Most Chinese scholars agree that there is bipartisan support for China’s ‘containment’ in the US. Moreover, it was Trump who designated China as a ‘strategic competitor’.
Donald Trump’s political stand throughout his electioneering has been to re-shore manufacturing and employment, domestic tax cuts, hike tariffs on foreign goods, end wars, stop illegal immigration and make America great again. Now, having won the election with an unprecedented mandate, nations are gearing up for the possible fallout of President-elect Trump’s “isolationist” and “unilateralist” political and economic propositions.
Obviously, Ukraine must be the most worried nation and Israel the happiest. As regards China, Trump has been favoured over Kamala Harris for four reasons—one, externally, the alliance between the US and its allies would be weakened, two, the ideological debate between democracies and authoritarianism would be put to the backburner, three, would further the cause of national unification, and four, polarise the American society. However, there is more to something that meets the eye, and China is already gearing up to meet the challenges.
As customs demand, on 7 November 2024, President Xi Jinping congratulated Donald Trump on his emphatic triumph. Xi Jinping pointed out that history shows us that China and the United States will benefit from cooperation and both will suffer from confrontation (合则两利、斗则俱伤). Reiterating China’s foreign policy—a new type of international relations for dealing with the major powers, Xi hoped that “the two sides will uphold the principles of mutual respect, peaceful coexistence and win-win cooperation, strengthen dialogue and communication, properly manage differences, expand mutually beneficial cooperation and find a new way for China and the United States to get along well in the new era, benefiting both countries and the world.” How has the Chinese scholarship reacted to Trump’s comeback, and how do they see the future of China-US relations?
One, most Chinese scholars agree that there is bipartisan support for China’s “containment” in the US. Moreover, it was Trump who designated China as a “strategic competitor”. Starting from 2017, the Trump administration issued a series of documents pertaining to the security and defence strategy that included “2017 US National Security Strategy of the United States of America”, “2018 US National Defence Strategy”, “2019 Department of Defence Indo-Pacific Strategy” and “2019 Department of State: A Free and Open Indo-Pacific: Advancing a Shared Vision.” These policy documents argued that China seeks to displace the United States in the Indo-Pacific region, and to shape a world antithetical to US values and interests. The 2019 document pronounces China as a revisionist power, and how it used coercive military and economic methods to advance its interests.
In 2020, “The US Strategic Approach to People’s Republic of China” further underscored the “great power competition” with China. In the words of Ren Zeping, Chief Economist of Evergrande Group and former Deputy Director at the Development Research Centre of the State Council, all above documents clarify the nature of Sino-US relations as great power competition and strategic containment of China. Therefore, in future, “the existing posturing will continue and new containment measures against China will be introduced”. Some of the most important pillars of the Indo-Pacific Strategy that took shape includes the Quad, AUKUS, Better Utilization of Investments Leading to Development Act (BUILD Act), Blue Dot Network, and the Indo-Pacific Economic Framework (IPEF).
Two, it was also President Trump who started the trade war with China. Therefore, his comeback “would mean further import cuts from China, hike in tariffs, restricting investment in the United States, and cancelling the most-favoured-nation treatment for China. Chinese goods may be subjected to 60% tariff hike, and restrictions are likely to be imposed on Chinese investment in real estate and new energy vehicles in the United States” according to Ren. However, he maintains that Trump’s trade protectionism has not really “saved” the United States during his first stint, for the US economic growth rate slowed down significantly in the third quarter of 2019, and the Trump administration publicly admitted that the trade war had a weakening effect on the US economy. This was also confirmed by the reports released by the World Bank, the Federal Reserve and US research institutions and demonstrated that “the main bearers of US tariffs are US companies and consumers” posits Ren.
Three, technology war, especially the impact on China’s semiconductor industry, has also been widely debated. Gu Wenjun, Chief Analyst of Shanghai Semiconductor Research Institute argues that the Biden administration essentially followed the Trump policy on advanced technology. This time, Trump may impose “indiscriminate and comprehensive sanctions” (无差别全面制裁) on Chinese semiconductors, including mature technology. Gu asserts that ever since October 7, 2022, new regulations are being continuously introduced for new products, new applications, and new processes such as GPU (graphic processing units), HBM (high bandwidth memory), drone technology, automobile chips, GAA (gate all-around architecture), etc., which will hinder China’s scientific and technological progress. Gu also believes that since the US has used all the tools from its toolkit, if it wants to continue to increase the intensity of sanctions against China, it will depend on whether the United States’ allies are willing to further sacrifice their own interests or not.
