Diplomacy at work in Florida when DJT meets China’s Xi


April 3, 2017

Diplomacy at work in Florida when DJT meets China’s Xi

by Editors, East Asia Forum

http://www.eastasiaforum.org

Image result for Xi meets  Trump in Florida

All eyes will be on Florida this week, when US President Donald Trump will host an inaugural summit with Chinese President Xi Jinping.

The first summit between the two leaders is always going to be consequential, given the size and influence of the two nations, and their growing competition over issues such as North Korean nuclear proliferation, East Asian maritime security disputes, bilateral trade and investment imbalances and the direction of the global economy.

But the Trump–Xi summit takes on even greater significance because of the degree of anti-China rhetoric Trump employed during his 2016 presidential campaign. There is now a high degree of uncertainty over whether President Trump will turn that rhetoric into policy.

Image result for Xi meets  Trump in Florida

Secretary of State, Rex Tillerson met President Xi in Beijing

During the election campaign, Trump threatened to impose a 45 per cent tariff on Chinese imports and described China as ‘the single greatest currency manipulator that’s ever been on this planet’. As President-Elect, Trump broke with decades of diplomatic protocol by accepting a phone call from Taiwanese President Tsai Ing-wen, and suggested in an interview on Fox News that he may use the ‘one China’ policy as a bargaining chip in trade negotiations.

So far, President Trump has not moved to enact specific policies that follow through these threats, although his appointment of Peter Navarro as the director of the National Trade Council and his nomination of Robert Lighthizer as US Trade Representative, suggested that the Trump administration was likely to take a more confrontational approach to China in the economic realm.

On security matters, there have been more contradictory signals. Despite his threats during and in the wake of the campaign, Trump told President Xi during their first phone call that he would respect the ‘one China’ policy. And although Trump’s Secretary of State, Rex Tillerson, took a tough line on China during his confirmation hearing, Tillerson surprised Chinese and American audiences alike during his first official visit to Beijing last month when he appeared to take a more conciliatory approach to China and adopted Beijing’s formulation of language underpinning the ‘new model of great power relations’.

Inevitably, teething issues and missteps confound the early days of any new administration, but the degree of uncertainty surrounding Trump’s China policy is unusual. There is no doubt that we are at a precarious moment in the US–China relationship. There is much at stake for both the United States and China in the lead up to the Florida summit.

As Zha Daojiong explains in our first lead piece this week, Trump faces considerable domestic pressure from America’s foreign policy advocates — Democrat and Republican alike — for whom ‘“get tough on China” is more the norm than the exception’, and from his supporters who are now encouraging Trump to ‘live up to his own tweets about China’. Trump also faces pressure from US allies and partners in Asia who ‘demand explicit and repeated assurance of American staying power’. The combination of these pressures, Zha argues, will make the Trump administration wary of appearing soft on China.

For Xi Jinping, the primary goal in Florida is avoiding a US–China trade war that would not only harm both countries’ economies, but which would also jeopardise Xi’s desire for a stable run up to the 19th Party Congress later this year. Despite pressure on Trump to come good on election hype, as David Dollar explains in our second lead piece this week, Trump must recognise that ‘threatening high tariffs is not likely to encourage China to yield and would backfire by hurting the US economy’. Instead, Trump ‘should consider restricting SOE mergers and acquisitions in the US given the lack of reciprocity on the Chinese side’, and should focus on encouraging the domestic reforms that would push China’s economy towards greater consumption. In addition, he notes ominously that the ‘US also has trade remedies that it can deploy in individual sectors’.

But the outcomes of the summit will have consequences well beyond the bilateral US–China relationship. There is a need for a new bargain between the US and China. The risk is that in pursuing this bargain, Trump and Xi will agree to forge a ‘G2’ or a ‘new model of major power relations’ that could overlook the security and economic interests of US allies and partners, or undermine the open economic order.

