President Donald Trump's anti-China stance could win him a second term in the November election. Photo: AFP / Mandel Ngan

The latest RealClearPolitics average of approval polling showed Democratic presidential hopeful Joe Biden 5.9 points ahead of Donald Trump nationally as well as in some swing states such as Wisconsin, Pennsylvania and Florida. Meanwhile, the US economy continued to tank, with the first quarter registering a whopping 5% contraction, according to US government statistics.

History records that no US president was ever re-elected for a second term in a tanking economy, no matter how popular he was. In 1992, George H W Bush lost his bid for a second term for that reason, despite his very high popularity rating at the end of the Gulf War.

The US economic recession has largely been attributed to President Trump not taking the Covid-19 outbreak seriously at the beginning, resulting in a pandemic that has infected more than 1.6 million Americans and been blamed for more than 100,000 deaths so far.

Had the president heeded the warning from China and taken decisive measures to curb the virus’ spread on January 3 or shortly after, the number of people infected and killed could have been considerably lower, according to infectious-disease experts such as Dr Anthony Fauci and Dr Richard Bright.

But Trump did not act until March, and by then it was too late because hundreds of thousands of people were already infected and tens of thousands killed by the virus. The rapid spread and large number of deaths forced the government to shut down many businesses, adding more than 40 million workers to the unemployment line in a little over three months. Coupled with the president’s ill-advised trade war, the US sank into an economic hole not seen since the 1930s Great Depression.

The lack of “winnable” election platforms might be the reason Trump has initiated a cold war against China to gain a second term. The strategy might just work, because his trade war and Covid-19 have increased the proportion of Americans holding a negative view on China to more than 65%, according to the latest Pew Poll.

The opinion polling organization also revealed that more than 70% of the US population blamed the “communist” country for creating and spreading Covid-19 and the damage it has caused. In light of rising anti-China sentiments among the US population, a US-China cold war could be in the offing, and Trump could win a second term based on being seen as a “strong leader” willing to take on the “evil communist.”

Such a cold war, however, would be costly and dangerous, promising to push the global economy into a deeper recession and risking a “hot war” between the two giants, because China has the power to strike back. For example, China passing national-security legislation (NSL) for Hong Kong knowing Trump would revoke the city’s special status and threaten sanctions against Chinese and Hong Kong officials is a clear signal that Beijing is not afraid of a dogfight with Washington.

Ironically, however, Trump’s decision could hurt the US and its businesses operating in Hong Kong more than China and the semi-autonomous region. Hong Kong is one of the few economies with which the US enjoys a trade surplus, but revoking the former’s import privileges would reduce America’s exports, exacerbating the US recession and trade deficits.

Too, US companies and banks that have set up in Hong Kong largely to access the Chinese market could be in quandary of whether to stay put or leave: leaving Hong Kong could kiss the lucrative Chinese market goodbye, but staying might add anxiety and business uncertainty.

Hong Kong, on the other hand, might not be affected or could even benefit from Trump’s extraterritorial stance, because the NSL is designed to stop “pro-democracy” activists and foreign powers from wreaking havoc in the city. Besides, Hong Kong has China’s backing, investing massively and sending big numbers of tourists to the city should the economy falter because of the US law. And no nations, including staunch US allies in the West, are interested in joining Trump in sanctioning China over the NSL.

While four members of the “Five Eyes” intelligence alliance – the US, the UK, Australia and Canada – issued a joint statement condemning the NSL, only the US went further by revoking Hong Kong’s special status and threatening sanctions against Hong Kong and Chinese officials.

The UK only planned to give Hong Kong residents holding British National (Overseas) passports the right to abode in the country. The gesture might be just that, an empty promise, given Britain’s basket-case economy and strong anti-immigration sentiment.

Australian Prime Minister Scott Morrison, whose country is highly dependent on China for its well-being, might be fearful of receiving a call from Trump demanding that Australia join the US against China. His loyalty to the US has already cost Australia export losses; it is doubtful that it can afford to lose any more.

Canada too might not want its relations with China to sink any further. Arresting Huawei chief financial officer Weng Manzhou at the behest of the US has already resulted in export losses.

Besides, there is not very much the Australia and Canada could do to hurt China even if they wanted to. China could buy resources from other countries, including the US.

The EU, other than issuing a statement of “grave concern” over China’s national-security law for Hong Kong, said it would not take action against Beijing or the special administrative region (SAR) because there is no reason to. China has every right to pass the law because Hong Kong is part of China.

What’s more, the Chinese market is important to members of the European bloc. For example, German automobile manufacturer Volkswagen just announced a US$2.2 billion investment in China to produce electric cars, and Chancellor Angela Merkel wants an investment agreement with Beijing.

So the US could be the “lone ranger,” in that no country will join it to punish China over the NSL because Trump’s revocation of Hong Kong’s special status has an extraterritorial aspect. That is, Trump is unhappy because the US (and the UK) is no longer able to use the SAR as a beachhead to instigate destabilization in China, or even regime change.

On the economic front, it was China’s manufacturing comparative advantage and huge, increasingly affluent market that lured many US Fortune 500 companies to the country, meaning economic decoupling would be costly. For example, US aircraft manufacturing giant Boeing invested in China because its airlines buy 25% of the company’s planes.

