U.S.–China Week: Trump–Xi call? THAAD ‘this year,’ Tillerson’s private SCS assurance, Mattis Asia trip (2017.02.06)

Welcome to Issue 86 of U.S.–China Week. Public indications about official relations between the United States and China in the era of President Donald Trump remain contradictory and thin. Below, this edition covers the signals sent by Defense Secretary James Mattis, newly confirmed Secretary of State Rex Tillerson, and the involvement of White House adviser Steve Bannon.

At the White House level, National Security Adviser Michael Flynn and State Councilor Yang Jiechi reportedly spoke by phone Friday. The Chinese readout said Flynn agreed to strengthen high-level contacts, which some read as a prelude to a call between Trump and President Xi Jinping. Such a call has not apparently happened so far, though the White House said Trump has spoken with the leaders of Mexico, Canada, Indonesia, Israel, Egypt, India, the United Kingdom, Japan, Germany, Russia, France, Australia, Saudi Arabia, the United Arab Emirates, South Korea, Jordan, Italy, Ukraine, and New Zealand.

Delaying presidential contact with China until the list is this long—plus Mattis’ trip to South Korea and Japan and Japanese Prime Minister Shinzo Abe’s scheduled visit to the White House Friday—sends a clear message that the new administration is not prioritizing China in the pecking order for symbolic engagement and diplomatic niceties. Officials and policy thinkers in Beijing have inevitably noticed this, and no amount of cute/awkward B-roll of the First Granddaughter visiting the Chinese embassy in Washington will erase the snub. On the other hand, the reports on Trump’s call with Australian Prime Minister Malcom Turnbull suggest making contact doesn’t necessarily mean making nice. In the mean time, the Economist Intelligence Unit has a good summary of the figures and unknowns in Trump administration China policy. And Nikkei Asian Review speculates on a backchannel role for Stephen Schwarzman, one of only two people I am aware of who have met both Trump and Xi since election day. (The other is Henry Kissinger.)

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ALLIANCES
Mattis S. Korea and Japan trip yields Senkaku treaty reiteration, THAAD deployment deadline, nuclear guarantee

In his first overseas trip as Secretary of Defense, Mattis visited South Korea and Japan, meeting with defense and civilian officials. In a press appearance with his South Korean counterpart, Mattis said, “Any attack on the United States or on our allies will be defeated and any use of nuclear weapons would be met with the response that would be effective and overwhelming.” With his Japanese counterpart, he said, “I made clear that our longstanding policy on the Senkaku Islands stands. The United States will continue to recognize Japanese administration of the islands, and as such article five of the U.S.-Japan Security Treaty applies.” China’s Foreign Ministry released a stand-alone statement opposing the reiteration. In each country, Mattis reaffirmed the U.S. nuclear umbrella. Reuters has a good story on Mattis’ statements about the South China Sea in Japan. He said there’s no “need for dramatic military moves” right now and emphasized diplomacy. A Chinese Foreign Ministry spokesperson welcomed the reference to diplomacy but limited China’s position to favoring diplomacy “by parties directly concerned” before saying “that is the right thing to do.” South Korea’s government reportedly said they had reached an agreement to deploy the THAAD missile-defense system in 2017. A Chinese spokesperson did not welcome THAAD-related news, saying, “We urge relevant parties to end the deployment and stop making more steps down the erroneous path.” / Meanwhile, Japan’s government was reportedly “putting together a package it says could generate 700,000 U.S. jobs.”

ANALYSIS: Mattis’ trip was informally billed as a reassurance tour for two allies whose officials had reason to be concerned that a Trump administration would mean U.S. retrenchment and a weaker security guarantee. In this context, the new defense secretary hit all the expected notes and did so with refreshing clarity, consistency, and professionalism. This level of engagement between the Trump administration and Japan, including Abe’s visit to Trump Tower during the transition and his coming stop by the White House this week, seems to send two messages at once. First, it casts Japan as supplicant, with Abe seeming prepared to come to Washington bearing a gift for Trump in the form of PR about U.S. jobs. Second, it seems a real possibility that the emphasis on Japan and South Korea during a relatively long wait before Trump–Xi contact is designed to cast China as supplicant, even if there’s little chance of Xi showing up as Alibaba’s Jack Ma did bearing the promise of U.S. jobs. Now more than ever, officials working on U.S.–China relations should be conscious of the need both top leaders have to claim they’ve won something out of each interaction. This is but one speculative reading of the situation, but such readings are all we have until actions emerge that allow us to check against the various conflicting narratives of Trump-era Asia policy.

THE PRESIDENT’S MEN
Bannon’s stated assumption of inevitable war with China, and Tillerson’s tempered off-camera views on South China Sea

White House strategist Steve Bannon, who is famous for leading the white nationalist–friendly Breitbart website, was at the center of speculation about unusual and possibly changing patterns of White House decision making this week. USA Today uncovered some of his publicly stated views on China: “‘We’re going to war in the South China Sea in five to 10 years, aren’t we?’ he said in March 2016. ‘There’s no doubt about that. They’re taking their sandbars and making basically stationary aircraft carriers and putting missiles on those. They come here to the United States in front of our face — and you understand how important face is — and say it’s an ancient territorial sea.'” Ankit Panda wrote up the implications.

