Mon. Apr 22nd, 2024

Prof. ST Hsieh

Director, US-China Energy Industry Forum

626-376-7460

[email protected]

April 27, 2023

It is very true that US-China relation is spiraling and risky. But it is important to realize that a US-China war is not inevitable. Both the US and China should take time to rationalize what kind of relation could be acceptable to both sides. There is no need to rush any engagement for the purpose of preventing the relation from downward spiraling. The risk of pushing the envelope too fast could be worse than the status quo.

After President Biden took office, the US-China relation faced some new challenges. Most of the bilateral meetings between the two nations so far produced no new hope but at least these meetings were frank so both sides should have a clear understanding of each other’s bottom lines. Of course, understanding does not mean acceptance. Any new engagement will not improve the bilateral relation if there are no follow up actions or direct deliverables. There is no time to waste!

Specifically, now that President Biden has announced that he will run for re-election in 2024, everyone in the world understands that his top priority for the next 17 months now is to get re-elected, and it means that President Biden will not be interested in any idea, statement, or action that would offend the US voters. On the other hand, GOP will take every action possible to attack Biden and his administration. This is the time again that the world will have watch the US domestic political dog fights every four years.

Of course, US domestic politics have global impacts. But giving the divided bipartisan politics in the US, especially if the next general election would feature of a re-match of Biden vs Trump, it is best for any foreign country to stay out of the way. The world will survive without being actively managed by the US.

China should understand the US domestic political process and take a wait-see attitude on engaging with Biden Administration, unless the re-engagement will have a real impact on China.

U.S.-China Ties Are Spiraling. The Cabinet’s Stuck in a Turf War.

Bob Davis

Thu, April 27, 2023 at 1:30 AM PDT

Relations between the U.S. and China are as poisonous as they have been in decades. But as the White House tries to ease tensions, bureaucratic rivalries in the administration are complicating the effort.

A meeting in Beijing between a Biden Cabinet member and a Chinese counterpart would help repair relations, or at least halt the downward spiral. But then comes the next question: Who should the envoy be? Right now, three Cabinet secretaries are jockeying to make the trip to China, and the White House is weighing its options but hasn’t decided. This story is based on interviews with current and former U.S. officials and China experts close to the administration.

Secretary of State Antony Blinken would be the obvious first choice to go, but he is currently persona non grata in Beijing for canceling a visit in February after the U.S. shot down China’s alleged spy balloon. He annoyed China further by using a meeting shortly afterward in Munich with China’s top foreign affairs official to publicly warn China not to arm Russia in its Ukraine war.

That’s provided an opening for both Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo to become the lead envoy. Both have said they wanted to travel to China, and, unlike Blinken, both have received public invitations from Chinese cabinet agencies. Treasury and Commerce have dispatched officials to Beijing to scout out possible meetings, although neither session is far along in planning. Yellen had expected to go to China in March until the balloon incident put the kibosh on that visit.


The bureaucratic wrangling has been fairly civil thus far by Washington standards, but the Biden administration is eager to tamp down any notion of internal conflict.

“The Administration has been clear about maintaining channels of communication with Beijing to manage competition responsibly,” said National Security Adviser Jake Sullivan in a statement. “The engagements Secretary Blinken, Secretary Yellen, Secretary Raimondo and others will have in the coming months will all be a part of that.”

It’s also not as simple as who the U.S. may want to send. Chinese officials are also jostling over who should meet an American emissary, and it’s uncertain whether any of the Americans could score a meeting with Chinese leader Xi Jinping. Meanwhile, as friction grows between the two superpowers, some wonder if détente is even possible at this point.

“We have left strategic competition behind,” said Christopher K. Johnson, a former CIA China analyst. “We’re in strategic rivalry and are at the risk of careening toward strategic enmity.”

Last November, the two sides looked as if they wanted an accommodation. Biden and Xi met in Bali and, despite their many differences, agreed that the two sides should work together on economic stability, food security, climate and other issues.

But follow-up meetings were scrapped after the balloon saga embarrassed Beijing. Then, China launched military drills around Taiwan after the island’s leader met with Speaker Kevin McCarthy in early April, which outraged Washington.

Since March, the Chinese have sent conflicting signals about their interest in warming ties with the U.S. On the one hand, Chinese leaders have used mainland economic conferences to welcome U.S. business investment. On the other, Beijing has raided an American financial analysis firm in Beijing and slowed merger approvals needed by American companies. Xi accused the U.S. by name — a breach of Chinese etiquette — of “all-round containment, encirclement and suppression.”

There are two strands of thought among the Chinese leadership, said Harvard University’s Graham Allison, a prominent political scientist who recently met with top Chinese leaders in Beijing. “One strand is fatalistic,” he said. “The second strand says, ‘We can’t let things remain this way. We need to get back to Bali, with private conversations about the flashpoints that matter most.’”

The U.S. has tried to pick up on that second strand but hasn’t gotten very far. Meetings of U.S. and Chinese officials are “like being trapped in a bad episode of ‘Seinfeld’ where the ‘Festivus airing of grievances’ is a year-round holiday,” said Johnson, who now heads the political-risk consultancy China Strategies Group.

