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Thursday, April 6, 2017

Has Donald Trump really got Chinese president Xi Jinping where he wants him?

Donald Trump announced on his Twitter feed last week that his meeting with China would be "a very difficult one" because of the "massive trade deficits".

Then he threatened them on North Korea, warning: "If China is not going to solve North Korea, we will."

On the basis of his public comments so far, the President's agenda for this meeting appears to be burnishing his world leader, 'negotiator-in-chief' credentials, by talking tough with Xi Jinping, and demonstrating the art of how these big geopolitical deals are done.

He may believe he has the Chinese president where he wants him.


After taking a phone call from Taiwan's leader Tsai Ing-wen in December, and warning that the "One China" policy (which acknowledges Taiwan as part of China) was up for grabs, Mr Trump then publicly reaffirmed his commitment to it in February, after his first call with Mr Xi.

The White House read-out afterwards said Mr Trump had agreed to honour the policy "at the request of President Xi". Asked what he had got in return, his press secretary, Sean Spicer, said: "The President always gets something."

So perhaps Mr Trump is about to call in his "something".

Perhaps he feels that by dangling his cooperation on Taiwan over Mr Xi, he can extract concessions on other issues, such as North Korea's nuclear ambitions and American manufacturing jobs.

It might sound like a winning strategy, but it's a dangerous one.

Senior Chinese officials have publicly warned the Trump administration that Taiwan is not a bargaining chip; it is a core national interest, and it will be defended as such.

Attempting to tackle them on this issue would be "like lifting a rock to drop on one's own feet," China's foreign minister said. State media threatened that Beijing would have no choice but to "take off the gloves".

This is not just empty rhetoric. Taiwan is an extremely sensitive issue in China, and this is a crucial year for its leader, Mr Xi, who is cultivating an image of strength as the "core" of the Chinese Communist Party ahead of an important party congress this autumn.

:: Sky Views: Is Trump prepared for war with China?

He has no room for negotiation on this, and would have little option for anything but a hard-line response.

Taiwan, incidentally, is equally keen not to be used as a pawn between the two, and has reportedly sought assurances from Washington to this effect.

As to the big wins Mr Trump seeks to extract in return, perhaps the most powerful negotiating strategy from the Chinese side would be to just ask him what it is he would like them to do.

How should Mr Xi tackle the US trade deficit for instance? Order Chinese companies to cease trade? Stop shipping goods to the States? Does he really expect Mr Trump to lay off large numbers of Chinese workers and risk social unrest, in this critical year, to make American manufacturing great again?

Then there is the charge of currency manipulation, which Candidate Trump liked to beat China with on the campaign trail.

It's true that China is manipulating its currency, but not in the way Mr Trump thinks - long gone are the days of artificially deflating the renminbi (RMB) to help Chinese exports - now China's central bank is burning through billions trying to prop its value up.

Would they like them to stop this, and allow the RMB to fall to its true level?

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