At Mar-a-Lago, Predictability Ascends

Apr 12 , 2017

President Xi Jinping and President Donald Trump just concluded a fruitful and important summit with seven-plus hours’ talks at Mar-a-Lago, Florica. Many in the world hailed the event as “the summit of the century” because of the significance of the bilateral relationship between China and the US. To me and many observers, the Xi-Trump meeting signals the injection of a large dose of predictability and certainty into the much-watched Sino-American relationship once shrouded by layers of uncertainty and unpredictability ever since Mr. Trump took office in late January, thus opening a new chapter in and providing direction for the future bilateral relationship.

There are several highlights that have caught the attention of the international community.

First and foremost is no doubt the strategic consensus reached by two Presidents on the future of Sino-US relations based on the principle of no confrontation, no conflict, mutual respect and win-win cooperation. Within this framework, a comprehensive dialogue mechanism has been put in place founded on four pillars of diplomatic and security dialogue, comprehensive economic dialogue, law enforcement and cyber security dialogue, social and people-to-people dialogue.

“Cooperation is the only option for China and the US”, and “there are a thousand reasons for two countries to be good partners and there is not a single reason to damage this relationship”. These quotes from President Xi aptly and accurately describe the nature and future of China-US relations.

The summit is not only of great salience to the steady development of bilateral ties, but also highly relevant to better global governance and conducive to the shaping of an emerging new global order that will better reflect the changed balance of power.

Admittedly there were much uncertainty and even worries about where China-US relationship will go this time around when President Trump entered the White House, forward or backward, as issues of trade deficit, RMB exchange rate, Korean Peninsula nuclear crisis, South China Sea were popping up one after another. The reality is that China and the US have plenty of converging interests both bilaterally and internationally, but are not possible to see eye-to-eye on everything. The key for a steady and sound relationship therefore is not to be hijacked by single issues, but to reach comprehensive strategic understanding on the overall direction and nature of such an important relationship. The most important question is of course the following: Will each treat the other as a friend or foe, a partner or rival? The positive answer has been clearly given at Mar-a-Lago a few days ago which has invalidated the doomsday prediction about inevitable confrontation between China and the US.

Secondly, the summit has contributed to keeping Sino-American economic relationship on an even keel and it has also given the world economy a much-needed helping hand by two countries comparing notes on each other’s development strategies and deciding to expand cooperation on various economic and financial issues. It is no small feat for the two biggest economies to be in the same wave-length in favor of greater economic cooperation rather than going into trade wars in whatever form. It seems that both understand that nobody will come out a winner in any trade conflict or war.

The consensus on and cooperative measures in bilateral and global economic fields agreed at Mar-a-Lago are really impressive as they are achieved against the backdrop of anemic world economic growth, increasing financial risks amid high turbulence in global capital movement and rising tides of protectionism in some advanced economies.

Let us look at a few figures to understand the strategic importance of China-US economic ties. In 2016, the volume of Sino-American bilateral trade in goods reached $519.6 billion and trade in services amounted to $110 billion while two-way investment stock exceeded $170 billion. It is estimated that 26% of Boeing airplanes, 56% of soy beans, 16% of automobiles and 15% of integrated circuits made in the US were exported to China that year. On personnel exchanges, there were 14,000 people travelling between China and the US on a daily basis and there are now over 300,000 Chinese students in the US, taking up one third of the total foreign students.

It seems that President Trump’s “America First” does not necessarily mean “China Last”. More accurately his “America First” might be best achieved through Beijing. Of course, Chinese nation’s rejuvenation also needs a peaceful and prosperous global environment wherein the US has been a leading player.

US trade deficit has been often mentioned by American officials as an indication of the imbalance in China-US trade. Deficit or surplus is a fact in bilateral trade and the figure for 2016 is $347 billion. The key is to find ways and means to reduce deficit and restore balance in trade. According to a Financial Times report, the summit agreed “a hundred days negotiation on trade”, mainly focusing on opening financial and beef markets in China. Trade is not one way street and it needs mutual benefits to sustain it. In other words, it is by no means a “zero-sum” game and has to be win-win cooperation. Negotiation to find solutions of mutual benefit is highly welcome.

President Xi mentioned at Mar-a-Lago that two countries, among other things, could consider expand cooperation in infrastructure construction and energy. As far as infrastructure is concerned, China has the advantage of capital, equipment, construction capacity etc., and therefore will be of great help to America should two sides decide to cooperate in upgrading American infrastructure. For energy cooperation, the US could export shale oil and gas to China where there is a great demand for energy as China goes for “green economy”. And of course the US ought to consider seriously lifting bans on the exports of dual-usage goods to China.

Last but not least, the summit is about regional security and world peace. From media reports it is understood that two Presidents talked at length about regional security including how to handle the Korean Peninsula nuclear crisis.

Without a secure environment, regional political cohesion and economic growth will both be in peril. Unfortunately East Asia especially Korean Peninsula is now fraught with increasing tension and potential conflicts which are quite alarming to the parties concerned including China.
China has repeated expressed its preference to seeking solutions through political negotiation and dialogue and its strong opposition to nuclearization and any military action or war on the Peninsula. We have seen endless large scale military exercises and missile firing and even signs for possible new nuclear testing in and around the Peninsula.

It is not a good sign at all that the US now openly talks about a military solution and has moved huge amounts of military assets including aircraft carrier groups to the waters near the Peninsula. Saber-rattling will only lead to war not peace. We strongly urge parties concerned to stop doing whatever they are doing or plan to do which will hurt regional security. China also urges the parties concerned to take into serious consideration its recent proposal of “parallel suspension” to create conditions for restarting negotiation, in particular Six-Party Talks.

On a philosophical level, East Asian nations and outside ones who have interests in the region need to take up the new security concept proposed by President Xi which is based on cooperative security and comprehensive security rather than seeking absolute security at the expense of others’.
It would be totally wrong if some countries try to use the tension on the Peninsula to “rebalance” China by creating troubles and obstacles right at the door step of China. “Off-shore balancing” and “negative reciprocity” have been proven futile and even harmful in the past and definitely will not succeed now or in the future. What is needed should be enhanced efforts to maintain strategic balance in the region, including giving up the plan to deploy THAAD missile defense system in ROK, and work in concert to formulate a workable regional security arrangement aimed at promoting peace and preventing conflict while providing a certain level of “comfort” to all countries.

In sum, Mar-a-Lago summit has given guidance on how to manage the important bilateral relations between China and the US and drawn clear roadmap towards this goal. The tone and direction have thus been set and now we need to “roll up our sleeves” to concretize the work cut out for us at the Summit.

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