Cooperation and Conflict between US & China

U.S. President Joe Biden and Chinese President Xi Jinping engaged in a formal telephonic conversation on April 2 in an effort to keep tensions between the two countries at a simmer. The discussions revolved around avenues of cooperation, including recent collaborative endeavours to address climate change and narcotics, based on the summaries of the call. However, there was significant disagreement on Taiwan and economic issues.

President Biden emphasized support for Taiwan, while President Xi declared U.S. involvement in the South China Sea as a “red line.”

President Xi also expressed his objection to the sanctions imposed by the United States on China and Chinese-owned companies, calling them an “endless stream of measures to suppress China’s economy, trade, science and technology”.

Between 2018 and 2023, U.S.-China relations witnessed a steady deterioration. Contributing factors included the trade war, intensifying technological competition, the COVID-19 pandemic, escalating disputes in the South China Sea and Taiwan Strait, and most recently the differing stances on the Russia-Ukraine conflict. Together, these elements created a sense of inevitability regarding the decline in the relationship signifying that the countries were heading toward the abyss of outright economic decoupling and a disastrous military conflict.

Last year witnessed a nadir in the deterioration of the U.S.-China relations since the countries established diplomatic ties in 1979. There have been signs of stabilisation since the San Francisco meeting, but US and Chinese officials say the fundamental disparities between the parties persist without alteration. During the call, Mr Biden also challenged Mr Xi on China’s continued support for Russia’s military industrial base, its trade policies, and national security threats to the United States, the White House readout said. The upcoming weeks will witness significant geopolitical upheavals. The past weeks witnessed significant geopolitical upheavals. US Treasury Secretary, Janet Yellen in her visit to China made it a point to discuss trade, anti-money laundering and Chinese ‘overproduction.’ Secretary of State Anthony Blinken’s visit to China is also scheduled from April 24^th to 26^th. While the US is keen to keep relations from deteriorating further in an election year, China has been desperately attempting to display an image of bolstering diplomatic ties with Washington. Follow-up meetings between U.S. and Chinese officials will reinforce the premise that competition requires communication. But unless the two sides take genuine efforts to reduce underlying frictions, any stabilization will likely prove short-lived.

In May, Taiwan’s new president-elect Lai Ching-te will take office and must deal with the ire of China whom Beijing has repeatedly called a “troublemaker” and “separatist”. The catalogue of underlying tensions and risks within the relationship is steadily increasing. While many frictions have endured for a considerable time, the majority have exacerbated in recent years. The expanding size and scope of irritants renders diplomacy more important, but also more fragile. To look from India’s perspective, it would face severe consequences if China were to attack Taiwan. According to a recent Bloomberg analysis, the financial impact of such a conflict could exceed 10% of global GDP. India’s economy would endure a more significant setback than the United States, with critical industries like electronics and pharmaceuticals running out of key components and raw materials. Washington remains concerned about exit bans on U.S. citizens; cyberattacks on critical infrastructure; pressure on Taiwan, the Philippines, and other U.S. allies; the strengthening of China-Russia economic ties; the erosion of Hong Kong’s autonomy; overcapacity in China’s industrial sector; and Beijing’s xinchuang strategy to replace American technology. The list goes on.

From the Chinese perspective, there’s ongoing unease about perceived U.S. interference in China’s internal affairs, support for Taiwan, efforts to create a “latticework” of U.S. allies in the Indo-Pacific, Washington’s “small yard, high fence” technology policy, and increasing restrictions on Chinese companies, including the U.S. Congress’s recent push to require the divestiture of TikTok.

