Washington’s Supposed Consensus on China Is an Illusion

U.S. Secretary of State Antony Blinken’s just-completed trip to Beijing highlights a renewed diplomatic effort to pull the U.S.-China ties out of the death cycle of tit-for-tat confrontation. The February “balloongate” incident disrupted planned diplomacy, and China implemented a total freeze of diplomatic contact. White House senior Asia coordinator Kurt Campbell framed the issue: “I think you will see in the coming months whether it’s going to be possible to reestablish effective, predictable, constructive diplomacy between the United States and China.” But the ultimate obstacle to that may lie in Washington’s own contradictory approach toward China.

The conventional wisdom that there is a bipartisan consensus on China is half-wrong. There is a real consensus that the old assumptions about China were proved incorrect. Engagement did not bring liberalization, nor political reform; in contrast, a far richer China is more autocratic, under President Xi Jinping, than at any time since perhaps the 1970s. But the sniping around Blinken’s China trip, with leading congressional Republicans accusing him of being “weak” and serving to “legitimize” the Chinese Communist Party (CCP), shows that there is no bipartisan clarity on what the United States sees as the desired end state.

This is reflected in a frenzied Washington, D.C., climate, where politicians are sometimes recklessly vying to bash the China piñata harder. It reflects a view that accommodation is not possible. At times, it seems as if the common wisdom in both Washington and Beijing is a tacit assumption that war between the United States and China, most likely over Taiwan, is inevitable—and the policy debate is mainly about how to best punish China and prepare for it.

For example, the U.S. House select committee on the Chinese Communist Party recently issued policy recommendations—calling for still more sanctions on China for its repression in the Xinjiang province, and for all but integrating the U.S. and Taiwanese militaries in aspects from stockpiling weapons to joint planning. There are dozens of bills in Congress aiming to remove China’s permanent normal trade relations status, to curb China’s financial power, to impose more sanctions for China’s behavior in Xinjiang and Hong Kong and for its spy balloon, and to ban Chinese purchases of U.S. land.

The White House is keenly aware that as the United States enters the 2024 election season, there is a narrow window of opportunity to recapture the narrative and show that diplomacy can advance U.S. interests. Despite the political climate, U.S. President Joe Biden seems to grasp his the country will have to reckon with a CCP-led China for the foreseeable future. That means reckoning with an $18 trillion Chinese economy, an important market in which the United States is intertwined, and with an assertive power that is also a mature nuclear weapons state. Biden seeks a stable framework to define and manage competition, and as Blinken said in Beijing, “to explore areas where we might work together when our interests align.”

The recent parade of top U.S. business leaders—including Elon Musk, J.P Morgan’s Jamie Dimon, CEO Mary Barra of General Motors, and Bill Gates—suggests a fear that U.S. anti-China actions may put economic interests at risk appear something of a counteroffensive to limit “de-risking.” Jensen Huang, the CEO of Nvidia, one of the world’s largest semiconductor firms, recently summed up U.S. corporate fear, suggesting that losing the China market would cause “enormous damage” to the U.S. tech industry, jeopardizing the construction of new chip factories that was envisioned in the 2022 CHIPS and Science Act.

Trying to find a balance between the potentially destructive risks of the Capitol Hill agenda on the one hand, and the overeagerness of U.S. business in China on the other, would help explain why Biden remains determined to put a floor under the relationship and fashion a framework to manage competition, protect national security, and find areas of mutual interest for cooperation.

It also explains the new buzzword “de-risking,” which has replaced “decoupling” in recent speeches by U.S. Treasury Secretary Janet Yellen and National Security Advisor Jake Sullivan, and was adopted by the G-7 in a an unusually stinging communique criticizing China. Yellen emphasized that “we do not seek to ‘decouple’ our economy from China’s. A full separation of our economies would be disastrous for both countries.”

But there is an internal tension in Biden’s own policies. The White House has choked off access to top-end artificial intelligence, supercomputer chips, and chip-making equipment to China, and is limiting U.S. outward tech investment, That may be the right policy, but to tell China, as Yellen did in an April speech, that it doesn’t intend to constrain China’s growth is a rhetoric-reality gap that leads Beijing to doubt U.S. sincerity about limiting the terms of confrontation. Beijing’s recent partial ban on Chinese firms buying chips from Micron, a U.S. company that has been there for years, was likely a proportionate response to signal its displeasure.

There’s plenty of hawkishness and nationalism to go around on the Chinese side, too. Chinese Foreign Minister Qin Gang admonished Blinken to “stop interfering in China’s internal affairs,” and top foreign policy advisor Wang Yi scolded Blinken for hyping the “China threat,” saying the United States should “reflect” on its “erroneous views,” which he implied are the cause of U.S.-China tension.

But it’s possible that recent events may have at least imposed some realism on Chinese ambitions. A growing skepticism—if not antipathy—toward China in Europe and much of Asia, as recent polls indicate, as well as a deeply troubled Chinese economy, may help Beijing recognize the difference between what it would like to have and what it can accept, at least for now.

That could make it possible to find a floor for relations, rather than continuing to sink further into the quagmire of mutual antagonism. But to do that the United States and China need to address the still elusive bottom-line question: What is the endgame? For some, it is strategically reducing economic interdependence and geopolitically and militarily counterbalancing China; to others, it seems to be a tacit wish to get rid of the CCP—which vastly inflates U.S. agency. For China, a realistic endgame would mean abandoning some of the fantasies of its own ultranationalists, such as accepting that the United States is not in permanent decline, has bolstered its global position, and will remain a Pacific power. It would also mean recognizing that China’s reach exceeds its grasp and scaling back its ambitions, as well as the attempts to use economic and military coercion that have prompted strong reactions from the United States, Canada, Australia, and others.

