Later On

A blog written for those whose interests more or less match mine.

Trump in the China Shop

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Gideon Rachman writes in the NY Review of Books:

The arrival of Donald Trump in the White House threatens a significant acceleration in the rivalry between the US and China. The deliberate but careful attempts of the Obama administration to push back against Chinese ambitions in the Asia-Pacific region are likely to be replaced by a new Trump approach that is much more openly confrontational, and more impulsive in style. Even before taking office, the new US president demonstrated his willingness to antagonize Beijing—by speaking directly to the president of Taiwan, something that all US presidents have refused to do since the normalization of relations between the United States and China in the 1970s.

If a direct military conflict between China and the United States does break out during the Trump years, the likeliest arena for a clash is the South China Sea. In his confirmation hearings before the US Senate, Rex Tillerson, Trump’s new secretary of state, signaled a significant hardening in the American attitude to the artificial islands that China has been building in the South China Sea. Tillerson likened the island building to Russia’s illegal annexation of Crimea and said that the Trump administration intended to let Beijing know that “your access to those islands is not going to be allowed.”

Taken at face value, that sounded like a threat to blockade the islands, on which China has been constructing military installations. China would almost certainly attempt to break such a blockade by sea or air. The stage would be set for a modern version of the Cuba missile crisis. The Chinese government’s official reaction to the Tillerson statement was restrained. But China’s state-controlled media was ferocious. The Global Times, a nationalist paper, warned of the possibility of a “large-scale war” between the United States and China, while the China Daily spoke of a “devastating confrontation between China and the U.S.” Independent observers had come to similar conclusions. Speaking to me in Davos a couple of days after Tillerson’s statement, Vivian Balakrishnan, the foreign minister of Singapore, warned that any effort at a US blockade in the South China Sea would lead to a war between the United States and China. The Singaporeans, who maintain close ties to both Washington and Beijing and whose natural style is cautious and technocratic, are not given to hysteria.

In an effort to calm the rising anxieties in Asia, expressed by the likes of Balakrishnan, James Mattis, Trump’s new defense secretary, used his first trip to the region in early February to reassure allies that the US is not planning any “dramatic military moves” in the South China Sea. But there are other influential voices in the new administration who clearly believe that a war with China is both inevitable and necessary. Stephen K. Bannon, chief strategist in the Trump White House, told a radio show in early 2016, “We’re going to war in the South China Sea in five to ten years. There is no doubt about that.”

A decision by President Trump to confront China over its territorial claims would represent a new development in the president’s thinking, for Trump’s most longstanding and profound concerns about Asia are economic. Conventional economic theory has long held that the growing wealth of Asian nations is a good thing for the United States, since it creates larger markets for American companies and cheaper goods for American consumers. But Trump and his advisers emphatically reject this idea. They blame the stagnation of the living standards of American workers on “globalism”—otherwise known as international trade and investment. Bannon argues that “the globalists gutted the American working-class and created a middle-class in Asia.” In his view, the increasing wealth of Asia, far from being a mutually advantageous process, has impoverished the United States.

During the election campaign, Trump was visceral in his denunciations of China, proclaiming that, “We have a $500 billion deficit with China…We can’t continue to allow China to rape our country…It’s the greatest theft in the history of the world.” Those who hoped that Trump would abandon protectionism after winning office were quickly disappointed. On the contrary, the new president placed protectionists in top positions in his administration. Peter Navarro, author of a book and film called Death By China, was appointed to head a new National Trade Council, based in the White House. Navarro’s intellectual ally and sometime coauthor, Wilbur Ross, was made Commerce Secretary. Robert Lighthizer, another noted protectionist, was given the job of chief trade negotiator.

Navarro’s film begins by urging viewers, “Don’t buy Made in China.” It points out the considerable loss in US manufacturing jobs since China joined the World Trade Organization in 2001, and blames this on a range of “unfair” Chinese trading practices, including lax environmental standards, currency manipulation, intellectual property theft, and illegal export subsidies. Some of the ills that Navarro highlights, such as commercial espionage, are real enough. Other complaints, such as the charge of currency manipulation, are outdated.

The broader difficulty with the Trump–Navarro analysis is that . . .

Continue reading.

Written by LeisureGuy

7 March 2017 at 1:19 pm

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