Source: Global Times Published: 2018-4-11
Editor`s Note: As tensions over Sino-US trade ties become increasingly sharp, a tit-for-tat trade war between the world`s two largest economies is taking shape. The China-US relationship seemed promising during US President Donald Trump`s first year in office. Yet contradictions between the two suddenly escalated with the publication of Washington`s latest National Security Strategy and National Defense Strategy. What provoked the sharp turn? Where are the current trade conflict and Sino-US relations headed? Global Times (GT) reporters Li Aixin, Luan Xuan and Yu Tianjiao interviewed Jin Canrong (Jin), associate dean of the School of International Studies at Renmin University of China, about these issues.
GT: What caused the sharp turn in US China policy this past year?
Jin: Staff changes among US policymakers is one reason. Previously Trump did not trust the establishment. During his first year in the Oval Office, he only trusted two groups of people - family members, such as his son-in-law Jared Kushner, and those who played a key role in helping him win the presidential election, including Steve Bannon, Trump`s former chief strategist. But the internal power struggle between two groups has led to heavy losses. Bannon was expelled from the White House and Kushner was marginalized. Meanwhile, traditional elites, who are mostly vigilant toward China, availed themselves of the opportunity to gain power. Therefore, a group of politicians hostile to Beijing with a Cold War mind-set are formulating US policy toward China.
The second reason is that Washington is feeling nervous about China, especially after the 19th National Congress of the Communist Party of China. Chinese people are moved by positive energies from President Xi Jinping`s speech at the 19th National Congress, but all the US sees are challenges.
GT: Some analysts say there is little rational sense left in US strategic circles over its policy toward China. What do you think of this view?
Jin: The US will argue it is very rational. Kurt M. Campbell, former US assistant secretary of state for East Asia as well as Hillary Clinton`s confidant, published an article with Ely Ratner, former Joe Biden advisor, entitled "The China Reckoning" in Foreign Affairs. It basically said that Beijing tricked Washington into making the latter think that China was weak and wanted to keep a low profile. They believed that China was so powerful and was attempting to replace the US as the world`s No.1. Washington hence had to pile pressure on Beijing while the US still had some advantages.
From our perspective, the US is aggressive. But Campbell deems that the US should have been so long ago. Now Washington is anxious and is moving fast. So it seems to us that those US moves are disorganized and irrational.
GT: Does Campbell`s article represent the mainstream viewpoint in US strategic circles?
Jin: Yes it does. Ties between the Democratic and Republican parties have often been tense, and sometimes even antagonistic. They frequently threaten a government shutdown, yet when it comes to their China policy, they share a consensus. Those generals in the White House now are so biased toward China. Apart from analyzing the moves of Trump and his aides, it should be noticed that the entire US establishment is taking a tough stance on China. Campbell`s article shows the common ground shared by the two parties. It indicates that a hard-line policy toward China has a solid political basis in the US.
GT: Where do you think the China-US trade conflict is headed?
Jin: The Office of the US Trade Representative (USTR) once estimated that as China and the US are intertwined in their interests, Washington finds it difficult to find replacements for certain products it imports from China. Washington finds it difficult to hurt only Beijing while at the same time protecting US interests. I`ve heard that it took a lot of effort for the USTR to present a tariff proposal that could end up hitting $30 billion worth of Chinese imports. If it raises the figure to $50 billion, US interests will be hurt. Trump`s request to identify tariffs on $100 billion more Chinese imports will therefore be fairly hard to realize.
But once Washington`s plan to increase tariffs on $50 billion worth of Chinese goods is reached and China`s plans to increase taxes on $50 billion of US products are also implemented, that will total $100 billion. Then the conflict between the two can be viewed as a trade war.
However, a large number of the poor in the US rely on Chinese goods for their low prices and fine quality. The US can of course find alternatives in Mexico and India, but those products are definitely faulty, expensive and can hardly be delivered on time. As Chinese goods survived the fiercely competitive global market, they have gained a stronger foothold in the US market.
The US is vigilant toward Made in China 2025, an initiative to comprehensively upgrade Chinese industry to world-class level, especially in 10 high-tech sectors including medical equipment, machine tools, microchips and aerospace. The US is so frightened by this. Washington believes the most crucial boxing ring for future Sino-US competition is in the field of high technology.
Therefore the Trump administration asked the Chinese government not to support the high-tech sector and to let Chinese enterprises develop high-end technologies on their own. We want to upgrade the industrial structure toward the high end of the industrial chain. This is a common wish of 1.4 billion Chinese people. How can the US demand we do low-end work forever? We have the right to promote our industry. China will certainly not step back under sanctions. You impose sanctions? We fight you harder.
Unlike previous trade disputes between China and the US, this time Washington has adopted a new tactic: forging a united front to contain China. Last month Trump signed an order that enacts tariffs on steel and aluminum imports to the US. People are puzzled, because the volume of Chinese steel and aluminum products exported to the US is smaller than that of Mexico, Canada, the EU and Japan. Later he started granting exemptions. For example, the EU and six other countries, including South Korea, will be exempt from the tariffs. Trump is piling pressure on those nations to force them to take his side. Siding with the US to sanction China is the prerequisite for those countries to secure exemptions. This is Washington`s bluff.
In a sense, the united front has already been formed. China should be cautious toward the new trend.
Twists and turns lie ahead of China-US ties because Beijing is catching up with Washington. The already fatigued US is feeling nervous as China approaches fast on its heels. Therefore Washington will be hot-tempered and the future Sino-US relationship will face more bumps on the road.
China should not always make overtures, but fight back when necessary. China`s US policies may increasingly involve a fight-back. The Anglo-Saxons are pragmatic in nature. Only when they suffer losses can they learn a lesson.
Jin Canrong is associate dean of the School of International Studies at Renmin University of China.