Pompeo’s recent speech and US-China relations

--FILE--Flags of China and the United States are pictured in Ji'nan city, east China's Shandong province, 4 June 2018.China on Tuesday (19 June 2018) urged the United States to be more rational concerning the ongoing trade issue and to stop undermining the interests of others as well as itself. Foreign Ministry spokesperson Geng Shuang made the remarks at a daily press briefing in response to a question on U.S. Secretary of State Mike Pompeo's recent speech at the Detroit Economic Club. According to reports, Pompeo blamed China's economic and trade policy for the trade issue in his speech Monday and said the United States will respond to "protect American property." "The spokesperson for the Ministry of Commerce has already declared China's solemn position on the economy and trade," said Geng, pointing out that the U.S. has confused right and wrong and the purpose of the accusation is to disguise its unilateralism and protectionism policy.No Use China. No Use France.
Editor's note:

The US-China Perception Monitor’s Yuxuan Chen recently conducted a Zoom interview with Jonathan D. Pollack, a nonresident senior fellow in the John L. Thornton China Center and Center for East Asia Policy at Brookings, where they discussed a range of issues related to US-China relations, from decoupling to COVID-19. This interview was originally published in the US-China Perception Monitor.

Jonathan D. Pollack is a nonresident senior fellow in the John L. Thornton China Center and Center for East Asia Policy at the Brookings Institution. The US-China Perception Monitor’s student journalist Yuxuan Chen recently conducted a Zoom interview with Pollack, transcribed below.

Secretary of State Pompeo presented the speech “Communist China and the Free World’s Future” on July 23rd at the Nixon Presidential Library. How do you view this speech and the Trump administration’s China policy overall?

Pollack: The speech that Pompeo delivered was very politicized. By that I mean, he believed it would serve a political agenda that he favors, and that many others from the Republican Party favor.

In the speech, he repeatedly uses the term “Communist China,” which we have not heard American officials use in half a century, certainly at least since the time of Nixon.  He and other Trump Administration officials also now repeatedly refer to “the CCP,” somehow hoping to make the Party the principal villain in the story.  When Nixon began calling China the “People’s Republic of China,” it was a signal. Pompeo’s use of the term “Communist China” is also a signal.  Using the Nixon Library as the setting for his speech is very deliberate on his part.  He’s trying to suggest that Nixon first sought to open the door to China, and now Pompeo is trying to close it.

The references to the “free world” in the speech are statements used in the Cold War. The label of the “free world” was very much associated with a belief that the world was bipolar, and that it was the Soviet Union versus the United States. What is ironic about the use of this term is that China and the Soviet Union had their own ideological battles that began as early as the 1950s, so the alliance that China with the Soviet Union was under great stress, if not immediately, then in its early years.  For a long time China was neither part of the “Soviet camp” nor the “US camp.” In other words, even by the late 1950s the world did not look very bipolar.

The speech also reveals Pompeo’s personal ambitions. Pompeo will almost certainly be a candidate for president in 2024, regardless of whether Trump wins the election or not. Pompeo is more closely tied to Trump compared to all the other possible candidates from the Republican Party. So if Trump were to lose in November, Pompeo would have to try to find a way to reposition himself. Nonetheless, I think the sentiments that Pompeo expressed are very antagonistic towards China, in part because he does not want to be “outflanked” by other conservative rivals.

For nearly all Republicans, China has become the “punching bag,” so no one wants to look “soft on China.” In part this reflects the Trump administration’s effort to describe China as the leading threat to the United States. It is kind of ironic because for many years, Chinese officials have accused the United States of having a “Cold War” mentality, though I always believed that this accusations was somewhat exaggerated. After all, until the Trump administration, every president since Richard Nixon had more or less shared comparable views in pursuing improved relations with China. Sometimes that was done from national security reasons.  However, since China joined the WTO, the goals of American corporations and broader, more positive American thinking about China  had been basically shared by Republicans and Democrats alike.  This is no longer the case. Both parties are increasingly critical of China, but the critique from Republicans is much more ideologically driven, whereas many Democrats fault China for not living up to its commitments under the WTO, and also severely criticize China for its human rights policies and for its more assertive foreign policy. China objects strongly to these criticisms, but if Biden is elected we should expect more attention to these issues.  In other words, Democrats are emphasizing what they see as China not living up to its responsibilities as an increasingly powerful and important state.

Some scholars have argued that the United States has now become a key driver of de-globalization. Do you expect that the United States will go back to embracing globalization if a Democratic administration is back in office? Does President Trump’s view on globalization generally represent all Republicans?

