Trump Taiwan Phone Call Not an Impulsive Act
Professor Ho-Fung Hung tells Paul Jay that Trump’s call to the President of Taiwan signals a deeper shift in Washington’s China policy
PAUL JAY: Welcome to The Real News Network. I’m Paul Jay in Baltimore. On Friday, President-elect Donald Trump spoke with Taiwan’s President Tsai Ing-wen who, according to Trump, had offered her congratulations on his election. Trump is believed to be the first President or President-elect to speak with a Taiwanese leader since 1979 when the United States cut ties with Taiwan. Most of the world respects the One China Policy, meaning respecting China’s claim to Taiwan. Since Nixon, the US has dealt only with the People’s Republic of China and not dealt directly with the government of Taiwan, even though it carries on trade relations directly with Taiwan and formally considers Taiwan’s status as unsettled. Well, over the weekend, Trump tweeted, “Did China ask us if it was okay to devalue their currency, making it harder for our companies to compete, heavily tax our products going into their country, US doesn’t tax them, or to build a massive military complex in the middle of the South China Sea? I don’t think so,” said Trump. Well, with a $336 billion US net trade deficit with China in 2015, many are wondering what a Trump presidency will mean for economic and political relations with China. Here to talk about all of this with us and joining us from Baltimore is Ho Fung Hung. He’s an Associate Professor at Johns Hopkins University in the Sociology Department and his scholarly interests include global political economy, protest, nation state formation, social theory with a focus on East Asia. Thanks very much for joining us.
HO FUNG HUNG: Thanks, how are you doing?
PAUL JAY: So, first of all, what do you make of Trump’s objections? Are some of these critiques of the Chinese-American relationship valid?
HO FUNG HUNG: His critique of Chinese behavior regarding US-China relations, if you talk about the details, there is some inaccuracy there. For example, he complains about China’s deliberate devaluation of the currency to hurt American enterprises. But, in fact, over the last two years or so, China actually has been facing a problem of capital out-flow, capital flight. That lead to a devaluation of the currency that the Chinese government doesn’t want to see. So, actually, the intervention by the Chinese Central Bank in terms of the currency movement is to push up the currency that Chinese government doesn’t want the renminbi to devaluate that fast. So, Trump’s accusation that China is intervening to push down the currency is not accurate.
PAUL JAY: I assume China wants their currency to increase in value because it makes commodities far more expensive for China and China’s a major investor all over the world. So, you would think they do want a stronger currency. It strengthens their hand in purchasing.
HO FUNG HUNG: And I think that the Chinese government, right now the concern is to stem the out-flow of capital — because many people who have money are trying to smuggle money in different ways out of China. And if the currency continues to devaluate rapidly and then more people will get the money out and it is the fear that China is dealing with right now. So, to say Chinese government is intervening to depreciate the currency is not quite accurate. But the sentiments among the American business community to what China is moving toward the negative, Trump is right about that part because even before the election, over the last three or four years, there’s more and more American enterprises doing business in China, has been complaining that the regulators in China and the state enterprise in China are treating them unfairly because the Chinese economy is slowing down. And so, the Chinese government is trying to use a lot of extra economic measures to out-compete, to let the state enterprises out-compete the American enterprises, other foreign enterprises. So, there’s a lot of complaint, so that part of the spirit regarding US-China relations is quite right.
PAUL JAY: And is he right about the issue that China taxes American products but not the other way around?
HO FUNG HUNG: This is controversial, that because over the years that US and China have been taking this kind of a trade issues to the WTO and some of them have not been settled because US has been, even the Obama Administration, has been having issues with China regarding the dumping… accusing China is dumping certain kind of products, like steel and tires to the US market and so on and so forth. But it is very complicated issues that it is difficult to say it in a simple and right manner.
PAUL JAY: Now, if I’m in the leadership in China, I’m thinking to myself, if this represents where American politics is going, and an American political leadership is going to be so unreliable in terms of the traditional way United States and China deal with each other — in other words, if Trump is really serious about what might amount to a trade war, and also geo-politically, the kind of people Trump is gathering around himself are very intent on regime change in Iran and they’re on the far right-wing of American geo-political thinking — if I’m in a Chinese leadership, I’m thinking to myself, well we got a lot of eggs in this American economic basket. We own a ton of American debt. A lot of our economy is based on exporting, providing cheap labor for exports to the United States. Am I thinking about ways to decouple China more and perhaps in a more rapid pace than I might otherwise, from the American economy?
HO FUNG HUNG: In terms of decoupling, I think, anyway, it is happening, or it has been happening already because of the slow-down in the Chinese economy and the rising wage of Chinese labor, and also the increasingly tough environment for American businesses in China because of the regulatory discrimination against foreign enterprises. So, for example, the American Chamber of Commerce in China has published a survey of American business in China earlier this year, 2016, and found that actually quite a large number of American businesses already consider leaving China. After they leave China they might go to Southeast Asia and other low-cost country and some might go to Mexico or some might go back to the US. And many of them are citing these kinds of harsh regulatory environment and a slow-down and the increasing wage in China. So, this kind of a honeymoon period of US-China economic relations has been ending anyway, with or without Trump. So, it is a big environment. And whether Trump’s action will trigger a trade war with China, I’m not that sure. And, actually, I’m not that worried about it because China will be very cautious about whether it wages a trade war with the US also. That on the one hand, a lot of American enterprises like Apple and many big businesses have interests in China, but also China still would depend a lot on American markets and American capital. And so, you look at Beijing’s response to Trump’s phone call to Taiwan in the official media, you already sense that the Chinese government is trying to put the blame on the Taiwan leader rather than Trump and then they try to portray Trump as an inexperienced politician that is kind of played by kind of a cunning Taiwan leader. So, they are very cautious not to put all the blame on the Trump as the President-elect.
