With Trump’s Inauguration, China Wary of Change in US-China Relations

| Jan 24, 2017 09:00 AM EST

Trump's inauguration

There's a new U.S. President in town, and China is hoping that it would still be "business as usual" under the Trump administration. At this point, no one is sure how President Trump would be dealing with the very delicate relations between the two countries.

While his predecessors might have threatened China in the past, the Chinese government fears that Trump might just follow through with his words, escalating into a full-blown trade war.

Prior to his inauguration, the U.S. President has strongly criticized China's currency management and trade practices, unwillingness to rein in North Korea, and unlawful military activities in the disputed South China Sea.

Trump has also questioned the principle of the One China principle, which has been one of the foundations of the U.S.-China relations for decades.

For now, China will be playing the "wait and see" game before it decides how to deal with Trump.

"It all comes down to whether Trump presents China as an enemy. China just wants to know what the price tag is to return to business as usual," said Dr. Scott Kennedy, deputy director of the Freeman Chair in China Studies and director of the Project on China Business and Political Economy at the Center for Strategic and International Studies.

China is cautious in dealing with the new administration, but it remains optimistic.

The Xi government has signaled that it's ready to work with the new administration and has already taken some policy steps that may help improve relations.

China plans to relax restrictions on foreign investment in long-closed areas of its economy such as banking, securities, features, mutual funds and insurance.

"China will take a positive approach to its relationship with the U.S. The question is, can they do that quickly enough and effectively enough to avoid the negative dynamics of a looming trade war?" said Paul Haenle, China adviser to former U.S. President George W. Bush and director of the Carnegie-Tsinghua Center for Global Policy in Beijing.

It's been only a few days since his inauguration and his next steps are still unknown. Like China, everyone just hopes that this doesn't erupt into a trade war.

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