Trump’s decision to speak to the Taiwanese President Tsai has left
almost everyone befuddled. Was it a deliberate decision or was the
President-Elect demonstrating his colossal ignorance of international affairs? The
Taipei Times recalled that “Trump reportedly agreed to the call, which was
arranged by his Taiwan friendly campaign staff after his aides briefed him regarding
Taiwan and the situation in the Taiwan Straits”. So if the Taipei Times story
is accurate then this wasn’t an impromptu call at all, nor was it done in a fit
of absent mindedness. It is reported that John Bolton, the former US
representative to the UN, visited Trump the Friday before the call for
undisclosed reasons. Bolton is known for his extreme right wing views and his
thoughts on China/Taiwan expressed in a Wall Street Journal op-ed published in
January 2016, call for the eventual establishment of diplomatic relations with
Taiwan. There are also reports that the Trump family is interested in a stake
in the lucrative Taoyuan Aerotropolis project. Although this may have been the
first time that a US President or a President-Elect has spoken to a Taiwanese
leader since the normalization of relations with China since 1979, yet to be
fair, even President-Elect Reagan had invited senior Taiwanese leaders to his
inaugural in 1981. Then as now the Chinese were livid.
There were two choices open before the Chinese leadership on how to
react. The first was to play down the incident as trivial and of no
consequence, or to escalate matters. The Chinese chose the first option.
Foreign Minister Wang Yi dismissed the phone call as the “Taiwanese side engaging
in petty action”, although his Ministry was rattled enough to lodge “stern
representations” with the “relevant US side”. By blaming the Taiwanese
exclusively, the Chinese clearly had no intention to rile the new incoming
President just yet. The well- known Chinese strategist, Shen Dengli [Fudan
University] appeared to absolve the Americans of culpability by saying that the
Chinese can hardly object to a “private” citizen [Trump] talking to the
Taiwanese leader! But the Chinese leadership is clearly flustered by what Trump
has done and watches with increasing trepidation on what he might do after he
assumes the presidency. The main fear is that President Trump maybe no different from candidate Trump.
One of the most prescient and authoritative observations on the thinking
of the Chinese leadership on Trump was recently penned down by Jin Keyu, who
teaches at the London School of Economics and is the only child of Jin Liqun,
the President of the AIIB. Jin Liqun is a former Vice-Minister of Finance in
China, has held a string of important and powerful financial appointments and
is considered to be one of President Xi Jinping’s closest economic advisors.
According to Jin Keyu, the Chinese leadership’s expectations of Trump are as
follows:
[a] The Chinese leadership is
neutral on Trump’s victory. They have noted that Trump posted a video of his
grand-daughter reciting a poem in Mandarin. They do not expect Trump to follow
through on his campaign rhetoric regarding climate change [“hoax cooked up by
China”] or the imposition of 45 percent duty on Chinese goods imported into the
US. Thus the Chinese leadership feels that Trump’s campaign rhetoric on
economic matters bears little relation to reality.
[b] But what is the reality?
According to the Chinese, if 45 per cent imposts are put on Chinese imports
then [1] the non- availability of inexpensive Chinese goods would no longer put
down ward pressure on prices which has been a boon for low income American house-holds,
thus effectively raising their purchasing power [2] prices in US would rise
undermining consumption, impeding economic growth and exacerbating inequality.
[3] low- cost manufacturing would in any case not go back to the US, but would
gravitate to countries such as Vietnam and Bangladesh that have even lower
labor costs than China.
[c] China is one of the largest purchasers of US Treasury Bonds and
continues to finance American consumption and investment. US should not rule
out that the Chinese are capable of financing Trump’s proposed large
infrastructure projects, thus reducing pressure on the US budget. Thus the
anticipation is that there will not be much change in US economic policy.
[d] It is in the Strategic and political area that the Chinese
leadership feels that Trump is far from inconsequential. He is no ordinary
American President. Trump should be taken seriously, though not literally to
borrow a phrase from the ‘Atlantic’s’ Salina Zito. The fact that Trump wishes
to put “America First” means that so far he has shown little interest in the
SCS dispute. China would welcome less US involvement in Asia.
The Chinese have noted that Trump has assured both the South Korean and
Japanese leaders that the US commitment to their security would continue and he
has not raised the campaign rhetoric of asking both South Korea and Japan to
pay “more” for US bases. The Chinese leadership does not want any instability
in North-East Asia.
The Chinese leadership is aware of what Trump has said about Russia and
President Putin. If Trump mends fences with Russia, it would mean that there
would be “subtle” changes in Sino-Russian relations.
Finally, Jin Keyu says that the Chinese leadership is focused on what it
considers really important. That is the absolute need for a co-operative
relationship with the incoming Trump Administration.
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