Is China likely to be in a stronger position at the end of the Trump presidency?

The Trump presidency presents China with unique opportunities and unique challenges. How China responds to these challenges and opportunities will have a huge impact on the shape of the global order and on the Asia-Pacific in particular. This paper will briefly analyse China’s current strategic position and then based on this analysis will attempt to outline likely Chinese strategy in the coming year. It needs to be stressed that the global strategic environment is constantly changing, now more than ever. A change in the environment next week, for example a new policy from the Trump administration, could easily make all the analysis in this paper redundant. This is an inherent risk that lies with any attempt at prediction in the international arena.

China’s strategic environment is currently in flux. American strategy in the Asia-Pacific had been fairly constant from 1945 until the end of the Obama administration. It has, for the most part, been based around maintaining freedom of navigation along maritime trade routes, maintaining a level of regional stability, and preventing any one power from dominating the region and becoming a peer competitor. It was this last goal that prompted the ‘rebalance to Asia’ under Obama that involved American military, economic, and political resources and activities in the Asia-Pacific being heightened. The rebalance had limited success and the Trump administration already appears to be dismantling the political and economic dimensions. This is evidenced by US withdrawal from the TPP, apparent lack of interest in regional institutions, and rhetoric suggesting that the US is no longer willing to support its regional allies and partners to the same extent that it previously would (although these last two assertions regarding institutions and allies and partners may change).

Chinese President Xi Jinping with Filipino President Rodrigo Duterte

The Trump administration’s actions and rhetoric present China with opportunities and challenges. The opportunities stem from the global leadership vacuum as the US withdraws its engagement on many global issues, economic opportunities created by controversial US trade policies, and the damage to US reputation and credibility with its allies and partners. On the other hand, the challenges come in the form of a more confrontational, less predictable US.

Slogans such as “America First” present an image of a US that is no longer willing to be the primary stake holder in every global issue. Whether this is the case or not, the heads of states of countries from all around the world can be forgiven in wondering whether the US will continue to be the global leader they once were. Additionally, the Trump administration’s rhetoric have been decidedly protectionist. As Trump and his officials were making these statements Chinese President Xi Jinping was giving a speech at the World Economic Forum in Davos defending economic globalisation (which you can read here). At the same time as the US appears to be moving away from action on climate change China announced a $360 billion investment into renewable energy over the next four years. From a public relations point of view, these moves are brilliant, and it is natural that as the US begins to appear to be an unreliable global leader, China will begin to look more alluring.

President Xi Jinping with UK Prime Minister Theresa May

This being said, it should not be assumed that China wants to be a global leader in the same way that the US was. As Ankit Panda of ‘The Diplomat’ points out, being a global leader is expensive and thankless. There is no reason China would want to inherit certain problems such as Syria or the Israeli-Palestinian conflict. Historically for controversial issues such as these, China will tend to stay in the background and make broad statements that no reasonable party disagrees with. It is unlikely that China will begin to expend political and economic capital on issues that, for the most part, don’t affect them. As Zhang Jun, the Director General of the Chinese Foreign Ministry’s international economics department said, “If anyone were to say China is playing a leadership role in the world, I would say it’s not China rushing to the front, but rather the front runners have stepped back, leaving the place to China.”

What China will want is to become a regional leader and a global economic leader. Both of these are possible to a certain degree. The US withdrawal from the TPP and statements that indicate potential tariffs aimed at a number of countries, from Mexico to German car manufacturers, there appears to be a void that China can begin to fill. It should however be stressed that, especially for a small economy, US and Chinese markets are not entirely interchangeable. The US has historically been willing to run trade deficits and its local economy has a huge source of consumer demand. China on the other hand runs trade surpluses and there is less consumer demand in local Chinese markets. This means that US trade deals cannot so easily be replaced with Chinese ones. It’s not impossible, but it’s also not easy.

President Xi Jinping with Australian Prime Minister Malcolm Turnbull

The most significant area of opportunity for China is the erosion of US credibility in the Asia-Pacific. The US alliance and strategic partner network had been severely limiting to China. The US had several significant allies and partners, whilst China had no significant allies and very few security partners. However, pulling out of the TPP resulted in a huge loss of US credibility. The US wasn’t the only country in which the TPP was controversial, and the leaders of countries like Japan, Malaysia, and Vietnam put a huge amount of political capital on the line to push forward a controversial deal, with the expectation that closer ties with the US would reap long term economic and strategic benefits. Countries like Malaysia and Vietnam are now wondering whether the US is a serious partner; can they trust the US to follow through on future assurances? Regardless of other concerns they might have about China, at least geography dictates that the Asia-Pacific will always be guaranteed to be China’s top priority.

