Biden’s economic policies will define his vision of China as a real, genuine economic threat to the United States. The focus will be on technological rivalry with China. We can say that under the Biden administration, China may face much more complex problems than those of the US-China relations under Trump, writes Yana Leksyutina, Professor at the St. Petersburg State University.
There’s every reason to assert that Washington’s current, hard line course of containing China reflects a deliberate, long-term US policy that is not subject to changes in American administrations in the medium or even long term. China is positioned in the United States as the main strategic adversary, whose foreign policy ambitions and international influence must be contained. And on this issue, both political parties — Democratic and Republican — show rare unanimity.
China is objectively accelerating its integrated national power, not only economic, but also military and technological. It is expanding its international influence, while at the same time strengthening the control of the Communist party over all spheres of state and social activity inside China. China is becoming a strong competitor in a number of areas, and especially in those areas where the United States until recently considered itself invulnerable — namely, superior technological development. This makes it imperative for the United States to contain China. Changes in China’s foreign policy behaviour and China’s increased willingness and ability to defend its fundamental national interests are interpreted in the United States as an increase in Chinese aggressiveness. In particular, such changes are recorded on the Hong Kong issue, the Uyghur issue, the Taiwan issue, and the issue of freedom of navigation in the South China Sea. Describing China’s foreign policy behaviour, American experts focus not only on the growth of China’s aggressiveness, but also on the fact that if earlier the fear of criticism from the international community partly limited Beijing in its actions, recently the Chinese leadership has increasingly shown indifference to international criticism. The perception by the American side of China’s foreign policy behaviour as aggressive contributes to the toughening of Washington’s line towards Beijing.
The emergence and development of the novel coronavirus infection, COVID-19, has had a serious impact on US-China relations and brought the confrontation between the two countries to a fundamentally new level — the level of ideological confrontation. In American-Chinese relations, for the first time since the establishment of diplomatic relations in 1979, an ideological confrontation (according to the American side, the confrontation between the neoliberal ideology of the United States and the Marxism-Leninism of the CCP) as well as the confrontation of differing political, economic and socio-political models were clearly visible.
The Democratic Party and Biden’s emphasis on values can further ideologise the US-China confrontation. Under the Biden administration, human rights issues will become even more prominent in US-China relations, especially the Hong Kong issue, the Uyghur issue, and the Internet freedom. Much attention will be paid to the role of American technology companies and social media in the implementation of censorship, supervision and surveillance in China.
The development of the situation in connection with the spread of COVID-19 had a great impact on the US approaches to the development of trade and economic relations with China. Washington may have for the first time directly recognised the serious vulnerability of the United States because of China’s location at the centre of global value chains and, in some cases, the critical dependence of the United States and American companies on them. First of all, the vulnerability of the United States in terms of the provision of personal protective equipment and pharmaceutical ingredients was clarified. Second, the temporary shutdowns of manufacturing facilities in China during the first wave of the epidemic caused serious disruptions in global value chains, raising the issue of rethinking approaches to the international outsourcing of production.
The issue of the return to the United States of enterprises that are critical from the point of view of US national security (such as those producing pharmaceutical ingredients, personal protective equipment, etc.), as well as the general reconfiguration of global value chains so that they would bypass China (for example, relocating them to the countries of Southeast and South Asia, and Latin America). In fact, the course set by the Trump administration back in 2017 to transfer production capacity from China to the United States received a strong impetus with the development of the COVID-19 epidemic and became a confirmation of the correctness of Trump’s ideas. If in 2017 the task of returning manufacturing facilities from China to the United States was viewed through the prism of solving the imbalance in US-Chinese trade and fostering job creation in the United States, now it is considered in the context of ensuring US national security.
While, in a purely economic sense, many American companies are economically efficient to rely on China in organising their value chains (good infrastructure and logistics in China, high production efficiency, etc.), the pandemic has demonstrated the vulnerability of such companies, which faced serious disruptions. The Biden administration will continue its course of reconfiguring global value chains, bypassing China and returning manufacturing capacity to the United States, and it is likely to rely in this regard on a policy of providing American companies with appropriate preferences and incentives to relocate production.