Pollack: De-globalization was one of the issues that helped elect Trump. He has a very rigid view of how he thinks the international economy should operate, and not only with China. When Trump first began to voice strong opinions on international issues more than thirty years ago, he focused primarily on Japan because its economy was booming, especially in the automotive sector and in consumer electronics, and the US trade deficit with Japan was expanding massively.   Trade between the US and China was then very limited, so I am not aware that he paid any particular attention to China in those years.  But Trump is a mercantilist.  He assumes that a country should export much more than it should import. Therefore, if there is any country with a trade surplus that favors that country and not the US, he considers that unacceptable. That describes his basic objections to China, which is now the world’s leading trading state and has very imbalanced trade relations with the United States.

However, most economists view trade between two countries in terms of what the British economist David Riccardo termed comparative advantage. There are goods that China as a developing economy can produce much more cheaply and efficiently than the United States. At the same time, there are products and technologies where the US is much more advanced.  It remains a major source of global innovation.  Let’s take iPhones as an example. When you buy an iPhone, on the box it says “designed in California, assembled in China.”  But the phone is not really manufactured in China, even if China is designated as the country of origin. The company that operates the very modern facility  where the iPhones are assembled (Foxcon) is based in Taiwan.  The protective glass on an iPhone is manufactured in South Korea, which is a major participant in regional supply chains.  When the completed product enters the United States, it is counted as a Chinese export, and Apple makes a big profit from sales of the iPhone.  But the presumption has long been that all sides benefit from this arrangement.

That is the theory, but there are also very negative consequences to these arrangements.  Although American consumers benefit a lot because they purchase consumer products at much lower cost, the old industrial economy in states like Ohio, Michigan, Wisconsin has suffered a lot. These are locations where many factories have closed, and where many workers have lost good paying jobs. These were states that voted for Trump in 2016 and helped secure his election as President. But even as Trump has relied on tariffs and sanctions against China and other countries, the US global trade deficit continues to increase.  In July the US’s trade imbalance reached $63.6 billion, its highest level in twelve years, reflecting record imports into the United States.

At the same time, many American manufacturers and American farmers have had ample success in exporting products, including to China. They have an interest in globalization as long as the terms of globalization are considered reasonably fair and open.  Market access is an obligation under WTO rules, which require reciprocity in both directions.  But many US companies complain that they are not able to compete fairly and fully in the Chinese domestic market, because various sectors in the Chinese economy remain protected.

China is also benefiting a great deal by enrolling hundreds of thousands of Chinese students in American colleges and  universities.  This is a big business in the US, and many schools now fear the loss of revenue from international students, because of COVID-19 and major changes in US visa policy.  American firms, including in Silicon Valley, don’t want to lose the creativity of very talented young scientists and engineers, especially from China and India.  This is another whole dimension of globalization. But the Trump administration has defined China as a comprehensive national security threat and uses that definition to justify much more restrictive policies toward China.

But who plays a decisive role in US-China policy?  You would intuitively think the President of the United States makes these determinations, but many powerful government bureaucracies play a crucial role in this process.  Of course, Trump has a particular interest in trade, which matters most to him.  But Trump looks at the world in very personal terms.  He fears that he might not win reelection. His failure to control the pandemic has had very bad effects on the American economy, and there is also intense racial upheaval in the US.  He finds it much easier to blame China for many of these problems rather than acknowledge his own failures as President.  He therefore blames his declining public support and the severe recession and job losses on China, because the coronavirus first appeared in Wuhan, and he claims that China should have been able to stop its spread very quickly.  This also fits in his larger narrative that defines globalization as a negative phenomenon, and China as a comprehensive threat.

If Biden is elected, we will see a more positive attitude toward globalization, but it’s very likely to be a different model of globalization.  Biden has talked about rebuilding some of America’s industries that have suffered a lot, and on developing new opportunities for American workers in innovative sectors like clean energy.  He doesn’t want the US to always depend on foreign products.  He is trying to address America’s own problems, not simply blame others for these problems. However, Biden is very much identified as an internationalist.  He believes in international institutions and in multilateral agreements.  He is not trying to talk like Trump, and he knows solving America’s problems has to begin at home rather than looking for villains abroad.

According to recent polls published by Pew Research Center, more and more Americans are having increasingly negative views of China amid the coronavirus. How does public opinion usually play a role in bilateral relations and in the specific case of the current US-China relationship?