The above paints a picture of potential opportunity for China, opportunity with caveats, but opportunity nonetheless. The change in international environment does however present some significant challenges for China. These challenges come in the form of more aggressive and unpredictable US policy, namely in the areas of trade, the South China Sea, and the Taiwan issue.

President Xi Jinping with Japanese Prime Minister Shinzo Abe

Whilst it is too early to try and predict what it would look like, it is likely that there will be some kind of US action to crack down on Chinese trade practices. We know this both from Trump’s rhetoric and the people he has chosen to surround him. For example he has chosen Peter Navarro, the author of Death by China (a book largely acknowledged by economics to be on the fringe) as the director of the newly created White House Trade Council. This being said, there certainly are questionable Chinese trade practices. These range from steel dumping (selling huge amounts of steel in other countries at a loss to drive competition out of business and to gain a larger share of the market), to massive government subsidies to firms so that they can buy out competitors in key industries, to currency manipulation (artificially raising and lowering the value of their currency as it suits them). These are not new problems and the Obama administration noted them as well and had policies in place to try and combat these. These policies tended to be nuanced, long-term and industry specific. Trump has proposed a more radical approach that frankly could result in a trade war. A trade war would negatively affect both countries in different ways. The US is Chinas largest trading partner, and China is one of the US’s largest, but is also the largest foreign owner of US debt, owning over $1.3 trillion (around 7%) of US debt. What these mean in practice is complicated, but the bottom line is that both countries can hurt each other economically. In China this is particularly troubling, as regime security largely rests on economic success. A damaging enough trade war not only has the potential to hurt China, but could lead to the undermining of the Chinese Communist Parties power base.

President Xi Jinping with French President François Hollande

The South China Sea and Taiwan are other areas that will prove to be challenging for China. These are difficult to comment on as besides for a string of tough-talk comments from officials, the Trump administration has yet to put out an official policy concerning these areas. What is somewhat clear, is that it is likely that Chinese strategies that were successful in the face of the Obama administration’s policies, may not be successful against a Trump administration. A Trump administration is likely to be more confrontational and less likely to apply nuance to its China policies. As of the moment China cannot afford a war against the US. But on the other hand, they cannot afford to be seen to back down in the face of US threats. This would hurt their credibility on both domestic and international fronts. China must avoid being forced into a position where they need to choose between war and extreme loss of face. This will need to involve delicate manoeuvring, strategic diplomacy, and quickly learning to read the Trump administration’s intentions. It is this last task that will be the most difficult. It is likely that the Trump administration is still developing their policy, and after it is developed there is no promise it will be consistent. The security of China’s national interests will lie in their ability to work out how far the US can be pushed, and what actions are likely to trigger positive or negative US reactions. Another difference is that if China is forced into a limited conflict with the US, the gut reaction of the international community will likely place the blame on foreign policy blunders by Trump. This is a new development as just six months ago the gut reaction would have been to blame ‘an aggressive China.’

President Xi Jinping with German Chancellor Angela Merkel

This strategic environment is likely to result in the following action by China in the next year.

  1. The continued growth of economic influence and attempts to shore up the Chinese economy so as to mitigate any potential trade war with the US. This will involve continued investment into their One Belt One Road policy as they expand their trade influence west into Central Asia and Europe. There may also be attempts to use the vacuum left by the TPP to create an economic framework for the Asia-Pacific that allows China to use their economic influence to achieve strategic objectives.
  2. A global charm offensive that routinely displays China as a responsible, reliable global stakeholder in direct contrast to the US. This will involve China selectively involving itself in issues that were previously beyond its scope. China will take care not to overreach and will constantly emphasize a ‘rules based order,’ negotiation, and ‘win-win scenarios.’ This will have the intended effect of reassuring the world as to their intentions.
  3. China will focus on taking advantage of the loss of US credibility in the Asia-Pacific to create new regional security architecture. This is already beginning as can be seen in the speech of Lui Zhenmin, China’s Vice Foreign Minister, at the Xiangshan forum in which he outlined five organizing principles for China’s vision of a new security framework (can be read here). This new security architecture will seek to supplant the US alliance network as the primary security guarantor for the region.
  4. Finally China will attempt to navigate between provoking the Trump administration into a detrimental war and appearing to give in to an aggressive Trump. One can expect a mix between strong rhetoric on the domestic front, an emphasis on international law, dialogue, and negotiation on the international front, and a steady build-up of Chinese military assets so as to deter hasty US action.

