In the contest between China and the US in the coming four years, China is going to play downcards and the US upcards. In the 14th Five-Year Plan Outline unveiled by the Chinese Communist Party (CCP) recently, almost not a word is mentioned of Sino-US relations. But a lot more emphasis is placed on increasing domestic demand and enhancing China’s competitiveness. This, however, does not mean the CCP does not care about using strategy and tactics towards US economy. The thing is its approach involves the elements of both open contest and covert battle, of which the strategy and tactics are kept under wraps. With his upcards, Joe Biden can hardly see through the hidden game of Xi Jinping.

Biden’s slogan is “America is back”. He wants to deal with the CCP’s barbaric rise through existing international organizations and by restoring America’s relations with its allies. One thing for sure is that Biden’s government will not get into a state of cold war with China. Last Thursday, Katherine Tai, Biden’s pick for US trade representative, said she backed tariffs as a “legitimate tool” to counter China’s state-driven economic model and vowed to hold Beijing to its prior commitments. She also promised a sweeping new approach to US trade, which will involve restoring cooperation among international trade organizations, and doing a better job in dealing with climate change and the global recession triggered by the pandemic.

Tai was part of the economic and trade team under Barack Obama’s administration. How did she try to avoid failures of America’s economic policy towards China under Obama? America’s loss in the contest with China under Obama was attributable to the fact that Washington always treated China’s economic bullying and breach of contracts in good faith, engaged in marathon accusations and investigations in accordance with international regulations. However, such an approach is hardly effective, and could only cause sheer trade unfairness to the US. Donald Trump used more unilateral means against the CCP as he was forced to amend an ineffective policy adopted by his predecessor, and because he had no choice but to escalate the economic contest.

There have long been consensuses on the issues raised by Tai at the Senate confirmation hearing. She had said nothing new. First, she pointed out that China takes advantage of certain gray areas, such as certain advantages it enjoys, to force Europe and the US to transfer core technologies to it and also plagiarize and steal advanced technologies from Europe and the US. Second, the way China’s “race to the bottom” in terms of its poor human rights protection and its low threshold for environmental protection, has not only caused serious damage to the rights and interests of Chinese workers, but also caused American workers to lose their jobs. Third, US’s presumption that “the more we trade, the freer trade becomes and the more peace and prosperity there will be” is wrong. Tai can see that such a premise is counterproductive.

What has gone wrong? Tai called China “an extremely formidable competitor whose government is able to conduct the economy almost like a conductor directing an orchestra”. Yet she did not say that it is the CCP that “conducts the economy”, nor did she describe the CCP economy as party-based capitalism. Her narrative is in line with that of Biden, which is about softening the struggle and avoiding upsetting the rival. She is completely unaware that the CCP economy is not only politics-driven but also has elements of militarism due to the high degree of integration between civilian and military elements. In its political suppression of the CCP, Trump’s administration separated the CCP from Chinese people. But Biden’s government does not up America’s hostility towards the CCP. Tai’s proposal is for the US to make more strategic investments, reinforce the flexibly of the supply chain and strengthen enforcement of trade laws as ways to tackle Beijing’s strategy and ambitions.

The first card played by the US involves demanding China to live up to its promise made in the phase one Sino-US trade agreement signed in January 2020. But apart from using an existing law enforcement tool (Section 301), she did not specify how to achieve this objective.

For the second card, Tai pointed out that China exports products made by forced labor in Xinjiang and that its “use of forced labor is probably the crudest example of the race to the bottom” in global trade. Nevertheless, she did not raise the issue to the level of human rights violations or criticize the illegality and injustice of the Chinese economy.

For the third card, the US wants to build a more robust and flexible supply chain and also invest in manpower and infrastructure to improve the country’s competitiveness. But the issues concerning masks and medical supplies during the coronavirus pandemic has plunged the US into trouble.

Routinely Tai is urging China to carry out structural reforms. Such a call is similar to the calls made by the US together with its traditional allies as they try to deal with the barbaric expansion and encroachment of the Chinese economy. It is merely political correctness, but there is a lack of strong countermeasures. When Trump was in office, America’s relations with China escalated to the level of political confrontation. Downgrading it to economic contest is tantamount to fooling oneself and others.

Canada has joined hands with the US judiciary to detain Huawei’s Meng Wanzhou, and the CCP retaliated by imposing severe jail terms on Canadian citizens. It has also got back at Australia by banning its red wines while knocking down EU countries one after another. Germany is deeply dependent on the Chinese market and so it can hardly join the US to impose effective sanctions on the CCP. Recently, the CCP decided to ban the import of Taiwanese pineapples as a form of deterrence. Failing on the economic united front, the CCP has resorted to individual sanctions to strike its rivals, creating a chilling effect. How is the US going to bring justice together with its allies? If it merely pays lip service and uses strategic patience as an excuse, it would be failing to fulfill its responsibility as a superpower. Its allies may then want to keep a distance from it, and the Biden government will become yet another US government that fails in its policy towards China.

(Wu Zuolai, independent scholar)

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