9 questions about China you were too embarrassed to ask

21-Jan-2017 Intellasia | VOX | 6:00 AM Print This Post

Over the past eight years, US-Chinese relations have taken the shape of two fearsome giants who eye each other with caution – but also consistently find more reasons to cooperate rather than clash.

There have been major points of tension between the two, as the global powerhouses have traded accusations of cyber espionage and butted heads over China’s land grabs in the South China Sea. But they’ve also worked together on preventing a nuclear Iran and partnered against the threat of climate change. All the while, their economies have achieved an unprecedented level of economic integration; the most visible thread that holds their relationship together is the enormous volume of trade between them.

Donald Trump wants to take things in a very different direction. He devoted a considerable portion of his campaign trail energy to vilifying China and painting it as one of the American worker’s foremost threats. He’s vowed to declare China a currency manipulator and slap punitive tariffs on the goods that it exports to the US, an act that could result in retaliatory tariffs from China and potentially spark a trade war. He’s also hinted that he’s ready to rip up the Iran deal that China helped negotiate and withdraw from the historic climate agreement that the US and China teamed up for.

Some of Trump’s nominees to key economic posts have been echoing his hawkish rhetoric recently. Trump’s pick for commerce secretary, Wilbur Ross, who is set to play a leading role in Trump’s trade policy if confirmed, criticised China Wednesday as “the most protectionist” major economy in the world. Ross has taken a tough line on Beijing in the past year and co-wrote a report with Death by China author and Trump trade appointee Peter Navarro slamming China as the “biggest trade cheater in the world.” Trump’s pick for Treasury secretary, Steven Mnuchin, who will have his hearing on Thursday, isn’t known as a China hawk, but he would have the power to formally label China a currency manipulator and limit Chinese investment in the US.

Over the course of this process, China’s relationship with the US has begun to shift in the public’s eyes from something of a quiet back-burner issue to a burning foreign policy question. Which makes it an excellent time to step back and review some very basic questions about US-Chinese relations – as well as some about the nature of China itself. I spoke with several experts to do just that.

1) Is China a friend or foe of the US?

It depends on the issue. In some matters, like nuclear nonproliferation, the US and China have shared interests. In others, like the economy, they are competitors. And in other realms, like the South China Sea, their interests are in direct conflict.

The economic sphere is particularly complicated. On one hand, there is tangible competition between the countries – the US lost between 1.2 and 2.4 million jobs to China after it joined the World Trade Organisation, for example. And American policymakers have criticised policies that Beijing employs to give it an extra edge over other economies, like when it suppressed its currency, the yuan, for many years in order to sell cheaper goods in the global market and discourage imports.

On the other hand, China’s rise has also provided American consumers with exceptionally cheap goods and American exporters with a colossal pool of buyers – consider, for example, that China’s smartphone market is almost two times larger than the US and Western Europe’s combined.

The US and China are both each other’s largest trading partners, and their economic fate is heavily intertwined. China would be devastated by losing access to American consumers, just as the US would be devastated by being cut off from the Chinese market and its supply chains there. Thus, a spirit of collaboration on trade is mutually beneficial, and for this reason many economists across the political spectrum – including some fierce free trade skeptics – think that at this point in the game the two countries have more to lose than to gain by erecting new trade barriers between them.

The US and China have also worked together to prevent other countries from developing nuclear weapons. China was one of the six world powers that helped negotiate the Iran nuclear deal, and the fact that it has strong diplomatic ties with North Korea makes it a crucial partner in Washington’s quest to stop Pyongyang’s nuclear weapons programme.

The last major area where Washington and Beijing generally see eye to eye is on climate policy. In 2014, after years of stalemate and more than nine months of negotiations, China and the US agreed to work together to tackle climate change. As the two largest carbon emitters in the world – responsible collectively for about 40 percent of emissions – their breakthrough helped set the framework for the landmark 2015 Paris agreement and helped convince other countries to join the global treaty to lower carbon emissions. (Trump has insisted that he will pull the US out of the Paris accord, but it’s unclear if he really will.)

In some spheres, differences between the US and China are a source of discomfort and criticism, but they aren’t grounds for considering each other enemies. The most obvious example of that is their sharply contrasting notions of political liberty; the US is a liberal democracy, while China has a one-party authoritarian state. “Our fundamental political values don’t align, but that doesn’t mean they are necessarily a foe of ours. It means there may be limitations on our ability to trust each other,” says Julian Gewirtz, a Rhodes scholar studying Chinese history at Oxford University and the author of a new book on the history of China’s economy. Beijing does not take kindly to the way Washington criticises it for its approach to human rights.

Then there are a couple of big issues that would fit under the “foe” category.

