Americans see a Trump or Harris victory in 2024 as leading to starkly different political outcomes -- but making sense of how the outcome will be received in China is not the same study in contrasts. The Chinese government and business community are well aware of the bipartisan consensus against China in the United States (often pointed out as the “one thing both parties agree on”), and expert intelligence indicates that government and business stakeholders in China almost uniformly believe that no matter who wins, the next American administration will continue to be antagonistic, confrontational and negative toward China. They accept that disputes over trade, technology and Taiwan are unavoidable.
Unsurprisingly, this conviction is leading the Chinese to build a resilient and self-sufficient economy that prizes innovation and can cope with chronic geopolitical tension. Many Americans frame this trend as readiness for military competition, but it may just be pragmatism. Having been co-dependent with the U.S. economy for a long time, China now wants to ensure that the deterioration in Sino-American relations doesn’t destabilize its economy, which underpins the regime’s legitimacy. Witness the late September stimulus measures, better late than never, which sparked a stock market rally. China also needs to expand its economic and political influence in other countries (especially the Global South), because China is now firmly perceived as a threat and a rival to the West.
But who do the Chinese want to win, and how will Trump or Harris deal with China when in office?
While it is true that both Democrats and Republicans will continue to be very tough on China, there is a nuanced difference between the two sides. Notwithstanding Trump’s apparent admiration of strongmen leaders, Republican hard-liners tend to characterize China as inherently bad, militaristic, untrustworthy and authoritarian, and there is very little China can do in their eyes to have a more constructive relationship with America.
Republicans are less likely to distinguish between private and state-owned companies, more likely to protect U.S. military and defense interests and advocate for sanctions, and quicker to criticize Western companies for their China-related business activities. If Trump wins, he is very likely to make good on his threat of 60% tariffs on all Chinese exports and to squeeze China for better trade and investment terms. He may move to revoke China’s Permanent Normal Trade Relations (PNTR) status, which is probably Beijing’s biggest worry.
The Democrats are unhappy with China’s behavior, to be sure, particularly that related to human rights, surveillance and censorship, and intellectual property theft. But Democrats seem to leave open the possibility that if China’s behavior changes, the relationship might stabilize, and the chance of military confrontation could be mitigated.
A Democratic administration under Harris, with Tim Walz as vice president, would still be tough on China but might pursue a more nuanced strategy than Trump-Vance, informed in part by Walz’s first-hand knowledge of the country. More administration career appointees would also stay in place, and continuation of the same policy approach in the Commerce Department and CFIUS regime is likely, even if the balance of power changes in the House and/or Senate. A Harris administration might be more open to responding to China’s overtures for better inter-governmental and inter-military communication with the US.
The U.S. has never been quick to understand Chinese strategic planning; we have read the country wrong in the past and have trouble comprehending just how far ahead China’s leaders think and plan. Making matters worse, ever since Xi Jinping came to power in 2012, there’s been a dwindling interest in Americans studying in and gaining first-hand knowledge of China, leading to a worrying asymmetry. While there are still 300,000 Chinese studying in the U.S. and the overseas diaspora is huge, the number of Americans studying in China is only in the low hundreds, and the expatriate population in mainland China and Hong Kong has decreased dramatically since the pandemic.
The business community is on the front line, as international multinational corporations have first- hand knowledge of cross-border realities. In most of the realistic scenarios we can imagine – that is, absent full-blown war over Taiwan – most ambitious multinational companies don’t intend to give up on doing business in China. Likewise, ambitious Chinese clients still want access to the U.S. and other Western countries for global expansion. No matter who wins the election, corporates will have to continue dealing with Congressional Committee investigations, China legislation, and Executive Orders that scrutinize and change the rules around their international business plans. Capital flows will come and go, depending on the ease of getting in and out.
In short, the challenges will be very similar, no matter who wins. As international MNCs weigh options for de-risking their China operations without pulling out, and Asia companies pursue global expansion, FGS Global will be there to offer elections and political insights and practical advice for navigating the cross-border challenges.