US-China Relations:

The Mar-A-Lago Retreat and

Implications for Bilateral Ties

LYE Liang Fook*

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US-China relations appear to have attained a more practical and realistic

footing following the meeting between Chinese President Xi Jinping and
US President Donald Trump at the Mar-a-Lago retreat in April 2017. At the
meeting, they elevated their existing bilateral talks to a more comprehensive
framework and agreed to unveil a 100-day economic plan. Trump further
expects China to play a bigger role in reining in North Korea.

US-CHINA RELATIONS SEEMED to have settled down to a more practical

and realistic phase following the meeting between Chinese President Xi Jinping
and US President Donald Trump at the Mar-a-Lago retreat in April 2017. Before
their meeting, there were indications that Trump would be tough on Xi. Trump

* LYE Liang Fook is Assistant Director and Research Fellow at the East Asian Institute, National
University of Singapore.

east asian policy 5

 had tweeted that his meeting with Xi at Mar-a-Lago would be a “very difficult
one”. Even earlier, Trump stood out among previous US president-elect candidates
for his wide-ranging verbal attacks on China from trade, investment, currency
manipulation, intellectual property rights, global warming to China’s actions in
the South China Sea. He used extremely harsh terms to describe China’s actions
in these areas.
After winning the US presidential elections, Trump appeared to up the ante
by speaking on the phone with Taiwan President Tsai Ing-wen, breaking with
decades of protocol. China responded with its warning that the one China policy
– there is only one China and that Taiwan is part of one China – was the political
foundation of China-US relations. It also stepped up military manoeuvres around
Taiwan. Tensions eased somewhat when Trump agreed to adhere to the one
China policy in a telephone conversation with Xi
in February 2017. This paved the way for a visit by
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Achieving more Chinese State Councillor Yang Jiechi whose reported

primary objective was to discuss where and when a
balanced trade between Trump-Xi meeting could take place.
By travelling from Beijing to meet Trump in
the United States and America, Xi is continuing a practice he set when he
China and addressing became Chinese president in March 2013. In that
year, he travelled to California to meet US President
the North Korean issue Barack Obama who was in his second term of office.
dominated the agenda This time round, by travelling to Mar-a-Lago in
Florida, Xi was making an even more significant
at the Mar-a-Lago gesture as Trump is fresh at the helm.
Achieving more balanced trade between the
retreat. United States and China and addressing the North
Korean issue dominated the agenda at the Mar-a-
Lago retreat. Trump pressed China to do more in
these two areas. They agreed on a 100-day plan to reveal actions/steps that the
two countries will take to achieve fairer trade.
They further agreed to elevate their existing bilateral talks to a more
comprehensive mechanism covering four key areas of diplomatic and security,
economic, law enforcement and cybersecurity, and social and cultural issues. They
are expected to work together to drive progress and deliver results in each of the
four areas. The new comprehensive mechanism for bilateral engagement indicates
that US-China relations are now geared towards a result- and action-oriented
outcome which bodes well for the two countries. When Trump visits China later
in 2017, more deliverables are likely to be announced.
However, there are challenges along the way that could affect the tenor of
relations. On the economic front, while China appears most willing to work with
America to deliver win-win outcomes, it does not want to be seen as the only
party granting concessions.

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 The two countries are still divided on how to tackle the North Korean issue,
particularly its missile and nuclear weapons programme. While Trump appears
open to all options including a military response, China only prefers a peaceful
approach of talks and negotiations. The Taiwan issue could rear its ugly head again.
The Trump administration has approved its first arms sale to Taiwan and there
are indications that it would step up military exchanges with Taiwan. Therefore,
while the Mar-a-Lago retreat has marked a positive start for US-China relations,
there are still uncertainties in the relationship.

