Republican presidential nominee Donald Trump's drastic proposal of a 45 percent punitive tariff on Chinese imports belies the likelihood that he has a far more realistic and sophisticated strategy to "beat" China on trade than he feels fit to reveal so far.
It's all a matter of US export growth to China outstripping US import growth from it. Logically, it follows that Trump would lobby Beijing for better mainland market access for US exporters and use the carrot of increased investment opportunities within America for Chinese firms as his big bargaining chip; for the latter would simultaneously reduce the trade deficit by turning Chinese exports into Chinese-owned American production lines (for local American markets and consumers).
Of course, Beijing will push back on Trump as much as possible by continuing to demand that US firms invest in China if they want to sell to it; Trump will hold the line by offering even more incentives for Chinese companies (especially publicly traded ones) to set up shop in America, knowing that every single domestic exporter he shields from having to make concessions to earn China business is a victory worth paying the price of additional Chinese investment in the US (since such investment both reduces China's exports to the US and increases American leverage over China).
In other words, Trump wants to turn China's own strategy of trade and investment on its head and beat Beijing at its own game - that is, to "out-China" China.
His calculation is that with infrastructure and property investment saturated in much of China yet badly needed in much of the US, there's a huge impetus for Chinese industrial, construction, and real estate firms to pour large sums into US projects. The problem is that China and the US are strategic competitors as much as they are partners, and nothing can be more sensitive than billions of Chinese investment flowing into core sectors of the American economy.
But as someone who's dealt with Chinese firms and investors for years, Trump knows firsthand that not only is it beneficial to pull one's suspected adversaries closer to oneself than trusted friends, but it's absolutely necessary. Being a student of Sun Tzu - The Art of the Deal is effectively a corollary to The Art of War - Trump is arguably more familiar with Oriental master strategy than anyone who's ever occupied the White House. The more he can coax China to voluntarily enter into arrangements that tie its fortunes up with domestic American politics, the less room Beijing will have to maneuver all across the board against US interests anywhere in the world.
Of course, Trump will make concessions to China too, most likely in the latter's immediate neighborhood like the much contested South China Sea, where the symbolism of the US-China relationship has grossly outstripped the substance. And where past presidents have tended to at least pay lip service to Chinese democratization (irrespective of actual collusion with Beijing), Trump won't even bother to put his mouth somewhere other than where his money is. As far as he's concerned, China knows we stand for rule of law and political and civil liberties, and the best way to evangelize these values is to talk about them less and practice them better.
As such, Trump will be uniquely capable of nudging China to accelerate its own modernization - with its inevitable long-term political implications. By more deeply respecting not only American rules, but America itself as rulemaker, China will help its own cause immensely too.
Newly empowered Chinese investors will clamor for the same quality of market transparency and regulatory fairness on their home turf as they get on the other side of the Pacific - yet neither will they feel compelled to hedge heavily against local risk, because a strong yuan (The Donald will personally see to that one) will make it more attractive to invest primarily, as they should, in their own society. The Chinese private sector will thus get an enormous boost, even as local governments find they can drastically reduce their administrative and regulatory overhead; these in turn will streamline the central government's own coordinating operations across the vast domain of the empire.
This won't put China on a path to genuine representative democracy per se, but it does greatly increase the chance that successors of Xi Jinping and Li Keqiang will feel secure enough at some point to bring piecemeal political liberalization back on the party's agenda. Such changes will then merely be an extension of governance reforms which have already been proven and institutionalized. The party-state will be able to cruise further and more safely along the path of a massively scaled-up "Singapore model" of political modernization, thereby making Xi Jinping's "China dream" a reality by mid-century.
In the end, Donald Trump may not only "out-China" China: he could also lay additional solid groundwork for achieving the great American dream of changing it. His nomination as the GOP candidate has already been an affirmation of a truth that freedom-loving Americans have been compelled to rediscover: that the whole point of freedom is effective and benevolent authority, which harnesses individual potentials to attain a more perfect collective society. And should he actually run China policy in the White House come January, he could guide China itself on the path to finally attain the enlightenment that the whole point of effective and benevolent authority is freedom, which liberates the members of a collective society to attain the fullness of their individual potentials.
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