Although presidents Xi Jinping and Joe Biden met virtually on Tuesday for their first formal dialogue since Biden took office in January, there was little indication that their nearly four hours of talks achieved any sort of breakthrough in the areas of trade and industrial policies – thorny issues that have strained China-US relations for almost two decades.
US National Security Adviser Jake Sullivan elaborated on this prickly point during a separate discussion hosted by the Brookings Institution in Washington on Tuesday.
Sullivan specifically referred to agreements between the United States and European Union – such as ending a 17-year dispute between Boeing and Airbus to set the terms for the civil aviation industry – and said such arrangements help provide a foundation to counter China’s economic practices.
“All of this is about working with like-minded partners to write the rules of the road for the 21st century in a way that advances our interests, reflects our values, and yes – pushes back on China’s non-market economic practices,” Sullivan said.
Also this week, US Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo are meeting with their counterparts in Japan, South Korea and India, but not China, as the Biden administration aims to forge stronger trade ties with the largest economies in Asia.
Ryan Hass, a senior fellow and the Michael H. Armacost chair in the foreign policy programme at Brookings, who was also a speaker at the research group’s event, framed the current state of dialogue between the US and China in the context of how wrought bilateral ties were when Biden took the reins.
“It’s worth reminding ourselves that, when Joe Biden entered office in January, the US-China relationship was effectively dysfunctional. There were no real functioning channels of communication between Washington and Beijing, and I think the dominant trait of the relationship at that time was confrontation through public condemnation in both directions,” Hass said.
The sporadic meetings on trade and economic issues between China and US since the trade war began in 2018 are in contrast to those that took place during President Barack Obama’s administration (2008-2016), when there were regular high-level meetings through various forums to discuss a broad range of global, regional and bilateral issues related to politics, economics and security.
Those talks, however, were not always deemed effective when it came to implementing significant changes to China’s trade and economic practices.
While some of the key forums established by Obama’s administration – including the Paris climate negotiations, the Iran nuclear agreement, and the response to the Ebola outbreak – yielded substantial outcomes in terms of establishing connections with China, there are questions about the effectiveness of efforts such as the US-China Strategic and Economic Dialogue, and the US-China bilateral investment treaty (BIT).
The US-China Strategic and Economic Dialogue (S&ED) mechanism was created in 2009 by the Obama administration as an upgrade to the Strategic Economic Dialogue that was initiated in 2006 by the administration of former president George W. Bush.
The upgraded agreement between former Obama and former Chinese president Hu Jintao added a “strategic” track covering a broad range of global, regional and bilateral political and security issues, but it was suspended by the administration of Donald Trump. And Bloomberg reported in July that US Treasury Secretary Janet Yellen and her staff have no plans to resurrect the regular US-China economic dialogue that governed ties between the two nations.
Meanwhile, efforts to reach a US-China bilateral investment treaty (BIT) during Obama’s eight years in the White House also failed. The BIT talks also fizzled out once Trump became president, although the basic objectives stayed intact – including China’s trade and economic practices, unclear regulatory and legal enforcement, forced technology transfer, and long-standing market-access barriers.
Trump and the phase-one trade deal
In January 2018, Trump began imposing tariffs and other trade barriers on China, aiming to force Beijing to make changes to what Washington said were “unfair trade practices”, intellectual property theft, forced technology transfer, lack of market access for American companies in China, and creating an unlevel playing field through state subsidies of Chinese companies. After a series of high-level talks, the prolonged conflict reached a turning point in January 2020 with the signing of the phase-one trade deal.
The US National Security Council said in May 2020 that it was time the United States to “rethink the failed policies of the past two decades – policies based on the assumption that engagement with rivals and their inclusion in international institutions and global commerce would turn them into benign actors and trustworthy partners”.
Biden’s turn at the table
Trade Representative Katherine Tai has said the US intends to launch new talks with Beijing but will keep existing tariffs in place, while also allowing some US importers to seek exemptions from those levies. Analysts believe there is a long way to go before the two nations can return to the drawing board to have regular talks.
Guo Changlin, a former diplomat to the US and the United Nations and now an analyst with the Beijing-based Taihe Institute think tank, said the series of meetings taking place in Alaska, Tianjin and Geneva between China and the US, away from the capitals of the two countries, indicate that there remains “distance” between the two nations, with differences that will be difficult to reconcile.
“With a meeting between the two heads of state – no matter what the format is – it is hoped that the current tensions between China and the United States can be eased to a certain extent,” Guo said in a blog post on Tuesday.
“However, Sino-US relations have undergone profound changes. It is impossible for the United States to change its perception of China. It is impossible for the Biden administration to change its current China policy.
“The political environment within the United States [regarding Sino-US relations] cannot be changed in the foreseeable future.”
Guo added that there is still a “long way to go” before the two nations can cooperate, and China should not “fantasise” about better relations with US.