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https://scmp.com/comment/opinion/article/3034778/mike-pences-china-speech-had-two-messages-and-two-audiences-along
Comment/ Opinion

Mike Pence’s China speech had two messages – and two audiences – along with some good news on the trade war

  • The US vice-president’s speech sought to reassure financial markets ahead of the 2020 election while also rousing Trump’s political base. Red meat thrown to the latter crowd made headlines and irritated Beijing, but the speech also left leeway on a trade deal
US Vice-President Mike Pence speaks on the future of the US relationship with China at the Wilson Centre in Washington on October 24. Photo: AFP

US Vice-President Mike Pence delivered a long-awaited speech on China policy last week that surprised on the upside. Last October, he delivered a harangue against China that was an embarrassing pastiche of the many complaints the Trump administration has made against China and its practices.

The earlier speech seemed to have no specific policy objective. By contrast, this time, Pence combined a litany of complaints with some more reassuring words in support of an impending interim truce in the trade war Donald Trump has initiated. 

American headlines about Pence’s speech focused on his criticism of Nike and the National Basketball Association. It is not apparent why he chose to dwell on these recent topics, where athletes and executives expressed themselves in a variety of ways on the merits of Hong Kong’s recent protests and violence. But Americans will always be drawn to stories involving sports.

Overall, to my eye, the speech appeared instead to be a political message aimed at two audiences. The first is the global business and financial community, which has been repeatedly buffeted by abrupt tweets from Trump, announcing new tariffs or measures to intensify the trade war that the president has declared “easy to win”.

The trouble for Trump and Pence has been that, every time a new measure is taken against China, stock markets have a fit and plummet. Moreover, increasingly, responsible economists and bankers have been saying that the trade frictions are slowing American and global economic growth.

These market signals directly conflict with Trump’s political message that he is delivering unprecedented growth, low unemployment and high stock market valuations. With his re-election already overshadowed by White House turmoil and the impeachment inquiry, Trump needs to calm the markets as he goes into the election year.

So, Trump has agreed to the outlines of an interim, or mini, trade deal that addresses some but not all of the issues that have kept his fractured negotiating team busy with Beijing.

The pact reportedly includes China resuming purchase of high levels of agricultural products from the US, addressing protection of intellectual property rights and expanding market access in exchange for a suspension of new tariff increases.

Trump says he intends to sign the pact with Chinese President Xi Jinping at the Asia-Pacific Economic Co-operation leaders meeting in Santiago, Chile, next month. Some details remain to be ironed out, including whether Trump will roll back some of the tariffs previously put in place.

Thus, Pence’s speech reassured investors that there is a good chance for a trade war truce. The problem for Trump and Pence then becomes managing the hard-line political base; the leaders have encouraged them to believe much greater results can be achieved from the trade conflict than just an interim agreement.

US President Donald Trump arrives on stage to speak during a rally in Dallas, Texas, on October 17. His voter base believes the blunt-spoken businessman is uniquely suited to solving US disputes with China in America’s favour. Photo: Bloomberg
US President Donald Trump arrives on stage to speak during a rally in Dallas, Texas, on October 17. His voter base believes the blunt-spoken businessman is uniquely suited to solving US disputes with China in America’s favour. Photo: Bloomberg

Much of the remainder of Pence’s speech, then, was an effort to throw red meat at Trump’s political base. Pence claimed the US is responsible for China’s recent 25 years of success, condemned its practices in Hong Kong and Xinjiang, and much more. This Jekyll-and-Hyde approach allowed Pence to straddle both of the administration’s political objectives – reassuring the markets while promising the voter base that more will be done.

In the same vein, Pence broadly criticised China’s crackdown on religion. The vice-president has a strong association with the religious right in America, and it will serve his longer-term ambitions to cultivate support in that camp for the day when he might campaign to succeed Trump, should he win a second presidential term.

Updating last year’s speech, Pence also repeated rumours that China may have plans for a naval base in Cambodia or even somewhere in the Atlantic. He hit out at Beijing’s domestic surveillance state and its efforts to export the technique to other authoritarian-leaning nations.

Along the way, Pence managed to make a few backhanded, reassuring noises to his Chinese audience as well. While complaining about Beijing’s pressures against Taiwan, he included the mantra of the basis for Washington’s “one China policy”: the Three Communiqués between the US and China, as well as the Taiwan Relations Act.

This surprised Beijing after a series of actions to upgrade Washington’s relations with Taipei and defend the island against the mainland’s diplomatic inroads against its partners.

Pence probably irritated Beijing by dwelling on Chinese interventions in Hong Kong, but he also supported “peaceful” protesters, implicitly separating the US from the violence that has marred weeks of protest.

Finally, Pence asserted that the US does not pursue policies that many in China and elsewhere believed were at the core of the Trump China policy. In what some might call the “three no’s”, Pence said that Washington isn’t seeking to decouple the two economies, does not pursue containment and is not seeking confrontation.

Beijing will probably take some time to judge whether these steps constitute something that lasts, or expires with the next tweet. But for now, China should see some upside in this speech intended to manage the administration’s political dilemma of how to look constructive to the world’s markets while acting disruptively towards America’s previous China policy.

Douglas H. Paal is a distinguished fellow at the Carnegie Endowment for International Peace