China, East Asia and the upcoming US Presidential election

China is highly likely to face stronger opposition in East Asia from whoever wins the upcoming US presidential election.

Clinton is a longtime China hawk dating back to her time as Secretary of State and even before then when she was First Lady and criticised the country for its human rights record. She is likely to intensify the pivot to Asia started by Obama but also to take a tougher line against China on freedom of navigation around the disputed islands in the South China Sea. This could also embolden regional allies like the Japanese or South Koreans to push back against the Chinese, but with the obvious danger that this will enrage the Chinese government and bring with it a greater risk of regional war.

Could TPP tip the balance in the USA’s favour?

The Trans-Pacific Partnership promises in increase economic cooperation between countries in the region led by the US and including Japan, South Korea, Australia, Malaysia and many others, but excluding China. It has been signed but not fully ratified yet, it’s full implementation could yet shift economic power away from China and back to the US.

Would China celebrate a Trump victory?

The outcome for China in the event of a Trump victory is much more difficult to predict simply because his foreign policy outlook is constantly shifting depending on his mood, but it is certainly isolationist and protectionist in tone. Trump has vowed to cut military commitments in countries like Japan and Korea, this represents an ideal scenario for a more assertive China as the withdrawal of US forces would leave it as the major military and economic power in East Asia.

The return of protectionism

But more worryingly for Beijing he also promises to hit Chinese goods with crushing tariffs of 40% which would cripple the country’s export model – not to mention lead to huge price increases for consumers in the United States. It goes without saying that Trump is unpredictable and the reality of office or more likely the restraints of Congress would make it hard for him to back out of treaty obligations and trade agreements. But he and whatever foreign policy team he brings on board could certainly set the tone for foreign policy and if that involves annoying China as well as the US’s close allies – then he is the man for the job.

Beijing’s differing viewpoints

The Chinese for their part do not have a united viewpoint, within Beijing’s foreign policy elite are those who want an assertive foreign policy, this group have been in the ascendant since President Xi took the reins of power. But there are also those who advocate internationalism and promoting good relations with global partners over the the militarisation of disputed islands and nationalist rhetoric and they are still very much in the picture with regard to policymaking.

Rule taker to rule maker

In the last few years China has gone from being a rule taker to a rule maker – it has been used to joining international organisations like the WTO and adhering to western made rules, now they are creating their own organisations like the AIIB. The AIIB is modelled on  existing development banks but China is the host and key shareholder.

The recent G20 jamboree in Hangzhou did not achieve much in terms of results except lots of long communiques and vague soon to be forgotten economic aspirations, but it did underline China’s determination to develop a more multilateral world emphasising the G20 over the G7 and one where the rules are not overturned but slowly tilted in China’s favour.

Despite their multilateral talk the Chinese have aggressively pursued their claims over the islands in the South China Sea, one (unlikely to occur) solution to the disputed islands in the South China Sea would be to demilitarise them and turn the area into a marine park, making control over the area less significant.

But neutralisation of that issue would still leave disputes over Taiwanese sovereignty and the Senkaku (or Diaoyu) islands claimed by Japan, China and Taiwan.

However lands in the Whitehouse next January is highly likely to find tensions in East Asia at the top of their foreign policy inbox.



Categories: China Goes Global, Geo-Economics, Kula Ring Trade Blog

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