China and the US reset relations in search of a ‘new approach’

Since June, China has received a near-constant flow of visits from senior U.S. officials. But this has not led to any major deals. There have been no fancy receptions, no military marches and no music performances of ancient instruments — like the one given to French President Emmanuel Macron. It wasn’t what was expected, either. There have been few tangible results. But the four emissaries from the White House, who visited China at a rate of almost two per month, do seem to have changed the mood in the geopolitical arena and to have reset relations, which were heading down a dangerous downward spiral.

If Secretary of State Antony Blinken managed in June to stabilize what he called “the most important [bilateral] relation that we have in the world,” during the first of these visits; Secretary of Commerce Gina Raimondo left China “with some optimism” on the last of the trips.

“This is the beginning of a new approach. There’s a strong appetite among U.S. business to make this work,” she told reporters last Wednesday in Shanghai after spending four days in two cities and completing half a dozen high-profile meetings. These meetings were not mere exchanges of points of view, according to her statement.

During Raimondo’s stay, both superpowers committed to keeping open lines of communication to reduce risks and increase mutual understanding. They agreed to a new working group on trade issues, the launch of an export control enforcement information exchange, to hold the 14th China-United States Tourism Leadership Summit in China and for experts from each country to meet to resolve trade secrets issues.

“An excellent start,” Raimondo told reporters at a hangar of Boeing Shanghai, a joint venture between Boeing, Shanghai Airport Authorities and China Eastern Airlines.

Raimondo was speaking to the press after visiting Disneyland Shanghai. At the conference, she spoke of the smiling children she saw there, the more than 1,000 Starbucks coffee shops that have opened in the city and of the young Chinese and Americans studying side by side at New York University’s campus in Shanghai.

“[I] saw the benefits of American students and Chinese students studying together,” she said. “This is all business that we should be encouraging.”

National security

As head of the Department of Commerce, Raimondo’s visit was one of the most highly anticipated by China. Beijing believes that the United States is leading a campaign of “encirclement and suppression” by imposing tariffs and restrictions on the export of critical technologies.

For example, just two weeks before Raimondo’s trip, U.S. President Joe Biden announced new restrictions to limit his country’s investments in strategic technological areas in China. During her stay, several Chinese leaders asked her to reduce these export controls. “Of course, I said no,” said Raimondo at her final press conference, adding that Washington is not seeking to “decouple” from China, but rather protecting its own interests. “We don’t negotiate on matters of national security,” she said.

For this reason, some analysts question whether any real progress has been made and are skeptical that relations have improved. “Preventing access to semiconductors and other advanced technologies that China needs so much is, by far, the most damaging measure that Washington has taken against its economic interests,” wrote the consulting firm Trivium China in a recent note. “The U.S.’ refusal to relax such measures means there is little room for bilateral relations to improve,” meaning “geopolitical risks will remain high for multinationals.”

Despite the fact that U.S. and Chinese military officials resumed contact at a conference in Fiji last week, which reduces the risk of clashes due to lack of communication, the Global Times newspaper — a strong voice of Beijing’s propaganda — was less optimistic about U.S.-China relations. An article following Raimondo’s visit was headlined: “U.S. not making substantive steps to improve ties with China despite détente atmosphere.”

Few in China had anticipated the “aggressiveness” of the Biden administration, says Mark Leonard, director of the European Institute of International Relations, in a recent article in Foreign Affairs. Some Chinese analysts today compare Biden’s actions to those of former president Donald Trump against Iran, according to Leonard. “A consensus has formed in Beijing that Washington’s goal is not to make China play by the rules; it is to stop China from growing.” The analysis concludes that this belief is wrong: the goal of Washington and the European Union is to ensure that their businesses do not share sensitive technologies with Beijing and to reduce dependence on imports in strategic sectors. This is what Brussels has called derisking.

Shortly after Blinken’s visit, a Chinese businessman and Communist Party member, concerned that business in China has not bounced back enough after the pandemic, called for less “derisking” and more “depoliticizing.” Speaking to EL PAÍS on the condition of anonymity, he made this observation while drinking French wine from a hotel overlooking Tiananmen Square in Beijing. A government official in one of China’s biggest cities also told EL PAÍS: “We need communication.”

Depoliticization

Chinese Premier Li Qiang spoke along the same lines last Tuesday during a meeting with Raimondo: “Politicizing and overstretching the concept of security on economic and trade issues not only seriously affects bilateral relations and mutual trust, but also harms the interests of enterprises and people in both countries,” he said, according to the Chinese news agency Xinhua. But Beijing, he said, was willing to “strengthen dialogue and cooperation” on trade and the economy.

After a bad summer for China — which saw negative prices, low consumption, a drop in exports and higher youth unemployment — the Chinese government has begun to take shock measures to try to reactivate the economy. One measure is the call for increased foreign investment. Beijing is urgently seeking to ease multinational companies’ apprehension about investing in China. But the mood is far from propitious.

Raimondo told reporters that many American businesses believe that the Asian giant has become “uninvestible.” Compounding old problems of accessing the Chinese market, intellectual property, trade secrets and an uneven playing field, there is now the added concern about China’s unpredictable regulatory environment, strengthened anti-espionage law, and recent raids and fines against U.S. companies.

The mechanisms agreed upon during Raimondo’s stay also seek to reassure worried businessmen in the U.S. The top official said she believed these measures would improve conditions. “We are not returning to the days when we had dialogue for dialogue’s sake,” she said during her press conference in the headquarters of Boeing Shanghai.

After the frenzy of visits from U.S. officials, it’s now time to wait for Biden and Chinese President Xi Jinping to meet again and propose new objectives. In their last meeting, last November during the G-20 summit in Bali (Indonesia), the two leaders managed to timidly thaw relations, and this has trickled down during the visits of senior U.S. officials. They have decided not to enter into a new Cold War.

The next G-20 summit, which starts in India on Saturday, is not, however, likely to bring the leaders of the world’s two biggest superpowers together. According to an exclusive from Reuters, Xi “probably” will not attend the meeting as it is being held in India, a country with which China has serious disputes. Beijing has not yet confirmed this decision. Various analysts point out that, at any rate, the next meeting between Biden and Xi could take place in November during the annual meeting of the Asia-Pacific Economic Cooperation Forum held in San Francisco.

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