China managing a declining USA
Trump's visit achieved nothing, and the Chinese American relationship remains structurally unstable.
Commercial topics: Change in Taiwan war risks, China’s business strategy against the USA, and why commercial agreements are unlikely to be implemented, renewal of the trade war.
The Trump administration has not achieved very much in President Donald Trump’s visit to China. The promised increased purchases of American grains and natural resources, and of Boeing aircraft, will at best only partially materialise. Moreover, there was no agreement on Taiwan, with Xi openly saying that Taiwan could lead to “conflict” between the two sides. Trump claimed that the Chinese agreed that Iran should not have nuclear weapons, but, this has consistently been the position of China, Russia, and, officially, at least, Iran.
Is the USA deal-capable?
The Chinese fear, shared by Russia and Iran, is that the Americans are incapable of making stable agreements. Hence the repeated references in most Chinese communiques covering bilateral talks to the importance of implementing agreements. The view of America’s rivals is that American presidents make agreements, but the establishment refuses to implement them.
The Chinese perception is that the Americans, in their decline, are becoming far more aggressive - hence the capture of Venezuelan President Maduro and the Iran War, which some American policymakers incorrectly believe would weaken China.
Parity and American decline
The visit was a win for China. Trump entered his term promising a far more confrontational approach with China. Now, he is admitting that China is an equal. And with its manufacturing capacity outstripping that of the USA and its allies, it is China that is the ascendent force. Indeed, Xi went as far as describing America as a declining power - a rather unusual formulation from a head of state.
China’s aim during these talks was to stabilise the relationship with the USA as what it believes is American decline continues. Hence the emphasis in Chinese communiques relating to the visit on maintaining “constructive strategic stability”. The subtext is no renewal of the trade wars and no American support for Taiwan. However, without tariffs, and without European support for a trade war with China, the Americans cannot fulfil Trump’s ambition of a manufacturing resurgence that restores manufacturing parity between the USA and China.
Taiwan: implicit threats
When reading Chinese statements, it is important to note what is not said, or, the silent contrast between what is said and what is not said. Therefore, when Xi told Trump that “whether or not we could have mutual respect, peaceful coexistence, and win-win cooperation is the key to whether the relationship can advance steadily,” the subtext is that not having mutual respect, peaceful coexistence, and cooperation will lead to deteriorating relations and eventually conflict. Meaning that the Chinese will never acquiesce to a Chinese resumption of the trade war and will retaliate forcefully. Notably, Xi was more explicit on the Taiwan question. The Chinese official readout of the meeting said: “Xi described [Taiwan] as the most important issue in China-U.S. relations. If [Taiwan] is handled properly, the bilateral relationship will enjoy overall stability. Otherwise, the two countries will have clashes and even conflicts...”. Xi explicitly warned Trump against the Thucydides trap - a reference to the idea that ambitious naval and land powers inevitably collide based on the Peloponnesian Wars.
