HONG KONG (NYTIMES) - When former United States president Bill Clinton deliberated whether he should loosen trade barriers against China, Wall Street helped plead Beijing's case.
When presidents George W. Bush and Barack Obama talked tough about labelling China as a currency manipulator, Wall Street urged restraint - and both presidents backed down.
Today, China is hoping that Wall Street will once again use its political heft to soothe tempers in Washington. But as President Donald Trump ratchets up the trade war with Beijing, Wall Street's words are falling on deaf ears.
Senior Wall Street executives met current and former Chinese officials and bankers at a hastily organised session in Beijing on Sunday (Sept 16) to find ways to strengthen financial ties between the US and China.
On Monday, the group - which included executives from Goldman Sachs Group, Morgan Stanley and the Blackstone Group, the private equity firm, among others - planned to meet Vice-President Wang Qishan, the right-hand man of Chinese leader Xi Jinping.
New trade talks between the two governments are tentatively scheduled between Treasury Secretary Steven Mnuchin, and Chinese Vice-Premier Liu He later this month in Washington. Mr Stephen Schwarzman, Blackstone's chief, has been playing a critical role in organising them, say people familiar with the talks, who asked for anonymity because the process is sensitive.
But the Chinese have indicated that they will pull out of the talks if Mr Trump follows through on his threat to impose tariffs on another US$200 billion (S$275 billion) in Chinese goods, according to a person familiar with the matter. Mr Trump has told advisers that he wants to move ahead with the new round of tariffs, and an announcement could come as early as this week, another person familiar with the discussions said.
That continues a frustrating trend for America's financial titans: Even as they win tax cuts and regulatory rollbacks from the Trump administration and the Republican-controlled Congress, they appear to be able to do little to stop the trade war.
"What's really surprising is that the connections that used to work, the formula that used to work, just don't work at this point," said Mr Marshall Meyer, an emeritus professor of management at the Wharton School of Business.
Wall Street has long gambled that helping China would pay off. China has been slow to open its vast but tightly controlled financial markets, and Wall Street banks hope to get more business advising Chinese companies on acquisitions in the United States, lending money and selling financial services. Pressure from the Trump administration is now bearing fruit, as China has begun to open its financial markets to foreign banks, though a worsening trade war could stymie that progress.
The financial sector's arguments have often found a sympathetic ear in Washington. During the last two decades, China has emerged as a major global economic growth driver and as an important customer for many US companies, including Apple, Qualcomm and General Motors.
But the Trump administration's trade hawks have so far prevailed against Wall Street-friendly voices of trade moderation, such as Mr Mnuchin, a one-time Goldman Sachs executive. That is partly because the trade war has not shown Mr Trump much downside. His stance has won support from both parties. The US economy shows few signs of trade-war damage, and markets continue to rise.
Even if Republicans lose Congress in November's elections, the trade war will probably continue, said Mr Robert Zoellick, a former US trade representative. Only a slump in the markets might make him reconsider, Mr Zoellick said.
"I don't think that's going to affect Trump," Mr Zoellick said about November's elections. "Markets could."
Relations between Mr Trump and Wall Street are complicated. Last year's tax bill greatly favoured big financial companies, but some financial executives have clashed openly with Mr Trump.
JPMorgan's chief executive Jamie Dimon, a one-time informal adviser to Mr Trump, said in a speech last Wednesday that "I'm smarter than he is" and that unlike Mr Trump's, his personal wealth "wasn't a gift from Daddy".
The next day, Mr Trump called Mr Dimon a "nervous mess", and Mr Dimon has since said he should not have made the remarks.
Others, like Morgan Stanley's chief James Gorman and Goldman Sachs chief executive Lloyd Blankfein, opposed Mr Trump policies like his original travel and immigration ban.
In the past, Wall Street was an effective advocate. In the late 1990s, when China's effort to lower trade barriers faced tough political opposition, China flew its premier Zhu Rongji to New York City to meet directly with financial and business leaders. Senior leaders of Goldman Sachs and the American International Group, the big financial conglomerate, urged Mr Clinton to strike a deal. He did, and China joined the World Trade Organisation (WTO) in 2001.
Wall Street also discouraged the US from formally accusing China of manipulating its currency. Both Mr Bush and Mr Obama vowed to get tough on China's long-standing efforts to weaken the value of its currency to help its importers. Wall Street banks urged them to reconsider. Both ultimately backed down.
Mr Trump has also threatened to label China a currency manipulator, though the currency has strengthened considerably in recent years. Business leaders and some members of his administration have discouraged him from acting.
The Wall Street influence ran deep. Mr Robert Rubin, a Wall Street veteran, served as Treasury secretary under Mr Clinton and helped forge the consensus within the Clinton administration on how to bring China into the WTO. Mr Henry Paulson, a former Goldman Sachs executive with a high profile in China, served as Mr Bush's Treasury secretary.
Wall Street figures have cultivated China connections in other ways. Mr Schwarzman has raised more than US$500 million to build a scholarship programme in his name at China's prestigious Tsinghua University. Last year, Goldman Sachs said it would help China's sovereign wealth fund put US$5 billion into acquiring stakes in US businesses.
Mr Schwarzman is working behind the scenes to get China and the US talking again. He urged US officials to invite their Chinese counterparts to resume talks, according to the people familiar with the discussions.
Last week, Mr Mnuchin issued an invitation, which Chinese officials publicly greeted warmly. But Mr Larry Kudlow, Mr Trump's chief economic adviser and another Wall Street veteran, suggested afterward that China had sought the invitation.
"There's some discussions and information that we've received that the top of the Chinese government wishes to pursue talks," he told Fox News.
The meeting in Beijing on Sunday - organised by Mr Zhou Xiaochuan, China's former central banker, and Mr John Thornton, a former Goldman Sachs president - gave Wall Street a chance to press for more business from China. The bankers were planning to present Wall Street's wish list for more market access, including creating a more transparent process for financial firms to get operating licenses and expanding the services that US bank branches can offer.
Because the meeting was called on short notice, top Wall Street executives did not attend. Most sent a senior executive, like Mr Franck Petitgas, head of Morgan Stanley's international business; Mr John Waldron, president of Goldman Sachs; and Mr Jon Gray, the No. 2 executive at Blackstone. Officials will pass suggestions to Mr Liu, Mr Xi's top economic adviser.
Prospects are good that this type of outreach will help, said Ms Wendy Cutler, a former US trade negotiator.
"Traditionally, there have been these back channels, and one of the reasons why Beijing has put people like Liu He in these senior positions has been because they have such good relationships with Wall Street," said Ms Cutler, who is vice-president of the Asia Society Policy Institute.
"To date, these back channels don't seem to be working in moving this administration towards a negotiated solution."