How would Clinton or Trump Impact US-China Ties?

A risk analyst, an academic and a journalist predict the implications of a Trump or Clinton White House

Screen Shot 2016-10-10 at 10.42.07 AM.png

This year’s US presidential election pits populist Republican Donald Trump against the more conventional Democrat Hillary Clinton. To discuss the potential impact of either a Trump or Clinton presidency to US-China relations, the next issue of AmCham China's Business Now magazine brings together voices of experts from our Sept. 1 event (below), member companies discussing business implications and statements from the candidates themselves. To be sure your own voice is heard, check out our voting from abroad guide.

Clinton Would Be Tough, but Trump Would Threaten Continuity of the Relationship

Paul Haenle

Director, Carnegie-Tsinghua Center for Global Policy

If you look back over the years, actually there has been a lot of continuity between Republican presidents and Democratic presidents on China policy. That has been a trend that we’ve seen. What we’re seeing now, in the event that Trump is elected, will be the exception, because I think there will be a very different tone and approach to the US-China relationship. Right now our relationship with China is a mix of cooperation and competition. We’ve seen the competition component intensify in the US-China relationship as of late, but generally, the framework for the relationship has been consistent.

If Hillary Clinton wins, I don’t expect a radical departure from the general outlines of the Obama administration’s approach to Asia and China. With respect to Asia, of course, the importance of our relationship with our allies and the role of our alliance relationship in our overall Asia policy, will remain central, as will the understanding that our relationship with China requires strong management of our differences. Some of those are getting more difficult to manage, to include the maritime disputes in the East and South China seas. But there are a number of important areas where we should be working together and where we have common interest. And I think that general idea will be part of the approach Hillary Clinton takes. I do expect her, frankly, to be a bit tougher than we have seen from President Obama. I actually don’t think it’s a reaction to anything that Trump has done or anything that’s going on in the world. I think it’s actually in her DNA. She is, from a foreign policy standpoint, just a little tougher.  And, if she becomes President, I would expect to see a more robust defense of US interests as part of her Administration's foreign policy approach.

In a China context, Hillary Clinton represents continuity and stability, which the Chinese prefer. You see a lot on the internet about Chinese people saying they like Trump, that he’s a businessman and would make a good negotiator or interlocutor, he has questioned the importance of US alliances with Japan and Korea, which of course sounds good here in China. But then at the end of the day, from an official standpoint, my own guess is that the Chinese government would prefer to see Hillary Clinton because of the continuity. There’s only been one Chinese official who’s said anything about the election and about the candidates, and that was the Finance Minister Lou Jiwei. He said that Trump appears to be of the irrational type. And I think that’s probably the worst fear of the Chinese government – to have an irrational or unpredictable US administration.

Expect More Friction, Regardless of who is in the White House

Shan Huang

Vice Chief Director, Caixin Media

There are two types of conventional wisdom with regards to the US presidential election. The first is that China is more willing to have a Republican in the White House, because they are less ideological and they took pro-trade steps and had past trade conversations. We know that China has been a beneficiary of the free trade movement and past decades’ globalization chain. So China will welcome a more pragmatic approach about trade and conversations.

The second conventional wisdom is that in the past four decades of dealing with the executive branch, whoever is in the White House will end up taking the pragmatic approach and work with China to tackle regional and global challenges. And I think that point is more striking against the backdrop of a rising China. Ironically speaking, the less stable and more risky the world is, the bigger the chances that the US and China can work together. Examples include the fight against terrorism, ISIS and health epidemics, and regional issues like North Korean missiles and some territorial disputes.

But this year’s presidential election is quite unique and dramatic. So there’s a need for us to revisit these two types of wisdom.

Given Trump’s unpredictability and fickle temperament, I think things could be better off or worse off for China. But, we know in the political realm, we abhor uncertainty. From that perspective, Clinton’s White House would maybe more welcome in Chinese eyes.

Yes, we know that maybe Clinton’s White House is more protectionist when it comes to trade, and penalizing China for its human rights issues. We know Clinton doesn’t like China a lot. Just last year, she had a social media post shaming our Chinese president. But China knows her trade and foreign policy team quite well. We know whom to talk with, whom to deal with, because most of her administration will come from the Obama administration and Bill Clinton’s administration. We know how to deal with these guys and we know them quite well.

That being said, Clinton’s White House may be more hostile given her personal dislike of Beijing. Her campaign has promised to protect US blue-collar jobs and that can be a harbinger of more trade friction, against the backdrop of unwelcome domestic legislation in China and a seemingly less welcoming business climate in China.

My guess is that we will see more friction, regardless of who is in the White House.

Whatever Their Politics, Next US President Can’t Ignore Mutual Interest

Michael Moran

Principal, Global Risk Analysis, Control Risks

You can pretty much sum up the two approaches to the world this way. Trump is an economic nationalist. It doesn’t represent his party. There are very large portions of the Republican party that remain very committed to free trade and are very unhappy with this. But Trump has taken the concept of low-wage laborers, conflated it with illegal immigration from Mexico, and it is the rallying cry of every campaign rally he has: “Build the wall,” and in effect, “Who’s to blame for your problems? China, China, China.” This is the message that resonates so well in the industrial Midwest, but not necessarily on the coasts. The question is whether Trump is an oddity for the Republicans, who are traditionally the party of free trade, or whether he reflects a new drift in the Republican Party that is going to make it impossible for the next Republican candidate to revert back to being pro-free trade. I fear it’s the latter.

Clinton is an internationalist at heart, who had been forced by the drift of her party to renounce it. I believe in her heart she probably still is, but I also believe that the challenge Bernie Sanders and the progressive left put up in the primary has closed the door on Democratic beliefs in free trade. The Democratic elites, since NAFTA (the North American Free Trade Agreement), when President Bill Clinton managed to pass that without his party’s support, have kind of had their finger in the dike. And they’ve been able to keep the anger in the Democratic Party at bay about free trade. That’s over. I don’t believe you’ll see another Democratic free trade president like Barrack Obama for another generation.

Since 1979, when normalization took place, presidents of both parties and the leaders of China have faced a number of troublesome incidents and troublesome disputes. But they’ve always managed to keep these things contained. And I think part of the reason for that is there’s this mutual understanding that the economic and commercial relationship is really important to both sides. It’s only become more important as the relative size of China has grown, and the fact that the US and China together make up nearly 50 percent of global commercial activity means that this is only going to get more and more important. I worry that the loss of that consensus thinking in the United States makes it easier for a small incident, wherever it happens, to get out of hand. Political incentives changed. There’s less on the side of the United States counseling moderation and calmness than there would be otherwise. So this is the great challenge that we have, and (AmCham China) is filled with people who can make a difference in that challenge.

I don’t want to end on a completely horrible tone. I think actually, there’s an amazing ability for both of these countries to muddle on even if the leadership is distracted or incentivized not to be moderate and not to be rational. There’s enormous mutual interest that will be evident to any president of the United States. But I do worry that the political incentives have changed and the political environment is not conducive to the kind of stability that we’ve had in the relationship for the last 35, 40 years.