After years of bitter exchanges between Washington and Beijing – sparked by a trade and tech war during the Trump administration – Joe Biden’s incoming presidency offers both governments a chance to find some middle ground.
Some commentators have taken the point rather more literally, however, following Washington’s confirmation on Wednesday that Secretary of State Antony Blinken and National Security Advisor Jake Sullivan will meet China’s top diplomats Yang Jiechi and Wang Yi in Alaska’s biggest city Anchorage on March 18.
The location is significant, explains Liu Weidong, an international relations expert from the Chinese Academy of Social Sciences, because Alaska is about the same distance between the “contiguous US” and China (he means Alaska is not part of the US mainland). He explained to the South China Morning Post this avoids “the impression that one side is making excessive concessions to make this happen”.
Diplomatic contortions aside, a senior meeting between the two sides is overdue after the Biden administration gave a foretaste of its new approach to its relationship with Beijing last week. What did it signal?
How is Biden rebooting his China strategy?
Blinken gave an overview of the new American foreign policy priorities on March 3 – which accompanied the publication of an interim plan on the same day that will be formalised in a new National Security Strategy later this year.
The review lists eight core areas that shape America’s vision of its role in the wider world, including challenges such as bringing an end to the coronavirus pandemic and countering climate change.
The eighth item on Blinken’s list highlighted China – the only nation to get a direct mention as a priority – as “the biggest geopolitical test” of the century.
“Our relationship with China will be competitive when it should be, collaborative when it can be, and adversarial when it must be,” he confirmed, adding that Washington’s goal is to engage the Chinese from a “position of strength”.
Any sign of a break with the policies of the Trump administration?
Early changes in approach are coming more in terms of tactics and tone than far-reaching goals. Part of the rethink has been communicated for a while, especially the focus on building a coalition with other likeminded nations. This will allow Washington to respond to Beijing more effectively, Blinken believes. “Real strength is not bluster or bullying”, he added, in a rebuke of the Trump administration.
Yet there was confirmation that some of the trends that solidified in the Trump era will be cemented under Biden’s watch. Specifically, the guiding principle of engaging economically with China as a means of influencing its behaviour will remain out of favour. Trade and investment with the Chinese has long been seen as a way of bringing them into the global economy in a manner that advances the American agenda. But Blinken acknowledges that the results haven’t always benefited Americans as a whole.
Now there’s a change of emphasis to fighting “for every American job”, alongside a promise “to use every tool to stop countries from stealing our intellectual property or manipulating their currencies to get an unfair advantage”.
There is no need for speculation about whom he might be talking about.
Is Blinken setting the mood on China policy or responding to it?
Blinken was franker in recognising China as the “only competitor potentially capable of combining its economic, diplomatic, military, and technological power to mount a sustained challenge to a stable and open international system”.
What’s also clear is that Joe Biden’s team is resetting its approach at a time when sentiment towards China has hardened across the United States.
The mood is apparent in the bipartisan consensus in Washington that a tougher line is required, with no real counterweight to the view that the relationship with China is inevitably getting more adversarial. Public sentiment towards China has darkened as well. Some of that is in response to Trump’s incendiary style but the trauma of the Covid-19 pandemic has coloured perceptions more broadly, with surveys from the Pew Research Center last October showing that just over two-thirds of American adults already felt “cold” towards China, a record increase in negative sentiment.
This looks to be a global trend: Australia, the UK, Germany, the Netherlands, Sweden, South Korea, Spain and Canada all reported their most negative reactions to China since polling began on the topic more than a decade ago.
Does China expect a major change in Sino-US relations?
President Biden’s approach isn’t going to be dictated by the results of opinion surveys. But he can’t ignore the polling completely and even newer survey results released by Pew this month confirm the shift in sentiment. The latest findings had almost nine out of 10 Americans classing China as hostile or a danger to US interests.
Mentions of the opinion polls have elicited exasperated responses from China’s foreign ministry, with spokesperson Wang Wenbing claiming that the Trump administration “wilfully provoked confrontation and division, spread political viruses, and seriously poisoned the public opinion of both countries”.
Wang Yi, the foreign minister, adopted a more measured tone at the annual media session held at the National Peoples’ Congress (NPC) last Sunday, calling for a more collaborative spirit between the two governments. Yet, as ever, there were warnings about areas where compromise is impossible, like Hong Kong, Xinjiang and Taiwan, where Wang insisted that Biden show a “clear departure from the previous administration’s actions of crossing the line and playing with fire”.
Media commentary on the likely direction of American policy has been cautious too.
Blinken’s predecessor Mike Pompeo had actually met Yang (the director of the Chinese Communist Party’s Office of Foreign Affairs Commission) last summer in tropical Hawaii which, like Alaska, is situated close to the midpoint between Beijing and Washington. But the senior-level meeting achieved nothing apart from both sides “fully expounding their respective stances”, United Daily News noted. Sino-US relations plunged to a new nadir less than a month later following Washington’s decision to shut down the Chinese consulate in Houston.
The meeting in Alaska next week offers an occasion for the two sides to symbolically break the ice, although Blinken stressed this wouldn’t be a “strategic dialogue”, and it would only take place after his visits to Japan and South Korea, whom he called “two of our most important allies”.
