The US and China are now locked in an adversarial posture. As China’s power grows and it moves towards its stated ambitions to be at the centre of global governance by 2049, its relations with the US, seen by it as a declining power, will be subject to increasing stress. The challenge on both sides will be to avoid an actual conflict, even if it is a contained one, as that would unleash disruptions with massive global repercussions.
President Xi Jinping might be calculating that the US is currently in a relatively weak position, especially after the debacle in Afghanistan, to seriously confront China. With internal divisions in the US, this is even more the case. China’s strength as the world’s second largest economy and the biggest exporter gives it huge international leverage. That the US itself is China’s biggest trade partner limits its options. Neither US nor its allies can ignore the world’s biggest market, especially those countries whose economies depend heavily on exports.
Decoupling is a choice to be made essentially by multinational corporations that were the motor of globalisation that first created a global space for China’s economic rise by facilitating its emergence as the centre of global manufacturing. Beyond a certain point, democratic governments cannot dictate the corporations on the degree and pace of decoupling. The rest of the world is now faced with the situation in which China controls many of the critical global supply chains and uses interdependence as a political and economic weapon against those that resist its hegemonic ambitions.
Selective decoupling could occur because of rising labour costs in China, the imposition of CCP nominees on the boards of companies operating there and pressure by human rights groups. The Chinese government has unveiled a five-year plan to tighten regulation of a large part of its economy such as technology and education industries, monopolies, the digital economy including internet finance, AI, big data, cloud computing, online insurance companies etc., and this has raised investor concerns. This is inducing US investors to look for alternatives, and India as the only other huge market is a clear choice, though at the same time moving out from the world’s biggest market is not a practical proposition for them.
The US therefore has to balance its economic interests in China and its security concerns emanating from China’s expansionist policies and its bid to erode US power, especially in the western Pacific. Until recently, the US believed that the gap in power between it and China was large enough to not take the China threat seriously. With Trump, the mood towards China began to change as the realisation sunk in about the extent to which China pursued an all-of-government strategy to steal sensitive US technologies or gain access to them through forced technology transfers, its policies of helping the companies unfairly with export subsidies and below-market lending rates, its non-market behaviour, and the need to shrink the US trade deficit etc. The hollowing out of America’s manufacturing base and impoverishing its middle class by outsourcing manufacturing—and re-shoring it—was driving Trump’s policy towards China.
Biden Administration’s Tough Stand on China
It was initially expected that the Biden administration would be more accommodative of China and work for a modus vivendi with it. Trump and the Republicans were promoting the narrative that President Biden would be soft on China for personal reasons. Outside Republican circles, it was assumed that the Democrats being more prone to negotiations to find solutions to differences would reach out to China and reverse Trump’s aggressive posture toward Beijing.
In the event, the Biden administration has proved to be unexpectedly tough toward China. It seems to have discovered that the technology and innovation gap between the US and China is much narrower than was thought and that no time could be lost to maintain American lead vis-a-vis China. America now understands that it cannot now do it alone and needs to build strong coalitions to meet the challenge.
On issues of screening Chinese investments, excluding Huawei from 5G telecom networks, ensuring resilient supply chains, the US is putting pressure on European countries. Italy is being goaded to withdraw from the BRI. The Aukus initiative, positioning intermediate range missiles in Guam, strengthening the Quad, more active diplomacy in Southeast Asia to counter China etc. are features of this hardened approach to China. The technology portion of the Quad summit document reveals the US bid to counter China’s technology advances through a cooperative agenda with partners, not to mention a collaborative effort to offer alternatives to China’s BRI, provide anti-COVID vaccines to the Indo-Pacific region to offset China’s vaccine diplomacy etc.
