How Trump vs China impacts us all

The relationship between the US and China is critical to the fate of many countries, including New Zealand - so how is it holding up? Sam Sachdeva reports on the key issues from a gathering of academics in Wellington to hash out the state of play and possible impact for the Asia-Pacific region.

A US president known for his provocative comments on social media, a rising Asian superpower stepping up its leadership on the world stage - and any number of countries who could be caught in the crossfire.

It’s no wonder the relationship between new US President Donald Trump and China has been the subject of endless headlines and analysis.

But now we’re past the first 100 days of the Trump administration, what exactly is the state of play and should New Zealand be worried?

Academic experts from all over the Asia-Pacific gathered at Victoria University last week for a symposium about Trump’s presidency, his relationship with China and the possible effects for countries in the region.

Here are just some of the lessons those in attendance could take away from the day.

Trump’s bite hasn’t matched his bark - but there’s still uncertainty

Bates Gill, professor of Asia-Pacific strategic studies at the Australian National University, says Trump came into office as perhaps the most anti-China candidate and president since the first Nixon administration.

After all, this is the man who accused China of “raping” the US with its trade policies while on the campaign trail.

However, a “series of flip flops, reversals and accommodations” have followed since then, with Trump committing to the One China policy, refraining from declaring China a currency manipulator, and not slapping on significant trade tariffs.

Gill says Trump’s meeting with Chinese president Xi Jinping at his Mar-a-Lago estate in Florida, while short on substance, “seemed to put the relationship on a more positive footing”.

That sentiment is echoed by Wang Dong, associate professor in the School of International Studies at Peking University, who says President Trump has appeared very different from candidate Trump.

“He looks increasingly like a more conventional, traditional Republican president.”

However, Gill cautions that there is still a “lot of volatility and unpredictability baked into the relationship”, while Wang notes the Trump administration’s lack of a coherent China policy as an issue still to be navigated.

More US work needed for Asia Pacific

It’s not only China where the Trump administration must work on its strategy.

A number of experts, including Ian Storey of the ISEAS Yusof Ishak Institute in Singapore, remarked on the lack of “a clear overriding policy for the Asia-Pacific region, or foreign policy in general”.

Storey made a particular note of the lack of South East Asian experience within the administration, and noting that up until mid-April Trump had not met or had a telephone conversation with a single leader from the region (although that has since changed).

In contrast to former US president Barack Obama’s highly-publicised “pivot to Asia”, Trump’s lack of engagement - coupled with withdrawal from the TPP - suggests he does not intend to follow the lead of his predecessor.

However, Robert Ayson, professor of strategic studies at Victoria University, says Asian countries should be cheered by the news that Trump will attend the East Asia Summit (EAS) in the Philippines and APEC Forum in Vietnam later this year, given Obama’s commitment to attend EAS was one of the first signs of his pivot.

He says the summit is another chance for the US and China to work on their relationship, supported by regional partners who have a stake in stability between the two.

A trade war is unlikely - but would be damaging for New Zealand

One of the major concerns in the wake of Trump’s victory was a damaging trade war between the US and China.

A number of experts at the symposium agreed that the meeting between Xi and Trump, coupled with the latter’s need to secure cooperation in dealing with North Korea, has led to that risk subsiding.

As Storey says: “Most fears of a trade war between US and China have receded - not disappeared, but certainly receded.”

However, if tensions were to flare up again and result in retaliatory action, New Zealand would not escape the consequences.

Natasha Hamilton-Hart, director of Auckland University’s New Zealand Asia Institute, says with six of New Zealand’s top 10 export markets in Asia, we would be hit by a domino effect from the impact on the Chinese economy.

“If there is a major trade conflict involving China and the US, that affects the whole of East Asia because China plays such a pivotal role in regional production...any dispute with China has fall-out for whole region.”

New Zealand’s exports to China, mainly in the primary industries, food and beverage, and education sectors, would also be subject to any serious economic downturn as the result of a trade war.

Australia is looking to NZ for guidance

While Australia is a bigger player than New Zealand on the international stage, some across the ditch have argued the country should follow the “road to Wellington” when navigating relations with the US and China.

Brendan Taylor, interim director of the Coral Bell School of Asia-Pacific Affairs at Australian National University, says a number of former and current politicians have urged their government to lessen its reliance on the US and deepen ties with Asia as part of a more self-reliant approach to defence.

With fears that Trump’s unpredictable rhetoric and “America First” approach could weaken the US administration's leadership role in the region, New Zealand’s commitment to an independent foreign policy has been lauded by some in Australia.

“It is hard to think of a period since the Anzus crisis of the mid-1980s when New Zealand has enjoyed a higher profile in strategic and foreign policy debates,” Taylor says.

Australian Greens leader Richard Di Natale called on the country to shift its allegiances earlier this year, saying: “We saw New Zealand do that some time ago and they continue to demonstrate that it is possible for a middle power, a smaller nation, to stand on their own two feet.”

However, Taylor believes Australia is more likely to heighten its alliance with the US or significantly expand its own military capabilities - neither of which would take the country on the road to Wellington.

We must look beyond the US and China

However, that’s not say New Zealand doesn't have room for improvement in how it handles US-China relations.

Ayson says while we don’t have to choose between the two countries, we also should not restrict ourselves to building relationships with only those two.

“If we have had, like a number of other countries in the region, a hedging position, [where] we were kind of trying to manage that balance between the US-China relationship...we should be moving from that to more of a kind of a wider range of options.

“I hesitate to use the word diversification because it is slightly overused, but it’s an important one.”

Ayson says New Zealand should be putting more attention on its relationship with Australia, while the growing ties with Singapore, including on security issues, is also important.

Relationships with other, less obvious allies like Canada, India and Indonesia could also be boosted, he says.

“We probably need to get away from an idea, if we’ve had it - and I’ve certainly had it myself - that New Zealand’s comfort level in the region depends on whether it feels it's in the right situation vis-a-vis US and China...

“Getting away from that fixation of New Zealand's position in that great power situation, I think we need to go beyond that.”

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