Trump visit: Optics aside, China holds the upper hand

In his remarks at the Raisina Dialogue on March 5 this year, United States Deputy Secretary of State Christopher Landau said, “We are not going to make the same mistakes with India that we made with China 20 years ago.” He was alluding to the US’ engagement with China, inviting the country to join the World Trade Organisation (WTO), pumping in investments and technology, providing market access, and nudging American allies to contribute to China’s rise.

However, the US President Donald Trump’s visit to Beijing on May 13-15 seems to be repeating that “mistake”, despite the optics. America’s leading CEOs who accompanied Trump, among them Elon Musk, Tim Cook, and Jensen Huang, were there to explore China’s market further. Why China? In American assessments, the Chinese Communist Party (CCP) guarantees efficient utilisation of wage labour, compared to India. There is a downside, though, with Chinese companies. What works in China may not hold elsewhere.

The Brazilian Labour Ministry’s 2024 strictures against China’s BYD car factory for “slavery-like conditions” and human trafficking are a case in point. At home, the story is different. In Zhengzhou, BYD, which owns the world’s largest auto plant globally by area, also owns the land, hires directly, runs dorms, and receives state support. In Brazil, contractors imported workers and ran into trouble due to incorrect paperwork and long hours. The BYD factory in Hungary’s Szeged also witnessed allegations of long work-hours.

Western rankings show China as investor-friendly. The country provides tax holidays, land, energy, and special economic zones, while India does not, and is straddled with controls, labour unrest, and divisive politics. India needs to take note of this and create a lonely furrow or a bandwagon with other democratic middle powers.

However, despite the fanfare, Trump’s visit did not result in major commercial deals with China as the balance of power shifted amid the US’s losses in the Iranian conflict. During his last visit to Beijing in November 2017, China promised to invest over $250 billion in the US, a promise that was never realised. In the current round, too, there was mention of creating a board of investment in non-sensitive areas. This would, of course, depend on how the two countries take their bilateral relations forward.

The US sought China’s investments as compensation for the trade surplus of over $8.9 trillion. Last year, China’s trade surplus was nearly $200 billion out of a total trade volume of $414 billion. This was partly due to the US-imposed tariffs. China had a trade surplus with India of more than $1.6 trillion over the last two decades, but invested only $3.2 billion in India.

China did not announce any deal on the purchase of Nvidia’s H200 chips. Earlier, the Biden administration imposed restrictions on exporting advanced semiconductors to China because they were intended for military purposes.

A new, strategic pivot

Significant also is the Chinese formulation of bilateral relations as a “constructive China-US relationship of strategic stability.” President Hu Jintao, during his visit to the US in 2006, desired “long-term and stable constructive and cooperative” relations. After China became the second largest economy, during his January 2011 visit to the US, Jintao suggested “equality, mutual trust, and the precept of seeking common ground while reserving differences”. His successor, Xi Jinping, reiterated these points and suggested the emergence of a ‘G2’ between the two countries. Xi would like these phrases to be binding on the US’s conduct “in the next three years and beyond”.

Xi Jinping, in his speech, raised an important query: “Can China and the US overcome the so-called Thucydides Trap and create a new paradigm of major-country relations?”. The trap is
the ambition of a rising power threatening the existing dominant power, reflected in Greek history between Athens and Sparta.

Xi had alluded to the Thucydides Trap earlier in his speeches in 2013, 2015, 2023, and 2024. Its repetition now with Trump indicates the growing tension between the two on Taiwan and other issues, and perhaps to elicit US responses in favour of Beijing. Xi, in his speech, stated: “If handled well, the relationship can remain overall stable; if mishandled, it could lead to clashes or even conflict, pushing ties into a very dangerous situation.” Trump’s suggestion that the US is unwilling to fight 9,500 miles away (in the Taiwan Straits) indicates that the US has conceded, at least partly, to the Chinese demand, even though US Secretary of State Marco Rubio stated that nothing had changed in the US policy on Taiwan.

There appears to be some consensus on another contentious issue. Although the US and China were in rival camps during the Iran conflict, the depletion of US power and American dependence on China’s (and Pakistan’s) mediation are visible in two outcomes from Xi’s meeting with Trump: the Iranian nuclear issue and the militarisation of the Strait of Hormuz. Both leaders agreed that the strait should remain open and that Iran should not have nuclear weapons.

The inclusion of Secretary of War Pete Hegseth in the US delegation is a surprise, as no Secretary of Defence was included in Presidential tours to China, barring the 1972 visit. Xi mentioned the possibility of military relations between the two countries in the near future.

There was pomp at Zhongnanhai and the nine-course meal banquet, but Trump essentially returned empty-handed after his visit, with China asserting over Taiwan and ushering in G2, and with no major trade or investment concessions from Beijing. China has the advantage in this round, and the newfound confidence in Beijing could also constrain New Delhi.

(The writer is a professor in Chinese Studies at the Jawaharlal Nehru
University; Syndicate: The Billion Press)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.