Reports indicate that last week’s phone call between President Joe Biden and Chinese President Xi Jinping was contentious.
Washington has been debating for a few years about whether, or how, to decouple from Beijing. But Biden appears undecided on what exactly his China policy will be. Meanwhile, Xi appears to have made up his mind about the degree of distance he wants between the two great powers, and he’s making it happen. It’s past time for U.S. policymakers to get their act together.
Five months into the Biden administration, I wrote in this space about the president’s indecisiveness on China and, consequently, Beijing’s delay in a counterpunch. An update of that analysis shows that Beijing’s wait is over.
The Chinese Communist Party’s mouthpiece, modeled after its Soviet prototype, is typically silent on important subjects if leaders in Beijing are unsure about how to approach them. The below chart shows the coverage of U.S.-China relations in the CCP’s gazette, the People’s Daily, as the last four U.S. presidents took office. After an unusual silence during Biden’s first six months, Beijing appears to have decided what it wants.
Weifeng Zhong graph
The People’s Daily has intensified coverage in the last month not because there have been more developments in U.S.-China relations but because Beijing has a clearer game plan for splitting from the bilateral relationship than does the Biden administration. The gazette ran a 16-day series of articles hitting back at the West on the origin of COVID-19 and touting China as a better global partner than the United States, including in dealing with the virus and donating vaccines overseas. While this rhetoric is by no means new, its heightened profile makes a clean break from Beijing’s “wait and see” mode in the preceding months.
More important, Beijing’s new, far-reaching measures are already pulling its economic interests away from America. China’s recent crackdown on its Big Tech companies, for example, is likely the beginning of Beijing’s severing of ties between its corporate darlings and Wall Street.
For years, Chinese firms on U.S. stock exchanges have refused to comply with the audit review process required by U.S. law because China has its own law that prevents them from doing so. Due to the economic lure of these companies, Wall Street turned a blind eye until the Holding Foreign Companies Accountable Act, which became law last year, threatened to delist those that still fail to comply in three years. But now that Beijing is making new rules to ban its companies from going public in America and creating a new stock exchange at home to fill the void, the U.S.-China financial distancing may kick in sooner than the audit tension suggests.
Even foreign companies doing business with China may be forced by Beijing to pick a side. In June, China passed its anti-foreign-sanctions law, threatening to hit back at companies that comply with U.S. and its allies’ sanctions against China on human rights and other contentious issues. Beijing also has the option to extend the measure from the mainland to Hong Kong. As such, multinational corporations may need to choose between upholding Western sanctions or keeping their access to lucrative Chinese markets.
During her recent Asia trip, Vice President Kamala Harris said the U.S. wouldn’t force countries in the region to pick sides between Washington and Beijing. Perhaps, but thanks to Xi’s moves, those countries may nevertheless need to choose. The perceived weakening of U.S. overseas commitments, fueled by the chaotic pullout from Afghanistan, hasn’t helped, either.
The challenge facing U.S. policymakers is to articulate what their China strategy is. How does an open society protect its liberal-democratic institutions as it coexists with a closed one that’s just as powerful? Upholding the integrity of our stock markets and sanctions regime is only the first step. Our leaders have a responsibility to lay the plan out for the public.
Weifeng Zhong is a senior research fellow with the Mercatus Center at George Mason University and a core developer of the open-sourced Policy Change Index project, which uses machine-learning algorithms to predict authoritarian regimes’ major policy moves by “reading” their propaganda.
