Is the Trump approach of China working? I do not think so - Sara Hsu

Sara Hsu

US president Donald Trump has been going aggressively after China as a trade partner. But is it working? Political analyst Sara Hsu does not think so, she explains in Forbes."From the Boston tea party to the Smoot Hawley tariffs imposed during the Great Depression, protectionist measures have always imposed far higher costs than benefits."

Sara Hsu:

The aggressive Trump stance hasn't worked because Chinese diplomacy is nuanced and officials do not use threats as a negotiation tactic. The Chinese generally negotiate through reciprocity, which is why we saw Xi Jinping making concessions on automobile tariffs. Within the philosophy of Confucianism, Chinese negotiators attempt to avoid conflict and save face, or show mutual respect. Relationship building is essential, and the bonds of the relationship are not meant to be broken. 

If pushed, however, the Chinese often use silence or long negotiation processes as a response tactic. Chinese negotiators may also attempt to use a response that targets the weakness of the counterparty, especially if the counterparty is not viewed as civilized or friendly. The Chinese Thirty-Six Strategems calls for using specific tactics to deal with a hostile party, which including "wait at leisure while the enemy labors" and "watch the fires burning across the river." Chinese officials indeed waited to respond to Trump's bluster and hoped that he would wear himself down by griping and tweeting about his issues with the Asian nation. 

China's strategy appears to be working in the sense that the nation has, to some extent, benefited from Trump's aggressive mentality. Its diplomatic response has been calculated and staid. As Trump rants and raves about China, Chinese officials have emphasized the need for cooperation. It couldn't be clearer who is speaking the voice of reason. If Trump had a better knowledge of economics, he would realize that history has shown that trade showdowns don't work. From the Boston tea party to the Smoot Hawley tariffs imposed during the Great Depression, protectionist measures have always imposed far higher costs than benefits.

More in Forbes.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form. 

Are you looking for more experts on the US-China trade war at the China Speakers Bureau? Do check out this list.   

How Trump might improve China-US relations - Shaun Rein

Shaun Rein

Many see president-elect Donald Trump as a disruptive force in international trade, after he decided to cancel the transpacific trade agreement TPP. But for the relations between China and the US, Trump might actually be a blessing in disguise and can deal with China´s protectionism and other issues, argues Shanghai-based business analyst Shaun Rein, author of The End of Copycat China: The Rise of Creativity, Innovation, and Individualism in Asia for CNN.

Shaun Rein:

During the campaign, Trump demonized China over alleged currency manipulation and for stealing American jobs. To get tough on China he threatened to slap a 45% tariff on goods made there. 

However, contrary to the fears of many China's watchers who are put off by Trump, there are several reasons a Trump presidency might actually help US-China relations, lowering the risk of military tensions and buttressing US business interests. 

Because Trump is less concerned about diplomatic niceties, and doesn't appear to have an underlying strict foreign policy ideology, he can and should lobby for an end to protectionism in China. 

While Beijing seems to regard President Obama as a pushover, they won't be able to ignore a threatening and volatile Trump who fights for a fairer playing field for US firms.

Protectionism has always been a problem in China. 

US automakers like GM are forced to enter into joint ventures with state-owned enterprises rather than owning outright their production facilities. 

Banks and insurance companies like Citigroup are similarly hamstrung by regulations limiting ownership and business scope. 

For the internet sector, good luck trying to get into China -- websites from Facebook to Twitter to YouTube are all blocked in the name of national security. 

When China entered the World Trade Organization 15 years ago, protectionism was less of an issue when the market accounted for a relatively small proportion of the global economy and lumbering Chinese companies were playing catch up. 

But now, China is the world's second largest economy and has global champions like Huawei -- the world's largest producer of mobile phones -- or Wanda -- a real estate firm buying up Hollywood studios and cinemas -- that cannot be allowed unfettered access to the US market when American firms are left picking up scraps in China.

More at CNN.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more strategy experts at the China Speakers Bureau? Do check out this list.

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