China-us ties sink­ing amid ac­ri­mony over trade, pol­i­tics

The Myanmar Times - Weekend - - International Business -

“BOTH ig­no­rant and ma­li­cious” was how the of­fi­cial China Daily news­pa­per re­cently de­scribed com­ments by U.S. Sec­re­tary of State Mike Pom­peo, of­fer­ing a sting­ing in­sight into the cur­rent bit­ter tone of dis­course be­tween the coun­tries.

The White House’s move to ex­pand Wash­ing­ton’s dis­pute with Beijing be­yond trade and tech­nol­ogy and into ac­cu­sa­tions of po­lit­i­cal med­dling has sunk re­la­tions be­tween the world’s two largest economies to the low­est level since the Cold War.

A ma­jor speech by U.S. Vice Pres­i­dent Mike Pence on Oct. 4 was the clear­est, high­est-level sign that U.S. strategy was turn­ing from en­gage­ment to con­fronta­tion. Pence ac­cused China of in­ter­fer­ing in the midterm elec­tions to un­der­mine Pres­i­dent Don­ald Trump’s tough trade poli­cies against Beijing, warned other coun­tries to be wary of Beijing’s “debt diplo­macy” and de­nounced China’s ac­tions in the South China Sea.

“What the Rus­sians are do­ing pales in com­par­i­son to what China is do­ing across this coun­try,” Pence told an au­di­ence at the Hud­son In­sti­tute think tank in Wash­ing­ton.

Both sides are trad­ing in­creas­ingly sharp ac­cu­sa­tions over hu­man rights and global hege­mony, ex­pos­ing an ide­o­log­i­cal di­vide that pits the two on a path of con­fronta­tion with no clear resolution in sight.

While a mil­i­tary clash has not been ruled out, Amer­i­can-based an­a­lysts en­vi­sion a con­tin­u­ing push-and-pull for dom­i­nance be­tween Trump and his Chi­nese coun­ter­part, Xi Jin­ping, China’s most dom­i­nant — and re­pres­sive — leader since Mao Ze­dong. Xi’s ag­gres­sive for­eign pol­icy and au­thor­i­tar­ian ways have al­tered views of China across the board.

“What has hap­pened is a sea change in U.S. per­cep­tions of China,” said June Teufel Dreyer, an ex­pert on Chi­nese pol­i­tics who teaches po­lit­i­cal sci­ence at the Univer­sity of Mi­ami. While Chi­nese of­fi­cials pri­vately say they’re con­cerned about the sharp de­te­ri­o­ra­tion in ties, es­pe­cially given the mas­sive links be­tween the two in trade, im­mi­gra­tion and ed­u­ca­tion, it ap­pears Beijing is more than will­ing to go toe-to-toe un­der the new cir­cum­stances.

In­creas­ingly, the per­cep­tion that as China grew more pros­per­ous it would fall in line with global val­ues and in­ter­na­tional law has been ex­ploded. Into that breach has come hard­en­ing U.S. rhetoric to­ward Beijing and ac­tions to counter, deter or defy China’s moves in the in­ter­na­tional sec­tor, par­tic­u­larly its “Belt and Road” trade and in­fra­struc­ture ini­tia­tive that seeks to ex­pand Beijing’s eco­nomic and po­lit­i­cal foot­print from Cambodia to Cairo.

Trump’s first na­tional se­cu­rity strategy, re­leased last year, also la­beled China a “re­vi­sion­ist power” along­side Rus­sia.

Beijing’s out­rage at Pom­peo, mean­while, was prompted by his re­cent warn­ings to Latin Amer­i­can coun­tries about the dan­gers of ac­cept­ing Chi­nese in­fra­struc­ture loans that are a key as­pect of Xi’s sig­na­ture for­eign pol­icy project.

“U.s.-china re­la­tions have de­te­ri­o­rated to their worst point” since the 1989 Tianan­men Square pro-democ­racy protests in Beijing that were crushed by the Chi­nese mil­i­tary, said Michael Kovrig, se­nior ad­viser for North­east Asia at the In­ter­na­tional Cri­sis Group.

“It may not be a clash of civ­i­liza­tions, but it is a long-fes­ter­ing con­flict of na­tional, po­lit­i­cal and eco­nomic in­ter­est and sys­tems that has reached a point of rup­ture,” Kovrig said.

Xi has aban­doned the strategy laid out by re­formist leader Deng Xiaop­ing that China should bide its time and re­frain from ad­ver­tis­ing its am­bi­tions to be­come a world power. In­stead, he has been ac­cused of over­reach by pro­mot­ing China’s drive to be­come a global tech­nol­ogy leader by 2025, in­clud­ing by com­pelling for­eign com­pa­nies to hand over their know-how, and push­ing Chi­nese-fi­nanced en­ergy and trans­porta­tion projects that leave tar­get coun­tries with un­sus­tain­able debt.

