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17 November 2017, Gateway House

Trump in China: ceremonial hits, strategic misses

The visit yielded no dramatic breakthrough. But Team Xi finally got the respect and validation it desired, and deserved. Trump rightly praised China’s success in meeting its own development goals and contributing to global growth. But he is unlikely to soften his stance on jobs lost to China or the more vexing structural issues

Former Adjunct Fellow, China Studies

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As Presidents Donald Trump and Xi Jinping stood side by side outside the Great Hall of the People in Beijing on November 9, the two leaders presented a study in contrasts. Whether measured by domestic mandate or international prestige, Xi’s credentials appeared to trump his U.S. counterpart’s. Just a day earlier, Trump’s Republican Party had been defeated in key gubernatorial elections along the U.S. East Coast. The Democrats’ resounding victory, Trump’s abysmal approval ratings, and a contentious Tax Bill under negotiation in the U.S. Congress, placed him on a shaky footing next to Xi, who emerged triumphant from October’s 19th Party Congress.

Trump’s five-nation Asia tour (Japan, South Korea, China, Vietnam and the Philippines) was timed to coincide with two high-profile regional gatherings: the APEC Summit in Hanoi and the anniversary of the Association of South East Asian Nations (ASEAN) in Manila. Naturally, his state visit to China elicited the most interest and attention.

Trade issues and North Korea dominated the discussions, and as expected, everyone stuck to the script. Although there was no dramatic breakthrough, there were smiles and handshakes all around, and success was declared: the Chinese presented $250 billion worth of agreements and business deals as proof of it. Several non-binding MoUs comprised this bundle, and at least one deal—purchase of aircraft from Boeing—had been concluded at an earlier date, with the announcement being made during the visit.

Although Trump did openly declare at the state banquet that the U.S. had been taken advantage of, and been treated unfairly in trade, there was no movement on structural issues related to Renminbi valuation, intellectual property rights infringements, suspected forced technology transfers from acquired U.S. companies, and denial of market access in finance, pharma and other sectors. Progress in any of these negotiations will impact India as well.

Unexpectedly, and to the delight of his hosts, Trump blamed previous U.S. administrations—not China—for the trade imbalance, which is currently estimated at $350 billion. It was left to Secretary Tillerson to clarify next morning that the president’s remarks were tongue-in-cheek. The irony was lost on Beijing, which essentially values a show of unity and continuity in leadership.

As for redressing the trade imbalance, the two sides espouse fundamentally different approaches. China would like to buy hi-tech high-value items from the U.S. while the U.S. will not part with its most precious R&D wealth, and instead seeks market access across a broad range of products and services.

Likewise, the two sides have fundamentally different approaches to North Korea. China shares a long and sensitive border with the Democratic People’s Republic of Korea (DPRK), and is wary of a refugee crisis, should the regime collapse. It is bound by treaty, history and communist ideology to Pyongyang. If China were to cut off the lifeline—that is, its humanitarian and considerably reduced trade ties—North Korea is likely to retreat, and become even more belligerent, unpredictable, and inaccessible to all.

The U.S. insists that if China were, in fact, to act in this manner, North Korea will collapse, and be miraculously reborn as a reformed, modern, sensible nation. The latter scenario is less likely than the former. Washington’s anxiety, while understandable, needs to be translated into constructive engagement with all relevant stakeholders in the region. Denuclearisation is a minimal goal to which China is publicly committed; but it is unlikely to endorse regime change and Korean reunification outside of an institutional framework.

While Indian observers are monitoring both trade and DPRK, there are other aspects of China-U.S. relations that are of interest to India. Trump’s frequent use of the term ‘Indo-Pacific’ in place of ‘Asia-Pacific’ in all his speeches, is a case in point. This not only marks a recognition of India’s role, but also validates the significance of the maritime sphere, linking two oceans into one strategic zone. The terminology and policy change are both hugely consequential, and merit a separate discussion altogether.

As we assess the outcome of this state visit by the U.S. President who has, over the years, blamed China for everything—from the Climate Change “hoax” to American job losses—it is possible to say that Team Xi finally got the respect and validation it desired, and deserved. Trump was right to praise China’s success in meeting its own development goals and contributing to global growth. Trump was serenaded with the best of Chinese cultural offerings, and the pomp and ceremony that he so clearly enjoys. However, it will be incorrect and hasty to conclude that he has softened his stance, and altogether scuttled his core constituency’s concerns with jobs lost to China, or the more vexing structural issues. Neither his voters nor lobbyists in DC will let him forget that.

This week, American commentators bemoaned Trump’s abdication of global leadership to Xi; they declared China had ‘won’, and the U.S. had ‘lost’. Not only is it unhelpful, but it is also immaterial to assess who won and who lost. The reigning and aspiring superpower should instead both be held to higher standards in its adherence to global norms and international law. World public opinion has ruled that it is simply not ‘cool’ to pull out of the Paris Climate Change Accord, or reverse gains in areas such as migrant and refugee rights. And while Xi certainly emerged more statesman-like in his globalisation-affirming address in Hanoi, in contrast to Trump’s “America First-ism”, actions do speak louder than words. China favours a selective multilateral approach to trade, while disregarding international law and adhering to bilateralism when it comes to territorial disputes. Major powers have always adopted a selective approach to international law and institutions; and everybody loses if there is no convergence on the most urgent issues confronting the planet.

While the Trump-Xi “family diplomacy” in Beijing made for beautiful visuals, there is no indication of real gains on the ground. These economic or security gains, if any, need to be institutionalised and made transparent to people around the world. Else, we are subject to the vagaries of personal chemistry between the leaders of the U.S., China and other major powers.

Indira Ravindran is Adjunct Fellow, China Studies, Gateway House.

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