President Donald Trump will face the greatest challenge of his presidency so far when he meets next week with Chinese President Xi Jinping during his 12-day trip to Asia.
Discussion of North Korea’s nuclear saber-rattling may make headlines, but it is the economic talks between Trump and Xi that will reveal who holds the power in the room.
Trump’s comments on China have run the gamut. He has vowed to “get tough” with Beijing in the past but has also praised Xi, saying the two have the greatest “president-president” relationship ever. With his trip to Asia, Trump has an opportunity to show the world whether that relationship can survive Trump’s tough stance on trade with China.
Xi’s aggressive version of realpolitik and ability to consolidate power and unite the party behind a much more outward-looking policy for China, including the increasing modernization of the nation’s military, should give Trump pause. In his marathon speech last week before China’s Communist Party (CCP) National Congress, President Xi laid out his vision for a “strong China” that is a rising superpower with the ability to influence geopolitics in Southeast Asia and beyond.
While the speech clearly established Xi as China’s strongest leader since Mao Zedong’s declaration of the Communist state, his rise and plans for a more outward-looking China represent an existential threat to the United States and to President Trump’s vision of “America first.”
It is difficult to see how America can be first in the world when it must rely on China for consumer products as well as much of the raw minerals to produce those goods. All of America will be watching Trump’s negotiations with Xi to see who comes out the better for the talks.
Unlike Mao, the China that Xi oversees is an international powerhouse with a roaring economy and growing military might that has greatly expanded the country’s sphere of influence. President Trump describes Xi as “probably the most powerful” leader China has had in a century. That may be an understatement. With the Politburo consisting of close friends and no potential successor on the horizon, Xi could remain China’s leader well beyond the traditional ten-year term, his grip on the nation so tight as to dissuade any potential challengers.
In his negotiations with Xi, President Trump will likely be thinking about the next three or seven years, President Xi, on the other hand, will be focused on what’s in China’s best interest a decade or a century from now.
Mao reportedly told his followers in 1949 that China had finally “stood up” to the world. Xi appears to be building on that theme with the goal of making sure that all of China is not only standing up, but standing tall.
Xi has laid out a clear vision for China’s future that includes investing hundreds of billions of dollars abroad in railways, ports, power stations, and other infrastructure that will help vast swathes of the world while burnishing China’s reputation and influence – much as the former Soviet Union used trade and military assistance in the developing world to spread its form of communism.
His vision for a new era – Xi’s era – includes ambitious plans for economic growth and for expanding China’s global reach through international investment under his “Belt and Road Initiative,” which includes 68 nations and 4.4 billion people in its scope.
In order to fund such rapid and broad economic investment – and in turn potentially surpass the United States as the world’s largest economy – China will need to continue to accumulate debt into its state-owned industries.
Whether that is a sustainable operating model or not is the subject of considerable debate outside the authoritarian nation (and probably, to some degree, within it, although dissenting voices are not as likely to be heard). As Morgan Stanley Chief Global Strategist Ruchir Sharma wrote recently in The New York Times, to avoid running its economy off the rails, China should pursue a slower, yet more steady, rate of growth. Think tortoise rather than rabbit.
Obviously, if China’s economy implodes, it would have catastrophic global implications. And while world leaders are surely disquieted by the prospect of a global economic meltdown, it seems unlikely external influences will have much effect changing the course Xi has set for China.
Equally concerning is the language Xi used in addressing the 19th National Congress – statements that indicate the Chinese president’s goal of challenging the United States for the title of the world’s leading superpower.
Consider the fact that, during his speech, Xi repeatedly described China as a “strong” and “great power.” Under his leadership, Xi said China should return to “its rightful place at the center of the world, after a century of humiliation at the hands of foreign imperial powers.”
Xi vowed that China would never again pursue development at the expense of others’ interests, nor would China give up its legitimate rights and interests. “No one should expect China to swallow anything that undermines its interests,” Xi said.
As the endeavors of the “Belt and Road Initiative” suggest, China’s interests are expanding substantially to include all of Asia and beyond to Europe. China’s state media tout’s Xi’s five-pronged economic program as holding benefits for “the entire world,” improving everything from the Middle East peace process to global poverty.
Xi’s economic investment plans for his country are ambitious, designed to expand trade and influence, and go well beyond China’s borders. They include a railway between Beijing and London, a road to Pakistan; a railway to Tehran providing China greater access to Middle East oil, an extension of the Central Asia-China pipeline system to secure additional natural gas supplies from Turkmenistan, and a railway connecting China to what will be the world’s largest dry port in Kazakhstan.
On top of these efforts aimed at increasing China’s clout in the world, Xi is also aggressively pursuing plans to make use of the Arctic Ocean to boost trade with Europe and as a new source of mineral and energy resources.
In short, China is investing billions to help itself economically, but also to generate economic gains in other parts of the world that will pay dividends for Beijing in increased trade and clout.
If that is not enough to shake up the world order, Xi has promised to champion globalization and free-trade – policies typically associated with American Democracy, not Chinese Communism. Xi has even suggested that China will take the lead on addressing climate change now that the United States is reconsidering its own policies.
As President Trump begins a 12-day trip to Asia, how to respond to China’s ambitious nation-building plans should surely be at the forefront of his mind.
A good working relationship with Xi could help Trump negotiate a satisfactory way forward for both countries. Trump has called his relationship with Xi “extremely close” and has been quoted describing Xi is the most powerful leader China has had in a century.
On the other hand, Trump’s criticism of China’s handling of trade and its increasing militarization shows that he is willing to meet China’s hard line with tough talk of his own. Now Trump needs to move beyond projecting power on social media and successfully impress Xi that the United States remains the world’s only true superpower. Failure to do so could cause the United States to lose face.
Dan K. Eberhart is the CEO of Canary, LLC and a board member of the Los Angeles World Affairs Council who lived in Singapore for several years.