Trump Playing Catch-up: White House Launches Comprehensive Review of China Policy

US President Donald Trump and Chinese President Xi Jinping (R) arrive prior to a meeting on the sidelines of the G20 Summit in Hamburg, Germany, July 8, 2017. / AFP PHOTO / POOL / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
SAUL LOEB/AFP/Getty Images

On Thursday, Politico reported that the White House has initiated a comprehensive review of China policy, with the goal of developing a more “holistic” approach that would clearly outline U.S. goals, ensure all U.S. policies are designed to achieve those goals, and get everyone in the Administration on the same page. Intriguingly, that appears to be the same page as former White House chief strategist and Breitbart News Executive Chairman Steve Bannon, who has made China a major focus of his policy advocacy since leaving the administration.

Politico reports that Bannon is one of several senior officials – others include trade adviser Peter Navarro, National Economic Council Director Gary Cohn, and President Trump’s son-in-law Jared Kushner – who proposed a major China policy review to the president in June. The review was to include every aspect of America’s relationship with China, taking full account of China’s economic and strategic ambitions, and provide a vast range of policy options, some of which could presumably be described to China during negotiations as the harsh consequences of refusing to respect America’s interests.

It’s not certain when the report would be completed, although President Trump’s original deadline would be reached in just a week or two, and he would surely like to have the report in hand before he visits China to meet with President Xi Jinping in November.

One problem with crafting a comprehensive China policy is that Beijing has so many ambitions, covering such a vast area of the globe, and virtually all of the world’s commerce. Another is that Trump administration officials have such a wide variety of perspectives toward China. President Trump himself has long been an outspoken critic of Chinese trade practices and its theft of intellectual property. Navarro, a former University of California business professor, made a movie called “Death by China” that accused China of sabotaging American markets with illegally subsidized exports.

Other top administration officials, such as Secretary of State Rex Tillerson, advocate a much less confrontational approach to China. These advisers tout the benefits of developing a constructive relationship with the emerging Asian hyperpower, tend to view Russia or Islamic terrorism as the more urgent strategic threats, and warn that China could be provoked into launching a hot trade war or undermining crucial aspects of U.S. foreign policy.

Obviously, North Korea is the top current example of the latter situation. The Trump administration pushed hard for Beijing to get tough with its psychotic client state and has been quick to praise the Chinese when they cooperate.

The problem with this focus on North Korea, warn China hawks, is that giving the Chinese massive concessions on other policies to secure their assistance in taming Pyongyang is essentially rewarding China for its decades of nurturing the feral regime. Using North Korea as a threat to extract policy concessions from the U.S. and its allies has always been China’s strategy.

The most cynical China-watchers suspect Beijing is venting its frustrations with Pyongyang in public, but behind the scenes, they’re happily piling up one long-term diplomatic and economic concession after another, gained at the very manageable cost of some short-term pain to Chinese businesses that do business with North Korea. China pursues a grand vision with ruthless dedication, while the U.S. scrambles to deal with crises.

Holistic policies require guiding visions, which is where Bannon comes in. He discussed his China policy view with Bloomberg Businessweek in an interview published on Friday:

Bannon, who’s been consulting with Henry Kissinger and other foreign policy veterans, is preparing a project to sound an alarm about what he views as the primary economic threat to America: China.

“If we don’t get our situation sorted with China, we’ll be destroyed economically,” Bannon says, sitting in the Capitol Hill town house that serves as Washington headquarters of Breitbart News, where he returned as executive chairman after leaving the White House. “The forced technology transfer of American innovation to China is the single biggest economic and business issue of our time. Until we sort that out, they will continue to appropriate our innovation to their own system and leave us as a colony—our Jamestown to their Great Britain, a tributary state.”

