After the meeting between Chinese President Xi Jinping and U.S. President Joe Biden in San Francisco in November this year, there have been some signs of easing in the relations between the two countries. In this turbulent world, the improvement of U.S.-China relations will reduce the likelihood of conflicts between the two, which is a positive development for the global community.
From the perspective of the economic strength, U.S.-China relations are undoubtedly the most influential bilateral relationship worldwide. The relations' future development might just hold the most significant variable that can impact the world. Researchers at ANBOUND believe that in assessing the situation, one should avoid being neither too optimistic nor excessively pessimistic. Instead, a methodical and objective analysis is needed to foster a nuanced understanding of the circumstances. As a simple analytical framework, one can look at U.S.-China relations from the two dimensions of changeable elements and unchangeable elements.
Which aspects of the U.S.-China relationship are likely to undergo changes? Based on the meetings between the leaders of the two nations and their subsequent actions, positive developments are anticipated in the following areas.
Firstly, there is an expectation for the restoration of high-level military communication between the U.S. and China, the resumption of working-level meetings between the defense departments of both countries, the initiation of consultations on maritime military security between the two countries, and the commencement of telephonic exchanges between the leaders of the military zones. Following the balloon incident earlier this year, communication between the American and the Chinese militaries has been largely suspended. Due to the then-Chinese Defense Minister being on the U.S. sanctions list, multiple attempts by the U.S. military to engage in dialogue with their Chinese counterparts were diplomatically declined by China.
Secondly, both countries will restart the anti-drug cooperation. The U.S. witnesses tens of thousands of deaths annually due to the abuse of drugs such as fentanyl, and this figure has been on the rise. Historically, the U.S. has accused China of supplying large quantities of opioid-like drugs. The establishment of an anti-drug working group aims to address domestic concerns within the U.S., while also aiding China in better managing the impact of the U.S. drug abuse crisis.
Thirdly, the two countries will establish a government-level dialogue on artificial intelligence (AI). With the rapid development and application of the technology, AI demonstrates extensive potential and influence. However, as an evolving technology, the misuse of it could lead to social crises. Dialogue and communication between the U.S. and China on AI are conducive to jointly exploring and addressing the matters in the development of AI.
Fourthly, in the civil aviation sector, both countries will continue to increase bilateral civil aviation flights next year, providing more convenience and opportunities for people-to-people exchanges.
Fifthly, the two countries will expand exchanges in education, students studying abroad, youth, culture, sports, and business. However, given the overall friction in bilateral relations and the lack of mutual trust, expectations for cooperation in the fields of education and culture do not appear to be overly optimistic.
Sixthly, the cooperation in the field of climate change will be strengthened. Climate change is the area with the most significant number of cooperative agreements between the U.S. and China because this field does not pose a threat to the two countries. Without the participation of both the U.S. and China, the global climate change agenda may be challenging to advance.
At the same time, it is crucial to recognize that there are many areas where the bilateral relations remain unchanged. These unchanging areas may better represent the essence of the U.S.-China relations.
The first of these unchangeable aspects is the U.S.’ competitive strategy toward China. In its national defense strategy at the end of 2017, the U.S. defined China as a long-term strategic competitor. A series of adjustments in the U.S. national security strategy is the fundamental driving force behind significant changes in U.S.-China relations. This strategy defines many aspects of the relationship and its fundamental nature. We believe that in the visible future, likely lasting for several decades, the U.S. is unlikely to adjust this strategy significantly. Dealing with "strategic competition" from China is the "underlying theme" of the relations. As long as this underlying theme remains unchanged, it is challenging for other aspects to undergo fundamental changes.
Secondly, the "small yard, high wall" strategy adopted by the U.S. toward China will not change. Despite being a market-oriented economy that has long championed a free market, the U.S. aims to contain China in service of its major power competition strategy. Due to national security concerns and to prevent the export of more technology, knowledge, and products to China, the U.S. has devised the "small yard, high fence" strategy that delineates a series of restricted areas within the "small yard" covering knowledge-intensive and high-tech fields such as semiconductor chips, artificial intelligence, biomedicine, and more. The "high fence" imposes restrictions on China at the levels of technology, products, equipment, and knowledge. This concept has also expanded globally through the American alliances. For instance, the U.S., along with the Netherlands and Japan, restricts the export of advanced semiconductor equipment to China. Additionally, through some forms of long-arm jurisdiction, the U.S. limits the flow of technology, equipment, and talent from other countries and regions to China.
Thirdly, the U.S. strategy and approach to the Taiwan issue will remain unchanged. The Taiwan issue is a core interest for China, and the U.S. has consistently used it as a significant leverage point and geopolitical pivot to influence China. Hence, such an issue will continue to be a crucial point of friction between the two nations, serving as a strategic card for the U.S. However, as China's economic and military strength grows, the U.S. also recognizes the potential risks of getting involved in a crisis in the Taiwan Strait and the potential costs of intervening in a conflict there.
Fourthly, the joint efforts of the U.S. and its allies to impose restrictions on China will not change. During the meeting in San Francisco, President Biden stated that the U.S. had no intention of forming an encirclement against China with its allies. However, it is challenging for such a statement to be faithfully adhered to. This is because, for the U.S. to "contain" the long-term strategic competitor that is China, it will inevitably implement a prolonged "encirclement" strategy. Nevertheless, the allied countries of the U.S. will determine their attitudes and policies toward China based on their very own national interests.
In a recent speech, U.S. Secretary of Commerce, Gina Raimondo, conveyed a stance perceived as notably assertive by Chinese observers. She explicitly declared that China is not a friend of the U.S., emphasizing the U.S. stance against allowing advanced chips to be exported to China. This is not particularly surprising. If one understands the changeable and unchangeable elements in U.S.-China relations, it becomes evident that Raimondo's remarks essentially represent a candid position from the U.S. The "small yard, high fence" policy of the U.S. toward the high-tech sector in China is anticipated to remain unchanged.
Final analysis conclusion:
According to researchers at ANBOUND, a crucial strategy for China in navigating future U.S.-China relations involves steadfast adherence to the principles of reform and opening up, ensuring continued openness to the global community. Greater openness means a more favorable business environment. In addition, undertaking comprehensive market-oriented reforms are crucial as well. These actions can mitigate the impact of the U.S. containment strategy and alleviate constraints imposed by such efforts.
