No end in sight to US-China rivalry despite talks

Yogesh Gupta

Former Ambassador

US Secretary of State Antony Blinken’s recent talks with his Chinese counterpart, Wang Yi, and Chinese President Xi Jinping ended in sharp recriminations. The Chinese side dismissed the US concerns about the Dragon’s assistance to Russia in the Ukraine war and its massive exports of electric vehicles (EVs), batteries and solar panels to America. Blinken repeated the familiar US refrain on Taiwan sidestepping China’s objection to its military aid. But despite their differences, China agreed to not only continue but expand its dialogue with the US on artificial intelligence, climate change and consular and people-to-people exchanges, signalling that bilateral cooperation was increasing.

There are several reasons behind the change in Beijing’s attitude. First, China has realised that a modicum of decent relations with the US is a must to get American private investments, which bring along new technologies and greater market access and reduce China’s isolation. Many American, European and other companies are guided by the state of the relations between the two nations in expanding their presence and committing new investments in China. Even Chinese private companies are not keen on making new investments in China unless they see a greater demand coming from the West. Some Chinese companies have moved to Mexico, Hungary, Vietnam, Malaysia and other countries to supply to the US and other markets, but these investments do not create jobs in China. The economic recovery requires a period of sustained good ties with the US to promote exports to the West and substitute the investments in the property sector with high-value green items.

Second, several countries in South and East Asia — such as Japan, South Korea and the Philippines — are establishing closer political and defence ties with the US. Japan has conveyed its resolve to expand its military capabilities and export to other countries in the region. The ties among America, Japan, the Philippines and Australia have warmed up. There is talk of Japan joining the AUKUS alliance. In this environment, a good working relationship with the US would provide China with the necessary elbow room to focus on its economic revival, on which considerable pessimism is spreading in the West.

Third, only six months are left until the US presidential elections. A Trump comeback with his America First policy could provide new opportunities for China to sow fissures between the US and its European and Asian allies, weaken the US global leadership and accelerate its relative decline and China’s ascent. Beijing is hoping that there may be reduced American support for Taiwan as Trump’s views on the US global commitments are markedly different from those of Biden. President Xi is touring France, Hungary and Serbia this month to position China suitably in Europe so that these countries could prevent a transatlantic consensus emerging on the imposition of any anti-dumping duties by the EU against it.

During the talks, Blinken complained that China had provided Moscow with semiconductors, drones and other materials that fill critical gaps in the Russian supply chains, and Russia would struggle to sustain its assault on Ukraine without China’s assistance. Beijing held Washington responsible for “pouring munitions into Ukraine” while blaming China’s normal trade with Russia and said it would not allow America to interfere or disrupt its right to have normal economic ties with Russia and other countries. Similarly, on the issue of its overcapacity, Chinese leaders said the Dragon only exported 12 per cent of its EVs against Germany’s export of 80 per cent of its automobile production, Japan’s 50 per cent and America’s 25 per cent. It was not a market-driven argument; it reflected “an anxiety due to the lack of confidence and smears against China”.

Beijing complained that Washington was “saying nice things while continuing harmful actions”. The US had adopted an “endless stream of measures to suppress China’s economy, trade, science and technology” and hurt the latter’s interests through recent measures in the South China Sea and Taiwan (a reference to the US military exercises with Japan and the Philippines and America’s military aid to Taiwan). The US was continuing to strengthen its alliances and sanctions directed against China. Beijing rejected the US claim of ‘interference’ in its presidential election.

At a press conference, Blinken vowed that the US would take strong action if “China failed to heed the US warnings about its support for Russia’s war in Ukraine”. China quickly dismissed Blinken’s remarks as “influenced by domestic political considerations and an attempt to present a tough and uncompromising image toward China”. It is quite clear that the détente between the two countries, claimed in a section of the global media, is superficial, and their relationship is underpinned by conflicting interests. America, which does not consider the Dragon even its equal, is working to weaken the latter’s economic, technological and military progress by isolating it, containing its influence and retarding its progress through the strengthening of alliances and the application of sanctions and tariffs.

The Chinese Communist Party continues to harbour ‘imperial and expansionist’ ambitions about the revival of the “Middle Kingdom through national rejuvenation” and would continue to strive for a world-class military equal to or even exceeding that of the US. These aspirations may be cloaked at times in conciliatory overtures or tactical moves to seek détente or improved ties. But China — with its allies like Russia, Iran and North Korea — will use every opportunity to weaken the US global leadership, its international standing and the America-led global order. In pursuit of these conflicting ambitions, the rivalry between the two countries would continue for a long time, marked by periods of varying intensity, with the avoidance of a full-scale conflict as much as possible, as that would be devastating for both countries and the rest of the world.

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