There have been some mixed signals in China-U.S. relations recently. Talks have resumed between Liu He, chief of the Chinese side of the comprehensive economic dialogue, and his counterpart, U.S. Treasury Secretary Janet Yellen, sending a clear signal of a relaxation in economic and trade relations between the two countries.
At the same time, however, the U.S. has not only strengthened its science and technology sanctions against China in an all-around way but also introduced sweeping ideologically based legislation to counter China. The U.S. Innovation and Competition Act of 2021 sounds the trumpet for U.S. allies to rally to the cause. So where will the China-U.S. relationship go next?
For now, the general mood in the relationship is better than it was toward the end of the Trump term: The U.S. generally has been less hostile toward China than it was in the frenzied Trump years. However, a resumption of economic and trade dialogue cannot be seen yet as a true rebound. On the contrary, it seems to be a tactical choice for the U.S. to step up efforts to counterbalance China while trying not to lose its entire economic stake. The Biden administration has signaled that it will go even further than Trump on its China policy.
It proposes to manage the relationship with China as “the single biggest geopolitical test in the 21st century,” highlighting the primacy and uniqueness of the China challenge. In the choice of ways and means, it has inherited the hawkish position of the previous administration, while making a strategic change from the unilateral isolationism of Trump to the building of a multilateral alliance system.
In other words, with an overarching competitive strategy in mind, the U.S. intends to confront and engage China simultaneously within a “competition, collaboration, confrontation” framework, supported by three pillars: an alliance strategy, multilateralism and values-based diplomacy. It has worked to develop a united front based on Western values, sought to maintain the upper hand in science and technology and moved to coordinate multilateral economic and trade rules.
In recent years, the U.S. has played up the China challenge in science and technology, even suggesting that a new “Sputnik moment” has arrived. The administration and opposition agree deeply on countering high-tech competition and containing China’s technological development. The Biden administration differs from the previous one in that it has chosen to move away from Trump’s carpet-bombing approach to more precision attacks to maintain pressure on China through a strategy of “small courtyard, high walls,” together with confinement.
Meanwhile, to secure its edge in a few key technological fields, the U.S. has expanded (with other leading nations) the Wassenaar Arrangement and is working with Europe to create the transatlantic trade and technology council (TTC), with a view toward putting in place China-free supply chains and technology alliances. As the U.S. strengthens the ideological narrative, uses values and human rights to politicize economic, trade and tech issues and generalizes the concept of national security, the risk of a new cold war in high-tech is increasing.
Moreover, the U.S. wants to reshape the international system to regulate and constrain China, prevent China from participating in and leading international rule-making and try to exclude China from the rule-making circle. The rules of trade, technology and climate change will be at the forefront of emerging major-power games.
In economy and trade, the 2021 Trade Policy Agenda and 2020 Annual Report released by the Office of the U.S. Trade Representative proposes to address nonmarket economic coercion or retaliation by China with a comprehensive strategy and road map. Returning to multilateralism, the Biden administration exhibits a clear intent to reassert its dominance of the World Trade Organization. The West is looking for breakthroughs on such important items as digital trade, intellectual property rights protection, labor, environmental protection and competitive neutrality. Various ad hoc coalitions targeting China may be expected on various topics.
In science and technology rule-making, the U.S. and Europe have stepped up their fight for international leadership. They have also been pressing the rhetoric of an authoritarian, rule-breaking China. The Biden administration stresses the need to keep China out of the process of setting technical standards and protocols. Western countries will inevitably leverage core technical standards and rules to increase their suppression of China in science and technology and block the overseas expansion of Chinese tech companies with more stringent market access requirements and technical barriers.
Admittedly there is room for China-U.S. cooperation in climate change and the making of rules to reduce carbon emissions. However, as carbon neutrality dominates the international climate change negotiation process, the U.S. is bound to link reductions to industrial and trade policies in the future, pressure China to implement large-scale additional measures and climate to constrain China’s development.
The current international geopolitical landscape is a confirmation of Zbigniew Brzezinski’s concern more than two decades ago. U.S. adjustments to its China policy and the China-U.S. relationship seemingly moving in different directions have been both the products of ongoing history and important elements of change. What is central between the two countries is no longer the balance of interests in economy, trade, markets and resources but rather the international order and the direction of movement for the international system.
The U.S. strategy is to use all available resources, unite all forces that can be united and concentrate on China. With American encouragement and coercion, other countries have to follow the U.S. or take sides. In the future, the game between China and the U.S. will evolve into a competition or even confrontation between two systems, two roads and two camps. In this regard, China should have no illusions and must prepare itself through long-term strategic planning and policy design.