Will Biden be Fredo, Sonny, or Michael on China?

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Will Biden be Fredo, Sonny, or Michael on China?

Trump was tough on China, but not very strategic.  Biden needs to be both.  Less Sonny, more Michael.


No doubt China hawks would say that Barack Obama, and probably even George W. Bush, were like Fredo Corleone when it came to China—weak, ineffectual, even naïve.  It’s a fair point, although with the caveat that China Hawks tend to disregard context when analyzing China and therefore overstate this point.  On the other hand, China Hawks wouldn’t be too happy with my opinion that Donald Trump was Sonny Corleone on China—impetuous, petty, too quick to anger, not strategic enough.


We need more Michael, not Fredo or Sonny

The answer is not a compromise between Fredo and Sonny, but rather the option behind Door #3—be like the youngest Corleone son, Michael.  Be tough with China, because some push back is warranted on a range of issue, but also be smart and strategic.  Choose a strategy that is realistic and workable, which recognizes US strengths and weaknesses as well as China’s, and which protects US interests broadly.


Of course, many would point out that, if Obama was Fredo, so was Biden, as he was part of that team.  That would also be a fair criticism.  Ordinarily, we would think President Biden would be like VP Biden on China.  But much has changed in the last four years.


Trump changed the consensus opinion on China

It might be one of most enduring aspect of the Trump Presidency.  Trump coalesced opinion around the notion that it is time to push back against China, on trade and most other issues.  Although they might disagree with the particulars, most people agree that the approach to China had to change.  Most Democrats agree.  Business leaders who disagreed with the overall Trump trade strategy agree on this.  Europeans who despised most of Trump’s foreign policy mostly agree on China.  The American people agree, as public opinion polling reveals.  China was probably President Trump’s most popular position.  Even if Joe Biden wanted to go back to the Fredo position, it might be impossible as many in his own party would object vehemently.


Being smart is not being weak

All eyes will be on Biden looking for signs of weakness.  But being smart isn’t being weak.  Trump’s goals may have been correct.  His tactics were not always optimal.  There is room for improvement.  It is too early to tell where the Biden Administration will land on most issues.  I’m sure we will be issuing a slew of articles in the months ahead analyzing the latest US-China relationship “reset.”  Below is a brief description of the issues and factors to watch for.


A healthy American economy is the best answer to China

Nothing is more important to China policy than a healthy American economy.  At more than 300% of GDP, the level of debt in the US was dangerously high before COVID-19.  It is worse now.  This debt, and the policies that support it (artificially low interest rates and out of control government spending), are a far greater threat to the US than China.  The Biden platform does not suggest any improvement in this area.


Leading a unified front

The biggest mistake made by Team Trump was not proactively pursuing a more unified approach to China with allies.  With 1.35 billion people, China is more the 4X the size of the US and has more people than the combined populations of all the advanced economies (1.2 billion).  It simply doesn’t make sense to take a unilateral approach to China if allies are available and they certainly are.  Nothing would improve the ability of US policy to impact China more than the appearance that the US is rallying the world around its approach to China.  Biden will seek to improve US policy in this area.


Targeted approach to trade

Donald Trump’s goal of getting China to remove unfair trade practices was correct and overdue.  He took a shotgun approach, applying tariffs to just about everything China sells.  In the end this tactic created too much collateral damage (US farmers at the top of that list) which in turn created time pressure to reach some sort of truce (Phase One Deal), without prompting much change in Chinese trade and economic policies.  A more targeted approach, designed to counter the mid to high value industries where China is beginning to compete with the US, executed in coordination with US allies, would likely fare better.

Other issues: Democracy, Freedom of Navigation, Tech

There are a host of other issues that the Biden Administration will have to confront.  Unfortunately, little of what the outside world does ever seems to influence non-democratic governments, so while the Biden Team is likely to continue the criticism and symbolic sanctioning, we should understand our limits in this regard.  The initial indication is that there won’t be much change in the US position relative to navigation in the South China Sea which means the US will continue to challenge China’s assertions as to control of the air and sea in that region.  Lastly, will the Biden Administration hold the line relative to preventing Chinese tech companies (Huawei, TikTok, etc.) from operating in spaces that, due to potential access to information, could involve US national security?  Too early to tell how the Biden Team will handle this one, but a softer overall position will no doubt lead to howls of condemnation from China Hawks on both sides of aisle.


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