On April 10^th, President Biden hosted the Japanese Prime Minister on a state visit to the White House. Fumio Kishida is the third leader from the Quad group to receive this special welcome under the Biden presidency. The other two state visits were by South Korean President Yoon Suk Yeol and French President Emmanuel Macron. The constrained number of state visits reflects the ongoing strategic significance Biden attaches to the Indo-Pacific, despite the war in the heart of Europe. In addition to enhancing the security alliance with Japan, the United States seeks to involve Tokyo in the AUKUS initiative, a proposed advanced technology partnership with Australia and the UK, announced in 2021. But to China, AUCKUS emerges as an impending threat. On Saturday, China’s foreign minister criticized the Western nations involved in the AUKUS security pact, alleging that they were fostering division and increasing the risk of nuclear proliferation in the South Pacific. The initial phase of AUKUS includes the transfer of conventionally-armed, nuclear-powered submarines from Washington and London to Canberra. Due to Japan’s anti-nuclear stance, it will not participate in this aspect. However, Japan, which has its own territorial issues with China, is already supplying the Philippines with ships, radar, and other technology to assist with maritime patrols. Even India put a step forward in providing the Philippines with BrahMos supersonic cruise missiles as per a $375 million agreement inked in 2022.

The Indo-Pacific region is characterized by two contrasting strategic outlooks. One asserts China’s dominance, positioning it as the arbiter of regional rules and norms. Conversely, the alternative perspective views the United States as a steadfast Pacific power with enduring influence. Currently, the U.S. narrative is progressively asserting itself. Its strategy in the Indo-Pacific involves bolstering alliances, forging fresh partnerships, establishing minilateral arrangements, and fostering autonomous collaboration among Asian nations. In contrast, China’s agenda centers on revitalizing direct relations with the U.S. and securing Washington’s recognition of Beijing’s pre-eminent position in Asia.

While Washington proactively engages with China’s major neighbours, Beijing has not yet extended diplomatic gestures to them on political or territorial matters. The intense rivalry between the United States and China has granted greater autonomy to China’s neighbouring countries, including India. To look back in the past, the United States’ relations with allies in Asia and Europe have improved dramatically in general and with respect to their approach toward China in particular. Analysis of the challenge China poses on economic and national security issues sounds increasingly similar whether one is in Tokyo, Berlin, Brussels, Washington, or other advanced market democracies. Greater alignment has been driven by China’s escalating industrial policies, which are seen as ambitious and distortionary; the human rights issues in Xinjiang and Hong Kong including Uyghur genocide; China’s increasingly close relationship with Russia and its stance on Ukraine; Beijing’s instances of economic coercion; and the deteriorating security environment in the South China Sea, the Taiwan Strait, and the China-India border.

In the long run, just the countries’ common urge to oppose China’s aggression will not be sufficient to sustain the momentum. If the United States does not enhance the investment and trade components of its Indo-Pacific strategy, its Asian allies might eventually shift back to China due to economic pressures. But for now, Xi’s bullying is driving his neighbours to call for more U.S. engagement and cooperation.

Today, both India and the U.S. have relationships with China that have elements of cooperation, competition and, potentially, conflict—though in different degrees. Both nations adopt a mixed strategy in dealing with China, while also bracing for potential deterioration in Chinese conduct. Each acknowledges the other’s role in its approach to China, viewing a positive relationship as a signal to Beijing. However, neither wishes to antagonize China or be compelled to choose between the other and China.

Each also recognizes that China—especially uncertainty about its behaviour—is partly what is driving the India-U.S. partnership. Arguably, there have been three imperatives in the U.S. for a more robust relationship with India and for supporting its rise: strategic interest, especially in the context of the rise of China; economic interest; and shared democratic values. Indian policymakers recognize that American concerns about the nature of China’s rise are responsible for some of the interest in India. India’s strategy towards China focuses on fortifying its security and economy (internal balancing), while also forming various partnerships (external balancing), with the U.S. playing a crucial role in both aspects. According to some Indian policymakers, a further advantage of India’s relationship with the U.S. is that Beijing treats Delhi with greater seriousness because Washington does.

The recent efforts toward mutual accommodation between Beijing and Washington have been influenced by their immediate interests in alleviating tensions. China’s priority lies in bolstering domestic economic growth, while the United States grapples with a multitude of global and internal crises, spanning from Ukraine to the Middle East and the fractured political system and deteriorating economy at home. Nevertheless, external factors are unlikely to provide a lasting foundation for durably stabilizing bilateral relations. Washington tends to prioritize urgent matters over long-term strategic goals. However, as China’s influence continues to rise, it becomes imperative for the United States to demonstrate its ability to engage in sustained geopolitical strategy in Asia, notwithstanding ongoing conflicts, and domestic challenges.