• There will be trouble ahead for the world’s two biggest economies but it needn’t be all bad news, White House adviser says
  • US president views China as both a challenge and an opportunity, and his idea that there is “a good China and a bad China” is reflected in the ongoing trade talks, Pillsbury says

China and the United States will face more conflict and confrontation in the future but the “chemistry” between their leaders will provide something of a buffer, according to a White House adviser.

“Trust has been going down in the past 10 years,” Michael Pillsbury, a senior fellow and director for Chinese strategy at the Hudson Institute, a conservative think tank based in Washington, told the South China Morning Post.

“Confrontation will go up between the two economic systems, but don’t forget what’s new: the personal relationship between President Xi Jinping and President Donald Trump. Do they have some level of trust? I would say yes,” he said.

On the future of relations between the two countries Pillsbury, who is described by Trump as a leading authority on China, said: “It is going to be a mixture of cooperation and competition.”

This year marks the 40th anniversary of the establishment of formal diplomatic relations between China and the US, but their rivalry – on everything from technology and the military to geopolitics – has been on the rise in recent years. Since July they have been locked in an unprecedented tariff war, which officials are currently working hard to resolve.

Trump’s administration has labelled China a strategic competitor and accused it of being a “revisionist power” that seeks to displace US leadership in Asia and expand the reach of its “state-driven” economic model. Cold war-style rhetoric has been increasingly common in Washington, but Pillsbury said many of Trump’s critics “misunderstood his China policy”.

The US president has long viewed China as both a challenge and an opportunity, and his idea that there is “a good China and a bad China” is reflected in the ongoing trade talks, he said.

The current thinking is that a “good America is facing a bad China … [but] this relationship can be improved, so we have a good America and a good China”, he said.

Negotiators are moving towards a comprehensive deal to end the trade war that tackles the long-term concerns of US companies, such as ending forced technology transfers, improving intellectual property protection and reducing industrial subsidies for state companies.

“This is the desire to have a good China”, Pillsbury said.

One of the stickiest issues in the negotiations has been the enforcement mechanism. The US insists that any deal must be enforceable and allow the US to verify China’s actions and punish any violations. China, on the other hand, wants it to more balanced.

To that end, US Treasury Secretary Steven Mnuchin said on Thursday that the two sides had agreed to set up “enforcement offices” to monitor progress on trade reforms.

According to Pillsbury, the deal may incorporate a series of targets and time frames for China to deliver on its commitments.

“We [will] have a new kind of a court of appeal led by Vice-Premier Liu He and US Trade Representative Robert Lighthizer to manage the disputes,” he said.

If an agreement could be reached and implemented, “we [will] have stability in trade relations for 10 years”, he said.

Pillsbury cited a report titled: “China 2030: Building a Modern, Harmonious, and Creative High-Income Society” – published in 2012 by the World Bank and China’s national policy research agency, the Development Research Institute of the State Council – as evidence of “a good China”.

The study proposed six priorities for economic reform, including strengthening the foundations for a market-based economy by redefining the role of the government, reforming state owned enterprises, and creating an open innovation system.

“If China really succeeds in its reforms, and if it reduces the role of the party and really reforms its economy, society and government, that would be a good China,” he said.

“If it is a good China, it is not a bad thing that China surpasses the US. [In that case] China is like us and resembles the transition when we surpassed the UK.

“But we have economic, military and technological supremacy. We can’t give China free rein on technology, like an idiot.”

Pillsbury, who spoke in both English and Mandarin during the interview, said he did not advocate a cold war, but said the US had to “be smart”.

On the issue of Beijing’s increasingly aggressive stance in the South China Sea, Pillsbury said another element of “a good China” would be for it not to militarise features in the disputed waterway.

He acknowledged, however, that tensions between Washington and Beijing were rising on the South China Sea issue, as well as on Taiwan, technological rivalry, cyber governance and data control.

In recent months, several US universities have cut research ties with Chinese telecoms giant Huawei, citing national security concerns, and Washington is pressing its allies to restrict the firm’s access to their 5G markets.

The US was also “very suspicious” about China’s flagship “Belt and Road Initiative”, Pillsbury said, citing allegations that major infrastructure projects developed under it created debt traps for host countries and ultimately undermined their sovereignty.

“But this is something for future negotiations,” he said.

Beijing will host the second Belt and Road Forum later this month. While the US sent a semi-ministerial delegation – led by Matthew Pottinger, senior director of Asian affairs at the National Security Council, who also delivered a short speech – to the inaugural event in 2017, Washington said it would not be sending any representatives this time around.

Pillsbury is the author of three books on China, but is best known for his 2015 work, The Hundred-Year Marathon: China’s Secret Strategy To Replace America As The Global Superpower, which found an audience as the current US administration adopted a hawkish stance on China.

The book was translated into Chinese and published for “internal reference” only by the PLA National Defence University with forewords by Liu Yazhou, a former air force general of the People’s Liberation Army, and Dai Xu, a former PLA colonel, both of whom are China hawks.

Pillsbury, who also served under the Ronald Reagan and George H.W. Bush administrations, said he was currently working on a new book exploring the relationship between the US and China over the past 40 years.

Source: https://www.scmp.com/news/china/diplomacy/article/3009426/us-president-donald-trump-repeats-plan-keep-tariffs-chinese