Bannon said he was inspired by hearing Kissinger talk about the Committee on the Present Danger, a 70s-era policy shop that called for a tougher stand against the Soviet Union at a time when much of the American academic, media, and foreign-policy establishments were scoring the Soviets as the likely winners of the Cold War, or at least portraying energetic opposition to the U.S.S.R. as foolishly destructive and wasteful when so much could be gained through constructive partnership. This is exactly where the great foreign policy debate of the new millennium seems to be stalled with respect to China.

Bannon stressed the importance of public activism in rallying support from the American people for such a mighty contest. “They understood that you couldn’t do it from the inside,” he said of the Committee on the Present Danger. “You had to go outside and, like a fire bell in the night, wake up the American people.”

In Bannon’s view, the question is not about whether to start an economic war with China – it’s about standing up and fighting in a war China started long ago. “It’s always about making the barbarians a tributary state. Our tribute to China is our technology – that’s what it takes to enter their market, and [they’ve taken] $3.5 trillion worth over the last 10 years. We have to give them the basic essence of American capitalism: our innovation,” he told Bloomberg Businessweek.

This raises an uncomfortable question about holistic China policy: it would necessarily involve making America much more capitalist and innovative than it currently is. Bannon wants to infect China with viral capitalism, but America has already contracted a very bad case of viral authoritarianism, one symptom of which is open admiration for the Chinese model from certain quarters.

The New York Times, for example, has been on an utterly deranged quest to rehabilitate the image of Soviet and Chinese communism, most recently producing tributes to how women had great sex and learned to “dream big” under Chairman Mao. How does America sell capitalism to people in authoritarian socialist regimes when so much of American politics is dedicated to blasting capitalism as cruel and uncertain while longing for the maternal embrace of socialism and the wise guidance of Chinese command economics?

Part of the answer lies in sorting out the proper relationship between government and business, while stressing the need for disciplined government. In a speech in Hong Kong on September 12, Bannon said China’s “way of running their economic system is quite brilliant,” and said there is no world leader President Trump admires more than President Xi.

There is nothing wrong with understanding an adversary and learning to appreciate what they do well, to avoid underestimating them. Also – and this might be difficult for those steeped in emotionally turbocharged American politics to digest – it is possible to compete vigorously against a formidable adversary without hating them. Beijing has plenty of policymakers who don’t really hate America, but are absolutely determined to replace it as the world’s dominant power over the next twenty years.

President Barack Obama left America with the worst of both worlds: a lavishly funded government with authoritarian tendencies that desires control over every aspect of our lives and commerce, but is completely lacking in fiscal discipline, efficiency, the ability to make short-term sacrifice for long-term game, or a sense of humble duty to the American people. The Obama model normalized corruption and made it standard operating procedure. The central government became bigger than ever and less able to get anything done.

Worse, the political class thinks using American diplomatic and economic power to get things done for the American people is wrong – greedy, xenophobic, and (shudder) nationalist. Most of our leaders can scarcely imagine competing in the hardball game China has been playing for decades.

“We’re at economic war with China. It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. On Korea, they’re just tapping us along. It’s just a sideshow,” Bannon said in the August American Prospect telephone interview that presaged his departure from the White House.

“To me, the economic war with China is everything, and we have to be maniacally focused on that,” he urged. “If we continue to lose it, we’re five years away, I think, ten years at the most, of hitting an inflection point from which we’ll never be able to recover.”

Politico credits President Trump’s impending visit to China as the reason work seems to be moving briskly ahead on the great China policy review, but Bannon’s policy activism and public pressure should not be discounted, especially since he is advocating a view President Trump has long held. He’s also made it clear he will continue to be aggressively involved in 2018 midterm races after notching a big win in the Alabama GOP Senate primary. The Maniacal Focus 2017 Tour is well underway, and 2018 dates will be booked from coast to coast.

The White House has signaled that while North Korea will be a major topic during Trump’s November trip to China, he will “also emphasize the importance of fair and reciprocal economic ties with America’s trade partners.” That’s not quite maniacal focus, but it’s encouraging evidence that Trump remains interested in playing the long game with China.


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