02.08.2017 Author: Vladimir Terehov

On the Next Stage of the US-China “Dialogue”

2424One of the main practical results of the meeting between the leaders of two major global powers (the USA and People’s Republic of China) held in early April, 2017 at Donald Trump’s estate in Florida, was the decision to deepen and concretize the bilateral “Dialogue” that has been held annually since 2006. For this purpose, the “Dialogue” was divided into four thematic (sub thematic) “dialogues” covering the essential spheres of interstate relations.

Earlier on June 21-23, 2017 the first “dialogue”, officially named the U.S-China Diplomatic and Security Dialogue (D&SD), was held in Washington. Its outcome (being quite vague) was previously considered in the NEO.

A month later Washington hosted the U.S.-China Comprehensive Economic Dialogue (CED). The Delegations were headed by Vice-Premier of the State Council of China Wang Yang, US Secretary of Treasury Steven Mnuchin, and US Secretary of Commerce Wilbur Ross. We shall note that the results of the second “dialogue” were as uncertain as of the first one.

Nothing else, however, should have been expected, as both global giants (as yet with no success) are trying to prevent the bad logic of the development of the historical process, when emergence and establishment of a new global leader is considered by the previous one as a threat that is to be repelled by all means possible.

In the area of economic relations, the current huge negative balance in trade in goods with China, which, according to American data, fluctuates around an amount of USD 350 billion, is in the US regarded as such a source of threat in the sphere of economic relations. If we take into account service trade, the unfavourable environment (but not very much) for the USA is slightly improving.

According to the Chinese Ambassador to the United States, who delivered a speech at the annual conference of Washington Institute of China-America Studies after the CED, the above mentioned data does not reflect several essential aspects, for example, the participation of the other countries (sometimes determinative, as in the case of Apple products) in the production of goods supplied from China to the USA. Additionally, a huge inflow of Chinese tourist spending into the USA of more than USD 50 billion annually is ignored.

However, the consideration of such corrections does not change the overall picture of the defeat of the US in the trade game by a lopsided score. These circumstances, in particular, rather than various political and strategic aspects of bilateral relations, were at the core of Donald Trump’s pre-election discourse. That was well within his views on key US issues back then, which he mainly connected with the country’s deindustrialization following the relocation of manufacturing to countries with low-cost labour. The factor of “manipulating” the exchange rate of the yuan was also mentioned.

To exert a positive influence on the long-held trade imbalance, as well as pursuant to preparation for the forthcoming CED, Donald Trump and Xi Jinping have made an agreement on establishment of (since May) a 100-day period of favourable conditions for the US to export American products, mainly live-stock goods and services, to China.

Based on the speeches of the CED participants and comments from experts, so far, the results of the 100-day plan are not impressive. There are talks about prolongation of this initiative for one year in the hopes that it will impact more positively over the longer period.

The estimates prevailing in the comments on the outcome of the CED are equally conservative and sceptical. As compared with amateur fishing during the weekend, the main reason for carrying out the CED is likely seen (earlier D&SD) in the process itself rather than in the particular results. This is precisely because, we shall repeat, it is difficult to expect a breakthrough in relations between major global powers if mutual political and strategic tension remains (or even grows).

Regarding the latter, ten days before the CED, an extraordinary incident occurred on the margins of the G20 Forum in Hamburg. Mr Trump’s “remarks” (traces of which have remained on the internet) on the matter of an anticipated meeting with the Chinese leader, published by White House, allegedly comprised of a text where the latter was called the President of “the Republic of China.”

Let us recall that this is the way Taiwan identifies itself. However, Taiwan is considered as part of the People’s Republic of China by the vast majority of the world. This fact does not prevent Washington from rendering full support to Taiwan in its confrontation with “mainland” China.

The Ministry of Foreign Affairs of People’s Republic of China noticed the wrong designation of the country whose leader was due to meet the US President. Apologies were submitted, the accident was explained as a “technical error”. The plausibility of such an explanation being true is hard to believe, taking into account the (appropriate) professional level at which the officials responsible for the protocol aspects of the foreign policy of top-ranking officials work.

However, the situation that happened in Hamburg might have well been a pre-planned taunt rather than a genuine blunder (similar to the attack on the Syrian airfield with Tomahawk missiles right during the April talks that were being held between Donald Trump and Xi Jinping). The notorious telephone conversation between Mr. Trump, then just-elected President of the USA, with Taiwanese President Tsai Ing-wen was the same well-arranged manoeuvre (although on the surface, it too looked like a mistake).

What are the regular warship sails (continuing under the Trump administration) within a 12-mile zone around the artificial Chinese islands in South China Sea, if not a taunt-style policy toward the main geopolitical adversary?

The very fact of the taunt made by Washington toward Beijing in Hamburg in the form of a protocol (quasi) mistake doe characterize the real state of relations between the two major global powers more precisely than verbose official statements various questions.

These political realities cannot but reflect negatively on the economic sphere of relations between these leading world powers.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine New Eastern Outlook.”


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