Trump’s Tirade against China

In the run-up to the Republican Party nomination and while campaigning for
the US presidential elections in 2016, Trump was extremely critical of China in
various areas from trade, investment, currency manipulation, intellectual property
rights, global warming to China’s actions in the South
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China Sea. This created the impression that he would

be adopting an immediate, tough and no-nonsense
approach towards China should he be elected. One of Trump’s most
During the hustings, Trump accused China of memorable remarks
engaging in unfair trade, causing the closure of tens of
thousands of American factories and the loss of millions on unfair US-China
of American jobs. He described America as “living
through the greatest jobs theft in the history of the
trade was his threat
world” with the loss of “70,000 factories since China to impose 45% tariffs
entered the World Trade Organisation”. He clamoured
that America cannot continue to allow China to “rape on Chinese goods
our country”. entering the US
Trump also criticised China for manipulating its
currency to make its exports more competitive vis- market.
à-vis the United States, portraying China as solely
responsible for the hundreds of billions of dollars in
trade deficit against America. He promised to instruct his treasury secretary to
“label China a currency manipulator, the greatest in the world” and to follow up
with “tariffs and taxes to stop the cheating”.
Trump further accused China of stealing America’s trade secrets and providing
unfair subsidies for its exports, thereby exacerbating factory closures and job
losses in the United States. He vowed to instruct his US trade representative to
bring trade cases against China “both in this country and at the WTO [World Trade
Organisation]”, enforce WTO rules against China’s unfair subsidy behaviour
and use “every lawful presidential power to remedy trade disputes” including
imposing tariffs.
One of Trump’s most memorable remarks on unfair US-China trade was
his threat to impose 45% tariffs on Chinese goods entering the US market.
Subsequently, he qualified his remarks by saying that the 45% is merely “a threat”

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 and not a tax, and that “it will be a tax, if they don’t behave”. The message was
that China was solely responsible for America’s economic woes.
Beyond trade, Trump has made the much more tenuous claim that China is
responsible for global warming. Way back in 2012, Trump said global warming was
a “hoax China created by and for the Chinese in order to make U.S. manufacturing
non-competitive” [i.e. by forcing American companies to relocate their operations
and jobs away from the United States to elsewhere like China].
Since then, though he has commented variously on global warming, much
of his rhetoric appears to be less about making China a scapegoat but more
about how America’s adherence to stringent environmental standards has raised
business costs and made its companies uncompetitive. Hence, his signing of a
Presidential Executive Order in March 2017 to dismantle Obama’s Clean Power
Plan essentially revives America’s coal industry and jobs that are tied to it even
though it is debatable how many jobs can be created.
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Trump took issue with China’s island building and military installation on the
islands in the South China Sea. He accused China of building a “massive military
fortress” in the South China Sea after ripping off America economically or after
benefiting disproportionately from the bad trade deals America had signed with
China.
Weighing in on this issue was US Secretary of State-designate Rex Tillerson’s
remarks during his confirmation hearings in January 2017 that described China’s
island building and military deployment on the islands in the South China Sea
as “akin to Russia’s taking Crimea” from Ukraine. He suggested that the United
States send China a clear signal that, “first, the island-building stops and, second,
your [China’s] access to those islands also is not going to be allowed”.
There were indications that China was somewhat rattled by the incoming Trump
administration’s policy towards China. Its State Council Information Office issued
China’s first ever white paper on Asia-Pacific Security Cooperation days before
Trump’s inauguration that outlines China’s security vision for the Asia-Pacific and
its willingness to work with other major powers including America in fulfilling
this vision. The implied message was that China and the United States can achieve
much more by working together than by working against each other.
China gave a more robust response when Trump was perceived to have infringed
the one China policy. China lodged a formal protest when Trump, before his
inauguration, broke decades of protocol by accepting a congratulatory phone call
from Taiwan President Tsai Ing-wen in December 2016. He further irked China
by suggesting on two public occasions that the one China policy was negotiable.1
To demonstrate its resolve to uphold its territorial integrity and sovereignty,
China stepped up military manoeuvres around Taiwan. In December 2016, its
1
In an interview with Fox News on 11 December 2016, Trump questioned why the
United States had to be bounded by the one China policy unless it was part of a deal with China
that included other things including trade. In an interview with Wall Street Journal published on
13 January 2017, Trump said that “[e]verything is under negotiation including One China”.

