Picking a fight: Is Trump’s hawkish behaviour towards China the start of a new cold war?

US President Donald Trump might still brag about his close relation with Chinese President Xi Jinping, but few would disagree that relations between the two countries are at a new low not seen for decades.

Despite a glimmer of optimism sparked by the possibility of a meeting next month between Trump and Xi to resolve increasing tensions between the planet’s two largest economies, Sino-US relations are more likely to head to a long-term competition, analysts say.

After the White House abruptly cancelled Trump’s trip to the Apec summit next month in Papua New Guinea, which Xi is scheduled to attend, that leaves the G20 summit in Buenos Aires, Argentina, at the end of November as the last big international event this year where the two presidents could meet on neutral turf.

At this point, whether they can reach any significant agreement remains an open question. The last few months have shown the US taking a profoundly different tack in its dealings with China across a wide range of economic, diplomatic and military fronts, moving aggressively to cast it as a rival and potential enemy, not the trading partner and possible ally five decades of US statecraft have striven to cultivate. 

In a sharp departure from past administrations, Trump listed China last year as a strategic competitor of the US. And months after Washington began the trade war in July, Vice-President Mike Pence sent an even stronger signal to China at the Hudson Institute two weeks ago: “This president will not back down.”

Pence’s speech has echoed widely since he delivered it on October 4, further escalating tensions between Washington and Beijing, which has already spilled out of the area of trade, to broader security and diplomatic fields.

“This clearly shows a seismic shift in the American government’s approach to China. It’s not about containing China. America couldn’t contain China if it wanted to – given the interdependence in the relationship and the need for other countries to enforce a containment policy,” said David Shambaugh, a professor of political science and international affairs at George Washington University.

“This is about active competition with occasional confrontation.”

In his speech, Pence lashed out with a long list of accusations and criticism against Beijing: interfering with the US’s midterm elections; militarisation of the South China Sea; the tightening of religious freedoms for the country’s Muslims, Christians and Buddhists; and business practices like forced technology transfers that prompted Trump to launch the trade war three months ago.

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The sheer sweep of Pence’s address and the protocol of its release speaks to its watershed significance, Shambaugh said.

“My understanding is that preparation of the speech took several weeks, if not months, and was coordinated by the White House but with considerable inter-agency input,” he said. “This is the policy of the Trump administration.”

The speech marked a “seismic shift” in the American perceptions of China, although, he added, it fed on negative perceptions that have been building for years and with broad consensus in the country.

Dennis Wilder, a former CIA chief of China studies and senior East Asia director at the National Security Council, agreed.

“The most notable thing about Vice-President Pence’s speech the other day is how little domestic criticism it is seeing from the Democrats,” he said. 

The speech came after months of friction on multiple fronts. The Trump administration blocked ZTE Corp’s access to US suppliers in April on grounds of violation of sanctions on Iran and North Korea, paralysing China’s second-largest telecoms manufacturer before relenting in June. In September, Washington imposed sanctions on China’s military for buying arms from Russia. Just last week, a Chinese intelligence officer was arrested in Belgium and extradited to the US to face charges of economic espionage. And for months, the US and Chinese militaries have rattled sabres as their navies patrol or conduct exercises in the Taiwan Strait and South China Sea.

Still, it has been the high-profile punitive schedule of tariffs Washington has initiated since July that have obviously caught Chinese officials off guard. In a recent interview with NPR, Cui Tiankai, China’s ambassador to the US, admitted that his government’s officials “don’t know what exactly the US would want as priorities”.

In another interview with Fox News Sunday, Cui said Trump’s inner circle was “very confusing”, but China’s policies were consistent. “For China, our only goal is for people to have a better life. We don’t want to challenge or replace anybody else in the world,” he said.

Yet Wilder, who dealt extensively with China as a diplomat and intelligence official in the George W. Bush and Barack Obama administrations, said he did not think Beijing should be surprised.

“Every single CEO, economist they talk to, every administration official, has put on the table what China needs to do for structural reform. It isn’t hard to figure out,” he said.

“It means to change the economic model. And national champions will have to compete on a level playing field with the United States.”

Shambaugh, though, said such a goal was impossible to achieve.

“The Trump administration’s tariffs are aimed at changing China’s fundamental economic model. You are not going to change their model just because of tariffs,” he said. “The state-dominant Chinese economic model is hard-wired into the system, and American pressure is hardly going to change it.

“This is going to lead into a much more prolonged, tense, competitive confrontational relation. This is not going to pass. It will polarise the relationship and polarise Asia.”

Pence’s pugnacious speech has also led some allies in East Asia to sense a definite change in Washington’s sentiment – and policy.

Taiwanese President Tsai Ing-wen was sufficiently emboldened by it last week to cite the speech while assailing Beijing as the cause of cross-strait tension and conflicts in the region, during an address marking the 107th anniversary of the Republic of China, Taiwan’s official title.

