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At the beginning of his re-election campaign, President Biden increased his pressure for economic cooperation with Beijing. Seeking such dialogue makes political sense, but risks increasing US pressure on China for no real gains in return.
Biden begins his presidential bid in a chaotic political environment. The war in Ukraine rages on, the US economic recovery is on the brink, and Americans are suffering from inflation. Regarding China, there are tensions between Biden’s interest in taking a tough stance and his desire to slow the relationship’s rapid decline. Meanwhile, China is courting European allies to isolate Washington.
Officials tell me that Biden is targeting another meeting with China’s President Xi Jinping to follow up on their talks last November in Bali, Indonesia. But strategic engagement has been frozen since Foreign Secretary Antony Blinken’s planned trip was scuttled by the spy balloon incident in February. At this point, Xi doesn’t even take a call from the American President. But his administration has told the Biden administration that it wants to resume economic talks. This has given Biden’s economic officials a chance to step forward.
At an April 6 meeting of Biden’s top national security officials, known as the Joint Committee, several expressed support for economic engagement with Beijing. The following week, two senior Commerce Ministry officials visited Beijing and Shanghai, in part to learn about a possible trip by Commerce Secretary Gina Raimondo later this year.
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Then, last week, in a speech on China at the Johns Hopkins University School of Advanced International Studies in Washington, Treasury Secretary Janet L. Yellen reiterated her desire to travel to Beijing “at the right time”. She hopes to establish a substantive dialogue to “lay the groundwork for responsible stewardship of our bilateral relations,” she said.
But it would be a huge concession to the Chinese government – and would represent a de facto shift in US strategy – if either Yellen or Raimondo traveled to Beijing before Blinken rescheduled his trip. Yellen’s speech, while reiterating national security concerns, delivered a clear message to Xi: engagement in business and relations can improve.
“Negotiating the contours of engagement between great powers is difficult,” she said. “And the United States will never compromise our security or our principles. But we can find a way forward if China is also willing to play its part.”
White House, Treasury and Commerce Department spokesmen told me that economic engagement with Beijing had always been a goal; There was no change of strategy. But several other officials told me that public statements of unity mask a growing tension within the government over policy direction.
The Chinese leadership clearly believes that it is better for them to negotiate with Yellen than Blinken. Yellen has repeatedly advocated lowering tariffs on China. Treasury Department officials reportedly persuaded the White House to limit restrictions on foreign investment into China. A long-delayed executive order to achieve this is unlikely to cover large areas of America’s economic vulnerabilities, including clean energy technologies and biotechnology.
Many national security officials see weaknesses in Biden’s strategy to put economic pressure on China. For example, an earlier plan to investigate China’s abuse of government subsidies was dropped. And six months after the government announced new technology export restrictions for China, the final rules for enforcing those restrictions have yet to be released. If the government has any serious plan to crack down on China’s abuse of US capital markets, it’s a closely guarded secret.
For her part, Raimondo has taken a relatively tough stance on China. For example, she has campaigned for legislation to revitalize American semiconductor manufacturing. But she also has political ambitions, and a trip to Beijing would strengthen her honest foreign policy.
Certainly, increasing economic pressure on China in the current environment would pose its own risks. Indeed, some observers are praising Biden’s “course correction,” while others point out that the outreach is unlikely to produce results because the government is unwilling to give in to Beijing’s demands to roll back tariffs, technology restrictions and bans on products made with forced labor .
Officials stress that the purpose of a Yellen or Raimondo trip is to discuss macroeconomic issues rather than negotiate a specific deal. Expectations of significant advances would be low. But if so, why go at all?
Beijing’s longstanding pattern has been to lure American governments into economic dialogues that get nowhere but end up delaying U.S. action to hold China accountable for its unfair trade practices. There’s no reason to fall for this trick again.
Yes, the United States should seek engagement and competition with China at the same time. But Beijing is trying to force Biden to prioritize the former over the latter. The problem with this is that the US cannot expect fair competition or security until it addresses China’s economic aggression.
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