Opinion | The US is dismantling the multilateral order it built, but the world will have to carry on

Andrew Sheng says US-China relations are unlikely to recover, even with the forthcoming Trump-Xi meeting. The US is turning inward, and the rest of the world has to find a way forward in this new political order

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US Vice-President Mike Pence (centre) looks at President Xi Jinping (second from right) before the official family photograph during the Asia-Pacific Economic Cooperation summit at the Hilton Hotel in Port Moresby, Papua New Guinea, on November 17. This year, Apec countries failed to even agree on a routine joint statement. Photo: EPA

Published: 3:00pm, 23 Nov 2018Updated: 6:00pm, 23 Nov 2018

The Chinese have a saying, “crossing the river by feeling the stones”, which describes a folksy, pragmatic approach to an uncertain situation, whether it is reforming the economy or going on the Long March. When uncharted territory looms, the idea is to take slow, but bold, steps forward – to improvise along the way, adapt and survive.

The approach is consistent with Ming dynasty philosopher and war minister Wang Yangming’s dictum: knowledge and action are one (知行合一). In a situation when existing knowledge cannot guide you, only action can reveal the way forward.

We have arrived at just such a moment in history. In the past few months, the gulf between the United States and China has widened greatly, even as their trade war rages on. US Vice-President Mike Pence’s China speech in October was interpreted as the opening salvo in a new cold war. In November, 21 countries, including the US and China, failed to arrive at a routine joint statement at the Apec summit in Papua New Guinea.

Most analysts are looking forward to cooler rhetoric when US and Chinese presidents Donald Trump and Xi Jinping meet at the forthcoming G20 gathering. But it should be clear that Trump and Pence have only been reflecting a widespread consensus in Washington that China is a strategic competitor, as the US swings further away from globalisation and towards protectionism.

As former Trump adviser Steve Bannon has said, American workers are angry. They are angry at the elite – the financial-political complex – who spent trillions on wars in Iraq, Afghanistan and elsewhere; who let foreigners and robots steal millions of factory jobs; and who printed US$3.4 trillion of new money to make the rich richer and the hard-working poor poorer. The Trump administration is therefore restricting immigration and fighting a trade war with China to “maximise citizenship value”, a variation on the corporate phrase, “maximise shareholder value”.

There is little doubt that America’s trading partners, not only China but also Japan and Europe, have been wrong-footed by the Americans’ change in direction. From now on, it can no longer be business as usual. America is dismantling the multilateral order it built over the past 70 years and taking a bilateral approach that will force allies to pay for their own defence, cut trade deficits and play by American-made rules.

America can do this not because it is the strongest military power but because it has the world’s largest consumer market. The buyer, not the seller, is always right. As former Chongqing mayor Huang Qifan has pointed out, a powerful exporter is not necessarily an economic power, but a large importer is sure to be a real powerhouse. Strategically, China sees that domestic consumption is the way to go.

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