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Why Trump’s election is China’s triumph

There is huge speculation and fear about Donald Trump’s intentions. Figuring out which of the future President’s election tweets represent his real views is a complex task. The policy implications will become clearer over the next few months.

In the meantime, here are four distinct winners, some more serious than others.


Forget Trump’s rhetoric on the campaign trail. “We can’t allow China to continue to rape our country,” he said, referring to the US trade deficit with China.

When a bullying buffoon is elected President of the US, the decline of the West is accelerated and the momentum behind the rise of China accelerates. This is visible in at least two areas, trade and Treasuries.

The US-led Trans-Pacific Partnership (TPP), from which China was excluded, is dead. Both Trump, and the Republican party which dominates both houses of Congress, have expressed opposition to it. The vacuum left by a lack of US leadership is rapidly being filled.

Already this week US ally Australia has spoken out in support of the Beijing-directed Free Trade Area of the Asia-Pacific (FTAAP) proposal, as well as Beijing-supported regional trade pacts, which exclude the US.

Secondly, given that a Trump government plans to increase spending while lowering taxes, higher borrowing will be needed. China has been by far the largest foreign owner of US Treasuries for a number of years. According to estimates available from the Department of the Treasury/Federal Reserve, this amounts to $1.185 trillion, or over 19% of foreign-owned Treasuries, at 31 August 2016. China’s goodwill is crucial to issuing more debt.

There is a third area, foreign direct investment (FDI). Data from 2015 shows Chinese investors bought a record $15 billion worth of companies and real estate in the US, a figure which is set to be doubled in 2016, according to data from the Rhodium Group and the National Committee on US-China relations. Earlier this month, Dalian Wanda, China’s largest real estate company, acquired the US company behind the Golden Globe awards for $1bn. Around 90,000 people are employed by Chinese-affiliated companies across more than 80% of congressional districts – a handy lever for China if relations deteriorate.

Additionally, China could prove an important ally in improving ailing US infrastructure, a $550m Trump promise and one that all parties can agree on. The Chinese are master builders and their experience in Africa, where they have built roads and bridges in exchange for minerals and land, will stand them in good stead. (Your intrepid, fearless/foolhardy correspondent witnessed this for herself two weeks ago, driving along the asphalt roads of Tigray in Ethiopia, all built by the Chinese).

Interestingly, US FDI into China was less than Chinese FDI into the US for the first time in 2015. Lower growth is one cause, but the Chinese government’s obstructionist stance towards foreign businesses has played a major role.

US universities

They are benefitting from the UK’s policy mistakes, including: the government’s insistence on foreign students being included in the immigration statistics, a hostile tone towards immigrants over the last few years and the 2012 decision to abolish visas that allowed non-EU students to work in the UK for two years after graduating. While Indian enrolment in UK universities fell to 6% of total foreign enrolment last year from 14% in 2010, Indians are the fastest growing foreign students in the US.

Most study Stem (science, technology, engineering and maths) subjects at graduate level. Many go back home to run major enterprises or to join government. Fond memories of their American sojourn and contacts most likely lead to their doing business with the US. Others, like Indian-born Sundar Pichai, graduate from Stanford University and end up becoming CEO of Google.

Donald Trump has no quarrel with these immigrants.

Plastic surgeons and chiropodists

Michelle Obama is yesterday’s woman. The new role models for girls are tall blondes with artificially puffed-out breasts, cheeks and lips. See the Trump family troupe – from wife Melania to daughter Ivanka – or buy a Barbie doll. Their exorbitantly high heels, worn at all hours of the day and night, lead to corns, bunions and other foot conditions. Plastic surgeons and chiropodists will be kept busy in Trump’s America.

catherine phelps