It Won’t Be Easy for Donald Trump to Bully China


Clay Chandler Feb 06, 2017

In first two weeks as president, Donald Trump locked horns with so many U.S. trade partners—denouncing Japan’s biggest car maker for building factories in Mexico, hectoring Mexico’s president for failing to stand up to “bad hombres,” browbeating Australian prime minister and allowing his top trade advisor to slam Germany as a currency manipulator—that pundits the world over are calling him a “bull in the china shop.” But the cliché is inapt. So far, the one country President Trump has avoided charging at is China.

Such forbearance, whether by accident or design, seems unlikely to last. Trump’s screeds against China—for cheapening its currency, stoking its export machine and “stealing” American jobs—were a centerpiece of his campaign. And yet, as Trump himself probably knows, China won’t be easy to bully.

That is so partly because China is a strategic rival, not an ally, and thus less willing forgive a rude phone call or testy Tweet, and because China’s leaders, like Trump himself, are unpredictable, thin-skinned and obsessed with matters of “face.” But the real difficulty in taking on China lies in the fact that China’s economic relationship with the U.S. is at once more important and more complicated than that of any other nation.

It’s hard to overstate how tangled the U.S.–China partnership has become. Historian Niall Ferguson has famously suggested the two countries are so inter-dependent that they should be thought of as a single creature; he calls it “Chimerica.” China owns $1.1 trillion of U.S. government debt, ranking just behind Japan as America’s largest foreign creditor. China is America’s largest trading partner, with annual trade in goods and services worth $663 billion, and its third-largest export market. By one estimate, if sales by U.S. foreign affiliates in China and re-exports of U.S. products through Hong Kong to China are factored in, U.S. exports to China total $400 billion. Last year General Motors sold 3.9 million vehicles in China, more than 25% more than it sold in the U.S. China now has more than 130 million iPhone users, making it larger market for Apple than the United States.

The U.S. far outweighs China in military firepower and economic output, of course. But trade wars, once begun, aren’t easily controlled and if the world’s two largest economies get into a mutually destructive economic confrontation, the real question won’t be who has the biggest GDP, but which country has the highest threshold for pain. In theory, Trump could slap high taxes on Chinese imports. Beijing’s countermoves could include shutting out Boeing, which is hoping to claim at least half of China’s estimated $1 trillion market for airplanes over the next 20 years. China could put the squeeze on host of other U.S. companies including Ford, Qualcomm, Walmart, Starbucks. The risk for Trump is that, with China, his get-tough approach could start to look less like The Art of the Deal and more like “The Art of the Squeal.”

As we wait for Trump’s China policy to take shape, you can get a good idea of the complexities of the U.S.–China economic relationship by reading this fascinating article by veteran China correspondent Brook Larmar, who takes a detailed look at what may be China’s most important U.S. export: students. Chinese students now account for about 300,000 of the roughly 1 million foreign students enrolled in American colleges, making them by far the biggest foreign group. Brook’s latest piece tries to understand why the number of Chinese high school students, part of what some call the “parachute generation,” has also grown so rapidly. Interdependence is one of the article’s main themes. The Chinese students benefit from coming to America, learning English and preparing for U.S. universities. But the communities into which these kids parachute benefit too, from Chinese money that funds schools and has many trickle-down benefits.

But Brook captures the many human dynamics of the surge: the yearning of Chinese students to escape the rigors of their own brutal examination system; the Chinese brokers who exploit the desires of their countrymen for hefty profit; and the sense of alienation students feel after coming to America. The piece notes that ultimately, rather than gaining a new understanding and appreciation for the United States, many students who come to America to study return with a new wariness of America, and stronger sense of identity as Chinese. It’s a classic study in the paradox in globalization, and how sweeping forces that should be bring us countries and cultures together often wind up just pushing us all apart.

Source: Fortune “It Won’t Be Easy for Donald Trump to Bully China”

Note: This is Fortune’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.

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One Comment on “It Won’t Be Easy for Donald Trump to Bully China”

  1. Simon says:

    Without Chinese students many western univisersities will be closed down or suffer immense cut backs. Apart from tuition fees which are paid in hard currency and are not loans like home students do that sometimes never back, Chinese student spends a huge amount of money shopping at high streets. In the UK I can vouch Chinese student saved the economy of cities such as Manchester and Liverpool from decline. There are investment to build student accomodations running several hundred millions £££ and these cities are now buzzing with cash, but these are peanuts compared to the cash Chinese students brings to America.

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