Taiwan could cope with Beijing’s challenges, Tsai said, by seeking further support from the United States, Japan, Europe and other like-minded countries, and strengthening its strategic significance so that other nations could rally behind it.

The shift in policy could also be felt in Tokyo, despite the concern that Japan might be affected by the waves of tariffs between the US and China, said Toshihiro Nakayama, a political scientist at Keio University.

“There is a sense that at least now in the White House you see a tough president who is trying to deal with China in a very different way than the other leaders used to,” Nakayama said. “It’s a very ambivalent sort of feeling, but there is a certain sector, especially in the security and diplomatic community, that is quite comfortable.”

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Still, not everyone agrees that the Trump administration is aiming to drive the bilateral relationship into a full-on cold war.

Trump wants a trade deal with China and is “ratcheting up the rhetoric” as much as possible to strengthen his bargaining position, said Gary Horlick, a Washington-based lawyer who has served as international trade counsel to the US Senate Finance Committee.

Horlick noted that the G20 would be an ideal time to get an agreement because it comes after the midterm elections – which threaten to turn control of the House of Representatives, and possibly the Senate, over to Democrats – and because Trump will be surrounded in Buenos Aires by traditional US allies.

“Trump said he would make a deal on China … and some people in the White House have a list of promises made,” Horlick said.

“There’s a reason they’re doing this after the election … and it’s very important to do this with our allies, and G20 is where our allies are.”

For its part, Beijing has responded to Pence’s speech with more defiantly nationalistic fervour.

A signed commentary from People’s Daily, the Communist Party’s mouthpiece, attacked the speech point by point with a highly confrontational tone. The nearly 5,400-word screed was written by “Zhong Xuanli”, a pseudonym used by the Central Propaganda Department’s Theory Bureau.

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“The problem is not that China does not buy, but that the United States does not sell,” the piece argued, referring to the escalating trade war. “For example, is the US willing to sell its Ford-class aircraft carriers? If one piece is priced at US$15 billion and the US sells four to China, we can immediately narrow the trade gap by US$60 billion.”

The official news agency Xinhua ran at least eight nationalistic opinion pieces, written by academics, business leaders and government officials, that likewise took an indignant tone.

“This pressure is going to feed the insecurity and national narrative of the Chinese government. So we may be heading into a new cold war,” said Shambaugh. “But I doubt if it’ll produce a cooperative outcome from China. It’s going to make the Chinese government even more resistant.”

Among the points People's Daily criticised from Pence’s speech was Trump’s argument that the US “rebuilt China” over the last 25 years. “It’s the hard-earned result of work of over a billion Chinese people,” the Zhong commentary noted.

“The CCP’s whole legitimacy is based on having stood up to shame and humiliation,” Shambaugh said of the ruling Communist Party of China. “It’s just not just Chinese people feeling insulted by the American pressure campaign. This led directly to the core of the legitimacy of the CCP.”

Trump is squeezing the bilateral economic relationship in ways that go well beyond tariffs. This month, the US Treasury Department took further steps to increase scrutiny of Chinese investments in the US, particularly in hi-tech industries including aviation, semiconductors, guided missiles and other military technology.

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Expectations of the crackdown curtailed investment even before the new rules were announced. Chinese investments in the US dropped by 92 per cent, year over year, in the first five months of 2018, to just US$1.8 billion, according to Rhodium Group, a China-focused consultancy and publisher.

That tighter review of foreign investments “is part of a wider US government approach to China, which is changing significantly”, said Amiad Kushner, a New York-based partner at Dai & Associates, a law firm that specialises in representing Chinese businesses in the US.

“Chinese companies should not give up on the United States, but in the near term, things will be very challenging,” he added.

Trump has been sending mixed signals on whether the US and China could reach a trade agreement. During a rally in Topeka, Kansas, two weeks ago, the president said: “Right now we are working on a deal with China. They have been hitting us hard, but relations are good at the moment.”

Three days later, Trump told reporters that China was “not ready” to reach a deal and repeated a threat to hit the world’s second-largest economy with further punitive tariffs.

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Trump’s inconsistencies may remind Beijing of his dealings with North Korean leader Kim Jong-un, said Allen Carlson, director of Cornell University’s China and Asia-Pacific studies programme.

“Xi Jinping may very well also have been studying Trump’s interactions with Kim and realised that the most effective way to deal with this American administration is to make superficial concessions, play to the US president’s ego, and then continue to do whatever one sees as being in one’s best interests,” Carlson said.

Even so, with the uncertainties of the nations’ relations on so many fronts, one thing seems sure: the Trump administration’s confidence.

“I called it a battle,” Trump said about his dealings with China in a much-discussed interview broadcast on Sunday on the CBS News programme 60 Minutes. “But, actually, I'm going to lower that. I consider it a skirmish. And we’re going to win.”

Additional reporting by Robert Delaney