China vs. USA in the Trump Era

Originally published on Fox News, July 16, 2017

Chinese leaders are determined to challenge U.S. dominance in Asia and had never planned on asking for American permission, no matter who occupies the White House.

U.S. global leadership also is not premised on blindly following the preferences of other countries. Additionally, under Trump’s predecessor, U.S. foreign policy bounced between setback and blunder, especially in Asia. The Trump administration would be wise not to rush into the same exercise.

After the new U.S. president took office, the Chinese commerce minister admonished America: “Now is no time for protectionism.” Instead, he observed, more “openness and cooperation” between the two countries was the right path forward.

His message, delivered in 2009, was intended for President Barack Obama, who came to office promising to renegotiate NAFTA unilaterally and oppose free trade pacts concluded by the George W. Bush administration.

Today, Communist China has again taken to preaching the virtues of globalization. Those who declare the world has been turned upside downobviously have a short memory, but they also fail to appreciate that China’s pronouncements stem from more than pure opportunism; they are about the core tenets of the country’s messy economic reforms as well.

Beijing had professed its affection for the market economy long before Trump surprised the world with his trade rhetoric. Indeed, China’s economic reforms of the past 38 years featured precisely a raging battle between free-market capitalism and state control. In November 2013, the Chinese Communist Party even issued a “blueprint” pledging to give the market a “decisive role” in its ongoing economic experiment.

Yet China is in no way qualified to lecture the U.S. on economic freedom. In its “blueprint,” the Chinese Communist Party could not even bring itself to refer to the private sector by name, and opted to call it the “non-public ownership economy.” Whatever Xi may say about open economies at fancy international gatherings, he has expressed little interest to stand on the side of the market reforms against statism at home.

Meanwhile, those familiar with China’s trading practices know not to buy into Xi’s speechmaking at face value. Trump’s threats of drastic tariffs might be over the top, but China hardly has the moral high ground. After all, this is the country that favors domestic industries while restricting imports, coerces technology transfer from foreign firms wishing to operate in the China market, and steals over $200 billion of intellectual property from the U.S. each year.

Similarly, Beijing’s supposed leadership on climate change means standing together with Europe and other countries on an agreement that would have almost no discernable impact on the climate.

Amid these contradictions, Beijing’s intent to challenge the U.S.-led order in Asia is no joke, and it would be a mistake to assume, as the Obama administration did, that China will back down simply because the U.S. says so.

Notably, China’s “One Belt, One Road” initiative, a grand vision for building infrastructure and promoting development along maritime and land routes of the old Silk Road, has been touted as China’s effort to create a new world order. Already, the initiative has attracted 68 other member countries, on whom China has promised to spend over $100 billion.

Many see this as an opening for China to challenge the international financial architecture that America helped built, but the unmistakable rebuke to U.S. leadership in this realm actually took place a couple of years ago when Obama tried and failed to strong-arm allies into boycotting the Asian Infrastructure Investment Bank (AIIB), an entity established by China to fulfill the unmet infrastructure needs of Asia’s emerging markets. Allies from Europe to Asia ignored U.S. wishes and signed on. The AIIB is now a key funding organization for “One Belt, One Road” projects.

The Obama administration’s ham-handed approach to the AIIB fit into an overall Asia policy that was ineffective and inadequate. Having begun by over-promising an accommodation of Beijing’s interests, the administration then announced a muscular “pivot” to Asia. Beijing saw the effort as a thinly veiled effort to contain China’s rise and pushed back harder. Before China’s aggressive land grabs in the South China Sea, intimidation of neighbors and outrageous cyber-attacks against the U.S. government, the Obama administration’s response was frequently hapless.

Obama’s inability to enforce the red line he drew for Syria’s use of chemical weapons in 2013 further eroded U.S. credibility. It sent a message to the capitals of Asia that America might talk tough but would do little.

In short, recollections of the success of U.S. global leadership before Trump are simply misplaced, as rumors of the imminence of a Chinese global takeover are greatly exaggerated.

This does not mean that the U.S. should graciously yield power to China, and the Trump administration has never argued as such. Just in recent weeks, it grumbled about China’s inability to rein in North Korea’s nuclear ambitions, announced sanctions against a Chinese bank for aiding North Korea, approved a new arms sales package to Taiwan (to help it defend against China), and conducted a “freedom of navigation” exercise in the South China Sea near an island that is claimed by China but disputed by its neighbors.

Contending with China’s rise will require a much more comprehensive strategy than just a tougher posture, but trying something new might actually be a good idea, and was exactly what the American electorate ordered last November.


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