Joanna Shelton

China already figures prominently in President-elect Donald Trump’s sights as he prepares to take office. A sizable number of high-profile controversies promise to keep U.S.-China relations in the headlines in the new year.

On the trade front, the American Chamber of Commerce in China accuses China of significantly increasing barriers to American investors, products and services, and notes that American businesses feel more unwelcome in China today than at any time in the past 20 years. Their complaints mirror statements Trump made on the campaign trail, when he criticized China for stealing U.S. jobs and promised to bring some of them back if elected.

From support and protection of domestic (especially state-owned) industries; theft of U.S. patents and trade secrets; forced transfer of U.S. technology to Chinese companies as a condition of investment; to discrimination against foreign firms in a host of ways, the list of complaints by U.S. firms doing business in China has grown markedly in recent years.

Trump has chosen Peter Navarro, an economics professor and campaign adviser, to head a new White House National Trade Council charged with the ambitious task of reducing America’s trade deficit, bringing jobs back home, and growing the economy. Navarro is co-author of a provocative book, Death by China: Confronting the Dragon, which suggests he will take a tough approach to America’s largest trading partner.

China has its own complaint about America’s refusal to recognize China as a “market economy,” something China argues it was promised as part of its accession to the World Trade Organization 15 years ago on December 11. This technical issue has big implications for how we treat unfairly priced imports from China, such as low-cost steel.

China has brought WTO cases against the United States and the European Union for refusing to recognize it as a market economy. These cases will take years to play out, but China’s ire over what it considers unfair treatment by advanced economies likely will color its approach on other contentious bilateral issues.

Among these issues is a law taking effect January 1 requiring foreign nonprofit organizations in China to register with police and have a government sponsor – part of China’s efforts to reduce foreign influence.

Little guidance has been issued, and many organizations – especially those working on civil or human rights – fear their staff could face arrest, expulsion or other penalties. The law will have a chilling effect on informal, people-to-people ties that can strengthen relations between countries, even when government-to-government ties are strained.

The broader foreign policy front in U.S.-China relations also faces potentially serious strains in 2017.

In December, Trump accepted a phone call from Taiwan’s leader and questioned the “One China” policy that has governed America’s (and most of the world’s) diplomatic approach to China since 1979.

China’s initial response to this unprecedented high level communication was relatively muted, but its leaders are unlikely to remain so quiescent in the face of future challenges to the status quo concerning Taiwan, which China considers a renegade province.

China’s aggressive island-building on, and militarization of, coral reefs and other islets in the South and East China Seas is causing growing concern in neighboring countries – and in U.S. military circles – about China’s intentions. More worrisome, it’s not entirely clear whether Chinese President Xi Jinping is fully in control of Chinese military provocations in the region.

Adding to the uncertainties is the Communist Party congress scheduled for late 2017, during which President Xi faces (likely) reelection as head of the party for another five-year term. But he also will try to engineer the election of a new leadership team loyal to him, in an effort to further consolidate his already considerable power.

Balancing the many stresses and strains that inevitably accompany the emergence of a new power on the world scene is always difficult. Handling a country like China, whose economic and political systems and values differ so greatly from ours, is particularly challenging.

President Richard Nixon in 1972 surprised America and the world when he became the first president to visit the People’s Republic of China, paving the way for normalization of relations. His historic visit was part of an American effort to drive a wedge between two communist powers, China and the Soviet Union.

It’s anyone’s guess whether Trump or his advisers have the same strategic foresight or plans as did Nixon and his National Security Advisor, Henry Kissinger. What we can say with certainty is that U.S.-China relations face some very rocky times in the years ahead.

Joanna Shelton was Deputy Secretary General of the Organization for Economic Cooperation and Development (OECD) in Paris; held senior positions in the executive branch and Congress in Washington, D.C.; and teaches periodically at the University of Montana. You can reach her through her website, joannashelton.com.

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