The Obama administration has criticised Beijing for years for backing hackers who have primarily engaged in two different kinds of activity: breaking into US government databases (including White House email systems) and industrial espionage, which involves stealing trade secrets to help China gain commercial advantage. President Obama has spoken out against both types of crimes but considered the cybertheft of trade secrets to be particularly intolerable.

China seems to have dialed back its cyberattacks recently. After the Justice Department’s indictment of five Chinese military hackers for stealing trade secrets in 2014 and a 2015 agreement between the US and China to refrain from hacking each other’s private sectors, the government and experts have said that China’s hacking operations appear to have declined. But analysts say they could pick up again at any point – something that seems entirely plausible if Trump keeps up his hawkish rhetoric on China.

The South China Sea is the biggest potential flashpoint. Using its ever-expanding naval presence and the construction of artificial islands, China has continually been making bolder claims to territory in the South China Sea that have previously been considered international or claimed by countries in Southeast Asia. Some of the islands have runways that can accommodate jumbo jets and appear to have anti-aircraft guns and missile defense systems on them. China has also been using ships to flex its muscles over territory in the East China Sea, disputing Japan’s claims to a number of islets it controls. As a result of all this, countries across the region are boosting their defense spending.

The US has been sending US Navy vessels through the South China Sea and ignoring Beijing’s attempts to control airspace over them, both in defense of the territorial claims of its allies in the region and on the basis that some of Beijing’s claims violate “freedom of navigation” principles in international waterways. But Washington hasn’t taken many concrete steps to actually curb China’s claims in the area.

In 2016, an international tribunal in the Hague ruled in favour of the Philippines in a maritime dispute and strongly rejected China’s claim that it has rights to most of the South China Sea. But the question of how that ruling will be enforced by the powerful allies of countries in the region like the US remains an open question. At the moment, the US’s refusal to sign the UN Convention on the Law of the Sea undermines its authority as an enforcer of maritime law.

2) What does Trump want to do with China?

Trump sees China through a primarily economic lens – specifically, as the leading source of job loss for Americans in recent years. His biggest and most course-altering policy prescriptions emanate from that conviction.

Trump has promised to label China a currency manipulator on day one of his presidency, a move that would give his administration license to impose new tariffs on Chinese exports, making them more expensive for American customers. He’s floated the idea of making tariffs as high as 45 percent across the board. That would be a game changer and a massive blow to China’s export sector: Currently the US taxes the country’s goods at 3.5 percent on average.

An editorial in China’s state-run Global Times newspaper in November said that “China will take a tit-for-tat approach,” in response to tariffs. The publication tends to represent a more brazenly nationalist and hawkish outlook than the one held by the Communist Party, but it still provides a window into the kind of pressure Beijing will feel to reciprocate US tariffs. If both countries end up trying to match or outstrip each other’s severe tariffs, it could devastate both of their economies.

Trump’s opening gambit for his negotiation over a new trade relationship has been to put Washington’s adherence to the so-called One China policy on the negotiating table. The policy, which has been in place since 1979, is a diplomatic acknowledgement of Beijing’s stance that it alone represents China’s national government and that the island of Taiwan is a breakaway province that belongs to China. What that means in practice is that the US can only have unofficial diplomatic ties with Taiwan – something that Trump upended by taking a call from Taiwan’s president.

There are hints of other new and potentially aggressive policies, but most of them aren’t yet as firm. The Washington Post reported earlier in January that the transition team has spoken of stepping up the US’s presence in the South China Sea and boosting regional alliances with countries like the Philippines to act as a check on China’s influence in the region.

During his confirmation hearing, secretary of state nominee Rex Tillerson actually spoke of preventing China from accessing the islands it created in the South China Sea, although he didn’t indicate how that would be done. Beijing responded with restraint, but some nationalist media from China interpreted the possibility of a blockade as an invitation to war.

Will any of this actually happen? Many China analysts are skeptical, especially on the question of overturning trade relations. “A lot of the rhetoric may simply be that – just rhetoric,” says David Kang, a professor of international relations at the University of Southern California. “Every US president since Nixon has come into office promising to be tough on China, and every single one of them has backed off when they realise the complexity of the situation.”

One bit of silver lining for Beijing: Much of China’s leadership was concerned that Hillary Clinton would’ve been a persistent source of criticism of China’s human rights record. Trump is unlikely to care.

3) What does China think of the US?

There is of course no way to sum up the perspectives of more than 1.3 billion people – it goes without saying that they hold countless opinions of the US shaped by a complex matrix of class, ideology, geography, and so on – but in conversations with experts on China, a few major themes emerge.

