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Experienced tough talker or avid China basher: is a Clinton or Trump presidency better for Beijing?

In every politics textbook in China, US presidential elections are belittled as money games among the ruling bourgeois to win power and deceive the general public. It doesn’t matter who wins office because a US president will defend moneyed interests at home and extend American imperialism abroad, according to Communist Party orthodoxy.

On the surface, the Chinese government does appear to have taken a lofty and detached view of the US election.

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Beijing did not take China-bashing comments seriously during presidential candidate debates. Chinese officials have also rarely shown any public preference for a candidate and simply voice confidence in Sino-US ties regardless of who will ultimately sit in the Oval office at the White House.

China’s government did, however, quietly send a special delegation to keep a closer watcher on the election process partly because the possible impacts on the Chinese economy are too real and tangible to ignore.

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Beijing clearly does have a vested interest in the outcome of the election and is faced with a puzzle: which presidential candidate will be better for China? A former US state secretary who has proudly talked about being tough in dealing with Beijing or a property tycoon who has little experience of China, but is high in China-bashing rhetoric?

“A Clinton presidency is more favourable to China in economic terms,” said Julian Evans-Pritchard, an economist at Capital Economics in Singapore. “Clinton will take a reasonable approach when dealing with bilateral economic issues, although she will be a tough negotiator.”

Clinton has a track record of criticising China’s human rights performance and promoting US influence in the South China Sea, but she was also a key figure in creating the Strategic and Economic Dialogue in 2009, a high-level platform for the two countries to discuss a wide variety of issues.

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Trump, meanwhile, has been blaming China for “stealing” American jobs and “manipulating” the yuan exchange rate to make the nation’s exports more competitive, accusations strongly denied by
Beijing.

Trump has also threatened to impose punitive tariffs on Chinese products and wage a trade war against China – a call that appeals to the US working class but would harm economic ties between the world’s two biggest economies. “Trump’s repeated threats of a trade war contain huge risks to the whole world,” according to a research report by Sinolink Securities, a Chinese securities brokerage house.

Another major issue is the two candidates’ stance on international trade.

Both Clinton and Trump oppose the Trans-Pacific Partnership pact, or TPP. The deal excludes China and it is in Beijing’s interest to see the US-led trade pact stalled.

“The current situation in the US is anti-globalisation and anti-trade agreements,” said Nicolas Lardy, a senior fellow at the Peterson Institute for International Economics.

While Trump is unlikely to approve the TPP, Clinton is also unlikely to back it, according to Lardy.

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“The best outcome for her is to get the TPP to be approved after the election amid the lame duck session before the inauguration, but it is of low possibility.”

The accusation that China is manipulating the yuan’s exchange rate is more political rhetoric from the two candidates rather than the desire to take concrete action, although the issue may linger some time yet, according to Tim Condon, chief Asia economist at ING. “It will not be an overnight thing,” he said.

Shen Jianguang, the Hong Kong-based chief economist with Mizuho Securities Asia, said the real ripples from the US presidential election could be “the interest rate increase cycle” by the US Federal Reserve hitting China’s currency.

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Pressure on yuan to weaken may be severe under Trump presidency because he favours more interest rate increases in the US, Shen noted.

“No matter who wins the election, the Chinese yuan will face depreciation pressure against the US dollar. “The Trump presidency would be a big blow to developing countries, especially for China, which is the biggest beneficiary of globalisation,” he said.