China is confronting new US hostility. But is it ready for the fight?

File photo of containers being loaded onto shipping vessels at the Port of Long Beach in Long Beach, California.
File photo of containers being loaded onto shipping vessels at the Port of Long Beach in Long Beach, California.PHOTO: AFP

BEIJING (NYTIMES) - The Chinese leader, wearing a dark Mao suit, and the American president, in a black tuxedo, stood side by side with arms aloft at the Kennedy Centre. Deng Xiaoping and Jimmy Carter smiled broadly as the orchestra played "Getting to Know You", signalling the dawn of a new era of friendship and cooperation between their two nations.

Over the next 40 years, China and the United States built the most important economic relationship in the world and worked together on issues such as regional security, counter-terrorism and climate change.

Taking Deng's lead, China played the junior partner, if not always deferential then at least soft-pedalling its ambitions and avoiding conflict with the much stronger US.

Now, faster than many in either nation expected, that has all changed.

On Monday, the US will begin taxing US$200 billion (S$273 billion) in imports from China, the biggest round of tariffs to take effect yet in an escalating trade war. President Donald Trump says the measures are necessary to fight an economic model that requires US firms to hand over technology in exchange for market access and provides state subsidies to Chinese competitors.

China's strongman leader, Mr Xi Jinping, presiding over an economy gaining quickly on the US, has openly challenged American leadership abroad while dashing hopes of any political thaw at home.

During this time, both Republicans and Democrats in Washington have turned on Beijing, accusing it of imperial ambitions in Asia, aggression in disputed waters, persecution of ethnic minorities and unscrupulous trade policies aimed at dominating the industries of the future.

 
 
 
 

In a fundamental shift, the Trump administration has formally described China as a "revisionist power" and "strategic competitor" in the past year. China has been saying similar things about the US for even longer. But as relations deteriorated in recent months, many Chinese are asking if their country is really prepared to take on the world's most powerful nation.

China has abruptly cancelled not only trade talks that were planned this week in Washington but also military-to-military talks scheduled to begin on Tuesday. The latter move was made to protest against US sanctions imposed last week on a Chinese military department for buying warplanes and missile equipment from Russia.

In a sign of Beijing's growing international influence, though, the Vatican and the Chinese government said  last Saturday that they had reached a breakthrough agreement on the appointment of Roman Catholic bishops in China, taking a step towards normalising relations.

As the acrimony and rivalry with the US have intensified, the immediate worry in Beijing is how the Chinese public, accustomed to a fast-expanding economy, will handle the trade war, and what impact it might have on the ruling Communist Party's overriding concern - domestic stability.

The government has sought to project confidence.

"Maybe the growth rate will slow 1 per cent. We can accept it. That's not terrible for us," said Mr Hu Xijin, editor-in-chief of The Global Times, a state-run newspaper known for its nationalist tone. He added that Washington would soon realise that its mobile phone and auto manufacturers could not survive without Chinese customers.

"As long as our market is expanding economically and growing, China will win the trade war," he said.

Mr Charles S.Y. Liu, a private equity investor who sometimes advises the government, said the Chinese people were prepared to endure a protracted trade conflict.

"The Chinese are more tolerant of pain because we have been poor for so long," he said. "Wealth has only arrived in the last decade."

But many others are worried, and some have urged the Chinese leadership to seize the moment and shift the economy even further towards open markets and private enterprise rather than allowing an inefficient state sector to dig in.

"A closed approach will lead to a decline in the rate of national competitiveness," wrote Professor Yan Xuetong, dean of the Institute of International Relations at Tsinghua University, in a recent paper. He warned that China risked returning to the stagnation it suffered in isolation during the Mao era.

"When Trump adopts a protectionist strategy, China should have an open door and force the state-owned enterprises to reform," Prof Yan added in an interview. But he said his advice was being ignored. "I get no reaction. Nobody listens to me."

Other Chinese are arguing that the spike in hostility from the US could have been avoided if Mr Xi had continued the policy of "hiding strength, biding time" followed by his predecessors and originally set by Deng.

Mr Xi instead has flaunted two ambitious programmes: the global infrastructure plan known as the Belt and Road Initiative and the effort to dominate advanced industries known as Made in China 2025, both of which have drawn criticism by the Trump administration.

