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Trump Pursues Smart China Strategy Heading Into Meeting with Xi Jinping

Chinese President Xi Jinping and US President Donald Trump attend their bilateral meeting on the sidelines of the G20 Summit in Osaka on June 29, 2019. (BRENDAN SMIALOWSKI/Getty Images)
Chinese President Xi Jinping and US President Donald Trump attend their bilateral meeting on the sidelines of the G20 Summit in Osaka on June 29, 2019. (BRENDAN SMIALOWSKI/Getty Images)

At President Trump’s planned meeting Saturday with Chinese President Xi Jinping at the G20 Summit in Japan, Trump is expected to continue to advance a strategy that his administration introduced in his first six months in office: viewing China as a strategic competitor to the United States and its allies.

This shift from an enabling posture to a competitive strategy was a response to years of Chinese Communist Party efforts to shape the international system in a way that disadvantaged the United States on trade and advanced China’s authoritarian system.

Trump’s goal is two-fold: reorder economic relationships so that the United States is not giving an advantage to an adversary, and achieve a balance of power favorable to countries seeking free and open societies.

There are four main elements to the Trump strategy: sustaining America’s technological advantages; achieving reciprocity; strengthening deterrence; and restoring a regional balance of power.

A focus of the strategy has been to prevent China from dominating technologies critical to U.S. economic growth and national security.

China uses the theft of intellectual property to advance its economic and national security interests. It has targeted companies focused on artificial intelligence, autonomous vehicles, and other technologies that the U.S. Defense Department depends on to maintain American military superiority. For example, China’s J-20 fighter plane looks uncannily like an American F-22.

The Trump administration highlighted this theft early on. As a result, bipartisan legislation signed into law by the president now makes it harder for China to invest in companies that are strategically important to the United States.

In addition, the Trump administration has increased scrutiny over visa policies that have allowed China’s People’s Liberation Army to deploy “researchers” into U.S. government-funded laboratories.

Most recently, the U.S. banned the use of Chinese components in key communications infrastructure to address concerns about “back doors” that enable the theft of American information.

There are also new initiatives underway to counter China’s strategy of using ownership stakes in technology firms to access sensitive intellectual property, along with a new Defense Department initiative to match trusted sources of capital to support technology companies that could help to meet defense needs.

The Trump administration’s focus on reciprocity is rooted in the conclusion that years of accommodating China’s behavior have resulted in a trading relationship that is neither free nor fair.

China has long used its World Trade Organization status as a developing country and preferential access to capital for state-owned enterprises to substantially distort domestic and global markets, as the U.S. Chamber of Commerce has pointed out.

In addition, China erected barriers to prevent others from gaining access to its markets. These barriers include forced technology transfers, a highly restrictive foreign investment regime, and non-transparent technical standards – all of which impeded U.S. exports.

As a result, since 2013, the U.S. goods and services trade deficit with China has ballooned to an average of $370 billion annually.

Beijing’s Made in China 2025 Plan has made clear its goal is to use subsidies and other non-market measures to monopolize critical high-tech industries. Trump’s strategy has called out these actions as bad for the United States and other market economies, and he is using tariffs to pressure China to reduce these barriers.

Restoring deterrence is a third pillar of Trump’s strategy. The 2017 U.S. National Security Strategy identified China as the top priority for the Defense Department.

For nearly a decade China has advanced its military modernization programs and built outposts in the South China Sea, threatening the free flow of trade and infringing on the sovereignty of other nations. As a result, America no longer enjoys uncontested military dominance in the land, sea, air, space and cyber domains in the region.

The Trump administration has increased investments to grow our military, improve readiness, and to modernize key capabilities – including in space, nuclear forces, and ballistic missile defenses.

President Trump’s decision to withdraw from the Intermediate-Range Nuclear Forces Treaty with Russia – while a response to Russian violations – will allow the development of U.S. missiles to counter China’s modernization of these systems.

And the U.S. now has a more assertive posture toward cyber threats to “defend forward” and counter cyber aggression,

Finally, President Trump’s China strategy advances policies to help countries in the Indo-Pacific resist Chinese coercion.

At the 2017 Asia-Pacific Economic Cooperation Summit, Trump announced his vision for a free and open Indo-Pacific region. In doing so, he drew attention to Beijing’s predatory program of infrastructure loans through China’s One Belt-One Road program.

Trump’s signing of the bipartisan BUILD Act established the new Development Finance Corporation to provide loans and limited equity investments designed to catalyze private sector investments and to expand America’s worldwide lead over China in foreign direct investments.

With Japan, Australia and India – and increasingly with Europe – the United States represents more capital than the total deployed under the One Belt-One Road program, and under much friendlier terms. This counters the misperception that China is the monopoly provider of economic goods in the region.

In addition, enhanced U.S. security cooperation with other nations – such as increased patrols, arms sales, and greater assistance via foreign military financing – are also a part of a U.S. effort to bolster regional friends.

Although President Trump often expresses the need for burden-sharing in alliance relationships, the context of the U.S.-China competition makes American alliances and partnerships across the region mutually beneficial and more important than ever.

By exposing the Chinese Communist Party’s malign activities and interference campaigns, the Trump administration has made it harder for Beijing to hide behind the illusion that China’s rise under the party is peaceful and benign.

China has used the rhetoric of economic convergence and reform to construct this illusion and deflect attention from its actions. Our allies are recognizing this. For the first time, the European Commission has recognized China as “a systemic rival promoting alternative models of governance.”

In addition, Australia’s new prime minister recently reaffirmed concerns about China’s forced technology transfers, intellectual property theft and industrial subsidies.

Strategies are not static – they change, as they should, as circumstances shift. President Trump has made clear his willingness to keep channels of communication open with President Xi and to work with him if China makes meaningful changes.

The G20 Summit is not just a chance to re-start stalled trade talks. It’s an opportunity to put China on notice that it is past time to stop subverting the international system that has enabled China’s economic success.

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