US – China trade war in Russian political discourse: strategic opportunities VS. Economic challenges

The attitude towards strategic containment of China is not new and has been becoming more influential along with the rising confrontation between the countries. The current US approach regarding China is the end product of the evolution of the US policy since 2000s, thus far, given the reactionist nature of Chinese behavior, it has to be evaluated through the lens of the US policy. The reason why the Sino-US conflict took a form of the trade war and not any other, was due to the fact that the disagreement and frictions primarily were associated with the economic sphere. The evolution of the US policy in relation to PRC, including the economic component, is briefly evaluated in this paragraph.

Both the administrations of George W. Bush and Barack Obama could be characterized as being cautions towards China, but rather soft, trying to integrate it into the US-led order. Rahawestri (2010) notes, that it was during the Bush presidency when China got relabeled from strategic competitor to a partner, moreover he south “constructive, candid and cooperative” relations. Despite the rhetoric, the US also sought to strengthen both military presence in Asia-Pacific as well as the influence, though including China to decision-making table. The US increased China's role in the War on Terror, engaged along with Russia, in the Six-party talks over North Korea's nuclear weapon program, and invited to participate in the Senior Dialogue to discuss nuclear proliferation, human rights violations and, above all, the issues with Taiwan. (Rahawestri, 2010). Overall, the Bush administration was certainly putting China on the agenda, although was more concerned with the global war on terror, while engaging China into struggle against terrorism. Navarro and Autry(2011) puts much of the blame for letting China use the tools of “job destruction” on Bush arguing that:

“Bush certainly had the backbone to stand up to China. Unfortunately, his ideological blinders didn't allow him to understand the difference between free versus fair trade. As a result, the fiddling Bush administration did nothing but fixate upon the war on terror while a mercantilist and protectionist China systematically took apart our economy job by job and company by company.”

The first decade of the 21st century was characterized by the rise of Asian countries, particularly initiation the era of Chinese “strategic opportunity”, which resulted in the “East up and West down phenomenon”, thus after the global financial crisis, the global balance of power underwent significant changes causing the restructuring of international strategic environment, calling for growing discontent and warries of the US. (Jian, 2014).

The post-crisis of 2008 signified a rather turning point in the US attitude towards China, president Obama took a more assertive stand towards China, while also trying to maintain integrative policies in Asia as his predecessor. Obama's departure from the Middle East towards recovering the image of the United States in Asia, most apparently with efforts to reestablish relations with countries of Southeast Asia, mainly Indonesia as one of the rising states in the region, for Rahawestri (2010), means the most apparent point of departure from the policies of George W. Bush.While manifesting multilateralism, Obama continued the strategy of maintaining US presence in the region in order to hedge growing Chinese military power, while also seeking cooperation with China as “responsible stakeholder”. (Zeng and Breslin, 2016). Despite being recognized as emerging power, China was at the time not ready to accept the responsibility of being one. In their article of 2016, Zeng and Berslin appeal to the most skeptical Chinese analysts, who argued that despite being the second largest economy, China was relatively poor in per capita basis and was not rich, thus the countries of the West were simply trying to put the responsibility for global financial crisis and military imbalances on the “responsible stakeholder”, instead of restructuring their own financial systems. China did not wish to accept burdens for solving global problems that were not of its fault.

Although the issues related to trade deficit with China, currency manipulations and discriminatory asymmetrical financial policies were at stance before, encouraging the initiation of the Strategic Economic Dialogue (SED) in 2006 (United States State Committee on Banking, Housing and Urban Affairs, 2007), President Obama adopted a more forceful stand in dealing with economic disputes with China. The imposition of punitive tariffs on imports of Chinese tyres and solar panels, has raised discontent and opposition in China, which responded by accusing the US of “breaking commitments made during the G-20 Summit” and by pointing to the issue of grave protectionist measures. (Rahawestri, 2010). From this point, the tensions between the United States and China started to escalate giving grounds of mutual dissatisfaction for the current trade war in the future. One of the tools Obama used to tackle the trade controversies with China was the WTO dispute settlement.Although, as underlined by President of Center for China and Globalization Wang, in his interview to Al Jazeera in 2019, the US also did not hesitate to establish cases against China, like the first formal complaint to WTO in 2004, Obama implemented such policy more aggressively, by 2012 the US has initiated 9 complaints to WTO against China.

It is worth mentioning, that Obama administration has put special emphasis outlining in 2012 “Pivot to Asia” that has shifted the US policy towards strengthening bilateral alliances, deepening the relations with China as an emerging power, expanded military bases in Asia Pacific while promoting democratic values. (Clinton, 2011). One of the most profound US experts on China, the director of Center for Northeast Asian Policy Studies, Richard C. Bush (2012) stated that the “Pivot” was seen differently by varies Asian states. The policy aimed at rebalancing the relations in Asia though both containment and involvement through institution building. Bush (2012) quoted Prof. Christensen who used to be a deputy assistant of state:

“Rather than trying to rollback or contain the growth of Chinese power, the UnitedStates has used the combinationof astrong U.S. regional presence and a series of creative diplomatic initiatives to encourage Beijing to seek increased influence through diplomatic and economic interactions rather than coercion, and to use that increased influence in a manner that improves the prospects for security and economic prosperity in Asia and around the world.”

