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How has Duke Kunshan University been affected by the U.S.-China trade war?

<p>The idea for Duke Kunshan University started as a branch of Duke’s Fuqua School of Business to establish connections in China.</p>

The idea for Duke Kunshan University started as a branch of Duke’s Fuqua School of Business to establish connections in China.

As the U.S.-China trade war escalates, Duke Kunshan University has managed to stay out of the cross fire—at least for now.

The trade war, which began in 2018, has amounted to around $250 billion of American tariffs on Chinese goods and at least $110 billion of Chinese tariffs on American goods. Suspicions linger that the conflict marks the beginning of a new Cold War between the United States and China.

DKU, however, has so far remained high and dry in the midst of the conflict.

“As far as operations and the general situation of the school, we’ve been fairly immune from the impact of difficult relations,” said Denis Simon, executive vice chancellor of DKU and professor of China business and technology at the Fuqua School of Business.

Tariffs are not the only tools at the two countries’ disposal. China’s antitrust regulator imposed a $23.6 million fine on American automaker Ford, and Chinese tech giant Huawei faces criminal charges in the United States for allegedly stealing trade secrets.

Peter Feaver, professor of political science and public policy and director of the Duke Program in American Grand Strategy, described the United States’ hard line towards China as pushback against China’s exploitation of concessionary U.S. policy dating back to 1994.

“The Great Recession of 2008-2009 and the subsequent leadership of [Chinese President] Xi Jinping seemed to usher in a new era in U.S.-Chinese relations, one marked by greater tension and mistrust,” Feaver wrote in an email. “Xi is far more assertive about exploiting Chinese advantages, and now, with President [Donald] Trump, the United States is far more assertive about pushing back.”

Simon asserted that people-to-people diplomacy keeps U.S.-China collaboration chugging along despite tense politics. The countries’ interdependence and outsize influence on world affairs mean they must collaborate to resolve global issues such as climate change and global health, he argued.

“There’s no global problem that isn’t going to require close U.S.-China collaboration. We need one another,” Simon said. “Our relationship is the most important issue shaping world affairs in the 21st century.”

At DKU, neither student enrollment nor faculty recruitment has declined since the trade war began. So far, students, faculty and visitors to DKU have not had any trouble obtaining Chinese visas, nor have visitors from DKU struggled to obtain U.S. visas, Simon said.

This is not a happy accident. DKU’s administration has taken measures to avoid treading on either U.S. or Chinese toes. For example, Kunshan limits the scope of research on its campus to fields that are neutral enough to avoid scrutiny from either government.

“We have to be very careful about what kind of research we do,” Simon said. “We stick to research on global health and the environment. They’re what you would call ‘safe’ and don’t get us into difficulty with things like export controls.”

DKU avoids research on materials with potential applications in military technology, for instance. Duke faculty applying for research grants in these and other sensitive areas must leave their laptops at home when they visit Kunshan.

Although DKU is legally a Chinese entity, it is also a joint venture with an American counterpart, Simon explained. Accordingly, its administrators must keep up with policy in both countries. 

Simon corresponds with U.S. officials, business representatives and the office of government relations at Duke “to ensure [DKU] is operating in a way consistent with the intent of the U.S. government.”

“Everyone agrees that we have some obligation to do that,” Simon said. “The good news is that it hasn’t limited our behavior.”

Optimism permeates high-level discussions of Kunshan’s future. During his visit to the campus in April, President Vincent Price spoke on the success of Kunshan’s first class of students and the University’s plans for the construction of a “phase two” campus. 

Days before, Price met with Education Minister Chen Baosheng and Wu Zhenglong, the governor of Jiangsu province, where DKU is located. The officials expressed similar optimism and commitment to supporting DKU in the future, Simon said.

There may be challenges on the horizon, however.

Simon speculated that tariffs could affect the price of U.S. goods that DKU needs to purchase for the construction of its second campus. The visa situation also may change. 

Trump and Xi agreed to reinitiate trade talks at the Group of 20 meeting in Japan. This came after seven weeks of tumult during which Trump threatened higher tariffs on another $300 billion worth of Chinese imports. A deal may be a long way off, however.

“I’ve been working in and out of China for almost four decades. This is the most difficult period I’ve experienced,” Simon said. “And there are some indications that things may get worse before they get better.”

Billy Pizer, Susan B. King professor of public policy, voiced concerns for the environmental consequences of the trade war. Pizer, who holds faculty appointments in environmental sciences and policy at both Duke and DKU, described how policy dialogue around climate change has declined in parallel to the relationship between the United States and China.

“Even as we were at odds with China on trade and human rights issues, there was this shiny area of hope that was climate change and clean energy,” Pizer said. “Our relationship with China has significantly deteriorated, and this area of collaboration in environment has since gone away.”

Pizer noted that the trade war and its political ramifications have not limited his research to date. He also continues to engage non-governmental stakeholders in China on climate change, though policy talks with the government remain stalled.

DKU students are not the only ones who should worry about potential visa difficulties, Pizer also mused.

“Forget about the DKU campus and the fact that the students there will have to rotate to Duke’s campus,” he said. “Duke has a lot of Chinese students. It will be a problem if their or our government makes moves to prevent them from coming to the [United States].”

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