Economics and finance, Government and governance, Trade and industry, International relations, National security | Asia, East Asia, The World

2 December 2016

China will likely take its place at the top of the world economic tree during Trump’s presidency. How will the “outsider” in the White House cope with this unprecedented shift in global power? In the second of his series looking at the Trump effect in East Asia, Stephen Nagy reports from China on the bilateral and broader regional implications.

In China, Donald Trump’s successful election bid has fostered a sense of strategic opportunity, increased uncertainty, as well as cemented realist notions of the importance of power transition and structural change as the core drivers behind great power politics.

On the streets of Beijing, Shanghai and Nanjing however, average Chinese citizens view Clinton’s defeat as an example of the problems with democracy. For many, the election of someone with no experience in government and with such visibly vulgar campaign rhetoric is evidence that the democratic system can be, and has been, delegitimised. At the same time, many view the ascent of a complete outsider to the pinnacle of political power in the US as an inspiration, reaffirming views that the current system in China favours particular interest groups rather than the ordinary Chinese.

In China’s scholarly and policy world, however, three distinct schools have emerged. The first sees Trump’s Presidency as a strategic opportunity for China to exert its credentials as the leader of globalisation through mutually beneficial national projects such as the One Belt One Road initiative, leadership through the Regional Comprehensive Economic Partnership (RCEP) and the Asian Infrastructure Investment Bank. The second school of thought stresses that national interests will surpass personalities, and the new Trump administration will continue many of his predecessor’s policies toward East Asia in general and China in particular. The third revolves around the ideas of power transition and the reconceptualisation of roles and relationships in an era in which a developed country, namely China, becomes the world’s largest economy during a Trump Presidency.

More on this: Trump and the future of American policy in Asia

Each of these schools of thought regarding the future of US-China relations leads us to different preliminary conclusions about the trajectory of the bilateral relationship under Trump. In the first case, assumptions among this group of scholars and policymakers are that Trump will focus on domestic issues, retrench US commitments in East Asia and dramatically decrease what many policymakers in China perceive as a containment strategy under Obama’s rebalance initiative.

A pull back would manifest itself in more favourable conditions for China to pursue what it deems its core interests in its immediate vicinity. This includes territorial consolidation in the East and South China Seas, but also the strengthening of its grip on Taiwan. China would emphasise to Trump that the trade and geopolitical advantages of maintaining a relationship with Taiwan do not outweigh the great trade opportunities that the US could accrue through a bolstered US-China relationship that de-emphasises and perhaps abandons Taiwan altogether. This group assumes that Trump’s inclinations as a businessman will lead him to value trade over ideology and economic opportunity over human rights and the promotion of democratic institutions.

Aside from their view that a Trump Presidency will be a boon to China’s long sought after dream of reunification with Taiwan, people holding this view also see an enormous opportunity for China in what they understand is the death of the Trans-Pacific Partnership and Trump’s pronouncements about rethinking trade. Many see a once in a lifetime opportunity to take a leadership role in the promotion of free trade through the RCEP, a potential China-Korea-Japan free trade agreement, and the Asia-Pacific Free Trade Area (also known as a Free Trade Area of the Asia-Pacific, or FTAAP). These would all contribute to “returning the global economy to its natural order”, as one scholar articulated it when discussing China’s economic statecraft.

This first school of thought contrasts with the second, which primarily assumes that Trump’s foreign policy in relation to East Asia and China will be driven by national interests, not personality. For this group of scholars and policymakers, Trump’s views on East Asia and China are merely an extension of the Obama-Clinton rebalance in which China will face increasing diplomatic, economic, political, and military pressure to accept the current US-led international system. They see tangential and non-tangential challenges for China from the US, through proxy states and through various kinds of alliances and strategic partnerships that are conceived with the aim of containing China, arresting its development or preventing it from achieving some of its stated core interests.

More on this: The TPP looks like it’s dead in the water, but that won’t be the end of US involvement in regional economics

With national interests the key determinants of foreign policy, this group subscribes to the view that the US will continue to try to prevent China becoming a peer competitor, as John Mearsheimer argues in The Tragedy of Great Power Politics. As a result, they believe Trump will broadly continue the past 40 years’ bipartisan approach to dealing with China which has pursued engagement, welcomed China into international institutions such as the World Trade Organization, invited participation in military-to-military exchanges such as the RIMPAC exercises, and seen the expansion of the US-China Strategic and Economic Dialogue. All of this is being conducted on the assumption that engagement will incrementally inculcate China into the existing world order paradigm.

At the same time, they perceive an increasingly tenuous relationship with Washington in areas that China states are its core interests, as outlined in the white paper China’s Peaceful Development 2011 namely: state sovereignty; national security; territorial integrity; national reunification; China’s political system established by the Constitution and overall social stability; and basic safeguards for ensuring sustainable economic and social development.

Rooted in national interests, this second school of thought on Trump’s Presidency views the change of administration as, at a minimum, a continuation of Obama’s policies and, at worse, an incremental increase in tension that can be managed through continued dialogue and the pursuit of functional cooperation when interests align.

While broadly in agreement with the second school of thought, the third diverges somewhat in its views of China-US relations through a focus on power transition and the reconceptualisation of roles and relationships under a Trump Presidency. For them, the salient question is how a Trump Presidency (and China) will deal with the real possibility that China’s economy will become larger than the US economy during the Trump administration?

More on this: Why China is not to blame for the decline of US blue collar jobs

This economic power transition will give China the accompanying resources to make friends and wield both political and economic influence. At the same time its economic position will coexist and contradict many of the challenges that come with China’s developmental status, such as large gaps between the urban and rural areas, underdeveloped social welfare systems, a looming demographic problem, weak rule-of-law, corruption, and comparatively low levels of hard and soft power compared to the US.

This unprecedented position and contradiction in what power means as it pertains to great power politics will require a reconceptualisation of roles and relationships in the region but also within international institutions. It will compel the US, Japan, and neighbouring countries to reconceptualise their relationship with China. It will also demand that China reconceptualises its role, relationships, and identity in relation to itself and others.

Hubris about its new role would only consolidate the way in which China is viewed by its neighbours and the US – of a country seeking to change the status quo, to dominate the region and push out the US. Humility, in contrast, and a return to Deng Xiaoping’s wisdom: “Observe calmly; secure our position; cope with affairs calmly; hide our capacities and bide our time; be good at maintaining a low profile; and never claim leadership”, may allay concerns in the region and ultimately move great power politics closer towards China’s cherished win-win mantra for major power relations.

Trump’s inexperience in government and perceived transactional approach to international relations will complicate this unprecedented moment in history. Ironically, it will contradict his “Make America Great Again” campaign slogan, as he will only be able to say “Keep America at Number 2!”

Scholars in this third school understand the fragility and danger of this period in history being overseen by an American leader with less-than-informed views about the region and isolationist tendencies. They also tacitly acknowledge that while the first and second schools of thought may offer immediate to mid-term benefits for China, the country still needs American leadership in the region. Such leadership affords China a stable environment in which to incrementally deal with both its domestic and regional challenges in a manner that maintains the peace, security, and stability required for it to achieve its fundamental, core interest of long-term socioeconomic stability.

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Nagy, Stephen R. 2017. "What China Expects From Trump - Policy Forum". Policy Forum.