How Should President-Elect Joe Biden Address the US-China Competition?

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How Should President-Elect Joe Biden Address the US-China Competition?

The rivalry is here to stay, but there are 3 things the Biden administration can do to stabilize the critical relationship.

How Should President-Elect Joe Biden Address the US-China Competition?

Then-Vice Presidents Joe Biden and Xi Jinping share a toast during Biden’s 2011 visit to China.

Credit: Official White House Photo by David Lienemann

This year’s U.S. presidential election were especially dramatic. By election day on November 3, the early votes cast nationwide had reached a record-setting 99 million, around 78 percent of the total turnout from the 2016 election. Buoyed by voters’ enthusiasm amid the pandemic, Democratic nominee Joe Biden won the presidency after a vote count filled with twists and turns. Biden emerged with a substantial lead in both popular and electoral votes over President Donald Trump.

Outside observers found themselves trying to decipher the swing state puzzle, to deduce every possibility of voter turnout, to gauge the potential for domestic turbulence following the result, and, most of all, to predict what it will all mean for U.S. foreign policy over the next four years. The winner of the election will guide the country’s future relationship with allies and competitors toward a new direction.

The U.S.-China relationship is a case in point. One of the most prominent bilateral relationships worldwide has undertaken a drastic fall since 2018 and will likely continue on its downward slog in the short term, at least, given the prevalent zero-sum perception within Washington. President-elect Biden now faces a nadir between the two colossi unprecedented since the normalization of relations in 1979. Figuring out how his administration should and will approach China is therefore on the top of the list.

One thing is certain: As a veteran politician for nearly half a decade, Biden, unlike Trump, has a predictable, standardized, and consistent pattern in his dealings with foreign affairs. In addition to following the principles of interaction among states, he is capable of reacting to cues and external signals and understanding the various consequences of each decision. After eight years as Barack Obama’s vice president, Biden may carry on the legacy of the Obama administration, including repairing relations with traditional U.S. allies, emphasizing multilateral diplomacy, and restoring U.S. leadership in multilateral cooperation mechanisms. Following this logic, Biden may soften the rhetoric with regard to China, so both Beijing and Washington could be extended an opportunity to catch a breath and prevent a continued downward spiral in the relationship.

U.S. policymakers under the Biden administration must reflect on their perceptions about China and adopt a “more careful and considered approach,” which is entirely different from Trump’s “maximum pressure” inclination. Centered around such a step-by-step principal, we propose three suggestions that can be used as a thermometer to measure the postures from each side, and signal an alarm before either one takes any aggressive move.

First, we expect the United States to reestablish a rational mode of dialogue between the two countries. The standstill of multiple mechanisms for exchange, even including the U.S.-China Fulbright program, is a very dangerous sign that demands an overhaul under Biden’s leadership. Fortunately, the military sectors still maintain close contact, and have become a vital fail-safe for bilateral relations after the unilateral cut-off in political and cultural interactions. But we cannot always survive so close to the red lines. A reboot of conversation, especially Track I and Track II dialogues, is necessary to preclude any miscalculation and confrontation, even nonviolent ones, by providing buffer zones for Washington and Beijing to reach a middle ground.

As the first step, all tit-for-tat reckless remarks should now stop and be replaced with more rational and influential voices, both in public and in hearings or any other governmental discussions. Such conciliatory rhetoric, on one hand, can mitigate the rising hyper-nationalism among the public, whose grievances and fervor might tilt policymaking beyond control. On the other hand, it can facilitate the new team, both the government and Congress, to progress a nonpartisan re-assessment of the regional influence of the United States, regional threat perception from China, and future strategic balance.

Second, Washington and Beijing should fortify and normalize the crisis management mechanism to avoid misfiring on hot issues. Over the past few years, the two governments have adopted a series of measures to enhance mutual trust on both strategic and tactical levels, highlighting two mechanisms in 2014: the “mutual reporting and trust mechanism on major military operations” and the “code of safe conduct on naval and air military encounters.” Then, amid tensions over Korean denuclearization and territorial controversies in the South China Sea, there came an agreement signed in 2017 by the U.S. and Chinese joint chiefs of staff, a step toward crisis mitigation and increased communication.

Given the growing frequency of military drills amid the deteriorating political relationship, it is getting increasingly difficult to manage differences over issues in such sensitive areas. Recently, in particular, both sides have been stepping up military activities around East Asia, such as U.S.-South Korea annual joint military exercises. Certain Chinese think tank have even hyped the possibility of the People’s Liberation Army conducting live-fire exercises near the U.S. island of Guam. More than one fail-safe, therefore, might help dodge the bullet of any accidental event possibly escalating into irreparable military conflict. As Jake Sullivan, a strong candidate for Biden’s national security advisor, stressed, the foreign policy establishment should “elevate diplomacy and the civilian tools of power over the use and deployment of military force.”

Third, one closely related to the two suggestions above, the administration needs to contemplate the long-term U.S.-China relationship and how they can coexist competitively, as the daunting challenge is still ahead. The key is to understand the other’s contextual demands. As a result of the trade dispute, the two countries’ comprehensive cooperation in economy, trade, science and technology, and other fields cannot return to the past. “Decoupling” to some extent will become a reality.

Surprisingly, however, bilateral financial relations appear to be otherwise stable due to their resilience. From 744 billion RMB in 2013 to 4.2 trillion RMB in the first quarter of 2020, foreign ownership of Chinese stocks and bonds has undertaken a steady growth even while confronted with waves of disturbance from import and export restrictions, tariff barriers, and the wide-ranging pandemic. Indeed, statistics suggest that China continue to deepen its integration into global financial markets, with the active engagement of U.S.-affiliated financial institutions in this process. Companies like JP Morgan, Morgan Stanley, American Express, and Goldman Sachs have profited to varying degrees from the expansion of ownership stakes for joint ventures, the approval of operations as a wholly foreign-owned firm, and increasing Chinese market access. As one of the few positive trends, the financial relationship is expected to become a new “ballast” for the future development of U.S.-China relations. Maintaining financial stability as a basis and also a trigger to reconstruct cooperation and healthy competition should be prioritized in Biden’s political agenda.

It is undeniable that the United States and China would be stuck in a strategic competition for technological and economic supremacy; it is not all bad, though. Discarding the previous zero-sum perception toward China, Biden will likely draft more balanced policies to cope with divergences, enhance the country’s capacity for competition, and meanwhile, minimize the confrontation. The challenge, for sure, requires enormous patience and empathy, which happens to be a strength that Biden’s team has and that his predecessor did not. On this foundation, Washington and Beijing could then discuss more on how to establish an affinity between the two states where they can inject more cultural and societal factors into the mix, to reverse the negative dynamic propelled by adverse structural and attitudinal trends.

Junyang Hu is an assistant research fellow at Intellisia Institute and Dingding Chen is the President of Intellisia.