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 military aircraft encircled the international airspace around Taiwan in a clockwise
direction and Liaoning, its aircraft carrier, made a brief stopover in Hainan after
completing its first ever “distant sea waters” training in the Western Pacific, again
taking a route that encircled Taiwan. Liaoning further sailed through the Taiwan
Strait in January 2017, marking the first time it had done so since 2013.

Tamping Down on Campaign Rhetoric

After Trump was sworn in as America’s 45th president on 20 January 2017,
there was a noticeable tamping down of anti-China rhetoric. It is not uncommon for
past US presidents to tone down their campaign rhetoric after their inauguration.
For the Trump administration, what was noticeable was the pace and extent of
the softening of this stance.
The first inkling of this shift occurred less than two weeks after his inauguration
in early February 2017 when Trump’s daughter Ivanka and granddaughter Arabella
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attended the Lunar New Year reception at the Chinese embassy in Washington
DC. This turnout was regarded as a positive development for US-China relations
as opposed to the view then that Trump had broken with tradition by not sending
Lunar New Year greetings to the Chinese people during their most important
festival.2
Another sign of this shift was when Trump wrote to thank Xi in February
2017 for the latter’s congratulatory letter on his inauguration. In the letter, Trump
conveyed his wishes, albeit belatedly, to the Chinese people towards the tail end
of their Lunar New Year celebrations. Trump further expressed his willingness
to work with Xi to develop a “constructive relationship” that benefits the two
countries. In response, China’s foreign ministry said China “highly commend”
Trump’s festive greetings to Xi and the Chinese people and that China attaches
“great importance to growing its relations with the United States”.
The clearest indication of America’s willingness to work with China emerged
during Trump’s second tele-conversation with Xi Jinping in February 2017, a day
after his letter to Xi. Before they spoke, Trump had reportedly spoken to about 20
world leaders since his inauguration. The fact that he had yet to speak to Xi led to
concerns that the absence of contact did not bode well for US-China ties. When
they finally spoke, the White House highlighted that the two leaders had a “lengthy
telephone conversation”, a stark contrast to Trump’s earlier tele-conversation with
his Australian counterpart which was described as “hostile and charged” and even
ending abruptly due to their disagreement over immigration issues.
Most significantly, during the telephone exchange, Trump agreed, at Xi’s
request, to honour “our one China” policy”. By discarding his earlier suggestions
that the one China policy was negotiable, Trump eased tensions and put US-China
relations on a more stable footing.

2
Past US presidents normally convey their Lunar New Year greetings before the start of
the celebrations. In 2017, the first day of the Lunar New Year fell on 28 January.

east asian policy 9

 The Trump administration further appeared unwilling to allow the South China
Sea issue to dominate US-China relations, unlike what had happened under the
Obama administration. China welcomed US Defence Secretary Jim Mattis’ call to
exhaust all “diplomatic efforts” and to refrain from “dramatic military moves” to
resolve the South China Sea issue during his first visit to Asia in February 2017.
US Secretary of State Rex Tillerson was even more conciliatory towards China
compared to his earlier clarion call to deny China’s access to its islands in the South
China Sea. While visiting China in March 2017, Tillerson described US-China
relationship as guided by an understanding of an oft-repeated Chinese phrase of
“non-conflict, non-confrontation, mutual respect and win-win cooperation”.
On previous occasions, Xi had articulated the same phrase of “non-conflict,
non-confrontation, mutual respect and win-win cooperation” when he called on
America to build a new type of major power relations with China. Xi reiterated
the phrase when he congratulated Trump on his election victory by phone in
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November 2016. By regurgitating this phrase, Tillerson appeared to be conveying

America’s endorsement of it, thereby expressing common ground with China to
move bilateral ties to another level.

