China: Biden embraces “strategic competition”

By Kevin rudd, President of the Asia Society and former Australian Prime Minister

When US President Joe Biden took office, some in Beijing surmised that the new administration would act quickly to “reset” US-China relations, reduce trade tariffs and reduce sanctions imposed during the administration of the United States. former US President Donald Trump. They were quickly disappointed.

The Biden administration’s Asian policy team has rejected Chinese invitations to resume high-level strategic dialogue and retained nearly all of the Trump-era restrictions. At the same time, the White House conducted a comprehensive review of U.S.-China strategy spanning the entire spectrum of diplomatic, security, trade, and technology policy. This review is expected to be completed in the fall.

But at the broadest level, the Biden administration has accepted that the concept of “strategic competition” – embraced by the Trump administration – remains the defining framework for the relationship. But in this approach, the Biden team sought to stabilize the relationship and channel competition into specific forms rather than continuing the roller coaster of the previous four years. This effort is best summed up by US Secretary of State Antony Blinken’s statement that the US approach to Beijing aims to be “competitive when it should be, collaborative when it can be, and adversarial when it can be.” must be ”.

As the administration’s review of China’s policy draws to a close, it will be critical to see how it now categorizes the various components of the U.S.-China relationship: which parts are reserved for rhetoric and public statements, which are delegated to the purely operational field, and which ones to be determined by a substantive dialogue with Beijing? The answer to this question will influence the extent to which a more stable US-China policy framework can emerge in the medium term.

A major factor that adds to the complexity of this task is Beijing’s shift in strategic thinking. Specifically, Beijing’s recent move to punish Chinese tech company DiDi for its decision to go ahead with an initial public offering in the United States indicates that Chinese President Xi Jinping has concluded that broader financial decoupling of the United States is an acceptable – and perhaps inevitable – consequence of strategic competition. . It also reinforces its long-standing quest to make China a “self-sufficient” economy in the face of increasing pressure from the United States.

In other words, Xi is starting to signal that China is ready to pull out of important economic components of the US relationship, as it wishes to be less vulnerable to US economic, financial, and technological influence. This differs from a number of American assumptions that decoupling is largely a political choice that belongs only to the West. Xi could instead signal that China will cut ties with the United States on its own, become more self-sufficient, and start accelerating economic engagement with Europe and other parts of the world through trade and investment policy. more accommodating than in the past.

This highlights the main missing piece in the U.S.-China strategy to date: trade and the economy. A protectionist Washington has refused to acknowledge it so far. To put it bluntly, the United States can only prevail in its strategic competition with China if it does not fully and reciprocally open its markets to the rest of Asia, Europe and beyond, offering its friends and current and future allies an alternative to the great Chinese global economic juggernaut. . This is why much of the world has yet to follow Washington on China and continues to cover up.

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