Once again it needs to be stressed that, as with all predictions, these are liable to change as new information comes to the fore. US-China relations is likely to be one of the major potential flashpoints during the Trump administration and whether Trump’s first term ends with China in a much stronger or much weaker position is not up to any on side, but will depend on the competing strategies, and the action-reaction dynamics of both the US and China.

President Xi Jinping with Russian President Vladimir Putin

Why South Korea and Japan are not friends

South Korea and Japan do not get along. This is strange, as on paper, one would expect the two countries to be close friends. They are both Asian liberal democracies with the US as their largest ally. They are in the same geographical region and both trade heavily with the other. Importantly, they are both concerned about potential geopolitical trends such as a rising China and are anxious about an armed and dangerous North Korea. These appear to tick the three boxes, economic interest, strategic interest, and similar enough cultures that tend to lead to close friendships between countries.

The reason there is tension between the two states comes down to their history and the resentment this history has caused. Korea was ruled by the Joseon dynasty for just over 500 years but, being right next to powerful Imperial China, was eventually reduced to somewhat of a client kingdom. A peasant revolution led to the short-lived Korean Empire being declared in 1897 and in 1910 Japan forcibly annexed the region. They would rule this area until their World War Two defeat in 1945.

The height of the Japanese Empire (1942)

Before the Japanese annexed the area Korea was a nation deeply-divided. Peasant revolutionaries and the ruling-class had been at each others throats for a long period of time. However, the thirty-five years of Japanese occupation was brutal. It involved slaughter, the seizure of land, the treatment of Koreans as second class citizens, forced labour, and of course, the infamous ‘comfort women’ (women forced into sexual slavery by the Japanese military). The anti-Japanese sentiment these actions stirred up was the driving force behind the unifying nationalism that forged Korean national identity.

Japanese memory of this time is different, and is twofold. On the one hand, many Japanese remember World War Two as a time where military elites took power and drove the country into a war that caused much suffering. This period ended when Japan became the only ever victim of a nuclear bombing. This narrative involves the Japanese as the victims of that time. Another narrative, used by many Japanese nationalists, claims that the imperial legacy wasn’t all bad for countries like South Korea. They introduced modern economic practices, modernized agriculture, built infrastructure, and introduced rigorous education systems.

The existence of these two narratives have led Japanese decision makers to give apologies that South Koreans have found to be half-hearted at best. For example, Shinzo Abe’s 2015 speech, commemorating the 70th anniversary of the Second World War was met with anger in Seoul. South Korean President Park Geun-Hye made a public statement shortly afterward saying that Abe’s speech fell far below her expectations. More dramatically, in 2005 Japanese action in disputed territory led to protests in South Korea that involved the burning of the Japanese flag as well as self-mutilation.

Anti-Japanese protests in Seoul (2015)

Most notably, many South Koreans feel as though Japan has repeatedly minimized the issue of the comfort woman. They are not entirely wrong in this. Ikuhiko Hata, an influential Japanese historian claimed that there were never more than 10,000-20,000 comfort women (mainstream historians estimate around 200,000). He also claims that none of the women were forcibly recruited, something which is demonstrably false.

The result of these factors: a not so distant memory of brutal Japanese occupation; the roots of national identity in anti-Japanese sentiment; and. the ongoing historical (and territorial) disputes has led to a huge amount of public resentment in South Korea against Japan. To this day, South Korean political leaders exploit negative domestic sentiment toward Japan in order to help their election chances.

More protests in Seoul

Despite these tensions the two countries do work together. Although, they have very different responses to the rise of China and to Chinese assertiveness in the South China Sea, both countries have a strong strategic rationale to coordinate. They are involved in many multilateral ventures together and are both involved in the Six Party Talks (talks between China, Japan, South Korea, North Korea, Russia, and the US aimed at peacefully resolving the North Korean nuclear program). Most recently, in mid-November, the two states signed a preliminary intelligence sharing pact, promising to share sensitive information regarding North Korea’s missile and nuclear activities. This agreement was originally designed in 2012 but was suspended due to public criticism. There are still loud voices in South Korea claiming that a security pact should never be created with Japan, a former colonial ruler.

