Hong Kong – China’s national president Xi Jinping is attracting its charm as he is trying to wipe out the fragments of America’s crushed economic ties.
As global markets and leaders attempted to absorb the market impacts unlocked by the Trump administration’s announcement, softening of swept tariffs on almost all US trading partners led Xi to set out on a trip to Southeast Asia. After visiting Vietnam, he landed in Malaysia on Tuesday.
“The trade war and the tariff war create winners, and protectionism is nowhere to be connected,” he wrote in the Vietnamese newspaper Nhan Dan. “Both of our countries need to decisively protect our multilateral trading system, stable global industry and supply chains, and our open, collaborative international environment.”
President Donald Trump interpreted Xi’s words and meetings with Chinese counterparts with leaders of China’s major economics.
The messages XI is sending on his tour are loud and clear. China is trying to capitalize on the Trump administration’s religion of casting itself as the world’s favourable trading partner.
It is no coincidence that XI’s rare Southeast Asia tour began in Vietnam. The 46% tariff, which Trump punishes 46% tariffs in the country, is the sixth largest source of US imports, with a third of them hitting the economy of countries where trade with the US is dependent.
After Malaysia, which received a 24% levy from the US, XI is scheduled to visit Cambodia, with 49% of his duties. According to China’s state broadcaster CCTV News, he does so after telling Vietnam’s counterpart Lam that Beijing and Hanoi “have to jointly oppose unilateral bullying and protect it in the world’s free trade system.”
Xi’s junkets are just the beginning of a broader response to Trumpnomics, analysts say.
Chinese leaders are willing to see a deliberate international order in which Donald Trump destroys, undermines and cautions the international order to facilitate the transformation of the international order into something “better”,” says Steve Tsang, director of the Institute of China at the University of London.
Developing countries already have a strong dependence on Beijing, so beating Southeast Asia will be an easy part.
What’s a little difficult for XI is replacing the US as the European Union’s biggest trading partner.
Last week, XI told Spanish Prime Minister Pedro Sanchez that the Bloc should oppose “unilateral bullying” and join forces with China to defend “international rules and order.”
While Beijing followed on Monday in a statement highlighting China-European unification, Washington made XI simple, said Wang Dong, executive director of Peking University’s Institute of Global Cooperation.
“China doesn’t have to “drill the wedge” between the US and its allies,” Wang told NBC News. “In fact, the bullying and cruel attitudes that the Trump administration has deployed punitive tariffs, as well as the unpredictability and selfishness revealed by the US, have already brought US allies and partners closer to Beijing.”
The relationship has already begun to be unzipped. EU leaders agreed to revive negotiations on price of electric vehicles last week – they imposed a 45% tariff on low-emission Chinese cars in October – fears that Chinese products could flood the European market if they maintain a 145% collection on Chinese imports.
However, its softening comes amidst many economic conflicts among the world’s second largest economy. It may also be difficult to achieve more due to concerns over China’s one-party rules and human rights allegations.
“Many people do not share China’s political values,” said Kelly Brown, professor of Chinese studies and director of the Lau Chinese Institute at King’s College London.
What’s even more difficult is to warm up longtime US allies in Asia, particularly Japan and South Korea. The economy will suffer the effects of tariffs of 24% and 25%, respectively, despite stolen trade-use teams within days of the tariff announcement.
The United States is the leading guarantor of both countries to security threats from China and Russia, and the response of Tokyo and Seoul is best summarized by the South Korean Foreign Ministry’s comment that “bilateral dialogue with the United States is the most effective way to resolve US fee measures.”
But China means the increasingly uneven loyalty of both countries’ biggest trading partners and Washington, and South Korea and Japan were essentially “engulfed in confusion,” Brown said. “China is still a force you really have to deal with.”
And if the carrots don’t work, there’s always a stick. Beijing holds at least one more important leverage than Washington and its allies.
China holds more than $700 billion in US government bonds, which are revenues that the US Treasury will finance public spending.
If China sells these bonds, Brown said it threatens its ability to fund US debt.
He added that, and Beijing, wearing the encouraging faces of his trusty trading partner, “China has fallen into a relatively good position.” “And that bothers America’s hell.”