Reconfiguring global value chains bypassing China will also be facilitated by the imposition of US sanctions on Chinese companies accused of human rights violations by Washington. The Trump administration has already imposed sanctions on Xinjiang Industrial and Construction Corps and a ban on the import of clothing, cotton products and computer parts made using forced labour in the XUAR. The Biden administration, in view of the importance of human rights issues for the Democratic Party, is likely to increase its pressure on China in this direction and will try to attract American allies and partners to these sanctions (for example, the EU, Japan, Australia, South Korea, etc.).
Overall, Biden’s economic policies will define his vision of China as a real, genuine economic threat to the United States. The focus will be on technological rivalry with China. In this regard, the American-Chinese struggle for technological leadership is intensifying, including in areas such as 5G, artificial intelligence, quantum computers, clean energy, etc. The technological war is underway, and new restrictions and sanctions will be introduced against Chinese telecommunications and technology companies.
In the context of the trade war, one can hardly expect a significant improvement in the situation; rather, one can predict the conservation of the current state of affairs. The Democrats are unlikely to dare to significantly escalate the tariff war, but it is not worth expecting a reduction by Washington of tariffs on Chinese imported goods: import tariffs imposed on Chinese goods bring billions of dollars in revenues to the American budget and serve as a serious lever of pressure on China. The reaction of the Biden administration to China’s failure to fulfil its obligations to purchase American products in accordance with the 2020 Trade Deal, Phase 1 (signed in January of this year) is questionable, and the likelihood of China’s failure to fulfil its obligations is very high.
Washington is deeply concerned about the signing in November 2020 of the Regional Comprehensive Economic Partnership, meaning that China, as the bloc’s largest economy, will determine the rules of trade in the region. In his campaign speeches, Biden highlighted the inadmissibility of China setting the pace for the world with regards to regional trade rules, and outlined the US intention to lead and guide the process of formulating the rules of the game for trade, and concluding high-quality trade agreements that would set high standards in the field of labour relations regulation, environmental protection, transparency, etc. It is rather difficult to predict how exactly Biden will realise this goal, since the return of the United States to the newest incarnation of the TPP, the Comprehensive and Progressive Trans-Pacific Partnership (as they are now writing in the media) looks unlikely. Most likely, Washington will come up with initiatives to conclude a network of agreements on a bilateral basis with the countries of the region (Vietnam is one of the options).
Overall, the Biden administration will strive to form a so-called Coalition of Democracies, and Biden is likely to be more successful in this than his predecessor. The Trump administration failed to achieve full solidarity with the world’s democracies on what Washington calls the “China threat” because it did not discriminate between China and its allies and close democracies in its trade war and economic pressure. Biden intends to end economic pressure on US allies and partners, increasing the already consolidated pressure of the entire democratic world against China (on human rights issues, issues affecting the development of technology, on trade and economic issues).
The alliances are viewed by Biden as a systemic and structural superiority that the United States (as opposed to China) has, and Washington will try to realise this superiority to the full in order to pressure and counter China’s plans (whether it is China’s plans to participate in the creation of 5G networks around the world or the implementation of the Belt and Road Initiative). The contours of such a “Coalition of Democracies” can already be traced: Britain, Germany, France, Sweden, the Netherlands, Czech Republic, Canada, Japan, Australia, Taiwan, India, etc. And in this regard, we can say that under the Biden administration, China may face much more complex problems than those of the US-China relations under Trump.
Also, the Biden administration will seek to restore the United States’ position as a world leader, setting world rules, promoting various multilateral agreements and supporting international institutions. This, in turn, can only aggravate relations with China, which during the Trump administration was gradually building up its own leadership potential: creating global and regional public goods, promoting economic globalisation, etc.
With all of the above, meanwhile, it should be emphasised that while maintaining a common course of containing China and pursuing a tough policy towards it, Washington will demonstrate its desire not to raise the degree of tension in US-China relations and is ready to engage in dialogue with China on topical issues on the global agenda, for example, on environmental protection, Iran and North Korea. Biden’s policies will not be sharply confrontational towards China, aimed at a head-on collision, as was typical for Trump’s policies during the pandemic in 2020. Biden’s policies will become less chaotic, unpredictable and rough (as was the case under Trump), but more strategically focused, well-calibrated and consistent.
