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Analysts weigh Trump’s negotiation style with China; Taiwan stays cautious

President-elect Donald Trump has fueled greater uncertainty in U.S.-China ties after he said Washington did not necessarily have to adhere to the "One China" policy, setting off a debate on his strategy for the world's two largest economies.

"In the case of China and Taiwan, he is attempting to say that it's not business as usual. He believes that under both President Barack Obama and his predecessor George W. Bush, America didn't stand up to China and he intends in all kinds of ways to do just that," said Patrick Basham, director of Washington D.C.-based think tank, Democracy Institute.

"One of the things he wants to do is to put China on the back foot and not be quite sure what America's response will be to any given act or statement from the Chinese," Basham told CNBC's "Squawk Box".

It's a highly risky strategy, but potentially offers high rewards, Basham added.

"Either this brilliant bit of negotiating confuses China early on and then when you sit down, you are very conciliatory and you come to the deal you want to, or you have an inexperienced team that's unsure about the nuances of China policy and they put Beijing in a very uncomfortable situation which Beijing has to escalate," concurred JP Morgan's chief Asian and EM Strategist, Adrian Mowat.

"This "One China" principle is a core policy in China, it's not a negotiating point," Mowat said.

China and Taiwan parted ways in 1949, when the Nationalist Party was forced to retreat to Taiwan by the Chinese Communist Party and China views the territory as a renegade province that can be re-taken by force if necessary. Washington embraced the "One China" policy in 1979 under which Beijing views Taiwan, Hong Kong and Macau as part of China.

On Monday, Chinese foreign ministry spokesman Geng Shuang said at a regular press briefing that China was "seriously concerned" about Trump's comments.

"The Taiwan question bears on China's sovereignty and territorial integrity and touches our core interests," said Geng.

"Adherence to the one China principle is the political basis and premise for China-US relations, the disruption and damage of which would make the sound and steady development of bilateral relations and cooperation in major fields out of the question," he said.

Meanwhile, White House spokesman Josh Earnest said Monday the U.S. is committed to the "One China" principle and will not use the Taiwan issue to gain leverage in any dealings with Beijing.

"The United States does not view Taiwan and our relationship with Taiwan as a bargaining chip," he told a daily briefing, calling Taiwan a "close partner." "And bargaining that away is not something that this administration believes is our best interest," Earnest said.

Joe Raedle | Getty Images

"Disrupting this policy," he said, "could have a disruptive effect on our ability to work with China in those areas where our interests do align. That reflects the high priority that China puts on the policy and on Taiwan."

Taiwan's Presidential Office has remained mum on the controversy, although there are concerns that the territory is being used as a pawn.

"Trump's comments regularly mention Taiwan. What advantage is this giving Taiwan? This is something we must consider," Johnny Chiang, an opposition Nationalist lawmaker, told reporters on Monday.

"Otherwise, among the superpowers, when we are betrayed, we won't even realize it."

Taiwanese President Tsai Ing-wen from the independence-leaning Democratic Progressive Party has so far not acknowledged the "One China" policy, irritating Beijing.

The Mainland Affairs Council, which handles cross-straits affairs in Taiwan, reiterated on Monday that Taipei regards Taiwan-US relations and cross-strait ties "as equally important."

Taiwan's presidential office spokesman Alex Huang declined to comment about Trump's Sunday comments but told Reuters: "When Taiwan is seen as a contributor in regional politics or regional security then you won't be ignored nor used as a pawn for others."

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