U.S. China Policy Under Biden: New Ground or Back to the Past?

Biden won the election. So what will be the China policy of the new administration? Will Biden follow the lead of Trump and Pompeo? Will Biden return to the accommodating policy of the Obama/Bush era? Or will Biden dig new ground?

Biden and his team have carefully avoided tipping their hand on the direction the new administration will take on China. In the face of this uncertainty, both the current administration and its opponents have already starting pushing for their competing visions.  In the hope Biden will stay the course of the tough Trump China policy, the State Department under Mike Pompeo has issued a report that seeks to answer the question for Mr. Biden. The position is outlined in detail in a just-released policy report entitled The Elements of the China Challenge.

The Report describes the recent behavior of the PRC, both internally and internationally. The Report focuses on guidance for the appropriate response to China’s international challenge. The State Department describes China as an enemy, along the lines of the Soviet Union, post World War II, and it explicitly recommends a policy of containment, along the lines of the cold war system set forth in George Kennan’s “long telegram“. In support of this containment policy, the Report provides a detailed program of ten tasks the U.S. should take in response to China. Predictably, the PRC has condemned the Report as an example of outworn, cold war thinking with no application in the modern world.

As reported by the SCMP, China foreign ministry spokesman Zhao Lijian called  it “another anti-China lie concocted by Cold War fossils from the US State Department . . . .  [that] fully exposes the deep-rooted Cold War thinking and ideological prejudice of some people in the US, and also exposes their fear, anxiety and unhealthy mentality about China’s continuous development.”  He went on to add that the United States is “doomed to fail, and will eventually be swept into the garbage dump of history.”

Supporters of the “back to Obama/Bush”  U.S. seem to agree with China’s foreign ministry. They suggest Biden follow the lead of the Chinese foreign ministry and relegate the Report to the garbage dump. In Time for the West to revisit its China narratives, Politico provides an excellent example of this position.  Unfortunately for the opponents of the containment policy of the Report,  the Politico piece shows a lack of understanding about China and it fails to provide a practical alternative policy for the Biden administration. Rather than discussing the facts and policy contained in the Report, Politico simply blows off the Report with little more than a shrug of indifference, by asserting it “contains little that’s new.” Per Politico, even though the Policy Planning staff at Foggy Bottom are tasked with “innovation and creativity” within their agency, most of the Report “equates to the 2020 version of conventional wisdom about China, marshaling administration talking points that felt fresh two years ago but are well-worn now.”

This dismissal by Politico ignores the structure of the Report and makes us wonder whether the author even read the Report at all. The Report can be roughly divided into two sections. First, a factual statement of Chinese actions both domestically and internationally. These actions are described by the Report as a direct threat to the United States and the Western world. Second, and more important, the Report outlines a set of policies designed to contain the China threat. So there are two issues: the facts and the policy response to the facts.

We can first look at the factual issues. On the facts, the statement that there is “nothing new” must mean Politico agrees that the factual statements are correct. This is a somewhat shocking admission, since the facts stated in the report are a damning condemnation of China and the Party.  But, since Politico apparently agrees with the facts, we can turn to address the claim that the facts stated are not “new”. The truth is that the facts ARE new. This shows an important weakness in the Politico position and that of many other old line China watchers. These people see a China from the past, not the China under Chairman Xi and the revived Communist Party.

That Politico and others are so willing to ignore the actions of the Xi administration since 2016 is new, and it is this continued denial of the facts by U.S. China watchers that is a primary concern of the Report. The actions of China carried out during the Xi administration described in the Report represent a complete reversal of the policies of the previous administrations under Deng, Jiang and Hu. Under the previous administrations, the Party took a reduced role in society and the PRC did not seek to extend its influence outside its borders. Xi has taken the opposite position and I wrote about this in China Cybersecurity: No Place to Hide:

The primary goal of the Xi Jinping administration has been to reverse this trend. Through the efforts of Chairman Xi, the CCP is now the leader on everything. There is no limit on its role in directing all aspects of China. Accordingly, in 2018 the CCP constitution was revised to state:

The leadership of the CCP is the primary characteristic of socialism with Chinese characteristics. The Party, government, military, civil and education, north, south, east, west and the center, the Party is the leader on everything.

中国共产党的领导是中国特色社会主义最本质的特征，是中国特色社会主义制度的最大优势。党政军民学，东西南北中，党是领导一切的。

This statement is a rejection of the policy of Deng, Jiang and Hu. It hearkens back to the position of Mao Zedong as stated in 1962. 1962年1月30日，中国共产党中央委员会主席毛泽东在扩大的中央工作会议.

