The escalating U.S.-China trade friction engineered by U.S. President Donald Trump has directly hit China’s economy — the source of Beijing’s power. The administration of Chinese President Xi Jinping hopes to quickly take the sting out of this situation, but doing so will not be easy. The U.S.-China strategic joint foundation has eroded, and Beijing’s diplomatic strategy of persuading the United States that it is a “friend” is becoming less effective.
In a sense, the intentions of China — a one-party dictatorship administration — are easy to understand. Until around early summer, the state media did little but heap lavish praise on Xi, but later began calling for economic and social stability to be maintained.
“Trump changed everything,” a Chinese Communist Party official said. “We suddenly found ourselves standing on the brink of a severe crisis.”
The Xi administration took office after China became the world’s second-largest economy. Xi has used this formidable economic might to shore up social infrastructure, nurture cutting-edge industries, bolster China’s navy and air forces, and pour money into policies aimed at eliminating poverty. Various countries wanting some of this “China money” threw themselves before Beijing. A “strong economy” was the lifeline for this autocratic regime, and for Xi’s approach of building a powerful nation as he spearheaded China’s attempt to catch up with the United States.
In July, Trump hit China where it hurts by slapping punitive tariffs on a range of Chinese imports. According to U.S. statistics, China had a staggering annual trade surplus of more than $370 billion with the United States in 2017. Trump’s moves to reduce this U.S. trade deficit could trigger an economic slowdown in China – the Xi administration’s biggest fear.
Furthermore, the United States stated the reason for imposing tariffs was China’s violation of intellectual property rights. Rectifying the trade imbalance was not its only intention; the punitive measures also took aim at China’s sophisticated technologies that could become economic and military threats to the United States in the near future.
The battle for dominance between Washington and Beijing can be said to have started taking concrete form.
A growing sense of nervousness was tangible in a commentary carried by the People’s Daily, a newspaper of China’s ruling party. The United States, the article said, has previously suppressed countries that rose to be the world’s second-most powerful nation, citing the former Soviet Union and Japan as examples. “Now it is China,” the commentary said.
China is often perceived to be a major nation that cooperated with Russia and other countries to counter the United States.
However, many experts on international issues offer an alternative view. “Stably developing U.S. ties, which is essential for economic growth, is actually more important than anything else,” one analyst said.
That is certainly true. Indeed, even though China has opposed the United States on issues including Taiwan, human rights and trade, it has constantly sided with Washington on the most important issues. Beijing has shown an approach in which “it stands with the United States.”
During the Cold War, China teamed up with the United States in confronting the Soviet Union. After the Tiananmen Square incident and the Soviet Union’s collapse, China quickly moved to join the U.S.-led free trade system and raised U.S. hopes it would usher in greater democracy and open its markets. In the 2000s, China’s support for the U.S. “war on terrorism” was deemed sufficient. During the administration of former U.S. President Barack Obama, China signified efforts to cooperate with other major powers on global issues including climate change.
Through its diplomatic approach of singling out “common adversaries,” “common interests” and “common issues,” China has strategically reached out to the United States and reaped economic benefits under the U.S.-led order.
That situation has been turned on its head.
At the moment, a “common adversary” does not seem to exist. Since around 2015, 70 years after the end of World War II, Xi has bashed Japan over historical issues and attempted to build stronger ties with the United States and other nations victorious in the war. However, the Japan-U.S. alliance did not waver. If anything, it has become stronger.
When it came to “common interests,” Xi advocated what could be interpreted as a division of the Pacific Ocean into U.S. and Chinese spheres of influence, according to diplomatic sources. However, the United States balked at this idea. On the contrary, it became even more alarmed as it watched China’s actions, including an expansion in its influence through the huge “Belt and Road” economic zone initiative and its increasingly assertive maritime advances.
Trump does not have the slightest interest in “common issues” such as free trade and the global environment.
With the disappearance of common strategic foundations, the two countries have greater difficulty viewing each other as “friends.” Under these circumstances, Trump, who touts an “America first” policy, and Xi, who trumpets “the great restoration of the Chinese people,” are directly locked in a test of strength over issues including trade, Taiwan, Iran, Russia and the South China Sea. Maneuvering over North Korea is also intense.
China’s moves to quickly improve ties and strengthen cooperation with Japan, European nations, India and other countries are obviously aimed at forming strategic alliances.
The Xi administration has shown a degree of consideration for Trump by lowering tariffs on automobiles and easing regulations on foreign-owned companies entering Chinese markets. It also is fervently seeking to resolve tensions through talks.
However, the person on the other side of the table is Trump. Making easy concessions to him could open the door to more concessions.
Xi also has domestic conditions to take into account. Xi has spoken publicly of his dream to make China a powerful country, and he has concentrated overwhelming power in his hands. The entire nation has been full of praise for him. If he makes any compromises that appear to be caving to the United States, bottled-up angst toward the government could erupt, and there are even fears Xi’s authority could be tarnished.
At present, there is no clear path toward the earnestly desired resolution of the U.S.-China friction. Amid these circumstances, Xi has given strict orders to maintain stability in various fields including employment, finance, trade and society.
His administration is certainly mired in uncertainty.
The Yomiuri Shimbun/ANN.