Instead, as Zha argues, China ‘would be best advised to drop its past attempts at winning support from the United States for a broad framing of the bilateral relationship’ along the lines of the ‘new model of major power relations’. Failure to do so would ‘set off complicated trilateral geopolitical relations’ with countries like South Korea and Japan, and could further stymie efforts to resolve critical challenges like the North Korean nuclear issue. In Florida, Zha suggests, ‘the Chinese side should echo Trump by noting that the smooth development of ties between the United States and its Asian allies is positive for China’.

On economic issues, the two sides must resist a deal that pulls China away from greater economic openness. Instead, Dollar argues that speeding up the pace of China’s domestic economic reforms would actually help to shift China’s economy towards consumption and reduce the large trade surpluses that are so resented by the Trump administration.

‘China is keeping zombie state enterprises alive with credit from state-owned banks. [Trump] should encourage China to close bankrupt enterprises and privatize viable ones. China could easily afford more generous pensions for its large number of military and civilian retirees. This would be an immediate way to increase household income for a group that is likely to spend it. China also spends little public money on health and education, and greater social spending would increase households’ real income and bolster their consumption’, Dollar argues.

Though the Florida summit may end up being more about style than substance, the tenor of discussions between Xi and Trump, and whether or not the two sides can lay the foundations for striking some kind of bargain, will have major implications for regional and global order.

The EAF Editorial Group is comprised of Peter Drysdale, Shiro Armstrong, Ben Ascione, Ryan Manuel, Amy King and Jillian Mowbray-Tsutsumi and is located in the Crawford School of Public Policy in the ANU College of Asia and the Pacific.

14 thoughts on “Diplomacy at work in Florida when DJT meets China’s Xi

  1. Mr. Dollar,aptly,

    “Dollar and cent ” and ” Peace and Stability ” matter most for equitable Trade Offs secured in term of trades, commerce and security, through negotiations in achieving a win-win situation for both and the rest of world will also be affected, some deeply.

    The common enemies are Dominance, Trade Protectionism, Terrorism, Extremism, Violence and Illicit Interference.
    Let’s hope for substance, rather just style and rhethoric would emerge from the summit, to address this issues with the recognisable views that :

    1. Dominance suppresses “Shared Benefits and of Responsibilities” (SaBoR).
    2. Protectionism is “a game all can play, but none will win in the end.”
    3. Terrorism, Extremism and Violence must be tackled and eradicated at the source.
    4. Illicit Interference will create more problems than it intended to source.

    Let’s hope these views could enhance an emerging outcome that is positive and progressive.

  2. It seems like a meeting about gangland turf between an aging Mafia godfather who is fighting back for control and a young up-and-coming upstart muscling in.

    It can go either way.

    I say Trump still has an edge with Putin on his side.

  3. Donald Trump is set to meet China’s Xi Jinping, who will come to Trump’s private Mar-a-Lago residence in Palm Beach, Florida on April 6 and 7. Considering Trump’s repeated slams on China during his presidential campaign — accusing China of “raping” the US economy and unfairly imposing import taxes on American goods, initiating a phone call with the leader of Taiwan and threatening the one China policy — there is no surprise that the summit is the focus of media attention. But just days before the summit begins, unsettled problems remain. Despite the fact that the whole world knows about the visit, the media on both sides are awfully quiet. This is a likely sign that the diplomatic bodies of the two countries are still trying to negotiate last-minute details, and that likely means that there is a certain level of tension behind the scenes, kept away from the public eye.

    Between Trump’s boisterousness and bravado and the Chinese strict adherence to ceremony and protocol, the White House protocol service is likely on pins and needles already. For example, Beijing has already declared that Xi won’t stay overnight at Mar-a-Lago. Instead, the Chinese leader will stay at Eau Palm Beach Resort and Spa, and will come to Mar-a-Lago for negotiations. Obviously, China is trying to avoid being caught up in US criticisms of Trump’s spending on expenses on his own private property.

