was taking shape and saying that China reneged on an agreement to legislate various agreed reforms.

On Monday, Xi visited a rare earths facility in Jiangxi, fueling speculation that the strategic materials could be weaponized in China’s tit-for-tat with the U.S. on trade. The VanEck Vectors Rare Earth/Strategic Metals ETF, which tracks producers, jumped the most since 2011 on Monday.

Tech Threat

Trump is considering blacklisting up to five Chinese surveillance companies including Hangzhou Hikvision Digital Technology Co. and Zheijiang Dahua Technology Co., according to people familiar with the matter. The restrictions would be similar to those imposed last week on Huawei Technologies Co., and would sharply curtail the companies’ access to U.S. market and American suppliers.

Chinese Foreign Minister Wang Yi, speaking at the Shanghai Cooperation Organization meeting in Bishkek, Kyrgyzstan, said China’s doors are open if the U.S. is willing to negotiate in an equal manner, but will definitely fight until the end if the U.S. opts for “extreme pressures.”

Wang said the U.S.’s suppression of a private company such as Huawei is “typical behavior of economic hegemony.”

The U.S. policy of "maximum pressure" on Huawei has proved again that China can’t buy its way into modernization, according to a commentary published on Wednesday in the People’s Daily, the flagship newspaper of the Communist Party. The paper cautioned that "China’s economic security can not be ensured unless it achieves technology independence."

The paper also rebutted U.S. accusations of "China backtracking" in the trade talks in another commentary on Wednesday, saying the claims were deliberately made up by U.S.

Even Tencent Holdings Ltd.’s billionaire founder Pony Ma chimed in on the need for China to chart its own tech course. He said that without fundamental research, the country’s tech industry would be built on shifting sands. He stressed how the social media giant he runs had invested in artificial intelligence, quantum computing and robotics over the past two years.

“Given how the dispute on ZTE and Huawei is escalating, Tencent has been paying attention to whether the trade war will turn into a tech war,” Ma said during a May 21 speech.

Xi’s remarks drew a reaction from a U.S. lawmaker who has a big stake in the U.S.-China trade war because of his state’s agricultural base. Senator Chuck Grassley, a Republican from Iowa, said on Twitter Wednesday that Xi’s “long” view is counting on a Trump defeat in 2020 elections. In his tweet, Grassley offered Xi some advice, saying “Chinese stalling will reelect Trump.”

(Adds Chinese official’s comments in eighth and ninth paragraphs.)

--With assistance from Lulu Yilun Chen.

To contact Bloomberg News staff for this story: Dandan Li in Beijing at dli395@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Sharon Chen, James Mayger

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