New Cold War

Trump’s tour of Asia: an emperor with no clothes

 

Despite the razzamatazz of Trump’s visit to Asia, the verdict of the international news media was unanimous: the trip had simply served to underline the US’s declining influence in Asia; a decline that Trump is blamed for accelerating by ceding leadership to China on the crucial issues of contemporary geopolitics: trade, climate change, development and multilateral agreements.

This was reflected most clearly towards the end of the trip at the Asia-Pacific Economic Cooperation (APEC) meeting in Vietnam. Trump cut an almost irrelevant and isolated figure, whose bombastic speech was peppered with dire threats on trade that were simply ignored by his audience. In telling contrast, speaking soon after Trump, China’s president Xi Jinping, talked about the positive role of globalisation and the contribution of a ‘multilateral trading regime’ to ensuring developing countries ‘benefit more from international trade and investment’ in which China pledged to play a key role.

Thus, while the changing relationship of forces between China and the West is primarily down to the continuing contrast between China’s rapid growth and the West’s relative stagnation, which predated Trump, there is no doubt that his ‘America First’ framework and isolationist foreign policy have further weakened the position of the US internationally and especially in Asia.

A recent survey conducted in 37 countries by the Pew Research Center showed that international confidence in American leadership has declined sharply in the last year, particularly in some of the key countries of the Asia-Pacific. In South Korea and Japan confidence in the US president to make the right decisions internationally fell by 71 and 54 percentage points respectively. In Indonesia it fell by 41 percentage points and even in pro-US Philippines it fell by 25 points. As the Washington Post put it: ‘This is nothing short of a disaster for American soft power’.

It is a contradictory fact for those sections of the international and American left that still have illusions in Clinton that despite Trump’s appeal to right-wing populism, racist immigration policies and proposed tax cuts for the rich, there is no doubt that if Hillary Clinton had become president she would have pursued a more aggressive US line internationally, against China, Russia and in the Middle East, not just in words – à la Trump – but in deeds.

Probably the most decisive single act in weakening the US position in Asia was Trump’s decision to pull out from the 12-country Trans-Pacific Partnership trade deal. Clinton may have also said that the deal was flawed, but she had left herself a number of let-out clauses that suggested if elected President she would probably have found a way to go ahead. The US abandoning the TPP was a major blow to its standing in the region, not least because most of the other signatories had ridden out substantial domestic oppositions to get agreement through their respective legislatures. They did not like being marched up to the top of the hill only to be left standing exposed.

Moreover, despite correct criticisms of the TPP by oppositions within the signatory countries, the deal did put something on the table for both sides. Obama’s administration, which had driven the entire process, had also faced resistance in getting the TPP through Congress, precisely because it pledged the other signatories significant new openings to the US market – albeit in return for accepting effective US regulation of their domestic economic policies, opening up their own markets to US imports and, of course, distancing themselves from China.

Trump’s alternative vision of new bilateral trade negotiations with the US has gone down like a lead balloon with potential partners. As the Prime Minister of Singapore, Lee, put it entirely accurately when on a visit to Washington: ‘I think [the Trump administration] believe that, bilaterally, you are bigger than any other partner that comes along and so you get a better deal. As a result of which I think not that many partners will be keen to deal with you bilaterally.’[i] Even Japan has resisted Trump’s blandishments to enter bilateral trade talks.

Thus while US domestic protectionist lobbies and others applauded Trump for pulling out of the TPP, it was greeted with consternation in US foreign policy circles, as it left the US with no economic or trade initiative to counter China. As if to underline this, it was while most of the original TPP signatories were with Trump at the APEC summit in Vietnam that they chose to announce their plans to resuscitate the deal without the participation of the US.

Worse, immediately after Trump left the ASEAN meeting in the Philippines, the first full summit of the 16-country Regional Comprehensive Economic Partnership convened also without the US. The RCEP, which has been driven by China, would be an even wider trade deal than the TPP, including China, India and South Korea, which are not partners to the TPP. This RCEP, likely to be agreed next year, will involve tariff reductions in economies that together constitute a quarter of the world economy.

The announcement that the TPP would go ahead without the US and the first summit of the RCEP were graphic illustrations of just how little the US is seen to contribute to the economic development of the Asia-Pacific region. But the TPP and RCEP were just the ones that came up during the trip. Other China-led investment and development initiatives are setting an entirely new economic agenda in Asia. These include the establishment of the $100bn Asian Infrastructure Investment Bank, which the US tried and failed to bloc in 2015; and the gigantic Belt and Road Initiative to develop land and sea transport and communications infrastructure from East Asia to Europe, involving 60 countries and projecting upwards of $4tr in investment over coming years.

