Before the 2020 U.S. presidential election, former President Donald Trump released a statement that introduced a collection of speeches titled Trump on China: Putting America First. This publication contains speeches with high-level and groundbreaking remarks targeting China. Those remarks point out that the Communist Party of China (CPC) has posed a severe threat to American economic and political life. Confronting China's threat, Trump seeks to form and reinforce an Indo-Pacific alliance in containing China. Trump administration encouraged allies to decouple from China and restructure the global supply chain. Economically he started a trade war and chip war against China and sanctioned Chinese citizens who sabotaged human rights in Hong Kong. Internationally, Trump holds Beijing accountable for many global problems, such as COVID-19 and global environmental pollution. Structurally, the U.S. and China are undergoing serious power competition. And Taiwan has played an increasing role in Trump's era.
From China's side, in late October 2020, the Communist Party of China (CPC) was holding its fifth plenary session of the 19 th Central Committee and initiates the 14 th fiveyear plan (2021–2015). Xi Jinping mentioned that China is rivaling with the U.S. over issues in trade, Hong Kong, Xinjiang and human rights and economic shocks after the coronavirus pandemic broke up. Xi also recognized the ongoing power transition and the emerging uncertainty that complicates the global situation China has to tackle. Recognizing technological innovation as critical strategic support for national development, in the next 15 years, Xi called for China to achieve self-sufficiency in manufacturing critical components in protecting China from sanctions made by the White House. People's Liberation Army (PLA) will complete another round of reform for dealing with multi-directional military challenges. In strengthening national security, Xi ordered PLA to “comprehensively enhance military training and preparation for war”(全面加強練兵備戰). Possible flashpoints include the China-India Himalayas border region, Taiwan Strait, South China Sea, and Indo-Pacific maritime region.
As U.S. and China enter into tough competition, people in Taiwan are anxious that the new Biden administration might change the whole thing. Is this kind of worry justified? At least so far, the Biden administration appears to show a tough stance on China, just like Trump and, to me, even tougher than Trump's first two years in his presidency. On January 20. Biden finally made his first phone call to Chinese President Xi Jinping. According to a statement by the White House, the call centered around the interests of the U.S. and the international situation. Biden said that his top priority was to ensure the security, prosperity, health, and lifestyle of Americans and to maintain a free and open Indo-Pacific. Furthermore, Biden emphasized that he was very concerned about China's arbitrary and unfair economic policies, its suppression of Hong Kong people, its violation of human rights in Xinjiang, and its strict measures against the region and Taiwan. In a CNN program, Biden reiterated that he told Xi Jinping that China would pay the price for its human rights violations.
Apparently, the power-competing structure between the U.S. and China will not disappear anytime soon. Biden and his team have to deal with such structural contradiction and the repercussion left by his predecessor. So far, Biden's gesture to China demonstrates that his policy towards China would be no less strict than Trump's.
However, there are some observable differences. Biden administration seeks to revitalize democracy around the world is a key while competing with China. He said,“I firmly believe that democracy holds the key to freedom, prosperity, peace, and dignity. We must now demonstrate — with a clarity that dispels any doubt — that democracy can still deliver for our people and for people around the world. We must prove that our model is not a relic of history; it is the single best way to realize the promise of our future.” He also emphazie to tackle pressing issues, such as global climate issues, public health or human rights, throught re-entering the international institutions like the Paris Climate Accord, World Health Orgsanization and UN Human Right Council.
Apparenty, Biden and his team emphasize a multilateral approach, which will mobilize international support before U.S. actions. Biden administration will also aim to end the trade wars on many fronts and endeavor to negotiate with the U.S.'s like-minded allies in Europe and Asia and unite them in countering China and changing China's improper trade practices such as dumping, illegal subsidies to state-owned firms, and forced labor. Rather than fight alone, all these efforts should go through the international institutions, which APEC can play a role.
There is a good reason behind the Biden administration's eagerness to win back the hearts of the U.S.'s allies internationally. Shortly after the U.S. presidential election, China and 14 other Asia-Pacific countries have just signed the Regional Comprehensive Economic Partnership (RCEP). Once the agreement takes shape, it will create the world's largest free-trade zone that surpasses the European Union (E.U.). In 2018, before the RCEP was signed, 11 Asia-Pacific countries signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) without U.S. involvement after it had withdrawn from the Trans-Pacific Partnership Agreement (TPP). Outside the Asia-Pacific region, Europe and China have completed the negotiations on the EU-China Comprehensive Agreement on Investment, which started in 2014, right before the end of 2020.
Divergent interests of allies
However, the Biden administration may confront come challenges. I think the most significant challenge is that not all U.S. allies support Biden's strict policy toward China, especially those residing close to and those with a tight economic relationship with China. In APEC, Australia and Japan are two important like-minded partners to the U.S., And true, people in both countries hold unfavorable views of China that have hit a record high. 86 percent of Japanese people and 81 percent of Australian people view China unfavorably. However, such sentiments may not transform quickly into governments' policies in both countries.
