U.S.–China Week: Trump takes power, Chinese reaction cautious, U.S. policy in question, cyber-incident hotline in use (2017.01.23)

Welcome to Issue 84 of U.S.–China Week. Donald Trump is president of the United States. In his first major policy action that bears directly on U.S.–Asia relations, Trump withdrew the United States from the Trans-Pacific Partnership, widely regarded as the economic crux of the Obama administration’s rebalance to the Asia-Pacific.

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TAKING OVER
Chinese official reaction cautious but sometimes firm as Trump takes office

Chinese Foreign Ministry (MFA) spokesperson Hua Chunying was careful not to speculate about Trump administration policy toward China. Asked about the “America first” message of the inaugural address, she advocated “build[ing] a community of shared future for mankind” and emphasized mutual benefit in trade. She had “no details of offer” on a high-level meetings to come but said President Xi Jinping sent Trump a message of congratulations. (U.S. and Japanese officials were reportedly negotiating a possible meeting between Prime Minister Abe Shinzo and Trump for February.) Hua repeated the concepts of respect for “each other’s core interests and major concerns,” plus “non-conflict, non-confrontation, mutual respect, and win-win cooperation,” but MFA statements have not recently mentioned the “new model” despite Xi’s mentions in Geneva and meeting Vice President Joe Biden in Davos. Departing from generalities, Hua repeated that “the one-China principle is the political foundation of China-US relations.” Hua separately accused Taiwanese officials of aiming “to disrupt and undermine China–U.S. relations” by attending the inauguration. A People’s Daily commentary also reportedly pledged continued military drills, referring to Rex Tillerson’s remarks during confirmation hearings to become Secretary of State reported last week.

In a front-page People’s Daily Overseas Edition article, Ruan Zongze of the MFA think tank CIIS wrote that “China-U.S. win-win cooperation can help make America great again” alongside China’s “great rejuvenation,” and that the two countries should avoid mutual harm. Da Wei of CICIR in The Paper urged a calm strategic stance for China during this time of uncertainty, when “it’s not just Chinese experts who are uncertain, but U.S. experts also say they don’t know.” Da also suggested “if the new U.S. leader faces a ‘learning curve,’ China has the ability to make that curve shorter.”

In more popular-focused state media reaction, a Global Times editorial framed Trump’s remarks in class terms but discounted speculation online in China that Trump would launch a U.S. “Cultural Revolution,” saying “the U.S. system substantially limits presidential power.” The editorial also noted Trump “did not speak of ‘universal values’ or geopolitics,” but it argued this doesn’t mean his team will not pressure China. China Digital Times and the Financial Times reported on Chinese government censorship notices limiting Trump coverage. On another end of the Chinese opinion spectrum comes Wang Lixiong, who writes in the Washington Post on diverse views from “pro-democracy liberals” and proposes those advocating democracy in China need to “build a system that can avoid a Chinese version of the Trump phenomenon.”

ANALYSIS: This week Jason Li and I revamped our written and visual guide to “authoritativeness” in Chinese media statements of Chinese government perspectives for SupChina. With that rubric, originally drawn from Alice Miller and Michael Swaine, in mind, it is clear we have very little material in authoritative Chinese comment on Trump’s first hours in the presidency. With the exception of a firm “one China” stance, official China is waiting for clearer signals before reacting. I suspect it’s not just diplomats who hope Trump sees China as a partner in achieving goals, rather than as a rival to be provoked or blamed. At the same time, I would not confuse hope with optimism, nor wait-and-see judiciousness with a lack of preparation for what Da Wei delicately calls a possible “headwind” in bilateral ties.

WASHINGTON’S CHINA
Trump team’s uncertain China agenda, and China’s place on Trump critics’ agenda

On national security issues especially, the Trump administration arrives amidst continuing trends. Nuclear proliferation and the Korean Peninsula are active issues: Senator John McCain criticized China for penalizing South Korea over missile defense plans; U.S., South Korean, and Japanese forces staged military exercises; and South Korean sources said North Korea had prepared ballistic missiles for launch. The South China Sea is in flux, and the AP has a good round-up. And U.S. Pacific Command leader Adm. Harry Harris said U.S. and Indian navies are sharing information on Chinese movements in the Indian Ocean. The Trump team had sent a number of mixed signals on China policy before and after the inauguration. Alastair Iain Johnston has analyzed “three contradictions” in the signals so far and is well worth reading.

How the Trump administration will handle these trends is largely unknown. In a confirmation hearing to become ambassador to the United Nations, South Carolina Gov. Nikki Haley suggested China was gradually putting more pressure on North Korea but that it would need more convincing. If Tillerson’s South China Sea remarks truly presage a major initiative to use force against Chinese activities, China could very well use force in return. See the next item for discussion of some of the trade issues.

“China” is also a potential focus of a lawsuit effort by a group of legal scholars who see Trump’s business dealings involving foreign governments as a potential constitutional violation.

