Professor Yun-han Chu's Lecture on Donald Trump's Election Victory Reported by Yazhou Zhoukan

2017-01-16

Yun-han Chu: “No Winners in the World after Trump’s Inauguration”

Original text in Chinese by Tong Qingfeng, translation by Raoul Bunskoek

President Trump is due to take office on 20 January 2017. However, his radical words and actions have already caused anxiety all over the globe. Each and every nation follows closely what the impact of his presidency will be on the world when all is said and done. Accordingly, on December 29, 2016 Academician of Academia Sinica and National Taiwan University Professor Yun-han Chu held a lecture titled “Reconsidering Democracy and Globalization after Trump’s victory,” in which he thoroughly examined the state of affairs in the world after Trump’s inauguration.     

Chu mentioned an article published in December 2016 in the Atlantic by world-famous democracy theorist Larry Diamond titled “Russia and the Threat to Liberal Democracy.” Diamond points out that whereas in the past [the spread of] democracy was an unshakable American goal, he is now worried that Trump will abandon this universal value. “He downright uses an economic or geo-political perspective to separate friends from enemies”. Currently his number one opponent is China, and he uses all his strength to deal with it. Russian President Putin, on the other hand, is the partner he attempts to entice: “Of course there are people who say that he has no choice but to entice him, because he is extremely grateful for Putin’s ‘secret assistance’ during his campaign. This is another perspective to look at the situation”.      

Some people are of the opinion that Trump intends to ally with Russia in order to contain China, but this is difficult to prove. Also, Chu believes that it is unlikely for Germany to agree with this, as Europe is suspicious that Putin wants to disintegrate Europe, and cannot stand him at all.

Someone who is equally worried as Larry Diamond is the famous currency speculator George Soros. In an article published by the Guardian in February 2016, he warns of the imminent danger Europe is facing in 2017, that is, Putin’s strategic goal to divide Europe. “He masterfully uses social media to spread fake information and news in order to mislead voters and destabilize democracies. That is the way he helped Trump get into power”. Soros believes that in 2017 a replay of the elections in the US might take place during the election seasons in the Netherlands, Germany, and Italy.   

The most explicit criticism of Trump’s violations of democracy comes from the two political scientists Steven Levitsky and Daniel Ziblatt. In an article published by the New York Times in December 2016, they clearly point out three warning signs of Trump’s anti-democratic orientation. However, under “normal circumstances,” America’s checks and balances system “should be able to let Trump’s time in office smoothly pass over”. Still, Chu points out, they “could not guarantee this”. At this time of democratic crisis, with an anti-democratic politician in the White House, in case a war breaks out, a large-scale terrorist attack occurs, or extensive demonstrations arise, they highly doubt that America’s current system is able to constrain Trump.       

Moreover, the anti-globalization storm Trump’s election might cause should not be underestimated either. During the latest Doha Round multilateral negotiations already hit a snag, causing the initiation of temporary border controls by certain European countries, the UK’s Brexit, the election of Donald Trump, the emergence of Italy’s far-right Five Star Movement, and so on. In other words, globalization has started to crumble. Chu uses the metaphor of loosening parts on a car. “Although at the moment the car can still drive, but when key components such as the engine and the transmission mechanism start to fall apart, then basically the whole car will.” Imagine that the engine and the transmission mechanism represent respectively the biggest global market and the biggest global production area, i.e. the US and China, Niall Ferguson’s so-called Chimerica, and that one day they are suddenly cut apart. This trigger might suffice to cause the collapse of globalization and the initiation of a trade war in which there will be no winners. However, Trump’s current message is, I will put through my methods “no matter the costs or sacrifices”.        

On the screen appears a picture of Apple’s CEO Tim Cook visiting Foxxcon’s Zhenghzou factory. Chu says, “This assembly line creates 50 million IPhone’s in half a year. No other assembly line combined with its surrounding supply chain anywhere in the world produces on such a scale. And there are no problems with quality control.” If the US and China start a trade war, the biggest casualty will be Taiwan’s Apple provider. “The Taiwan Stock Exchange might drop by 50%,” and the majority of Taiwan’s high technology industries will be implicated.     

