Platt Perspective on Business and Technology

China and its transition imperatives 41: rethinking China’s emerging trends and challenges in the emerging era of a United States Trump presidency 3

Posted in macroeconomics by Timothy Platt on January 19, 2017

This is my 48th 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 January 16, 2014.)

I said at the end of Part 40 that I would turn back to discussing China and Xi Jinping himself, in my next installment to this series. And I added in that context, “think of Part 39 and now this posting (e.g. Part 40), as background for putting those pieces to come, into clearer perspective in a rapidly changing world.” And I will change course in what I write of here in this series as promised in that statement, with an upcoming Part 42 installment that is currently scheduled to go live to this blog on February 8, 2017. But I have decided to add one more installment to this subseries on how a soon to be sitting president of the United States: Donald Trump, and his decisions and actions impact upon China, first. So I write this installment on January 16, 2017, to go live on this blog on the 19th: the day before Trump is to be sworn into office in his presidential inauguration.

As a point of unintended irony, I find myself actually writing this posting on the third anniversary of Part 1 to this series going live here – how much has happened and changed since then, and in the United States and China and everywhere else as well. I offer this posting at least in part as an acknowledgment of that flow of change, as I seek to note and discuss our context and situation of today: so different and unexpected from the circumstances then in place those three years ago.

I begin this posting with a pivotally important puzzle piece, for understanding what Donald Trump’s true interests and priorities might include – besides advancing his own more narcissistic self-interest. He has proclaimed a great many inflammatory and divisive beliefs and intentions, and very publically since he first began running for the presidential nomination of the Republican Party, for the 2016 elections. And to cite just a few of them, this has included an insistence that the United States has to both build a wall along their border with Mexico, and force that nation to pay for it – while expelling millions of people of Mexican extraction if not current Mexican nationality out of the country. And he has proclaimed a complete religious litmus test-based ban on any Muslims entering the United States, and with harsh measures to be taken against those already in the country. He has professed open ended esteem of Vladimir Putin and his government and has loudly and repeatedly attacked the US FBI, CIA and NSA for even raising the possibility that Russia, at Putin’s behest might have sought to influence the US presidential election in 2016 to increase the chances that Trump would be elected, while harming Clinton’s effectiveness if she was. He has called global warming a hoax – and more particularly a Chinese hoax. And this list, however unsettling only touches upon a few of the high(?) points of what could easily be offered as a much fuller list.

And Trump has selected cabinet officers and other high level appointees who he would like to see confirmed for office by the US Congress, who have inflammatory and fringe-extreme records for partisanship that would at the very least mesh with his more general, arm waving campaign pronouncements, whether delivered vocally or via Twitter. And then a perhaps curious thing happened. A significant number of those proposed appointees, have backed away from Trump and his more inflammatory positions, and certainly in areas where they would hold managerial and oversight responsibility – and many have explicitly taken positions on those issues that are directly, diametrically opposed to those that Trump has taken in his rhetoric as they seek to become more mainstream appointable. I cite, as a recent, January 12, 2017 news story reference on that:

Latest to Disagree With Donald Trump: His Cabinet Nominees

But the one key area of rhetoric, and of proposed policy and action that all of these people seem to agree upon is China, and how best to act towards that nation and its interests. Vice president elect Pence has also at least backed away from some of Trump’s more inflammatory statements and positions, but he is also in lock step with Trump and his appointee choices on China too.

What does this mean? Soon to be United States President Trump has called for what can only be considered an open trade war with China, with the imposition of stiff, barrier-like tariffs on the importation of goods from that nation. He has challenged China for their territorial claims and has directly offered recognition to Taiwan as a part of that, effectively ending the so called One-China policy that both Democratic and Republican presidents have adhered to up until now. That policy, at least tacitly acknowledging as a matter of principle that Taiwan is still a part of China, has been a point of pride and one deeply held by the Beijing government and for as long as there has been a Chinese Communist government there. And to cite just one more area of disagreement and of conflict here, Trump and several of his more senior appointees have taken positions and proposed actions that would limit how China’s wealthiest and most politically powerful can move their personal wealth off-shore through purchase of foreign based capital assets.

• All of these proposed actions and more that have been at least noted as being likely, would directly challenge China, its wealthiest and most politically powerful, or both. And given the uniformity in how this anti-China refrain has been offered, and without any real dissent from it, it is likely that this is one area where Donald Trump will in fact do, and insist on doing what he has said he would.

In fact the one and only other policy area where there is little if any disagreement regarding change coming from Trump and his team, going into his presidency, is that of repealing the US Patient Protection and Affordable Care Act (ACA) – often referred to as Obama Care. And even there, every time the issue of defunding or repealing the ACA comes up, that is always met with the question of what it will be replaced with and when – how quickly. And that question is always couched in terms of how many millions will lose health insurance coverage, and coverage for preexisting conditions even if they can keep coverage at all, if the ACA is ended without a benefits matching replacement. So bottom line, the one policy area where Trump and his administration are really likely to do what they have said they would in the campaigning – and without any caveats or how-to challenges to that, is China.

This is what Xi Jinping and the Beijing government face starting on the morning of January 21, 2017, Eastern time – President Trump’s first full day in office. And that summarizes the current – as of just before Trump’s inauguration, hopes and fears for what he will actually do or at least actively seek to do once in office – with China mostly holding reason to see fear and uncertainty in that and particularly given the current state of their economy and the current state of the many other challenges they face and just from within. And I will turn back to considering those issues, among others in my next installment to this series.

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.

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