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Trump Tightens the Noose on China

Feb 18, 2019
  • Wu Xinbo

    Director of the Center for American Studies, Fudan University

The Trump administration aims to compete with China above all else.

China-U.S. relations used to feature both cooperation and competition. But the Trump administration has identified China as America’s primary strategic competitor, whose rise must be contained or even stopped.

The U.S. government wants to shake up the economic relations with China. In the past forty years, Chinese economic development has benefited from American money and technology, and some in the Trump administration want to sever these links. But that will not be possible. The level of economic interdependence between China and the U.S. is uniquely high among major countries, such that America will have to pay a huge price to cut off all its varied ties. It is no longer possible for American companies that have already taken root in China or sell mainly to the Chinese market to decouple now.

The Trump administration is especially interested in technological decoupling. The Chinese economy depends on technology. If a wall can be built between the U.S. and China in the high-tech sector to prevent the latter from getting technology from the former, Chinese economic growth will surely slow down substantially.

I went to the U.S. at the end of November last year and had the opportunity to talk to an American expert close to the Trump administration. He had been very straightforward when talking to Trump about China-U.S. economic relations, arguing that the only advantage the West held against China is in the high-tech sector, as China now has the market, money, and manufacturing capacity.

The Trump administration is also interested in decoupling the defense industrial chain. Last October, the Pentagon published a report revealing that the U.S. defense industry has to rely on China for 280 parts and components, as well as important raw materials and fuels. In other words, should there be war between the two, China would be in a position to cut off the American military’s supply chain. To create a logistics system that functions safely and free from Chinese constraints, the U.S. has made up its mind to decouple from China. Many American companies, including those investing in China, used to produce parts and components for the American defense industry by leveraging China’s low costs. Now they are required by the U.S. government to relocate from China to Vietnam or India or else they no longer get Pentagon contracts. The U.S. also imports rare earth minerals from China in large quantities, without which the production of sophisticated equipment will be impossible—now the U.S. is even considering whether it can source these minerals from other countries or find a substitute for them.

The Trump administration published its first national security report at the end of 2017. It states that China’s rise has been to a large extent attributable to Chinese scholars and students who leveraged the openness of higher education and research institutions over the past forty years. The statement has led to policy changes, with the U.S. now increasingly restricting Chinese students and scholars studying security-related disciplines or engaging in scientific research in the U.S.

Restrictions also apply to Chinese media and cultural organizations, including foundations, and even Chinese diplomats engaging in cooperation and exchanges in the U.S. It was quite unimaginable in the past that Chinese diplomats would not be granted visas by the U.S. Today such cases are common and on the rise. Various restrictions have been imposed on Chinese diplomats in the U.S. Why? To prevent Chinese infiltration into American society. In other words, the U.S. wants to prevent China both from acquiring core technologies from America, and from infiltrating and influencing American society through cultural, diplomatic, and political channels.

The Trump administration wants to exert pressure on China through the judiciary too. Chinese enterprises and individuals are now being accused of violating American intellectual property rights or other relevant policies and are being targeted in judicial actions. Last year, the U.S. sanctioned the Chief of the Central Military Commission’s General Armament Department, on the grounds that is China importing Su-39 fighter jets and the S-400 air defense system. There had been no precedent for sanctioning China over the purchase of weapons from another country. Other examples include the series of measures to suppress Huawei and actions against ZTE last year.

Confrontation in every realm, whether economics, technology, politics, or defense: this is the Trump administration’s China policy.

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