Three Negotiating Issues to Watch at the Xi Trump Meeting

The upcoming Xi – Trump meeting is the first face-to-face sit down between the two leaders.  The US side has been clear about what it wants from China, but it’s not quite as clear what it plans on offering.  Don’t get distracted by the background noise like Tillerson’s visit  or uninformed “princeling” gossip.  This is all about the relationship between 2 leaders.

Every negotiation is a competition between two narratives

The Trump story is entitled “Make America Great Again” – but the plot is a muddle of victimhood (China is bullying America) and bravado (unilateral action on North Korea).  Xi Jinping’s narrative is “The Chinese Dream” which juxtaposes a need for global respect with insistence on non-confrontation – all wrapped around one of the largest projections of power since the early Ming (OBOR, 9 Dash Line).

Which story will end up having greater impact over the next 4 years?  We’ll have a much better idea after this week’s Xi-Trump meet at Mar a Lago – Trump’s ultraluxe resort in Florida.

Here’s a handy cheat-sheet for assessing the key issues

  1. Process & Protocol
  2. Asks and offers
  3. North Korea
  1. Process:  The who, what, where, and when of negotiation.
  • What is this negotiation about? This first sit-down seems to be about everything and nothing.  The new US admin is being incredibly ambitious and hopelessly vague at the same time. For the US, this meeting will be a mash-up of relationship-building, trade, currency, North Korea, South China Seas, Taiwan, One China policy — and possibly new hotels.  The White House seems to believe that it can tick off the Trade and Regional Security boxes in one two-day session.  The Party guys in Beijing have a narrower agenda – they want to see Xi get in and out without a humiliating incident that could doom one of China’s most important global relationships.
  • The choice to set the first meet at a luxury golf course was either bold or tone-deaf.  Xi, who has made his name as an anti-corruption populist, has outlawed just this kind of resort in China.  Chinese leaders are known to appreciate ceremony and protocol – the last meeting Xi had with Obama at Sunnlyands got more headlines for the casual tone than for substance.  It will be interesting to see how Zongnanhai sensibilities react to Palm Beach gilded opulence.  The international press likes to dwell on Xi’s princeling pedigree, but they gloss over his Red Guard survival skills.  His generation still see themselves as tough-as-nails pragmatists.
  • Lots of speculation about Jared Kushner and the princeling back-channels.  Tillerson seems to be absent – at least for the planning stages – so it’s a safe bet that his promise of “non-confrontation” means a lot more in Beijing than it does in DC.  Don’t get pulled off-focus by the headlines – the only relationship that matters is between the leaders.

If this meeting goes poorly,the lack of a formal bureaucratic backstop puts the US-China relationship in jeopardy.

  1. Asks and Offers.

We are pretty clear on what Washington wants – better trade terms, an end to predatory dumping practices, and a neutralized Pyongyang. The question is –what are we offering?  Or put another — what does China want from the US?  Unfortunately, the US has already played away three big cards – the TPP, Tillerson’s acceptance of CCP “non-confront, mutual-power” language, and an early visit for Xi.  It’s been a pretty good honeymoon for Beijing, and it shouldn’t be too surprising if the Chinese side is satisfied with the status quo.  Remember those competing narratives:  “America is no longer a great nation” (according to Trump), while China needs to focus it’s efforts on making its dream a reality (according to Xi).

  1. North Korea. So far, no good. 

Kim Jong Un has become even more belligerent and unpredictable since the inauguration.   Not only has the new admin not stopped NK from testing missiles and bombs, but the US response to the February missile test bordered on the farcical as the admin huddled with Japan’s Abe in public to monitor the action.    North Korea is the big ask in this meeting, and the White House seems to be making two amateur mistakes.  First, the goals don’t seem SMART – specific, measurable, actionable, realistic, or timed.   But even more concerning, the US seems to have a deeply flawed BATNA – or best alternative to no agreement.  Trump has blustered about unilateral action (presumably military), but an attack on North Korea would make the Iraq invasion seem like a garden party.  And THAT’s assuming China doesn’t consider it an act of war (which they may very well do).

There are 3 conditions to a productive partnership in China:

  • The Chinese side has to believe they’ll do better with you than without you.
  • The Chinese side has to believe they’ll do better tomorrow than today.
  • The Chinese side has to believe they’ll do better than you.

So the question is — what does the Chinese side think they’re getting from this negotiation?  Chinese negotiators are famous for demanding real concessions in the short term in exchange for vague promises to be delivered down the road.  If the US elevates China to “equal global partner” status in exchange for vague promises to try harder to manage Pyongyang (while still insisting that there is little they can do), then it bodes ill for the future of the US China relations.

The Fragile Bridge - Conflict Management in Chinese Business
The Fragile Bridge: Conflict Management in Chinese Business

The Fragile Bridge: Conflict Management in Chinese Business

Written by an American for Westerners negotiating in China, “The Fragile Bridge” dispenses with politically correct euphemisms and ivory tower pseudo-psychology.  Knowing which 1,500 year-old philosopher uttered what esoteric phrase won’t help you safeguard your assets or keep your JV operating, but learning from the lessons of dozens of successful Westerners who have survived the China challenge just might.

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