Containers sit stacked next to gantry cranes at the Yangshan Deep Water Port in Shanghai, China. (Photographer: Qilai Shen/Bloomberg)

There's No Cold War With China, Says Trump's Hawkish Adviser

(Bloomberg) -- Michael Pillsbury has rock solid credentials as a China hawk. He’s been called the “leading authority” on America’s trade war opponent by none other than President Donald Trump.

So when Pillsbury says that U.S.-China relations are in fact improving, and will likely get even better after Trump meets his Chinese counterpart Xi Jinping on Saturday, it’s worth paying attention –- especially for investors alarmed by the trade standoff between the world’s biggest economies.

The two leaders “have forged a very rich relationship” and their cooperation will likely deepen after their talks at this week’s Group of 20 meeting in Argentina, said Pillsbury, a senior fellow at the Hudson Institute and a defense official under presidents including Ronald Reagan and George W. Bush. “Tariffs is not the only strand.”

There's No Cold War With China, Says Trump's Hawkish Adviser

In an interview, Pillsbury wouldn’t speculate on the next steps in the tit-for-tat exchange that’s seen tariffs levied on some $360 billion of goods. But he said cooperation with China has deepened under Trump in areas such as addressing North Korea’s nuclear threat and sharing counter-terrorism intelligence.

World Domination

Pillsbury’s optimism may surprise those who’ve read his 2015 book, “The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower.’’

In it, he rejects an approach of “constructive engagement” in favor of “recognizing that China is a competitor,” and argues that Beijing is hell-bent on full-spectrum dominance by 2049, a century after the Communist Party seized power.

Pillsbury says China duped the West into believing it will eventually abide by global trade and free-market rules. But he doesn’t advocate tariffs, unlike another Trump adviser and China hawk, Peter Navarro. Pillsbury’s book is more focused on security, recommending that the U.S. should build a coalition of nations to counter Beijing’s claims in the South China Sea, as well as backing pro-democracy reforms inside China.

That worldview has been reflected in American policy under Trump, whose administration has labeled China a strategic competitor that wants to “shape a world antithetical to U.S. values and interests.’’

In a speech last month, Vice President Mike Pence said the administration was committed to defending American interests against Chinese “aggression,” prompting some commentators to warn that the U.S. and China were entering a “new Cold War.” But Pillsbury shoots that thesis down. "I know what a Cold War is. This isn’t one of them," he said.

‘Not Even Close’

Publicly, Xi has played down China’s ambitions. In a speech this month, Xi said a trade war will produce “no winners” and called for nations to maintain the rules-based system led by the World Trade Organization.

Pillsbury has served as an outside adviser to the administration on China issues. A Mandarin-speaker who’s visited China more than 50 times, he was asked to help out in December 2016 when Trump, then president-elect, annoyed Beijing by holding a formal phone call with the president of Taiwan. China claims the island as part of its territory.

This month, Trump said China’s economic ambition to surpass America has been contained. “They’re not even close,’’ the president said. (The International Monetary Fund predicts that China’s economy will reach the top ranking in 2030.)

At the same press conference, Trump lavished praise on Pillsbury. People shouldn’t read too much into such endorsements, since the president hasn’t shown much interest in long-term strategy, said Ian Bremmer, president of the Eurasia Group. Still, Bremmer shares some of Pillsbury’s optimism about the looming Trump-Xi summit.

“Trump right now finds it very useful to use China as an existential bogeyman,’’ Bremmer said. “It wouldn’t surprise me if the one-on-one meeting with Xi in Argentina ends up going better than people expect.’’

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