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CCG Report | Trump’s Coming Era: Challenges, Opportunities and Policy Responses

Thursday,Jan 19, 2017

By: CCG

通讯 CCG报告:特朗普时代 挑战、机遇 与中国应对(1)-1

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Executive Summary

 

On Friday, Jan 20th 2017, Donald Trump will officially be sworn in as the 45th president of the United States. As an “outlier” in political science, the President-elect stirred tremendous attention from both within and outside of U.S. with his strong personality and anti-establishment statements. Scholars and politicians believe that under Trump’s leadership, major policy changes will be made and might even observe a growing trend of anti-globalization. This report will discuss U.S.-China relations based on Trump political perspective and behaviors, such as his “twitter presidency” and controversial cabinet nominations. Through studying Trump’s personal administrative style, his cabinet members’ professional background and U.S.-China diplomatic relationship, the report summarizes the research findings into eight challenges and eight opportunities that both China and U.S. might need to deal with in the future, and then suggests ten possible countermeasures to Chinese policymakers.

 

Under Trump’s “America First” political perspective, China might face eight potential challenges:

 

  1. Intends to withdraw U.S. from TPP and renegotiate the international/regional free trade system, such as NAFTA and WTO.
  2. Indicts China for currency manipulation, and proposes to raise tariffs on Chinese exports to U.S. by 45%
  3. Uses tax policy and other financial measures to encourage U.S. enterprises moving back to the States
  4. Challenges the “One China” Policy and the three U.S.-China Joint Communiques through making sensitive statements on Taiwan issues
  5. Unleashes America’s shale gas and clean coal reserves and withdraw from the Paris Climate Agreement
  6. Pressures China to crack down on North Korea’s development of nuclear weapons
  7. Indirectly encourages Japan and South Korea to develop nuclear weapons
  8. Reduces the “free-riding issues” by charging American allies a higher price for U.S. security commitments

 

Economic, trade ties between China and U.S. as well as people-to-people exchanges have become much closer than ever, and neither side could stand the cost of cutting these ties. Both countries will soon recognize that Sino-US relations, even in the Trump Administration, should maintain the momentum of the past 40 years - that of reciprocity, mutual benefits and interdependence. The two countries should continue to deepen their cooperation with immense common interests, a great benefit for either.

 

The report releases eight major opportunities for the two countries in future cooperation:

  1. Strong bilateral trade allows both U.S. and China to enjoy the fruitful outcome of shared common interests and in-depth cooperation. Through years of development, the two countries’ economies are getting increasingly intertwined with each other in various industries.
  2. By actively participate on international platforms, such as the Free Trade Area of the Asia-Pacific (FTAAP), U.S. and China can collaboratively promote fairer game rules for the 21st century
  3. U.S. – China bilateral investment experienced a rapid increase in the past few decades. This astonishing development has resulted immense spillover effect for both countries, such as promoting domestic employment, upgrading technological development, and stimulating industrial restructuring.
  4. Multinational corporations are playing an essential role in stabilizing the U.S.-China relations. By maintaining a close economic tie with these large corporations, they will continue to influence both countries’ political leaders in making restraint decisions.
  5. China has a unique competitiveness in building infrastructure. Trump’s infrastructure construction plan might become the new highlights in U.S.-China cooperation.
  6. After more than three decades of cultural exchanges, both countries have experienced strong growth in communication from various aspects, such as tourism, academic exchanges and immigration. With continuous encouragement, this trend will continue to make tremendous contribution in fostering cultural integration between U.S. and China.
  7. The state governments of U.S. have high degree of autonomy and maintain close economic ties with China. Such a strong provincial economic relationship may allow state governments to assist both U.S. and China in strengthening its relationship.
  8. With the collaborative effort, China and U.S. can make milestone achievement in global governance and delivering new forms of public goods. The recent ratification of the Paris Climate Agreement made by both American and Chinese governments can be viewed as a great demonstration of such collaboration.

 

The report concludes that China and the U.S. should take precautions to prepare contingency plans, strive to maintain the overall smooth development of bilateral trade, cultural exchanges and relations in security and global governance. At the end, CCG scholars suggest Chinese government be more active in promoting the relations in following ten aspects:

  1. Initiate China-American summit, and invite Trump’s team to visit China.
  2. Prioritize economic diplomacy, and try to strengthen cooperation in international trade and overseas investment.
  3. Considering the crucial role U.S. multinational corporations play in foreign relations, China should work together with these corporations to address the importance of China-US relations.
  4. Enhance regional economic collaboration with U.S., such as jointly initiating the establishment of FTAAP.
  5. Further promote China- US cultural exchanges, such as tourism, education, scientific research and public health.
  6. Invite U.S. to join AIIB. Collaboratively, China works together with US to foster a stronger and wider collaboration in infrastructure construction, including jointly exploring market in the third country.
  7. Further enhance international cooperation with the state governments of the U.S., possible events may include regular provincial-state level summits.
  8. Pay more attention to collaboration with Southeastern countries, Japan and South Korea. Creating common trust and easing regional tensions through leveraging regional cultural similarities, so as to reduce possibilities of regional conflicts.
  9. Enhance U.S.-China cooperation in global governance. Through collaborative effort, U.S. and China may assist the international community in upgrading and refining the global governance system.
  10. Actively engaged in “Track-II Diplomacy”, provide policy advices for both Chinese and American governments.

 

 

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