“One might think about it like the magnetic forces of attraction and repulsion. On the one hand, there is widespread respect for many of the things the US stands for, in terms of lifestyle, culture, and business, and there’s a desire in many people to go to the US to study and work,” Gewirtz says. “But there’s also a powerful strain of nationalism and pride in China’s reemergence on the world stage, as well as concern about what the US really thinks about China – whether it truly wants to welcome China into the club of powerful countries or wants to hold it back.”

These conflicting attitudes of admiration and anxiety extend all the way up to the upper echelons of China’s ambitious political class. “You have propaganda videos coming out that are talking about America as an evil country trying to use conspiratorial plans to bring about the downfall of the Chinese Communist Party – but it’s still is a place that Communist Party leaders are sending their children to go to school,” explains Jeffrey Wasserstrom, a historian of China at the University of California Irvine and the editor of The Oxford Illustrated History of Modern China.

What if we’re to frame the question more narrowly, and ask how China’s government thinks about how it should engage with the US? Beijing’s biggest concern at the moment is ensuring that its relationship with the US allows its economy, which has begun to slow after years of meteoric growth, to continue to grow at the fastest rate possible. (Trump’s hawkish rhetoric on trade doesn’t bode well in that regard.)

It also wants to maintain an image of strength, which is about projecting power not just abroad but also at home. The Communist Party considers conceding on foundational issues like the One China policy to be political suicide, as it would leave it vulnerable to claims of being pushed around by a foreign bully. And analysts believe China could ramp up its activity in the South China Sea even more aggressively if the US tries to build up its own naval presence in the area.

While the stakes are high for China, it will likely act prudently as it navigates these issues with the unpredictable Trump team, at least at first. “Beijing is likely to give the new administration a grace period to settle in,” says Jessica Chen Weiss, a scholar of Chinese foreign relations at Cornell University.

As she’s shown through her academic work, China tends to act with “tactical restraint” and historically favours stability as a new administration takes the reins in Washington. After Trump’s protocol-breaking call with the Taiwanese president, Beijing was measured in its criticism, mainly downplayed the meaning of the chat, and deleted messages about it on WeChat, a popular social media platform in China, in an attempt to ward off an uptick in nationalist anger.

4) Is China still communist?

Yes and no. Since the beginning of communist rule under Mao Zedong in 1949, China’s economy has transformed far more than its style of governance.

Mao was a Leninist – he adopted a kind of Marxist doctrine that held that the state should be held under the tight control of a vanguard party that would oversee the course of communist revolution as it shifted to a centrally planned economy. He also conceived of China through an anti-imperialistic lens, and saw resisting powerful foreign countries as part of the Communist Party’s major priorities. Mao probably wouldn’t recognise the modern Chinese economy, but its closed political system and powerful central government still look much like what he called for decades ago.

“Today in China there isn’t much left of the legacy of ideas of class struggle and the equalisation of the relations between classes in China. It is a place with very rich people and very poor people and big business – things you have trouble squaring with Marx’s idea of where things were going,” Wasserstrom explains.

Since the 1980s, China’s government has pared back tight control and regulation of the country’s economic affairs. Today, it’s a market economy with significant elements of state control and participation. China’s 100-plus state-owned enterprises control trillions of dollars in assets and account for about a third of the country’s industrial output. But the country is a member of the World Trade Organisation, encourages private enterprise and entrepreneurship, and considers reforming many of its state-owned enterprises to be a priority.

The Communist Party still pervades Chinese life in a serious way. It has around 90 million members, meaning most people in China know Communist Party members even if they aren’t one. In a bid to maintain its status as the sole authority in the country, it restricts political liberties like freedom of speech and press heavily, though not completely. Small protests on local issues are tolerated, but demonstrations that tie people together from different geographical areas or social groups will face repression, Wasserstrom notes.

Over the years there have been ebbs and flows in what is permissible in civil society, but under President Xi Jinping, political freedom has been on the wane – he has overseen a crackdown on human rights advocates and NGOs and a tightening on political discussion.

5) Do Chinese people like American food as much as Americans like (a Westernised version of) Chinese food?

“Yes! Many kids in China are now overweight because they want to eat at McDonald’s, Burger King, and Kentucky Fried Chicken all the time – and they are indulged by doting grandparents and parents raising one-child families,” Weiss says.

6) Is China going to be richer than the US soon?

China is the world’s largest exporter, its growth is still consistently among the highest in the world, and it’s the second-largest economy in the world. In terms of size, it doesn’t trail the US by much – most economists believe that China’s GDP will surpass the US’s within a decade.

But China isn’t remotely close to achieving America’s standard of living. In 2014, GDP per capita in the US was around $55,000; in China, it was around $8,000. The US’s GDP per capita is seven times that in China, and that gap isn’t going to close any time soon.

“When you look at per capita statistics you can see why China still calls itself a developing country. Even though enormous wealth has been generated in China for the past 40 years, inequality is extremely high,” Gewirtz says. “Many millions of people in regions across the country are still living in poverty.”

