How Xi is filling the ‘global leadership vacuum’ left by Trump

This article first appeared in The Edge Financial Daily, on April 16, 2018.
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CHINA and the US present a study in contrasts. The US approach to foreign policy at present could best be characterised as shambolic, to put it mildly. In addition to record personnel turnover, the administration of US President Donald Trump appears internally conflicted over whether and how to: leave Syria, tear up the Iran deal, exit North American Free Trade Agreement  (Nafta), confront Russia, disarm North Korea, contain China and support democracy abroad. At the same time the US may or may not be starting several trade wars.

In a rare case of progress, the US recently was able to successfully negotiate a (mostly symbolic) trade deal with South Korea. But then only days later, Trump threatened publically to walk away from the agreement. If grand strategy focuses on uniting allies and dividing enemies, disarray in Washington is unfortunately achieving the opposite objectives.

China’s influence expands 

Meanwhile China cautiously, but continually, expands its influence. China’s President Xi Jinping took centre stage last Monday at the annual Boao forum, China’s answer to Davos. He and other Chinese leaders spoke optimistically about opening China and playing a responsible role on the world stage. While Trump’s trade rhetoric caused market jitters, Xi soothing and supportive words had a calming effect (even if many are sceptical about Chinese assurances over trade.)

In the face of constant turmoil in Washington, China presents itself as a bastion of stability. China’s policy is to ignore much of what comes out of Washington, respond in measured steps only where provoked and expand Chinese influence unobtrusively while the world focuses on American antics. China is the super ego to America’s id. You could say Washington is the high energy comedian while Beijing is content to play the straight man.

But this is no joke: China is filling the vacuum in global leadership that has been created by the chaos of the Trump administration.

Long-term strategic thinking

It is helpful to consider China’s long-term strategic thinking to understand how the authoritarian regime is pulling off this feat. After a century and a half of humiliations, China is re-emerging on the world stage. Xi’s simplest and broadest international goal is to create prestige, respect and influence for China worthy of its historical legacy. China also seeks to insure the party’s continual dominance by signalling the legitimacy, equality and (at times) superiority of its political system vis-à-vis the US and the West abroad and at home.

China works to project constancy and cooperativeness to accomplish these goals. When the US exited from the Paris Climate accords, it afforded an easy and cheap opportunity for Xi to present himself as an international statesman. China talks of global partnership and stewardship where the Trump administration publicly extols mercantilist self-interest as the guiding light of US foreign policy. While the US brags of building walls, China reforms its immigration system with little news coverage and no fanfare.

Under this oasis of calm, China quietly, but systematically, expands its influence. For example, China’s One Belt, One Road initiative and creation of the Asian Infrastructure Investment Bank are both investment strategies to open up foreign markets that simultaneously serve as key instruments to increase Chinese diplomatic power (just as the Marshall Plan, the World Bank and the IMF [International Monetary Fund] served multiple purposes for the US decades ago).

The irony of current trade frictions is that US complaints about unfair Chines trade, especially regarding intellectual property protections, have obvious merit (something many Chinese observers would also grant). But rather than reach out to other trading partners to form an international coalition to place common pressure on China to alter its policies, the US has been lashing out in all directions with a series of poorly aimed trade threats against China, against Canada and Mexico, against Europe and against allies like Japan and Korea.

Abandoning TPP

Similarly, the Trans-Pacific Partnership (TPP) was at its heart a US political alliance masquerading as a trade deal. TPP was meant to help cement ties between many of China’s nervous neighbours, while also concentrating bargaining power to offer economic leverage for the US to open the Chinese market.

Abandoning TPP, along with the reluctance of Trump to reaffirm traditional alliances (and even our commitment under Article 5 to defend our Nato allies) and the more general constant chaos in Washington, have all combined to force allies to reassess whether the US is trustworthy.

China’s response has moved forward as the US has retreated. In Asia, China is quietly, but systematically, expanding its Island building programme in the South China Sea (which the previous administration was also unable to check). In the same vein, China has sought to strike side deals to peel off American allies like the Philippines.

Across Latin America, where Trump has cancelled his appearance at this weekend’s Summit of the America’s to handle Syria, China is building political relationships and making investments.

In Africa, China is moving from natural resource extraction to developing future markets by building ports, roads and utilities.
There is one final broader irony in comparing both countries. Despite its long history, China’s president speaks of the future while America’s leader fixates on the past. — by Joseph Foudy, CNBC

Joseph Foudy is a clinical associate professor of economics at the New York University Stern School of Business. He teaches courses on Asian economies, international management and Chinese business and foreign relations.