The conclusions of both Bush and Christensen that the Obama's “Pivot to Asia” was more interactive rather than coercive hegemonic attempt to retain the influence and bring prosperity was not perceived by China as one, thus stimulated China to balance against the US, by introducing Chinese led institutions and building military capacity. Thus, as underlined by Li (2016), such turn to Asia was perceived by Beijing as rather a “strategic pivot' aimed at containing China, causing a most significant misunderstanding from the Chinese point

The series of bilateral agreements with the US closest Asian allies such as Japan, South Korea and even India provided the sense of insecurity and surrounding for China calling for a security dilemma to escalate. Around the same time, the Chinese policy of “keeping a low profile” shifted to China considering itself a great power calling for a “the new type of great power relations” under Xi Jinping. (Zeng and Breslin, 2016). From now on, China has realized its power status and wished the US to reckon with its interests. While before Obama was using “sticks” in trying to force China to back up on its economic policy, it was time to admit that further pressure would only exacerbate the relations and new “carrot” measures needed to be implemented. The TPP was to be one of such carrots to be used in order to gently involve China into the US crafted new multilateral but still hegemonic order in Asia Pacific. Despite the attempts of the administration, China realized quickly that the US is trying to create, to cite Zeng and Breslin, “Washington-based global governance structure” that goes against the Chinese interests. Since the declaration of a US “Pivot to Asia” Strategic opportunity, China started to work through Chinese led regional architecture, like the RCEP and AIIB RCEP, that were perceived by Washington as the attempt to outcompete the US from the regional maintenance. As Jian (2014) writes, the recent decades have been the period of strategic opportunity for China, thus it is vitally important to promote new model of relations with the US, thus the negotiations for Sino-US and Sino-EU investment agreements as well as participation in RCEP could resolve potential unfavorable impacts of TPP. Although both China and the US admit the importance of restructuring the relations, structural differences, divergent interests and varies bias add up to the mutual distrust.

As Navarro and Autry (2011) outlines, unlike Bush who was mainly concentrated on the issue of global terrorism and overlooked the Chinese threat, President Obama had the intellect to the problem, but while trying to overcome Chinese mercantilism with involvement into US-led trade order, did not have the “backbone” to undertake assertive actions that were necessary. The Trump administration seemed to concede the suggestions outlined by Navarro and has implemented the strategy of stiff containment embodied through the initiation of trade war. The growth of confrontational potential, along with the changing structural role of PRC, have been brought together and defined the strategy of President Trump. These strategic preconditions are to be outlined in the following section.

3.2 From strategic partners to strategic competitors: domestic factor in the US-China relations

China was actively present in the US domestic debates since the early 90s, when the US needed to somehow establish the post-Cold War order, and Chin, according to Congressional Research Service report of 2019, was already among the fastest growing economies, hence soon the emerging power to deal with. Although the attitude towards PRC may have been swinging from more cooperative to rather rough depending on the president, generally the policy over the past 30 years has been evolving in the direction from partnership to competition.

Although in the early 90s the relations between countries strained over US-Taiwan demonstrative rapprochement and human rights issues, starting from the mid 90s Clinton sought to stabilize the relations with China. (Frost, 1997). During the visit to the United States in autumn 1997, President Jiang Zemin and Clinton have reached the “common commitment to the establishment of Sino-US strategic partnership” (Ministry of Foreign Affairs of the PRC, 1997).The visit illustrated the willingness of both parties for cooperation in the various areas (trade, environmental protection, energy, technology) and constructive dialogue especially regarding the delicate issues over Taiwan. The domestic rhetoric in the US soon shifted with the Governor's Bush presidential campaign speech on the foreign policy agenda in 1999. George W. Bush was the first president to address China as a “strategic competitor” particularly in Eurasia along with Russia. He was also very critical of the Clinton's administration for the bias that have been present in the US policy in relations with China, Bush (1999) voiced out: “China… has taken different shapes in different eyes at different times. An empire to be divided. A door to be opened. A model of collective conformity. A diplomatic card to be played. One year, it is said to be run by "the butchers of Beijing." A few years later, the same administration pronounces it a "strategic partner.” Although Bush was calling for a more alert position towards China as rising power in transition, he did not immediately call for open confrontation with Beijing, to the contrary, he stressed the importance of mutual respect and enhanced trade partnership in the framework of WTO to invite China into the “world of economic freedom and “open door for Taiwan” (Bush, 1999). The 9/11 attacks forced newly elected President to turn to the Middle East and initiate War on Terror, while deepening the cooperation with China and involving it into the fight against global terrorism and the proliferation of weapons of mass destruction. Indeed, as Baum (2001) concluded, the “significant qualitative shift” has taken with Bush administration coming in the office, although the relations remained in the unstable equilibrium, neither side wished to trigger uncontrolled worsening of relations.

