Trump
Anti-China Policy – Will Xi Blink?
The
US-China relationship is ending 2016 on its most ominous note in years.
President-elect Donald Trump has questioned the one-China policy. China has
responded with visible anti-aircraft systems to the artificial islands dredged
out of the South China Sea. An underwater American drone from under the nose of
a U.S. warship was seized.
The big question for 2017 is whether the two sides will
let the relationship unravel further.
President Xi Jinping is under
pressure to show that his “Chinese dream” is progressing.
US policy toward China over the past two decades is
marked by moderation. As China has been transformed from a second-tier power
into the major challenger to the political order of the Pacific region, the
Bush and Obama administrations have responded cautiously.
China’s economic growth poses no problem for the US,
because rising global wealth is not a zero-sum game. China-US trade was mostly
seen in classically liberal, free-trade terms. China has given low-priced goods
to American consumers and jobs for Chinese.
But the main reason for moderation is surely that both
President George W. Bush and President Barack Obama judged that there wasn’t
much they could do about China’s rise and the enhanced negotiating power that
comes with it - especially while China remains the single largest non-US holder
of Treasury debt.
Militarily, both Bush and Obama maintained the
traditional hub-and-spokes security relationship with various Pacific nations,
in effect containing China without using that provocative word.
Trump sees things very differently. He depicts China’s
growth as illegitimate, caused by unfair currency policy rather than the export
of goods at rock-bottom prices. He is already demonstrating that he believes he
can change the negotiating calculus by revisiting the traditionally
accommodating US position.
Meanwhile, Trump seems fairly unconcerned about China’s
regional geopolitical ambitions. On the campaign trail, he criticized the US
treaty obligation to defend Japan and called on Japan to pay more for US troops
stationed there.
How
China will respond depends very much on Xi Jinping’s
perception of his nation’s economic and strategic interests - and his own
political objectives. China’s export-driven economy cannot afford a trade war
with the US
Holding vast amounts of US debt is a form of leverage,
to be sure; but it also means China can’t afford to push the US into a position
where its bonds fall sharply in value. Trump’s history of bankruptcy is an
extra reason for Chinese caution on this front.
At the same time, Xi has committed himself, and the
Chinese Communist Party, to a nationalist domestic strategy. Given the
inevitable decline of economic growth in China from its world-historical
heights, only nationalism promises to shore up the party’s legitimacy.
The
nationalist imperative will matter especially to Xi if he decides to try to
stay in power longer than 10 years, thus breaking the norm developed by two
decade-long cycles of Chinese politics. If he does, he will need a still
stronger nationalist rationale to justify the deviation.