External Affairs

Ahead of Donald Trump and Xi Jinping Meet, China Holds All The Cards

There are many obstacles for the US-China summit, such that the American side is simply not ready for a substantive negotiation. But there are also many areas of discussion, including North Korea, the One-China policy and trade.

Donald Trump (left) intends to hold a summit with Chinese counterpart Xi Jinping (right) which is surprising given that his administration is still in its early days. Credit: Reuters/Files

Donald Trump (left) intends to hold a summit with Chinese counterpart Xi Jinping (right) which is surprising given that his administration is still in its early days. Credit: Reuters/Files

The forthcoming summit between President Xi Jinping of China and US President Donald Trump at Mar-a-Lago, Florida, could well be the most important summit of 2017 because it has implications not just for the two countries in question, but many other parts of the world, especially East Asia, home to a dynamic economic region upon which rests the fate of the global economy.

At first sight, it is possible to trace the outlines of the summit – Trump will be tough on trade and North Korea, while Xi will adopt his Davos persona of a statesman defending the rule-based international system. There is a limit as to how far China will be willing to go with North Korea. And on the trade issue, Xi could come prepared with a package to assuage American anger.

However, we also know that we have a US leader with a reputation for unpredictability and going off the script, while on the other is a cautious and calculating Chinese leader who tends to stick to the script, but is capable of out of the box thinking.

First summits can be inherently dangerous because the two leaders come from two different systems and often do not often know each other well. In this case, the US goes with a greater disadvantage because they have a president who has come to power with no political experience whatsoever, while many of his senior aides like Steve Bannon and Jared Kushner, also do not have experience. Further, the two key departments of government – state and defence – are functioning with a skeletal staff.

In trying to read the tea-leaves, we also notice that no one in the US administration, not the president nor any of his senior aides, have outlined its overview on security and foreign policy goals in any kind of document. All we have are a few events – US secretary of state Rex Tillerson speaking tough on the South China Sea and then retracting and going on to accept China’s favourite formulation China-US relations; Trump taking a call from Taiwan President Tsai Ing-wen and expressing a desire to extract concessions from China to maintain the policy and then making an about turn; the cancelled summit with Mexico; the benign references to Russian President Vladimir Putin; Trump’s bonhomie with Egyptian dictator Abdel Fattah el-Sisi; and the cold vibes with German Chancellor Angela Merkel.

As such there are clearly three principal issues that both sides would like to focus on – North Korea, Taiwan and trade. Trump has shown flexibility on Taiwan and the One China issue, and will clearly expect a Chinese reciprocation on North Korea, which he threatened to deal with unilaterally otherwise.

A lot clearly will rest on the third issue – trade. This is one area in which Trump has been consistent, calling for better management of trade and the need to punish offenders. He will have the services of  three officials, nominee for US trade representative Robert Lighthizer, commerce secretary Wilbur Ross and Peter Navarro of the National Trade Council, all of whom are against the free trade orthodoxy. Since a Trump administration trade policy is yet to be formulated, it is difficult to predict how things will unfold. Perhaps Chinese offers of voluntary restraint in exports and promises of heavy investment may ease the tension. In this way, Xi could forestall the emergence of a tougher US trade policy.

Xi’s reasons

Why has Trump agreed to a summit so early in his administration?

This is not quite clear given the lack of preparations for a substantive dialogue or negotiations by his administration. It possibly has to do with the belief that the Chinese hold the key to two main issues before him – dealing with North Korea and trade. Or, perhaps his son-in-law and senior aide Kushner, who has good ties with the Chinese, has persuaded him. There are indications that the first son-in-law played a key role via Henry Kissinger in setting the table for the summit, overcoming the turbulence that hit it following the Taiwan phone call.

And why is Xi pushing for a summit with an interlocutor as unpredictable as Trump? He has much more to lose considering that he is in the last mile for the 19th Communist Party of China Congress later this year.

Perhaps Xi’s motives are linked to the Communist Party. He appears to be firmly in control of the system and the 6th Plenum of the Central Committee of the Communist Party called on its members to unite behind the Central Committee “with Comrade Xi Jinping as the core”. He needs to ensure that nothing like trade war erupts between now and the November party congress to derail his plans.

Another factor could be a desire to incrementally advance China’s standing in world affairs in an era where the US seems to be retreating. In that sense, his impressive presence in Davos for the World Economic Forum meeting was a prelude. By engaging the leader of the US, Xi is revealing his self confidence as well as cementing his political authority.

Finally, Xi could be seeking to preempt the emerging US trade agenda. Right now, the US trade representative, Lighthizer, is yet to be confirmed, and Navarro and Ross are not quite in command of the trade agenda. Indeed, with an active White House figure like Kushner, there is little clarity on the authority of the state department in making US foreign policy. This could be a good moment for Xi to come up with a surprise package that could sow confusion among the policy-makers who are, as it is, divided on the nature of measures to be taken against China.

All eyes on summit

What do US allies and friends in the region expect?

There can be little doubt that US allies and friends will be paying close attention to the proceedings of the summit. Countries like South Korea and Taiwan are directly affected by decisions that could be taken, or not taken, at Mar-a-Lago.

Countries like Japan, Vietnam and the Philippines will be watching for signs that the US is weakening it stance in relation to China. As of now, the Americans have convinced the Japanese and the South Koreans that they stand firmly with them. But the big problem that all the American friends in the region confront is that the Trump administration has knocked the foundations of a sustainable policy of countering China by scrapping the Trans Pacific Partnership agreement.

More than American aircraft carriers and ships, what the countries of the region who face the economic pull of China want are signs of deeper and more sophisticated American economic engagement. At the same time, they remain concerned over the trade issue because if the US raises trade barriers across the board, it could affect their not-so-inconsiderable economic ties with the US.

Great expectations

Beyond the short term, China has a major interest in maintaining an even keel in its relationship with the US. This has as much to do with their huge trade relations as to issues of potential instability in China arising out of any trade war. The Chinese are keen to avoid the Thuycidides trap and have proposed the ‘new type’ of great power relations emphasising no conflict, no confrontation, mutual respect and win-win cooperation.

The problem for the world community is that as Chinese power grows, so does their list of  “core interests” or red lines. It began with Taiwan, then included Tibet and Xinjiang, and the preservation of the Communist Party of China’s primacy in the country. Soon the South China Sea could be included.

On the other hand, China has little understanding of the core interests of other nations. Many of them, like the US, do not articulate interests in similar terms, but that does not mean that they do not have them.

The agenda for a US-China summit is not surprisingly large and complicated. There are many obstacles they confront. Some are systemic – such as that the American side is simply not ready in terms of policy formulation for a substantive negotiation. On the other hand, some are built into the potential subjects of discussion – such as North Korea, the One-China policy or China-US trade issues.

But newer problems could emerge if the chemistry between the two leaders turns out to be bad. Both have a certain notion of themselves and either coming across as being disrespectful or casual could poison the relationship in the coming years.

Manoj Joshi is a distinguished fellow, Observer Research Foundation, New Delhi

  • K SHESHU BABU

    Trump is not a prosaic person and his policies have very little resemblance to his predecessors. He tries to come out of the ‘ ghetto’ of unipolar world and even tried to revive elations with Russia. His major foreign policy hinges on trade and sale of arms. His policies may not be hostile to Russia or China. Hence. Though the meeting with Xi may be unexpected, it may not be very surprising. If China allows his way of dealing with ISIS, arming Israelis, ties with South Korea and Japan, and, some sort of compromise on South China Sea, the relations between China and US may not deteriorate