While everywhere Trump went he was treated to a charm offensive, the pomp was almost in inverse proportion to his actual influence. In Japan Prime Minister Abe described Trump as his ‘favourite guy’ (to play golf with!) – before announcing the relaunch of the TPP without the US a few days later. In South Korea he was introduced at the National Assembly as ‘leader of the world’, while President Moon oiled that Trump was ‘already making America great’ again. But immediately on Trump’s departure South Korea announced a reset of its relations with China and limits to the deployment of the US THAAD anti-missile system that China objected to. In the Philippines President Duterte sang Trump a Filipino love song at their gala dinner, but continued to reorient his country to China and turned down any role for the US in the South China Sea.

For its part, China did not throw around such personal praise during Trump’s visit, but the red carpet was rolled out for him in every respect.

But despite the glitz, Trump will find it hard to show what he brought home from the trip, either on trade – which he had declared was the number one issue for his Asian tour – or on strengthening the US’s military position in the region.

The exception is that he can say he signed trade and investment deals with China worth $250bn – a very considerable sum. However, scratching the surface reveals that these deals are all in the form of Memoranda of Understanding, reflecting aspirations, future potential projects and expressions of interests rather than definite commitments. This is not to say that the Chinese are acting in bad faith and do not intend to meet at least some of what has been proposed – and even if only 25% came to fruition, $60plus billion is a lot of investment. But it does leave open what would happen to these deals if the US were to ratchet up the military pressure over North Korea or in the South China Sea?

As outlined above, it was when Trump reached Vietnam for the APEC summit that the pomp accompanying his Asian tour fell away and the emperor was seen to have no clothes. His speech to APEC was to all intents and purposes ignored. Perhaps as a result, or because the trip was almost over, Trump, whose tweets had been more measured than usual during his visit, returned to using Twitter to trade insults with North Korea and launch unexpected policy initiatives. But apart from provoking a North Korean death threat for describing Kim Jong-un as ‘short and fat’, even his tweets brought little interest.

This was most striking in the lack of any response to his tweeted and off-the-cuff suggestion that the US ‘mediate’ on the South China Sea disputes: ‘I’m a very good mediator’ he claimed. The silence with which this was greeted was in sharp contrast to the flurry of diplomacy, protests from China, remilitarisation and stepped up conflict that flowed from Hillary Clinton’s offer made in the same terms – in the same country – in 2010. That Clinton speech in Hanoi marked the launch of Obama’s ‘pivot to Asia’, which led in particular to a heating up of conflict between the various claimants to islets in the South China Sea, which in turn was used to justify a sharply stepped up US naval presence in the Sea.

This time Trump’s audience simply shrugged and moved on. On the one hand this was partly because the experience of stepped up US intervention in the region after 2010 had not been positive. US involvement had led to disruptive tensions and military threats compared to the relative stability of the preceding period when the disagreements over territory in the South China Sea had been successfully managed bilaterally or under the auspices of ASEAN.

IMF projected growth rates for the key South China Sea economies – not just China – suggest they will massively outstrip growth in the US (and EU) over the next five years.[ii] Given that military conflict in the region is about the only thing that could disrupt this, there is no appetite among these countries for signing up to a US policy of ratchetting up tensions with China over disputes in the Sea.

But above all, it is because the countries of the region increasingly no longer feel obliged to answer when the USA calls or jump when it says ‘Attention!’

It is true that US still has a substantial military advantage over China, and is still accepted as key security guarantor by most countries in the region. But as these countries do not believe the Western hype that China is engaged in a dangerous expansionist policy in the region and do not feel under military threat from their neighbours, the US’s military might has limited clout in determining priorities. As former Philippines president Gloria Arroyo said during the ASEAN summit: ‘[In the 1980s] everybody thought China would become a competitor. Today, we see China is not a …competitor. It’s a collaborator, a donor and a market.’

By contrast with Trump’s blundering and bombast, China has shown an increased sureness of foot in the international arena, sidestepping Trump’s rhetorical excesses and relentlessly pursuing stable international relations, demonstrating subtlety and effectiveness in dealing with the series of tensions that have emerged in the last year as a result of the big changes in the White House.

On the one hand China has drawn clear ‘red lines’ which have been accepted – for example, in turning around Trump’s early suggestions that the US might break with ‘one China’ on relations with Taiwan. On the other, China has been prepared to meet the US ‘half-way’ on such issues as sanctions on North Korea, some liberalisation of trade, for example allowing the import of more US beef and the MOUs signed during Trump’s visit.