Pollack: In 2000, China had the sixth largest economy in the world. In 2015, it became the second biggest economy. Many Americans were amazed and very admiring of this extraordinarily rapid growth. But in the past few years there has been much more wariness toward China’s rapid advances than before, and in ensuring that there is a level playing field in long-term economic competition.  Part of that is that China has moved up the value chain, which means it can increasingly compete in areas of the global economy where it could not in the past, like telecommunications.  All of those issues were emphasized by Trump when he was running for President.  The effort to restrict China’s access to advanced US technologies now dominates a lot of US actions, based on the advice of Peter Navarro and other advisers on trade and technology, most of whom are economic nationalists.

When Americans are asked whether China has done a good or a bad job in addressing the coronavirus, a large portion percent of them claim that China has performed poorly. However, China dealt with the virus in ways that were impossible for the United States, given the difference between our political systems, and the “independence” mindedness of numerous Americans, who don’t like being told what they should do, even if it benefits society as a whole. Not just in China, but countries all across East Asia have done a far better job in controlling the spread of the virus than in the US.  By comparison, the United States has done poorly, not only at the federal government level, but also in the irresponsible behavior of many Americans. Trump has now paid a severe price for this in terms of declining support in public opinion. Generally speaking, any president, if major problems arise during his presidency, will be held accountable for them. Trump is now blaming China and others for his own mistakes, but the virus is not a member of the Democratic Party or the Chinese government.

I am always uneasy when political sentiment shifts so decisively and rapidly in one direction or another. A lot of the resentment directed against China is more an acknowledgement of American failures. At the end of the Second World War the US was the dominant world power, and controlled more than 25 percent of the global GDP. The US remains the world’s most powerful country today, and is highly advanced in numerous areas of science and technology.  But many Americans seem convinced that its advantage is slipping away.

I don’t want to say this is just like the Cold War because China is very different from the Soviet Union. The Soviet Union was a very potent military power but was not a major economic actor, whereas China is a dual capable great power.  This is a principal reason why China’s rise causes great concern in American policy circles. In the years when China was advancing rapidly following its entry into the WTO, the United States spent trillions on the wars in Iraq and Afghanistan. There was great upheaval in the Middle East and now we have Trump repeatedly complaining that the Germans and other US allies are not paying their fair share.

These factors all suggest a very unhappy United States. Trump is exploiting those sentiments. He is claiming that other countries are mocking America and taking advantage of the US. Prior to 2017, the Pew studies show a more equal share of favorable and unfavorable views towards China. Now, seventy-three percent of the population have an unfavorable opinion of China. That tells us that public opinion is very malleable and changeable. Governments can deliver coordinated messages that influence public opinion. For example, terrorism was considered the major threat twenty years ago, following the attacks on 9/11. But in casting their votes, the state of the economy is more typically the dominant factor in the decision of voters. Public opinion is now focused on Covid-19 now Trump is doing whatever he can to shift the blame. He is trying to still find a way to retain his core supporters, who focus on grievances directed against others, both in the United States and abroad.  This is a very dark view of the outside world. Other than among his core supporters, his approach is not working effectively, so he has dropped into a deep political hole. It’s also important to emphasize that Trump does not have the power to delay the election. It is against the law and this has never happened in American history.

How does the deteriorating US-China relationship affect China’s standing in the Asia Pacific? Do you envision that North Korea will help China–more or less—in its dealing with the United States? 

Pollack: Most of the countries in East Asia do not want to be caught between the United States and China, or forced to make a decision one way or another.  The United States sometimes thinks it should be able to compel others to make a choice.  But countries such as South Korea and Japan know that it is totally unrealistic to make an absolute choice, unless allies see a severe threat to their national security.  At the same time, these countries don’t want to be compelled by China to make a choice.  All across East Asia, there is a recognition of the growth of China’s economic, political, and military power.  These are facts. But various neighboring states seek assurance about China’s long term intentions.  They do not want to be compelled by China to make decisions that are not in their interest.  If states believe that they can work effectively with the United States, then they will feel more confident about their ability to deal effectively with China. All of them want to feel confident that the United States “has their back.”

However, Trump often regards alliances as a burden and a hindrance to his foreign policy goals. The question is what states might do if Trump is reelected and by the end of his second term the US commitment to its allies has been severely undermined.  We can take South Korea as an example. If South Korea is no longer confident about its relationship with the US, this would alter its strategic calculations not only in relation to China but also in relation to Japan and others. Alliances reflect values, interests, perceptions of security and so forth. In contrast to Trump, Biden believes in alliances. The countries and regions in East Asia would feel more comfortable in pursuing improved relations with China if they had a predictable, stable relationship with the United States.

