The relationship between the United States and China is built upon a complicated and contradictory schizoid economic and military partnership. With President Trump coming into power, perhaps it is time to un-complicate the relationship and instead make it the backbone of a real Asia pivot. One in which we create a meaningful Sino-American bond that allows us to lead the world as partners. It’s too expensive for either of us to go it alone.
I call it the American-Chinese KISSS – Keep It Simple Sino Solutions
For starters, we have to accept that unpredictability is going to be the new normal as the Trump administration’s appointees settle in and familiarize themselves with the career bureaucratic infrastructure and ingrained Sino-phobic culture they inherited.
Although in decline, America is still the world’s No. 1 superpower, with China snapping at its heels at No. 2. Russia is nowhere to be seen on the horizon. America has the upper hand economically and militarily everywhere, except in Southeast Asia and Australasia. There, the U.S. is either tied or, depending on the country, China usually has the upper hand. Already, former President Obama’s much-heralded Asia pivot is dead on arrival, a victim of inertia, ambivalence, and having no one understanding what the point was in the first place.
Assertions otherwise (which I tend to discount in the first place), China is not a currency manipulator trying to depress the value of its currency. On the contrary, it has spent heavily to prevent the currency from falling faster and further. China’s steady appreciation of the yuan over the past decade has pushed it to levels the International Monetary Fund said are generally in line with market fundamentals.
Why China Owns the U.S. (Watch the Video)
China and Taiwan agree that there is only “One China.” The remaining deliberately ambiguous question is which one. Washington recognizes the government of China as the “sole legal government of China” and maintains no official diplomatic relations with Taiwan. The U.S. does not accept Beijing’s position that there is “One China” of which Taiwan is a part. Washington has said it will not challenge China’s position in the 1982 U.S.-China Communiqué that forced President Reagan to commit the U.S. to not pursue a policy of “Two China’s” or “One China, One Taiwan.”
Taiwan has an expensive and effective team of lobbyists in Washington, a subject I address in my book Custom Maid Spin for New World Disorder. Those lobbyists planned and initiated the phone call between President Tsai Ing-wen of Taiwan and then-President-elect Trump after his election victory. Ms. Tsai placed the call, which angered Beijing because, unlike her predecessor, she is pro-independence, and does not accept China’s interpretation of “One China.”
China has threatened to offer support, even military assistance, to enemies of the United States, if America continues to challenge the “One China” policy. The Communist Party leadership has even threatened a military takeover of Taiwan.
If the Trump administration wants China to accelerate market access for American companies and to fully cooperate in de-nuclearizing North Korea, it has to stop selling arms to Taiwan and do away with existing legislation that obligates America to protect Taiwan should China invade. It’s a sensible move, and it works favorably for America, China and the world.
China is key to de-nuclearizing North Korea and developing a reunification plan with South Korea. The solution is a peaceful economic reunification, not a military confrontation. If you want to know more about proposals to successfully reunify the Koreas, it is a subject I cover at great length in my book Feasting Dragon, Starving Eagle and Custom Maid Knowledge for New World Disorder.
So why get into a war of words over the “One China policy” or the South China Sea dispute, both of which could lead to a trade war, or worse, something the Military Industrial Congress appears to be gunning for. In the short term, America will have some victories on both the economic and military fronts. In the long run, China will win both wars. It has home court advantage and public support, something the Trump administration desperately lacks.
President Trump, like his fellow Republicans Reagan and George W. before him, is a modern-day American cowboy-sheriff-gunslinger. As such, America has to respect the deadlier gunslingers at the shootout at the U.S.-Sino-Soviet corral!
To his credit, in building his cabinet, President Trump has assembled a talented and well-balanced posse to help him execute the American-Chinese KISSS; hopefully, only with a war of words.
Like several other Trump cabinet picks who are successful billionaire CEO’s of corporate America, Secretary of State Rex Tillerson is a businessman with no diplomatic training or full appreciation of China’s sensitivities. That was clear from his answers to senators grilling him during his confirmation hearing. He has, however, negotiated with many governments and their heads of state and should have no difficulty making the transition.