The tensions between South Korea and Japan comprise an interesting case study. It demonstrates that there is more to the relationships between countries than economic and strategic rationale. Messier ideas such as history and identity play a large role. This is incredibly frustrating for an analyst of international relations. Identity is near impossible to measure, and the use of history is unpredictable at best. An interesting comparison to the Japanese-South Korean relationship might be the relationship between Germany and the countries that were occupied in World War Two. But that would be a job for another article.

 

Who is Rodrigo Duterte and what does he mean for the Philippines

On the 30th of June this year the controversial Rodrigo Duterte will begin his terms as President of the Philippines. But who is this man, why has his election so heavily divided Filipinos and international commentators, and what does his presidency mean for the Philippines?

Duterte has been the Mayor of Davao City (the third largest city in the Philippines) for over 22 years, running on a strong anti-crime platform. During the 2016 Presidential campaign he quickly established himself as the unconventional, anti-establishment candidate, running with a great deal of showmanship and controversy.  He outraged critics and captivated fans with his refusal to stop his swearing, off colour jokes, or threats to kill throughout the election campaign. Notable examples include joking about the rape and murder of an Australian missionary, calling the Pope a “son of a whore,” and threatening to have journalists who are “unfair” to him killed. Typical to his nonconformist style, he skipped his own proclamation after claiming victory in the election, choosing to perform his usual duties as Mayor of Davao instead.

The three main issues he ran on included stamping down on crime, weeding out corruption, and a push toward Federalism.

Regarding crime, he cites his record as Mayor and the success he has had in battling criminal syndicates in the past. Controversially, as Mayor he was linked to 1,000 extra-legal executions of alleged criminals. Rather than apologizing for this he claims that as president he will “turn the 1,000 into 100,000.” At his final campaign rally he built upon this, saying “Forget the laws on human rights. If I make it to the presidential palace, I will do just what I did as mayor. You drug pushers, hold-up men, and do-nothings, you better go out. Because as the mayor, I’d kill you.” This strong man stance, along with his claim that he will end crime in six months has been met with huge support and is a key component of his electoral success.

Another core issue was his promise to challenge the ruling elite. Economically and politically, the Filipino society consists of huge inequalities. According to some economists, 40 families in the Philippines control 76% of GDP. Additionally, in 2014 the Centre for People Empowerment in Governance estimated that dynastic families controlled 80% of congressional seats and another 80% of Governors and Mayors. In the 2016 election this was particularly visual as three out of the five candidates were backed by the powerful Couangco family. Duterte’s popularity and election is seen by many analysts as a symptom of the frustration of many Filipinos who have been disenfranchised by the political establishment.

Duterte also stood out through his promise to push for federalism. The Philippines currently have a unitary government with the vast majority of the power coming from the central government in Manila. However, many advocates of federalism, including Duterte, argue for a division of responsibility and power between the central (federal), state, and local governments. Duterte claims that this division of power will lead to more attention being given to poorer regions of the Philippines which will in turn lead to higher levels of economic growth. Additionally, Duterte argues that giving poorer regions some level of autonomy will help to bring peace in areas such as Mindanao that have experienced armed insurgencies.

Rodrigo-Duterte_3515202b
Photo: Reuters

Many are questioning how his election will impact the troubled Chinese-Philippines relationship. In the past 6 years, relations have been strained over territorial disputes over areas in the South China Sea such as the Spratly Islands and Scarborough Shoal. The tensions have been exacerbated over reports of growing Chinese aggression toward Filipino fishermen. Chinese President Xi Jinping expressed hope that Duterte’s new administration could mean the revival of Sino-Filipino relations. In response, Duterte expressed a willingness to improve bilateral relations, and to work closely with China on joint development projects, but clarified that this would in no way constitute the Philippines backing down on its claims in the South China Sea. Speaking directly to China, he said, “I told you that is ours, you have no right to be there.”

It is questionable whether once in office, Duterte’s hard-line will soften and whether if it doesn’t he will have the ability to work with congress to approve his ambitious policies. His potential success will very much depend on his ability to work with his more mainstream Vice-President, Leni Robredo. Filipino elections involve voting for Presidents and Vice-Presidents separately, and this time, the pair come from different tickets. Some, like Filipino political scientist Julio Teehankee, have great hope for the pair, saying that under them the Philippines will see a “disciplinarian father and nurturing mother” who make a potent mix.

Whatever the case, the way in which the first few months of a Duterte presidency unfold will have huge ramifications on the Philippines, and indeed on the Asia-Pacific as a whole.