China’s success can be measured by a real retreat by Trump from his ultra-hostile starting point on relations with China. Personally Trump has appeared wrong-footed by China, overly keen to assert that he and Xi have a special relationship and that China is a ‘good friend’. During the trip Trump went further, taking the Western media aback by saying ‘I don’t blame China’ for ‘unfair’ trade relationships with the US, instead reproaching previous US administrations. And it is not just a matter of words. In the White House, extreme China hawks, like Peter Navarro, have been sidelined, while others, like Steve Bannon, have departed.

While this success is considerably down to China’s effective foreign policy responses, not just towards the US but also its Asian partners, Trump’s policies have isolated the US further. China’s success in building partnerships in Asia is because it is consistently putting forward solutions to complex regional problems that offer mutual benefit in securing stability for trade and economic development.

It is precisely on these decisive issues for the fast developing economies of Asia that Trump’s ‘America First’ protectionism is empty. Thus perhaps the most telling assessment of Trump’s Asia tour was the despairing The Washington Post headline: ‘This is how a superpower commits suicide’.

Jude Woodward is the author of ‘The US vs China: Asia’s new Cold War’, Manchester University Press, 2017

 

[i] Donnen, S. ‘Globalisation marches on without Trump’, Financial Times, 6 November 2017

[ii] The cumulative IMF growth rate projections for 2016-22 for these countries are: Philippines 48%, China and Vietnam 44%, Indonesia 37%, Malaysia 34%, Hong Kong SAR 20%, Singapore 17%, Province Taiwan 13%, compared to the US and EU on 12% apiece. Source: IMF World Economic Outlook October 2007, calculations courtesy John Ross

America’s “Pacific pivot”: Round One to China

Obama’s November week-long, whistle stop tour of Asia – attending the Beijing APEC (Asia-Pacific Economic Co-operation) summit, the ASEAN meeting in Myanmar and the G20 in Australia – was intended to re-launch America’s crucial Asia-Pacific (aka China) strategy, in the doldrums since Obama’s aborted 2013 trip cancelled in the context of the “fiscal cliff” crisis.[1] Instead the trip merely underlined how much ground the USA has to make up in order to trump China’s growing influence in the region.  

The goal of the Obama trip was to roll out a display of the USA’s superior economic and strategic weight in the region, demonstrating America’s continued ‘indispensible’ role and putting China in its place.

The American plan was to dominate the APEC agenda with discussion on progressing the Trans-Pacific Partnership (TPP) free trade agreement from which China is excluded. Alongside this Obama would be associated with a regional show of force through parading the power of the USA’s encircling alliances, particularly its crucial trilateral alliance with Japan and South Korea. Added to that, on the sidelines the USA would demonstrate its ability to drive a wedge between China and its regional friends – Vietnam and Myanmar – while gathering nationalist Modi’s India into America’s close embrace against the alleged “China threat”. This strategy was a failure on all fronts.

The TPP remained stalled – although now Obama aims to use the Republican majorities in Congress to overcome the domestic obstacles that have contributed to its delay.

Rather than a resurgent Japan wheeled out as a counterweight to China, Abenomics dramatically hit the skids, with the announcement that the economy was sliding into recession and Abe forced to call a snap election.

Meanwhile South Korea’s Park Geun-hye resolutely refused to bend to US pressure to reopen top-level relations with Japan, broken off in response to Abe’s revisionism on Japan’s Second World War crimes.

On top of that Vietnam proved keen to smooth troubled waters with China and wouldn’t play to the USA’s tune at ASEAN. Myanmar’s military-backed government has stalled on American encouraged progress towards “free” elections, as promised US investment has failed to materialise. This left the Philippines isolated to fulminate alone against alleged Chinese aggression in the South China Sea.

And to cap it all Modi continued along his careful course of courting both the USA and China, significantly refusing to join in American-led rhetoric against alleged Chinese regional aggression.

As a result the photo opportunity that ended Obama’s tour after the G20 was just a tired restatement of America’s long-standing military agreements with Australia and Japan.[2] Rather than a new triumphal arc of American economic and military alliances surrounding China, Obama’s Asian parade ended in a retreat to where the USA started – reliant on its pre-1990s old Cold War allies.

But while America strategy seemed beset by woes, China quietly moved into the spotlight.

