These Are the Dealmakers Behind
Donald Trump and Xi Jinping
Bloomberg
One president pledging to “make America great again” and another pushing his “Chinese dream” will meet for the first time Thursday in Palm Beach, Florida. Together, Presidents Donald Trump and Xi Jinping oversee about one-third of the world’s economy, a quarter of its trade and two of its most powerful militaries. So whether their negotiating teams set a path toward cooperation or confrontation carries huge consequences.
While it’s impossible to precisely pair up the key players in these vastly different political systems, here’s a look at some of the men (and they are all men) shaping decisions:
The Big Picture
Trump’s surprise election victory propelled into the White House a cast of officials skeptical of free trade and advisers who have endorsed a more robust challenge to China’s growing military might. Across the table sits Xi’s team of career Communist Party officials increasingly willing to push back against U.S. dominance, especially in Asia.
China Exports
U.S. Exports
21%
10%
go to U.S.
go to China
Trump has predicted a “very difficult” discussion when the two sides begin hashing out trade policies and thorny security issues such as North Korea. He’s backed by a largely untested group of self-professed nationalists like Chief Strategist Steve Bannon, who once predicted war over the South China Sea, and businessmen-turned-officials such as Wilbur Ross, who has assailed China’s “protectionist” trade practices.
Chinese officials have sought to maintain “strategic composure,” signalling a willingness to compromise on trade without giving up ground on regional security concerns. Xi dispatched veteran diplomats such as Yang Jiechi to build relationships with perceived moderates such as Senior Adviser Jared Kushner, while his premier, Li Keqiang, carries abroad the president’s warnings against harmful trade wars.
Economics
The two economies are so intertwined, historian Niall Ferguson and economist Moritz Schularick dubbed them “Chimerica” more than a decade ago. In this loop, American shoppers snap up cheap, Chinese-made widgets while the massive trade surpluses that result are funneled back into Treasuries. That keeps the yuan weak, U.S. borrowing costs low and ensures that cash registers keep ringing on both sides of the Pacific.
Trump wants to reshape the U.S.-Chinese economic relationship and has suggested American companies find alternatives to a system he blames for job losses and a trade deficit with China of almost $350 billion last year.
China’s Yuan Has Been Weakening
1/2/2014
1USD = 6.050CNY
3/31/2017
1USD = 6.884CNY
The real estate tycoon’s arsenal includes the steep tariffs advocated by long-time China critic Peter Navarro. He could also dub the country a currency manipulator, a move being considered by Treasury Secretary Steven Mnuchin.
But the current set up works pretty well for Xi, who told global elites gathered in Davos, Switzerland, in January that, “waging a trade war will only cause injury and loss to both sides.” His options: Open up closed services industries like insurance and telecommunications, or shrug off U.S. demands and expand trade elsewhere.
Xi also needs access to the world’s biggest economy to keep his country producing higher-value goods. Programs such as the Made-in-China initiative overseen by Industry and Information Technology Minister Miao Wei aim to expand manufacturing in new fields like robots, machine tools and medical devices by 2025.
Security
Even before Trump’s win, experts have been predicting more confrontation over security in the Asia-Pacific region, where China’s military build-up is challenging more than 70 years of U.S. dominance.
While disputes over China’s expansive territorial claims in the South China Sea continue to simmer, the first months of Trump’s tenure have been preoccupied with North Korea and getting Xi to pressure the country back to the negotiating table. Secretary of State Rex Tillerson delivered sharp warnings about the country’s nuclear-weapons program during visits to Tokyo and Seoul last month, only to deliver a more measured message of “non-conflict, non-confrontation” during a Beijing meeting with Foreign Minister Wang Yi.
China's Military Budget Is Now Second Only to the U.S.'s
No. 1
$596B
U.S.
No. 2
$215B
3
4
5
6
7
Spending speeds up after tensions over Taiwan show U.S. air and naval superiority
8
8
9
9
11
13
No. 13
China
1991
1995
1999
2003
2007
2011
2015
Looming in the background is Chinese concern that Trump might consider expanded ties with Taiwan, which China considers a province. Xi is expected to seek Trump to reaffirm in person his earlier commitment to the U.S.’s long-standing policy of recognizing Beijing as the capital of “One China.”
No comments:
Post a Comment