Gonzalo de Cadenas-Santiago
Director of Economics and Financial Research at MAPFRE Economics
The first 100 days of Biden’s presidency have provided an indication of the policy the US will adopt in relation to China going forward. This policy falls under the remit of President Biden’s Secretary of State, Antony Blinken, who said that the relationship between the US China will be “competitive when it should be, collaborative when it can be and adversarial when it must be.”
So far, Biden and his cabinet have opted to follow traditional protocols with meetings, country visits and a careful choice of words to indicate the way forward. One thing the administration has made known is the importance of its focus on forming coalitions with other countries. Allies such as the United Kingdom, the EU, Japan, India and Australia have supported sanctions on Chinese officials following developments in Hong Kong, along with sanctions on China over the country’s differing views on climate change and its intentions to annex Taiwan. This view suggests that Biden is determined to “pull every lever.”
Nonetheless, there have been attempts to establish positive relations with China. Antony Blinken and Yang Jiechi recently met in Alaska to discuss various issues, though subsequent headlines were dominated by the sharp remarks exchanged between the two countries. In fact, behind the scenes, hours of productive meetings took place. This was demonstrated when John Kerry traveled to Shanghai and declared during his visit that a joint agreement had been reached with China to combat climate change at all costs.
In essence, Biden’s government is working to increase its sway to compete with China rather than engaging in direct confrontations over the fundamental issues that divide the two countries. However, Biden’s priorities currently lie on the domestic front as his administration tackles the pandemic and economic recovery in the US. The main problem is that China wants to flex its muscles, and Biden’s decision to support Taiwan and to reaffirm mutual defense treaties with Japan and the Philippines could lead to a crisis between the US and China.
In general, Biden’s government has not set out to halt the anti-Chinese tendency that it inherited from the previous administration, marked by policies such as sanctions and the blacklisting of Chinese companies. Biden wants to move toward the trilogy of cooperation, competition and rivalry referenced by Blinken, but the President is also keen to avoid being seen as taking a soft approach. There is some discrepancy in the messages emerging from the White House. For example, a spokesperson for the US State Department indicated that the 2022 Beijing Winter Olympics could be boycotted, however this statement was later repudiated by Blinken.
Similar confusion in relation to policies between the US and China seems to be on the rise. While seeking to find an escape route to avoid any miscalculation, a war of words is currently being waged, which is not without its own risks.
The minefield of risks regarding Taiwan, the situation in Xinjiang and the arrest of Huawei executives in Canada represents fuel that, if ignited, could escalate into a crisis, and the private sector must be prepared to react to these developments.