5 Issues Trump Needs to Get Right on China

by Melanie Hart –

This week, Chinese President Xi Jinping will visit Mar-a-Lago for his first meeting with President Donald Trump. Thus far, the Trump White House has consistently stumbled in its dealings with China. This Mar-a-Lago meeting is the new administration’s last chance to convince Beijing that President Trump has a China strategy and will be a formidable—or at least competent—counterpart.

U.S.-China presidential summits are always important, but this one comes at a particularly sensitive time. Under the Obama administration, China proved to be a valuable U.S. partner on climate change, Iranian nuclear nonproliferation, and other areas of common interest. Where U.S. and Chinese interests diverge, however, Beijing has shown an increasing willingness to act in ways that directly undermine the United States. From a U.S. perspective, the negatives are beginning to undermine the positives, and it is time for a change in course.

At Mar-a-Lago, Americans need the Trump administration to show up with a coherent strategy for dealing with high-priority issues, such as trade and North Korea, without needlessly sacrificing positive progress in other areas.

President Xi will arrive with his own agenda. Beijing is well aware that U.S. frustration over trade and Chinese support for North Korea is reaching a breaking point, and President Xi will be angling to diffuse that frustration with actions that are more show than substance. In other words, China will offer hollow proposals that address U.S. complaints on the surface without requiring Beijing to actually sacrifice its own interests.

Between the two presidents, President Xi has much more experience—not only in U.S.-China relations but also as a government leader and diplomat—and will probably have a more intricate and well-thought-out strategy than his counterpart. Based on President Trump’s performance thus far, Beijing is assuming that his principles are somewhat fluid and that he will be willing to cut deals with American interests in ways that previous U.S. presidents were not. If that assessment is correct and President Trump is indeed willing to compromise on U.S. priorities, this meeting may not go well for the United States.

As American observers watch the two presidents’ statements coming out of this summit, five key issues will demonstrate which side walked away with the upper hand.

Framing the complex mix of cooperation and competition in U.S.-China relations

President Xi will aim to put a positive spin on the current state of U.S.-China relations and call for both sides to avoid rocking the boat. However, from an American perspective, the boat is already taking on water—at this point, dramatic action is the only way to avoid disaster. The United States needs China to change course on a broad array of issues, ranging from North Korea to Chinese treatment of American companies, journalists, think tanks, and nongovernmental organizations. That fact should not be sugarcoated.

Thus far, China is winning on the framing front. Despite the Trump administration’s tough-talking rhetoric at home, when U.S. Secretary of State Rex Tillerson visited Beijing last month, he parroted President’s Xi’s favorite talking point, stating that the United States and China enjoy a “very positive relationship built on non-confrontation, no conflict, mutual respect, and always searching for win-win solutions.” President Xi’s “no conflict” slogan does not call for China to adjust its own actions—the slogan actually parallels a rise in Chinese assertiveness that has rattled other nations, particularly in the South China Sea. In short, when President Xi crafted that slogan, he was telling the United States that, although China is acting more assertively than before and may use its military in ways that challenge U.S. interests, the United States should not react negatively. Instead, the United States should simply sit back and quietly allow Beijing to do what it wants.

For the sake of the nation, the Trump administration needs to do a better job of setting the U.S.-China agenda at Mar-a-Lago. That will require the Trump team to show up with clear priorities and effective strategies for achieving them. Tweets will not get the job done.

Taking serous action on the North Korean nuclear threat

Beijing wants the United States to apply the brakes and ratchet down the pressure both Washington and its allies are applying on Pyongyang to abandon its nuclear weapons program. However, Pyongyang is developing capabilities to strike the continental United States with a nuclear-armed missile. If the United States does indeed acquiesce and apply the brakes, it would allow Pyongyang to continue plodding forward on that trajectory—an outcome that is unacceptable.

