CNN – Quest Means Business U.S. and China Agree to Pause Trade War Robert Lawrence Kuhn, December 3, 2018 1 Host Richard Quest: Robert Lawrence Kuhn is a longtime advisor to Chinese leaders and the author of How China’s Leaders Think. How will they be interpreting the deal that was done on Friday? 2 Robert Lawrence Kuhn / RLK: Everybody is pleased that there is the pause; 90 days is very short, of course. We have to look at the short-term, mid-term, and longterm. Let’s look at the background to understand where China is today. This is the 40 th year, the anniversary, of China’s reform and opening up. On December 18 th , 1978, Deng Xiaoping made his famous speech, which transformed China from ideologically driven class struggle into economic development. It’s a big deal in China; there’s a big celebration coming up. RLK: President Xi Jinping has said that the first big goal for China, in 2020, is to have a moderately prosperous society, specifically to eliminate all extreme poverty in China. That means they will have taken 800 million people out of poverty. So that’s their overview, and so they look at the status quo that they’ve had with America as something that’s good for both sides. 3 RLK: As for America, we have critical issues that we have to deal with: Open markets, IP protection, forced technology transfer, cyber security / cyber theft — there are a lot of issues on the table. Quest: The two sides are seeing Friday’s deal in very different ways. RLK: That always happens — Quest: But the Chinese — RLK: That’s diplomacy. That’s the definition — we saw that in the spy plane collision in 2001; we saw that in the bombing of the Yugoslavian embassy in 1999. 4 RLK: Both sides had different interpretations to suit their domestic markets. Quest: But they’re not even admitting, or at least acknowledging, a 90 days. Let alone all this business of, “we’re going to buy more cars.” RLK: Well, look. In China, there is a debate among Chinese economists, what’s good for Chin