18.11.2017 Author: Salman Rafi Sheikh

Trump’s Asia Tour Sees Chinese Win-Win in Swing

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Regardless of Trump’s pre-election anti-China rhetoric, the US president’s maiden visit to Asia has proved that the US relations with China are far from antagonistic. Two things have happened during this visit that clearly point not only to the deepening economic ties between the US and China but also that the US is gradually losing its erstwhile leverage in Asia. Contentious issues like south and east China seas could hardly be seen to have left any impact whatsoever on the trajectory of the US-China relations, or US relations with its allies. On the other hand, these issues seem to have begun to undergo slight normalization. This is pretty evident from what the Chinese PM Li Keqiang said that China and ASEAN are starting talks on the fine print of the code of conduct for the South China Sea. In addition to it, China agreed, setting Philippines concerns to rest, that access to waterways and airspace in the South China Sea would be “unbridled” and “unfettered”.

That China is getting more and more traction by the erstwhile US allies such as the Philippines is evident from the way the Philippine leader effectively used the ASEAN summit to advance not the old South China Sea agenda but his own balancing act of diplomacy between the US and China.

What, however, also became clear during the US-Philippines bi-lateral summit, which largely focused on issues like anti-terrorism and anti-narcotics, is that the US has no economic initiative on the table, after killing TPP, to mend the damage that US-Philippines relations have suffered in recent months. This explains why countries like the Philippines are getting eager to improve bilateral ties with Beijing, which has offered massive economic incentives to friendly neighboring states. This eagerness has been compounded by the US’ inability to counter the rising Chinese influence in the region.

Chinese premier Li Keqiang, accordingly, extended his stay in Manila beyond the summit to further solidify warming bilateral ties, signing major agreements as well as setting the stage for the state visit of President Xi Jinping in February. Lured by China’s economic carrots, the Filipino leader has also refrained from criticizing China over its massive reclamation activities and militarization of disputed land features in the South China Sea. On the contrary, and to China’s advantage, he has even put forward the idea to resolve the issue through bi-lateral means, thus revering efforts by external powers such as the US and Japan to mediate the disputes through multilateral frameworks and use the issue to put pressure on China.

And, while China has extended support to Regional Comprehensive Economic Partnership Agreement (RCEP), which aims to reduce trade barriers among 16 trading nations of the Asia-Pacific and is also going ahead at some pace with its Belt and Road initiative, the fact remains that the biggest impact on regional countries’ relations with China is coming from the way China-US relations have directly grown deeper. Trump’s visit only underscored this impact, as did the deals worth billions of dollars. Hence, the question for US policy makers: if the US-China trade relations are growing, why should other countries not do the same via-a-vis China?

As such, and ironically enough, Trump left China, a country he once lamented was “raping” the US in trade, without any concrete agreements to open Chinese markets. What he, however, did achieve includes a US$ 43 billion deal with China Petroleum and Chemical Corp to jointly explore natural gas with the US in Alaska. Financial support will come from China Investment Corp and Bank of China. China National Petroleum Corp signed an initial deal with Cheniere Energy for a “long-term supply contract” of liquefied natural gas. The Silk Road Fund – linked to the People’s Bank of China to promote the New Silk Roads/BRI – will set up a joint fund with the US. China Investment Corp will set up a joint fund with Goldman Sachs. And, China will buy more planes from Boeing and will import more Teslas.

And, besides what the Philippines and China are doing in the region, the US’ other allies, such as Japan and South Korea are also not doing good for the US, primarily because of Trump’s decision to nip the TPP. Neither Japan nor Vietnam, both TPP members, has expressed any interest in sitting down with the US to hammer out bilateral frameworks. Last week, Japan’s finance minister explicitly rejected the idea of a bilateral agreement. And, while none of the countries Trump visited pledged to negotiate new bi-lateral trade regimes, 11 countries, the erstwhile members of TPP, did reach an agreement, while Trump was in the region, to bring the Trans-Pacific Partnership into force without the US. Therefore, if the goal of this tour was to build and mend relationships with key regional countries and bring them on lines the US deemed fit for its interest, it hasn’t clearly happened.

On the contrary, what we have seen in and outside China is Chinese win-win in full swing. US-China deals show a first step towards materialization of Xi’s “Made in China 2025” vision, which is basically in stark contrast with Trump’s advocacy of ‘protectionism.’ This policy isn’t going to work at a time when countries in the region are looking for agreements that promote free trade. Free trade and investment is something the China is doing, and this is the reason why China is getting all the traction in the region, turning the erstwhile US allies into eager trade partners, willing to ‘forget’ the contentious issues as well.

Salman Rafi Sheikh, research-analyst of International Relations and Pakistan’s foreign and domestic affairs, exclusively for the online magazine “New Eastern Outlook”.


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