    Facing fierce criticism at home, Trump is looking to use the summit to give himself more presidential weight. Presidents often look to foreign affairs to make achievements they can’t achieve domestically. However, the outcome of this summit should not be taken as a prophecy of the future for US-China relations. I don’t expect anything substantial will come out of it. Xi simply comes to have a feel of the man and to hear what Trump has to say. With Trump initiating the summit, China has already won the first round.

    There’s a reason diplomacy is stodgy and boring and conducted in back rooms: because it gives all players options. The trouble with public diplomacy is it sets parameters and ends up narrowing the parties’ range of maneuver. Unlike Trump’s self-vaunted real-estate negotiations, in diplomacy all parties are accountable, first and foremost, to their domestic audiences. And domestically, the perception of what is a good outcome may be entirely different from the diplomats’ actual desired outcome. In business there is a reason why a party goes to the negotiating table: to buy, sell, or prevent a take-over. Parties understand clearly what the ideal outcome is. In diplomacy, parties are often brought to the negotiating table unwillingly, or they can simply choose not to show up.

    Trump fancies himself the ultimate negotiator. He promised to bring his acumen to the world stage and has now disturbed a beehive, causing plenty of headaches to US policymakers and global leaders and arguably limiting diplomatic options for the US. Just as he tried to do with Mexico, boasting that he would make it pay for a wall it did not need or want, Trump sought to “precondition” its negotiating counterparts by aiming high. In the case of China, he said everything was up for negotiation, including the sacrosanct One China policy. And just as the Mexican President was forced to cancel a meeting with Trump after political backlash at home, so did President Xi seek to distance himself from Trump for fear of appearing weak to his domestic audience regarding the One China policy.

    It bears repeating: every international political leader has a domestic audience that is his/her priority. Contrary to what Trump could imagine, foreign leaders may choose to ignore him if by talking to him they risk appearing weak to a domestic audience. Even among foreign leaders, there are differences in the leeway they have dealing with an ”imperial” power. Leaders of countries with a historic sense of imperial oppression or victimization, such as China, Mexico, and the Philippines, among others, have to be particularly sensitive to nationalist sentiment in the face of a perceived foreign insult. For a politician like Theresa May, inviting Trump for a state visit can result in a petition against it or perhaps an uncomfortable Prime Minister’s Question Time. But for the leader of a country like China with a longstanding grievance about mistreatment by a stronger power, a slight from Trump could lead to massive protests and the threat of widespread social unrest. Such a leader would sooner snub Trump than risk upheaval at home. This is why Enrique Peña Nieto cancelled his scheduled visit to Washington, and why Xi preferred to stall, waiting for Trump to reach out and then conditioning the conversation to support for the One China Policy.

    This was unfortunate for the US because it squandered the opportunity to engage with China assertively. The way to push back on China is not by humiliating it, not by painting it into a corner, and certainly not by bringing up the one thing no Chinese leader can agree even to consider negotiating: the integrity of the One China policy. Instead of preconditioning the Chinese with his blustery tweets, Trump put them in the impossible position of not being able to come to the table, even to talk on the telephone, without appearing weak. This broke all communication at the highest levels and put all other cooperation on standby. I cannot see a case in which the US wins diplomatically by not talking to its counterparts. The basis of diplomacy is communication, and if countries are not communicating they are hardly advancing their agendas and objectives. The biggest loser, in this case, is the country whose calls go unreturned: the United States.

    Trump out-maneuvered himself. His initial approach with the telephone call with Taiwan and the ‘everything’s up for negotiation, including One China,’ had all the hallmarks of headstrong position-taking from ignorance without thinking it through. Apparently, Rex Tillerson, Jim Mattis and Gary Cohn have staged a carefully calibrated damage limitation exercise to put that right, presumably while Steve Bannon and Peter Navarro were out of the room. Xi had simply to sit tight in line with his new ‘I am the responsible actor’ stance. So victory was his with the White House wording handing him the dominant role.

