Why Trump needs China onside to ‘make America great again’
Campaign rhetoric about China proved a successful sales pitch for the president-elect but it doesn’t make for a good business plan
Conspicuously absent from US President-elect Donald Trump’s recent video address outlining measures to be taken in the first one hundred days of his presidential term was any mention of China as a currency manipulator.
Maybe his transition team has begun to realise that anti-China campaign trail rhetoric founders in the face of the complexity of the China-US economic relationship.
On the campaign trail, Trump trumpeted his intention to designate China as a currency manipulator on the first day of his presidency. But post-election, there has been, so far, no mention that will happen on Day One or at all.
Yet the president-elect did not shy away from another controversial campaign position and has announced he would issue a notification of intent to withdraw from the Trans-Pacific Partnership (TPP) on the first day of his four-year term in office, a decision which itself has implications for China.
Trump’s rejection of US membership of the TPP may be a boon to Beijing, elevating to the fore the proposed China-backed Regional Comprehensive Economic Partnership, a 16-country grouping including China itself, Australia, India, Japan, New Zealand and South Korea, and all members of the Association of Southeast Asian Nations.
China is a key potential source of the very dollars the Trump administration will need in order to finance the large-scale infrastructure projects promised in the Republican manifesto
That aside, a former chairman of Morgan Stanley Asia, Yale University’s Stephen Roach, feels that “Donald Trump’s economic strategy is severely flawed,” arguing that the president-elect “wants to restore growth via deficit spending in a country with a chronic shortfall of saving.”