In race for global power, US and China push nations to pick a side

Across the globe, the United States and China are jockeying to build alliances or partnerships and shut out the other power. The hard-nosed competition surfaced over the weekend at an Asian economic forum that pitted Vice President Mike Pence against President Xi Jinping of China, and threatens to disrupt the Group of 20 summit that starts November 30 in Argentina.

The United States again vented its frustration Tuesday, accusing China of continuing to engage in unfair trade practices despite Trump’s tariffs. “China fundamentally has not altered its acts, policies and practices related to technology transfer, intellectual property and innovation, and indeed appears to have taken further unreasonable actions in recent months,” the Office of the US Trade Representative said in a report.

Trump has repeatedly said China “wants to make a deal very badly,” but continues to warn that he will tax nearly all Chinese imports if Beijing does not open its markets to US companies and end its unfair practices.

“China has been ripping off our country for many, many years,” the president told reporters at the White House on Tuesday. “And they don’t rip us off with me.”

In Beijing on Wednesday, a spokesman for the Chinese Foreign Ministry, Geng Shuang, responded to such criticisms by pointing to a paper previously issued by the government that rebutted similar accusations. “It is quite normal to have economic and trade frictions,” he said at a news conference. “The key is to resolve them through dialogue and consultation on the basis of mutual respect, equality and good faith.”

At the economic forum in Papua New Guinea over the weekend, the United States and China openly clashed over trade in their most explosive diplomatic standoff of the Trump administration. Pence and Xi each led delegations that sought to corral the other 19 nations in attendance to side with his country.

Elsewhere, the two nations are forging bilateral and multilateral trade pacts in parallel that limit options for the other. During his visit to the Philippines this week, Xi signed 29 trade and investment deals, though many were broad and vague.

Some countries are bristling at the economic demands that the two superpowers have made.

Canada’s agriculture minister said Monday his country could freely enter into formal trade negotiations with China, despite an apparent attempt by the United States to exercise leverage over any such action.

On Tuesday, in a blow to China, the European Union announced a proposed law to coordinate scrutiny of foreign investment in strategic sectors, such as ports and technology.

Trump and Xi are both expected to attend the G-20 meeting. While they could come to some mutual understanding, “it is becoming increasingly difficult for both sides to reconcile their competing perspectives,” said Ryan Hass, a China analyst at the Brookings Institution.

“Both countries are becoming entrenched in their narratives and having increasing difficulty finding common ground,” Hass said. But virtually no country in Asia wants to be exclusively aligned with either power, he added.

China’s moves to strengthen its global standing have received a big boost from Trump’s denunciations of multilateral institutions, alliances and treaties.

Trump pulled out of the Trans-Pacific Partnership, which shook the confidence of Asian nations. After Trump announced in June 2017 that the United States would leave the Paris climate accord, China has presented itself as the new standard-bearer on addressing climate change. Earlier that year, in a speech in Davos, Switzerland, Xi said China would defend the globalized economy in the face of criticism by Trump.

Some Trump administration officials are optimistic the two leaders will emerge from the G-20 meeting with the framework of a trade agreement that would reduce the US bilateral trade deficit with China and protect the intellectual property of American companies who do business there. Treasury Department officials have been in frequent contact with their Chinese counterparts in hopes of building the groundwork for a deal.

However, the latest lurch toward a détente has renewed division among Trump’s economic team.

This month, Peter Navarro, Trump’s top trade adviser, warned that a weak agreement would have the “stench” of Wall Street. In a public rebuke days later, Larry Kudlow, the National Economic Council director, called Navarro “way off base.” Navarro’s comments also frustrated Trump who, according to a person familiar with his thinking, felt boxed in by the remarks.

The dissonance has left China uncertain of the Trump administration’s goals and cast a shadow of uncertainty over their negotiations.

“It feels to me like the administration doesn’t quite have one strategy toward China,” said Jon B. Alterman, a global security expert at the Center for Strategic and International Studies. “Not only do you see administration leaders saying different things, but it feels like they’re not integrated, especially in the absence of something like the TPP, which was a genuine long-term strategy to deal with China’s rise.”

On Monday, the Commerce Department began drawing up new regulations on export controls, outlining potential industries to protect — such as artificial intelligence and quantum robotics — from Chinese theft of intellectual property. In early November, the Justice Department charged a Chinese state-owned company with stealing trade secrets from an American technology company. And last month, the Trump administration outlined a more aggressive system for policing foreign investment, using the expanded powers of the Committee on Foreign Investment in the United States.

The Trump administration has also embarked on bilateral trade deals with other countries with the intention of exerting pressure on China. Despite abandoning the Trans-Pacific Partnership, the administration is forging ahead with negotiations with Japan and the Philippines, and officials are eyeing possible talks with Vietnam and India.

Criticism of China’s trade practices was at the center of the blowup at the Asia-Pacific Economic Cooperation forum over the weekend.

In several meetings, Wang Yi, the Chinese foreign minister, and his colleagues objected to a draft of the forum’s closing statement that asserted, “We agree to fight protectionism including all unfair trade practices.”

Raising his voice, Wang accused US officials of trying to insert a veiled reference to China, said one US official who was there. At one point, Chinese officials barged into the office of the foreign minister of Papua New Guinea to demand changes.

Only China objected to the draft. The forum closed without a consensus statement from the 21 nations for the first time since 1989.

“It was truly a stupid move by the Chinese,” said Bonnie S. Glaser, senior adviser for Asia at the Center for Strategic and International Studies. “I guess we should all conclude that China will do whatever it takes to continue to pursue unfair trade practices.”

“And they will also continue to put their narrow self-interests first at the expense of multilateral institutions,” she added. “What’s next?”