    Fortunately, Trump appears to move rather than doubling down. The world’s largest and second-largest economies are back on speaking terms and we are all better off for that. To get there, Trump had to tone down his bluster, walk back his comments regarding the One China policy and behave, even if for a few moments, as a responsible leader. The Chinese learned that Trump blinks; they took his measure and came out ahead. With hope he will not seek to regain his lost ground by proving his strength in other ways. The case for push-back was there, but Trump’s negotiating style gave it all away just to get the Chinese on the phone. I applaud his correction. I hope he learns and applies the lessons to other regions of the world. In diplomacy, you accomplish very little by bluster, and a lot by being boring and discreet. Here’s hoping for more boring relations between the United States and the world.

  4. Trump should work out of the White House, official residence and office of POTUS not from Mar a Lago, a golf resort owned by him. If Xi wants to play golf then by all means take him to Mar a Lago.

    At the White House Trump will have all the executive support he needs and his Cabinet are all close by. Clearly he treats the Presidency of the US as a vacation instead of serious work. The United States of America is not Trump Organization and he better start learning how to behave like a President of the United States. Having summit with other world leaders at Mar a Lago is unethical as not only he owns the resort he is indirectly promoting the resort by him mere presence and also by hosting Heads of States. There’s no lack of world class resorts in the US that are conducive to hosting world Head of State, why Mar a Lago.

    • Semper:
      Xi is not going to stay the night at Mar-a-Lago. He is going to stay at Eau Palm Beach Resort and Spa, Apparently he is well informed of the criticism of Trump using his private property to make money for official purposes.

      Golf in China has come under scrutiny by way of the sweeping anti-corruption campaign launched under Xi Jinping. All Communist Party members are banned from joining golf clubs or play golf. I really love to see Xi’s reaction if Trump invites him to play a round of golf. Orange does not read intel reports anyway (really wonder if he knows how to read), he might just do that. And that will be fun.

    • Good for Xi, avoid the potential of being sucked into Orange Gasbag backyard. After all the Chinese government can well afford to have their Presidentbstay at any luxurious Golf Club anywhere and perhaps even buy up the golf club if needs be.

      Important summit like this should be held on neutral sites so one party won’t have advantage over the other. As it is Xi is already making a trip to the US and protocol calls for Xi to be met at the White House.

  5. 1. The creditor has power over the debtor.
    2. The Mainland Chinese leader has consolidated his power at home.
    Trump, the political amateur, is even upsetting his Libertarian Right
    allies of the so-called Freedom Caucus. Not to mention ignoring the
    advice of experts from within the Department of State.

  6. This will high stakes diplomacy which is all about knowing what not to say, allowing the the other side to have your right of way and set the tone for future dealings.

  7. This summit reminds me of the Hongmen Yan (鸿门宴 Feast at Hong Gate) in Chinese history. The event was one of the highlights of the Chu and the Han contention, a power struggle for supremacy over China between Liu Bang and Xiang Yu which concluded with the defeat of Xiang Yu’s stronger army and the establishment of the Han dynasty with Liu Bang as its first emperor.

    Will this summit have an opposite result that the stronger America being able to subdue the weaker China? We shall see. But Trump does possess the same personalities like Xiang Yu — narcissist, egoistic, erratic, impatient, thin-skin, blurt without consideration, unable to listen to advice …. And Xi is very much like Liu Bang — calculative, stoic, thick-skin, patient, cautious, think before he speaks, good judgement of characters and listen to their advice ….

  8. LeMoy descriptions of Xi and DJT are fittingly expressed.

    Though weaker in military strength , science and information technology, China will also negotiate from the strong position of its fast rising consumerism with its population of over 1.3 , nearly half are in the middle class range and it’s huge forex reserves estimated USD 3.1 trillion.

    Having a summit between the leaders of the world’s 2 largest economies soon after reversing the 2 Chinas policy from DJT is significant. It is a good start.

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