Why Xi Jinping China Play Hardball with Trump on the Rates: Analysis

Xi Jinping plays hardball.

The Chinese President wants to show his people that the country can withstand economic pain from President Donald Trump’s tariff and face what Beijing is called American “intimidation”, “according to experts.

Trump’s trade war also feeds strategies that have been worked on by XI for many years: to be less dependent on the United States.

This trade details are “exactly what Beijing has prepared,” said Jude Blanchette, Director of Rand China Research Center. “Beijing is not looking for negotiations.”

The world’s superpower is involved in a risky chicken game, experts said to ABC News. The question is who blinks first.

“At present, Xi seems to count that China can withstand damage and that in the end the United States will blink first,” said Neil Thomas, a colleague for Chinese politics at the Asian Asian Community Policy Institute Center for China

XI’s view is that countries will want to do less business with the US because of the uncertainty created by tariffs, which will encourage them to China, said Thomas, who added that China has prepared this possibility for years by improving trade relations with the whole world.

“Both Washington and Beijing think they hold a stronger hand for different reasons. Trump’s government sees China depending on exports, so they believe it is a significant leverage to make Chinese bend,” Blanchette said. “On the other hand, Beijing sees the US more economically weaker under Trump and keeps away from its allies.”

While Trump in his cabinet meeting on Thursday called Xi as a “friend” and said he wanted to make an agreement with China, calculus was not so simple for Xi. If Xi walked away from a telephone call without an agreement, he was at risk of losing a face.

“For Xi, there are many risks to look weak in dealing with the US, he is at risk of being humiliated or does not have something to be shown for his involvement with Trump,” said Thomas. “The tariff will be economically painful, but Xi also sees this as an opportunity to make China a healthier situation by reducing dependence on the US”

There is also another lever that China can draw to reply. Experts say Beijing can prohibit more companies from doing business in China and further limiting exports of important materials, such as rare soil minerals.

China “has not gone wherever approaching the maximum that can be done with rare land exports, considering that is the dominant player in this industry,” said Thomas.

China can “close the large segment of high -tech supply chains” by prohibiting rare soil minerals, said Thomas, calling it “nuclear options that will be very damaging not only the American economy but the European and Asian economy.”

Beijing also said he would limit Hollywood films in China. Although this is not a “significant” retaliation, Thomas said that “it feeds directly to the broader political agenda of Xi Jinping to reduce foreign influence on the Chinese society.”

But Scott Kenney, senior advisor and chairman of the trustee in China’s business and economy at the Strategic and International Study Center, argued that Beijing believed that Trump had blinked by stopping reciprocity tariffs for 90 days.

“I think the Chinese will read this as a weakness of President Trump and they will wait,” he said.