Significance of Mar-a-Lago Retreat

Trump’s invitation to Xi Jinping to his Spanish-style retreat at Mar-a-Lago
in Palm Springs, Florida from 6 to 7 April 2017 and Xi’s presence at the retreat
provides the clearest indication yet that the two leaders seek realistic and practical
cooperation. The Mar-a-Lago meet therefore puts further distance between Trump’s
anti-China rhetoric during the campaigning period and Trump as president. There
were early indications that the two leaders were preparing to meet.
In Xi’s first congratulatory phone call to Trump in November 2016, they had
reportedly agreed to “meet at an early date” to exchange views on various issues
of common concern. In their second tele-conversation in February 2017, it was
reported that the two leaders “expressed their eagerness to hold a meeting at an
early date”. The words used conveyed an added urgency to meet. Indeed, the tempo
for a Xi-Trump meet noticeably picked up after Trump agreed to adhere to the one
China policy in his second tele-conversation with Xi. Chinese State Councillor
Yang Jiechi, former Chinese ambassador to Washington D C and former foreign
minister, was soon dispatched to America in the same month. Apparently, a key
item on his visit agenda was to discuss when and where a Xi-Trump meeting
would take place.
The timing of Yang Jiechi’s US visit from 27 to 28 February 2017 appears to
be deliberately timed to convey a message to the United States, notably, to look
at China-US relations from a strategic vantage point and focus on what the two
countries can do together. A Xinhua article on 26 February 2017 highlighted that
Yang’s visit coincided with the “45th anniversary of President Richard Nixon’s
ice-breaking visit to China in 1972 (from 21 to 28 February 1972), which paved
the way for Beijing and Washington to officially establish diplomatic ties in 1979”.

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 By travelling all the way from Beijing to meet Trump in America, Xi is
continuing a practice he set when he became Chinese president in March 2013 –
building a personal relationship with his US counterpart in an informal setting.
In June 2013, not long after he became president, Xi travelled to Sunnylands,
California to meet Obama, who was just into his second term of office. Xi
only embarked on a state visit to the United States more than two years later in
September 2015.
In contrast, previous Chinese leaders prefer their visits to the United States
to be accorded the pomp of a state visit. For instance, Jiang Zemin’s first visit to
the United States was a state visit at the invitation of US President Bill Clinton
in 1997, more than four years after he became Chinese president in 1993. Jiang
only met his US counterpart, George Bush Jr, in an informal setting at the latter’s
Crawford ranch in Texas in 2002 towards the tail end of his tenure as president.
Xi’s predecessor Hu Jintao was even more “distant” in his relationship with
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his US counterpart. Hu did not engage in any similar informal talks with his US
counterpart. Hu only embarked on a state visit to the United States in 2011, two
years before he relinquished his post as Chinese president.
This time round, unlike the 2013 Xi-Obama encounter in Sunnylands, the Xi-
Trump meeting in Mar-a-Lago is even more significant because Xi is the incumbent
who has been in office for a few years already while Trump was only sworn in as
president a few months ago. In a sense, Xi can be regarded as going out of his way
to develop a personal relationship with Trump. Xi was evidently underscoring the
importance China attached to developing its ties with the United States.
At the same time, China was careful not to give the impression that the Xi-
Trump meeting was a China cosying up to the United States. There was an effort
to maintain some distance to keep the relationship respectful. Xi and his entourage,
for instance, did not stay overnight at Mar-a-Lago but instead spent the night at
the nearby Eau Palm Beach Resort and Spa. Golf was also off the table as Xi
does not play the game. Moreover, within China, Xi’s anti-corruption drive has
led to the closure of golf courses in China as they are regarded as a source of
shady deals. In contrast, when Japanese Prime Minister Shinzo Abe met Trump
at Mar-a-Lago in February 2017, he spent a night and played a round of golf with
Trump there in an indication of the close alliance partnership between Japan and
the United States.

