China v. US: Same Music, New Dance Partner

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China v. US: Same Music, New Dance Partner

US-China tensions are rooted in real differences and legitimate issues.  They won’t go away just because of an election in the US.

 

As the saying goes, the more things change, the more they stay the same.  Donald Trump, China’s great irritant, is gone.  But the first week of the Biden Administration looked like any other week in the new US-China relationship.

 

China: Nice words but tough attitude and actions

China made statements that it looks forward to efforts to bring a more cooperative spirit to the US-China relationship.  But China’s President also made comments insisting that efforts to isolate China won’t work and that China won’t be pushed around.  President Xi pledged China’s continued adherence to multilateral cooperation and integration, yet did not address specific complaints of the US and its allies.  At the same time, China’s air force flew fighters into Taiwanese air space in a deliberate show of force.

 

US: We won’t back down either

The flights over Taiwan may have been a reaction to the Biden Administration inviting a Taiwanese official to attend the inaugural ceremony, in principle contradicting China’s aim of isolating Taiwan.  After the Chinese air force maneuver, the US flew its own airplanes into that same airspace to demonstrate resolve, which China matched with another of its own flights.  On the diplomatic side, the Biden Administration responded to China’s pledges of cooperation by pointing out that progress depends on addressing specific issues, not just making speeches.  And the Biden Administration expressed support for one of the Trump’s Administrations more hardline positions—condemning China for atrocities with the Uygar ethnic minority community in China.

 

In other words, flowery words and fresh start aside, nothing changed.

 

Trump changed the consensus on China

One could build the argument that Donald Trump’s tough approach to China didn’t really work, at least in the sense that, from trade to Hong Kong to Huawei, China’s behavior didn’t change much.  You could also argue that in some respects, particularly trade, the Trump Administration may have picked the right strategy but it had the wrong tactics.  But you have to give credit to Donald Trump for coalescing opinion around the idea that we need to push back on China.  Most people on both sides of the aisle agree, as do allies.  There’s good reason for this tension with China, and main reasons are as follows:

 

China has an authoritarian government which exerts immense control of society

China has never known democracy.  From 1950-80 it was 100% communist with virtually no type of freedom whatsoever for anyone.  Its experience, traditions, and culture are very different from the US and the rest of the advanced world.

 

Economic reform worked but has stalled

China became a force in the world because it gradually enacted economic liberalization, taking the economy from 100% communist to roughly 60% private enterprise and 40% state controlled.  This change led to tremendous growth, which, combined with China’s size, makes China a powerful player on the world stage.  But reform began to slow about 10-15 years ago and in recent years China’s government has not expressed much interest in more reform.  This has led to slower growth and more debt for China and more problems with trade partners.

 

China’s has gone from supplier to customer and competitor

China’s economic role used to be nothing more than selling low cost, high labor goods.  As its economy has matured, it is now time for China to “move up the value curve” and start making higher value added products, developing its own technology, and becoming more involved in global investment flows.  But, due to the lack of reform, China hasn’t made the changes necessary to take these next steps fairly or successfully.  This creates the tensions with China’s trade partners who now see China as not just a supplier but a potential customer and competitor.

 

China has taken a more assertive role in the world

The man who started China’s reform, Deng Xiaoping, described his approach to foreign policy as “keep your head down and bide time,” meaning China should wait until it is stronger before it tries to be a global influencer.  China’s current president, Xi Jinping, has decided China no longer needs to bide times.  Not only is China being more assertive economically, militarily, and with global institutions, it is even going as far as to suggest that its system of government is actually superior to the US and its allies.  That is a huge break from the China of ten years ago.

 

These trends have an impact that simply can’t be ignored which is why so many have agreed with Donald Trump’s overall message on China.  Even if it made sense to try to stifle China’s growth, the US could not do so.  But China’s rise, its size, and the way it is managing its economy and its political affairs, have become a concern for the entire developed world.  No matter who is in the White House, dealing with that concern won’t be easy.

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