Deep rifts between two powers set to persist

Top News | REUTERS 17 Jan 2020

From Huawei to the South China Sea, deep political rifts between Beijing and Washington are set to persist despite a trade breakthrough as the United States pushes back against an increasingly powerful China.

Relations between the world's two largest economies have deteriorated sharply since US President Donald Trump imposed punitive trade tariffs in 2018, igniting a trade war.

"The broader, darkening picture is not going to be brightened much by this deal," said Bates Gill, an expert on Chinese security policy at Macquarie University in Sydney.

This backdrop spans China's militarization of the South China Sea, rising tensions over Taiwan, US criticism over human rights in Hong Kong and Xinjiang, and a backlash against telecoms gear provider Huawei.

While the trade deal defuses an 18-month row that has hit global growth, experts say it is unlikely to provide much balm for broader frictions rooted in US fears over an economically and technologically powerful China with a modernizing military.

"We can see phase one as an emergency treatment to lower the temperature, but it has not addressed the fundamental problems," said Wang Heng, a professor at the University of New South Wales in Sydney who studies the China-US economic relationship.

Washington is increasingly alarmed about the security implications of Chinese technology and has tightened its rules to keep better tabs on acquisition of key technology by China, setting in motion changes to the global supply chain.

"The Chinese leadership are not naive about this," said Gill. "They are already making moves to be more autonomous and thinking about a future in an environment of hostility."

The two countries are also at odds over Taiwan, where President Tsai Ing-wen was reelected and vowed not to submit to Beijing pressure or control.

Tsai's campaign was helped by seven months of anti-government protests in Hong Kong, which Beijing accuses Washington of helping to foment.

Treasury Secretary Steven Mnuchin said the United States is concerned about other issues involving China but these should be dealt with separately.

"You have to negotiate different pieces at different times," he said.

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