Which candidate do Chinese leaders hope will win the 2020 U.S. presidential election: Donald Trump or Joe Biden? According to the U.S. Directorate for National Intelligence, the Chinese government would prefer that "Trump...not win reelection" because of his unpredictability and tough policies toward Beijing.
But Chinese experts disagree over which candidate would be better for their country. Yan Xuetong, Dean of the School of International Relations at Tsinghua University and a prominent foreign policy expert, sees Trump's global retreat and weakening of U.S. alliances as constituting the best strategic opportunity for China since the end of the Cold War. Yan noted that a Trump victory would be preferable "because he definitely will damage the U.S. more than Biden," thereby improving China's position in the U.S.-China balance of power.
By contrast, Shi Yinhong, Professor of International Relations at Renmin University and a foreign policy advisor to the Chinese government, sees a Biden victory providing an opportunity for improved crisis communication with China. Other Chinese scholars view a Biden Administration as a potentially more rational partner, though not necessarily an easier one to deal with.
What can be divined from the soy leaves? Under the Phase 1 trade deal with the United States, China has pledged to buy $36.6 billion in American agricultural goods in 2020. China's soybean imports from the U.S. have increased since the summer and Chinese companies pledged to purchase 9.8 million tons through 2021. By August, however, China had only had purchased $11.1 billion in U.S. agricultural goods and the Chinese government is not on track to meet its target for soy imports, which are down 40% from January to August 2020, from its five-year average.
Typically Chinese soy imports rise in the autumn months, but with the onset of the trade war, U.S. soy exports fell by 75% between 2017 and 2018. Chinese imports from Brazil made up for the shortfall, even though their soy is more expensive. In response to the Trump Administration's trade sanctions, China retaliated by imposing a 25% tariff on U.S. soy imports. Previously, one third of China's soy came from the United States and U.S. soy exports to China accounted for more than half of U.S. agricultural exports.
Graphic: Reuters (This chart reflects data through March 2020.)
Brazil has expanded the area for soy cultivation in response to growing Chinese demand as well as the priorities of the Brazilian president, leading to greater deforestation and climate change. Clearing forest land in the soy-producing Cerrado and Amazon regions has a compounding effect on climate change--it removes the trees that serve as a carbon sink and releases greenhouse gases into the atmosphere.
Photo: Shutterstock.com/The Conversation Brazilian Soy and Deforestation
What does China's recent American soy buy mean for Trump? Trump falsely claimed in last week's debate that China was paying for the subsidies to U.S. farm workers to compensate them for lost income due to his administration's trade war as well as the pandemic. In actuality, U.S. taxpayers are subsidizing farmers with a record $32 billion. Nevertheless, farmers are a key group in Trump's base--farmers overwhelmingly supported Trump in 2016, and are likely to do so again despite the adverse impact of the agricultural tariffs.
If you take a key soy-producing state like Iowa, for example, the picture is more mixed. Victory in Iowa has long been a predictor of overall victory in U.S. presidential elections, and in 2016 Trump won the state handily, attracting 51.1% of the vote to Hillary Clinton's 41.7%. Corn and soy are among the top three exports from the state, but the rural population of Iowa accounts for just 35.7% of the population. Although Iowa has been hit hard by COVID-19, Republican Governor Kim Reynolds has followed Trump's skepticism of scientific best practices, agreeing to hold large rallies without requiring social distancing or masks.
The pandemic, the trade war, and recent weather disasters have taken their toll on Republican support in the state. Despite subsidies, farm bankruptcies are up 8% this year compared to 2019. Incumbent GOP Senator Jodi Ernst, who famously could not quote the price of soybeans in a debate with Democratic challenger Theresa Greenfield (who aced the same question about corn), is now in danger of losing her seat. Polls show Trump tied with Biden in the state or even within a point or two of losing.
President Trump has claimed that “China has been buying a lot of — a lot of things, and they’re doing it to keep me happy, but they’re dreaming about Joe Biden.” There's some truth to this, as Chinese state-owned companies have leeway in timing their soy deliveries and, if Biden is elected president, could schedule imports after his inauguration, as a goodwill gesture. This shows some hedging on China's part, and an effort to placate Trump, while paving the way for a relationship with a potential new American president.
Where's the Risk?
China imports 75% of its soybeans, which it uses primarily for animal feed (mostly pigs). With the recovery of the Chinese pig herd from swine flu, which wiped out half of the country's pigs in 2018-19, China plans to import record quantities of soy this year. The Chinese government has long been concerned about the concentration risk in its soy imports, which largely come from just three countries: the United States, Brazil and Argentina -- though Russia, Ukraine, and Kazakhstan are now exporting smaller quantities to China as well.
For Chinese leaders, both a Trump presidency and a Biden presidency involve risks. In a recent interview, Chinese Ambassador to the U.S. Cui Tiankai, who was sent down to the countryside to plant soybeans during the Cultural Revolution, noted that his government "was concerned, even alarmed" at the increasing difficulties in managing disputes in Sino-American relations and expressed hope that the two countries would find ways to cooperate to address global challenges.
Some of the risks China faces are a reflection of its own domestic and foreign policies, which increasingly have faced global pushback. As China's power has expanded, its diplomats have responded with increasing vehemence whenever they see challenges to Chinese interests. Such "wolf warrior diplomacy" (referring to the nationalistic blockbuster Wolf Warrior films)--where "anyone who affronts China will pay"--has not won China many friends. To the contrary, despite China's largesse during the pandemic, views of the country and its leader have plummeted in the past year, according to a 14-country study by the Pew Research Center.
China's growing economic power has led to concerns over its use of economic leverage for political gain, such as its oil-for-loans agreements as a part of the Belt and Road Inititiative. After the Australian government called for an independent global inquiry into the origins of COVID-19 in April 2020, the Chinese government imposed heavy tariffs on Australian barley, blocked some of its beef imports, and began an anti-dumping investigation into Australian wine exports to China.
Typically, Chinese influence campaigns in other countries have focused on efforts to rebut criticism of China in the media and academe, as well as to pressure policymakers who take positions that Chinese officials view as hostile to their interests and restrict the ability of Chinese citizens overseas to take positions that are at odds with Beijing's. Using agricultural exports as political leverage in an election would be a departure from this playbook, though the timing of the Chinese purchases of U.S. soy seems like more than a coincidence.
Both Trump and Xi could expect some political gain--increased soy purchases would resonate with Trump's base--but the Phase I deal is structured so that the bulk of Chinese purchases of U.S. goods ($143.3 billion of a total $240 billion) will occur in 2021, boosting the U.S.-China relationship with a new Biden administration. A Peterson Institute study considers these numbers unrealistic and notes that, even if achieved, the soy imports and other purchases from the U.S. would come at the expense of U.S. partners--providing a side benefit for Beijing.
China is a major buyer of soybeans and has an outsized impact on global commodity markets as a result. Thus far, China has not used its enormous market power to influence elections, but the agricultural deal with the U.S. comes very close. Does Chinese "soy power" translate into influence in the 2020 U.S. presidential election? China appears to be hedging its bets on this one.