Peaceful Erosion? Trump, China and the American Crisis in Asia
Reflections by former US Assistant Secretary of Defense David B. Shear
October 26, 2017
Beijing has the resources it will take to reorder Asia. After overtaking the United States as the world’s largest producer of manufactured goods in 2009, China’s gross domestic product (GDP) surpassed America’s on a purchasing power basis in 2014.4 China has supplanted America as Asian countries’ largest trading partner, and sits on more than three trillion dollars in foreign exchange reserves.5 Growing interdependence between China and the economies of its periphery is inevitable. Everybody wants to cash in on the Chinese dream. It’s clear in Australia. It’s clear in Japan. And it’s particularly clear in Southeast Asia, which is straining for finance to support its great infrastructure build-out. Economically speaking, China is there to help its neighbours. And it is able to do so in substantial numbers. According to some estimates, China can sustain annual direct investment outflows of US$300 billion for the foreseeable future.
President Trump has deepened this crisis. Trump’s foreign policy contretemps have already become the stuff of legend. His open disdain for alliances during the campaign, his surprise phone call with Taiwan President Tsai Ing-wen followed by his retraction and then reinstatement of the “one China policy”, his bizarre January phone call with Prime Minister Malcolm Turnbull, his rejection of the Trans-Pacific Partnership, and his administration’s obsessive focus on trade deficits have engendered profound uncertainty throughout the region. Add to this Trump’s transactional thinking, his bipolar relationship with Xi Jinping, and German Chancellor Angela Merkel’s judgement that her continent can no longer “fully count on” America, and it’s easy to see the impact that Trump has had on this crisis of confidence.
https://www.ussc.edu.au/analysis/peaceful-erosion-trump-china-and-the-dual-crisis-in-americas-asia-policy