Administration officials acknowledge Blinken hasn’t had much luck changing that dynamic, but they argue China’s top foreign affairs official, Wang Yi, and others are at least as much at fault for the downward spiral.

So far, Yellen hasn’t been at the center of China policymaking. The National Security Council plays an outsized role there, with the State Department also having an important voice. But issues fundamental to Treasury — global economic growth, financial sector stability — are among those China wants to discuss with the U.S. even as the two countries tangle over Taiwan, Russia and technology.

Treasury is also viewed elsewhere in the government as holding on to the idea that a formal economic “dialogue” between the two nations would be useful, although the Biden White House has picked up Trump’s position that the Chinese used earlier dialogues, where senior officials met regularly, to filibuster a subject. Some at Treasury make sure not even to use the word “dialogue” when asking for White House approval to call or meet with Chinese counterparts.

During a speech last week at the Johns Hopkins School of Advanced International Studies, Yellen gave a tough-minded preview of the kinds of conversations she anticipated having with the Chinese. The speech had two audiences: Beijing and those in Washington and the allied capitals that doubted the White House fully trusted her.

“These national security actions are not designed for us to gain a competitive economic advantage, or stifle China’s economic and technological modernization,” Yellen said.

In other words, the two nations would disagree on many fronts, but there were still plenty of areas where they could profitably work together.

Within the White House, no decision has been made on whether Blinken, Yellen or Raimondo will be the initial envoy to Beijing. One consideration: Which of them would wrangle a meeting with the highest-ranking Chinese official?

That makes Raimondo a long shot for the first trip to Beijing. Commerce secretaries traditionally rank low in the Washington hierarchy and have been generally treated in Beijing as salespeople for corporate America. However, Raimondo plays a critical role in sanctioning Chinese companies and overseeing U.S. industrial policy — areas the Chinese want to discuss. Vice Premier Ding Xuexiang, one of the seven members of the ruling Politburo Standing Committee, is expected to oversee technology issues for Beijing and would be a high-profile interlocutor on the Chinese side.

Some at State also are concerned that the Chinese could look to splinter the U.S. government by favoring Treasury and trying to cut out the State Department. In the Trump administration, for instance, the Chinese focused their lobbying on Treasury Secretary Steven Mnuchin to try to sideline the uber-hawkish U.S. Trade Representative Robert Lighthizer, who was pressing a trade war between the two nations.

It didn’t work under Trump, and U.S. officials say it wouldn’t work now. Beijing “won’t find a way to divide what we’re doing,” said Deputy Treasury Secretary Wally Adeyemo. “What we are trying to do is make it clear that we are going to protect our national security, but our goal is not to constrain China’s economy from growing.

For all the aggravation with Blinken in Beijing, China’s Ministry of Foreign Affairs also has been throwing up some roadblocks to an early Yellen visit, said several China experts who have recently visited Beijing. Presumably, that’s for reasons similar to those in Washington; each ministry wants to assert its preeminence and have its ministers host the first U.S. cabinet visit since the balloon imbroglio. That’s especially important now in Beijing where Xi has reshuffled top government and Communist Party officials.

In the end, whom Biden chooses to make the first cabinet-level trip to Beijing may come down to who is available to travel when preparations are completed. The U.S. envoy may carry a letter from Biden during the trip. An important goal of this round of diplomacy is promoting a summit between Biden and Xi in November in San Francisco when the U.S. hosts the Asia-Pacific Economic Cooperation forum, an organization of 21 major economies, including the U.S., Japan, China and Russia.

But it’s far from clear that cabinet-level meetings will be enough for China to start modulating its policies. The U.S. has plenty it could offer China as inducements — cuts to tariffs that even Biden criticized when he was running for president in 2020, limiting U.S. export controls, backing away from banning TikTok in the U.S., among many other possibilities.

“At this moment, we need deeds as well as words,” said Summers, the former Treasury secretary.

But across the government, U.S. officials say the focus now is on restarting talks, not about making changes in policy — particularly anything resembling a concession that could be criticized by Republicans.

“We want senior empowered channels of communication,” said a senior State Department official. “We want to engage regularly.”

For Washington, in other words, the meetings are the message.

Dalio Warns US-China Relationship Is in ‘Very Risky Period’

Ye Xie

Wed, April 26, 2023 at 2:00 PM PDT

(Bloomberg) — The world’s two largest economies are on the edge of war, and the situation will worsen as the US heads into the presidential election in 2024, according to Ray Dalio, founder of Bridgewater Associates.

“The hawkish political influences in the United States will exert more pressure on the relationship over the next 18 months because of the emergence of the 2024 election season,” Dalio, who has traveled to China twice recently, wrote in a LinkedIn post Wednesday. “That will be a very risky period because China and the US are now already on the brink of war.”

While a war isn’t inevitable, many “red lines” will be pushed up against with “brinksmanship,” including issues on Taiwan, Beijing’s dealing with Moscow, and the US’s move to cut off China’s access to essential semiconductors, he wrote.

“Each one is risky, and together they carry a lot of risk,” he said.

Taiwan, which China views as its territory and a top national security priority, will hold its own presidential election in January 2024 — 10 months before the US one.

“Both sides have been very clear that they recognize that either an economic decoupling or a military confrontation would be disastrous, while they are testing each other’s limits,” he said.

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