"The same things can be done without such arrogance," said Mr Yun Sun, an analyst at the Stimson Centre, a think tank in Washington. "I believe the Chinese policy community does wish to see more actions and more assertiveness, but Xi went too far."

The party has sought to censor criticism of Mr Xi, but there have been glimpses of anxiety online about the potential impact of the trade war as well as anger at the Belt and Road Initiative, which has earmarked hundreds of billions of dollars for overseas projects intended to lift China's clout abroad.

Echoing a popular opinion on social media, a retired economics professor, Dr Sun Wenguang, has argued that it is wrong to spend so much money in other countries, given the problems that China faces at home.

"Some are too poor to see a doctor, some are too poor to have pensions after retirement, and some too poor to go to school," Dr Sun said in an interview on the Voice of America last month. "Under such circumstances, if you still choose to throw money at other countries, domestic backlash is almost guaranteed."

As he was speaking, police entered his home and forced him off the phone.

Dr Sun's criticism reflects a broader concern in China about the government's efforts to win over allies. The subject is important because the US has long touted its alliances as key to its national strength generally and its ability to counter China's rise in Asia in particular.

China enjoys significant advantages in the region. It is the largest trading partner of almost every country in Asia while Mr Trump has strained relations with allies around the world.

Even Japan, America's most important ally in Asia, appears to be drifting closer to China as Mr Trump threatens the nation with tariffs.

In a rapprochement between the two Asian rivals, Prime Minister Shinzo Abe is scheduled to travel to Beijing next month, the first visit to China by a Japanese leader since 2011.

"Trump said recently, 'Japan, you're next for tariffs,'" said Mr Liu, the private equity manager. "Thank you, Donald Trump."

But some say China is fumbling the opportunity presented by the Trump administration and alienating neighbours by throwing its weight around too aggressively. There has been a backlash in several countries against Belt and Road projects that have left governments in deep debt, created few jobs for local residents or damaged the environment. Others have raised an alarm about Chinese efforts to interfere in the politics of smaller nations.

In an essay that has been widely shared on Chinese social media, a prominent Communist Party scholar warned against national arrogance and overreach, noting the fate of rising powers that succumbed to "recklessness and impetuousness" in the 20th century: Germany, Japan and the Soviet Union.

"I recall a topic hotly debated online by young Internet users: Who is really China's enemy? Is it America? Japan? Russia?" wrote scholar Luo Jianbo, head of the China Foreign Policy Centre at the Central Party School. "If we think about things coolly, perhaps none of them are. China's enemy is itself."

In many ways, the Chinese political elite has been caught off guard by how quickly relations have deteriorated with the US, which has long been a source of envy and inspiration for many Chinese as well as a leading destination for education and immigration.

Chinese scholars often observe that new American presidents usually take a hard line against China but seek cooperation after realising how the two nations need each other. Mr Trump has stunned them by defying that pattern.

"I personally feel surprised by the fact that Trump is taking such radical measures," said Mr Hu, the newspaper editor. "I initially thought it was a joke, but it turns out to be a real policy, putting tariffs on all these products."

Some Chinese analysts have sought to explain the escalating conflict with the US by focusing on the personal qualities of the nation's two leaders. Mr Trump is viewed as a fickle, transactional businessman who may retreat after the mid-term elections in November. They note that he has repeatedly spoken out against China's trade practices but said little about human rights or military issues.

Mr Xi, on the other hand, is said to have invested too much politically in his signature programmes to back down under foreign pressure.

"Personality matters in this relationship," said Professor Wu Xinbo, director of the American Studies Centre at Fudan University. "The biggest problem is Trump's credibility."

Though Beijing devotes tremendous resources to studying the US, there seems to be little understanding that the hostility against China in Washington is bipartisan and extends beyond trade, and that many frustrated business leaders, once defenders of good ties with China, now favour tougher measures against it as well.

Dr Teng Jianqun, director of American studies at the China Institute for International Studies, said the government needed to accept the new reality and tell the Chinese public that the coming struggle could be the beginning of a long fight for the country's survival as a great power.

"We should let our people fully know that this trade war is not a short-term contest," he said, "but a contest that will determine the future of the Chinese nation."