Learning to live with the dragon in the Year of the Ox

With Trump now booted out of the White House, we now have a chance to reboot some key relationships around the world. President Joe Biden and his team have a long list to manage their way through from mismanagement of the pandemic through to climate change and possibly the most important international issue, the United States’ relationship with China.

The stupidity and inconsistency of the Trump regime just underlined the frankly amateurish way in which Trump attempted to manage foreign policy and especially with the People’s Republic. The past four years has provided for the Chinese Communist policy the best advert for their authoritarian regime as against the weak and floundering American system of democracy.

It is now for Biden to reverse that view and prove that despite its inherent faults, democratic capitalism has the considerable benefits of creating and sustaining wealth in the face of major disruptions and disasters.

The Biden administration has greater experience with more depth and knows far better how to manage the relationship with China. Trump’s method of communication was pathetic with public ranting and raving at anyone with whom he disagreed or could not support his populist program of personal vanity.

Shouting at most enemies achieves little, especially with the Chinese. Never underestimate the importance of “face” in the Orient and thus attempts at public humiliation only serve to worsen relationships.

Equally though one should not be seeing to “kow-tow” (if I may mix my popular Oriental terms) either. One negotiates fairly, firmly and on occasion even forcefully, but that is very different from being rude and offensive. To most of us, that would normally be regarded as good manners and I am afraid it only served to highlight, especially at the recent inauguration ceremony, what a vulgar “little” man Trump was.

Biden should thus be celebrating with President Xi the Lunar New Year of the Ox – seen as solid, strong and usually reliable, although dangerous when finally roused  Not a perfect simile for either of them but worth bearing in mind when negotiating with such a power.

However let’s be clear, the Chinese should not be seen as a perfect partner for us all. From the treatment of their Muslim and other minorities, through to the authoritarian control of the Communist Party in all aspects of both corporate and personal life, China has questions to answer. In terms of trade its abuse of intellectual property rights and on occasions the price dumping of goods are valuable and important issues that have to be addressed. These issues though are managed by way of firm negotiation and diplomacy, although there will no doubt be a need for assertive action on occasion in areas where the wrong behaviour is deemed totally unacceptable.

The recent spat with Australia has been a case in point, in which criticism from that nation prompted a reaction stretching from the abuse of national journalists through to punishing import tariffs on Australian wines.

There are also other issues which the international community has to address with China. On the last count, I found some seventeen border disputes the PRC has with its numerous neighbours. Three especially are already causing issues and unless managed carefully could quite easily become the catalyst for a greater conflagration.

The border issues with India both in Kashmir and the North East have rumbled on for years, but have taken on a greater friction more recently. Add to that the dispute over the international maritime waters and the economic-related zones of the South China Sea, which has brought the ire of six regional nations, none of whom, however, have anywhere near either the political or naval strength of its neighbouring Behemoth. The one that concerns me most though is the dispute between the two economic giants of the region, namely the People’s Republic of China and Japan over some tiny rocks in the East China Sea.

So does China have all the cards and a growing strength to back it up? The answer is actually no. China has a dreadful age demographic to manage, with an ageing population and a huge mismatch of the sexes as a result of the previous birth control laws. The cultural effects resulted in a far greater number of males. Its economic value per head is tiny compared to that of the US, and its ability to properly feed its population over the next few decades is going to provide far greater pressures.

The reality is that China and the United States are in a symbiotic relationship. They may have huge disagreements over certain issues but they also need each other. At a very simplistic level, China needs the purchasing power of the US citizen and its corporates, and the States needs the funding for its huge government debt and deficit.

This is where the Biden administration needs to restart the bipartisan developments with the Chinese, and in my view, they should be managed firmly. The Party under President Xi has moved to effectively make him leader for life and some of the more enlightened policy areas seem to have been pushed back to be replaced by greater state and party control. This is not just for issues relating to the Uyghurs and Tibetans, but also for mainstream Chinese, whose behaviour is increasingly being managed under the control of greater technological systems.

Internationally China has been investing “cheap” money into many developing nations’ infrastructure, as can be seen in Africa and now increasingly in the Caribbean. Although this has been welcomed initially, it has often resulted in a not unexpected backlash from local governments when the next generation of investors turn into colonialists and take on a form of neo-colonial behavior.

So now is the time for a celebration of a re-setting of a vital relationship between China and America. And they should both raise a glass together to celebrate it and with it the Year of the Ox – “Gong Xi Fa Cai”.