【Economist】China and America: The end of the beginning

From friendship to friction in a few easy steps

AFTER their first meeting in Florida in April, President Donald Trump enthused about his Chinese opposite number, Xi Jinping: “We had a great chemistry, not good but great.” But as the two leaders prepare for a second meeting, this time in Hamburg at a gathering on July 7th and 8th of the G20 group of countries, the sweetness of their citrus summit has turned sour.

Over the past fortnight, in a calculated escalation of criticism, America’s State Department downgraded China to the lowest ranking in its annual report on human trafficking. Then the Treasury said it would impose sanctions on the China-based Bank of Dandong because, it claimed, the bank was helping North Korea’s government to finance a ballistic-missile programme. Next the State Department approved the sale of arms worth $1.4bn to Taiwan, which China says is a mere province of the People’s Republic (the sale must still be approved by America’s Congress).

Three days later, the Pentagon sent a destroyer on a “freedom of navigation” operation within 12 nautical miles of Triton, an island in the South China Sea. It is part of the Paracel archipelago, which is occupied by China but claimed by Vietnam. This was only 39 days after the Trump administration’s first such operation, an unusually brief interval, causing China’s foreign ministry to complain about “a serious political and military provocation” (as China sees it, waters less than 12 nautical miles from Triton’s shore count as its sovereign territory).

Then, on July 4th, North Korea—the main source of America’s frustration with China—reminded the two big powers of the potential dangers of inaction. The government in Pyongyang claimed it had successfully tested an intercontinental ballistic missile that American experts reckon is capable of hitting Alaska . One day earlier Mr Trump had called Mr Xi to tell him that, if China would not ratchet up pressure on North Korea, America would. The recent steps taken by his administration seem designed to influence Mr Xi not by persuasion (which has got nowhere) but by sanctions and coercion.

The surprise is not that the honeymoon has come to an end but that there was ever one at all. The interlude depended on wishful thinking by both sides. China saw Mr Trump as just one more American president who, though he might roar anti-Chinese rhetoric on the campaign trail, would be constrained by the responsibilities of office. Mr Trump’s penchant for personal (rather than institutional) power and for installing family members in the White House, also pleased Chinese leaders: this is the sort of thing they are familiar with at home. And when Mr Xi demanded that Mr Trump endorse America’s traditional one-China policy and Mr Trump duly obliged, the Chinese concluded that all they had to do was sit tight and Mr Trump would cave in. All this seems to have led China to overestimate its influence over Mr Trump.

Mr Trump may have miscalculated, too, perhaps out of naivety. He seems to have thought he could persuade Mr Xi to be tough enough to force the government in Pyongyang to the negotiating table. But though China has stepped up sanctions, it is reluctant to do anything that it believes might threaten the stability of North Korea’s regime. America’s understanding of how far Mr Xi will go may well have been clouded by a lack of senior appointees at the top of the State Department. For instance, there is still no deputy secretary of state, let alone a diplomat responsible for overseeing East Asian affairs.

Still talking, at least

The end of the honeymoon does not mean that China and America are at daggers drawn. A recent phone call between the presidents suggests they are still prepared to work together on North Korea. But the timing of America’s China-riling moves was significant. They came on the eve of the G20 summit, overshadowing what Mr Xi hopes will be an opportunity to bask in global acclaim by again proclaiming his support for globalisation and for the Paris climate treaty, which Mr Trump has said America will abandon.

They also came just before the deadline (on July 16th) that America and China set themselves to implement a list of trade measures that were promised at the citrus summit, such as letting foreign credit-rating agencies into China. Most important, the end of the honeymoon comes just as the administration is again threatening to impose tariffs on steel and other imports into America, which would affect China more than most. The risks of a trade dispute are rising, even as mutual rancour grows over North Korea, Taiwan and the South China Sea.

Correction (July 9th): An earlier version of this story claimed that America did not have a deputy secretary of state. In fact, John Sullivan was confirmed in the post in May. Sorry.

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Jul 8th 2017 | China | 801 words