China Watch: Implications Of Biden’s China Policy
President Biden’s 20-24 May trip to Asia and Secretary of State Blinken’s speech on 26 May confirm that China is the Administration’s top long-term foreign policy challenge, despite Russian aggression in Ukraine. Blinken’s speech at George Washington University was a preview of Biden’s long-awaited China strategy, which has been delayed by the war in Ukraine.
Blinken asserts that past engagement with China has failed to change its behavior. As a result, the US must shape the strategic environment surrounding Beijing to strengthen allies who are committed to an open and free world.
The Chinese Foreign Ministry on 27 May responded to Blinken’s speech by labelling it “containment” policy and a defense of “US hegemony.” However, Chinese leaders were probably not surprised by the content, given Biden’s comments on China during his Asia trip. The following are Beijing’s likely responses on seven key issues in the near future:
- Leadership Transition
Xi Jinping will use Biden’s tough strategy to strengthen his hand as he seeks an unprecedented third term this fall. Xi will argue that with an increasingly hostile external environment, China needs a strong leader for five more years. He may even promise to resolve the Taiwan issue before he retires.
- Xi has long believed that Trump’s confrontational China policy represented a permanent shift in American thinking rather than an aberration, and Blinken’s speech proved Xi right.
- There are technocrats in the China who favor market-oriented reforms and more engagement with the West. They are Washington’s natural allies, but with a tough stance from the US, they would look like traitors if they were to push pro-engagement views.
Beijing will be somewhat relieved that Blinken reiterated US support for the One China policy and opposition to Taiwan independence. China, however, has expressed concerns over what it refers to as a “hollowing out” of the One China policy under Trump and Biden. China is particularly worried about:
- Defense Cooperation: drawing from lessons learned from the Ukraine war, Washington and Taipei are engaged in discussions on shifting Taiwan’s defense procurement to focus on systems that are more suitable to asymmetrical warfare with China. Beijing likely views these exchanges as a harbinger of closer military cooperation between the US and Taiwan.
- Higher Level US Visits: In April 2020, then-US Health and Human Services Secretary Alex Azar became the only US cabinet member to visit Taiwan since the end of formal diplomatic relations in 1979. US House of Representatives Speaker Nancy Pelosi was reportedly planning to make a precedent-breaking visit to Taiwan in April 2022, but she later tested positive for COVID and could not travel.
In the coming months, Beijing will press Washington to clarify its position on One China and may even increase pressure on US businesses in China to openly oppose Taiwan independence. Many US companies in China have experienced increased pressure in the past year to either express or not express an opinion on political issues, according to a 2022 survey conducted by the American Chamber of Commerce in China.
- Indo-Pacific Economic Framework
Beijing is probably not overly concerned about the US-led Indo-Pacific Economic Framework (IPEF) because it is not a free trade agreement. In 2020, China signed the Regional Comprehensive Economic Partnership – a free trade agreement (FTA) – with many of the member nations of IPEF. Beijing also relies on separate bilateral FTAs with regional countries to advance economic cooperation.
- Regional Influence and South China Sea
Despite Biden’s recent summit with ASEAN leaders in Washington and a USD 150 million assistance package, ASEAN nations maintain stable ties with China and are reluctant to confront it. Biden’s China strategy is similar to Obama’s Asia “pivot,” which aimed to strengthen ties with ASEAN nations to counter China. They welcomed a stronger US presence but also told Washington they would not pick sides.
- Ferdinand Marcos Jr., Philippines’ newly elected president, recently stated that his country cannot “go to war” with China and expressed his desire for good bilateral relations.
- China is trying to increase its influence with Pacific Island nations that have traditionally been in Australia’s sphere of influence. China recently proposed a new agreement on security and technology cooperation with the Solomon Islands, Kiribati, Samoa, Fiji, Tonga, Vanuatu, Papua New Guinea, Niue, and the Federate States of Micronesia.
Biden’ China strategy will not change the status quo in the South China Sea (SCS). Occasional clashes and tension will erupt between China and ASEAN nations over maritime claims, but China’s militarization of the islands is a fait accompli. Negotiations between China and ASEAN on a code of conduct in the SCS remain stalled. China will continue to oppose and disrupt US freedom of navigation operations in the SCS, but Beijing has largely accepted them as the results of its own actions.
- Trade and Investment
Chinese leaders have openly opposed an economic “decoupling” with the US because China is heavily reliant on the US for markets, investment, and technology. As such, Beijing is likely to seek incremental progress on discrete economic issues.
- Beijing is looking to Washington to lift some of the Trump-era trade tariffs, and it may be willing to make minor concessions, such as fully implementing the US-China phase one trade deal signed in January 2020. China has so far fallen short on its promise to purchase a certain amount of US goods under the deal.
- Chinese regulatory agencies have been engaged in talks with the SEC’s Public Company Accounting Oversight Board to work out an agreement to audit Chinese companies that could be potentially delisted in the US.
- About 80 Chinese companies currently face the threat of expulsion from US stock exchanges. The 2020 Holding Foreign Companies Accountable Act aims to remove foreign companies from US stock exchanges if they failed to comply with US auditing standards for three years in a row.
- Human Rights
Paradoxically, the Biden Administration’s China strategy is likely to embolden hardliners in China, who have long argued that the West is only interested in human rights as a tool to contain China. Technocrats in China have welcomed exchanges with the US on issues such as legal reform and civil society development, but a perceived containment policy would likely limit those exchanges and further undermine the influence of technocrats who are interested in improving the system from within.
- Seeking a Biden-Xi Summit
Xi has emphasized “head-of-state diplomacy,” based on the belief that major advances in bilateral relations are results of personal relationships between leaders. Despite tensions, Xi likely wants an in-person meeting with Biden to discuss bilateral issues. The two leaders had met previously when Biden was vice president, but they have only done so virtually as presidents.
- The Xi-Obama summit at Sunnylands in California in 2013 was very important to Xi and ultimately resulted in a historic cyber security agreement in 2015, which subsequently broke down under the Trump Administration as tensions rose.
- In contrast to his predecessor Hu Jintao, Xi has given less autonomy to his two top foreign policy officials, State Councilor Yang Jiechi and Foreign Minster Wang Yi. This means that the Xi-Biden relationship is critical to any breakthrough in bilateral relations.