Platt Perspective on Business and Technology

China and its transition imperatives 40: rethinking China’s emerging trends and challenges in the emerging era of a United States Trump presidency 2

Posted in macroeconomics by Timothy Platt on January 7, 2017

This is my 47th installment, counting supplemental additions, to this ongoing and even open-ended series on China. Basically, what I am doing here is to trace how China has changed under the rule of Xi Jinping, with this series narrative starting approximately one year after he first took leadership of their Politburo Standing Committee, and through that of their entire Communist Party of China and of China as a whole (see Part 1, as written to first go live on this blog on February 8, 2014.)

I took what amounts to a digression in this narrative in Part 39 of this series, when I tossed the wild card of Donald Trump’s US presidential election into it (with that posting going live on December 6, 2016, still soon after that election.) And I did so for a simple reason; Donald Trump and even just the prospect of his election to high office in a country like the United States, creates destabilizing uncertainties and with a global reach. And this destabilizing uncertainty definitely impacts upon the relationship between the United States and China and upon China itself.

On the one hand, Trump (like his Democratic Party rival in the November, 2016 elections, Hillary Clinton) has spoken out against the Trans-Pacific Partnership (TPP) and other free trade agreements. And the prospect of blocking and killing off that initiative in particular can only be seen as a positive for the Beijing government, as China’s neighbors within and flanking the East and South China Seas have sought protection through that alliance in the face of China’s claims of hegemony over their entire region. Prospect of the United States abandoning and even roundly repudiating the TPP, can only serve to strengthen Xi Jinping’s hand in claiming control over its neighbors in any disputes as to who owns what resources in that area, including off-shore oil and mineral deposits, fishing rights, control of sea lanes and more – and with that “more” including direct sovereign territorial ownership of a significant number of well positioned islands and atolls in the region, including atolls that China is converting into islands, and island bases for projecting their military might. Basically, China claims sovereign rights over essentially everything there, not directly positioned within the populated land areas of other nations – and they even dispute some of the boundaries there too (e.g. with Vietnam.) See my series: Vietnam, Doi Moi and the Search for Business and Economic Strength and Global Relevance, as can be found at United Nations Global Alliance for ICT and Development (UN-GAID), postings 34 and following for a brief discussion of that conflict.

Trump’s promised policy there, helps Xi Jinping and China. But at the same time, Trump has been actively threatening the imposition of new tariffs and even active trade war against China, making accusations of that nation dumping below-cost goods and commodities on US markets, at the expense of United States businesses and industries. Trump has threatened trade war as retaliation for China carrying out what he calls predatory trade practices that have cost American workers their jobs as the businesses that they have worked for have suffered and even failed as a result. And president-elect (as of this writing) Trump continues to speak out against China in this vein since his election, and on more than just this one issue of dumping. And to drive home that point, he has selected senior level appointees, and in US Cabinet and other key positions, who have actively pursued anti-China positions and even for many years leading up to now.

For a current, post-election reference re Donald Trump’s Twitter posting attacks on China – where that is his favorite forum for reaching out to the public, I cite this news story, originally posted about on China’s Xinhua news service about China’s negative government response to Trump’s tweeting. China’s Great Firewall actively blocks Twitter, and as fully as it can within their country. But the fact that Donald Trump keeps attacking them through this forum and on a seemingly open ended range of issues drives them to distraction – as does the fact that a significant number of their citizens find ways through the firewall to access Twitter anyway.

So I have offered up to here in this posting, what China’s leadership would most likely see as a positive coming out of the post-2016 US presidential election, and a real negative too. On the whole though, Xi and his fellow Politburo Standing Committee members must see all of this as mostly representing negatives for them, as even as Trump has opened a door to them for claiming greater control over the South and East China Seas (on the putatively positive side), he has actively courted Taiwan and offered their government a type of direct recognition that breaks with decades of US policy and from both Democratic and Republican presidential administrations (see Part 39 on that, with more details still coming out for that news story.)

• The key theme running through all of this is uncertainty, and for both of the basic narratives (positive and negative) that I have just touched upon here, and for more as well.
• And when China has a weakened economy and sees overwhelming need to prop it up and cover that fact up to prevent social unrest, uncertainty in and of itself becomes a dire threat – and even when it includes in it what might be considered at least some strategically significant positives.

As an aside, that I offer here because I do have reason to think that at least someone from China’s government at least occasionally reviews my postings here, I offer a brief explanatory note and in much the same vein that I pursued when offering my brief “open letters” at the end of Part 39. Why is it that Donald Trump is excoriating China while praising Vladimir Putin of Russia? I am not even sure that Trump himself can fully explain his decisions and actions there – or what order he conducts them in, and certainly not on complex issues like his dealings with those countries. But I would suggest that one driving force behind all of that is his current, in the moment conception of what would be best for him, personally. He praises Putin for a lot of reasons, and has since early in his campaigning for elective office. But revelations of Russian hacking, attempting to skew or even throw the 2016 presidential election in his favor – he sees that as a direct and dire threat to himself and to his credible claim of having been legitimately elected. So the fact that the US FBI and CIA and other agencies in the US intelligence community have claimed that this happened, force him to actively speak out against the United States and its government agencies and in support of Russia. And now he is actively aligning himself with Julian Assange: the founder of WikiLeaks and an avowed enemy of the US government, to challenge claims against Russian involvement in hacking attacks that were made against the Democratic Party and his political opponent in the 2016 elections (see Trump and Julian Assange, an Unlikely Pair, Unite to Sow Hacking Doubts. And what of his attacks against China? Trump ran on a platform of supporting and championing the left-out in the United States: people who have seen their jobs go away and their vision of what should be their futures and the futures of their families. And at the same time, he has had most of the Trump branded goods that he has profited from, made in other countries and with a lot of that business going to China and their lower production cost manufacturers. So in the same way that he sees personal reason to praise Putin and Russia, he sees personal reason to back away from his up-to-now positive, active relationship with China, and reason to now attack Xi and his country. But even with this offered as a possible approach to lessoning uncertainty and doubt, at least for the events noted here, those risk creating issues still hold significant sway – or at least they should for China. Trump, after all, does make it up as he goes along and on way too many of what should be core principle issues.

So I end this note with the same uncertainties that I began it with – that China and every other nation will have to deal with, the United States included. And we do not have to wait for Donald Trump to be formally sworn into office as the president of the United States for that.

I have been accumulating a relatively large number of puzzle pieces that I still intend to add to what has been my ongoing narrative in this series. And after this now-two part digression from that, I plan on turning back to China itself and to Xi Jinping himself in my next installment to this series. Think of part 39 and now this posting, as background for putting those pieces to come, into clearer perspective in a rapidly changing world. Meanwhile, you can find this entire series and all of its postings at Macroeconomics and Business as postings 154 and loosely following for Parts 1-12 and for a supplemental posting: Part 12.5. And see Page 2 to that directory for subsequent main sequence and supplemental installments to this. You can also find other, China-related postings and series at those directory pages, and at Ubiquitous Computing and Communications – everywhere all the time too. (Note: I wrote this as a single quick draft on January5, 2017.)

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