Liu Qing, vice-president of the National Institute of Development and Strategy at Renmin University, recently gave media outlet Jiemian his predictions as to how Washington might change how it prioritises its objectives. In particular he is anticipating a shift away from Trump’s emphasis on brokering a massive trade deal towards a confrontation more likely to centre on technology. The positive in this scenario is that Biden may roll back some of the tariffs imposed on Chinese goods during the Trump period, Liu says, although he expects restrictions on exports of American technology to stay in place. “The Biden administration will be wary that China is going to surpass the United States in high technology and it will also formulate rules and unite allies to manage the global use of high technology such as IC [chips], 5G, and AI [artificial intelligence]. It will enhance the controllability of the US technology industry chain,” he posited.
Where will the technology tensions be greatest?
One of the sectors getting the most coverage in China is semiconductors, where restrictions on exports of key American components have crimped the ambitions of domestic champions such as Huawei and SMIC (see page 10).
The constraints have accelerated efforts to build a homegrown manufacturing base that is non-reliant on overseas vendors. Chip-making was cited in Li Keqiang’s address to the National Peoples’ Congress last Friday, when China’s premier announced a new focus on “frontier technologies” including artificial intelligence, quantum computing, genetic and biotech research, neuroscience and aerospace as the highest-priority areas.
Li said there would be new policies to encourage a flow of new capital into each of these sectors, with a vision for the country to have “significant breakthroughs on core technologies” by 2035.
Another of the biggest battlegrounds is AI, where the debate is deepening about which of the two superpowers is best positioned for leadership.
The argument is often made that the Americans are ahead in the raw science of AI, backed by a stronger base in scientific research, while the Chinese have the edge in deploying it, drawing on an unrivalled depth of data that allows for crucial improvements in how the technology is applied in real world applications.
In a bid to narrow the gap on American scientific capabilities, Premier Li announced that the government would boost funding for research and development, with a particular emphasis on basic research, where investment will increase by more than 10% a year.
Basic research provides the conceptual underpinnings for genuine breakthroughs in technology. But it is an area where the Americans have outspent the Chinese (about Rmb150 billion or $23 billion was invested last year in this field in China, according to government figures, substantially less than the $97 billion in American spending in 2018, as outlined by the National Science Foundation).
Strategists are nevertheless quick to seize on indicators that show the balance of power is shifting, including the most recent iteration of a study from Stanford University that measures progress in AI on a global basis. It reported that the Chinese have overtaken the US in numbers of academic journal citations for AI, while more AI patents are now being filed in China than in any other jurisdiction.
Whether the increase in activity is enough to extinguish the American lead is debatable, according to an article in Harvard Business Review last month by Li Daitian, Tony Tong and Xiao Yangao. Although the number of scientific publications and patents is rising rapidly in China, “truly original ideas and breakthrough technologies are lacking,” the authors claimed.
Another weakness is that many patents are filed by universities or research institutes with limited contact with companies. Firms that do fund technology transfer in China also tend to prefer the types of research promising faster commercial returns rather than the fundamental science that brings seminal breakthroughs.
Nonetheless, the authors claim that latecomers still have a better chance of catching up in AI than many other sectors because so much of the science becomes public knowledge. China also enjoys an abundance in data and engineering skills, they say, which gives it other advantages in establishing itself as the world superpower in AI. “Put simply, data and talent trump patents in AI research,” the report noted.
How is Washington preparing for China’s challenge?
The thinking in Washington is that the US is still ahead of China in AI but that the gap is shrinking rapidly.
That was the message from a major review by the National Security Commission on Artificial Intelligence, which counted some of the country’s top corporate bosses in its executive board. Led by former Google chief Eric Schmidt, the commission made its final recommendations after a two-year study last week, calling for a doubling of government funding in basic research to $32 billion a year by 2026 to fuel a new wave of innovation across the country.
“We must win the AI competition that is intensifying strategic competition with China,” Schmidt urged in a statement referencing Beijing’s own drive to take the top spot within a decade. “China’s plans, resources, and progress should concern all Americans.”
The same report called for the US to maintain a ‘two-generation’ advantage over China in semiconductor technology and warned about the dangers of becoming reliant on others for the manufacturing of computer chips, particularly on Taiwan’s TSMC.
Biden has already committed to $37 billion in funding to bring more chip manufacturing capacity back onto American soil and the same presidential order last month included stipulations for a 100-day review of the supply chains for rare earth minerals, pharmaceuticals and batteries for electric vehicles.
Many of the technological breakthroughs in recent American history emerged from research initiatives funded by the state. The building blocks of the internet were created from projects sponsored by government agencies, for example. Google benefited from state subsidies in its early work on algorithms and many of the features on smartphones trace their origins back to research funded by government money, including GPS tracking and touchscreen displays.
What’s revealing about the direction of travel is how Biden’s new strategy is being more openly articulated and how it could trigger a new era of state-backed investment in America after a long period in which the official line was to leave most of the work to market forces. The new horizons are also an example of how foreign policy and next-generation science are now inextricably intertwined as the two nations hunt for home advantage in technology terms.
And in this respect, at least, Washington seems to be heading in more of a Chinese direction in adopting the kind of policies for which Beijing has often been castigated. ‘If you can’t beat them, join them’, seems to be the message coming from the Biden government as it edges towards aspects of China’s model of state capitalism in the race for AI supremacy.
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