Guest Opinion: China is playing coy, for now

Pittsburgh Post-Gazette
Jan. 5
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America’s relations with China are and will remain a minefield, with domestic as well as international problems lying close to the surface for any Washington administration to step on.

Relations are particularly sensitive now, and not that easy to read. China is a country with a population of 1.3 billion, led by an ambitious president, Xi Jinping, only part way through his mandate, with the idea that he could become as important to China as Mao Zedong was in the country’s modern history.

China holds $1.1 trillion in U.S. debt through Treasury securities. In 2015, it was the largest provider of U.S. imports and America’s third-best customer for its exports, after Canada and Mexico. Right now China is playing an interesting waiting game in its relations with the United States, light on its feet, poised to respond to the advent of the administration of President-elect Donald Trump.

Right now, China is in a strong position. Apart from the worsening U.S. trade deficit in November, it is clear that China is well-anchored in the South China Sea, unlikely to be ejected easily or soon from the shoals and the artificial surfaces it has created there. Last month it handed back relatively without drama an underwater U.S. drone seized near the Philippines, apparently unaffected by U.S. huffing and puffing. In hopes of improving its image, China announced on Dec. 30 that it would ban all trade in ivory by the end of 2017, an area where it has taken an international licking for years.

It indicated its displeasure at Trump’s pre-inaugural contacts with Taiwan’s president but did not go ballistic on the subject, even though it is sensitive for China and governed by the 1972 agreement worked out between Mao and President Richard Nixon. Trump has also expressed his displeasure at China’s inability or unwillingness to stifle North Korea’s nuclear missile program. China has continued to say the right things on that subject but has not acted effectively to shut down Kim Jong Un, wishing to keep him and his country in the current mode.

It would be difficult for any administration to impose tariffs or other trade barriers aimed at Chinese imports into the United States. For one, U.S. consumers would pay more for goods, hurting the lower-income Americans whom Trump has pledged to try to help.

If the new president is looking to respond to China taking advantage of America, one route could be insisting that China even the current bilateral investment situation. U.S. companies seeking to invest in China are required by its government to take a Chinese partner in some industries. No such requirement exists on the American side and Chinese investors are scooping up both American companies and real estate. Trump could score political points, with American companies as well as with the public, by insisting that China permit reciprocally U.S. companies to invest in China free of Chinese strictures.

That would be fair and would also be seen as a triumph for Trump by Americans chafing to do something to China without clearing the Wal-Mart shelves.