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Trump’s Election A Critical Moment For India-China Ties – Analysis

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By Arun Mohan Sukumar

A week into the election of Donald Trump as the next President of the United States, the world has seen the remarkable spectacle of China publicly endorsing the core values of the liberal, international order. In his congratulatory call to Trump, Chinese President Xi Jinping reportedly suggested his country is ready to fight climate change “whatever the circumstances.” In Marrakesh, at the first conference of the parties after the Paris accord came into effect, Beijing’s chief climate negotiator underlined the “global responsibility” to work under the UN framework to tackle greenhouse gas emissions. In Latin America, where Xi is on state visits to Ecuador, Peru and Chile ahead of the Asia-Pacific Economic Community summit, the Chinese president has dusted off a decades-old trade proposal and sought renewed discussions on it. The Free Trade Area of the Asia Pacific (FTAAP) proposal, Xi said, is key to building an “institutional mechanism” that ensures an “open economy” in the region. On the sidelines of an APEC ministerial meeting, Chinese Vice Commerce Minister Wang Shouwen spoke out against trade protectionism and the need to remove trade barriers for the flow of goods and services.

Meanwhile, at the World Internet Conference hosted here in the Chinese town of Wuzhen, the country’s leading entrepreneurs invited immigrants to work and innovate for China’s tech giants. “I read that an advisor to President-elect Donald Trump complained that three-quarters of engineers in Silicon Valley aren’t Americans,” said Baidu’s CEO Robin Li in his speech. “So I myself hope that many of these engineers will come to China to work for us.”

Sensing the virtues of the liberal order

Self-interest, and not any burning desire to take over the mantle of protecting the liberal, institutional order from the US, explains Beijing’s recent declarations. For long, China has taken refuge under American stewardship that allowed it to trade freely in Asia, Africa and Latin America; with Trump’s election, its leaders now fear the adoption of protectionist measures in not just the US and Europe — still its most lucrative markets — but also in emerging economies. Hence the Chinese push for FTAAP, which, along with the Regional Comprehensive Economic Partnership now seems poised to be a viable alternative to the Trans-Pacific Partnership. Peru and Chile are heavily invested in the TPP’s future, whose dismal prospects may galvanise their support for the FTAAP.

Narrow considerations aside, China’s appetite to foster long and cumbersome trade negotiations also reflects its own perceptions as a global player. Long Yongtu, a former vice minister for foreign trade and an influential voice in Beijing, wrote recently that China is willing to make “additions” to the existing rule-based order without “subtracting” from them. China cannot “pick which rules to follow and which to ignore,” wrote Long. His views reflect that of the Chinese elite who argue Beijing should no longer pursue a transactional approach to its economic relations with other developing countries. This constituency feels the Asian Infrastructure Investment Bank (AIIB) and the Belt and Road project (OBOR) are tools to ensure future economic and political configurations ensure China’s leadership in the region. Ensuring that these institutions will consolidate China’s export-oriented economy may be possible if Chinese planners actually have a grand strategy for them. Translating their economic clout into political and normative value is another matter, which both the Chinese leadership and diplomacy is not ready for. If anything, Trump’s election and the role social media played in ensuring his victory will only harden the views of those in the Communist Party (CPC) who argue against easing domestic Internet controls and freer exchange of political thought. For now, the CPC is expected to focus on domestic issues, without wading too deep into international developments.

What next for India?

India’s immediate and long-term interests are affected by the US-China relationship during regnum Trump. Over the next four years, Trump is likely to channel government spending towards the building of domestic infrastructure, reducing further the US dollars available for foreign aid and economic assistance. Developing countries will realise — if not already — that Chinese capital is probably going to be the most reliable source of funding for the next decade. Even if Beijing has not offered a strategy to harvest intangible benefits from projects like OBOR or AIIB, it is only a matter of time before the opposition to Chinese projects become muted. Europe has already expressed a growing interest in OBOR, and the UK after Brexit is looking at the AIIB for infrastructure-based projects. As China continues to champion economic values that underpinned the US-led order, more countries will become comfortable engaging with Beijing. Were that to coincide with a general lack of interest from the Trump administration in South and Central Asian affairs, India’s opposition to the China-Pakistan Economic Corridor (CPEC) will receive little attention in Western capitals. How (and whether) the Trump administration pursues the US-Afghanistan-India trilateral dialogue is another matter of interest to India. The trilateral is the only dialogue mechanism on Afghanistan, which excludes China and Pakistan, which Islamabad is none too happy about. China’s footprint in South Asia has neither been conditioned by US foreign policy, nor is it expected to step into America’s role in the region. But the China-Pakistan military and economic relationship could grow steadily during this period, which should prompt India to begin pursuing options that make this bilateral embrace costly for Beijing.

On a more immediate note, China will have its ear to the ground for noises from the Trump administration in contentious areas of the bilateral relationship, as well as its commitment towards Asian security. Expect it to test the waters, through provocative conduct in the South China Sea, a border incident along the Line of Actual Control or a state-sponsored cyber attack on infrastructure in the United States or Japan. Such actions would necessitate a diplomatic response from India, which would be a difficult task given that it does not yet have a pulse of the new US government. Nevertheless, these are eventualities that New Delhi should be prepared for.


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Observer Research Foundation

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

One thought on “Trump’s Election A Critical Moment For India-China Ties – Analysis

  • November 23, 2016 at 1:58 am
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    “…But the China-Pakistan military and economic relationship could grow steadily during this period, which should prompt India to begin pursuing options that make this bilateral embrace costly for Beijing….”

    Basically India doesn’t know how Trump’s 4 years will turn out for India. I suspect that the H1B scheme which so many Indians benefit from would have the numbers reduced to appeal to US IT graduates and middle-class white collar workers. Also India hasn’t the capabilities or resources of China to attempt to do anything a tenth of the grand vision of China’s OBOR.
    The Indians could be clever and participate in the OBOR that would benefit India and her citizens. Instead the author suggests that India play spoiler to China’s plans. Such negativity and pettiness. The danger is that if India steps over the line the Chinese will come down hard on her.

    Reply

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