PAUL JAY: The American geo-political thinking has always had, or most of it has always had, a long-term prospect that, in the final analysis, the power that the United States is going to have to contend with is China. Franky, if I understand it correctly, really, more so than Russia. Certainly, China’s economy is bigger. We had Obama’s Asian Pivot, what amounts to a strategy for a kind of encirclement of China. And there’s been various, there used to be a group in Washington called The Blue Group and they may still be around, but their idea was that every geo-political decision the United States makes should work back from the idea that eventually there’s going to be some out and out confrontation with China. How much does that play into Chinese thinking? And as I say, again, with the level of aggressive rhetoric coming from Trump, does it make them more concerned about this?
HO FUNG HUNG: It’s quite ironic that during the election, or before the election, I observed many Chinese coming here and Chinese official media, they are actually quite worried that Hillary Clinton will be elected because of Obama pivot to Asia, actually is formulated when Hillary Clinton was the Secretary of State so they see Hillary Clinton as a kind of hawkish foreign policy person and so they think that this kind of pivot to Asia will continue to escalate if Clinton gets elected. While they see Trump as an isolationist that will leave Taiwan to China and then get out of the Western Pacific but it turns out it is not the case and it is quite ironic. And as it emerged today that the Wall Street Journal has a report this morning saying that actually the Trump Taiwan call was not a kind of an impulsive act but it was actually orchestrated by some old China policy hand in the Republican Party, namely Bob Dole, that actually he pulled the strings and made the phone call possible. So, it’s quite actually kind of the sentiment in the foreign policy communities in the Republican Party and, I believe, in large quarter of the Democratic Party as well, that a US leader will be thinking about a Taiwan and Asia policy because over the years that assumption is that the US has to be very sensitive, very careful not to hurt China’s feeling, not to offend China, so that China will cooperate with the US on the South China Sea and on North Korea. But as it turns out, over the last few years, North Korea seems to have moved beyond China’s control and recently the US government releases the information that it gathered that, actually, the North Korea nuclear bomb development program has been getting assistance from some Chinese steel(?) enterprises. So, there’s China’s help behind it. And so, it makes Washington foreign policy sort of quite frustrated about it and also the South China Sea, even though the US has been very careful not to provoke China, but China has been quite assertive, even some will say that is aggressive, in building all this military… militarizing the South China Sea and then raising alarms of China’s neighbor. So, there’s already thinking before the election that Washington should recalibrate its Asia policy, and particularly the Taiwan policy and because Taiwan has been a very important part of US strategies and defense positions in the Western Pacific. So, this thing has been going on and as it became clear this morning that actually this phone call between Trump and Tsai Ing-wen was not some ad hoc, impulsive act but there is some kind of a senior GOP foreign policy person’s involvement in making it possible. So, it seems to be signaling a deeper shift in Washington’s Asia policy rather than just an impulsive act.
PAUL JAY: Yeah, I mean, I think if people had paid attention to this it would have been clear this is where Trump was headed with his foreign policy. The non-interventionist talk I think was mostly window dressing. We’ve been saying on The Real News, the proof of Trump’s pudding is in the appointments. And you can see the kind of people he’s gathering around him. They’re very, very hawkish and very interventionist.
HO FUNG HUNG: … are back(?).
PAUL JAY: Let me just ask you, finally, China has fairly good relations, I understand, with Iran and, although, they did not support the intervention in Iraq, they didn’t do much to stop it. If there is a real move at the United Nations or outside the United Nations — it’s very possible this administration, they won’t even care about a United Nations Resolution — if they really move towards some kind of attack on Iran, I don’t know whether that would take the shape of bombing or much more serious sanctions plus some kind of military action. Is China likely to do anything? Or can they do anything? Or they would continue to sort of stay out of the way?
HO FUNG HUNG: China, on record, China has not been a very active politician on the world stage, and you look at US and the UN Resolution on the action in Libya a few years ago, you can see this — and originally Chinese siding with Russia to oppose the US and the Western countries in collaboration with a number of Arab countries’ actions in Libya against the Gaddafi regime because China has a lot of oil interests and investments with the Gaddafi government. But when they see the international environment is shifting to the way that it is inevitable and it is difficult to resist and they will just abstain and don’t get in the way. So, Chinese had been starting to talk with the rebels at that time to protect its interests. So, China has been quite practical and realistic and let other big players like Russia to take the lead if they feel that is necessary to oppose the US action. But they’re careful never to take the lead unless it is issues in its neighborhood, which is Asia.
PAUL JAY: And likely you think the same way on Iran?
HO FUNG HUNG: Should be, yeah.
PAUL JAY: Okay, thanks very much for joining us and we’ll continue following this story. We’ll come back to talk to you soon.
HO FUNG HUNG: Thank you, talk to you later.
PAUL JAY: And thank you for joining us on The Real News Network.