The Chinese strategy with regard to anything is usually opaque. But the US, being the global hegemon, has no hesitation in putting out just what drives its policies.
President Trump has fired a series of broadsides, some aimed directly, and the others indirectly, at China. In a speech on Friday, he announced the US withdrawal from the World Health Organisation (WHO) and said that his administration was beginning the process of ending the US’s special relationship with Hong Kong.
Trump’s speech, high on rhetoric, made five major points:
First, that the US was considering what action it could take on Chinese firms listed in US markets.
Second, restrictions would be imposed on Chinese students studying certain subjects in the US.
Third, the US would progressively eliminate the special privileges that Hong Kong has with regard to the US.
Fourth, the US would sanction Chinese officials involved in the decision-making affecting human rights in Hong Kong.
Lastly, the US would terminate its membership of the WHO.
Later, the Trump also issued a proclamation to block certain Chinese students associated with entities that support Civil Military Fusion programme from using certain classes of visas to enter the US. A notification listing the President’s actions also described the achievements of the administration vis-à-vis China. These were:
i. Tackled the issue of identifying and prosecuting trade secrets theft, hacking and economic espionage.
ii. Successfully negotiated a Phase I trade deal to secure “significant protections for American businesses and workers.”
iii. Acted against China to protect American producers from “unfair competition and counterfeit goods.”
iv. Prevented “foreign malign actors” from gaining access to US information networks.
Significantly, US stock markets shot up after the President’s comments indicating that from the point of view of business, the actions were not as drastic as were expected, and that there was still some wriggle room in how they would be given shape in the coming days and months.
Trump’s steps were in many ways a reiteration of existing authority the administration had and which, he says, it plans to implement. At this stage, the US has not specified its actions; either in naming listed companies, or individuals, things that could provoke a reaction from Beijing. The US has had to carefully calculate the impact of its actions — acting too tough would have played into the hands of Beijing’s hardliners, and being soft risks being seen as a ‘paper tiger’ by Xi Jinping and his associates. Further, Trump is worried that drastic action would lead to a market crash making US recovery, and possibly his re-election, that much more problematic.
Trump’s speech was a logical corollary from the position announced on 27 May by the US Secretary of State Mike Pompeo where he had said that the US no longer considered that Hong Kong had “significant autonomy.” This came just before the National People’s Congress (NPC) was to pass a national security law which would enable Chinese security agencies to take action to limit the liberties of Hong Kong residents. US actions in the island territory are directed by the Hong Kong Relations Act 1992 which allowed the US to treat Hong Kong as a distinct entity on issues of trade and finance because it believed that it would “enjoy a high degree of autonomy.”
In 2019, the US passed the Hong Kong Human Rights and Democracy Act that mandated an annual review to check if Hong Kong had sufficient autonomy to merit the special treatment it was given by the US. Further, it entailed sanctions on any officials deemed responsible for violating the human rights in the city. Since the State Department has made its position on the lack of autonomy clear, the sanctions outlined by the act could now play out.
From China’s point of view, having seen the breakdown of law and order in the last six months, and no sign of any improvement, they see that their action outweighs whatever negative developments may arise out of the Hong Kong situation with the US. You can be sure that Beijing has carefully gamed the situation and weighed the pros and cons carefully. Its absolutely primary concern is that Hong Kong should not become a bastion of democracy, because that would eventually impact the mainland. As it is, it seems to have encouraged pro-democracy forces in Taiwan.
Hong Kong is an important outpost for Beijing, indeed, a unique financial world unto itself. It prides itself, as being “the world’s freest economy,” with its GDP being greater than Pakistan, Malaysia, Singapore or South Africa. Its stock market is a major source for Chinese companies to raise capital, and more than a thousand companies from the mainland are listed in the exchange, which is the fifth largest in the world. This position has benefited enormously from the special treatment it has got, not just from the US, but also Beijing.
But the last year may have tipped the balance to the point where China is likely to press ahead with the development of the Guangdong-Hong Kong-Macau Greater Bay Area and allow Hong Kong’s functions to be served from Shenzhen, Shanghai or even Singapore. The developments in 2019, and the passage of the Hong Kong Human Rights and Democracy Act in 2019, was seen as a shot across Beijing’s bow, and was criticised by China as a sinister interference in its internal affairs.
Significantly, in his Friday remarks, Trump was silent on the Phase I trade deal which remains on the cards and commits China to enhance its imports from the US. The Chinese, too, have said little about it. Presumably both sides find it convenient to keep it alive for the present. But in the coming months there could be friction around it, especially if Trump sees China dragging its feet over some imports directly affecting his electoral base.
Just why did the last-named action, which was against WHO, get included in Friday’s moves relating to Hong Kong? It’s not clear, but perhaps as a proxy for hurting China. In the end, however, it will end up hurting the US’s international standing. Notwithstanding the criticism it has faced in relation to COVID-19, WHO remains a credible and useful body to deal with pandemics and other global public health issues. It is unlikely that even close allies of the US will follow its decision on leaving the organisation.
Once again, in keeping with his style, Trump has chosen to act alone. Perhaps he may not have got the support of his allies for all the moves, but involving Europe, Canada, Australia, UK and Japan would have been more effective in the long run. The action against WHO will actually persuade a number of allied countries to avoid coming out in support of Trump’s moves.
The Chinese strategy with regard to anything is usually opaque. But the US, being the global hegemon, has no hesitation in putting out just what drives its policies. Last Wednesday, the White House laid out its overall strategy on China. In the document “Unite States Strategic Approach to the People’s Republic of China,” it said that it had now adopted a “competitive approach to the PRC.” But it had not determined any particular “end state for China.” Its goal was to protect the US, its way of life, promote American prosperity, preserve peace and promote US influence. The 16-page document concluded that that despite the issue that had been raised, the US remained “open to constructive, results-oriented engagement and cooperation from China where our interests align.”
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Manoj Joshi is a Distinguished Fellow at the ORF. He has been a journalist specialising on national and international politics and is a commentator and ...
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