Pyongyang’s current missile capabilities already pose a direct threat to Japan and South Korea—two critical U.S. allies—and to U.S. servicemen and servicewomen based in those nations. If current trends continue, they could pose a direct nuclear threat to the continental United States by 2019. To be sure, no one knows what North Korean leader Kim Jung-un would do with a long-range nuclear missile once he has one, but his repeated threats to attack the United States and its allies—and the regime’s pattern of selling weapons to other U.S. adversaries—makes this issue a potential existential threat to U.S. national security.

China is contributing to this threat by providing economic support that buffers North Korea from international sanctions. China has ratcheted down that support over time, but it  remains a problem. Even more concerning is the fact that, as the United States begins to move missile defense systems into Northeast Asia to protect its allies from the growing nuclear threat, China is actively undermining those efforts instead of supporting them.

The problem is that Beijing and Washington see the North Korean issue very differently. From China’s perspective, Pyongyang’s weapons program is not aimed at them, so it does not top their list of concerns. Instead, they are more concerned about potentially losing North Korea as a buffer. Currently, the U.S. military cannot move north of the 38th parallel, which is the border between North and South Korea. If the regime in North Korea falls, the peninsula may unify—much like Germany after the Berlin Wall—and Beijing anticipates the U.S. military would then move its facilities northward, potentially right up to the Chinese border. From China’s perspective, the status quo is preferable to a path that risks regime collapse and an expanded U.S. military presence.

Two things must happen at Mar-a-Lago: First, President Xi must return to Beijing fully understanding that the United States is prepared to take serious action to address the rising North Korean threat, including action directed against China if Chinese leaders continue on their current course. Second, despite this willingness to take action, the Trump administration must also make very clear that U.S. interests are best served by working with—rather than against—China on this issue. The primary objective is to find a denuclearization pathway that makes everyone—including China—more secure, but that requires Beijing to engage in ways that Americans have not yet seen.

Addressing the lack of reciprocity in U.S.-China trade and investment relations

Beijing will want to put the U.S-China economic relationship in a positive light, touting the benefits both sides gain from economic cooperation and calling for the United States to open its doors even wider to Chinese companies. The problem is, the current structure of the U.S.-China economic relationship is no longer working for the United States, and that needs to be a key focus in Mar-a-Lago.

There are two forces colliding to undermine American support for U.S.-China economic cooperation. First, the United States is realizing that, for some American workers, the negatives of U.S.-China trade far outweigh the positives. When the United States first brought China into the World Trade Organization, or WTO, it was clear China’s accession would trigger an influx of low-cost Chinese goods and an outflow of at least some manufacturing jobs. However, it was assumed that once China rose up the economic ladder, Chinese citizens would start buying more goods and services from the United States, thus creating new U.S. job opportunities in higher-end export markets to balance out the relationship. For American workers to successfully make that jump—which was a big one with real risks—the United States needed to make sizable investments in education and training, infrastructure, science, and the other aspects of the industrial commons in order to help everyone adjust. Unfortunately, China’s WTO accession took place during a period of broad-based American deregulation and disinvestment in those key areas. Vigorous enforcement against a broad array of subsidies and mercantilist policies was also needed but sorely lacking.

Second, on top of the disadvantages brought about by domestic U.S. policy, Beijing failed to meet its end of this bargain. Perhaps as a response to the growing market concentration in the West and the threat of foreign monopolization of its markets—or simply as a function of economic nationalism—Beijing rolled out discriminatory policies to ensure the nation’s rising consumer class buys Chinese goods and services instead of American equivalents. Chinese leaders want their companies to dominate the entire value chain: They want both lower-end and higher-end goods to come from China—not the United States.

Beijing knows President Trump is aware of these U.S. concerns, and that trade tops his personal agenda with China. It also knows that he is prone to abrupt changes in course. President Xi may run a play that has worked well for China in other parts of the world and try to buy the Trump administration off with a massive investment package. The Washington-Beijing grapevine is abuzz with rumors that the Chinese delegation may bring $50 billion in promised investment deals. But the American people are not going to fall for a deal that tries to buy off select business interests at the expense of broader national economic security. Even if a Chinese investment package includes substantial export deals for American companies, that has to be paired with real movement on Chinese policies that have tilted the relationship out of balance.