It is not surprising that at the first encounter between Secretary of State Antony Blinken and Chinese Communist Party (CCP) foreign affairs chief Yang Jiechi at Alaska, the former spelt out all the areas in which the US is dissatisfied with China’s policies, be it a rules-based order or issues relating to Hong Kong, the treatment of Uighurs, Taiwan, cyber attacks on the US and economic coercion of US allies, even as he elucidated that the US relationship with China will be competitive where it should be, collaborative where it can be, and adversarial where it must be.
National Security Adviser Jake Sullivan, who has become the clearest proponent of a hard policy toward China, spoke of the US commitment to realise the vision of a free and open Indo-Pacific and cited areas of concern pertaining to economic and military coercion by China and its assault on basic values. Yang Jiechi retort was belligerent, asking the US to attend to its own problems of a dysfunctional democracy and racism in society, and declaring that the US was no longer in a position to dictate to China. Blinken’s meeting with his Chinese counterpart Wang Yi at the G20 meeting at Rome in October was once again an occasion for him to raise concerns about human rights and China’s actions in Xinjiang, Tibet, Hong Kong, the East and South China Seas and Taiwan, while noting areas where US and China’s interests intersected as in North Korea, Myanmar, Iran, Afghanistan and climate change issues.
Earlier, Deputy Secretary of State Wendy Sherman visited China in July, underscoring that the US welcomed stiff competition with China but did not seek conflict. She raised the familiar US concerns about human rights, including the anti-democratic crackdown in Hong Kong, genocide and crimes against humanity in Xinjiang, abuses in Tibet, the curtailing of media access and freedom of the press, Beijing’s conduct in cyberspace, across the Taiwan Strait and in the East and South China Seas, the cases of American and Canadian citizens detained in China, its unwillingness to cooperate with the WHO and allow a second phase in China into COVID-19’s origins, while also affirming the importance of cooperation in areas of global interest, such as climate crisis, counternarcotics, nonproliferation and regional concerns including North Korea, Iran, Afghanistan and Myanmar.
Backdrop for Xi-Biden Meet
At Biden’s own level, the signalling to China has lacked this bluntness and open airing of differences. He spoke to Xi in September and the White House read out was not abrasive. It merely mentioned that they discussed areas where their interests converge and where there interests, values and perspectives diverge, with a readiness to engage on both sets of issues openly and straightforwardly, as part of responsibly managing the competition between the two countries to ensure it does not veer into conflict.
In October, US National Security Adviser had met Yang Jiechi at Zurich and reached an agreement in principle to hold a virtual meeting between Biden and Xi before the year end. It may well take place next week, without any clear picture as yet about specific outcomes. Some positive outcome would need to emerge to make sure that a failed meeting does not become a political liability for both sides, even though a White House National Security Council spokesperson said very recently that the planned meeting was part of the US efforts to responsibly manage the competition with China and not about seeking specific deliverables.
The backdrop of the meeting with China’s military provocations against Taiwan, the US raising its political and diplomatic engagement levels with the island and warning against any use of force (and some mixed messages about whether the US will defend Taiwan), acknowledging the presence of US trainers on the island, along with the vociferous protests and intimidating rhetoric from the Chinese spokespersons about willingness to take military action to prevent Taiwan’s independence, is not very propitious. More so because of the need for Xi to appear strong at a time when the sixth CCP plenum meeting just took place which sets the stage for a third term for him next year at the 20th Party Congress.
The general atmosphere in the US is becoming increasingly antagonistic toward China, including in the US Congress. A Biden-Xi virtual meeting will not defuse this developing confrontation. Xi wants to rejuvenate China to find its rightful place in the comity of nations. The US wants to rejuvenate itself to preserve its rightful place at the top of the “free world”. The consolidation of Xi’s position will work against any settling of differences. The more the US seeks to build coalitions to contain the China threat, the more China under Xi is likely to pursue the path that he has set for his country.
The author is Former Foreign Secretary. He was India’s Ambassador to Turkey, Egypt, France and Russia. The views expressed in this article are those of the author and do not represent the stand of this publication.
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