affairs: AIIB, Belt & Road, and so on.55 As China became assertive in world affairs, involving itself too much in rebalancing toward the region would disadvantage the U.S. in global affairs. If the U.S. tried to balance China in global affairs, its attention in the region would be diverted. For example, in the case of AIIB, the U.S. used much diplomatic resources to prevent many countries inside or outside the region from joining in.
(4)China counteracts U.S. in trading war. The tariff policy of the Trump Administration threatens Chinese core interests. As the negotiation with U.S. has failed, China has no option but to accept the U.S. challenge. On March 27, 2018, the U.S. threatened to impose tariff on goods imported from China. On April 4, 2018, China also announced it would retaliate with the same strength.56
On May 18, 2018, in the Joint Statement of U.S. and China Regarding Trade Consultation, the U.S. and China agreed not to launch a trading war.57 However, U.S. reneged on the Statement.
On June 15, 2018, the Trump Administration announced plans for 25% tariffs on $50 billion worth of imports from China. The same day, China announced that it would also impose the same rate tariffs on $50 billion worth of U.S. goods. On July 6, 2018, the U.S.–China trading war broke out.
Regional Relations in U.S.–China Competition
U.S. and China are key players in regional affairs. No regional state could stay out of the consequence of the U.S.–China competition. They have their own objectives as the competition progresses. On the one hand, they hope the competition could be peaceful. Both the nations are nuclear powers. Serious conflicts between them would not be bliss but a disaster for the region.
On the other hand, many regional countries hedge between the U.S. and China. They still depend on U.S. in terms of security. But China is indispensable in terms of economy. The popular position they hold is a neutral one. But countries that are in dispute with China hoped to see a competitive Sino-U.S. relationship. A harmonious Sino-U.S. relationship without competition was not the state they wanted to see.
Also, the assertive China in rise changed the sub-regional status quo. Owing to diplomatic struggles in regional affairs, the U.S. and some of its regional allies still stuck to their original stances of balancing China, while some countries gave up and adopted again the hedging strategy to be neutral in the competition.
The transition brought on by the Trump Administration is both a challenge and a chance for regional countries. On the one hand, regional economic relations would be disrupted by the U.S.–China trading war and potential trading wars between U.S. and other regional countries. On the other hand, it offers chances for regional cooperation.
In the U.S.–China competition, regional countries could be divided into two camps. One camp supported U.S. against China. The other camp supported China. For the latter camp, on the one hand, supporting China against U.S. was of course an obvious way of showing support. On the other hand, taking no side was also an actual support for China. It was the position China wanted from them.
Camp one: Countries taking the U.S. side
The Obama Administration invited many regional countries to rebalance with the U.S. toward the region. Among those invited countries, U.S. regional allies responded favorably.
Japan
U.S. is Japan’s most important ally. The U.S.–Japan alliance is the foundation of Japanese security. Taking the side of the U.S. in regional security has been the Japanese tradition since the end of World War II. As the Obama Administration rebalanced toward the region, Japan had no option but to follow the U.S.
At the same time, China has been more assertive in regional relations. The status quo in East and South China Seas had been changed. Ships of the China coast guard have been frequenting the waters of Diaoyu/Senkaku Islands. China refuses to compromise in historical issues with Japan. For settling the disputes, Japan needs U.S. support. This is also a reason for Japanese taking the U.S. side.
On July 25, 2016, the Joint Statement of the Japan–U.S.–Australia Trilateral Strategic Dialogue called on China and Philippines to abide by the ruling of the Arbitration of South China Sea, although China proclaimed many times that it would not recognize the result of the ruling.
In 2016, Japan claimed to send warships to patrol South China Sea with the U.S.58 In 2018, Japan and the Philippines conducted a joint maritime patrol near the Sea.59
The Trump transition is not the change Japan wants to see. U.S. withdrawal from TPP made it more difficult for Japan to restrain the growing regional economic influence of China; the Indo-Pacific Strategy diminished the importance of Japan in balancing China; the progressing U.S.–China trading war and the possible U.S.–Japan trading war would be a threat to Japanese economy in the long term.
As the regional relations are made more complicated by the transition, Japan makes necessary adjustments. On March 8, 2018, Japan signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership with ten countries in Santiago, Chile.60 On May 9, 2018, the China–Japan–South Korea Summit was reconvened in Tokyo. On May 18, 2018, Japan notified WTO that it was reserving the right to impose retaliatory tariffs against U.S.
Australia
Australia is an important ally for U.S. in the Asia-Pacific region. Taking the side of the U.S. is also the Australian tradition in security. Although China has been Australia’s largest trading partner since 2009,61 it does not want to change its dependence on U.S. in terms of security. Australia is neighboring the South China Sea. The change in the status quo of the Sea deepens its concern over Chinese assertion. As the Obama Administration rebalanced towards the region, Australia supported the U.S. against China.
An Australian military surveillance plane flew over the disputed South China Sea on December 16, 2015.62 Australia issued a joint statement with U.S. and Japan on July 25, 2016. In it, they urged China to abide by the ruling of South China Sea Arbitration.
The Australian Foreign Minister Bishop, addressing the Konrad Adenauer Foundation in Berlin, stated that “The Hague tribunal decision was clear, final and binding ... EU should push back on Beijing in South China Sea” on September 8, 2016.63
South Korea
On July 7, 2016, U.S. and South Korea officially confirmed the deployment of the Terminal High-Altitude Area Defense System (THAAD) in South Korea.64 On September 5, 2016, Chinese President Xi Jinping told South Korean President Park Geun-hye that China opposed U.S. deployment of THAAD in South Korea.65
In the U.S.–China competition, South Korea has two diplomatic considerations: (1) unifying the Korean Peninsula and (2) developing close trading relations with the economic G2. Hence, South Korea prefers a hedging strategy to taking sides.
As the Obama Administration rebalanced towards the region, South Korea was forced to side with the U.S. As THAAD would disadvantage China in Northeast Asia, China began sanctioning South Korea in entertainment, consumer goods, travel and the like.66 China–South Korea relations deteriorated to unprecedented proportions since they established diplomatic relations in 1992.
As the Trump Administration tries to denuclearize North Korea, South Korea takes the historical chance to engage with North Korea. On April 27, 2018, South Korean President Moon Jae-in and North Korean leader Kim Jong-un signed documents at the truce village of Panmunjom inside the demilitarized zone separating the two Koreas.67
South Korea also tries to improve the damaged relations with China. On March 12, 2018, Special Envoy of South Korean President Chung Eui-yong visited Beijing. He briefed China on relevant scenarios of his visits to North Korea and U.S., and spoke positively of the role China had been playing in pushing for the process of political settlement of the Peninsula issue.68
Camp two: Countries that support China
Many countries supported China in the U.S.–China competition.