Surviving in today’s Cold War

So far, the return of Donald Trump as president of the United States has been seen as disruptive and almost apocalyptic by Western allies like the United Kingdom, France and Germany.

However, here in the Asia-Pacific region, it is clear that Donald Trump does not arouse the same fears. While in the West, Trump’s autocratic tendencies and contempt for liberal international order have sowed confusion, there is less concern in our part of the world. After all, autocratic regimes are much more common here in Asia. Even in the Philippines, we have just survived the Duterte regime, which really had very low regard for the basic freedoms like the freedom of speech.

In the West, it is common for countries to conduct foreign policy based on transactional mutual benefits rather than based on ideology.

Ever since the end of the Vietnam War, the United States has become less involved internationally, at least in this part of the world. Even in the matter of tariffs, most Asian countries can sympathize with Donald Trump’s attempt to protect the USA from the massive trade deficit with China. Just like the United States, countries like the Philippines have seen industries obliterated by the importation of cheap Chinese goods. When Trump talks about America First, he gets sympathetic responses from those in countries like the Philippines where there have been attempts to have a Filipino foreign trade policy based on the concepts of Filipino First and Buy Philippines.

The United States is vital for maintaining stability here in Asia, but Asian leaders have always understood that American and Chinese foreign policy interests are always based on protecting their own interests.

Trump is proving to be less consultative with allies and less generous in providing protection and aid. Most Asian countries will also accept the unreliability of America as an ally. Consider the foreign policy actions of one of Trump’s predecessors – Obama. Throughout his time as president, Obama made eloquent speeches about the United States’ commitment to democratic ideals and to Asia. It was also during Obama’s term that the United States popularized the term “Pivot to Asia.”

In 2015, Xi Jinping and Obama stood next to each other at the White House and both publicly promised not to militarize the South China Sea (SCS). But the next year, Beijing blatantly broke this agreement and started militarizing the SCS and violating the sovereignty of the Philippines. And Obama did nothing.

Under Biden, the US had become more aggressive in pronouncing its intention to defend the Philippines, Taiwan and Japan against Chinese incursions. This policy has continued, at least for now, under Trump.

There is of course no question that Biden’s and Trump’s actions against China have been motivated by their fears of Chinese expansion and challenge to American power.

It would seem that leaders in East and Southeast Asia have no strong reason to fear a second Trump administration. However, for Southeast Asian countries, there are three issues that bear close monitoring. These are Taiwan, tariffs and regional leadership.

The most difficult policy for the Trump administration is their outlook on Taiwan. The danger is that Trump may see Taiwan as a possible pawn in a global power game with China. At the moment, Trump seems eager to close a trade deal with China. Biden had unambiguous statements in support of Taiwan.

Up to this time, Trump has not made any clear statements that the US was prepared to defend the island from Chinese aggression. In their current trade discussions, it is clear that both Beijing and Washington are both trying to appear strong and defenders of their national sovereignty.

It is becoming clearer that a great part of Beijing’s economic problems are being driven by a collapsing confidence in the country’s economic management. Xi Jinping has given priority to political control and security over economic sufficiency. This has moved China to a more Maoist direction. It should be remembered that the social compact of the Chinese Communist Party with its people is that the Chinese would be given more space to pursue economic and other activities as long as they did not openly defy the CCP.

The present economic difficulties in China seem to have led Beijing to rely on state-directed investments to drive growth, which has caused overcapacity in certain export sectors. Chinese companies are flooding markets with cheap electric vehicles and batteries which have raised tariffs and political tensions with the United States and the West.

By insisting on exporting its overcapacity, China has increased the likelihood that the United States and Europe will impose tougher tariff policies. This will lead to greater reliance on state-directed investments and exports by the CCP.

The only way that the CCP can break this conundrum would be to go back and reinstall the economic policies of Deng Xiaoping, which would mean less controls and more economic freedom for Chinese businessmen and ordinary citizens.

If the CCP chooses to react with even more controls instead of reintroducing a market economy to China, this will lead to a long-term slowdown in the Chinese economy. A frustrated CCP would have security and economic consequences across Asia and the world. A slowdown in the domestic economy could lead to the CCP’s increased reliance on engendering nationalist tendencies and even adopting a more aggressive foreign security policy.

Southeast Asian countries like the Philippines would do well to encourage a return to a balance of power between China and the United States but must learn to protect their own interests in this unpredictable world.

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