(Originally published by South China Morning Post on 27 November, 2018.)
US President Donald Trump deserves some credit when it comes to his approach to China. For most people outside his base, this might be a challenging assertion. They will need to block out how Trump has debased the White House by saying lucrative arms deals with Saudi Arabia should excuse what was likely to have been a state-sanctioned killing. They must also forget for a moment his willingness to hasten potentially catastrophic climate change by deregulating the fossil fuel industry.
Once these blinkers are on, however, we can give Trump a thumbs up for the game of chicken he is playing with Beijing. After all, most analysts expect his counterpart, President Xi Jinping, to offer a concession or two when they meet in Buenos Aires this week.
Whatever Xi brings to the table will not be enough to return Sino-American relations to the relative stability of the few decades before Trump took office, but it should be more substantive than anything Beijing has offered since joining the World Trade Organisation in 2001.
The strategy Trump used to get whatever Xi will offer didn’t involve informed statecraft. It came from his one-page playbook for every challenge he faces: demand a better deal and hold everyone on all sides hostage until he can claim he has evened the score.
Trump has no apparent exit strategy for the trade war and seems content to let American multinationals figure out how to re-engineer complex global supply chains involving China, and so many resist the argument that he should be praised for his contretemps with Beijing.
Critics might also argue that the path to victory in Trump’s stand-off with China would have been easier had he not spent his first year in office antagonising America’s closest allies and trading partners. But none of this should detract from the fact that the moves made by Barack Obama, George W. Bush and all of the supposedly astute policymakers guiding their approach to Beijing amounted to a win-lose scenario in China’s favour.
It’s true that many American consumers and shareholders benefited from closer bilateral ties, but from a long-term strategic perspective, how do cheaper sweatshirts and fatter Boeing dividends compare with the broader-based rewards that could have been reaped if American companies had the kind of access to China’s market that Chinese companies have to America’s?
This question has been percolating through Washington for the past couple of years, and has solidified Trump’s case. Beijing feels it has no choice but to offer the US president something real on December 1, and the two sides are no doubt working behind the scenes to figure out what that something will be.
So Trump should be able to claim, rightly, that he did more to level the playing field with China than any of his predecessors. Unfortunately, as many analysts have been predicting recently, this victory will fade quickly as fundamental differences prevent the kind of reforms sought by Trump’s team, as well as others in US policymaking circles from all points of the ideological spectrum.
The disconnect started years ago. Around the time Xi took up the reins of leadership in Beijing, some of his country’s highest-ranking officials were finishing a blueprint for further reforms to what had just become the world’s second-largest economy.
Robert Zoellick, a former World Bank president and US trade representative, worked with members of China’s State Council to spell out the reforms that would put the market at the centre of the country’s economy.
Their joint report, China 2030, published in 2013, noted: “It is imperative, therefore, that China … develop a market-based system with sound foundations in which the state focuses on providing key public goods and services – while a vigorous private sector plays the more important role of driving growth.”
“China’s strategy toward the world,” the report added, “will need to be governed by a few key principles: open markets, fairness and equity, mutually beneficial cooperation, global inclusiveness and sustainable development”.
But China’s top leaders eventually figured out that such a path would threaten their hold on power and replaced it with Made in China 2025, an ambitious plan to put the country at the forefront of technical innovation. And the leaders, including Xi, are not about to back away from the plan because that would probably be political suicide.
So let’s give a cheer for Trump. We won’t need to keep it up for long.