The Trump threat?

 

The Trump threat?

How much Trump’s policies will challenge China remains an open and urgent question for Beijing.

The US president has refrained so far from slapping Chinese imports with the blanket 60% or more tariffs that he had threatened on the campaign trail.

He’s been focused elsewhere, including on unleashing sweeping changes to US global leadership by decimating US foreign assistance, threatening to take control of other countries’ sovereign territory, and upending US alliances in Europe, while pulling closer to Russia at the expense of Ukraine.

There are potential risks for Beijing in that shake-up. For example, if a Washington-Moscow rapprochement pulls Xi away from Russian President Vladimir Putin, his closest ally, or if an American dial-down of security in Europe allows it to ramp up attention on Asia.

But Chinese diplomats have also been taking advantage of the changes to play up their country as a responsible and stable global leader, despite criticisms of Beijing’s own aggressive behavior in Asia.

“A big country should honor its international obligations and fulfill its due responsibilities. It should not put selfish interests before principles, still less should it wield the power to bully the weak,” Foreign Minister Wang Yi said on Friday in response to a question from CNN on Trump’s “America First” policy. China “resolutely opposes power politics and hegemony,” Wang added.

When it comes to tariffs, observers say Beijing is trying to moderate its response, holding out for a potential meeting between Xi and Trump or perhaps even a deal that could avert an escalating trade war.

While China immediately retaliated against two sets of US tariffs this year, including with levies on US energy and key agricultural goods, it has remained measured in its reprisals.

The country’s deficit with the US means it will have less room to hit back if a trade war escalates, but Beijing is expected to be calculating other measures like export controls that it could use for leverage.

And the view from some parts is that even if tariffs cause the Chinese economy short-term pain, it will be the US which loses in the long run. China is still an indispensable part of global supply chains. It’s also better prepared to weather this trade war than the last one, because it’s sending goods to more markets globally now, data show.

“If you play (imposing tariffs) with a peer competitor, it actually would not work that well compared to if you’re doing this with small countries or medium powers,” said Zhou in Beijing, who is also the author of the forthcoming book “Should the World Fear China?”.

China, he said, wants cooperation not friction.

“But since the US is still the stronger side in this relationship, (it will) decide which kind of relationship this is … so China has to say ‘OK – if this has to be to be one of competition, then we must dare to fight,’” he said.