China is bracing for what could be a volatile and highly unpredictable path ahead in its escalating great power rivalry with the United States, after Donald Trump made a historic political comeback to win the race to the White House. <\/p>\n
His return could bring tariffs as high as 60% on Chinese goods \u2013 which could devastate economic growth in the world\u2019s second largest economy and upend global supply chains \u2013 more technology controls and fiery rhetoric on Beijing, heightening tension in already rocky relations between the superpowers. <\/p>\n
But Trump\u2019s protectionist trade posture and transactional approach to foreign policy may also weaken US alliances and global leadership, presenting opportunities for Beijing to fill the void of America\u2019s retreat and shape an alternative world order. <\/p>\n
\u201cTrump\u2019s return to power will certainly bring greater opportunities and greater risks for China,\u201d said Shen Dingli, a foreign policy analyst in Shanghai. \u201cWhether it eventually leads to more risks or more opportunities depend on how the two sides interact with each other.\u201d <\/p>\n
Officially, China has sought to present a neutral stance on Trump\u2019s win. Its Foreign Ministry said on Wednesday it \u201crespected\u201d America\u2019s choice. <\/p>\n
Chinese leader Xi Jinping congratulated Trump on Thursday. Known for his fondness for autocrats, Trump has regularly praised Xi and called the Chinese leader \u201ca very good friend,\u201d even as US-China relations nosedived under his watch. <\/p>\n
Xi told the president-elect that China and America can \u201cfind the right way\u201d to \u201cget along in the new era,\u201d according to a readout from the Chinese Foreign Ministry. <\/p>\n
But beneath the calm surface, Beijing is likely bracing for impact \u2013 and uncertainties. <\/p>\n
\u201cTrump is a very mercurial person,\u201d said Liu Dongshu, an assistant professor of international affairs at the City University of Hong Kong. \u201cIt remains to be seen whether he will implement, and to what extent, the policies he promised during the election campaign, and if he will stick to his first-term agenda.\u201d <\/p>\n
During Trump\u2019s first term in office, the tough-talking populist who promised to make \u201cAmerica great again\u201d launched a bruising trade war with China, backlisted Chinese telecom giant Huawei on national security grounds and blamed Beijing for the Covid-19 pandemic. By the end of his first term, bilateral relations had plunged to their lowest point in decades. <\/p>\n
This time around, Trump has threatened on the campaign trail to slap 60% tariffs on all goods made in China and revoke its \u201cpermanent normal trade relations\u201d status, which has given China the most favorable trade terms with the US for more than two decades. <\/p>\n
This punitive measure, if carried through, could deliver a body blow to an economy already beset by a property crisis, flagging consumer demand, falling prices and mounting local government debts. <\/p>\n
Investment bank Macquarie estimates that, at the sky-high 60% level, the tariffs are likely to cut the country\u2019s growth by a full two percentage points, which would be just under half of China\u2019s expected full-year economic expansion rate of 5%. <\/p>\n
\u201cTrade war 2.0 could end China\u2019s ongoing growth model, in which exports and manufacturing have been the main growth driver,\u201d Larry Hu, chief China economist at Macquarie, wrote in a Wednesday research note. <\/p>\n
Investors appeared to predict this outcome as Trump\u2019s lead over Vice President Kamala Harris widened on Wednesday, causing Chinese stocks and the yuan to fall sharply. <\/p>\n
Tariffs act as a tax on imports, hurting consumers in the country imposing them, as well as businesses that rely on imported raw materials and intermediate goods to make finished products. A significant escalation of global trade tensions will likely inflict pain not just on China and the US, but also on other countries involved in global supply chains. <\/p>\n
Unlike his Republican predecessors who hailed from the establishment, Trump wields an erratic and unconventional approach to policy making, adding to Beijing\u2019s sense of uncertainty. <\/p>\n
