Why the ‘One China’ policy works

In questioning the “One China” policy that’s governed US-China relations for nearly four decades, President-elect Donald Trump seems to believe he’s wielding powerful leverage to persuade leaders in Beijing to give the US a better deal on trade. In fact, he’s setting himself up to fail —and ignoring the more effective tools at his disposal.
The 1979 decision to withdraw diplomatic recognition from Taiwan and acknowledge the Beijing regime as the “sole legal government” of China has benefited the U.S. as much as anyone. It’s enabled a relationship that has grown into the world’s most important, both economically and geopolitically. By leaving Taiwan’s status ambiguous, it’s also allowed the U.S. to sell arms to its government and deter any Chinese attempt to retake the island by force. The policy has largely neutered what had been one of Asia’s most dangerous flashpoints and has allowed Taiwan’s democracy and economy to flourish. The alternative —to risk a break in ties with China in favor of Taiwan —would hardly further U.S. interests.
It’s not even clear that such an outcome would benefit Taiwan. The island’s leaders make a strong case for greater legitimacy and security: membership in international organizations, the freedom to meet with US and other foreign officials, more sophisticated weapons and a stronger affirmation of the US commitment to defend the island in case of attack. And there is room for the U.S. and other countries to provide Taiwan greater support, despite Chinese protests. But while most Taiwanese reject the idea of reunification with the mainland, they’re not asking for formal recognition from the US, which would almost certainly provoke hostilities with China. More to the point, they don’t want their fate to be a bargaining chip in Sino-U.S. negotiations —up for sale if China offers Trump enough concessions on trade.
And the truth is, Chinese President Xi Jinping won’t be offering any trade-offs in response to Trump’s bluster. No Chinese leader —especially not Xi, who has staked his reputation on restoring China’s greatness and avenging a “century of humiliation” at the hands of Western powers, and who faces a critical leadership transition next year —can afford to be seen negotiating over Taiwan’s status. China has limited room to retaliate economically against the US, so Xi is likely to respond strategically —by undermining the sanctions regime against North Korea, say, or by ramping up the militarization of islands in the South China Sea. At a minimum, Xi might stage military exercises near Taiwan to test US resolve.
Trump’s threats might be more credible if there were any indication he or his team had thought through these possibilities. The only way the incoming administration will get China to change its behavior on trade, increase access to its market, and pare back its territorial expansion and support for North Korea is by raising the costs of its current behavior and offering realistic alternatives. In the South China Sea, that means re-energizing the Obama administration’s efforts to build a regional coalition committed to defending the freedom of the seas and skies. On North Korea, existing sanctions legislation empowers the new administration to target Chinese companies and banks involved with Pyongyang’s weapons programs.
On trade and market access, finding a way to revive the Trans-Pacific Partnership would do more than tweaking Xi over Taiwan to push the region in a direction more favorable to the US. At the same time, the US could impose greater reciprocity on the relationship —for example, by scrutinizing Chinese investments in US companies more closely, limiting the number of visas issued to Chinese journalists and the children of Party leaders, naming and shaming state-linked Chinese hackers, and more aggressively using World Trade Organization rules to punish Chinese product dumping. Individually, such measures aren’t as dramatic as a shift on Taiwan policy would be. Taken together, though, they are more likely to lead to a stronger U.S., a more responsible China and a more stable Asia.
— Bloomberg