The US-China relationship is linked in so many ways that it is fundamentally impossible to break up. According to the latest detailed statistics, American companies have more than 6600 investments in China, all large-scale. Total investment amounts to 200 billion USD, which surpasses the sum quoted by official government sources with 25%. China, on the other hand, has 1200 investment projects running in the US, in total accounting for 64 billion USD.

Author of the bestseller Death by China, Peter Navarro, has recently been appointed by Trump as the head of the newly established White House National Trade Council. Navarro has criticized China pompously by stating “China has stolen our jobs”. This hawkish scholar intentionally classifies China as an exchange rate manipulating country, and wants to start collecting taxes as well as punitive tariffs from China. He even goes so far as to urge for a tax or punitive tariffs on the American companies that have moved their production facilities abroad and are selling their products back into the US. Chu states, “If he really implements these policies, a global trade war that will inflict heavy losses on multinational corporations worldwide will be hard to avoid.”   

“To make the subject even heavier. The fastest and most intense way of dismembering globalization would be the eruption of military conflict between the US and China,” Chu mentions a documentary by the British left wing director John Pilger titled “The Coming War on China”. According to the description of this documentary, the American military is already actively preparing for a war with China. Although it will not go so far as a full-blown nuclear war, but it will at least be a limited war that not excludes the usage of small-scale nuclear weapons.  

“Countries with close ties to America are in a state of bewilderment. They have no idea what Trump’s next step will be,” Chu continues, “He seems to be very proud of himself that everyone is afraid of him, that nobody knows what he will do next”. This is precisely his major bargaining chip; nobody knows how far he can take it. 

What is even more worrisome is the fact that all the reference materials that could be used on all past American presidents are useless now. Chu believes that Trump might behave like he is “speculating on the stock market”. “Actually he has no bargaining chips in his pockets, but because his pockets are bulging he gives people the impression that he might be able to do something”. Trump seems a complete mystery, “He has abandoned all standards of civilization. You might even say that he uses all principles an international leader should posses, such as political trust and personal values, as transactional bargaining chips. To Trump, continuity does not exist, he wears no cross on his body, and his behavior cannot be constrained by anything”.

“All things America stood for in the past, like democratization, economic liberalization, and globalization, Trump responds to with an, “I’m sorry, these things are all dispensable. Whether I want to continue with these entirely depends on whether they give me any advantage”.” Chu says, “He is capable of abandoning all established international promises, multilateral organizations and foreign policy frameworks, or to use them in exchange for other things.”

Chu even moves a step further. In Trump’s opinion all the rules and regulations of international economic contact can be redefined and negotiations can be restarted on all trade agreements. Trump is telling everyone, “American security and economic interests first,” in order to achieve this goal I will use all bargaining chips to the fullest. If I have no bargaining chips, I will create them. America will give less and take more. Nobody knows how this political madman will sing his show or how far he can go.   

Chu expresses that he has no idea how Trump will lead a team that contains both anti-mainstream economists like Peter Navarro, globalization magicians like Goldman Sachs, and large corporations like Exxon. “Rationally speaking, two areas might cause friction. The first is internal and contains the friction between the White House and the Republican Party in controlling the Congress. The second external, he must come to grips with Xi Jinping.”  

Judging from the current atmosphere, it looks like America wants to become a “loner”. Trump is not interested in the “multilateral,” unless it is on his terms. He wants to withdraw from the Trans-Pacific Partnership (TPP), causing nations such as Japan and Singapore to feel dejected and depressed, especially since they had already paid a considerable price in domestic politics in order to join TPP. Overnight TPP was suddenly off the table. Chu said, “Although TPP is written off, some people believe it can still function as the basis for bilateral negotiations with the US. However, most countries do not have enough power for this, they do not know how many concessions they would have to make in bilateral negotiations with the US. As such, it seems impossible for the US to just use a stick without providing any carrots.”