\u201cTrump began his first term as an enthusiastic admirer of Xi Jinping, before levying tariffs and then vilifying Beijing during the pandemic,\u201d said Daniel Russel, vice president of international security and diplomacy at the Asia Society Policy Institute. <\/p>\n
\u201cSo, Beijing is likely to approach the President-elect with caution \u2014 probing to ascertain which Trump to expect and where there may be opportunities to exploit,\u201d added Russel, who previously served as the top Asia advisor to former President Barack Obama. <\/p>\n
But Trump\u2019s \u201cAmerica First\u201d agenda and transactional worldview may also play in Beijing\u2019s favor, experts say. <\/p>\n
\u201cAlthough Beijing is deeply concerned about the unpredictability of Trump\u2019s China policy, it reminds itself that challenges also bring opportunities,\u201d said Tong Zhao, senior fellow at the Carnegie Endowment for International Peace. <\/p>\n
\u201cDespite fears of a renewed trade war, Beijing believes that Trump\u2019s tough tariff policies would be deeply unpopular in Europe, creating an opening for China to strengthen economic ties with Europe and counter US efforts to intensify technology and supply chain decoupling between China and Western nations,\u201d he said. <\/p>\n
Trump\u2019s longstanding distain for NATO (he said in February he would not defend NATO allies that fail to spend enough on defense from a future attack by Russia), as well as international alliances and institutions more broadly, also threatens to weaken American alliances that outgoing President Joe Biden has carefully cultivated to counter the threats of a rising China. <\/p>\n
That would offer some timely relief to Beijing, which is increasingly irritated by what it sees as Washington\u2019s strategy to encircle and contain China with an \u201cAsian Nato.\u201d <\/p>\n
America\u2019s potential inward turn under Trump will also be welcome news for Xi, who has ramped up efforts to claim leadership in the Global South and build a new world order no longer dominated by the West. <\/p>\n
Beijing may also be looking for ways to utilize Trump\u2019s penchant for deal-making, including on the issue of Taiwan. China\u2019s ruling Communist Party claims the island as its own, despite never having controlled it. <\/p>\n
Under the previous Trump administration, which was staffed with China hawks, the US bolstered support for Taiwan through increased arms sales and diplomatic visits. But the former leader\u2019s recent comments have fueled concerns about American commitment to the democratic island. <\/p>\n
On the campaign trail, Trump accused Taiwan of \u201cstealing\u201d the chip industry from the US and said that the self-governing democracy should pay the US for protection. <\/p>\n
Industry experts say Taiwan grew its own semiconductor industry organically through a combination of foresight, hard work and investment. And the island has purchased the vast majority of its weaponry from US arms manufacturers over recent decades. But Trump\u2019s campaign rhetoric nonetheless hinted at a more transactional approach to Taiwan. <\/p>\n
Asked by the Wall Street Journal in an interview if he would use military force against a blockade on Taiwan by China, Trump said it would not come to that because Xi respected him and knows he\u2019s \u201ccrazy.\u201d Instead, he said he would slap 150% to 200% tariffs on Beijing. <\/p>\n
\u201cWith Trump\u2019s relatively less strong interest in defending Taiwan, Beijing may seek greater concessions from Washington on the Taiwan issue, using both positive incentives and coercive leverage to push the United States to reduce its military and political support for Taiwan,\u201d Zhao said. <\/p>\n
Trump, who has touted his good relations with Russian President Vladimir Putin, has made comments that suggest the US could pressure Ukraine into an uneasy truce with Russia. <\/p>\n
While ending the grinding war in Ukraine could remove a crucial sore point in China-Europe relations, it could also complicate Moscow\u2019s alignment with Beijing, which has deepened since Russia\u2019s invasion, said Liu at the City University of Hong Kong. <\/p>\n
\u201cIf the US and Russia ease relations, it could create greater daylight between Russia and China, effectively driving a wedge between them.\u201d Liu said. <\/p>\n
\u201cFrom everything he has said, it\u2019s clear that Trump considers China, not Russia, as the main adversary.\u201d <\/p>\n<\/p>\n
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