Biden’s China Policy Hinges on How Much Xi Is Willing to Give

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NEW YORK (Bloomberg Businessweek) — As Joe Biden settles into the White House, there’s been endless debate about what his China policy should, could, and will be. Yet it takes two superpowers to tango, so Xi Jinping’s approach to Biden will be every bit as critical as Biden’s to Xi—perhaps even more so. Any significant improvement in U.S.-China relations is impossible unless Xi is willing to dance.

Is he? We don’t know with any certainty. Xi doesn’t share very much about his thinking on U.S. policy. He rarely ever even mentions the U.S. by name. As with so much else in China, we’re stuck parsing Xi’s comments, dissecting his actions, and making some educated projections.
A picture does emerge from the murk. And unfortunately for global stability and prosperity, it doesn’t look good.
The reason can be found in how Xi has changed China and China’s role in the world. Donald Trump’s rejection of traditional U.S. foreign policy principle grabbed the headlines, but Xi’s break with Beijing’s past practices has been just as dramatic. And while Trump has been shown the door by American voters, Xi isn’t going anywhere, and neither is his agenda.
In that sense, Xi’s impact on the world may prove to be greater and more fundamental than Trump’s. And that may make China’s rapprochement with the U.S. difficult, if not downright impossible.

Sure, Beijing is sending some positive signals. At the virtual Davos summit on Jan. 25, in his first speech since Biden’s inauguration, Xi called on the world to abandon an “outdated Cold War mentality,” adding that “confrontation will lead us to a dead end.” And there are ways Biden and Xi can at least tamp down tensions. Xi will probably be open to cutting small deals to achieve specific ends. For instance, he could offer Biden a few concessions on trade or market access for U.S. companies to get remaining Trump tariffs on Chinese goods lifted. He may also find more avenues of engagement with Biden than Trump—for example, a shared concern about climate change.
Biden may be just the right person to smooth things over. For a top American politician, he has had an unusual amount of face time with Xi. The two held extensive conversations during an exchange of visits in 2011 and 2012, when both were vice presidents. (We can guess who did most of the talking.)
But Biden will discover the Xi Jinping of 2021 is not the Xi Jinping of a decade ago. Back then, China watchers anticipated Xi would continue the “reform and opening up” launched by Deng Xiaoping in the 1980s. Now we know otherwise. Xi has reshaped the Chinese government by centralizing more control in his own hands than any leader since Mao Zedong, and he apparently aims to go down in China’s lengthy history books as the rejuvenator of the country’s greatness.
That has forced a drastic change in Beijing’s approach to the world. Xi’s reform era predecessors were content to focus primarily on economic development. But Xi, to bolster his carefully crafted image at home, has pursued a much more aggressive policy abroad.
On just about every front, he has flexed China’s new muscle in a quest for greater influence over, and respect from, the rest of the world. With his pet diplomatic project, the infrastructure-building Belt and Road Initiative, he’s expanding China’s clout across Eurasia and beyond. He’s sought heftier sway within international institutions such as the World Health Organization. What Beijing considers core interests have been pursued with extra gusto, whether its contentious claim to almost all of the South China Sea or the sensitive issue of Taiwan.
Add in Xi’s controversial policies at home—the detention of untold numbers of minority Uighurs and the crackdown on Hong Kong’s pro-democracy movement—and he’s as responsible for the dangerous deterioration in U.S. relations as Trump. Improving those ties will require changes in Xi’s policies as well as Washington’s.
There is a chance that a less combative approach by Biden, even in tone, could soften Xi’s policies in turn. The Trump administration was, after all, bound to make Xi extra defensive by battering China with sanctions and threats and poking him in the sorest of spots, such as Taiwan. Since the Beijing government likes to characterize its U.S. policies as reciprocal, every step back by Biden would almost compel Xi to match it.
Members of the media and police officers surround a vehicle carrying John Clancey, solicitor at Ho Tse Wai & Partners, after he was arrested in Hong Kong on Jan. 6.
Yet on many fronts, Xi appears to be digging in. Only two weeks before Biden’s inauguration, police in Hong Kong rounded up dozens of democracy advocates under the city’s new national security law. Similarly, Xi shrugged off U.S. outrage over his abysmal treatment of China’s Uighurs, calling his policy “totally correct” in September. Just days after Biden’s inauguration, the Chinese military sent jets near Taiwan to intimidate the island’s democratic government, ignoring a protest from the new U.S. administration.
On economic matters as well, Xi appears implacable. The state’s heavy subsidization of Chinese high-tech industries has been a long-running lament of U.S. companies and a (supposed) target of Trump’s trade war, but Xi continues to spend. In August, he unveiled juicy tax breaks to semiconductor companies.
In a rare published essay last August, Yang Jiechi, a member of the Communist Party’s Politburo, placed full blame for rising tensions on “a handful of self-serving U.S. politicians” who make “false statements and groundless remarks” about China. “We urge them to redress mistakes and change course,” he concluded. In return, Yang offered nothing concrete. In fact, he took some major issues—including Hong Kong, Taiwan, and the Uighurs—off the negotiating table, stating they “concern China’s sovereignty and territorial integrity.”
Translation: Xi wants a “reset” of relations with the U.S. as long as Biden does all the resetting. That’s unrealistic. Democrats and Republicans now see China as a strategic adversary, so there is almost no chance Biden will turn back the clock and restore the old policy of engagement, especially if Xi refuses to compromise.
It appears Xi may have already arrived at that conclusion. The new urgency with which he is pressing for “self-sufficiency,” most of all in key technologies such as chips, indicates that he aims to limit China’s reliance on the U.S. and Biden’s influence over the Chinese economy. Xi’s new economic catchphrase, “dual circulation,” places more stress on domestic development and thus may shift the focus of policy inward, That, too, could heighten tensions with the U.S. if Xi substitutes imports with homegrown products or further discriminates against American companies.
The bottom line is that Xi has policy priorities, both at home and abroad, that he won’t change for Biden. In a December interview, Biden said he intends “to make it real clear to China, there are international rules that if you want to play by we’ll play with you. If you don’t, we’re not going to play.” Xi’s actions make it quite clear he has no intention of abiding by what Biden considers the “rules,” but instead intends on setting his own rules for how other countries should deal with his China.
Increasingly, the U.S.-China conflict is becoming a contest of the core national interests of two major powers with fundamentally different governing ideologies and views of the world. Optimally, for the good of all of us, Xi and Biden can reach some accommodation. But without some drastic shift in Xi’s policies, that’s hard to imagine. Although Xi may pretend to dance, he’ll likely leave Biden in the stag line.

Source: Bloomberg Business News

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