How Trump can solve his Chinese puzzle

Getting tough with China is a central part of President Donald Trump's plan to "make America great again". During the election campaign, he claimed that China was "raping" American industry.

Since the election, he and senior aides have denounced Chinese policies over trade, North Korea and the South China Sea.

These facts alone would make Mr Trump's summit meeting this week with China's President Xi Jinping very difficult. It is not that confrontation with China should be feared for its own sake.

The real danger is that Mr Trump's China policies are likely to be counterproductive, damaging America's prosperity and endangering its security, while hastening the rise of China.

Mr Trump's erratic approach to security issues scares American allies, making them less likely to stand with the United States if it confronts China over North Korea or the South China Sea.

At the same time, the President's protectionism, demonstrated by his decision to pull out of the Trans-Pacific Partnership trade deal, will reduce America's economic role in Asia. As a result, America's traditional partners in the region will increasingly be tempted to look to Beijing, rather than Washington, for a lead.

The underlying problem is that a tough-guy approach to Asia belongs to a bygone age when America's economic and strategic dominance was unquestioned.

Mr Donald Trump on a magazine cover at a Shanghai newsstand. In his meeting with Mr Xi Jinping this week, the President needs to send a carefully balanced message to reassure America's Asian allies that it will stand by them, and stand up to China without taking reckless steps. PHOTO: AGENCE FRANCE-PRESSE

The rise of China has changed the balance of power in the region.

The US needs the help of allies and trading partners to manage a more assertive China - the very allies Mr Trump's policies threaten to alienate.

China is now the world's largest manufacturer, largest exporter and largest market for vehicles, smartphones and oil.

In 2014, the International Monetary Fund announced that China had become the largest economy in the world, measured by purchasing power.

By then, China had also become the biggest export market for 43 countries in the world; the US was the biggest market for just 32 countries. And this year, Germany announced that China is now its largest trading partner.

This shift of economic power, a process I call "easternisation", has increased China's geopolitical clout. All of America's most important partners in the Asia-Pacific region, including Japan, Australia and South Korea, still look to the US for protection.

But their most important economic relationships are all now with China. That gives Beijing real leverage, which Mr Xi's government is increasingly prepared to use.

Some traditional American allies show signs of defecting. During a visit to Beijing last year, the President of the Philippines, Mr Rodrigo Duterte, announced a "separation" from the US and a new relationship with China.

Philippine officials cite Chinese loans, infrastructure investment and fruit imports to explain why their country has modulated its criticism of Beijing's maritime claims in the South China Sea. As Defence Secretary Delfin Lorenzana said this week: "Any product that we produce, they will buy."

China is also more prepared to use economic and diplomatic threats against American allies.

To put pressure on Seoul not to cooperate with the deployment of an American anti-missile shield, Beijing recently cancelled contracts with prominent South Korean companies.

Even Australia is feeling the heat. On a recent trip there, Chinese Premier Li Keqiang warned Australia not to take sides in any dispute between America and China - a remarkable intervention, given that Australians fought alongside Americans in two world wars, as well as the Korean and Vietnam wars.

But no Australian government can afford to ignore Beijing's wishes, given China's significance as a trading partner and investor.

In 2015, a Chinese company bought a 100-year lease on the port of Darwin on Australia's northern coast - to the consternation of the Obama administration, which had chosen the location for a new Marine Corps training facility.

Neither South Korea nor Australia has yet gone as far as the Philippines, but there is a serious debate in both countries about their future relations with the US. Their doubts will only increase, thanks to Mr Trump's frequent questioning of such alliances.

"I believe in relationships," he told The Financial Times last weekend. "And I believe in partnerships. But alliances have not always worked out very well for us. OK?"

Faced with a delicate situation in Asia, America must adopt intelligent policies that reassure its partners. Unfortunately, Mr Trump has done the precise opposite: targeting countries that run big import surpluses with the US with a review of "trade abuses" and threatening retaliatory measures.

That move is a threat not just to China, but also to vital allies like South Korea and Japan.

The President has also shown an unnerving unpredictability on security issues. His strong hints that the US would entertain the idea of a first strike on North Korea's nuclear facilities will not be welcome in Seoul, which is just 56km from the North Korean border and could be devastated by retaliatory strikes.

Mr Trump has also demonstrated a willingness to risk war with China over both Taiwan and the South China Sea, conflicts that none of America's allies - with the possible exception of Japan - would welcome.

As tensions mount, nations in the region must feel able to trust Mr Trump's judgment and his word.

So far, the President has given them little reason to do so.

Any suggestion now of a trade war with China - or worse, a shooting war - would horrify most of Asia. So, too, would any hint of a grand bargain with Beijing that involved trading away American allies' interests in return for trade concessions for the US from China.

In his meeting with Mr Xi this week, Mr Trump needs to send a carefully balanced message - not easy for a president who does not do nuance - to reassure America's Asian allies that it will stand by them, and stand up to China without taking reckless steps.

If the President fails to offer such reassurance, America's position in Asia will continue to erode.


•The writer is the chief foreign affairs commentator for The Financial Times and the author of Easternisation: Asia's Rise And America's Decline From Obama To Trump And Beyond.

A version of this article appeared in the print edition of The Straits Times on April 06, 2017, with the headline 'How Trump can solve his Chinese puzzle'. Print Edition | Subscribe