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#5202, 12 December 2016

Eagle Eye

Paradigm Shift or Business As Usual: Trump’s China Policy
Chintamani Mahapatra
Rector and Professor, JNU, & Columnist, IPCS

Candidate Trump’s positions on China during the long election campaign and President-elect Trump’s tweets and phone calls have generated the impression of a coming paradigm shift in Washington’s approach to China under the Trump administration.

Whether trade, investment or security issues, Trump has yet to say something substantially positive about China since the campaign days. He promised to raise the tariffs on imports from China to an extent that could threaten a trade war, inducing many US analysts to warn about the negative impact of a trade war with China.

When President-elect Trump had a telephonic conversation with the President of Taiwan, China issued a modest reprimand, but others saw in it a paradigm shift in US policy. The reason is simple. No US President-elect or President has had a telephonic conversation with a Taiwanese President since the 1979 US agreement with China to view Taiwan as part of China in acceptance of the "one China” policy.

China retains the right to annex Taiwan by force, while accepting the US view that Taiwan’s final annexation with the mainland should be peaceful. The US, on the other hand, seeks to ensure peace by underwriting Taiwan’s defense preparedness through the supply of 'defensive' weapons. China usually fumes when Washington supplies sophisticated weaponry to Taiwan or a Taiwanese leader visits the US under some pretext or the other.

What explains Beijing’s modest response to Trump’s phone conversation with the Taiwanese President? First of all, the general perception in China during the US presidential election was that Trump would be a pragmatic leader and businessmen who would safeguard the deep Sino-US economic cooperation and not allow issues such as human rights to muddy the relationship. Chinese analysts also felt that the Trump administration would not uphold its traditional alliances in the Asia-Pacific, thus reducing strategic pressure on China. Secondly, when the Trump team contended that the President-elect merely responded to a congratulatory call from Taipei rather than took the initiative himself, the blame suddenly shifted to the Taiwanese President. China promptly admonished and warned Taiwan’s pro-democracy political forces.

Many others, however, quickly pointed out that the telephone conversation was premeditated and part of a political strategy to send signals, and was in no way a coincidence. China’s suspicion deepened when Trump tweeted that China did not consult the US before devaluing its currency and caused losses to US businesses. He also complained against China’s land reclamation in the South China Sea and its construction of military facilities.

The Chinese perception has to an extent changed again, and Trump is suspected of believing that US-China relations are zero-sum and that the greater loss has been to the US in recent decades. He will thus act tough on the rising superpower to make “America great again.” Trump’s rhetoric to make “America great again” is interpreted as his conviction that US' global influence had declined while China’s had increased, and thus there is a need for course correction.

China would have carefully monitored Japanese Prime Minister Shinzo Abe’s New York visit and meeting with the President-elect. Earlier, Beijing appeared more relaxed with Trump’s remarks that Japan and South Korea should fend for themselves or pay more for their protection by the US military. Washington’s differences with the allies would bring strategic benefits to Beijing. But Trump has apparently assured Tokyo, Seoul and many other allies of substantive continuity in US policy towards allies.

While the details of Trump’s Asia-Pacific policy are not known yet, both the strategic competitors and allies of the US appear to be in a state of anxiety about the Trump administration. China expects the 'business-as-usual' approach, since it has very high stakes in its trade and investment ties with the US and its economy is passing through a difficult transition. Japan, South Korea, Australia and other strategic allies do not desire any turbulence in their alliance relationship with the US.

It is likely that Trump will try to promote economic ties with China without conceding to China’s spreading foothold in strategic areas. Simultaneously, he will try to extract more defence burden-sharing from US' strategic allies. This way, he will try to strengthen US' military and economic presence in the region. The 'pivot to Asia', 'Asian rebalancing', Trans-Pacific Partnership (TPP) may become things of the past. Trump’s engagement with the region will thus neither be a paradigm shift nor will it be business as usual.  

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