Positive change more likely

Allies: Secretary of state Marco Rubio (second from right) had been considered a China hawk, but the joint statement at his first meeting with Quad counterparts (from left) Foreign Minister Iwaya Takeshi, Indian Foreign Minister Subrahmanyam Jaishankar and Australian Foreign Minister Penny Wong may indicate a dawning realism. — AFP

AMONG the speculative highlights of last November’s US presidential election was what the result would mean for United States-China relations.

The common assumption was that Donald Trump’s victory would worsen relations with China, while Kamala Harris vaguely and supposedly represented something less severe.

That simplistic assumption is however contradicted by the facts. After Trump’s sanctions on China through 2018-20, the Biden-Harris administration steadily widened them through 2021-24.

The outgoing administration kept raising tensions with China until its final days this month. The real-world problem was that its policy was unworldly and unreal.

The US and Chinese economies are joined at the hip and other body parts. In the unitary global economy, the two largest national economies are naturally, deeply and multifariously integrated.

“Decoupling” became a fashionable buzzword until it was not. The EU had always been sceptical of Beltway rhetoric, and proposed a more measured “de-risking” instead.

The Biden-Harris team verbally took to “de-risking” as it had to “de-coupling”. Yet it kept piling restrictions on China even after the losses impacted everybody including US businesses.

With Trump’s re-election, simpletons expected even tougher US policies on China. But those in tune with reality understood that Biden-Harris had already taken relations close to rock bottom, so the only likely way forward was up.

Personal differences between Trump and Harris as campaign candidates also mattered. Effectively a career Vice-President, Harris was glued to “what has been.”

Being more a businessman than a politician, Trump is more pragmatic than ideological. His realism differentiated between fierce rhetoric and actual policy, while a gift for switching between them makes for his “unpredictability”.

Before the election, Trump threatened higher tariffs on imports from China. But in a Fox News interview aired last Thursday, he said he “would rather not” place sanctions on China.

On the same day in a virtual address at the World Economic Forum in Davos, Trump was positive about China and said he enjoyed “a very good relationship” with Chinese President Xi Jinping.

Last year he said he looked forward to meeting Xi again to renew their relationship. He says the US and China only need a fair and reasonably healthy trade relationship, not a “phenomenal” one.

Trump acknowledges that tariffs are a powerful trade weapon, but prefers not to have to resort to them. Besides, raising tariffs would complicate his other objectives.

Trump seeks China’s cooperation in cutting back on nuclear weapons, along with Russia. He has said that the gravest threat to the world is not global warming but nuclear war.

The risk of nuclear war has been so dire as to find agreement with a Trump critic like Prof. Jeffrey Sachs. The risk is twofold, arising from a US-China or US-Russia conflict, where close China-Russia ties do not mitigate the risk but could increase it.

The Biden team could have continued widening the squeeze on China in trade, the economy, technology and other areas with no end in sight. Seeing China as a rival and then a “threat” risks conflict between them and a nuclear war.

The profound implications of the deeply integrated US and Chinese economies continue to hang over both countries’ policymaking. Nonetheless, the scope of integration seems to have escaped the previous administration’s understanding.

The challenges in US-China relations have always been more than just trade or economics. Meeting those challenges has also required more than just adding sanctions on China indefinitely.

Most geopolitical analysts now believe that the US is unlikely to win a serious conflict with China, and not only because of China’s growing military capabilities. Beijing dominates the global processing of strategic metals needed for a range of vital goods from microchips to defence equipment, and it has now curbed their export.

US consumers including military personnel also depend on the sourcing of goods from China, whether directly or indirectly. These include some 90% of active ingredients for pharmaceuticals such as antibiotics.

Trump also wants China to help end the Ukraine war. His “to do” list with China covers more ground and is more textured than anything the Biden administration was ready to consider with Beijing.

Secretary of state Marco Rubio had been considered a China hawk, but the joint statement at his first meeting with Quad counterparts from Australia, India and Japan last Tuesday may indicate a dawning realism.

The statement supports a region where “sovereignty and territorial integrity are upheld and defended.” Since the US from 1979 like China does not regard Taiwan as independent or sovereign, anxieties over Taiwan should be muted.

The statement also opposes any “unilateral actions to change the status quo by force or coercion.” Since the US and China both agree on the status quo, and on not changing it forcibly, the statement at least is reassuring.

Everything else will have to be seen and tested over the next four years.

Bunn Nagara is Director and Senior Fellow at the BRI Caucus for Asia-Pacific, and Honorary Fellow at the Perak Academy. The views expressed here are solely the writer’s own.