On the mil­i­tary front, a Chi­nese de­stroyer last month ma­neu­vered per­ilously close to the USS De­catur in the South China Sea. The Chi­nese also de­nied a re­quest for a U.S. Navy ship to visit Hong Kong and re­jects U.S. con­cerns over its poli­cies to­ward other coun­tries.

“The U.S. sim­ply aims to drive a wedge be­tween China and rel­e­vant coun­tries with those re­marks,” For­eign Min­istry spokes­woman Hua Chun­y­ing said Mon­day. “It is mean­ing­less and fu­tile.” The tart rhetoric is ev­i­dent on both sides. Nikki Ha­ley, the U.S. am­bas­sador to the United Na­tions, said in a speech last week that China’s gov­ern­ment “is en­gaged in the per­se­cu­tion of re­li­gious and eth­nic mi­nori­ties that is straight out of Ge­orge Or­well,” ref­er­enc­ing the in­tern­ment of Mus­lims in the coun­try’s north­west in po­lit­i­cal reed­u­ca­tion camps.

This month, the United States went fur­ther by threat­en­ing to pull out of the Universal Postal Union be­cause it says the treaty al­lows China to ship pack­ages to the U.S. at dis­counted rates at the ex­pense of Amer­i­can busi­nesses.

Un­der­ly­ing the es­trange­ment is the sense that Beijing lacks rec­i­proc­ity, tak­ing ad­van­tage of open mar­kets and free so­ci­eties to ex­tend its in­ter­ests, while deny­ing the same ben­e­fits to com­pa­nies, gov­ern­ments and in­di­vid­u­als over which it has in­flu­ence.

“My bot­tom line view is that Xi Jin­ping very much over­played his hand tak­ing ad­van­tage of the re­strained and mod­er­ate (for­mer Pres­i­dent Barack) Obama,” said Robert Sut­ter, a China ex­pert at Ge­orge Wash­ing­ton Univer­sity. “Now he has an enor­mous Amer­i­can series of chal­lenges to deal with, with no easy so­lu­tions.”

While Chi­nese com­pa­nies — of­ten backed by easy credit from state banks — have been snap­ping up for­eign as­sets, Beijing re­stricts such for­eign pur­chases in key sec­tors such as en­ergy, trans­port and telecom­mu­ni­ca­tions. Al­though China has loos­ened some joint-ven­ture de­mands, in­clud­ing in the auto in­dus­try, that may be too lit­tle too late.

China is “not very will­ing to con­strain it­self un­der rules that it feels were forced upon it,” said Dean Cheng, se­nior re­search fel­low at the Her­itage Foun­da­tion in Wash­ing­ton. “This in­cludes the in­ter­na­tional trad­ing sys­tem, which is dom­i­nated by the U.S.”

Still, at­tempts to con­tain China along the lines laid out dur­ing the Cold War would be “dif­fi­cult, if not im­pos­si­ble,” given the broad range of con­tacts across po­lit­i­cal, eco­nomic and per­sonal spheres, Cheng said.

The U.S. has also re­in­forced ties with Tai­wan — claimed by China as its own ter­ri­tory — build­ing an im­pres­sive new de facto em­bassy there, ap­prov­ing a ma­jor sale of mil­i­tary parts and ser­vices, and au­tho­riz­ing com­pa­nies to help the self-gov­ern­ing is­land democ­racy build sub­marines to de­fend it­self from China’s threats to use force to bring it un­der Beijing’s con­trol.

The ten­sions are un­der­scored by po­lit­i­cal un­cer­tain­ties in both coun­tries. Trump faces a ref­er­en­dum of sorts on his poli­cies in next month’s midterm elec­tions, while Xi has come un­der rare crit­i­cism at home since he forced through a con­sti­tu­tional amend­ment in March to al­low him to lead in­def­i­nitely.

Xi is also be­set by a slow­ing econ­omy, made worse by U.S. tar­iffs that threaten the jobs of mil­lions of Chi­nese work­ers. While China has re­tal­i­ated with its own tar­iffs on U.S. goods, the loss of Amer­i­can mar­kets will likely be a ma­jor drag on growth.

All such fac­tors ap­pear to speak poorly for any im­me­di­ate resolution to the fric­tions.

Michael Mazza, a for­eign pol­icy ex­pert at the con­ser­va­tive Amer­i­can En­ter­prise In­sti­tute think tank in Wash­ing­ton, said “com­pe­ti­tion will re­main the norm” be­tween the two coun­tries unless China is will­ing to make sig­nif­i­cant changes in its do­mes­tic, eco­nomic and for­eign poli­cies.

“At this point, there is lit­tle rea­son to sus­pect that such a shift is in the off­ing,” Mazza said. – AP

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