GT Voice: Better to define China-US relationship as equal ‘stakeholders’
Published: Oct 10, 2021 03:17 PM
China US Photo: VCG

China US Photo: VCG

Following a 9-month-long review of Donald Trump's China policy centering on containing the world's second largest economy by launching a relentless trade war, the Biden administration plans to ratchet down the fight. Biden's trade representative Katherine Tai said last week in Washington that the US government's objective "is not to inflame trade tensions with China", and her office of USTR will "start a targeted tariff exclusion" process that will benefit the vast majority of manufacturers and consumers in the US. 

Chinese Vice Premier Liu He, a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-US comprehensive economic dialogue, held a video call with Tai on Saturday, during which the two agreed to keep communicating in an attitude of equality and mutual respect.

Trump's tariffs have failed completely, for the policy did not stifle China's foreign trade and economic growth, but on the contrary backfired on the US as the country's manufacturers faced disrupted global supply chains and acute shortage of materials like semiconductor chips. And, high tariffs have contributed to elevated consumer prices and inflation levels in the US, which are impacting stability of its own domestic financial system. As a result, the US stock market has seen uncommon levels of volatility lately.

It's quite strange for the Biden administration to take as long as three quarters of a year to appraise Trump's legacy, and shift back to a pragmatic approach by re-engaging with China. The reason is not difficult to fathom, as Biden's top advisors are divided on how to interact with China, and Trump, though tainted by the scandal of January-6 assault on the US Capitol orchestrated by the former president, still commands a large following among the Republican Party.

With Trump likely to feature prominently in the 2024 election cycle, with himself attempting at another run, and, Biden's $4.5 trillion infrastructure and social security spending agenda being watered down by his fellow Democrats in Congress, Biden needs help from China, as he cannot afford to continuously fight the trade war with the country's most valuable trading partner. 

Biden knows perfectly well that without a strong American economy in 2024, he will lose his bid for reelection. Trump's trade and technology war with China is a trap prepared for Biden - to worsen the US economy so that American voters casting "no" to Biden and his fellow Democrats in 2022 mid-term and 2024 presidential ballots.

Now, the US' inflation has been hovering at over five percent for four consecutive months, drawing disgruntled voices from ordinary Americans about higher prices across food, clothing, fuel and other essentials. A majority of American manufacturers have been demanding the White House to scrap Trump's high tariffs on Chinese products. Citing a serious semiconductor shortage, General Motors said last week its auto sales in the US fell a staggering 33 percent in the third quarter. 

The trade war did not crush China's foreign trade, nor dent the country's economic momentum. Major newspapers in the US reported that China has kept on exporting large quantities of goods to Americans as if the trade war had never happened. The events of the last year have shown how indispensable China is to global manufacturing chain. Despite Trump's tariffs, the coronavirus and other disruptions, few American companies are re-shoring operations with most finding the notion of abandoning China just unrealistic and unthinkable. 

But the US' foreign trade has worsened. Its Commerce Department reported last week that the US trade deficit widened to a record high in August as American consumers snapped up imported goods such as electronics, clothing and pharmaceutical products. The deficit expanded to $73.3 billion in August from $70.3 billion in July, making the US increasingly a debt-ridden country, and a superpower living on a credit card.

The Chinese government, starting from middle 2018 when Trump pre-emptively kicked off the tariffs fight, has said the trade war was always double-edged, creating a lose-lose for both sides. It seems the Biden administration has now recognized the great perils behind the tussle. 

Tai used the new term "durable coexistence" when discussing the goals of the Biden administration's trade policy toward China. When asked about economic "decoupling" from China, Tai said it was not realistic for the world's two largest economies to stop trading with each other. "I think that the issue perhaps is, what are the goals we're looking for is a kind of 'recoupling'", she said. 

China will be looking closely at how the Biden administration attempts to "recouple" the two giant economies. What Beijing has proposed to Washington is continuing to cooperate, and strive for win-win effect that helps both sides. Lately, leading Chinese officials have kindly suggested the White House throw away defining the relationship between the two heavyweights as "rivals" or "competitors". 

If the Biden administration does not like describing the ties as "partners", maybe "stakeholders" is an acceptable word, as the two nations ought to cooperate on facing a wide range of global challenges, like overcoming climate change, defeating the coronavirus, the emerging variants, and fostering a rapid recovery of global economy. 

In addition to economic issues, China-US ties has more dimensions, and it is up to the US government to tone down its geopolitical assault on China, and be more cautious not to interfere with China's internal affairs, such as refraining from instigating secessionists on Taiwan island which would help maintain peace in the Taiwan Strait.

In late September, the US Justice Department made a deal with Huawei Technologies CFO Meng Wanzhou, allowing her to return to China and reunite with her family, nearly three years of illegal detention in Canada at the behest of US authorities. The arrangement has removed one irritant in the estranged relationship between the two countries, and to some extent helped the US' global reputation. The move is a good start.

For a time, the arrival of China as a global economic power has caused "heartburn" among elites in Washington. But China has been a major power on this Earth for more than 5,000 consecutive years distilling the distinct Chinese culture -- love it or hate it, China is not backing down and will always be standing here. 

The author is an editor with the Global Times.