China sees opportunities and threats in Trump presidency

Beijing could emerge as globalisation defender and entrench its power in Asia

Since winning the US election, Donald Trump has unleashed a volley of broadsides against China that has placed questions over practically every sensitive issue in Sino-US relations.

The scale of Trump’s anti-China rhetoric and the speed at which he has gone on the offensive on fundamental issues has appalled the Chinese, who watch his inauguration with a mixture of dismay and curiosity.

Beijing’s response has been multilayered, in turn aggressive and cautious, waiting to see how much of the rhetoric turns into action. But while the Communist Party recognises the danger, it also sees opportunities for China.

There has been a lot for China to take on board – although Trump has steered clear of Beijing’s human rights record so far.

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The new US president has infuriated Beijing by building warmer relations with Taiwan, the self-ruled island that China sees as one of its provinces, accepting a congratulatory call from President Tsai Ing-wen, whom Beijing considers an independence-minded adversary.

John Bolton, formerly US ambassador to the UN and a top adviser to Trump, has called for American troops to be stationed in on the self-ruled island.

There have been threats to swell the US Pacific fleet to curb China’s ambitions in the South China Sea, and Trump has repeatedly slammed China for not doing more to rein in ally North Korea’s nuclear ambitions.

He has called out the world's second-largest economy as a currency manipulator and surrounded himself with China hawks such as billionaire investor Wilbur Ross, his pick for commerce secretary, who has called China "the most protectionist country", and Peter Navarro, head of the newly established White House National Trade Council, who has made a documentary called Death by China and written numerous anti-China polemics.

Rattling sabres

The Beijing government knows that what is said during a political campaign does not necessarily mean it will happen during government, and it has rattled sabres of its own, sending the Liaoning aircraft carrier into the Taiwan strait.

The threat by Trump to withdraw from the Paris agreement on climate change, which was hailed as a major moment in China’s ascent to real global influence, will have angered the Chinese, but China could now become the world’s environmental champion.

There is a certain irony in Beijing, which only joined the World Trade Organisation in 2001 and is regularly accused of protectionist policies, now stepping up as a champion of globalisation.

“Whether you like it or not, the global economy is the big ocean that you cannot escape from,” China’s president, Xi Jinping, said at the World Economic Forum at Davos this week.

“Any attempt to cut off the flow of capital, technologies, products, industries and people between economies, and channel the waters in the ocean back into isolated lakes and creeks is simply not possible. Indeed, it runs counter to the historical trend,” he said.

The view of Trump as a businessman, with a cabinet full of businessmen who put commercial interests first, is one that resonates with the pragmatists in China, especially in the business community.

“You can’t really trust everything he says. The whole world thinks he will be an unreliable president, but do not forget that he is also a businessman,” said one factory owner with the surname of Sun.

Businessman politics

Another employer, Yu Guangwei, who runs a microbiology company, said he was optimistic despite the early utterances, such as those about Chinese companies “raping” the US economy with cheap exports.

“Trump is smart. In fact I think he is just creating hype to gain more bargains. He is a businessman after all. So even if he adopts some drastic measures, China will be able to respond. I am generally optimistic,” said Yu.

Jia Wenshan, a communications professor at Renmin University in Beijing, sees hopeful signs in the way that Trump and Alibaba chairman Jack Ma agreed to help US businesses create a million new jobs in the mid-west by using his website to sell to China.

“America cannot be made great by America alone,” Jia wrote in a commentary. “It can only be made great again when it joins China in China’s effort to make China great again and the world great again simultaneously.”

Wang Huiyao of Beijing-based think tank the Centre for China and Globalisation said Trump’s business interests mean he will have to pursue America’s interests.

“He can’t neglect the economic and trade relationship between the US and China. Although there will be conflicts, the mainstream is still going to be co-operation,” said Wang.

Diplomatic muscle

Not far behind the pragmatic approach there is always the insistence that China, flush with the success of years of economic growth, the build-up of its military and its diplomatic muscle in the region, should be prepared to stand its ground. More hawkish analysts believe a trade war is inevitable, one China would win because the economic price would be too high for the US to pay.

Wu Xinbo, director of the Centre for American Studies at Shanghai’s Fudan University, said China was well-prepared for the incoming US president, “who is not a man that plays by the rules. If Trump is to provoke China on economic and trade issues in the future, China is sure to fight back,” Wu wrote.