Key Outcomes of the Retreat

A few days before they met, Trump made clear that his priorities for the Mar-
a-Lago retreat were to make progress on fairer trade with China and dealing with
North Korea’s belligerent behaviour. Trump even threatened that if China was
not going to extend its help to solve the North Korea issue, the United States was
“totally” prepared to act alone.
Trump’s tough talk suggested that he would strike a hard bargain with Xi when
they met. However, during the Trump-Xi meet, the thrust was more on building

east asian policy 11

 a basis for cooperation and exploring further action to be taken by both sides.
Trump did not follow through with his campaign pledges of imposing punitive
measures on China. On trade, Trump conveyed America’s “serious concerns” over
the impact of “China’s industrial, agricultural, technology, and cyber policies on
United States jobs and exports”. Trump pressed China to take “concrete steps to
level the playing field” and stressed “repeatedly the need for reciprocal market
access”.
On North Korea, the two sides sought to downplay their differences by
reiterating common principles such as reaffirming their commitment to the
denuclearisation of the Korean peninsula and fully implementing relevant UN
Security Council resolutions. They further agreed to “increase cooperation and
work with the international community” to convince North Korea to “peacefully
resolve the issue” and dismantle its weapons programmes, without specifying
specific actions to be taken.
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One of the key outcomes of the Trump-Xi meet, which both sides were quick to
highlight, was that it provided a platform for the two leaders and their delegation
members to get to know each other better and provide the basis for a constructive
relationship. Xi reportedly said that his long hours of interaction with Trump has
deepened their understanding of each other, increased mutual trust, achieved
several important consensus and established a good working relationship.
Trump was more effusive, describing the relationship he has developed with
Xi as “outstanding” and that he looks forward to meeting Xi “many times” in
the future. He opined that the discussions made “tremendous progress” and even
surmised that “lots of very potentially bad problems will be going away”. Minus
Trump’s hyperbolic language, it is clear that the two sides have the intention to
work together and explore ways of addressing issues of common concern.
Another key outcome of the Trump-Xi meet was the creation of a new cabinet-
level bilateral mechanism known as the US-China Comprehensive Dialogue to
deliver progress in four specific areas.3 This mechanism replaces the Strategic and
Economic Dialogue established in 2009. Apart from the two existing important
strategic and economic topics, the new mechanism is more comprehensive in
that it will also include two additional key topics, namely, law enforcement and
cybersecurity, and social and cultural issues, under a common framework.4
The US-China Comprehensive Dialogue also elevates the status of existing

3
This comprehensive dialogue mechanism will be overseen by the two presidents and
comprise four pillars: the Diplomatic and Security Dialogue; the Comprehensive Economic
Dialogue; the Law Enforcement and Cybersecurity Dialogue; and the Social and Cultural Issues
Dialogue.

4
Under President Obama, there were separate tracks for bilateral engagement such as the
Strategic and Economic Dialogue, the China-US High-Level Consultation on People-to-People
Exchange and the China-US High-Level Dialogue on Cybercrime and Related Issues. The US-
China Comprehensive Dialogue brings all these issue areas under one roof.

