What China wants
Looking at the world from Beijing these days cannot be a comfortable situation. Though secure at home, “core leader” Xi Jinping has to contend with the five-yearly Congress of the Communist Party of China later this year. This congress is crucial for Xi to put his own stamp on the party and put in place individuals who will owe their jobs to him and push his policies. Further, they may be the key to Xi getting an unprecedented third term as the General Secretary of the CPC and the President of the country.
For this reason, when Beijing looks around it is not particularly comfortable. It would not like any kind of a conflict or confrontation which would disrupt the party Congress and the generally stable situation of China.
It would not want any change in the status quo in North Korea. China’s big worry is the possibility of a collapse of the rogue North Korean regime and a united Korea, a US ally, on its border. The Chinese do not have as much clout on North Korea as people assume, for Beijing, the main role for North Korea is as a buffer. What they are afraid of right now is that Kim Jong Un’s antics could.
The second issue that China would like to avoid is a confrontation in the South China Sea. China has now assumed a pole position in the dispute. It has disrupted the ASEAN unity on the issue and ignored the UNCLOS arbitral council order. Militarily it is in a strong position there and will therefore send a clear message to the US that should Washington follow up on Secretary of State Tillerson’s warning that China must stop island building, China will not take it lightly.

The third area that worries Beijing is the questions being raised on the “One China” policy. There was great anger in China’s leadership circles when Trump took a call from Taiwan’s President Tsai Ing Wen and refused to speak to the American President over the phone till the US reiterated its support for the status quo.
The next item in the Chinese agenda may be the most difficult—They don’t want a trade war. They have some capacity to hurt the Americans, but they know that they could be hurt more. At this stage when China is trying to rebalance its economy and a Party Congress is imminent, Xi and his colleagues would not want to get involved in a bruising stand off on trade. One major point could be the issue of automobiles. The Chinese put 25 per cent tariffs on American cars compelling US companies to manufacture in China. And when they do so, they are forced to set up joint ventures with Chinese companies where the Chinese partner must own 50 per cent or more of the venture. US tariffs are just 2.5 per cent and foreigners can own 100 per cent of a car company. American companies accept this because the Chinese market is lucrative, but for the Trump administration, this is an ideal point to press the Chinese, especially since the Chinese want to sell more cars in the US now.

For the present, Chinese relations with the US have stabilised following the visit of the Secretary of State Rex Tillerson last week. In fact Tillerson has been criticised for kowtowing to China. The Washington Post story on the visit noted “In China debut, Tillerson appears to hand Beijing a diplomatic victory.” The New Yorker’s report was even more pointed. It was titled “Rex Tillerson’s deferential visit to China.” What both reports lambasted was the American Secretary of State’s language where he said that the US was willing to develop relations with China “on the principle of no conflict, no confrontation, mutual respect, and win-win cooperation.” This sounded uncomfortably like what Xi Jinping has been saying about what China-US relations ought to be from the very outset. Indeed, the Global Times crowed that “Tillerson has implicitly endorsed the ‘new model of major power relations,’” a formulation that the Chinese have been pushing on the US for the past decade.
All this is reading the tea leaves from one visit. Perhaps Tillerson did read out the riot act to China, or maybe he has set the stage for a geopolitical deal with China that incorporates trade and political issues. We simply don’t know. As of now, we are reduced to speculating. The Trump Administration seems divided between economic nationalists like Steve Bannon and Peter Navarro and the soft-on-China lobby comprising Jared Kushner and Ivanka Trump, the US ambassador-designate to China Terry Branstad. Now, the world awaits the meeting between Trump and Xi scheduled for sometime in early April. No doubt, this will be a tightly scripted meeting. But Xi will have to worry about his American counterpart’s tendency to tweet “news” in the early hours of the morning, and to define “news” as what he believes to be true. This could not be a very comforting thought for the Chinese leader.