U.S.-China Economic Relations Should Be Fair, Stable, and Open
Economic relations between China and the U.S. cannot feasibly improve until the U.S. changes the course of many of the antagonistic policies against China that it is pursuing.
Chinese Minister of Commerce Wang Wentao held talks with visiting U.S. Commerce Secretary Gina Raimondo on Monday in Beijing. The two parties “engaged in rational, candid, and constructive communication regarding the implementation of the consensus reached by the two heads of state at their meeting in Bali, Indonesia, focusing on China-U.S. economic and trade relations, as well as economic and trade issues of common concern.”
It goes without saying that despite U.S. policies, the U.S.-China economic relationship should, in theory, be a lynchpin of global economic stability, confidence, and certainty. Both countries constitute the world’s two largest economies and share of GDP, and any disruption or challenges between them has a consequential and unavoidable impact on other countries. The global economy is interdependent. However, the U.S. has undertaken an approach toward China in “zero-sum” terms, outlining how economic relations between the two countries are not mutually beneficial but rather a question of “who wins or loses” and depicting how China’s economic development comes at an absolute loss to American dominance, jobs, and security.
In doing so, the U.S. has scarcely shown any commitment towards a stable relationship with China. Rather, Washington has pursued an increasingly aggressive approach to try and block China’s development in the name of its own hegemony. This has involved widening export controls, including the blacklisting of thousands of companies, many of which are involved in China’s semiconductor industry, as well as recently announced foreign investment controls. The Biden Presidency describes these rules as a “small yard, high fence,” yet has otherwise been happy to undermine confidence in China and its economy in any way possible.
This has also involved maintaining large-scale tariffs on Chinese goods and opportunistically blacklisting certain Chinese products under the pretense of “human rights abuses” or “national security.” In addition, it has also co-opted third-party countries, pressuring them to follow its policies and block China’s economic integration with others, such as getting Japan or the Netherlands to align with its unilateral export controls or having Chinese investments in other countries blocked or vetoed. The U.S. claims it wants ties with China but simultaneously seeks to undermine its development.
Therefore, the U.S. approaches dialogue concerning its economic relations with a mindset that assumes economic ties between any two countries should not be equal but rather one-sided, balanced in favor of America’s benefit, and hegemonic in nature. The U.S. has frequently complained about what it describes as China’s “unfair economic practices” despite trying to cripple China’s high-tech industries, among numerous other factors, and, of course, assumes it has a right to a greater market share in every other domain in China. Dialogue is therefore conducted rarely with the spirit of partnership or true engagement but the expectation that China subscribes to one-sided demands.
Despite this, China still recognizes the importance of economic relations with the United States, albeit on fair terms. As Wang Wentao stated from the meeting, “China is willing to work together with the United States to create a favorable policy environment for cooperation between the business sectors of both countries and to promote bilateral trade and investment while upholding principles of mutual respect, peaceful coexistence, and win-win cooperation.” In other words, economic relations between China and the U.S. cannot feasibly improve until the U.S. changes the course of many of the antagonistic policies against China that it is pursuing. A large portion of these is completely antithetical to trade, investment, mutual respect, and peaceful coexistence.
While American foreign policy seeks to actively roll back globalization in the pursuit of hegemonic and militaristic ends, it must understand that China is too important of a partner to disengage from, and the raft of measures pursued by the Biden administration is counterproductive to the growth and prosperity of the U.S. As just one example, China is the largest semiconductor market in the entire world, which constitutes over $200 billion in annual revenue, yet the Biden administration seems content on severing American companies’ links to it. Thus, although the two sides agreed to meet to establish “regular communication,” what does that truly mean if the policies do not change?
America’s policies towards China’s economy must stop spooking markets, stop promoting division and confrontation, and start reestablishing confidence. The Biden administration has always wanted to talk for the sake of talking, in which case, actions are desperately needed to redress confidence in the two countries’ ties.