SINO-US RELATIONS

Will dream shared by Xi Jinping and Donald Trump become a nightmare?

Can America and China achieve national rejuvenation simultaneously, or is a clash inevitable?

PUBLISHED : Wednesday, 05 April, 2017, 12:01pm
UPDATED : Wednesday, 05 April, 2017, 9:52pm

The Chinese and US presidents both dream of national rejuvenation, and that could be a nightmare scenario for Sino-US relations.

US President Donald Trump, a billionaire real estate developer, won election last year with his populist pledge to “Make America Great Again”. China’s Xi Jinping (習近平), a Communist Party “princeling”, has amassed great power four years into his first term as party chief with his nationalistic appeal for realisation of a “Chinese dream”.

As both men consolidate their power bases in very different political systems – Trump is sensitive about his mandate amid deep division among voters and Xi is campaigning to consolidate his “core” status within the party leadership – analysts said the potential for conflict between the world’s sole superpower and its fastest-rising rival is greater. That’s not because of Xi and Trump’s political and ideological differences, but because of commonalities in their respective agendas.

“They share much in common,” said Cornell University sociologist Professor Victor Nee. “They are both nationalists with ambitions to restore their country’s greatness.”

Trump’s wants to ensure the continuation of American economic supremacy and dominant superpower status in the face of a growing challenge from China. Xi wants to restore China to the world-leading status it last held centuries ago.

Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis, said their slogans showed the two leaders were coming from very different starting points, with Trump seeking to preserve the US pole position after years of seeing its lead narrow, and Xi wanting China to make it to the front of the pack.

“In other words, Trump needs to defend his interests while Xi needs to attack. Very different, indeed,” she said.

Trump’s anti-globalist philosophy, called Trumpism by some, is centred on economic nationalism and the vigorous pursuit of American national interests, with an unorthodox mercantilist and isolationist agenda.

Professor David Zweig, director of the Centre on China’s Transnational Relations at the Hong Kong University of Science and Technology, said Trump’s main agenda was to restrengthen the US economy, create new jobs, rebuild American infrastructure, speed up economic growth and, if possible, slow or even reverse the impact of globalisation on the US economy.

Now he faces having to deliver on at least some of the audacious goals he spelled out during his election campaign. This includes creating “millions” of new manufacturing jobs, doubling the growth rate for the gross domestic product to about 4 per cent, and rebuilding badly needed national infrastructure.

Trump has also pledged to dramatically restructure the system by cutting red tape and taxes. During the presidential campaign he promised to cut corporate taxes to 15 per cent from the current 35 per cent to boost US companies’ competitiveness, and to levy an import tax as high as 35 per cent on foreign-made products entering the US.

Analysts warned that if Trump carried out his threats to label China a “currency manipulator” and slap a punitive tariff of 45 per cent on its imports, it would spark a trade war between the world’s two largest economies. Many economists said that would have dire consequences, but also noted that the threats were unlikely to be implemented.

For the past three decades, the United States has played a crucial role in shaping China’s economic development, both as the single largest purchaser of Chinese products and through the transfer of technology to China.

Some economists have said Trump’s trade policy might signal the end of that supporting role.

But some Trump critics in the US say his isolationist policy might inadvertently end up being a “make China great” campaign. They see China aggressively expanding its global influence as a result of Trump pulling the US out of the Trans-Pacific Partnership trade deal, which would have covered 40 per cent of global output and excluded China.

It has been the biggest beneficiary of globalisation, with its share of the world’s exports rising from 3 per cent in 2001, when it joined the World Trade Organisation, to 12 per cent in 2015.

Xi has been advancing a China-led globalisation model that is challenging US economic domination. Between 2004 and 2013, direct foreign investment in China rose from US$45 billion to US$613 billion.

Trump claims that 60,000 American factories have closed down since China’s World Trade Organisation accession.

When they sit down Thursday at their summit in Florida for their first face-to-face meeting, Trump will want Xi to help address the huge American trade deficit with China, which stood at US$350 billion last year and a cumulative US$1.4 trillion since Xi became president in 2013.

The issue is at the heart of Trump’s political agenda.

Yet for all Xi’s globalist rhetoric, China’s state-capitalism has not followed the neoliberal route to global integration. State-owned businesses have received further support and increased their role in the Chinese economy and are now focused on expansion overseas to digest overcapacity at home.

Meanwhile, Xi has also been challenged by the loss of momentum in China’s export-oriented, investment-driven economy and has sought to promote an alternative economic growth model centred on domestic demand.

China’s GDP growth rate, which had averaged more than 10 per cent for three decades, slowed to 6.7 per cent last year, the weakest showing in a quarter of a ­century.

Analysts said Xi also faced political constraints at home, as he needed to make himself unassailable by achieving political unity within the leadership, domestic stability and economic prosperity ahead of a crucial five-yearly party congress late this year.

Xi is committed to turning China into a “moderately prosperous” society by doubling GDP between 2010 and 2020, as well as demonstrating China’s international statesmanship and global leadership.

Some analysts also see Xi’s “Chinese dream” as containing an effort to challenge the US-led global order that has been in place since the second world war. It was built on the creation of the World Bank and the International Monetary Fund in 1944.

Xi’s China dream also entails an increased military presence in the Asia-Pacific region, including the South and East China seas, which poses a challenge to long-held American maritime ­supremacy.

Nee said Trump and Xi needed to negotiate on Taiwan, bilateral trade and their national security interests, but other analysts said that Xi’s hardline, anti-Western political stance would reduce the prospects of cooperation with the United States.

“Xi wants a ‘national rejuvenation’, a secure future for the Chinese Communist Party, and a powerful party-state under his leadership,” Zweig said.

Personalities matter a lot in international relations, and Professor Zhiqun Zhu, director of the China Institute at Pennsylvania’s Bucknell University, said Xi and Trump were results-focused leaders with strong senses of historic mission, and that would help them cooperate.

Herrero agreed with Zhu, but said there would be a problem if Xi wanted to be portrayed as an equal.

“If Xi comes – as I suspect – to show Trump that the world is already a G2 and not a G1, I suspect that their personalities will clash,” she said.

Professor Xiaoyu Pu, an international relations specialist at the University of Nevada, said the leaders’ personalities were double-edged swords.

“They share similar personalities; they might build empathy and even personal chemistry through informal interactions,” he said.

“But as assertive leaders, both Xi and Trump are eager to win internationally to consolidate their domestic status. Thus, it is hard for them to compromise with each other.”

Jessica Chen Weiss, a foreign policy observer with Cornell University’s department of government, said it remained to be seen whether Xi and Trump could clinch a deal that both could call a “win”, despite the fact that their slogans were not fundamentally incompatible.

Zweig said Xi wanted to give China the room to grow further, but that it was not clear where the boundaries of the rejuvenation lay.

“Does it involve further pushes on the edges, such as the East and South China seas?” Zweig asked. “Does it involve technological dominance?

“Does it involve some regional – if not global – hegemony?

“If it does, Trump’s America is likely to be there to block Xi’s ambitions.”

The key question, Zweig said, was whether the two leaders’ endeavours might turn their rivalry into enmity.

“Are they doomed to compete, as they each seek to transform their nation in line with their respective goals? As one might wisely ask: is there room in the world for both their visions?”