Saturday, November 23

Trade, Taiwan and now Trump: China braces for a volatile new era in U.S. ties

HONG KONG — We must find a way to “get along,” Chinese President

Xi Jinping

told President-elect

Donald Trump

in a congratulatory message Thursday — an immediate nod to the long-frayed relations between the rival superpowers as well as the disruption Trump’s return to the White House might bring.

Trump could inject new levels of volatility into what is often described as the world’s most important bilateral relationship, after an election win that comes at a critical moment for the globe’s two largest economies.

Ties have been at their lowest point in decades amid disputes over trade, technology,

Taiwan

and Chinese aggression in the

South China Sea

. But since last year, the Biden administration has taken steps to improve relations with Beijing, which is one of Washington’s largest trading partners but is also seen as its main long-term strategic adversary.

“What President Biden has been able to achieve is, we have better channels of communication between our leadership and theirs, and we want to keep this relationship stable and keep it peaceful,” U.S. Ambassador to China

Nicholas Burns

told NBC News Wednesday at an election watch party at the U.S. Embassy in Beijing.

“That’s very important to them as well.”

In addition to the consequences for the global economy, an increase in U.S.-China tensions would have far-reaching implications for U.S. allies in the Asia-Pacific region such as

South Korea

,

Japan

and Australia.

A ‘new era’

Xi was among the many world leaders who quickly congratulated Trump, saying the U.S. and China “will both benefit from cooperation and lose from confrontation,” Xinhua, China’s state-run news agency, reported Thursday.

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He “urged the two countries to find the right way to get along in the new era, so as to benefit both countries and the wider world,” it said.

“We respect the choice of the American people,” the Chinese Foreign Ministry said in a statement earlier.

Trump’s return to the White House “was not entirely unexpected in Beijing,” said Rick Waters, managing director of the China practice at Eurasia Group, a New York-based consulting firm.

Chinese officials saw neither Trump nor his Democratic rival, Vice President

Kamala Harris

, as especially appealing at a time when taking a hard line on China is just about the only issue their two parties can agree on.

From China’s perspective, Waters said, Trump’s first term was divided between a “transactional period” from about 2017 to 2019 that was focused on tariffs and reaching a trade deal, and an “angry period” in 2020 during which both countries blamed each other for the emergence of Covid-19, which “poisoned the relationship.”

It was during that period that the U.S. closed the Chinese consulate in Houston, while China closed the U.S. consulate in Chengdu.

Beijing is therefore now trying to figure out “whether they’re going to get the transactional administration or the angry one,” Waters said, and “they will prepare for both options.”

In Chinese state media, the message Thursday was one of cautious optimism.

A second Trump presidency “could mark a new beginning in China-U.S. relations if the chance that has been offered is not wasted,” state-run newspaper China Daily

said in an editorial

on Wednesday.

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Another trade war?

But Chinese officials laser-focused on

stabilizing their faltering economy

are also mindful of the tariffs of 60% or more that Trump has vowed to impose on all Chinese imports.

His victory may prompt Beijing to

announce a stimulus package

this week that is 10% to 20% bigger than it would have been if Harris had won,

CNBC reported

.

Asked about possible Trump tariffs on Thursday, Chinese Foreign Ministry spokesperson Mao Ning said she would not answer hypothetical questions but that “there is no winner in a trade war.”

China has also complained that the U.S. is trying to contain its development with export controls and other restrictions on strategically sensitive sectors such as semiconductors. One person it may turn to for help is tech billionaire

Elon Musk

, a devoted Trump supporter with

extensive business interests in China

who is wildly popular there.

“The Chinese are hoping that he will be someone that can facilitate a warmer, less containment-oriented set of policies on technology,” though it remains to be seen whether Musk can deliver on that, said Ian Bremmer, founder and president of Eurasia Group.

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