A Delicate Balance Between China and the US

A Delicate Balance Between China and the US

President Trump’s meeting with Xi Jinping on April 6th, 2017 may come as a surprise to many due to Trump’s remarks on China during his presidential campaign last year.

On April 6th,, President Trump and Chinese president Xi Jinping met and discussed three topics: North Korea, Trade and Investment, and the dispute in the South China Sea.

North Korea:

Last week marked North Korea’s fourth attempt of launching a ballistic missile this year alone. The missile landed off the coast of Japan, fortunately not causing any damage.

Countries around the world have been trying to get North Korea to halt its missile program but have proved to be unsuccessful. Trump is now looking at China and pressuring it to take a more serious stance. Trump tweeted in March, “North Korea is behaving very badly. They have been “playing” the United States for years. China has done little to help!

China has enormous power because of North Korea’s dependence on it. North Korea conducts an estimated 90% of its trades with China; without China, North Korea would immensely struggle.

Trade and Investment:

From President Trump’s perspectives, the US’ trade agreements with China have been extremely costly for the US. In fact, because China is deemed as a non-market economy (NME), it is not being evaluated on whether the prices of its imported goods are too low, thus causing disruption in the US market. A review of China’s NME status enables the US to add tariffs on such goods.

On the other hand, Xi Jinping may establish its own agreement with the US with regards to free trade. At the beginning of this year, Trump’s withdrawal from the Trans-Pacific Agreement appealed greatly to China because China was excluded from the agreement.

Reportedly, the meeting between these President Trump and Xi Jinping heavily revolved around both sides’ economic interests and their respective future economic agreements.

South China Sea:

China’s expansion of its sphere of influence in the South China Sea has created much tension.

The Paracels and Spratlys islands have been a major area of dispute. As established by UNCLOS, each country is ‘given’ a 200-nautical mile exclusive economic zone, however China has been contesting this and taking possibly up to 1000-nautical miles from its coast. This area of sea is technically controlled by Malaysia, Indonesia, Vietnam, and the Philippines.
This expansion of China’s exclusive economic zone would mean that it can drill, fish, and conduct other economic activities in the area. The South China Sea has not been extensively mined for its natural resources and remains as an area possibly rich in oil.

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