But the country would need to appoint qualified foreigners to its panel of arbitrators to build international credibility. No one has any confidence in China’s commercial courts. For its own domestic reform needs, China needs to move toward fully independent commercial and civil divisions of its court system, even if the criminal division remains subject to political control. American concerns about Chinese state subsidies under the country’s Made in China 2025 strategy will be almost impossible As China seeks to re- stabilize its relationship with the U.S., its leaders are likely to use 2019 to form a deeper judgment about the future of U.S. politics. to resolve. The reality is that all countries use degrees of government support for their indigenous technology industries, although China uses the most. Even if we mandated a maximum level of state support for a given firm, compliance would be difficult to measure. I am not confident of a negotiated outcome in this area. America may simply need to outcompete China by increasing public investment in research and development across the information technology and biotechnology sectors. We should also not rule out the possibility of China pitching tariff reforms to the wider international community as well. For example, China could make a dramatic commitment to zero tariffs over time not
just to the U.S., but to all World Trade Organization member states. This would represent an almost irresistible opportunity for China to champion global free trade and arrest the trend toward protectionism. Such a turn by China could include approaching the Trans-Pacific Partnership’s member states for accession, in an ironic effort to outflank the U.S. (which Trump withdrew from the TPP immediately upon taking office) in the Asia-Pacific region. When it sees a political and market opening, China can be remarkably fleet of foot. Negotiations would be difficult, but Japan’s reservations about China’s TPP accession have softened since Prime Minister Shinzo Abe’s recent visit to Beijing. On the wider foreign policy and security front, China in 2019 is likely to “de-conflict” itself in its relations with other countries, given the core strategic challenges posed by the U.S. There is already some normalization in relations with Japan. Recent Japanese Coast Guard data indicate a drastic reduction in
American Consequences 57
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