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| Chinese President, Xi Jinping on the left and America President, Donald Trump on the right |
The unpredictable win of Donald Trump in the elections gave rise to a new wave of hatred towards American Muslims, Hispanics and blacks on one hand and towards China, Mexico and Muslim countries on the other hand. All these groups and countries were blamed for one thing or another but the inclusion of China on the list is a classic example of Trump’s lack of wisdom. Trump during his election campaign described China as a currency manipulator, stealer of American jobs and aggressor in the South and the East China Sea but with no logical arguments or policy line. The first argument that China is a currency manipulator is highly disputed because of the fact that the same globalization that Trump is cursing now is the beloved child of none other than the Capitalist economic system of which America is the flag bearer.
The other thing which should be kept in mind is that China is trying hard to keep its currency intact against America dollar to stop the outflow of money from the country and has resulted in the substantial reduction of government reserves over last few months. So what the American President will do to counter China on this so-called issue? Will Trump put China on the list of currency manipulators or will he try to negotiate with China on the matter? What we guessed from his election rhetoric and reception of a call from the Taiwanese president is that Trump would use the Taiwan issue as a bargaining chip against Chinese ambitions to get an upper hand in the trade deals but the reiteration of Trump that America still believes in One-China policy during his call with Chinese President conveys something else. The most likely step from the Trump administration would be the increase in antidumping duty on the cheap Chinese goods to counter trade surplus in the Chin’s favor.
The other thing which should be kept in mind is that China is trying hard to keep its currency intact against America dollar to stop the outflow of money from the country and has resulted in the substantial reduction of government reserves over last few months. So what the American President will do to counter China on this so-called issue? Will Trump put China on the list of currency manipulators or will he try to negotiate with China on the matter? What we guessed from his election rhetoric and reception of a call from the Taiwanese president is that Trump would use the Taiwan issue as a bargaining chip against Chinese ambitions to get an upper hand in the trade deals but the reiteration of Trump that America still believes in One-China policy during his call with Chinese President conveys something else. The most likely step from the Trump administration would be the increase in antidumping duty on the cheap Chinese goods to counter trade surplus in the Chin’s favor.
The other major rhetoric of Trump during his campaign was that Americans are losing jobs at the expense of Chinese cheap labor force.This is a reality but what Americans have been doing for years is now haunting them big time. How can Trump stop Chinese from entering America in search of jobs when multinational American companies are exploiting the same labor force for a meager pay. The deportation of immigrants from America and the strictness of rules for foreign cheap labor force has been in the initiatives that Trump administration will likely take but according to economists it will not only hamper America’s own progressive image but will severely impact the economy as well.
Trump administration has already called for a review of H-1B visa for Information technology and other such visas for many sectors, even stopping companies from expanding their plants in other countries, as was the case with recent hindrance in the path of several companies interested in building plants in Mexico. The third major bone of contention is the aggressive posture of both China and America in the South and the East China Sea, a gateway to the passage of more than 2$ trillion dollars worth of trade annually. China claims the whole sea in its historical reference to the 9 dash line, which other contenders strongly reject and even Philippine took China to the international court of arbitration last year.
The court’s decision was in favor of Philippine but China opposed the decision and ultimately started building new reefs and artificial islands. What can Trump administration do in this context? The secretary of state, Rex Tillerson, argued during his briefing to the Senate security committee that we will stop China from reaching it's newly built artificial islands but is that possible without military confrontation is yet to be seen and any military conflict will result in more destruction. The sole option for the Trump administration will be to engage China and neighbors in dialogue to find out an amicable solution not only for the South and East China seas but to reach some sort of strategic agreement to avert trade or military confrontation. Chinese President’s recent reiteration in his speech to the participants of Davos economic forum that his country believes in peaceful co-existence and equal distribution of fruits of globalization is a welcome sign.
Trump administration has already called for a review of H-1B visa for Information technology and other such visas for many sectors, even stopping companies from expanding their plants in other countries, as was the case with recent hindrance in the path of several companies interested in building plants in Mexico. The third major bone of contention is the aggressive posture of both China and America in the South and the East China Sea, a gateway to the passage of more than 2$ trillion dollars worth of trade annually. China claims the whole sea in its historical reference to the 9 dash line, which other contenders strongly reject and even Philippine took China to the international court of arbitration last year.
The court’s decision was in favor of Philippine but China opposed the decision and ultimately started building new reefs and artificial islands. What can Trump administration do in this context? The secretary of state, Rex Tillerson, argued during his briefing to the Senate security committee that we will stop China from reaching it's newly built artificial islands but is that possible without military confrontation is yet to be seen and any military conflict will result in more destruction. The sole option for the Trump administration will be to engage China and neighbors in dialogue to find out an amicable solution not only for the South and East China seas but to reach some sort of strategic agreement to avert trade or military confrontation. Chinese President’s recent reiteration in his speech to the participants of Davos economic forum that his country believes in peaceful co-existence and equal distribution of fruits of globalization is a welcome sign.
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