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A Trump presidency would make China great again

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Barron's Asia

Make China Great Again! OK, this isn’t Donald Trump’s official campaign slogan. But it has a nice ring to folks in Beijing quietly rooting for a Trump White House.

That’s not the official Chinese line, of course. Rather, The Donald is the “irrational type” and Washington “wouldn’t be entitled to world leadership” if Americans elected a trade-war-happy reality TV star so spectacularly unqualified for the presidency, Finance Minister Lou Jiwei told the Wall Street Journal.

In reality, that would suit Beijing’s global ambitions just fine. Four years of Trumpist lunacy wouldn’t be fun for President Xi Jinping. Trump’s threats to impose 45 percent tariffs, claw back manufacturing jobs from the mainland and pledge that “all trade and other agreements will be totally and completely renegotiated” would be a drag while he carries them out. But the longer-term payoffs will be even greater than the soft-power windfall the Communist Party enjoyed following America’s overreaction to 9/11.

China, it’s often forgotten, was the main beneficiary of the Bush administration’s Iraq invasion, torturing of prisoners and disastrous press over Guantanamo Bay. As the United States shot itself in the foot, China spread its tentacles. It became Africa’s biggest trading partner, poured untold billions into Latin America and bought friends around Asia with giant infrastructure projects. The 2008 Lehman shock allowed China to play a white knight role to stabilize Europe’s bond market and support other developing nations.

Xi is accelerating Chinese globalization with his “One Belt, One Road” push to recreate the Silk Road and the Asian Infrastructure Investment Bank. Xi’s China also is grabbing up real estate in the South China Sea at a rate neighbors like the Philippines and Vietnam find alarming. As Xi works to build an empire, it’s important to consider how a Trump presidency would play into his hands.

The China Press newspaper wasn’t being facetious last month when it called Trump “China’s secret agent in America.” With his own authoritarian tendencies, all indications are that Trump would go easy on human rights critiques, drag the U.S. back toward its pre-World War II isolation and wreck friendships with Japan and South Korea.

Officials here in Tokyo are in near panic mode. Trump wants to tear up U.S.-Japan postwar agreements. When he bashes China for “stealing” American jobs, Trump routinely tosses Japan into the mix. He talks of extorting Tokyo and Seoul for protection money and delights right-wingers by suggesting Japan and South Korea go nuclear. The glee with which Beijing is watching all this can’t be exaggerated. It dovetails brilliantly with China’s designs on hegemony.

China dismisses such suggestions. Beijing, as Foreign Minister Wang Yi rarely misses a chance to insist, “will never follow the track of Western colonists” and that its diplomatic outreach “will never come at the expense of the ecology, environment or long-term interests” of continents near and far. Yet, as Otto von Bismarck, a man who knew a thing or two about empire building, said, never believe anything in politics until it’s been officially denied. These days, it’s China doing the denying about its designs on world domination, and its disclaimers are even less believable than those of the German leader 150 years later.

While such negations are often aimed at Africa, the resource-rich South China Sea is the epicenter of today’s land grab. It has the Group of Seven nations taking swipes at Xi’s government and U.S. officials throwing down the gauntlet. Last Friday, Defense Secretary Ashton Carter enraged Beijing by visiting two aircraft carriers in disputed waters. Beijing called it a provocation.

“We have been here for decade upon decade,” Carter said. “The only reason that question even comes up is because of what has gone on over the last year, and that’s a question of Chinese behavior. What’s not new is an American carrier in this region. What’s new is the context and tension that exists, which we want to reduce.”

Good luck with that as China spreads its cash-rich tentacles at the same moment Americans are turning inward. The question is what China’s nascent empire means for the trajectory of the global economy?

The most immediate risk is tensions with Japan and the U.S. China’s rise prompted Prime Minister Shinzo Abe to boost military spending for four consecutive years to a record. Abe reinterpreted the pacifist Constitution to enable Japan to deploy troops abroad. Japanese and Chinese ships and aircraft are increasingly facing off in disputed waters in perilous ways. Any misstep, miscommunication or accident could quickly come to blows in ways that slam world markets.

Washington arguably has never faced a greater challenge to world domination than China. After all, China has been there before.

In his book “1421: The Year China Discovered the World,” Gavin Menzies chronicled Zheng He’s voyages to Antarctica, Australia, Greenland, Iceland, North and South America and West Africa long before Ferdinand Magellan and Christopher Columbus.

Far from curbing China’s ambitions, an isolated U.S. under President Trump would enable it to spread its wings ever wider. That raises troubling questions for the future of global capitalism. Inherent to China’s outreach efforts is a desire to remake the developing world in its image, what Sinologists call the “Beijing Consensus.”

Granted, the “Washington Consensus” of democracy, open markets, transparency and personal freedoms has done itself few favors. Since 2008, Western officials have broken every commandment they imposed on Asia and Latin America a decade earlier. U.S. President Barack Obama’s “pivot” to Asia has been more rhetorical than substantive. Also, extreme market volatility in recent years enabled Beijing to play a sugar-daddy role from Sudan to Moscow to Cambodia. But is Beijing’s alternative — autocratic state capitalism, support for rogue regimes, press blackouts and complete disregard for labor and environmental standards — really an improvement?

China’s AIIB is emblematic of these concerns. Why borrow from the World Bank or Asian Development Bank with their pesky audits, ecological studies and conditions when China will toss you a few billion with no strings attached? All Beijing wants in return in loyalty. Sadly, it reduces incentives to build the strong institutions needed in developing nations to thrive and spread the benefits of growth.

India’s take on Xi’s One Belt, One Road initiative is worth heeding. New Delhi isn’t saying much about the enterprise; no one wants to risk Beijing’s wrath. As Tanvi Madan wrote in a recent Brookings Institution article, though, “there’s clearly concern about the way China is pursuing OBOR, the motivations behind it, and particularly the kind of influence that Beijing might be seeking through it.”

Odds are, that influence will only grow as China exploits a distracted America. Even worse is the isolationist turn should Trump prevail in November. That void in U.S. engagement couldn’t come at a better time for China’s most powerful and ambitious leader in many decades. Trump would shelve Obama’s Trans-Pacific Partnership, a pact meant to contain China. China, after all, prefers checkbook diplomacy to military force, seeking to achieve with investment and trade what colonizers of the past did only by force. “Just as globalization has limited the utility of the old methods of empire building, China is emerging with a new model,” The Globalist’s Behzad Yaghmaian observed.

As Xi hones that model, a White House occupied by a man who neither does nuance nor heeds the lessons of history would be a nice thing to have. Trump, for example, is surely the first U.S. presidential contender on the record as applauding Beijing’s 1989 Tiananmen Square crackdown (it was a “riot” in his simplistic world view). Also, a leader who fans racism and violence at home would trump America’s human rights rebukes. The Republican front-runner’s calls for massive tariffs would hurt the U.S. most as Xi dumps Beijing’s $1 trillion of Treasuries and prices at Wal-Mart double.

Make America great again? More like make China’s empire ambitions a reality faster than Xi’s wildest dreams.

William Pesek, executive editor of Barron’s Asia, is based in Tokyo and writes on Asian economics. www.barronsasia.com