The China-U.S. relationship has been in free fall in recent years. It took a turn for the worse in the wake of the balloon incident earlier this year. The so-called “threat” China poses to America's national security has become an issue of great debate among American politicians and people. However, thanks to the resumption of bilateral high-level dialogues, there has been a growing expectation worldwide of a revival of relations between the two countries.
A few days before the G7 Summit, U.S. President Joe Biden told the media that he expected to see a “thaw” in U.S. relations with Beijing. As the tug-of-war in Congress over the debt ceiling ended, and as the curtain of the 2024 presidential election campaign lifted, Biden began to make efforts to repair deteriorating relations with Beijing. Senior American officials, from Secretary of State Antony Blinken to Treasury Secretary Janet Yellen and climate envoy John Kerry, have visited China recently and expressed their readiness to resume dialogue. For its part, Beijing encourages and welcomes dialogue and communication with Washington, believing that the resumption of communication mechanisms could prevent bilateral relations from derailing.
Ironically, the United States pays lip service to cooperation while intensifying its containment and suppression tactics against China. China never stands against competition; it welcomes fair competition instead. At present, Washington's containment campaign has expanded from individual Chinese companies to entire industrial chains. The Biden administration has formed a multilateral export control regime and built a values-based united front with like-minded countries to place greater pressure on China in terms of technological dominance and multilateral economic and trade rules.To maintain its supremacy in key technologies, the U.S. has established the EU-U.S. Trade and Technology Council, developed the Indo-Pacific Economic Framework for Prosperity and built supply chains and technology alliances that are less reliant on China. In these groups, members coordinate their efforts on fundamental R&D, talent exchanges, technical standards, supply chain resilience and norm-setting and policies on key technologies. These efforts are not the regular toolkits normally used in state-to-state competition.
China-U.S. trade has maintained its growth momentum over the years, despite significant disruptions to bilateral relations. In 2021, two-way trade reached $755.65 billion, a 28.7 percent year-on-year increase. In 2022, the figure reached about $700 billion. Notably, U.S. imports from China achieved a record high and U.S. exports to China also reached a new level, demonstrating that the two countries have an internal impulse to form interdependent economic and trade ties that serve the interests of both sides.Given the close and extensive industrial cooperation formed over the decades, a U.S. decoupling from China is an unrealistic policy option. According to Treasury Secretary Yellen, attempts to decouple from China would be “disastrous.” So the United States seeks “diversification,” not decoupling.
As a matter of fact, the fundamental purpose of the China visits by senior American officials echoes the overall China policy developed by the Biden administration, which claims that competition remains the defining feature of the bilateral relationship, even though confrontation may arise in certain areas.Before Yellen left for China, a statement from the U.S. Treasury Department mentioned three principles of U.S. economic policy toward China:First, U.S. national security remains the top priority; second, the U.S needs to build economic relations with China to support its own economy; and, third, it needs to work together with China to address global challenges. Strategic competition with China is the underlying assumption in Bidenomics, and strengthening state intervention in the formulation of industrial policy is a significant component of the U.S. de-risking strategy against China.
De-risking without decoupling means that the United States accepts “on-demand cooperation” with China in non-sensitive sectors. However, it also means that Washington may take more measures to curb China's strategic competitiveness in key areas. On-demand cooperation is most evident in the fight against climate change.Compared with strategic competition in other areas, the two countries' green competition is less intense and more consensus-based. They share a fundamental willingness to cooperate and indeed have considerable opportunities for cooperation in green technology, green standards and green finance. Therefore, the resumption of climate negotiations and the enhancement of cooperation on climate change and in green sectors, which promises to facilitate partnership in other areas, may prove to be a starting point to boost the recovery and substantive progress of China-U.S. relations.