To be sure, the United States also has plenty of work to do at home to address domestic policy shortcomings. Actions to strengthen U.S. antitrust enforcement and invest in U.S. manufacturing industrial commons are both much-needed and long overdue. The United States must also do more to address serious flaws in the broader rules governing global trade and globalization. However, from a U.S.-China perspective, the Trump team will have a long list of grievances to bring up with President Xi, and the degree to which the United States sees real movement on those grievances—as opposed to empty posturing—will largely determine whether U.S.-China relations can stabilize over the near term.

Finding positive anchors for the relationship

Under former President Barack Obama, climate change was a high-profile U.S.-China issue that delivered multiple breakthroughs; provided a positive frame for the relationship as a whole; and demonstrated why consistent, sustained U.S.-China engagement at the presidential level is so worthwhile.

Under President Trump, finding a positive anchor will be more challenging. Beijing will certainly bring up climate change, if only to needle President Trump. Last week, the Trump administration released executive orders that aim to undermine a range of U.S. climate and environmental protection policies. On this issue, the Trump administration is downplaying scientific evidence—and the devastation that is already hitting some American communities—to enrich special interests at the expense of both the nation and the world at large. On this issue, the Trump administration is setting the United States up to be the global bad guy, and that will give China leverage to push back against U.S. initiatives on other issues. If the Trump administration denies climate science or refuses to acknowledge the positive role Beijing is playing, that will undermine Washington’s credibility when it claims to be seriously considering new measures on North Korea or trade.

The Trump administration will have to find a positive anchor where both countries can work collaboratively toward a common goal. There are still plenty of options to choose from in the climate realm. For example, if the administration truly has doubts about whether China is delivering on its climate commitments, then it should lean into the ongoing transparency negotiations that the United States and China co-chair under the Paris Agreement framework. Beijing is pushing for a transparency regime that does not require China and other developing countries to adhere to high data reporting standards; the United States could engage in that process to push for stronger standards that apply to everyone.

Energy cooperation, counterterrorism, and coordinated development assistance—including a potential new role for the United States in the Asian Infrastructure Investment Bank—will also be on the table.

Stopping the bleeding on Taiwan

President Trump kicked off his relationship with China by rattling Beijing over Taiwan, an issue that is nowhere near the short list of high-priority problem areas that need an immediate change in course.

In January 2017, then-President-elect Trump stated that he would be willing to renegotiate the One China policy, which has been a central element of U.S. policy toward China since former President Richard Nixon and former National Security Adviser Henry Kissinger made their historic trip to the nation in 1972. Trump seemed to be acting on the assumption that the United States could gain new concessions on trade by threatening one of China’s core interests.

The problem is that Beijing views Taiwan as a red-line issue: It is more likely to go to war than it is to make concessions on this particular front. Once President Trump understood this fact—and realized he was risking a major conflict with China that would bring absolutely no benefit to the United States and virtually ensure that the real problem areas would remain unaddressed—he backed down, thus managing to make the restatement of a long-held U.S. policy look like a major concession to Beijing.

The triangular relationship between the United States, China, and Taiwan is one area of the U.S.-China relationship that has been going fairly well. It should not dominate the agenda at Mar-a-Lago. If it does, that will indicate that President Trump still does not have his priorities straight in his dealings with China and may be putting U.S. national security at risk.

Conclusion

Striking the right balance across this range of issues will require a deft combination of engagement and resolve in addition to an understanding of the fears that drive Beijing.

Thus far, Americans have not seen the Trump team perform at that level. U.S. National Security Adviser Lt. Gen. H. R. McMaster and U.S. Defense Secretary James Mattis, however, are certainly capable of doing so, and they can leverage a truly stellar group of professional China experts working at the National Security Council, the Department of State, the Pentagon, and other federal agencies, many of whom have been in their positions for years and are old hands at dealing with Beijing. The big question is whether the broader White House cast of characters can stay out of the way and if President Trump can effectively run the plays his best China experts draw up for him.

Melanie Hart is a Senior Fellow and the Director of China Policy at the Center for American Progress.

Reprinted with permission from The Center for American Progress