In Gu’s assessment, the US technology war to contain China did not achieve the expected results. He cites the Chinese customs data that maintains that in the first half of 2024, China’s exports of integrated circuit-related products amounted to 542.74 billion yuan, a year-on-year increase of 25.6%, surpassing automobiles, mobile phones, and home appliances to become the largest export category. Therefore, in the long run, Chinese semiconductors are not afraid of any sanctions, and will be globally competitive in the future, just like photovoltaics, high-speed rail and electric vehicles; conversely, “decline of US semiconductor manufacturing is irreversible” concludes Gu.
Four, decoupling and restructuring of the supply chains is also anticipated gaining momentum. Anonymous analysts of the ASIACHEM Consulting posit that the Trump administration is likely to continue to push for a “decoupling” process, which could prompt global companies to reconfigure their supply chains and reduce their reliance on China. For example, major suppliers may diversify operations to countries such as Vietnam and India that are seen as less geopolitically risky. However, as China is a huge market for consumer electronics, the “decoupling” process could bring volatility to global companies that have invested heavily in the Chinese market, including suppliers and equipment manufacturers. The analysts hold that “while the US restrictions have brought challenges, they have also brought momentum to China’s goal of accelerating self-sufficiency in semiconductor technology”.
Five, “Sino-US relations will fluctuate greatly in the next four years, with escalating tensions (紧张升级), intensified confrontation (对抗加剧), and even a major crisis” (重大危机) according to Wu Xinbo, dean of the Institute of International Studies and director of the Centre for American Studies at Fudan University. Wu Xinbo further stated that the space for Sino-US cooperation will be greatly compressed in areas such as climate change, official visits and even people to people exchanges, albeit he says that the US would still require China’s cooperation on drug control and fentanyl etc., issues. There are apprehensions whether Trump will “ally with Russia to contain China” or not after the war is over. Jin Canrong, professor of International relations at the Renmin University believes “Putin will definitely not be stupid” to move closer to the US.
In fact, Jin argues that Trump’s win brings three benefits for China. One, he predicts the end of democracy versus authoritarian construct of the Biden era, for Trump doesn’t believe in ideology. This according to Jin, would also serve as a “warning to those in China who still have illusions about the United States”. Two, Trump’s isolationism will certainly weaken the connect between the United States and its allies, thereby weakening the international system centred on the United States. Three, on the Taiwan issue, he asserts that Trump’s comeback is more favourable to China because as a businessman Trump has no special feelings for Taiwan.
Six, on Taiwan Wu Xinbo maintains that Trump’s new administration will not only promote decoupling from China economically, but also intensify confrontation with China on security issues. However, Professor Ouyang Hui of Cheung Kong Graduate School of Business, Beijing believes that while the hawks in the Trump administration may promote “decoupling and disruption of the supply chains” (脱钩断链) however, the doves may not be interested in “cooperating to defend” (协防) Taiwan, for they have been accusing Taiwan of not paying “protection fees” (保护费) and Taiwan’s chip industry “stealing American business”, and also propose that Taiwan is too far away and difficult to “defend” (防卫).
Finally, China is also vouching for the “Musk effect” (马斯克效应) as Elon Musk is a great supporter of Trump and “has huge business interests in China”. Presently, half of Tesla’s electric vehicles are manufactured in China. Zhu Feng, executive dean of the School of International Relations at Nanjing University, believes that Musk may promote Sino-US business. He holds that the “Musk effect in the Trump 2.0 era is indeed exciting”. Whether hardball or soft, China is all geared up to play it with the prospective Trump team—Elbridge Colby, Fred Fleitz, Ric Grenell, Keith Kellogg, Robert Lighthizer, Johnny McEntee, Christopher Miller, Stephen Miller, Robert O’Brien, Kash Patel, and Mike Pompeo.
* B.R. Deepak is Professor, Center of Chinese and Southeast Asian Studies, Jawaharlal Nehru University, New Delhi