Judd Gregg: China could be Trump’s first crisis

It is hard to predict where the first crisis for a new president will come from, but it is virtually certain that crisis will come.

Every president starts out with a cause and a purpose. President-elect Trump has made his goal clear. It is to “make America great again.”  

But such aims are often sidetracked by outside events that take outsize control over the direction of an administration.  

{mosads}George W. Bush’s presidency was the starkest example of this. He came into office with a strong domestic agenda. Within nine months, as a result of the September 11, 2001 terrorist attacks, he had become a wartime president.

One nation — China — has seemed ripe for President-elect Trump’s first crisis, even before he sent a tremor through diplomatic circles by accepting a congratulatory phone call from the president of Taiwan late last week.

In the campaign, candidate Trump made it clear that he intended to reset the trade relationship with China. This effort would be littered with potential landmines, but it is the internal politics of China that are more likely to spark a crisis.

Americans tend to ignore — or, more accurately, be tone-deaf to — the fact that China is an autocracy.  

It is governed by a Communist Party that has the retention of power as its first goal. In fact, if one looks at the actions of President Xi Jinping during his first years in control of the country, the primary focus of his presidency has been to consolidate and reinvigorate the Communist Party. 

He has done this by focusing on an incredibly aggressive anti-corruption campaign, aimed in large part at restoring public confidence. He has also re-ordered the Communist leadership.

This consolidation is being done in part because the Chinese economy is under considerable strain. The goal of maintaining a growth rate of 6.5 percent is an inherently difficult one.  

The most significant question facing the Chinese Communist Party leadership is how to create approximately 25 million jobs a year in order to keep pace with population growth.

The party leadership realizes that its control over the country could loosen if this growth is not achieved. The Chinese people seem to be willing to tolerate authoritarian governance as long as they are seeing their prosperity increase.

It is not clear what happens when that economic wellbeing starts to wane, but it is clear that the Chinese Communist Party does not want to find out.

There are already signs that this type of growth is not sustainable and is beginning to sputter. China’s debt is exploding, its state-run industry structure is under strain and its banking system has massive issues with non-performing loans.

Most importantly, it is facing a demographic tsunami as the fruits of the one-child policy come to bear, with two aging parents and four aged grandparents being supported by the single child. 

The Chinese government has other aims beyond economic growth. Two are related: the reinvigoration of China’s military prowess and the assertion of what it sees as its right to regional hegemony.

This is being played out most obviously in the South China Sea, where the Chinese have asserted their claim of control and backed it up by a variety of provocative actions.

The government’s actions in this region have generated considerable popular support, as has its growing focus on military strength.

Confrontations in this region with the U.S., Japan and Vietnam have already occurred. 

If the Chinese government feels it needs a way to unite its people and ease concerns about lack of economic growth, further and more dangerous confrontations are likely.

How the Trump administration handles this threat will be a huge test. 

If you want a real crisis, it sits right here.

Our relationship with China will likely head into a mode of deterioration over trade issues, and our communication with the leadership may become strained.

This will hinder the ability to handle a South China Sea event.

If such a confrontation should arise, it will be vital for the U.S. to realize that it has been generated not by us, but by the domestic needs of the Chinese leadership.

Our actions should be based on maintaining constructive communication. We need to stress the fact that any confrontation in this region, rather then improving the economic situation in China, will actually aggravate it.

The Trump team needs to develop — sooner rather than later — a clear, open, firm and definitive policy on dealing with a more aggressive China in the South China Sea.  

Trade relationships and negotiations must also be viewed through this prism. Our policy should show awareness of domestic Chinese activity and forces; it should not be overly belligerent.

It should reflect the fact that we have the high ground on the issue, and the leverage to assist China and its neighbors in constructively engaging. 

Failure would lead to events twisting out of control — and an exceptionally dangerous crisis.

Judd Gregg (R) is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee, and as ranking member of the Senate Appropriations Foreign Operations subcommittee.