The accession of China to the WTO has stimulated the growth of the Chinese economy even further. According to the Congressional Research on Chinese Economic Rise (2019), PRC's annual real GDP steadily had been growing from 8.4% in 2001 to 14% reaching its apex in 2007. Such rapid growth posed even greater concerns to the US interests in Asia, as there was a threat of losing geopolitical significance to China. Obama continued extending partnerships with China, not so much concerning with the East Asia region, but preoccupied with the issues outgoing from the Bush's administration in the Middle East.

As the crisis of 2008 shook global economy, Obama started to get blamed to be too soft on China, thus during the next presidential election China has become a focal point of the campaign. Historically, the Republicans have been advocating for a harsher policy towards. During the presidential campaign of 2012, the Republican candidate Mitt Romney have been putting special emphasis on Obama's failure to prevent cheating of China that stole America's manufacturing jobs. In his “anti-Obama on China” ad. he blamed Obama for letting the Chinese increase their manufacturing by 25% over the 4 years, causing for 582,000 job losses in the US (Failing American Workers ad, 2012). Moreover, Romney called for the increase of defense budget as the World needs strong America, while Obama's “massive defense cuts during the time of global instability should not be in the cards”. (Presidential General Election Ads, 2012)

Already at that time the rhetoric, later pushed through by president Trump, to blame China for the internal economic problems and the need for the containment was set in high-speed motion. During the 2016 presidential election campaign China occupied a special place in defining both domestic and foreign policy for both democratic and republican main candidates. Donald Trump outlined the importance to prevent Chinese military and economic expansion which was identified by him later in NSS as the main threat to the United States. The issues such as trade deficit, IP theft, military modernization and “cheating” through the application of unjust protectionist measures against American firms were put in the frontlines of the newly elected President's discourse. The study of the 20 claims of the US on Chinese trade misbehavior conducted by Charnovitz (2019), reveals that 6 of them are not violation of the WTO or inherently wrong (ex. lack of market-oriented policies, high bilateral trade deficit , corporate governance law), while those 7 that do violate norms were not promoted into negotiations at the WTO by the Trump Administration. One of the strongest defining features of the current administration is the desire to talk to Beijing from the position of force and not law, while also violating international trade law with the imposition of tariffs in order to force the domestic regulations in China.

Although trade imbalance might have not been a sufficient cause for US assertive actions against China, the possible attempts to interfere in the United States' democratic process certainly is an issue of domestic security to react to. In his 2018 UNSC speech, President Trump accused China of meddling in 2018 midterm elections. Trump (2018) said: “China has been attempting to interfere in our upcoming 2018 elections…they do not want me or us in the administration because I am the first president ever to challenge China on trade…and we are winning on every level.”Even an unconfirmed attempt of interfering into the US domestic affairs has grounded Chinese status as an existential threat to the US security, giving the Administration a justification for further escalation of political and economic pressure.

Unlike the US, the role of US in Chinese domestic policy is reactionist, determined by the policy of the US in relation to China. China seems to mirror the attitude of the counterpart while avoiding confrontation as long as it is possible in the times of crisis, if not expresses attitude to resolve disputes through multilateral institutions, for instance, through the WTO DSB in the case of trade frictions. During the presidency of Bill Clinton, China was open for cooperation in the framework of Sino-US strategic partnership. The visit of president Jiang Zemin to the US was a very significant step towards stabilizing the US-China relationship, thus as pointed by the Australian Parliament House brief of 1997, “the Chinese delegation clearly appreciated the official reception in Washington” and even during the growing tensions over Taiwan the president of the PRC expressed the desire to negotiate peacefully. The cooperation was also evident during the Bush administration on combating global terrorism. However, the “Pivot to Asia” advanced during the Obama presidency was met with suspicion in China, as it was perceived that the US is trying to contain China and integrate in the Asia-Pacific Region with their rules. Despite the concerns, China was openly negotiating the TPP, although with a degree of apprehension. The Chinese efforts to promote deeper cooperation in the spheres of banking and investment through the US-China Bilateral Investment Treaty (BIT) remained as, Li(2016) argued, dismal, moreover it appeared that the BIT would not be established unless the TPP is approved, thus the US Congress was eager to block such initiative.

The domestic perceptions of the US have also shifted and by the beginning of 2020 was determined by the president Xi Jinping. He came in office during the second presidency of Obama switching the unwillingness of China to be regarded as the great power and a “responsible stakeholder” in the G2 format, to the proposition of “the new type of great power relations” (Zeng and Breslin, 2016). Although China did not seek, and still doesn't, any direct confrontation and escalation of trade war, it has positioned that it will respond if needed, although it promotes negotiations and diplomacy.(White paper: China's Position on the China-US Economic and Trade Consultations 2019). Lukin (2019) asserts that in the past, China wished to remain “in the shadows” of global affairs and now the opposite is happening while the rhetoric of current leadership is aimed at easing the fears over growing role in international arena throw the `peaceful rise'. The current state of trade war and political discontent between the countries rests on China mirroring actions of Washington as well as the Chinese rejection to accept the hard power application enforced by President Trump.

3.3 The course and effects of the war

4.1 The impact of the US-China trade war on Russian economy