ANALYSIS: As Johnston’s piece notes, there is not yet a coherent Trump China or Asia policy to debate. Disoriented public commentary by U.S. foreign policy experts has generally been reduced to spinning out the (usually negative, most say) consequences of various proposals floated in the campaign or transition. The fulfillment of a promise to back out of TPP was no surprise, but has come with still more warnings of what demons may come. Strikingly, it seems to me that most of the affirmative suggestions out there (as opposed to negative warnings) come from those calling for increased countermeasures to perceived Chinese threats. On their way to an affirmative, mainstream proposal are former Deputy Secretary of State Jim Steinberg and Brookings scholar Michael O’Hanlon, who argue the “U.S.–China security relations[hip] is a glass half full” and have a forthcoming book to that effect. Even so, their short preview piece concludes, “Leaders on both sides need to avoid premature rushes to judgment about the other’s hostile intentions that could become self-fulfilling prophesies.”

TRADE + ECONOMICS
Commerce nominee Ross says China ‘most protectionist’ major economy

Trump’s nominee for secretary of commerce said in a confirmation hearing, “China is the most protectionist country, of very large countries. They have both very high tariff barriers and very high non-tariff barriers to commerce. So they talk much more about free trade than they actually practice.” MFA’s Hua responded citing Xi’s speech at Davos on global markets. (White House strategist Steve Bannon told a reporter to compare Trump’s inaugural with Xi’s Davos speech, and it’s pretty stark on who favors free trade.) FT reported that U.S. “companies investing in China are to lobby the incoming Trump administration to cool its rhetoric as they brace for painful repercussions if the president-elect follows through on his trade threats.” Citing the same sources, Bloomberg BNA emphasized U.S. companies’ hopes for a tough trade approach. AmCham’s Business Climate Survey is here. / Meanwhile WSJ reports Las Vegas Sands agreed “to pay a $6.96 million criminal penalty to settle a U.S. Justice Department investigation into violations of the antibribery law over payments the company made to a business consultant in China.”

TECHNOLOGY + CYBERSPACE
Unofficial bilateral cybersecurity dialogue continues; Rising U.S. concern over semiconductor industry

CFR’s Adam Segal and Harvard’s Michael Sulmeyer and Amy Chang each published thoughts emerging from the most recent CSIS-CICIR “track 1.5” dialogue on cybersecurity issues. Segal writes that the official bilateral hotline between the two governments was said to have “been used to handle over 2000 incidents, mainly covering botnets, counterfeit sites, and website vulnerabilities. The Chinese are clearly worried about China policy under President Trump.” Both Segal and the Harvard duo mention skepticism among Chinese participants that attribution in cyberspace is feasible. Sulmeyer and Chang report that, nonetheless, Chinese participants expressed an eagerness to access U.S. attribution capabilities. / FT reports that Trump and Obama administration figures both were concerned about Chinese investment and leverage in the semiconductor industry. WSJ reported that Chinese state-owned semiconductor firm Tsinghua Unigroup said it plans to build a $30 billion facility “as China moves to diminish its dependence on U.S. chip manufacturers.”

US-CHINA WEEK 1967
‘Chinese Assure U.S. on Warsaw Meeting’

“WASHINGTON, Jan. 20[, 1967] — Communist China has assured the United States that its ambassador will attend the schedule meeting between American and Chinese ambassadors in Warsaw Wednesday, officials said today. The periodic meetings between United States Ambassador John A. Gronouski and Ambassador Wang Kuo-chuan of China are the only direct diplomatic channels between Peking and Washington. When the Chinese asked for a two-week postponement of the meeting originally scheduled for Jan. 11, it raise speculation here that the political upheaval in China might disrupt the Warsaw contacts. The Chinese said the delay was necessary for ‘administrative reasons.’ The speculation was heightened when reports around the world indicated that a majority of Chinese ambassadors and perhaps half of all other Chinese foreign services officers had been summoned home. But informants said today that Ambassador Wang never left Warsaw.”

(Source: The New York TimesThis entry is part of an ongoing feature of U.S.–China Week that follows U.S.–China relations as they developed in another era of change and uncertainty, 50 years ago.)

ABOUT U.S.–CHINA WEEK

U.S.–China Week is a weekly news and analysis brief that covers important developments in U.S.–China relations and features especially insightful or influential new policy analysis.

Graham Webster is a senior research scholar, lecturer, and senior fellow of the Paul Tsai China Center at Yale Law School, where he specializes in U.S.–China diplomatic, security, and economic relations through research and Track II dialogues. He is also a fellow for China and East Asia with the EastWest Institute. His website is gwbstr.com.

Disclaimer: Opinions expressed here are my own (and I reserve the right to change my mind).

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Contact: Follow me on Twitter at @gwbstr. Send e-mail to [email protected].