Meanwhile, the Senate confirmed Rex Tillerson as secretary of state, and a purported copy of Tillerson’s written responses to pre-confirmation questions from Senator Ben Cardin was making the rounds. (At least parts of the document were confirmed authentic, according to Buzzfeed.) The undated document contains significant material on Tillerson’s positions on China. Tillerson said “the United States should continue to uphold the One China policy”; was noncommittal on any changes to the Strategic & Economic Dialogue; said “a bilateral investment treaty could help address this imbalance” in trade with China; and significantly adjusted his tune on the South China Sea compared with his live remarks. On Jan. 11, Tillerson had made a provocative statement about China’s installations in the Spratly Islands, saying “access to those islands also is not going to be allowed.” When observers speculated that Tillerson might have misspoken, the Trump administration seemed to double-down on the more provocative potential reading of those words when White House Press Secretary Sean Spicer said the United States would “defend international territories” there. If the White House sought not to back down from a tough-sounding line, Tillerson’s written response was quite moderate, saying, “If a contingency occurs, the United States and its allies and partners must be capable of limiting China’s access to and use of its artificial islands to pose a threat to the United States or its allies and partners.” In other words, Tillerson said that “access to those islands” need be impeded only in a “contingency,” not all the time. That means no unprovoked “blockade.”

ANALYSIS: A variety of reports suggest Bannon’s role in foreign policy issues or even more broadly could be decreasing, but the USA Today report underlines the implications of having such an extreme figure so close to the president. One may reasonably argue that the U.S. system will not be hijacked by one man who publicly stated war with China is inevitable. Still, officials in China and elsewhere have to take seriously the fact that the U.S. president embraces someone who thinks and speaks in that way. However conventional and reasonable Mattis or Tillerson may seem, everyone’s strategic calculations must take into account the possibility that Bannon (and others) might have real influence to accompany their warlike fatalism. Others in government may need to actively counter-program against that view—what Jeff Bader recently called the “untrammeled rivalry” approach to China policy. Whether Tillerson takes up that role is a complicated question, but assuming he might try, it is yet to be seen how much leverage the new titular top diplomat has in guiding U.S. foreign policy. His more measured comments in the Cardin responses were not necessarily intended to become a public signal, but instead seem to have been designed to ease confirmation. And as became clear in the Trump-Trunbull dust-up, there is currently no credible spokesperson for the U.S. government on foreign policy matters.

AFFIRMATIVE AGENDA
McGregor on ‘The Art of a China Deal’: Suspend S&ED for presidential summits, tweak and revive TPP, push ‘reciprocity’

James McGregor, a former journalist and AmCham chairman who is now APCO’s China chief, is one of Beijing’s wisest U.S. policy voices and has written the first must-read China policy proposal of the Trump administration. At ChinaFile, McGregor pushes a tough trade approach with “true reciprocity” at its center and retaliatory measures among its tools. He proposes an annual presidential-level U.S.–China dialogue and suspension of the Joint Commission on Commerce and Trade (JCCT) and the Strategic and Economic Dialogue (S&ED) until China agrees to more substantive talks. He proposes assigning Commerce Secretary Wilbur Ross to “work out a few face-saving tweaks and revive the TPP.” He identifies “Chinese techno-nationalism” as a true threat to U.S. economic security. And he has suggestions for how to use (or not use) competing centers of trade policy represented by Ross, Peter Navarro, and U.S. Trade Representative pick Robert Lighthizer. Almost no one will agree with every part of this essay, but it deserves to be taken seriously and achieves the rare feat of being both reality-based and constructed in such a way as to potentially speak to real Trump administration decision-making.

CYBERSPACE + TECH
Facebook’s plans to open China office stalled after it received only a 90-day permit

“We did, at one point in time, plan to have an office [in China], but we don’t today,” a Facebook spokesperson told WSJ in a major story about the company’s China efforts. In late 2015, Facebook reportedly received a permit to open an office in Beijing, but the permit only lasted three months. In the view of former head of Google China Kaifu Lee, “At this stage and time with WeChat, Weibo and other products, it’s hopeless.” / Meanwhile, Lorand Laksai at CFR writes on “cloud governance” as described in a People’s Daily op-ed by Li Zhen. / NYT covers Chinese advances in artificial intelligence research. / SCMP reports on a Chinese drive for international mergers and acquisitions in the superconductor industry.

ECONOMIC ROUND-UP

#USChinaWeek1967
‘Peking Denies Tacit U.S. Pact’

“HONG KONG, Feb. 2—Communist China violently denounced today reports, which it attributed to the Soviet Union, that it had a tacit understanding with the United States about nonintervention in the Vietnamese war. Coupling the reports with similar ones said to have been spread by ‘the Washington ruling clique’ and the ‘Indian reactionaries,’ an article distributed by Hsinhua, Peking’s official press agency, charged ‘the filthy swine of the Soviet revisionist leading clique’ with concocting a ‘barefaced lie.’ The article, signed by ‘Correspondent’ and radioed here from Peking, was concerned with an item said to have been published Jan. 20 in a Soviet information bulletin in Tanzania. The Soviet report was said to have ‘dishonestly stated’ that last year China sent to the United States through Paris a letter presenting China’s conditions for nonparticipation in the war.”

(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].