Donald Trump Is Making China Great Again
The strike on Syria on April 7th overshadowed what should have been the premier foreign policy story of that week: the summit between President Trump and China’s President Xi Jinping. Instead, Trump reportedly ordered the bewildering attack while enjoying a slice of chocolate cake with his Chinese counterpart. Aside from this anecdote, however, it was not clear if the summit achieved much of anything. Though Trump was quick to declare the summit a success, what was billed as a contentious showdown in which Trump would take China to task, instead yielded little more than pleasantries and photo ops. No trade deal was completed, no resolutions on territorial disputes in the Pacific made. Trump’s December dalliance with a recognition of Taiwan now seems a distant memory.
Trump’s contradictory foreign policy, as well as his isolationist tendencies, thus far all play into China’s own agenda quite well. As Trump aims to turn the U.S. inward, via cuts to foreign aid and the removal of the U.S. from multi-lateral trade and climate change treaties, China is looking to project their own interests outward, in an attempt to further boost its standing abroad. If this current trend continues, China will be able to greatly expand its global sphere of influence at the same time as Trump succeeds only in constraining that of the U.S. In so doing, Trump will indeed make a country great again, just not his own.
The administration’s interactions with China have so far been to China’s benefit rather than its detriment. Instead of the promised fight against the Chinese policies Trump claimed were “raping our country” during his campaign, he has instead opted to placate his erstwhile enemy while in office. His post-summit decision not to label China a currency manipulator (a campaign promise that was already nearly three months overdue) was one of a series of flip flops with which Trump regaled the American public last week.
Secretary of State Rex Tillerson offered his own appeasement to Beijing in a visit last month, in which he issued a promise of “mutual respect” and a call to respect each country’s “core interests.” Though this seems like a mild diplomatic stance, it is actually a line Chinese Communist Party officials themselves use to describe the Sino-American relationship they aim for. Such a relationship expects the U.S. not to meddle in China’s backyard, particularly when it comes to its contentious sovereignty claims in Tibet, Hong Kong, or the East and South China seas. In reiterating such a position, Tillerson is in effect signaling a free reign for China to continue its subversion and oppression in the region and pursue its agenda freely, at the expense of America’s allies, all without really receiving anything in return. So much for the “Art of the Deal.”
Trade offers further opportunities for China to benefit at the expense of the U.S. Trump ran on a promise to scrap free trade deals and did just that in withdrawing from the Trans Pacific Partnership (TPP) early in his presidency, while also eliminating all progress on talks on trade with the EU. While China might feel threatened from Trump’s threats of a trade war, it will see the breakdown of such agreements as a major silver lining. The TPP, which did not include China, was always a thorn in President Xi’s side, as it was a central piece of Obama’s “pivot to Asia,” meant in no small part to curb China’s influence in the region. Now that Trump is essentially doing away with both the TPP and Obama’s Asia doctrine, China has responded by working to build support for their own Pacific trade deal.
Dubbed the Regional Comprehensive Economic Partnership (RCEP), the agreement aims to cut tariffs between all members of the Association of Southeast Asian Nations (ASEAN), a 10 member regional body, as well as China, Japan, South Korea, Australia, New Zealand and India. Unlike in the anti-trade minded West, there seems to be appetite for the agreement among the countries involved, with RCEP taking center stage at the ASEAN meetings in the Philippines this week. If fully ratified, this agreement would encompass about 30% of global GDP, and would give Chinese firms a crucial competitive advantage. President Xi is also keen to further boost trade ties the world over. His speech at the World Economic Forum in Davos seems to have cemented his status as a defender of globalization in the face of rising Western populism. This would have been an outrageous prospect before Trump’s election and, given China's murky global track record, not one that inspires much confidence now.
Trump’s attempts to derail another multi-lateral effort, the Paris climate change agreement, also works to China’s advantage. Trump’s desire to withdraw from the agreement (not a certainty given heavy opposition from businesses and members of his own party), along with his cuts to EPA funding and environmental regulations make it very likely that the U.S., one of the biggest polluters on Earth, will fail in its agreed upon targets to curb its greenhouse gases (though the U.S. was set to miss them even before Trump’s election). Not so with China, which has put sustainable development at the center of its most recent five-year plan. It has been investing heavily in climate change programs, to the tune of $88 billion in renewable energy last year alone, the most of any country. Its proposed emissions trading scheme will be one of the world’s most comprehensive.
China is also dominating many clean energy industries, leading the world in production of solar panels and wind turbines. This is sure to be a source of growth and job creation for China, which would be at the expense of American clean energy firms, who will also be hurt by the Trump administration’s attacks on climate change programs as well as his misguided preference for the coal industry. Those who depend on clean energy for jobs in the U.S. will certainly not appreciate this irony.
