Dec 13 U.S. President-elect Donald Trump has
upset China by speaking to the president of self-ruled Taiwan
and saying the United States did not necessarily have to be
bound by its long-standing position that Taiwan is part of
Taiwan is arguably the most sensitive part of the China-U.S.
relationship, and China has never renounced the use of force to
bring the island it regards as a renegade province under its
Here are 10 things China could do to retaliate against the
Trump administration if he continues to push the Taiwan issue.
- Cutting ties with Washington
If Trump offers any type of formal diplomatic recognition to
Taiwan, China would likely severe its own diplomatic ties with
the United States, in what would be an extreme and highly
disruptive move. China refuses to have diplomatic ties with any
nation that also has diplomatic relations with Taiwan. Cutting
ties with Washington would likely be a final resort by Beijing.
- War games near Taiwan
China could signal its resolve over Taiwan by holding war
games close to the island, for example by effectively closing
off air and shipping routes by lobbing missiles into waters
close to Taiwan's densely populated western coast, a move that
would deeply unsettle the region. Chinese state media have even
suggested military means may now be needed to settle the Taiwan
issue once and for all.
- South China Sea face-off
China has been angered by U.S. freedom-of-navigation patrols
in the disputed South China Sea, where China has been reclaiming
land on the islands and reefs it occupies and building airfields
and other facilities.
So far, China has responded to U.S. patrols by shadowing
them and issuing verbal warnings. China may take more forceful
measures to future U.S. patrols. In 2001, a U.S. spy plane was
forced to land in China after colliding with a Chinese fighter
over the South China Sea.
Beijing would be reluctant to see a military clash as China
needs a peaceful South China Sea to keep its trade lanes open.
- Sanctioning U.S. companies involved in arms sales to
In 2010, Beijing reacted with fury to the Obama
administration plans for a new round of weapons sales to Taiwan,
threatening to sanction the U.S. companies involved. The threats
ultimately did not come to fruition.
- Cut its holdings of U.S. Treasuries
China is America's biggest creditor, holding $1.16 trillion
dollars worth of U.S. Treasuries as of September.
If Beijing decided to suddenly liquidate a big chunk of its
holdings, it could do severe damage to U.S. debt markets,
forcing the United States to scramble for funds. A big
retaliatory sell-off of U.S. government debt by China would not
be a precision strike, though. Such a move would roil global
markets and likely even rebound on China's own, making this, in
some analysts' minds, a worst case scenario short of war.
- Ease up pressure on North Korea
The United States has repeatedly urged China to "get tough"
on nuclear-armed North Korea, and while China is Pyongyang's
most important economic and diplomatic backer, it has also been
infuriated by its nuclear and missile tests.
While China could ease up on United Nations sanctions on
North Korea to express displeasure with the United States, it
could boomerang and end up giving succour to Pyongyang and its
missile and nuclear programmes, something Beijing does not want.
- Pressure on U.S. companies
Indirect levers exist for hitting companies via state-run
media and consumer organisations, or just stoking popular
After China lost an international ruling earlier this year
over its claims in the South China Sea, several U.S. brands
became targets for short-lived anti-U.S. protests and boycott
calls, including Apple Inc and KFC-parent Yum Brands
U.S. companies could also face higher tariffs as well as
outright substitution of their products, such as aircraft, in
favour of Chinese or other foreign competitors.
China might throw bureaucratic obstacles in the way of U.S.
firms in the country. A senior executive in China at a large
American consumer goods firm told Reuters any strike back
against U.S. firms would likely involve local authorities
clogging up approval processes or slowing down paperwork, rather
than a loud and brash response.
- Alternative agricultural supplies
China, the world's top consumer of commodities from copper,
to corn to crude oil, could hit the United States if it sought
alternative supplies of agricultural products.
Volumes of U.S. agricultural imports from corn to soybeans
into China hit a record 47.9 million tonnes in 2015.
- Kill momentum for market access
A Trump departure from a one China policy would almost
certainly undermine bilateral investment treaty talks. Trump may
not be a fan of those to begin with, but greater market access
under a Bilateral Investment Treaty tops the U.S. business
community's wish list for China.
The U.S.-China BIT had long been viewed within the broader
foreign business community to be the vanguard of liberalizing
investment deals with China. If those talks stall, it's possible
China will promote investment treaty talks with Europe.
- Undermining the consensus on cyber issues
If Trump goes back on One China, it's possible there could
be a Chinese reversal on cyber security commitments made between
Xi and Obama in 2015, which U.S. government advisers and
security experts have credited with reducing China-led
(Reporting by Ben Blanchard, Michael Martina, John Ruwitch, Jo
Mason and Adam Jourdan; Editing by Lincoln Feast)