What would a path to a reasonably stable, constructive U.S.-China relationship, able to absorb shocks, look like? A lot like the new round of diplomacy that Blinken’s trip kicked off. First, it requires both nations to avoid gratuitous incidents and rhetoric, define the terms of competition and respective red lines, and alter their approaches. To date, Washington and Beijing both tend to take act on worst-case fears of the other side’s presumed ambitions rather than realities.

Thus, China charges the United States, as Xi did recently, with “comprehensive containment, encirclement and suppression” every time Washington works with Beijing’s neighbors. For the United States, fears of Beijing displacing it in Asia and building a Sino-centric world order are now hooked around Xi’s still vague Global Security Initiative and Global Development Initiative and the extremely unlikely prospect of the yuan replacing the role of the U.S. dollar. Before that, Washington’s hawks were triggered by China’s supposed Marshall Plan equivalent— the now-troubled Belt and Road Initiative—and the BRICS bank, the alleged vehicle for “de-dollarization” that is now in debt and desperate for dollars.

But there is a large gap between these fears and the reality of what each side could manage. China lacks the agency to displace the United States as a global superpower in the foreseeable future, and the United States lacks the agency to isolate China or change the regime—and economic divorce would be a disaster for both. Strategic de-risking on both sides for top-end chips and chipmaking equipment, electric vehicles, and renewable technologies is likely, and perhaps inevitable—but it doesn’t have to mean a full decoupling.

The bilateral trade relationship hitting a record $690 billion in 2022 suggests that even discounting for inflation, a robust interdependence is likely to persist. As China dominates the industry of rare earth minerals and their processing, thus controlling components for solar panels and batteries for EVs, it is problematic to assume that the United States can achieve the green transition planned in the Inflation Reduction Act by 2035 absent some cooperation with China.

The operative principle of a predictable, constructive U.S.-China relationship should be reciprocity. Mutual, demonstrable, transactional steps can calm the atmosphere of mirror-image fervent nationalist animosity. The level of mutual distrust runs so deep that only action-for-action transactional demonstrations of sincerity can gradually rebuild a modicum of trust.

Small initial actions would help to set the mood music: reopening closed consulates in both countries, easing visa requirements, allowing more press in both nations, facilitating student exchanges, increasing airline routes, China releasing U.S. hostages who are blocked by exit visa bans, rethinking recent data security restriction laws that allow Beijing to criminalize foreign business due diligence practices, and a mutual reduction of air and naval activities around Taiwan and in the South China Sea. So far, little of this seems likely—but it’s still possible. Climate cooperation has moved forward, for instance, despite the general freezing of relations.

There are also some strategies to avoid: Creating new institutional mechanisms, as well as efforts at new risk-reduction measures or strategic dialogue, won’t be effective and should be deferred until some demonstrable steps to rebuild trust create sufficient ballast.

But to erode political toxicity, some hot-button grievances need to be remedied. High on the U.S. list is ending China’s role in the fentanyl trade. This would not be a high-cost issue for Beijing, and it would have an impact on U.S. public opinion and demonstrate to Congress that diplomacy can get results, though Biden might need to at least temporarily suspend sanctions on Chinese business and Public Security Bureau officials associated with it. China would likely link this action to U.S. steps on Taiwan or tech issues.

One critical issue is financial stability, and most immediately, coordination with the International Monetary Fund, World Bank, and private sector to manage the debt crisis in Africa and other low-income states. That is a major reason that Yellen seeks a visit to China. The world’s lowest-income countries must service $35 billion in in debt in 2023, but Beijing’s lending to them now accounts for 37 percent of the total, and its mostly unilateral approach to debt relief is impeding Western efforts.

Ukraine, where Biden is rethinking China’s role, is also a politically impactful issue where cooperation may be possible. Though China’s largely pro-Russian February position paper was dismissed in the United States, its views rejecting nuclear weapons use, advocating nuclear plant safety, and a making pledge to aid in postwar reconstruction were viewed positively by Ukrainian President Volodymyr Zelensky, with whom Beijing has opened a dialogue, albeit so far a limited one. As a major lender, China’s cooperation with the West rather than unilateral Belt and Road projects on reconstruction should be part of U.S.-China dialogues.

Other areas of important potential U.S.-China talks are global rules on AI—where China’s white paper overlaps with U.S. views on key ethical principles, without which there may be a race to the bottom—and trade, fulfilling Beijing’s agricultural purchases under a Trump administration deal and clarifying trade on EVs, battery tech, and solar panels. Also important is cooperation on an urgent issue of mutual vulnerability: space debris in a congested lower Earth orbit, which threatens the satellites that have become a key part of contemporary infrastructure. And, of course, the constant specter of climate change.

Achieving a new equilibrium will be a protracted process, always one balloon or Taiwan incident away from being derailed. It will require bold leadership, political will, and creative diplomacy. Curbing performative politics (and Biden gaffes, such as gratuitously calling Xi a dictator just days after Blinken’s trip) and quietly bolstering economic and military ties with Taipei would help. But if this exercise fails, the death spiral will worsen, and it may take a conflict of Cuban missile crisis proportions or worse to reach a new sobriety.