U S.-China Relations in 2021 Hit a Nadir

Though Washington is more determined than ever to step up to Beijing, some long-term U.S. allies aren’t so certain. In Europe, the prospect of losing access to Chinese markets and becoming entangled in diplomatic conflicts doesn’t appeal to many leaders, especially the Germans. Washington has been trying to persuade them to its side, but that’s likely a false hope, argues Foreign Policy columnist Stephen M. Walt. A curation of original analyses, data visualizations, and commentaries, examining the debates and efforts to improve health worldwide. As such confrontations intensify, the balance of power around Taiwan is fundamentally shifting, pushing a decades-long impasse over its future into a dangerous new phase. The 25 Chinese fighter jets, bombers and other warplanes flew in menacing formations off the southern end of Taiwan, a show of military might on China’s National Day, Oct. 1.

It’s not clear whether that’s possible or whether U.S. and Chinese ambitions are fundamentally incompatible. But in fact, it was a serious effort, months in the making, by both sides to try to halt the dangerous downward spiral toward conflict. The self-ruled island has moved to the heart of deepening discord and rivalry between the two superpowers, with the potential to ignite military conflagration and reshape the regional order. The People’s Republic of China assumed the China seat at the United Nations in 1971, replacing Taiwan, and is a permanent member of the UN Security Council. Over the years, China has become increasingly assertive in multilateral organizations, particularly in the United Nations and in various regional fora. Now, Mr. Xi, China’s leader since 2013, wants to restore the nation’s primacy in the global order.

While value chains connecting the two nations remain highly intertwined, the tariffs imposed by the Trump administration have had a noticeable negative impact on U.S.-China trade. Between 2017 and 2022, while China’s total exports to the U.S. increased, the share of U.S. imports from China fell from 22 percent to 16 percent. Crucially, compared to other countries, China’s export growth was significantly lower in products subject to U.S. tariffs.

However, serious obstacles remain for responsible actors in expanding non-proliferation efforts toward a nuclear-free zone in the Middle East. Some have pointed to President Trump’s outrageous rhetoric, including toward China, and his America First foreign policy. There are some other connections to Trump; for example, Wolf Warrior diplomats regularly borrow the phrase “fake news.” But there’s much more to the story. The Trump administration’s China policy is here to stay—or at least that is what the administration is working furiously to ensure. While it may appear as though these last-minute actions will make it more difficult for the incoming Biden administration, the opposite is true.

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China’s so-called nine-dash line claims most of the South China Sea, though a 2016 international tribunal in the Hague ruled that its claims violate the United Nations Convention on the Law of the Sea, which Beijing ratified but selectively adheres to. Given China’s current economic situation, it may seek to improve relations with the U.S. in the near-term, or at least prevent relations from worsening. As investment into China is already decreasing, for instance, China may be wary of retaliating against the latest U.S. economic restrictions as this may further deter foreign investment. The answer to the second question—how China’s current economic issues will impact the U.S.-China relationship going forward—is more complex.

Relations between the world’s two largest economic powers, the United States and China, are at lows not seen since the aftermath of 1989’s Tiananmen Square massacre. China’s human rights abuses, especially in Hong Kong and Xinjiang, border aggressiveness, and “wolf warrior” diplomacy, combined with the Trump administration’s legacy and the ongoing pandemic, have left bilateral relations at a nadir. On the other hand, with international terrorist networks and intense regional rivalry in the Middle East, it is impractical to discuss peace and security without addressing terrorism and the arms race in the region.

1. These measures dealt a severe blow to the company’s 5G business, and, as a result, several European countries announced restrictions on Huawei’s participation in their telecommunication networks.
2. Countries that have squared off with China do not seem intimidated, and attitudes toward China in countries such as Australia, India, and the United States have turned sharply negative.
3. Some decisions, such as whether to maintain tariffs on $370 billion worth of Chinese goods, will be challenging.
4. This dramatic transformation will not be the end of Hong Kong as a global financial hub, as it has already begun to boost economic integration with mainland China.

From a broader geopolitical perspective, with the need to secure its energy imports, China is also expected to increase its footprint in the region and influence the mentioned challenges. The complexities—and existential risks—of the multidimensional relationship between two nuclear weapon states bumping against each other pull in different directions. In China, the United States is an easy target for officials looking to boost their own careers in an atmosphere of growing nationalism.

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Beijing’s moves against Hong Kong have profoundly worsened U.S.-China relations, though they were not designed to do so. Beijing was undoubtedly aware that its sudden crushing of Hong Kong’s limited and struggling democracy would be costly to China’s relations with the United Kingdom, the United States, and many other powers. Indeed, the Trump administration has sanctioned Chinese and Hong Kong officials and ordered an end to Hong Kong’s special trade status. Beijing nevertheless felt compelled to act because of the embarrassing instability created by millions of democratic protesters in its prize special administrative region. U.S.-China relations sharply deteriorated in 2020, after three years of steadily declining under the Donald J. Trump administration. Beijing and Washington traded blame over the coronavirus pandemic, remained locked in a trade war, competed over 5G networks and other technologies, and clashed over rights abuses in Xinjiang and Hong Kong, among other issues.

