Trump accusing China on phantom grounds

Some of US president-elect Donald Trump's nastiest attacks have been directed at China. He has accused it of "raping" the United States with its trade policies, and of creating global warming as a "hoax" to undermine US competitiveness. Why, then, are many Chinese policy advisers and commentators sanguine about future US-China relations?

The reasoning seems to be that Trump is a businessman, and, to paraphrase former US president Calvin Coolidge, the business of China is business. China, the thinking goes, can work with a swashbuckling dealmaker like Trump better than with a supposedly "ideological" Hillary Clinton. The revelation that Trump and Taiwan leader Tsai Ing-wen spoke by telephone has probably shattered that hope.

It is therefore unlikely the incoming US administration will be anything but a bull in a China shop. That phone call violated a protocol - avoidance of direct contact between the US and Taiwan at the leadership level - which Democrat as well as Republican presidents have carefully observed for four decades.

Trump then aggravated the diplomatic breach by asking, in a series of tweets, if China consulted with the US before depreciating its currency or building a massive military base in the South China Sea.

But by calling into question the one-China policy, Trump is playing with fire. Careful and deft management by both Republican and Democratic administrations has helped maintain the fragile peace between the Chinese mainland and Taiwan. For the US, the primary objective is to maintain the status quo, by dissuading Taiwan from actively seeking "independence" and discouraging the mainland from pressuring Taiwan into a speedy reunification.

In another tweet, Trump asked why he shouldn't directly engage with Tsai when the US is selling Taiwan billions of dollars worth of weapons. Feigned or not, such bafflement from the US president-elect is truly worrying. The US sells Taiwan military equipment, but it deliberately attenuates this message by refusing to engage with Taiwan at the highest levels to disabuse the island of the notion that it can count on US support if it ever actually declares "independence".

Peace has survived multiple leadership changes on both sides of the Taiwan Straits. And trade and investment between Taiwan and the mainland have flourished.

A break with the long-established policy by Trump would be damaging in many ways. For starters, he could embolden Taiwan to be more aggressive in trying to upend the status quo. Tsai and her Democratic Progressive Party have not yet sought to realize their revisionist goals, but that could change if she feels Trump is sympathetic to her cause.

Trump could also do damage by inflaming China, if he confirms its belief that the US wants to undermine its "core interests". The Chinese Foreign Ministry initially voiced mild criticism of Trump's conversation with the island leader. But the People's Daily has since issued a far stronger rebuke, warning that "creating troubles for the China-US relationship is creating troubles for the US itself", which clearly signaled China's agitation.

There is no method to Trump's madness. In the tweet justifying his phone call, he also repeated a false charge that China is depreciating its currency to gain export advantages vis-a-vis the US. His knowledge of international economics is either non-existent or 10 years out of date. In reality, China is now hemorrhaging foreign exchange reserves and desperately trying to prop up the renminbi's value in the face of capital flight.

Trump is antagonizing China for no good reason. But by announcing that the US will withdraw from the Trans-Pacific Partnership agreement - designed, at least in part, to shape global trade and investment flows according to Western rules, rather than China's vision of globalization - Trump is also abandoning a US policy that could have checked China's surging influence in Asia. Since Trump's TPP announcement, many Asian countries have pledged to join a regional trade bloc spearheaded by China. With Trump's help, the "Chinese Century" may arrive sooner than anyone expected.

By attacking China on phantom grounds and dismantling the TPP, Trump is provoking Beijing while simultaneously empowering and enabling it. This is not the art of the deal. It's the road to disaster.

The author is a professor of Global Economics and Management at the Sloan School of Management of Massachusetts Institute of Technology.

Project Syndicate