US Foreign Trade Aunt Katherine Tai and Chinese Vice President Liu He, the first telephone exchange was “frank, pragmatic and constructive.” Janet Yellen, Secretary of the Treasury, and the same Liu also discussed “frankly” in an atmosphere of “mutual respect”. The Secretary of Commerce, Gina Raimondo, and her Chinese counterpart, for their part, exchanged their views in a “frank and practical” way and “agreed to stay in communication” …
Hollow diplomatic formulas? Not quite. With China, Washington dreams of a relationship on two levels: that of competition when necessary, and cooperation, when possible. Realistic? The situation of the two countries is not the same as between the United States and the USSR at the dawn of the Cold War: two entirely separate economic systems. In 2020, China and the United States again traded nearly $ 600 billion in goods, with US exports at a higher level than it was in 2016, before Donald Trump’s arrival, and imports. which fell over the same period by only 5.8%.
Warlike provocations
And yet … In view of the increasing tensions, one can wonder how long this dual competition-cooperation approach will survive. Verbal tensions, first: to the provocations of the warrior wolves of the Chinese Foreign Ministry, Joe Biden responded from the first days with an offensive vocabulary, portraying a Xi Jinping “who thinks that the future belongs to the ‘autocracy’ and does not hesitate to commit ‘genocide’ in Xinjiang. Biden’s special envoy to the Indo-Pacific region, Kurt Campbell, said: “The period that many have called ‘constructive engagement’ has come to an end.” Clearly, the end of a pragmatic dialogue instituted under Clinton.
Military tensions, then. Faced with Beijing’s worrying maneuvers in the China Sea and its threats against Taiwan, not to mention the bringing of Hong Kong, which did not even require the dispatch of the army, one of the very first decisions of Biden was to appoint an Asian specialist at the Pentagon, Ely Ratner. He gave him four months, at the head of a task force, to see how to move up a gear, in terms of military deterrence, against China.
“China has been considered a priority for several years. But not enough has been done to translate this into reality, and the problem is alarmingly urgent,” Elbridge Colby, former Wall Street Journalist told The Wall Street Journal. Pentagon official in the Trump administration.
The work of this task force has just resulted in a directive from Lloyd Austin, the Secretary of Defense. Most of the measures are classified as defense secrets, but Austin has assured that he will directly oversee all of the Pentagon’s Indo-Pacific policy.
One part of the response has been to expand the blacklist of Chinese companies accused of supporting Beijing’s military activities, which can no longer benefit from US investment. The list was created by Trump, Biden expanded it to 59 companies. One of the main battlegrounds is 5G, for which Washington is trying to block Huawei’s way. The criteria justifying the ban go beyond those of the Trump era: the executive order, says the White House, applies to “Chinese companies that undermine the security or democratic values of the United States and of our allies, “it also targets companies using” Chinese surveillance technologies outside of China, as well as their development or use to facilitate repression or serious human rights violations. “
Same relative continuity, from Trump to Biden, when it comes to the economy – arguably the most complex battleground between the two nations. Trump had imposed four successive slices of tariffs, Biden was careful not to cancel them. Their effect is real: they relate to a volume of American imports of 250 billion dollars, against 370 billion in 2019. This therefore means that part of the trade between the two countries has been replaced not by a repatriation of production. manufacturing in the United States, remained anecdotal, but by a move of production capacities in other countries. Vietnam, a major beneficiary, has fallen from 12th to 6th place in American imports in two years.
Customs retaliation
Biden didn’t stop there. He also ordered the creation of a new “strike force” concerning the “supply chain”.
Under the authority of the Trade Representative, she is responsible for combating problematic trade practices on strategic goods, such as semiconductors, automobile batteries, pharmaceuticals or rare earths. In Congress, where a series of “anti-China” laws are in the pipeline, the two parties have agreed to a law freeing $ 52 billion in credit to revive the US semiconductor industry.
Opposite, the Chinese are not left out. On the eve of the opening of the G7 summit in Cornwall last June, China urgently passed an “anti-foreign sanctions law” which reads: “If foreign countries violate international law and basic standards of relations international (…) and take discriminatory measures against Chinese citizens or organizations and interfere in Chinese internal affairs, China has the right to take corresponding countermeasures. “
The risks of escalation are therefore multiple, even if the situation has nothing to do with that of the 1950s or 1960s: the economic interdependence between the two countries and the globalization of trade remain a safeguard. The United States, China and India alone represent 60% of the world economy, and the share of international trade in relation to world GDP is also 60%.
Biden admits, “The more complicated the world becomes, the more difficult it is for democracies to converge and reach consensus.” But it is this weapon of the alliance that he intends to use in his standoff with China. He even managed to have a sentence inserted in the final communiqué of the last NATO summit, specifying that “China’s growing influence and its international policies may present challenges that we must meet together as an alliance” , despite the lack of enthusiasm of Emmanuel Macron, who had indicated that “China is not part of the Atlantic geography, or else my map has a problem” …
Intensified competition
On the economy, it will be more complicated. In an increasingly interconnected world, two-thirds of countries – including the allies Biden cultivates – trade more with China than with the United States. Two forces, however, push for a decoupling between the two countries or, to be more exact, for an exacerbated competition between two economic nationalisms. On the American side, the political world is under strong pressure from public opinion and from a part of the economic circles, Wall Street excepted, which regard Beijing with an eye more and more hostile. On the Chinese side, the globalized economy is no longer the priority. Xi Jinping is a president “deeply ideological”, estimates Kurt Campbell, the envoy to Asia, but he “is hardly passionate about the economy”.
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