China’s demographic and economic woes may catch up with it in the future—and the Chinese Communist Party knows it has only a short time to make the greatest use of its power, argue experts Andrew S. Erickson and Gabriel B. Collins. Tensions over Taiwan have also come to the fore, with China’s language and actions increasingly aggressive and the United States signaling a willingness to defend the island. The security architecture of the Middle East has undergone rapid transformations in an exceptionally short period. Notable developments include the United States gradual withdrawal from the region, rapprochement between Israel and some GCC states through the Abraham Accords and the rise of Chinese and Russian regional engagement.

The tariffs have hurt the U.S. economy, but they have also given the United States economic leverage. Moreover, unwinding them too quickly will leave the new administration open to accusations of being soft on China. Other moves, including reviving the Quadrilateral Security Dialogue with Australia, India, and Japan; elevating the U.S.-Taiwan relationship; and sanctioning officials and companies suspected of human rights abuses in Xinjiang, are likely here to stay. Some efforts, https://www.tradebot.online/ such as the aggressive prosecution of those involved in Chinese influence activities in the United States, could be maintained but tempered significantly. Strategic competition is the frame through which the United States views its relationship with the People’s Republic of China (PRC). The United States will address its relationship with the PRC from a position of strength in which we work closely with our allies and partners to defend our interests and values.

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Fueled by government incompetence and foreign interventions, terrorist insurgencies have imposed severe humanitarian and economic costs on the region. Meanwhile, regional actors have engaged in an unprecedented pursuit of arms accumulation. Saudi Arabia and the United Arab Emirates have imported billions of both Western and Russian-made weapons and funded militant groups across the region, intending to contain their regional adversaries, particularly Iran. Tehran has also provided sophisticated weaponry to various militia groups across the region to strengthen its geopolitical position against Saudi Arabia, UAE, and Israel.

In the United States, accusing opponents of being too soft on Beijing is a convenient political weapon. This mutual demonization inflames both respective nationalisms, complicating any U.S. and Chinese policy efforts to create a framework for managing competitive coexistence. The Biden-Harris administration is firmly committed to taking on the PRC’s abusive, unfair, and illegal practices. U.S. economic policies begin with investing at home and protecting American workers and businesses. The United States is firmly committed to maintaining its edge by investing in U.S. technology and scientific innovations without supporting the PRC’s malign activities.

The Biden administration’s export controls, while imposed relatively recently, have also had direct consequences. SMIC, China’s largest semiconductor manufacturer, saw revenues fall as much as 18 percent following the October 2022 export controls. The emerging regional order in West Asia will have wide-ranging implications for global security. The Biden administration has begun re-engaging Iran on the nuclear dossier, an initiative staunchly opposed by Israel, while also taking a harder line on Saudi Arabia’s intervention in Yemen. Meanwhile, key regional actors, including Qatar, Iraq, and Oman, have engaged in backchannel efforts to bring Iran and Saudi Arabia to the negotiating table.

The Biden administration’s delicate, much criticized line recognizes the lack of a coherent alternative strategy. No issue is thornier in U.S.-China relations than Taiwan, which Beijing believes it has a right to rule and the United States has long provided defensive aid to. This year, the presence of U.S. troops in small numbers on the island involved in training Taiwanese forces was highlighted by both Western and Chinese media. But as Jack Detsch and Zinya Salfiti of Foreign Policy note, U.S. troops have been present for decades, preparing the Taiwanese military to help fight off, or at least delay, a Chinese invasion through a “porcupine” strategy.

China’s real estate sector, long an engine of growth, may be in the midst of a collapse as overleveraged firms struggle to meet debt repayments. Municipal governments are reported to face trillions of dollars of debt, greatly contributing to China’s record 280 percent debt-to-GDP ratio. Consumer confidence in China is also reportedly grim, and actions from the authorities are doing little to bolster confidence. When China’s urban youth unemployment rate hit a record 21.3 percent in June, authorities simply stopped releasing youth unemployment data altogether. That makes deterring China a major priority for the United States if it wants to keep the global order intact, especially against an assertive leader like Chinese President Xi Jinping who wants to shore up his political legacy. “While Xi is under pressure to act, the external risks are magnified because so far, he has suffered few consequences from taking actions on issues his predecessors would likely never have gambled on,” they write.

With these new trends in the Middle East, it is timely to investigate the security implications of the Biden administration’s Middle East policy. In this respect, we will discuss the Biden team’s new approach vis-à-vis Iran, Yemen, Saudi Arabia, and Israel. The panel will also discuss the role of other major powers, including China and Russia in shaping this new security environment in the region, and how the Biden administration will respond to these powers’ increasing regional presence. The Biden administration’s technology policy will likely be more multilateral and more closely tied to domestic economic initiatives, but still oriented toward competition with China. Beijing will not abandon its efforts to increase indigenous innovation capabilities and reduce U.S. leverage. Given that the U.S. and Chinese economies remain deeply interconnected, U.S. sanctions and Chinese retaliations will damage both economies.