China, Again and Again and Again



William Reinsch | Center for Strategic and International Studies

Even though the Biden administration’s China policy appears to be under perpetual review, there have been some developments worth mentioning in the past two weeks that pose new challenges and provide some insight on where the review might be heading.

The first is an external development: China’s application to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). This is the latest step in what has been a significant evolution in Chinese thinking. They began by regarding the original Trans-Pacific Partnership (TPP) as an American plot aimed at them. Their attitude began to change as the likelihood of an agreement being reached increased and they realized how it would affect them. In short, China figured out that when it came to tariff-free zones, it was better to be inside the tent than outside if it wanted to sell to the other countries inside. Otherwise, its companies would vote with their feet and move inside the tent on their own.

While that may be the economic rationale for joining, politics may be more important. From that perspective it was a brilliant move, at least for the short term, because it allows China to portray itself as pro-trade, pro-multilateral agreement, and pro-trade law while at the same time reminding everybody that the United States has no Asian economic policy. In short, China is demonstrating leadership, and we are . . . just watching.

In the long run, however, this could play out differently. Nobody who has followed CPTPP thinks China would qualify to join without major changes in its economic system that it has long refused to make. So, the negotiations will go on—and they will take a long time. China has three choices: make the changes it will be asked to make, promise to make them and then ignore its promises, or pressure the other CPTPP members into lowering their standards. Right now, I’m betting on door number three, but the outcome could be more complicated than people think. By applying to join, China is handing leverage to the other members, some of whom are already victims of Chinese bullying. So, for example, will Canada veto Chinese membership because two of its citizens remain in Chinese prisons without justification, or will it make a deal to support membership in return for their release? You can ask the same question about Australia.

That means if the United States thinks China’s application is dead on arrival, it could be in for a rude surprise. Unfortunately, the one thing that is clear is that the United States is once again reacting rather than leading and therefore letting China determine the course of events in Asia.

In contrast, there is some thought that rumors the administration may start a new Section 301 investigation of Chinese subsidies indicate a policy is beginning to appear, but I am not persuaded. It is more likely that this is simply a clever way of kicking the can and postponing any action. Section 301 investigations can take up to a year, which means the administration is just buying time. By holding out hope that the investigation could lead to either more tariffs or fewer tariffs, the administration manages to keep both sides quiet without actually doing anything. And, since anything the president does will inevitably be criticized by Republican China hawks as dangerous and inadequate, this gives administration officials another year to dodge that bullet. Of course, they may not get away with it, since the expiration of Trump’s phase one agreement next February will likely force them to come up with something before then, but it still buys them several more months.

More indicative of the trend of the relationship was the call between the two presidents that the United States initiated. One report indicated that Biden proposed a summit between the two leaders, and Xi did not respond. Other reports denied that, but no agreement on a summit was announced. There are multiple explanations for that, the simplest one being Covid-related. Xi has not left China since the pandemic began, and it is rumored that he will join the G20 meeting next month remotely. However, it should also be viewed in the context of recent Chinese statements objecting strenuously to U.S. actions related to China’s human rights violations and the message conveyed to former secretary of state Kerry when he visited China to discuss climate that all these issues were linked, and he should not expect China to cooperate on one while the United States was not cooperating on the others.

This is a typical Chinese approach when the United States talks about human rights. For us it is a moral principle; for them it is an attack on the Communist Party’s control of the country. Past U.S. presidents have learned that if they persist, they will accomplish nothing with China, and they usually stop talking about it. It remains to be seen whether Biden will follow the same path, which is not noble but pragmatic.

Either way, the call is a reminder that the U.S.-China relationship is not in good shape and is getting worse. The other two events are reminders that the United States still does not have a China policy and does not seem in a hurry to develop one.

William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C. 

To read the full commentary from the Center for Strategic and International Studies, please click here.