Talk Is Cheap

Chinese Minister of Commerce Wang Wentao held talks with visiting U.S. Commerce Secretary Gina Raimondo in Beijing on August 28. 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 [November 2022] 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 regardless of U.S. policies, the U.S.-China economic relationship should theoretically be a cornerstone of global economic stability, confidence and security. The two countries represent the world’s two largest economies in terms of GDP, and any disruption or challenge between them has a consequential and inevitable impact on other countries.

The world economy is interdependent. However, the U.S. has adopted a “zero-sum” approach to China, describing how the economic relationship between the two countries is not mutually beneficial, but rather a matter of “who wins or loses,” and 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 toward 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 included expanded 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 Joe Biden administration describes these rules as a “small yard, high fence,” but otherwise has been happy to undermine confidence in China and its economy in any way possible.

This has also included maintaining high tariffs on Chinese goods and opportunistically blacklisting certain Chinese products under the pretext of “human rights abuses” or “national security.”

It has also co-opted third countries by pressuring them into following its policies and blocking China’s economic integration with other countries, such as getting Japan and the Netherlands to tighten restrictions on their export of chip manufacturing technology to Chinese companies or blocking Chinese investments in other countries. The U.S. claims to want a relationship with China, but at the same time is trying to undermine the latter’s development.

The U.S. approaches any 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.

The U.S. has often complained about what it calls China’s “unfair economic practices,” even as it tries to cripple China’s hi-tech industries by adding more Chinese supercomputing entities to the U.S. “entity list,” an economic blacklist that bars U.S. firms from supplying key technologies to organizations believed to pose a significant threat to American interests, issuing further restriction on chipmaking equipment exports to curb China’s fast-emerging semiconductor companies, and so on.

Dialogue is therefore rarely conducted with the spirit of partnership or true engagement but more with the expectation that China will subscribe to one-sided demands.

Nevertheless, China still recognizes the importance of economic relations with the U.S., albeit on fair terms. As Wang stated at the meeting, “China is willing to work with the United States to create a favorable policy environment for cooperation between the two countries’ business sectors and promote bilateral trade and investment while adhering to the principles of mutual respect, peaceful coexistence and win-win cooperation.”

In other words, economic relations between China and the U.S. cannot realistically improve until the U.S. reverses the course of many of the antagonistic policies it is pursuing against China. Many of these policies are completely at odds with the principles of trade, investment, mutual respect and peaceful coexistence.

The U.S. on its part 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 world, accounting for over $200 billion in annual sales, yet the Biden administration seems content to sever American companies’ ties to the country.

In sum, although the two sides agreed to meet to establish “regular communication,” what does that truly mean if the policies do not change?  –The Daily Mail-Beijing Review news exchange item