BEIJING (MarketWatch) — President Donald Trump’s relationships
with Russia and his sympathies, real and alleged, with
President Vladimir Putin have attracted much attention.
Another plausible candidate for a “friend of Trump” accolade is
President Xi Jinping of China. Many of Trump’s actions since
his inauguration Jan. 20 are likely, directly or indirectly, to
strengthen Beijing’s international position.
Retreat from leadership
Trump’s decision to pull out of the Paris climate accord
weakens overall momentum behind lowering carbon emissions and
quelling global warming. But the U.S.’s move to retreat from
leadership in this and other spheres, such as trade, may end up
reinforcing China’s ability, through a variety of “soft power”
measures, to move forward. While advocating “America first,”
Trump may become instrumental in promoting China to a more
effective position on the world stage.
One big problem for Trump in Asia is now starting to emerge,
across a variety of fields including defense cooperation —
dealing with the many political and security hotspots
throughout the region. By apparently ditching long-held
American principles in favor of a case-by-case “transactional
approach” in trying to resolve policy dilemmas, Trump may be
responding to U.S. domestic pressure for a more hard-nosed
attitude toward “free-riding” allies and partners. But he is
opening himself to the charge that America cannot be trusted
over the longer term — and giving China a gigantic opportunity
to move across Asia into a leadership role from which it will
not easily be supplanted.
In anti-climate change efforts, China will not be seeking to
move overtly to the front. Instead it will be advancing
stealthily in broad spheres using traditional multilateral
diplomacy backed by grants, credits and technological
commitments. As one Beijing official describes it, “There is a
vacancy, there is a place [for China]. The world has to move
forward.” He adds: “Climate change is financially and
technically very complex. China cannot simply take over. The
U.S. and China have been working together. China alone can’t do
that. We need Europe, we need emerging markets — we need a set
of proper governance measures.”
Many commentators and politicians have pointed out that
America’s step back from a liberal approach to international
commerce opens a vacuum that China is trying to fill. Trump’s
withdrawal from the 12-nation Trans-Pacific Partnership has
been widely interpreted as giving China a new instrument to
forge closer trade ties with countries in its region — and even
to supplant the American role in the Pacific Rim.
‘Belt and Road’ initiative
In a similar way, Trump’s climate change pronouncement provides
China with additional direct and indirect leverage. One
possible route for China is analogous to the multidimensional
policy it is forging over the “Belt and Road” initiative, a
move to develop infrastructure primarily across Asia and
Europe, also spreading to Australasia and East Africa,
encompassing around 60 countries.
This goes beyond a giant program to build continental-scale
roads, railways, ports and other trade-facilitation structures,
involving investment over several decades and from a variety of
sources of between $4 trillion and $8 trillion. As Chinese
officials make clear, the initiative is designed, too, to
encourage further international use of the yuan as an
investment, payments and transaction currency that will one day
challenge the dollar.
Chinese-style banking system
Furthermore, the Chinese effort also aims to build up a
Chinese-style financial regulatory and banking system in
countries in the “Belt and Road” program. This meets a
threefold objective: to strengthen economic and financial
systems; to safeguard Chinese credits and investment across
this widespread region, ensuring, for example, that repayments
are made on time; and to provide opportunities for Chinese
expansion in financial services.
In climate change, China could now take a similar
multidimensional approach by pushing forward with efforts to
harmonize regulatory standards in fields ranging from green
bond issuance to solar energy installations. Europe and China
have agreed on a “green alliance” to push forward the climate
There is room for China to propel forward a United Nations
commitment to reduce emissions by 26% from 2005 levels by 2025.
Michael Bloomberg, the former New York mayor, said after
meeting French President Emmanuel Macron last week that U.S.
cities, states, universities and businesses would inform the UN
that they aimed to honor the U.S. commitment. Jerry Brown, the
governor of California, has been in China to talk to political
and business leaders about coordinating new green technologies
being produced by Chinese manufacturers.
China Investment Corp., the Chinese sovereign fund, which has
been eyeing the vaunted $1 trillion Trump infrastructure
program as a possibility for enhanced American engagement, is
exploring whether Trump’s disavowal of the Paris agreement is a
possible opportunity for building cooperation in the U.S. at a
state and municipal level.
What is clear is that China now has a series of valuable
channels for enhanced international cooperation bypassing
Trump’s Washington. Over time, President Xi may be very
grateful to his opposite number in Washington. “America first”
may turn into “China first.”