US 2016 Election: Will US-China Relations Change?

US 2016 Election: Will US-China Relations Change

By Dan Steinbock           

 

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After one of the most degrading races in postwar history, US presidential campaigns are getting still dirtier. But will US-China relations change?

As Wikileaks has disclosed information about Hillary Clinton’s email and Benghazi scandals and deep ties with Wall Street, her campaign, with its cozy media relations, is promoting Donald Trump’s obscene tapes and comments on women.

In the first US presidential elections that have been “Kardashianed,” Clinton has a 5-10% lead against Trump. However, US electoral college is ruled by winner-takes-all principles, which give Clinton about 260 and Trump about 165 electors, respectively, while some 115 remain undecided. They are the ones Clinton and Trump are now courting – with big money.

After marginalizing her Democratic center-left opposition, Clinton’s campaign has raised almost $375 million, plus $145 million from big lobbyists. In contrast, Trump has failed to unite the party behind his campaign. As a result, he has raised less than half of Clinton’s total and is shunned by most big donors.

 

Clinton’s America: Sticks, carrots – and sticks

According to US-based Pew’s survey, the Chinese are divided about Hillary Clinton. More than a third have a favorable view of her, another third has an unfavorable opinion, and the rest has no view.

After all, Washington’s pivot to Asia – a de facto effort to contain China’s rise – was first presented by Clinton as President Obama’s foreign secretary. In that role, she also promoted the US-led Trans-Pacific Partnership (TPP) for Asia; but to beat her Democratic rival Senator Bernie Sanders, she turned against it. As president, she could flip-flop again and support the TPP. She has also threatened to accuse China for currency manipulation, which today makes even less sense than before.

Clinton supports the shift of 60 percent of US military ships to Asia Pacific, which has contributed to increasing rearmament and friction in the region. She is unlikely to cut military spending even though the US already spends $600 billion on defense annually; more than the next seven countries combined.

She also fully supports the ‘new Cold War’ against Russia. Indeed, the Bush era neoconservatives have joined Clinton’s campaign, including Robert Kagan who has supported China’s containment since the late 1990s, and his wife, Victoria Nuland, who has played a highly controversial role as Obama’s representative in Ukraine.

Neoconservatives have embraced Clinton’s ‘liberal internationalism,’ which justifies efforts at regime changes. In turn, 50 former Republican national security leaders have slammed Trump who would like to renegotiate US pacts with its allies. In Pentagon, Clinton means ‘more of the same’ continuity.

 

Trump’s America: Defense has a (new) price

According to Pew, two out of five Chinese see Trump unfavorably, or have no opinion about him, while only one of five sees him favorably. Trump’s negative ratings have been boosted by his many references to China as an economic rival, political adversary and military threat. But his discontent covers much more of Asia.

In foreign trade, Trump has pledged to tear up or renegotiate the TPP agreement which has potential to undermine Japanese Prime Minister Abe’s economic reforms and controversial security agenda. It would be a huge embarrassment to the ASEAN nations that have joined the TPP. To reduce the US trade deficit with the region, Trump would raise trade rhetoric, tariffs and import duties against China, Japan and low-cost ASEAN.

Indeed, some of his murmurings – whether NATO is still relevant; a more stable Middle East if Saddam Hussein and Muammar Gaddafi were in power; mutual admiration with Russia’s Vladimir Putin, and so on – suggest that Trump might focus his attention on renegotiating better deals and undermining bad ones.

If Trump would go after US allies Japan and South Korea, America’s postwar defense system in Asia would crumble. Due to his “America first” stance, Trump would reassess US economic and security pacts around the world. He gave his first foreign policy speech in the Nixon Center, which stresses foreign policy realism, not interventionism.

 

What next?

Would Clinton – or Trump – walk the talk? Despite series of critical references to China, Clinton has a track-record of cooperation with China and Trump is a pragmatic deal-maker.

However, a militarized US pivot to Asia has potential to split the region and defer the economic catch-up of emerging Asia. That would not only slow China’s rise but undermine the promise of the Asian Century and America’s own security interest.

 

A slightly shorter version of this commentary was published by China Daily on October 13, 2016

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Dr Steinbock is an internationally recognized expert of the multipolar world. He focuses on international business, international relations, investment and risk among the major advanced economies and large emerging economies; as well as multipolar trends in stocks, currencies, commodities, etc. Altogether, he analyzes some 40 major world economies and a dozen strategic nations, across all world regions.His commentaries are released regularly by major media in all world regions (see www.differencegroup.net). Dr Steinbock is CEO and founder of DifferenceGroup (for more, see www.differencegroup.net). In addition to advisory activities, he is affiliated as Research Director of International Business at India China and America Institute, and as Visiting Fellow in Shanghai Institutes for International Studies SIIS (China) and EU Center (Singapore). As a Senior Fulbright scholar, he is affiliated with Stern/NYU, Columbia Graduate School of Business and has cooperated with Harvard Business School. He has advised/consulted for the OECD, the European Commission, the Nordic Council and European government agencies, multinationals and SMEs, financial institutions, competitiveness and innovation organizations, and so on.