Other US conglomerates such as Apple and General Motors are similarly dependent on China because a big chunk of their revenues are generated in China. Indeed, technology firms such as Qualcomm might not survive without the China market because it buys more than 60% of US technology companies’ products.

The decisions of US corporations to relocate manufacturing to China, in fact, has served America well: raising productivity and competitiveness, reducing prices, raising living standards and reducing pollution. Inexpensive Chinese imports kept inflation and interest rates low and stable, both of which were conducive to consumption and investment. What more could the US ask for?

However, the lust for wealth and power, the main if not the sole reason behind the US-China rivalry, promises to derail the beneficial economic relationship, shutting US companies out of the Chinese market and causing consumer prices to rise. For example, studies have shown that Americans might have had to pay many times more for an iPhone or pair of Nike shoes had they been produced in the US.

It is also ironic that it was Trump’s policies and those of past US administrations that helped fuel China’s economic, technological and military rise.

Former president Barack Obama’s Trans-Pacific Partnership might be one reason China instituted the Belt and Road Initiative, a globalization stance meant to expand trade and investment opportunities to Asia, Europe, Africa, Latin America and other regions. Excluding China from the TPP might be interpreted as Obama trying to isolate China and stifle its rise.

Fearing being denied access to US technology might have been behind the “Made in China 2025” strategy in 2015. Investing massively in technology-related industries was designed to improve manufacturing efficiency, climb the value-added ladder and stimulate technological advancement. The results of the policy were remarkable in that China not only narrowed the technological gap, but surpassed US technology such as fifth-generation wireless (5G) and artificial intelligence.

Seeing Trump trying to choke off China from the US market and perhaps those of America’s allies, the recent “Two Sessions” joint meeting of the National People’s Conference (NPC) and Chinese People’s Political Consultative Conference (CPPCC) put more emphasis on domestic consumption as the country’s engine of economic growth.

With a population of 1.4 billion, most with money to spend because of huge savings, the domestic market could indeed enhance and sustain China’s medium-to-long-term economic growth and stability.

The Chinese leadership has also put more energy and resources into expanding the BRI, increasing investment in and trading more with participating countries. New BRI projects in Turkey and other countries are in the offing. More will likely be forthcoming because of the BRI’s proven economic benefits. Producing goods for and investing in almost half of the globe’s countries with more than 3 billion consumers, China could live without the US and its staunch allies.

On the military front, China has increased its defense budget by 6.5% amid the Covid-19-induced economic downturn. The policy could be construed as China being prepared to counter any military adventurism by the US or its allies. In fact, China is producing and deploying increasingly numbers of advanced and lethal weapons. Too, the Chinese military is becoming more assertive in countering US “freedom of navigation” operations in the South China Sea.

A cold war would not stifle China’s economic, technological and military rise because it is all about the US wanting to maintain global supremacy and getting Trump re-elected. The trade war was never about trade deficits or “unfair” trade practices, but imposing tariffs on Chinese goods was meant to make Trump look “strong.”

Barring Huawei and other Chinese technology products from the US market was not about national security, but preventing China from attaining technological advancement and protecting US technological supremacy. Blaming China for Covid-19 and the damage the virus caused was meant to deflect Trump’s failure to control the pandemic.

However, some in the US want to propagate the narrative that China was responsible for manufacturing Covid-19 to infect and kill Americans. Fox News anchor Lou Dobbs, for example, urged the US to declare war on China over Covid-19, saying (without any evidence) that China deliberately infected the world, the US in particular.

Some in the US have also been rewriting history, applying “subjective or selective information” to paint China as the aggressor and bully in the South and East China Seas. The US media, pundits and politicians, for example, ignored the fact it was the pro-US Nationalist Chinese government that drew the “nine-dash line” in 1947. Moreover, that policy was supported by the US until Mao Zedong’s Communists overthrew Chiang Kai-shek’s Nationalists.

Some in the US also ignored that the America was a signatory to the Cairo and Potsdam declarations, demanding that Japan return to their rightful and historical owners the territories it annexed before 1945 in the South China Sea, along with the Diaoyu or Senkuka Islands in the East China Sea. But the US gave the Diaoyus to Japan in 1972 without bothering to ask China or Taiwan.

In fact, there were no territorial conflicts between China and the other countries in the region until 2012 when the US instituted its “pivot to Asia” policy and Japan decided to “buy” the Diaoyu Islands from their Japanese owners. Those two developments prompted Beijing to declare the territories within the nine-dash line a Chinese core interest, culminating in China building islands and installing military assets on them.

It could therefore be argued that initiating a cold war against China just to gain a second term for Trump or put China in its place could backfire on the US. It would worsen the US recession and put the country’s national interests and security at greater risk unnecessarily.

It could also be argued that America’s hostile policies have actually made China more determined to become stronger and innovative as its technological advancements in telecommunications, artificial intelligence, space exploration, and military weapons development attest.

The US, on the other hand, would be more isolated because with the exception of a handful of staunch allies, very few if any countries would counter China over debatable or even manufactured misdeeds.

Ken Moak taught economic theory, public policy and globalization at university level for 33 years. He co-authored a book titled China’s Economic Rise and Its Global Impact in 2015. His second book, Developed Nations and the Economic Impact of Globalization, was published by Palgrave McMillan Springer.

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