US reshaping China policy

Slowly and systematically, the Biden administration is giving shape to its China policy. Unlike the haphazard, though sometimes effective, Trump policy, the new administration is going about it methodically, setting up study groups, task forces and consultative processes to ensure it gets it right. It has already assembled a formidable team of China experts to man its National Security Council.

This consultation is not just within the administration and with experts. The two-hour conversation between Biden and Xi Jinping is an indicator of the seriousness of the process. Biden has boasted that he has spent more time with Xi than any other world leader. As Vice President he had 24 to 25 hours of private meetings and the two travelled over 25,000 km together in China. But in his conversation of last week, Biden was about laying out the bounds of the renewed ‘friendship’.

According to the White House readout, ‘President Biden underscored his fundamental concern about Beijing’s coercive and unfair economic practices, crackdown in Hong Kong, human rights abuses in Xinjiang and increasingly assertive actions in the region, including toward Taiwan.’ But the readout also noted that the two leaders discussed the pandemic, climate change and nuclear proliferation, indicating they sought to identify potential areas of engagement as well.

Earlier, state councillor Yang Jichei had a conversation with US Secretary of State Anthony Blinken. Yang, who was formerly the foreign minister, is now the director of the Office of the Central Commission for Foreign Affairs, the body that makes China’s foreign policy. While Yang drew the line in the sand on issues like Xinjiang, Tibet and Hong Kong, Blinken made it clear that the US would hold China ‘accountable for its effort to threaten the stability of the Indo-Pacific, including across the Taiwan straits, and its undermining the rules based international system.’

It is clear that the new US policy towards China features engagement, competition and cooperation. As Blinken put it in an interview in CNN, the processes require the US to deal with China from a position of strength. This is not casual rhetoric, but the end product of an interlinked policy that involves action in domestic industrial policy, cooperation with allies and a changed military posture. The Biden team acknowledges that it was its predecessor Trump administration that had identified the importance of strategic competition with China. But the Trump approach was erratic, as is evident from the Phase I trade deal that was struck between the two countries in January 2020.

One of the key flaws of the Trump approach was to ignore the strength that America derives from its allies and the need for its leadership role in a range of areas from climate change to global health concerns.

The Biden approach on China will focus on an effort to rebuild America’s industrial base through strategic investments in R&D, as well as structural reforms to ensure that no American gets left behind. The administration will seek investment in areas like semiconductors, AI, biotech, new materials and clean energy, as well as in enhancing the quality of its workers to service these industries.

To start with, the administration will retain the Trump tariffs, but is likely to be ready after a review to negotiate with the Chinese on them. Further, there is likely to be much greater and systematic coordination with allies like Canada, Europe, Japan and South Korea.

Alliances will form a key area in the US strategic competition with China. The Biden team will have to work hard to convince them that the US is willing to play a leadership role once again, whether it is in Europe in relation to Russia or in the western Pacific with China. The Trump administration’s handling of alliances has left a trail of suspicion that the US is unwilling or unable to play a significant role outside its own immediate region. Its shambolic handling of the Covid pandemic has only deepened this worry.

The administration has been particularly careful to identify the Indo-Pacific as a priority region. The Indo-Pacific team under Kurt Campbell is the largest regional team in the National Security Council which has a generous quota of Indian Americans at the leadership levels.

Biden himself underscored the importance he attaches to Quad in his telephone conversation with PM Modi last week. The American readout noted that the two leaders agreed to ‘continuing close cooperation to promote a free and open Indo-Pacific’ as well as for a ‘stronger regional architecture through the Quad.’

To emphasise the importance of China in his scheme of things, the President used a visit to the Pentagon last week to announce a review of US strategy towards China which will look at key areas, including intelligence, technology and the US deployment in the region. This will be conducted by a 15-person task force headed by Ely Ratner, a well-regarded China specialist, and is expected to come up with its recommendations in four months.

Needless to say, all these are plans which usually come with a new administration. What marks them out as different is their inter-connectedness. Thus, if the US is not able to turn around its economy and heal the domestic political divisions within the country, its ambitious goal of undertaking an intense strategic competition with China will be doomed.

There is a sharp understanding that we are now at an inflection point in a contest that will shape the nature of the emerging world order.