China’s opener was the announcement of a new Siberian gas deal with Russia, signed on the fringes of the first day of APEC, which dominated the headlines the day Obama arrived in Beijing. Not only is this deal strategically important for China’s future energy security, it underlined China’s refusal to go along with Western driven sanctions on Russia, and gave further evidence of the strengthening of the strategically crucial quasi-alliance between the two countries.

This agenda-setting coup was followed up by a joint Chinese-South Korean announcement of the virtual finalisation of their bilateral free trade agreement. Given that the Americans heavily invested in attempts to persuade South Korea to postpone or preferably stay out of any such agreement, counter-posing the alleged benefits of the TPP, this was a further demonstration of China’s growing pull and America’s fading glory.

America’s problems with South Korea highlight a recurring feature of the reshaping of relations in the Asia-Pacific. While South Korea remains deeply committed to a military alliance with the United States, it is not willing to forego the benefits of close trade and investment relations with China, (nor, Incidentally, to be bullied into unpopular support for revanchist Japanese nationalism). Increasingly this is the problem that the USA faces across the region: India, Indonesia, Thailand, even Taiwan, Vietnam and others are happy to accept the offer of a US military umbrella but reject signing up to strings that mean stepping up conflict with China.

But the biggest headlines of all came for China’s announcement of its commitment of $40 billion to a “Silk Road Investment Fund” to provide finance for a trans-Asian network of roads, railways, seaports and other critical infrastructure, which won the warm-hearted applause of all China’s Asian continental partners.[3]

China's "Silk Road" initiatives – referencing the ancient East-West trade routes across the Asian continent and via the Indian Ocean – are a typical example of China's "win-win" strategic international interventions. China proposes to puts up the money for much-needed infrastructure development, linking China to the West overland via Laos, Cambodia, Myanmar, Bangladesh and In via Central Asia and Pakistan, and by sea via the Indian Ocean with port developments planned in Thailand and Sri Lanka. This investment of course offers greater speed, efficiency and security for China's own International trade, but also gives an enormous impetus to all the countries involved.

The attractions of this were underlined by a 2009 study by the World Bank aligned Asian Development Bank, which showed that the South Asian region needed national infrastructure investment of around $8 trillion and $290 billion in regional infrastructure investment by 2020 to sustain its growth trajectory.[4]

 China's $40 billion for regional infrastructure investment projects, plus a further $20 billion it has made available for cheap loans, will make a substantial contribution to growth in the region. Such Chinese intervention is possible for two reasons; firstly its high growth rates create funds for investment and secondly these are held by state banks, which can be directed on their investment priorities.

The USA on the other hand – despite being the most buoyant of the G7 economies coming out of the 2008 financial crisis – is still experiencing below trend rates of growth, its FDI is contracting and its import market is scarcely growing. Moreover, all it can do is urge its private companies to invest in the region; most have simply not responded to the call.

Thus while China offers major infrastructure development contributing to growth, the USA offers minimal and unreliable private sector investment, accompanied by pressure for increased military spending to contribute more fully to defence agreements with the United States.

Unsurprisingly China's proposal is proving more popular.

Of course the growing weight and presence of China in the region causes some jitters, hence the generally warm welcome given to stepped-up US naval and other military presence in the Pacific and Indian Ocean. But this is an insurance policy, and it would be a mistake to interpret this as a growing military line-up behind the United States against China.

Soon after his first election to the presidency in 2008 Obama announced the long-awaited reorientation of American foreign policy to the Pacific to counter China. The aim was to pull back from the Middle East, engage Russia in pressurising Iran and encircling China, shift US military resources to Asia, while extending and reinforcing it East Asian alliances.

Instead of pulling out of the Middle East however the American administration became bogged down in a military intervention in Libya, the attempt to do so in Syria and now again Iraq. This set of distractions all gave China time to extend its own relations in the Asia-Pacific region without the active presence of the USA.

But worse, rather than tying in Russia to its Asia strategy, US intervention in Ukraine has ensured Russia has grown closer and closer to its Chinese neighbour, and refused to go along with further sanctions on Iran.

The series of November meetings in East Asia showed not Obama's strength but the degree to which China is increasingly the key poll of attraction in the region.

Round one of America's attempted new Cold War against China has clearly gone to the other side.

 

---

[1] "US shutdown: Barrack Obama cancels Asia trip", BBC News, 4th October 2013

[2] "US, Japan and Australia to deepen alliance", Financial Times, 16 November 2014

[3] "China's Silk Road initiative's challenge US dominance in Asia", John Kemp column, Reuters, 10th November 2014

[4] Investment for a Seamless Asia, Asia Development Bank Institute, September 2009