Second, and just as important, these actions have been ignored by China watchers familiar with China as it operated under the Deng/Jiang/Hu system. They simply assume China today is just like China during their halcyon days of life and studies in China from 1984 to 2016. More critically, signs of change could be seen under the Hu administration, but these signs were ignored by those same China watchers. So the factual statement section of the Report cannot accurately be dismissed as “old news”. The Report states the facts bluntly and asks the question of all those who choose to ignore these facts: is this true or not? Politico declines to accept the challenge of contesting the facts. The Chinese government also declines to contest the facts.

So if everyone agrees on the facts, the only question then becomes what is the appropriate response of the U.S. to those facts. Per Politico, the “report generally describes China as a monolith, giving scant mention to the competing interests or equities that even a dictatorship must consider when making and executing policy, particularly in a large and complex country like China. There’s little about internal sentiment, or how the U.S. might leverage that to its advantage.”

Politico’s comments about competing interests in China makes no sense because because the PRC is indeed a monolith. The Party is the leader of everything. There are scant competing interests in China in that there are factions within the Party that want to take control of the spoils, but Politico is not referring to  Party factions, since they are still within the Party. Perhaps Politico is referring to individuals within civil society that oppose some of the Party policies. But those opponents of the Party simply don’t count in China in terms of nation to nation policy development. Opponents to the Party do not represent a civil society group that can be courted or worked with to promote change. No color revolutions will be permitted in China. When Kennan wrote his “long telegram”, there were many dissident groups within the Soviet Union. Those groups were not relevant to Kennan, and they are not relevant to any U.S. government developing an overall policy towards China. Nor should they be.

The brutal truth about China is that, as in Stalin’s Soviet Union, any opposition to the Party as the leader of everything is directly confronted and destroyed. The examples are numerous and would be tedious to list.

We will though give one recent example. Sun Dawu created a business organization that resisted Party control. He was an open critic of Mr. Xi. This is what happened, as described by the Wall Street Journal, in China’s Detention of Entrepreneur Raises Fresh Concerns About Vulnerability of Private Firms:”Sun Dawu, the entrepreneurial founder of the Dawu Agricultural and Animal Husbandry Group, famed equally for his clear-eyed political commentary as for his business acumen, is the latest prominent Chinese public figure to be detained on charges of ‘picking quarrels and provoking troubles.’ Sun, his son, and at least 10 other high-level Dawu Group executives were detained on November 10.”

“Picking quarrels” means opposing the absolute will of the Party. As with the Soviet Union, the U.S. might have a policy of covert support for dissidents within China. But that is part of a containment strategy. It is not an alternative to the containment strategy outlined in the Report.

More generally, the Party is working hard to ensure there is no alternative civil discourse within China, forcing alternative views into the shadow world of dissident speech and writings. This is illustrated quite clearly by recent Party directives on control of private online media in China. Per the SCMP in Chinese Communist Party tells online media firms to put loyalty first, This recent policy directive from the Propaganda Office makes this bluntly clear:

Xu Lin, vice-director of the central propaganda department, told a media forum on Thursday that China must “resolutely guard against digitalization diluting the party’s leadership, resolutely prevent the risk of capital manipulating public opinion”.
“Digitalization could bring about changes in media but no matter what kind of media outlet, no matter if it’s mainstream or a commercially run platform, online or offline, big or small screen, there is but one criterion for guidance, there is no space outside the law, no enclave for public opinion,” he said at the annual China New Media Conference in Changsha, the capital of Hunan province.

Note two critical terms: “capital” means “private, civil society” and “law” means “the absolute will of the Party as expressed under rule by law with Chinese characteristics”.

Politico offers little more than a shrug and a smug dismissal as its response to the containment policy advocated by the Report. In what seems like an effort to remedy its failure of analysis, Politico lists a series of recommendations for the new Biden policy that come not from Politico, but from “experts” surveyed by Politico. Apparently this list of comments is intended to stand as Politco’s recommendation to the Biden administration for its China policy. If this is the plan, the plan failed.

Politco’s  list of the ways the U.S. should deal with Xi’s China all come from academics; There is not a single proposal from people who deal with the PRC government, the Party, or with Chinese businesses on a daily basis. For those of us who do deal with China every day in this way, the comments read more like fantasy than analysis.

