Can the U.S. and China Leave the Spy Balloon Behind?

Welcome to Foreign Policy’s China Brief.

The highlights this week: The White House takes a step back after a week of shooting down suspicious objects in the sky, Chinese State Councilor Wang Yi travels through Europe en route to the Munich Security Conference, and protests in Wuhan erupt over proposed cuts to medical insurance.

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A spate of shootdowns of unidentified flying objects by the United States seemed to raise the stakes of the spy balloon spat between Washington and Beijing. But on Tuesday, the U.S. government began to pour cold water on more dramatic theories about the vessels, which were detected after U.S. and Canadian air defense shifted their parameters to track slower-moving craft.

In the last week, U.S. F-22 fighter jets downed objects over Alaska, Michigan, and Canada’s Yukon territory. (The planes have now racked up four air-to-air kills, the first ever for the F-22.) The vessel shot down in Canada was confirmed as a “small, metallic balloon with a tethered payload”—very different from the giant high-altitude surveillance balloon. Details about the other objects haven’t been released yet.

According to some reports, pilots said the vessels were cylindrical, unidentifiable, and lacking visible means of propulsion. That’s very common for UFO sightings; it’s hard to identify small craft from a fast plane. The unreliability of eyewitnesses also often leads to misleading claims about explainable phenomena, from weather balloons to the planet Venus.

The most likely explanation for the shootdowns is that the United States overreacted. Radar systems are now catching objects that previously slipped through the net, but they are likely regular civilian craft, including weather balloons and drones. The White House seems to favor that explanation, saying on Tuesday that “these could be balloons tied to commercial or research entities and therefore totally benign.” The skies are fuller than they once were, thanks to the growing use and affordability of drones.

That doesn’t mean that China’s spy balloon technology isn’t a genuine problem. The United States is briefing its allies on what it says is an extensive Chinese surveillance network. Japan just confirmed that it believes Chinese balloons have transited its airspace at least three times since 2019, while Taiwan has promised to shoot down intrusive vessels. As with the balloon shot down by the United States last week, these objects are larger and rarer than civilian craft.

Restraint is necessary, though, especially amid growing tensions. There is tragic precedent for mistakes under pressure during the Cold War: In 1983, the Soviet Union shot down a Korean Air Lines passenger jet that had strayed off course, killing 269 people.

However, it is possible that some of the objects are hostile drones carrying out missions in U.S. airspace, as some military aviation experts have long argued. If that’s the case, the United States must have serious discussion with China—and eventually Russia—about its response to such intrusions. If they are Chinese drones, that would be another serious breach of already frayed relations—and even more so if they were dispatched after the initial balloon.

Beijing doesn’t seem eager to get relations back on course, at least not publicly. In the last week, Chinese state media has ratcheted up its anti-U.S. rhetoric, along with tit-for-tat claims that U.S. balloons have intruded into Chinese airspace “more than 10 times” since last year. China’s official position on the first balloon remains that it was a civilian vessel, although it hasn’t named the civilian company supposedly involved.

Of course, the United States could be using surveillance balloons, too; the Defense Department has carried out such research in its own airspace in recent years. But Washington has vigorously denied that it used this particular form of surveillance against China. Beijing may simply have invented its claims of U.S. intrusions for damage control. There could also be ambiguity over airspace that China claims but the United States doesn’t recognize, specifically the air defense identification zone in the East China Sea.

China’s statement about the spy balloon shortly after it was first spotted included some rare apologetic language; it seemed ready to accept some blame, but its position has hardened since the shootdown. That is a worrying sign of how easily a disturbance can throw the U.S.-China relationship off balance. Washington’s climbdown over the most recent incidents may allow both sides to simply stop talking about balloons. But it’s more likely that nationalists in both China and the United States will keep using the controversy to push their own agenda.

The latest shootdowns have also led to a rare bleed-through of geopolitics into popular awareness. UFO sightings are not just a modern phenomenon—take this example from 11th-century China—but they peaked during the Cold War. The most famous modern Chinese science fiction book series, Liu Cixin’s The Three-Body Problem, reflects paranoias about foreign threats. As the U.S.-China dynamic gets weirder, expect the American imagination to follow suit.

China’s top diplomat tours Europe. Chinese State Councilor Wang Yi—the country’s top diplomat—is traveling through Europe before the Munich Security Conference. The trip is an attempt to repair Beijing’s damaged relations on the continent while also reassuring its autocratic allies. Wang first travels to Germany and France to talk to European Union leaders, followed by a visit to Hungary—increasingly trying to pull away from the West—and then Russia.

In Munich and beyond, Wang may face a tough audience. Both the COVID-19 pandemic and China’s sanctions on European officials—the latter of which destroyed a key trade deal—have damaged Beijing’s reputation. China’s support of Russia and anti-NATO propaganda has not gone over well in Eastern Europe. Another planned visitor to Europe, Xinjiang governor Erkin Tuniyaz, canceled his trip this week as lawmakers in multiple countries protested his involvement in state atrocities in the region.

Wang’s attendance at the Munich Security Conference may double as an opportunity to meet with U.S. Secretary of State Antony Blinken, who called off a planned trip to Beijing due to the spy balloon crisis. Wang’s Moscow visit, meanwhile, will likely lay the groundwork for a trip by Chinese President Xi Jinping soon.

Wuhan protests. Thousands of older people gathered in Wuhan last week to protest proposed cuts to medical insurance in the wake of the pandemic, following similar protests in Guangzhou in December and January. Although the COVID-19 wave that followed China’s reopening seems to have devastated China’s older population, budget-conscious governments are still cutting health care.

China has made a big effort to expand medical insurance, which now theoretically covers nearly all of the country. For around 65 percent of people, though, that means insurance that covers less than half the cost of care and excludes many treatments and higher-quality facilities. Meanwhile, the successful protests against China’s zero-COVID policy last year may have expanded the perceived space for public action, but that likely won’t last long.

Solomon Islands disputes. In the last year, the Solomon Islands have become one of the smallest but fiercest areas of U.S.-China competition, due to the country’s position as a potentially critical part of the Pacific supply chain that runs from Australia to Taiwan. A controversial security agreement between the Solomon Islands and China has led to a renewed U.S. diplomatic effort to woo the country. The deal has also caused domestic disputes, with opponents seeing it as a way for the government to get Chinese backing to crush its opposition.

Those internal fights worsened last week when the premier of Malaita, the islands’ most populous province, was dismissed in what his supporters call a Chinese-backed plot. The Solomon Islands only stopped recognizing Taipei in favor of Beijing in 2019, and Malaita retains close ties with Taiwan—as well as independence ambitions. The dispute could descend into fresh violence.

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AI competition heats up? The frenzy around ChatGPT has boosted artificial intelligence stocks in both the United States and China. Several Chinese companies are now set to trot out competing products, such as Baidu’s Ernie. The government, which has engaged in a flurry of dubious AI promotion in the recent years, is keen to get in on the act; Beijing’s city government has promised healthy backing for AI innovation. But China’s two biggest beneficiaries of ChatGPT enthusiasm saw most of their gains disappear after they admitted that—for all the talk—their new technologies had not actually brought in any revenue yet.

Shipping container bust. The pandemic led to a massive shortage of shipping containers, creating long supply chain delays. But in the wake of China’s reopening, overproduction and cautious stocking by retailers have resulted in a surplus of the boxes. Chinese ports are now piled high with empty containers, with some ships even temporarily turned into storage for unused containers. The surplus is another sign that even as the Chinese service sector bounces back, the ripple effects for the rest of the world may be limited.