war on the rocks

With Washington in Chaos, China Runs the Table in Asia

May 18, 2017

Editor’s Note: This was originally published by The Interpreter, which is published by the Lowy Institute for International Policy, an independent, nonpartisan think tank based in Sydney. War on the Rocks is proud to be publishing select articles from The Interpreter.

 

Somewhat obscured the recent outpouring of penny dreadful news from Washington (from the dubious termination of the director of the FBI to Sean Spicer ensconcing himself in the White House shrubbery) was the announcement of a U.S.-China 100-day economic action plan.

It is a pedestrian, workmanlike document, committing to a raft of bilateral trade, investment and regulatory measures. Its references to poultry, beef (which left the president enthused), and clearing houses are not obviously the stuff of grand strategy, or grand bargains.

It could prove economically beneficial, on its own merits, if China can be persuaded to open its market on more reciprocal terms. Interestingly, China will start importing U.S. liquefied natural gas to meet its energy needs, within existing U.S. export quota limits for non-free trade agreement countries.

Politically, it is a significant step forward, given the gathering American domestic headwinds against seemingly any kind of trade deal. A potentially damaging trade conflict with China, widely feared at the outset of the Trump administration, has been averted – for now.

Also tucked away with the action plan was an instantaneous commitment to send a U.S. delegation to this week’s Belt and Road Initiative summit in Beijing. They must have had their bags packed.

So, what’s the harm?

We often hear lately that the Trump administration is surrendering American influence in Asia because it lacks a regional economic policy beyond a knee-jerk rejection of existing trade deals, including those already negotiated with U.S. allies and partners under the Obama administration. As a result, the United States is falling back on an over-reliance on the military toolbox. That is the gist of an argument put by Ely Ratner and Samir Kumar in an article in Foreign Policy that pre-dates the U.S.-China action plan.

The authors contrast the currently haphazard U.S. approach with China’s purposeful promotion of the Belt and Road Initiative. Regardless of its merits or demerits, China is communicating a clear vision to a receptive audience in Asia, Africa, the Middle East, and Europe. The Beijing forum showcasing the initiative drew in “more than 1,200 delegates from 110 countries, including 29 heads of state.” Trade Minister Steven Ciobo represented Australia. Japan and India are the only two significant Asian countries that kept their distance.

To some observers, Washington’s decision to send a delegation to China’s Belt and Road Forum should be welcomed as a sign of growing maturity in the Trump administration’s position – an overdue correction from Barack Obama’s standoffishness on the Asian Infrastructure Investment Bank. Australian proponents of closer economic engagement with China will take heart, arguing that trade and investment don’t have to be zero-sum.

Let’s take a closer look at the 10th point of the action plan:

The United States recognizes the importance of China’s One Belt and One Road initiative and is to send delegates to attend the Belt and Road Forum in Beijing May 14-15.

What is striking is the implied subservience of recognizing “the importance” of this initiative. On Twitter, Ely Ratner compared the wording to Rex Tillerson’s verbatim “aping” of China’s “win-win” formulation for Sino-U.S. ties on his inaugural visit to Beijing.

I tend to agree. Words and set phrases mean more to China more than most countries, because they carry encoded meanings intended to be relationally and hierarchically defining. Agreeing on words is more than half the battle with Chinese officials.

For Trump’s negotiators new to diplomacy, especially those from business backgrounds, conceding such framing may seem inconsequential compared to tangible economic and commercial benefits of the type outlined in the 100-day action plan. The Trump administration is not only feeling its way through the unfamiliar terrain of international relations – it is deliberately mixing traditional boundaries between “high” and “low” politics, as part of a wheeler-dealing approach to foreign policy (regardless of whatever advice Henry Kissinger is supplying).

Indeed, China may already be embracing Trump’s transactional pragmatism with a more brazen variation on the package deal. If Japanese reports are to be believed, in the run-up to the Xi-Trump Mar-a-Lago summit, Beijing’s ambassador to the United States requested the removal of Pacific Command’s Chief Admiral Harry Harris in return for China’s cooperation over North Korea (China’s Foreign Ministry subsequently characterized the reports as “fake news”).

Some of Trump and Tillerson’s initial tough talk on China was clearly overheated and needed tempering by exposure to policy reality. But now U.S. policy on China shows signs of flipping to the opposite extreme. Since Mar-a-Lago, strategic and commercial frictions have given way to an uncritical embrace of cooperation on both fronts. America’s singular reliance on China as the crux of its “maximum pressure and engagement” approach on North Korea is proving especially useful to Beijing as a source of leverage with Washington for what appears to be a marginally tougher approach towards an indifferent Pyongyang.

In the South China Sea, the promised U.S. push-back against China’s encroachment has failed to materialize. Nor is there evidence yet of a strategy to guide Washington’s actions there. No American  freedom of navigation operations (FONOPs) have been publicly carried out since the U.S. presidential election, amid accounts that Pacific Command requests have repeatedly been spurned.

Intriguingly, the Carl Vinson aircraft carrier group not only continued to sail in the “wrong” direction after it was ordered back to the Korean Peninsula last month, it also diverted around the South China Sea, despite this detour significantly lengthening the transit. Whatever public communication errors there may have been on the part of the US defense bureaucracy, the absence of U.S. FONOPs and the carrier diversion won’t have appeared coincidental to Beijing, which has long demanded an American operational pull-back in the South China Sea.

While some U.S. allies and partners may be privately relieved that Washington has adopted a more accommodative approach on the Belt and Road Initiative, others will be anxious at this latest turn of events. Japan’s antennae are peculiarly alert to any prospect of a U.S.-China “G2” compact bypassing Tokyo’s interests. Security considerations aside, Japan must be piqued about the U.S.-China action plan and attendance at the Belt and Road Forum, particularly after being left high and dry on the Trans-Pacific Partnership, the main selling point of which, for Tokyo, was preferential access to the American market. India has stayed aloof from the Belt and Road for similar reasons to Japan, and though it is less directly affected as a non-ally, it will still regard Washington’s capriciousness with renewed caution.

In Southeast Asia, while the Trump administration has lately moved to engage allies and partners bilaterally and through multilateral fora, the results of the recent ASEAN summit in Manila were not encouraging for those hoping for a concerted stance on the South China Sea.

All this runs in Beijing’s favour.

The choice of National Security Council Asia Director Matt Pottinger to front the U.S. delegation at the Belt and Road Forum appears to be Washington’s way of trying to split the difference. Pottinger is, if not a hawk, certainly no acolyte of Beijing. But from China’s perspective, it’s showing up that counts.

It would hardly be surprising if the United States reverts to a harder line on China once the gulf in their national security interests in Asia is exposed as a result of frustrated expectations over North Korea or incidents in the South China Sea. But these abrupt swings in policy direction are themselves detracting from already diminished stocks of American trust and credibility.

 

Dr. Euan Graham is Director of the International Security Program at the Lowy Institute.