Quite the contrary, “all people will find out that in dealing with China there will only be carrots. For example, after Filipino President Duterte’s visit to China, a 15 billion USD loan came back, investments returned and bananas could be exported again”. In Chu’s opinion, if America really wants to get rid of its global leader position, China will suddenly become extremely important. Currently all parties closely follow the China directed Regional Comprehensive Economic Partnership (RCEP). Together with China’s “One Belt, One Road” and the Asian Infrastructure Investment Bank (AIIB), these are all effective instruments China can wield to break through US containment.

 Many countries look forward to China taking the lead

“If Trump really belongs to the hawkish faction, he will continue to create problems in order to make it impossible for China to attain everything it could wish for. Trump could create issues in the South China Sea, he could drive wedges between China and India and China and Russia, and he could play in upon the emergence of succession problems in a lot of Central Asian countries. From Trump’s perspective, the more obstacles he could create in countries along the One Belt, One Road line, the better.” Chu says. Since many Latin American countries are currently unable to join RCEP, they all say that they want China to take the lead. They want China to push for an Asia-Pacific free trade agreement (under the APEC framework), no matter whether the US wants to join or not. Countries like Chili, Peru, and others are all highly looking forward. Overall it is obvious that such a tendency has emerged.   

As the outside world closely follows Trump’s continuous making acute of the “One-China Policy,” the question arises what in the world is actually happening? Chu frankly states, “The truth is that I don’t know. I won’t lower my guard though, or, as some people suggest, “don’t take him too seriously,” because I feel that the hawkish people around Trump are planning to pit America against China. Still, perhaps when the situation reaches a critical point and it all becomes too dangerous, they might back down. Besides, China’s responses are also very worth following. After all, sounds only emerge when two palms clap together.”

“A lot of my friends in Washington tell me that Trump just flashes the One-China Policy around a little and tells everyone that the US does not necessarily have to stick to it because he wants people to feel worried.” Chu continues, “He has already crossed a line that former US Presidents have never crossed, bringing to Cross-Strait Relations another variable nobody can know the influence of.”

The humiliation of “One China” causes Taiwan to suffer

 According to Chu, if America really wanted to use humiliation of Beijing in order to weaken the One-China principle, it could use many other symbolic methods. For instance, Trump could invite the Taiwanese foreign minister to visit Washington, or allow President Tsai Ing-wen to transit there. If America would do so, undoubtedly this would come as a strong blow for Xi Jinping, forcing him to countermove some time in the future. If such a countermove would be necessary, the weakling would be Taiwan; therefore, “of course we hope that China and the US are only “making gestures””  

After Trump talked to President Tsai on the phone, he spoke even more provoking words. These caused Chinese bombers to fly by Taiwan twice, followed closely by the repositioning of Chinese aircraft carrier “Liaoning” from the Miyako Strait to the South China Sea. “Naturally, “signaling” will not just end so easily. It will be raised to another level. Mediators will appear and privately countless consultations will take place. If this does not happen and the situation continues to worsen, the lives of everyone involved will be implicated and the financial markets will plummet.” 

In case the situation intensifies, China’s response will be “both soft and hard”. On the one hand Beijing might want to fish for information in order to find out to what extent it can satisfy Trump. “Organize a few groups to visit the US, announce the establishment of some factories in the US, or reevaluate key purchases, to name just a few examples that can be implemented without any difficulty”. But on the other hand, China will need to display some hard measures in order to prove that it is not an easy target to play with.  

All things considered, America is carrying out a containment strategy towards the rising China. Even when faced with the explosive issues of the East and South China Seas, it cannot leave this framework. “What we see now of these tense districts is just the interface reaching out to us, underneath hide the strategic games of the US and China. It is as simple as that.” Chu spoke of “interface” a lot, next to the above “also regarding Malacca City and the Sea of Taiwan”. 

As for cross-Strait relations, Chu believes that Taiwan will sooner or later think of a way to improve them. “Economically speaking it is impossible for Taiwan to break away from China. Now that we are stuck in such a dangerous situation, who is able to save Taiwan?” Chu, “Exactly, only Taiwan itself can do that, and if we do not save ourselves then we can only wait for one of these two strong powers to either “sell us as part of a business deal” or “use forceful methods to take us away”. Naturally, Chu does not desire any of these two endings.  

Link to original article in Chinese: 亞洲週刊

 

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