CHINA STRATEGY : Trump in China: Don't expect too much

Research evidence excerpt

CHINA STRATEGY : Trump in China: Don't expect too much

The president is expected to push for significant Chinese purchases of American goods (e.g., planes,

beans, and grains), greater access to China’s financial markets, more certainty around rare earth supply, and for new

mechanisms to ensure China is held to commitments to buy US agricultural products. The US may also look to China

to support its efforts to resolve the current Middle East conflict (or, at least, to participate in efforts to secure the Strait

of Hormuz). At the same time, we expect China to seek clarity on US policy towards Taiwan, to press for greater stability

around US trade policies (especially in terms of tariffs and other product-specific restrictions), an easing of restrictions

around access to Western technologies, and reduced barriers for Chinese investments into the US.

As such, the two leaders (and their accompanying entourages) are set to have a busy agenda. But for all the associated

pomp and ceremony, this is no ordinary state visit, especially as it comes at a time when frictions between the two

superpowers are still being incrementally ratcheted up (for example, the number of Chinese companies sanctioned by

the US has continued to climb, while the US’ MATCH Act seeks to further restrict China’s access to Western

technologies). This aligns with our overarching view that the two superpowers are set to maintain their ongoing “grand

schism”. The only real question, at least to us, is whether this separation is disorderly and chaotic, or structured and

predictable. And from that perspective, the outcomes of this visit may prove pivotal in defining the longer-term nature

of the bilateral relationship between the two superpowers (with subsequent implications for the rest of the region).