On January 11, about one week before Trump’s Inauguration, the Pangoal Institution—a well-known Chinese think-tank—published a report in both Chinese and English, titled An Outlook for the Domestic and Foreign Policies of the New Administration of the US -- Observations over the President-Elect Trump before Inauguration. Based on all the preparation made by Donald Trump and his team, temperament and character of Donald Trump, and possible candidates of the new administration, this report aims to forecast the Trump administration’s way of governance in several aspects, such as economy, energy, foreign policy, military and security. It mainly focuses on issues closely related to the interests of China, and hopes to give clear thinking on where America and China-US relationship are going. In fact, after Trump’s inauguration on January 20, the messages he delivered and the steps he took have supported some conclusions in this report.
The first part is the assessment of economic policy of Trump administration. It says that the most urgent task of the new administration is to maintain sustainable economic growth by adopting loose fiscal policies. Related policies include “pro-growth” tax reforms, strengthening infrastructure, raising interest rates, deregulating the financial sector and attracting manufacturers back to the US. These policies probably will yield actual results in one year after Trump’s inauguration. But on the other hand, to curb economic bubbles, Trump will end the loose monetary policies that have lasted for eight years. The mix of loose fiscal policies and tight monetary policies is self-contradictory and unsustainable. In addition, Trump’s economic policies are actually built upon the economic recovery created by the Obama administration and the “economic legacy” is rather weak, leaving Trump little room to create the miracle of reinvigorating American economy.
The reason why Trump administration is willing to take the risk of adopting such an economic policy is: they hope to fulfill the promise of solving the urgent problem of weak economic growth made by Trump during his election, even at the expense of long-term economic dilemma. Similarly, Trump signed an executive order to withdraw the United States from the TPP trade deal on day one of Presidency in hope of raising the income of the lower class in a short term, at the expense of losing long-term strategic dominance. According to the estimation of the report, If Donald Trump is a pragmatic leader open to advice and adjustment, his economic policies are likely to start approaching to the neutral in the late half of his first term. In this regard, what are the odds? What’s the influence on American economy and global economy? Issues like these need to be followed by the Pangoal Institution Research Team.
Another important part of this report is the analysis of Trump and his administration team. Temperament and character traits are important clues to predict the political decisions of the US president. The “portrait” of Trump falls into a basic framework consisting of the following elements: frankness, narcissistic personality, desire to show off, white male chauvinism, aggressive behavioral tendency, strong desire for revenge, deal mentality. In analyzing the course of selecting people to join the administration, the report highlights three features: first, loyalty to the President and the ability to execute White House decisions are considered top priority in the personnel selection; second, the new cabinet is white-dominated, right-oriented, military-background and business-veterans; third, a strong White House will become the core of US strategic decision-making. However, different from most assessment, aside from showing concern about the conservatism tendency of the candidates and their lack of experience in administration, authors of this report also emphasized that they have rich experience in professional work, team management and personal success, meaning that it will be a diligent administration with full dedication and strict discipline.
Furthermore, as most of the backbone team members have been politically marginalized for too long, there will be a rather long warm-up time full of obstacles before they get into the groove. Together with extreme political hunger, offensive realism style as well as simple thinking mode, when faced with complex reality, Trump’s administration would be reduced to a “hurriedly improvised” administration that governs the country and run diplomatic affairs in a divergent, fragmented and problem-specific way. It would extremely dangerous for the whole world.
As a Chinese think tank, it is natural that the Pangoal Institution Research Team has paid much attention to policies towards China. Main conclusions in the report include: first, tackle relations with China in the deal mentality. Having spent most of his time doing businesses, and frankly inexperienced in politics, the basic logic Trump would follow in coping with China-US ties might be “the other countries have to pay the price for their concerns if they do not make concessions on his concerns”. Second, as his priority will be to achieve results in domestic affairs, what Trump desires most is China’s concessions on economic and trade issues. To this end, Trump is highly likely to make specific demands on China, including reducing exports to and expanding imports from US, enhancing intellectual property law enforcement, enlarging de-capacity in iron and steel industry, and opening access for US internet enterprises. Third, though the term “Asia-Pacific Rebalance” will not be inherited by Trump, his administration will not decrease its focus on this region. Instead, guided by “peace through strength” principle, Trump’s policy will focus on military buildup and competition with China. It can be forecasted that Trump administration will touch on sensitive issues in Asia-Pacific more frequently, such as the Taiwan issue, North Korea issue and South China Sea issue, in hope of forcing China to make concessions on economic and trade issues. Based upon these assessments, one can see that Trump administration will adopt tougher policies towards China, and China-US relations will soon be featured with ups and downs.
Last but not least, the Pangoal Institution Research Team has given constructive suggestions on how to shape the development of the China-US relations more actively. It is, to some degree, different from the past academic research in China that mainly focus on the adjustment of American policies towards China and on how to deal with it during American Presidential election. This is also a new phenomenon among Chinese academic society this year. As the report claims, the capital law in the China-US relations has started to work in response to the new political changes. As a result, China has shown her capability and confidence in actively shaping China-US relations on an unprecedented level. The two suggestions the report gives include: first, weapons and defense should be well prepared, bottom-line awareness and capability of competition should be strengthened; second, avoid making judgments or decisions too soon, and define the nature and boundary of the relations through reasonable interactions. Although these suggestions haven’t broken through the traditional two-handed strategy, they are pragmatic and rational choices for both sides, and China’s proactive rather than reactive attitude in dealing with China-US relations can be sensed. Possibly based on just the same logic, Chinese government has made her contribution to the stability of China-US relations by being calm and firm in a series of major emergencies recently. We sincerely hope the US can also be aware of the significance of positive interaction with China, make its efforts to avoid the encroachment of zero-sum pattern, and cooperate with China to come back to the normal track of strategic communication and coordination.
The link of the full text of this report can be downloaded here.