The fact that Biden could be elected President is not a guarantee that the relationship between the United States and China will be smooth and stable. For example, there would be questions about whether the US would be fully attentive to the core interests of regional states, including China.  Take new deployments of ballistic missiles as an example.  The United States can ask Japan and South Korea if they are prepared to accept new ballistic missile deployments on their territory. But neither seems especially eager about pursuing such possibilities, and the US cannot simply order them to do so.  A much more militarized rivalry between the US and China is not favored across East Asia.  Others want to be able to protect their own national security, without this degenerating into an intense military competition with China or anyone else.

How do you view the projected decoupling process between the United States and China? Is this manageable and what are the risks of this disengagement? How would the US government accommodate with American firms and consumers during the decoupling process?

Pollack: Trump has been a very unpredictable leader. Although decoupling might continue to an extent, American companies and institutions hope to retain existing partnerships and explore new or expanded ones.  Regardless of the role played by governments, there is a keen desire to retain societal and interpersonal connections.  This is very much true at a corporate level.  But this must be a two-way street.  It cannot be to the unilateral advantage of either side.  For example, almost all American companies operating in China are making a profit. Though very few would want to leave, they need to know that their involvement is welcomed and will be protected. Maybe some of them will begin to relocate some of their operations in lower wage countries. That’s the phenomena of comparative advantage. But a lot of them have made huge commitments to long-term involvement within China, as long as these relationships benefit everyone involved, both Chinese and American.

The problem at present is that Trump is openly hostile to the many of the fundamental premises of bilateral trade and of global order.  He is suspicious of foreign entities and is very much an economic nationalist. The administration as a whole has painted China in a very dark light, and there will enormous challenges in overcoming these big differences, no matter who is the next President.

While the Trump administration keeps propagating that China is the prime threat to US’ national security, some others stated that the internal issues such as the rise of populism, the defects of democracy exposed by Covid-19 are the real pivotal issues to the United States. In your opinion, is the United States’ domestic/internal problem a bigger threat to the welfare of the nation as a whole or is the external problem more serious?

Pollack: Broadly speaking, I think it’s domestic issues and they are accumulating. Even as Americans may fear threats from the outside world, fundamentally they are worried more about how to live better, and feel more confident about their futures. Many Americans are worried about the national debt that America is accumulating, about what kind of world and society they and their children be living in. These are questions that Americans increasingly ask right now.

There are often times when major threats can emerge very suddenly, such as the September 11 attacks.  But in my view the challenges that the United States confronts today are not the result of some big threat from abroad. These are induced by long term changes and problems that have accumulated in America.  Trump has not made the effort to address them. Biden claims that the election is about the “Soul of America.” I think I understand what he means.   It’s a very powerful image, and I believe that is what is dominating much thinking right now.

And also, more than 13.5 million American workers remain unemployed, and that’s where political and economic change must begin. If we can achieve a better direction at home, I think it could contribute to a more healthy relationship with countries abroad. With Covid-19, we should not be blaming the outside world but finding ways to work with others wherever possible to address COVID as a global crisis, not just an American crisis. This is not the first time we have confronted a pandemic and the only way to get us through all of these is going to be through collaboration. How to get the virus under control and how we begin to fully reopen the international economy is not going to happen overnight.

During your distinguished long career, you have worked for the RAND Corporation, the Naval War College and the Brookings Institution. How do you see the role of American think tanks in the US-China relations?

Pollack: Think tanks come in all shapes and sizes, and are not all genuine research institutes, but are instead what we might term advocacy organizations. To me, a think tank should be a place where you don’t know what conclusions you will reach until you conduct the research, whereas with many think tanks, you often know what they are going to say without even reading the study.

Think tank research has to be based on independence, objectivity, and a serious attention to questions that governments might be reluctant or unwilling to ask.  A genuine think tank must be prepared to pose these questions and be honest in its judgments, and gather the evidence required to substantiate these judgments.  It’s true that think tanks have developed extensively in the United States, but now they are a global phenomenon.

Think tanks should be places that encourage innovative thinking and that are prepared to ask uncomfortable questions. Most think tanks are located in national capitals, whether in the United States or elsewhere. But you have to be able to tell governments things they might not wish to hear.  I will continue to work with Chinese colleagues who can maintain an open mind, even as we live and work in very different societies. I am not especially interested in abstract theory. All of us operate based our judgments according to certain assumptions about how the world works, but that’s only where we need to start. It is where we must begin to understand problems that confront individual societies and challenges that are more international or transnational in nature. It’s a big and challenging job.