For Japan, which is a military ally of the U.S., it has conflicts with China over the sovereignty of the Diaoyu Islands and the exploration of resources in the East China Sea. Nonetheless, the conflicts are on a controllable scale. Both China and Japan have refrained from all-out conflicts for the Diaoyu Islands. Economically, China is Japan's biggest export market as well as its largest trading partner, with a trade dependence ratio of about 20 percent. When the Trump administration imposed sanctions on Huawei, Japan's Sony and Kioxia did not want to comply. Instead, both companies sought U.S. approval to export materials to Huawei. The Chinese telecom company sources a large amount of image sensors and flash memory chips from the two Japanese firms. If the two go along with the U.S. sanctions, their businesses will suffer tremendous losses. Japan concerns that if it goes along with Washington's anti-China strategy too much and boycotts China on the economic front, it may not be able to bear the resulting losses. Another key player in APEC, South Korea, is under a similar strategic situation as Japan. For Australia, it does not have any territorial dispute with China. Besides, it is far away from China. Compared with Japan, Australia does not feel as threatened by China, which is why the Chinese authorities had been able to infiltrate in the political circles, the business sector and other sectors in Australia over the past few decades so quickly. Now that Australia has become aware of China's threat to its national security, its relations with China have been deteriorating. Recently, two China-based Australian journalists had to seek refuge in the Australian embassy in Beijing in order to leave China for their home country. Worried about China's threat, the Australian government has followed in the footsteps of the U.S. to close its door to Huawei's 5G. It has also started to strongly condemn China's human rights violations in Hong Kong and Xinjiang.
China is Australia's biggest import and export trading partner, with a dependence ratio of 30 percent, and the ratio sees double-digit growth every year. High dependence on China led to Beijing's recent blocking of Australian wine from entering the Chinese market. This is a trade weapon that seeks to warn Australia's increasing unfriendly actions targeting China. Given its weaker sense of threat from China and its high level of dependence on China, Australia may have only modest security interest in Biden's global strategy and face the high cost of going against China.
Overcoming alliance security dilemma
In order to win back the hearts of the U.S. allies, the Biden administration has three challenges. First, as far as the U.S.'s national interest is concerned, Trump's launch of trade wars toward numerous countries can be justified. According to “Macroeconomic and Foreign Exchange Policies of Major Trading Partners” reports regularly released by the U.S.'s Treasury Department, China is merely one of the countries that contribute to the U.S.'s problems concerning global trade and exchange rates.
Controlling for size of economic scale, Singapore, Taiwan, Switzerland, Germany, Thailand, Vietnam, South Korea, Japan and Italy pose even more significant problems to the U.S. than China. Furthermore, the U.S. removed China from its list of “exchange rate manipulators”, but it listed Switzerland and Vietnam as “exchange rate manipulators”. These countries, together with China, are on the U.S.'s watchlist. Therefore, if Biden targets only China but is soft on its allies, he will have difficulty explaining to the U.S. society. On the other hand, if Biden continues Trump's policy that also targets essential U.S. allies, it will be even harder to win back allies' supports.
Secondly, even without the participation of the U.S., Asian-Pacific countries were able to achieve progress in regional integration and economic relations with China, as seen in RCEP and CPTPP. It is true that these regional arrangements are still uncertainties but that has made Asia-Pacific countries realize that it is possible to achieve something without the help from Washington. In such strategic settings, China will make efforts to fill the void left out by the Trump administration and woo U.S.
allies in order to counter the U.S. The allies that Biden tries to win back are using this in particular to play the China card. Its message is this: if the U.S. wants its allies to cooperate, it must put aside its arrogance and seek to mend fences.
Third, even though the U.S. and its allies are on the same page politically and have condemned China's attacks on human rights in Xinjiang, Tibet and Hong Kong, economically speaking, the U.S. has a competitive relationship with its allies. All the countries are scrambling for the potential economic costs after the U.S. began to counter China. Therefore, in their policies towards China, it is possible to separate economics from politics. Such a mindset is similar to that of the U.S. in the past. At a time when the U.S. is gradually handling China's political and economic issues together, it is a challenge for the U.S. to persuade its allies to work in tandem with it.
Such concern is even higher when allies confront an alliance security dilemma. Allies worry that if they do not echo Biden's China policy, they may be abandoned by Washington sometime in the future. Nevertheless, once they jump on Washington's anti-China bandwagon, they will be entrapped in the U.S.-China spiral that harms their interests with China. The perceived level of alliance security dilemma in U.S. allies is relatively higher after Trump's intractable and unpredictable four years. Therefore, the Biden administration must reassure allies away from such a dilemma.
To accomplish that, the Biden administration should signal the resolution and initiate concrete policies in countering China. Furthermore, Washington can magnify America's important allies' security interests and help ease their economic costs and pressure. Doing so will convince allies that the U.S. is very serious this time. There will be little risk of jumping on the U.S. bandwagon. In this sense, APEC can serve as a helpful platform in consolidating U.S.-led alliances. Concrete agreements may not be necessary but Washington should enhance its engagement and focus more on shaping concensus among allies in APEC.