Secretary of Commerce-designate Wilbur Ross is a billionaire private equity capitalist who is a passionate collector of Chinese art. His passion for it could influence his politics on China. Peter Navarro, who was nominated to the new post of director of the White House’s National Trade Council, is a China hawk. U.S. Trade Representative Robert Lighthizer is a lawyer with a record of “get tough on China” trade talks as well. Jared Kushner, the president’s son-in-law and senior policy adviser, is a real estate scion who has had many dealings with Chinese investors.
Last, but not least, is Terry Branstad, the governor of Iowa who has been tabbed to become the ambassador to China. Mr. Branstad has a close personal relationship with President Xi Jinping of China going back to 1985, when Mr. Xi was an agricultural official in Hubei Province visiting Iowa on an agricultural exchange. I suspect Mr. Branstad will offer Mr. Trump a direct, and very high-level line of communication with China.
However, before the American and Chinese lips can KISSS, the economic and trade relationship between the two countries has to be recalibrated and reset for the realities of the cyber 21st century by Mr. Trump’s China trade team.
There would be no winner in a trade war between America and China. The global collateral damage from the fallout would be heavy and most certainly would contribute to America’s decline.
The dismantling by the president of Mr. Obama’s Trans-Pacific Partnership, a trade agreement designed to contain Beijing, may play neatly into China’s hands, as it was already creating its own trade pact, the Regional Comprehensive Economic Partnership, which some China critics say could position Beijing to set the rules and standards that govern global trade for years to come.
I was opposed to the TPP, as I am to all economic and military alliances that attempt to contain or isolate China. My reasons are spelled out in Custom Maid Revolution for New World Disorder.
China’s trader partnership, the RCEP, has signed up the 10 countries that make up the Association of Southeast Asian Nations and six countries with which the bloc has existing free trade pacts: China, India, Japan, Korea, Australia and New Zealand. The pact spans countries that are home to 3.5 billion people with a combined gross domestic product of $22.6 trillion.
Seven of the 16 countries negotiating to join the RCEP – Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam – were signatories to America’s TPP. America should sign up as well. What does America have to lose by signing up?
Better yet, why doesn’t America sign up for China’s “One Belt, One Road” initiative linking ASEAN to the rest of Asia and Europe along the old Silk Road? China’s plan is to enhance global supply chains, primarily through debt-financed infrastructure projects across more than 60 countries. China expects annual trade with these countries to be worth $2.5 trillion within a decade – up from $1 trillion in 2015.
China has also set up three new financial institutions to help fund the belt and road infrastructure goals: the Asian Infrastructure Investment Bank, the New Development Bank and the Silk Road Fund. These three institutions have a registered capital of $240 billion. More than 300 Chinese-funded enterprises have been set up in 26 economic cooperation zones in eight ASEAN countries, investing $1.77 billion as of October 2016.
Even these combined funding capabilities cannot meet Asia’s immense need for infrastructure financing. The Asian Development Bank estimates that $750 billion a year will be needed in Asia by 2020. Isn’t this an economic opportunity America should embrace for U.S. financial institutions and corporate expertise?
China can also play a major role financially to help rebuild America’s infrastructure and create jobs. Some Chinese businessmen have already pledged to do so.
These opportunities should be taken up by the Trump team in their ongoing negotiations on the U.S.-China Bilateral Investment Treaty.
The Trump administration cannot “Make America Great Again” without “Making China Great Again.” Prosperity requires that America and China understand their dependence on each other. President Xi summed it up best in his congratulatory call to President Trump: “China and the U.S. shoulder special and important responsibilities and share wide common interests on maintaining world peace and stability and fostering global development and prosperity.”
Chinese history and culture was admired by America’s Founding Fathers. They engaged China economically as a trading partner. This history has to be closely studied by the Trump team before putting any pressure on the “One China policy.” China is on the rise, assertive and uncompromising on sovereignty issues.
There have been many changes in the U.S.-China relationship between the time Commodore Matthew C. Perry arrived in China in 1858 and 1972, when President Nixon forged diplomatic relations with China. Many changes have taken place since and shall continue into the future. Starting a trade or military war with China over the islands in the South China Sea or Taiwan is not a constructive move that is in America’s best interest. Implementing and executing the American-Chinese KISSS – Keeping It Simple Sino Solutions – building and expanding the economic and military leadership roles for both countries to share would be a welcome change. It is the only way to avoid Armageddon!