Note: This episode was recorded on March 15 Australia time (March 14 US time). On March 16 Australia time (March 15 US time), Trump threatened to delay his upcoming visit to China, if China doesn’t help unblock the Strait of Hormuz. In response to this news, James Zimmerman provided the following additional comment: China is unlikely to respond to the threat, and it’s not in their best interest to jump into the fray of the hostilities, which is not their battle. They’ll likely say that if Trump cancels, that is on his own volition and unfortunate as Beijing is able and willing to proceed with the planned Summit. But, overall, my guess is that Trump will proceed with the visit knowing that the US-China relationship is too important to postpone.

Jersey Lee

Welcome to this episode of Pacific Polarity. Today we’re speaking with James Zimmerman. He is a seasoned lawyer with more than three decades of diverse legal experience based in China since 1998 and is currently a partner at the law firm Loeb & Loeb where he advises foreign companies on corporate, transactional regulatory litigation and white collar criminal defense matters. He is also the chairman of the American Chamber of Commerce in China and had previously served in this position four times over the past two decades. He is also the author of the acclaimed nonfiction book, The Peking Express: The Bandits Who Stole a Train, Stunned the West and Broke the Republic of China. James Zimmerman, great to have you on.

James Zimmerman

Thank you so much. It’s great to be here. I appreciate the opportunity.

Jersey Lee

As I understand, you’ve been involved in the preparations surrounding Trump’s upcoming visit to China. To the extent that you can share, how have these preparations progressed and what can we expect from the visit?

James Zimmerman

This might actually be overstating our role, but we, the chamber and its members, are very much engaged with different departments in the U.S. administration, just providing our suggestions and input on the upcoming presidential visits. And we’re doing so because we want to make sure that the business communities, American business community’s agenda is part of that discussion. We are making sure that we’re having conversations with the administrations to let them know that we’re supportive. We’re here. And we’ve got ideas on what we want to see in terms of deliverables, outcome. And so, I mean, that’s why we’ve been making ourselves available.

I was in Washington, D.C. two weeks ago meeting with a number of the teams that are participating in the presidential summit and to make ourselves available and to be supportive in any way we can.

Jersey Lee

What might be some of the expectations from the business community that you represent?

James Zimmerman

Well, I think the best way I’d characterize it is the expectations are generally low. We’re not expecting a grand bargain. We’re not expecting significant deliverables, although I do know that there is some discussions at this point to try to come up with some purchases that may result from the discussions. But overall, I think the goal of the summit is to continue to maintain a stable relationship between the United States and China. And the goal of this summit is not to reach a whole new bargain, a whole new agreement, the key issue is maintaining the stability in the relationships, which I feel is very, very important from the business community’s perspective. So long as the parties continue to talk and the relationship is stable, I think that’s something that’s very important for not just the business community, but the global economy as well, because if the bilateral relationship is stable, that supports stability across the globe and is good for the global economy.

Jersey Lee

There’s been quite a number of reports that have noted issues with the preparation process, or at least, as you say, playing down expectations for the visit. There’s reports that there might not be a corporate delegation from America, and some other reports suggest that the preparation process has been a bit rushed, which is why there’s low expectations for outcomes. What do you think of such reporting?

James Zimmerman

Well, I think that there is some truth to the fact that, yeah, this has all been late discussions and we’re trying to put something together without a whole lot of planning time. But keep in mind, too, the delegation that Trump led to Saudi Arabia that was all put together at the last minute where CEOs got on board. And I think that there is some discussions that he will be bringing forward to China maybe 20, maybe 30 CEOs that have an interest in ongoing trade and investment in China.

I think the expectations and the reporting in general is accurate. I think they’re trying to put something together where we’re going to have some business that will be participating in some way, but the actual outcomes and the actual purchases is something that’s left for observation.

Jersey Lee

So it sounds like this is something that’s common in Trump’s visits, instead of specific to this upcoming visit to China. Is that what you’re saying?

James Zimmerman

Yeah, I mean, I think it would be—There are things specific to the U.S.-China relationship that we’re trying to put together, but the last-minute planning is nothing new with this administration, they seem to be doing things quite often at the last minute. Even when I was in Washington, when I met with the Chinese embassy the DCM (Deputy Chief of Mission) there had said to me that, wow, we haven’t heard what the plan is, and it’s so hard to have outcomes, so we have to play down expectations because we just don’t have a whole lot of time. That’s the situation here, but we may be surprised, there are some last minute preparations that will, may pull things together, so Trump brings along a real solid group with him, but we’ll have to see what happens.

The fact that Secretary of Treasury percent is meeting with Vice Premier He Lifeng in Paris as we speak, a lot of those discussions in Paris are planning the logistics and planning some of the outcomes that will come out of this meeting. So in the next few days, we may be hearing more information.

Jersey Lee

Beyond the usual conversation over trade and investment, which lots of people have talked about, some reporting suggests that the US might push China to reduce purchases of oil from Russia and Iran, or to push China to exert pressure on Iran to keep the Strait of Hormuz open. Meanwhile, there are suggestions that China may in turn push the U.S. to weaken its support for Taiwan or to significantly weaken export controls. Do you think any of these proposals might find a receptive counterpart here, or are they just thought bubbles, trial balloons?

James Zimmerman

No, I don’t think there’s going to be any progress in either direction on the more sensitive topics. Those things take a lot of time to work through, and I think the parties, both the U.S. and China, are more interested in keeping the general stability of the relationship and not throwing a monkey wrench in either direction that’s going to cause any kind of complications. If the U.S. was to pressure China to reduce its purchases of oil or if China was to put pressure on the U.S. to weaken its support for Taiwan, I think you’re opening up a whole week of discussions, a month of discussions, and it just complicates things. And I don’t think either party really wants to go down that path. I think it’s more of, let’s just continue to stabilize the relationship, let’s talk in general terms, and let’s keep things at a very simple pace right now. And I think that’s the direction we’re going in.

There’s been a lot of issues that have come up in the past few months that could very easily have derailed the pending truce that’s between the U.S. and China since the presidents met in South Korea back in October, a lot of things have happened, not just Iran, but Venezuela and so forth. But there’s been quite a bit of discipline on both sides to not overreact, to destabilize the relationship. So it’s the same theme. It’s like, let’s not complicate things with very difficult requests at this time. Let’s just keep the relationship stable. So I don’t think you’re going to find that a lot of proposals that are going to be made.

Now, there might be, I mean, both sides may take the opportunity to lecture one another on things that they find to be troubling. And I’m sure that Xi Jinping is going to raise questions about both Venezuela and Iran and so forth. And then Trump himself might raise questions about the things that are troubling him as well. But I don’t think those are going to be conversations that are going to result in any grand bargain, so to speak. They’re just too complicated and just not enough time.

Jersey Lee

On the topic of the ongoing war in Iran, do you think that’s affecting either side’s thinking towards the meeting? Maybe not to the extent of derailing it, but just thinking about how much importance, how much salience they want to put into this meeting. Because various analysts have made the case that this meeting might be bad optics for both Trump and Xi, but for different reasons, given the current geopolitical context.

James Zimmerman

Yeah, I mean, that’s a concern on both sides. I know that, in communications with people within the Chinese government, they were very concerned, and they continue to be concerned about the optics of providing Trump with a platform, with the opportunity to meet Xi whil...