Perhaps the biggest contrast in the foreign agendas of Trump and Xi lies in their outlooks on foreign aid and investment. Trump sees little value in U.S. foreign aid, and has vowed to cut the foreign aid budget (comprising just under 1% of the federal spending last year) by 28%. He is also keen to pressure businesses to invest in the U.S. instead of abroad, in a dubious effort to generate American jobs.
Though China, with its plethora of protected state-owned enterprises, is quite protectionist in its own right, it has long made huge investments abroad, about $189 billion last year alone. There is hardly a single country, no matter how poor, that has not received investment from China. Such largesse has usually been bilateral in nature, and unlike Western conditional aid, has notably come “with no strings attached,” a fact many of its autocrat clients appreciate. However, under President Xi, Chinese aid and investment is fast becoming multi-lateral as well.
China has gone about creating international finance institutions (IFIs) to rival the Western-led World Bank and IMF. The New Development Bank, headquartered in Shanghai, was founded in 2015 by the BRICS countries (Brazil, Russia, India, China, and South Africa), a club of large non-Western economies, and aims to further sustainable development among the members, as well as other low-income nations. Last year, China also founded the Asian Infrastructure Investment Bank (AIIB) in an effort to pursue energy and infrastructure projects throughout the continent. Though both banks are still small relative to their Western counterparts, they are growing rapidly. In its first year of operations, the AIIB added 70 member nations and includes all G7 countries except Japan and the U.S. (which opposed its creation).
Both IFIs will be used to pursue China’s most ambitions grand project: the “One Belt, One Road” (OBOR) initiative. Started by Hu Jintao, President Xi’s predecessor, OBOR aims to build roads, transport links, shipping lanes, and trade hubs to connect China to over 60 countries in a global network stretching from Beijing to Madrid, Jakarta, and Dar-Es-Salaam (see map). In complete contrast to Trump’s short-sighted protectionism, China is thus reinventing globalization to expand its own commercial ties. The potential social and economic windfall will be tremendous for both China as well as all countries involved.
Nor is Chinese investment limited to development in lower-income countries. China has been keen to make nice with the West as well, at the same time as Trump has gone out of his way to bash allies in NATO, the EU, and elsewhere. For example, contrary to Trump’s rhetoric, China has been less keen to pursue sketchy maneuverings with its currency, allowing the yuan to appreciate in recent years. It has also pursued better ties with Western IFIs, contributing more funding to them and also seeking the IMF’s advice on its own finances. The IMF, for its part, has added the yuan in its basket of approved reserve currencies, which gives China further financial clout on the global stage.
China has also made a large effort to change its global image, spending an estimated $10 billion on “soft power” initiatives to this end. This has included setting up hundreds of Confucius Institutes, aimed at spreading Chinese culture and language students around the world. The proliferation of Chinese New Year celebrations and traditional cultural shows has been another effort. As has China’s investment into Western cultural staples, most notably into European football clubs (to the delight of President Xi, an avid fan, but to the dismay of many fans elsewhere). This process has also been two-sided. For example, Western universities compete to fill campuses with Chinese students, who total over 330,000 just in the U.S. All of these efforts have softened perceptions on China in the eyes of many, just as Trump’s actions are hardening perceptions of the U.S.
It may be tempting to argue that China’s efforts abroad are only economically motivated; indeed they have shown little appetite for engagement on major foreign issues. But its global economic ties, together with the IFIs, OBOR, and other foreign aid and soft power initiatives, all buy China a huge amount of diplomatic power, allowing it to more effectively dictate the global agenda. This strategy has long been used by the U.S. to ensure support in global bodies such as the UN. President Trump seems keen on reneging on this, however, which may have many countries thinking twice about supporting the U.S. over China in a potential diplomatic fallout between the two nations.
This is not to say that these trends are necessarily positive for the world at large. China is a major perpetrator of human rights abuses, brutally oppressing millions in its borders, particularly minorities in Tibet and its Muslim-majority province of Xinjiang. In Hong Kong and Taiwan, it actively seeks to dismember democratic institutions. Further abroad, its intransigent expansionism in the East and South China seas have raised the prospect of war in the Pacific to its highest level since the second world war. The U.S. may find it all the more difficult to put a check on such actions if Trump succeeds in turning the country away from the world order, which may further embolden Chinese aggression. Worse, a rising China’s callous indifference for human rights may be temptation enough for other leaders to adopt the same mentality in their own countries. The world’s most vicious rulers — from Assad, to Erdogan, to Putin — may also be even more confident in pursuit of their brutalities without effective American backlash.
The tandem of China’s expansionism and Trump’s isolationism may thus make the world a much darker and more dangerous place. Whether or not this happens is increasingly up to Mr. Xi.