7) Is China already the world’s only other superpower?

While China is by many measures the closest thing to another superpower there is in the world, many analysts tend to shy away from using that exact term. Part of that is because China’s military power doesn’t come close to rivaling America’s yet, and its defense budget is less than a third of the size of the US’s.

But another part of it is because that’s not exactly the way that China perceives itself. “China see itself in a schizophrenic way. It sees itself a developing country … but it also sees itself as a great power, and on a security dimension, it doesn’t want to be treated as just another developing country,” Weiss says.

China sees itself as reemerging as a great power on the global stage after a period of sustained weakness and defeats by foreign powers in the 19th and 20th centuries. But its desire to stand out from the crowd of emerging economies and reclaim its historic status doesn’t necessarily mean it is making a pivot for global domination. Economically speaking, it’s a global player, but militarily speaking it’s more regionally focused, and concerned with cementing its influence in Asia and establishing hegemony in the South China Sea.

Kang emphasizes that even as China grows more powerful, it won’t end up being the new Soviet Union. “China might bump noses with [America] in the Pacific, but it has no intentions of conquering the US,” he says.

He added that China and the US have different political values and systems of government, but ultimately they both fit under the umbrella of the world’s market economies. Unlike during the Cold War, China today “doesn’t offer a grand ideological alternative to Western democracy,” Kang says.

8) Is China’s continued rise inevitable?

China’s ascent in the past few decades has been astonishing, but there are signs that it’s continued rise faces considerable obstacles.

The country faces serious demographic challenges. The combination of its one-child policy (which it scrapped in 2015 after 35 years) and the lower fertility rates that tend to accompany modern economies has created a situation in which the country’s population is aging and shrinking at a breathtaking clip. “By the end of the century, China’s population is projected to dip below 1 billion for the first time since 1980. At the same time, America’s population is expected to hit 450 million. Which is to say, China’s population will go from roughly four and a half times as large as America’s to scarcely more than twice its size,” Howard French wrote at the Atlantic.

The costs of taking care of the massive elderly population will be huge, and the generations of labourers replacing them will much smaller – a path toward fiscal disaster. Some demographers believe that within a few decades, China might be trying to do something that currently seems unfathomable: trying desperately to attract immigrants.

China’s environmental crises are also a pressing concern. Its breakneck industrialisation has come at a cost, with severely contaminated water supplies and heavy air pollution present throughout the country. The resulting health complications and effects on life expectancy have put a dent in China’s growth and could continue to take even more of a toll in the future. They’ve also sparked regular protests against the Chinese government which threaten its grip on power.

Economically speaking, China has huge levels of debt, and is struggling to find ways to keep growth strong as its export-driven manufacturing economy slows. Rising wages in China have started driving industrial jobs elsewhere in Southeast Asia, and the country has to find a way to transition to an economy more oriented toward services or developing high-end products of its own design.

Finally, there is never any guarantee of the stability of the Chinese Communist Party. Social unrest motivated by anything from economic discontent to environmental fears is always a possibility. And It’s unclear what effect Xi’s sweeping anti-corruption campaign is going to have on the appeal of being a member of the party, which is often attractive to people who use membership to enrich themselves illicitly.

9) Is China disliked by its neighbours?

There’s a great deal of tension between China and many of its neighbours, but relationships in the region are in flux.

As mentioned before, China is at odds with countries like Japan, Vietnam, and the Philippines over disputed territories in the East and South China seas. Defense spending among countries in the region is generally on the rise, and Vietnam has done things like increase the length of the runway on one of the Spratly Islands recently – which it said could handle maritime surveillance and combat aircraft – in a bid to counter the Chinese presence in the region. (The Spratlys consist of 100 tiny islands and reefs, of which nearly half are occupied by China, Malaysia, Vietnam, or the Philippines.) The 2016 international tribunal ruling against China’s claims could end up changing dynamics in the South China Sea if someone steps up to enforce it, but for now Beijing has made it clear that it doesn’t take the ruling seriously.

China has often used pragmatic regional diplomacy to mitigate tensions with its neighbours. And Kang, the international relations scholar at the University of Southern California, has done research showing that despite tensions over territory, a number of China’s neighbours are moving closer to Beijing by building economic ties. “A lot of the work I’ve done shows that all of these countries are rapidly trading more and more with China. They’re trying to increase their relationships,” he says.

Some are even seeking to cooperate with Beijing on security. Thailand works together with China on security and intelligence, for example, and Malaysia signed a deal to buy combat ships from China in the fall of 2016.

At the end of the day, they know they have to live with China. On some level, Trump must know that too. The question is what he’ll do about it.

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