12 east asian policy

 bilateral talks. Unlike the old Strategic and Economic Dialogue which was driven
and overseen by cabinet-level appointees, the new mechanism will be overseen by
the two presidents even though cabinet-level appointees will still drive the process.
Under the US-China Comprehensive Dialogue, the two sides have agreed
to pursue an “ambitious agenda and meeting schedule to show progress and
demonstrate meaningful results”. Separate meetings in each of the four areas
will hence be held to ensure that progress and results are made. In fact, the first
breakout session of the Comprehensive Economic Dialogue was held during the
Mar-a-Lago retreat with the two sides agreeing on a 100-day plan to promote a
more balanced economic relationship. A breakout session on the Diplomatic and
Security Dialogue was also convened.
The two leaders further agreed to set up a dialogue mechanism involving the
chief of joint staff of the two countries. This mechanism is expected to augment
existing platforms such as the China-US Defence Consultation Talks, Consultation
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on Strategic Security and Multilateral Arms Control and the Asia-Pacific Security
Dialogue. One of its likely areas of focus is on promoting
military-to-military communications in the event of major
military operations and military encounters/accidents to
reduce tensions and minimise military confrontation. The two countries
appear to have
Prospects for China-US Relations
The Mar-a-Lago retreat indicates to a large extent that reached a
US-China relations have attained a more realistic level, down consensus that
from the height of Trump’s vitriolic anti-China campaign
rhetoric. The two countries appear to have reached a they have more to
consensus that they have more to gain by working together.
They have adopted a practical, action-oriented approach
gain by working
by establishing the US-China Comprehensive Dialogue to together.
chart progress and deliver results in the future. There is likely
to be concrete actions or steps agreed upon by both sides in the forthcoming 100-
day plan to promote a more balanced trade and investment relationship.
Some initials steps that the two sides appeared to have agreed on include
greater access for US financial firms in China and US beef exports to China. In
turn, the United States will allow Chinese cooked poultry to enter US markets.
Other possible steps that China can take are for its companies to invest in
infrastructure construction in the United States, which will result in capital inflow
and employment generation to some extent. Another is for Chinese companies
to invest in the energy sector though they could run up against security concerns
as had happened in the past.
The economic arena is an area where China is willing and has the most leeway
to find win-win ways with America. Even then, this would depend on what America
is prepared to offer as China would not want to be perceived as the only party
giving the concessions.

east asian policy 13

 Apart from the intricacies of reaching agreement on trade and investment
matters, the two countries share different views on handling security issues. Trump
has shown that he is prepared to act tough such as when he ordered missile strikes
in Syria on the first day of meeting Xi in Mar-a-Lago.
In particular, they remain divided on how to handle North Korea. After the
Mar-a-Lago retreat, Trump ordered USS Carl Vinson to be stationed off the
Korean coast and renewed his threat to take on North Korea alone if China is not
willing to extend its help. He even revealed that during the Mar-a-Lago retreat,
he had dangled the offer of a “far better” trade deal with China if Beijing solves
the “North Korean problem”. In June 2017, in a sign that it wanted China to do
more on the North Korean issue, the United States announced that it was slapping
sanctions against a Chinese bank, a Chinese company and two Chinese individuals
for their ties to North Korea.
China, on the other hand, has advocated a peaceful approach involving talks
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and negotiations. It does not wish to apply too much pressure on North Korea
that would lead to a regime collapse in Pyongyang. Countering Trump’s claim
that China was not doing enough as evident by the 40% increase in China-North
Korea trade in the first quarter of 2017, China asserted that its trade with North
Korea only rose by 10% in the first half of 2017 and that this trade amounted to
normal business exchange of goods not on the UN embargo list. Clearly, China
and the United States have a different approach towards North Korea. The United
States may eventually have to accept a China that does not seek to apply maximum
pressure on North Korea.
The Taiwan issue could also complicate China-US relations. There are
indications that America is looking to deploy marines to guard the new American
Institute in Taiwan (a de facto embassy), thereby raising the level of US engagement
with Taiwan that will raise Beijing’s ire. Already, the Trump administration has
approved its first batch of arms sale worth over US$1.4 billion to Taiwan against
China’s protests. The US Senate Armed Services Committee has further called
for the re-establishment of regular port calls by the US Navy at Taiwanese ports
and for the US Pacific Command to receive ports of call by Taiwan. If approved,
this would mark another break from four decades of protocol.
Overall, the Mar-a-Lago retreat has marked a good start for US-China bilateral
engagement and Trump is expected to visit China later in 2017 where more
deliverables are expected to be announced that would input some predictability
to US-China relations. However, there are still a number of variables that could
adversely affect relations. 3

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