The US President essentially returned empty-handed, with China asserting over Taiwan, ushering in G2 and with no major trade or investment concessions from Beijing
In his remarks at the Raisina dialogue on March 5 this year, the US Deputy Secretary of State Christopher Landau said “we are not going to make the same mistakes with India that we made with China 20 years ago”. He was alluding to the US engagement policy towards China, inviting the country to join the World Trade Organisation, pumping in investments, technology, providing market access and nudging American allies to contribute to the rise of China.
However, US President Donald Trump’s May 13-15 visit to Beijing seems to be repeating that “mistake”, despite the optics. America’s leading CEOs who accompanied Trump, among them Elon Must, Tim Cook and Jensen Huang, were there to explore China’s market further.
Why China? In American assessments, the communist party in China (CCP) guarantees efficient utilisation of wage labour compared to India. Apart from its domestic 9 to 9 enforced work culture, externally as well China’s optimisation of wage labour has become legendary.
There is a downside though with Chinese companies. What works in China may not hold elsewhere. For instance, the Brazilian Labour Ministry’s strictures in 2024 on China’s BYD car factory for “slavery-like conditions”, human trafficking and extortion is a case in point. At home the story is different. In Zhengzhou, BYD, which has the largest auto plant globally by area, owns the land, hires directly, runs dorms and has State support. In Brazil, contractors imported workers and ran into trouble with wrong papers and long hours. Hungary’s BYD Szeged also witnessed similar allegations of long work hours without respite.
Western rankings show China as investor-friendly. China gives tax holidays, land, energy and special economic zones, while India in contrast does not. India is straddled with controls, labour unrest and divisive politics. India needs to take note of this, create a lonely furrow or bandwagon with other democratic middle powers.
Eventually, Trump’s visit, despite fanfare, did not result in major commercial deals with China as the balance of power shifted in the backdrop of US losses in the Iranian conflict. During his last visit to Beijing on November 2017, China promised to invest in over $250 billion in the US. That was never realised. In the current round as well, there was a mention of creating a board of investment in non-sensitive areas. This would, of course, depend on the status of bilateral relations.
China’s investments were sought by the US as a compensation for the trade surpluses of over $8.9 trillion that Beijing has had over the US in the last two decades.
Last year the Chinese trade surplus came down to nearly $200 billion out of total trades amounting to $414 billion. This was partly due to the tariffs imposed by the US. China also had a trade surplus with India of more than $1.6 trillion in the last two decades, but invested a lesser $3.2 billion in India.
There was also no deal announced by China on the purchase of H200 chips that Nvidia chief Jensen Huang has been canvassing for a long time. Earlier, the Biden Administration had imposed restrictions on the export of advanced semi-conductors to China given that these were intended for military purposes.
Significant also is the Chinese formulation of bilateral relations as a “constructive China-US relationship of strategic stability”. Earlier, President Hu Jintao, during his visit to the US in 2006 desired “long-term and stable constructive and cooperative” relations. After China became the second largest economy, during his January 2011 visit to the US Jintao suggested “equality, mutual trust and the precept of seeking common ground while reserving differences”. These were reiterated by his successor Xi Jinping, who suggested the emergence of G2 between the two countries. Xi would like these phrases binding on the conduct of the US “in the next three years and beyond”.
Interestingly as well, Jinping, in his speech, raised an important query that “Can China and the US overcome the so-called ‘Thucydides Trap’ and create a new paradigm of major-country relations?” The trap is the ambition of a rising power threatening the existing dominant power, reflected in Greek history between Athens and Sparta. Xi had alluded to the ‘Thucydides trap’ earlier in his speeches in 2013, 2015, 2023 and in 2024. Its repetition now with Trump indicates the growing tension between the two on Taiwan and other issues and perhaps to elicit US responses in favour of Beijing.
Xi, in his speech stated: “If handled well, the relationship can remain overall stable; if mishandled, it could lead to clashes or even conflict, pushing ties into a very dangerous situation.” Trump’s suggestion that the US is unwilling to fight 9,500 miles away (in Taiwan Straits) indicates that the US has conceded, at least partly, to the Chinese demand, even though US Secretary of State Marco Rubio stated that nothing had changed in the US policy on Taiwan.
On another contentious issue as well there appears to be some consensus. While the US and China were in rival camps during the recent Iran conflict, given the depletion in US power and American dependence on China (and Pakistan) mediation, two outcomes are visible in Xi’s meeting with Trump – on the Iranian nuclear issue and “militarisation of Hormuz Straits”. Both leaders agreed that the Strait of Hormuz should remain open and that Iran should not have nuclear weapons.
The inclusion of Secretary of War Pete Heseth in the US delegation is a surprise, as no Secretary of Defence was included in Presidential tours to China barring the 1972 visit. Xi mentioned the possibility of military-to-military relations between the two countries in the near future.
The Billion Press
(Dr Srikanth Kondapalli is a Professor in Chinese Studies at the Jawaharlal Nehru University.)
