<![CDATA[Donald Trump really is Xi Jinping's friend. The phase one US-China trade deal proves it]>
Since Donald Trump became the American president in January 2017, he has frequently called his Chinese counterpart Xi Jinping "a friend", even throughout the on-off trade war between the world's two largest economies over the past 18 months.
At the ceremony on Wednesday when he and Chinese Vice-Premier Liu He inked the phase one trade agreement, Trump, true to form, called Xi "a very, very good friend of mine" and promised to visit China "in the not-too-distant future".
Xi appears to have reciprocated only once in public, calling Trump a "friend" at a forum in Russia in June last year, though the Chinese media failed to report this. Let us hope the rapport between the two leaders will strengthen in their meeting later this year, riding on the latest agreement which should significantly lower trade tensions.
US President Donald Trump has often called his Chinese counterpart Xi Jinping a "friend", but Xi hasn't always seemed quite so keen. Photo: Reuters alt=US President Donald Trump has often called his Chinese counterpart Xi Jinping a "friend", but Xi hasn't always seemed quite so keen. Photo: Reuters
Indeed, Trump has already proved to be a friend of China in ways that the Chinese leaders and the state media would not want to acknowledge publicly. And I am saying this without any hint of irony.
Following the publication of the details of the agreement, reactions from the international media have been mixed. While they hailed the deal as progress, many news commentators remain sceptical about whether China will meet the target of purchasing US$200 billion more in US goods and services over the next two years or whether the enforcement mechanism will be effective enough to make China compliant.
While those points are valid, the geopolitical implications of the deal should not be underestimated.
The deal on Wednesday has greatly eased concerns not only in China but also in many parts of the world about the decoupling of the world's two largest economies, a theory pushed by many people in the United States where hostility against China is one of the few issues to have won bipartisan support.
It shows that both Beijing and Washington can work together to hammer out a more comprehensive trade agreement despite the growing anti-China sentiment in the US.
A cargo ship loaded with containers leaves a port in Qingdao, China. China's trade surplus with the United States has been a key issue in bilateral tensions. Photo: AFP alt=A cargo ship loaded with containers leaves a port in Qingdao, China. China's trade surplus with the United States has been a key issue in bilateral tensions. Photo: AFP
Last month, at a China conference in New York organised by the South China Morning Post, one could not help but notice the distinctively different narratives from the Chinese and American panellists. The Chinese analysts and policy insiders, including the former trade minister Chen Deming, argued strongly against "unthinkable" suggestions that the two economies could disengage from each other due to the trade tensions. In one particularly notable quote, Chen said "to hell with decoupling".
Meanwhile, the American speakers, including former trade officials in previous US administrations, all expressed serious concerns about whether the two countries were indeed heading for such a decoupling.
Following the signing ceremony, Vice-Premier Liu specifically addressed this issue in an interview, saying that while there were people outside the economic circles advocating the decoupling of the two economies, it was unrealistic and the phase one agreement would effectively put a stop to such speculation.
Moreover, the deal will strengthen the hands of China's pro-reform officials and kick-start the long-delayed economic restructuring and liberalisation nearly 20 years after China joined the World Trade Organisation (WTO).
The history of China's reforms has shown that every time the country's economy is at a crossroads, external pressure has helped the Chinese leadership overcome resistance from vested interest groups and move ahead with bold reforms and opening up to foreign investment.
It is little wonder that some Chinese analysts have compared the implications of the phase one agreement with those of China's WTO accession, which compelled the country to undertake drastic reforms to meet many of the targets specified in the agreement.
Of course, the targets in the latest agreement are more difficult for China to meet in the areas of intellectual protection, technological transfers, market access, and particularly liberalisation of financial services. Given Beijing's past record of paying lip service to implementing these necessary reforms, the scepticism among many Western analysts is understandable.
But they should not underestimate the Chinese government's resolve once its leaders have set their minds on the reform goals.
As Chinese officials have repeatedly said, with the Chinese economy slowing down and the government shifting its attention to pursue quality growth, it is in Beijing's own interests to beef up intellectual protection and further liberalise its financial services, for instance.
Vice-Premier Liu tried to address the concerns of the sceptics by saying in the same interview that the key to the success of the phase one agreement lay in its implementation.
Ordinary Chinese people have already benefited indirectly from the trade tensions. Ever since the trade war began in the summer of 2018, the Chinese government has continuously lowered import tariffs on both industrial goods and consumer goods, including food, wine, health supplements and pharmaceutical drugs. The Chinese government says that it has been cutting tariffs to boost spending and spur economic growth but concerns over the economic impact of the trade war with the US were no doubt a lurking factor.
China's greater purchases of US goods and services resulting from the phase one agreement will also help meet the demand from its growing middle class of 400 million people.
Trump's presidency may have heralded a new trajectory for Sino-US relations moving forward, as confrontation has replaced cooperation as the key theme but Trump himself should be seen in a light different from the China hawks in his cabinet including Peter Navarro, the White House trade adviser, and Mike Pompeo, the secretary of state.
In his presidential campaign, China-bashing was one of Trump's hallmarks. Trump used harsh language to attack what he saw as China's unfair trade practices, accusing the country of "raping" the US and calling America's trade deficit with China "the greatest theft in the history of the world".
But as Michael Pillsbury, a China scholar who advises Trump, told The New York Times, the latest agreement suggests Trump has been more swayed by his business supporters who are less concerned about China's record on human rights or fears that it is an existential threat and more interested in having greater access to its market.
This point is reflected in the performance of US stock markets, which have kept setting new records, thanks to positive news on the trade deal over the past few weeks.
Of course, it would be naive to assume that overall bilateral ties will suddenly take a turn for the better, given Trump's wilful unpredictability.
After all, the trade issue is probably one of the easier disputes to resolve between the two countries. They still must tackle more difficult issues related to their technology and industrial policies, not to mention their geopolitical rivalry.
But the 18 months of trade war has enabled both sides to gain a deeper understanding of each other's bottom lines.
If Pillsbury reads Trump correctly that he appears to have shifted his tone on China and is now most interested in making China more open to foreign trade and investment, many people in China will see him as a friend.
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This article originally appeared on the South China Morning Post (SCMP).
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