The views expressed by the Politico experts read as not so thinly disguised efforts to have making money be the U.S. government’s guiding policy with China.  Many U.S. businesses that are eager to profit by investing in China and selling their products and services to China, and in having their products made at low cost in China are “hoping” for a return to the good old days of the first decade of this millennium, when they were relatively free to do all of these things. The Washington Post recently reported on how “Apple lobbyists are trying to weaken a bill aimed at preventing forced labor in China, according to two congressional staffers familiar with the matter, highlighting the clash between its business imperatives and its official stance on human rights.”  See Apple is lobbying against a bill aimed at stopping forced labor in China.

This sort of “make money” foreign policy makes sense for companies like Apple and their patrons like Politico, but this sort of  orientation can lead to false narratives about benign intentions of the CCP and actual conditions on the ground in China. This sort of thinking can “whitewash” the realities on the ground in China and no sound foreign policy can be built on sanitized facts  and apologist “analysis”.  Focusing on profits is what companies do, not a country that is “back and ready to lead world.

Most importantly, all this “hope” from Politico writers and the academics they interviewed assumes the U.S. attitude towards China is all that matters and the CCP’s position can be completely ignored. But even though Politico and its select group of academics want open engagement and an easy (and profitable) commercial relationship with China as the passive “factory to the world”, what happens if that is not what the CCP wants? What if what the CCP wants is total control both within and outside China? What if the CCP wants to exploit the outside world while maintaining a completely closed and predatory system within China? What happens if, when the chips are down, the CCP does not want our money? Or what happens if the CCP puts unacceptable conditions on our business relations with it? What if the Party says: you must purchase products made by Uyghur and Tibetan and North Korean forced labor and if you continue to complain about our forced labor or report on our genocide in Xinjiang, we will shut down all commercial relations with you. What happens then? Politico conveniently ignores all of this.

These concerns are not fantasies as this is happening in China today. Consider the recent attacks on the (foreign VIE funded) fin-tech sector, where Xi Jinping personally shut down the Ant Financial IPO and following that decision, the Party immediately issued new guidelines designed to exert control over the entire VIE financed private sector. The Party has shown little concern for innovation or financial alternatives or for private investors; its only concern is with maintaining its control. This is the future of China.

Outside China, the Party is already working to shut down of civil society and informed opposition to China practices as a condition for bilateral trade. Most recently the CCP essentially told the government of Australia to shut down its civil society or it would lose out on trade with China. See If you make China the enemy, China will be the enemy: Beijing’s fresh threat to Australia:

“[A leaked] government document goes further than any public statements made by the Chinese Communist Party, accusing the Morrison government of attempting “to torpedo” Victoria’s Belt and Road deal, and blaming Canberra for “unfriendly or antagonistic” reports on China by independent Australian media.

“China is angry. If you make China the enemy, China will be the enemy,” a Chinese government official said in a briefing with a reporter in Canberra on Tuesday.

[…] The list of grievances also includes: government funding for “anti-China” research at the Australian Strategic Policy Institute, raids on Chinese journalists and academic visa cancellations, “spearheading a crusade” in multilateral forums on China’s affairs in Taiwan, Hong Kong and Xinjiang, calling for an independent investigation into the origins of COVID-19, banning Huawei from the 5G network in 2018, and blocking 10 Chinese foreign investment deals across infrastructure, agriculture and animal husbandry sectors.”

The PRC is requiring Australia fix all these “problems” before normal trade will resume. Consider the issue here: the leaked document says: “If you make China the enemy, China will be the enemy.” The only conclusion we can take from this is that this document is intended to let the world (including the United States) know that every country must accept the will of China without complaint. The threat is that if  the Biden administration does not back down and comply with China’s dictates, China will declare China to be the enemy of the U.S. and it will behave the way an enemy behaves, not the way a strategic competitor behaves. The Report concludes that this has already happened.

Either way, the issue is what is the appropriate policy response in this entirely new characterization of the U.S. relationship with China. But what is most important is that it is the CCP that will make this decision, not the United States. Indeed,  the content of the threat to Australia shows China has already made the decision to put the U.S. on its enemy list if the U.S. does not comply by shutting down its open government, media and civil society. Though many businesses and academics (see Apple and Politico) seem willing (almost happy) to pay this price, it is highly unlikely the Biden administration will be. See America is back and ready to lead world, says Joe Biden.

It is not clear the Report’s China containment policy is the best approach for dealing with China, but it is clear Politico’s “take the money and ignore the rest” approach is not.

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.