THE FOCUS: OUR EDITORIAL

The Biden's China

Don't Expect Him to be Tough on China

1/25/2021:

To those who paid attention during the US election campaign in 2020, Joe Biden was arguably the Chinese Communist Party's candidate for president. Of course, the Democratic Party’s media propaganda machines, along with the Big Tech, never mentioned it or simply covered up the fact that the Biden family has deep financial ties to the Chinese Communist Party stretching back to 2010 as reported by the New York Post.

​Now that Biden has been the official president*, how will China react to it? Equally important, how will the Biden administration approach the US relationship with China? 

Before Biden even makes his move, Chinese President Xi Jinping already fired the first salvo on Monday, January 25, by sending a warning that the U.S. risks sparking a “new Cold War” by seeking to rally the world against Beijing and its 21st-century economic model.

This is after some signals, not yet proposed as a policy course, from Washington, D.C. that Joe Biden will likely pursue a broader alliance with Western democracies to pressure Beijing, in contrast with President Trump’s go-it-alone approach.

 

Trump Was Alone

But did Trump intentionally decide to do it alone, or did the underlying geopolitics and geoeconomics leave him without much choice?

The tensions between the U.S. and China are on multi fronts, from domestic politics to geoeconomics. Back in July 2020, FBI director, Christopher Wray, stated that China is the 'greatest threat' to the US. And in December 2020, Director of National Intelligence (DNI) John Ratcliffe penned an op-ed in Wall Street Journal stating that China is national security threat number one to the US. China's influence on the US is not exclusive on global economy and business. They have extended their leverage to the US domestic politics, including local and state levels.

The Trump administration had made it clear from the start in 2017 that containing China and holding them accountable for many misdeeds committed in the US, including stealing technology, were number one priority of their geopolitical and geoeconomic policies. According to the FBI director, China's theft of technology is the biggest law enforcement threat to US.

In 2019, President Trump ordered US firms to move production out of China. For the US companies, especially those have heavily invested in China, that’s it not easy to do.

Take Boeing for instance. The aircraft maker doesn’t look poised to abandon the Chinese market any time soon after opening a plant for 737 Max jets in 2018. Moving production could also put Boeing at risk of ceding ground to rival Airbus, which competes heavily in the Chinese market. Boeing delivered 200 new 737 Max planes to Chinese airline Xiamen in 2018.

Apple is another prime example which has most of its products built in China. Its largest supplier Foxconn produces the lion’s share of the company’s iPhones in 29 factories in the central province of Zhengzhou. Taken in total, roughly 50% of Apple’s supplier locations as well as its global revenues are based in China. Moving out its factory from China would be enormously costly and could clear the way for competitors like Samsung to grab its market share.

As the American factories are moving to China and so are their financial capital. Instead of following the order of the Trump Administration, American financial firms including JPMorgan and Goldman Sachs were doubling down on investing in China and expanding headcount.

Even the last ditch by the Trump Administration to prevent the Chinese companies raising capital in the US financial markets almost went futile. On November 12, 2020, Trump signed an executive order prohibiting U.S. investments in Chinese companies, particularly China MobileChina Telecom and China Unicom Hong Kong, that Washington says are owned or controlled by the Chinese military. The Order stated:

“China is increasingly exploiting the United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses, which continues to allow the PRC to directly threaten the United States.” 

The New York Stock Exchange said it would begin the process of delisting the aforementioned companies, but then backtracked toward the end of the year only to reverse it later after pressure from the Trump administration. This shows that it’s not easy to form a coalition even within domestic to face China's threat.

The Europeans Are Tone Deaf

Globally, the Trump administration had tried to rally European countries to collectively challenge China. But their call fell on deaf ear.   

Part of the problem is the European Union is not composed of homogenous countries. Hence, although there are criticisms of China in Europe, they are not confined to one country or one political group. While parties on right tend to emphasize what they see as the strategic threat to Europe’s interests, politicians on the left take up human rights causes, such as Hong Kong and the treatment of the Uighers in Xinzhen.

On December 30, the European Union finalized an agreement in principle on a long-delayed investment deal with China. The deal will open up both markets and strengthen economic ties between the EU and its second-largest trading partner. The deal still has yet to be approved by the members of the European Parliament, which has been against it over China's use of forced labor, especially in the region of Xinjiang.

The Trump administration also raised serious concern of China’s act in Xinjiang which they labelled as genocide. However, they pressured China on multi fronts. In contrast, the Left is the US are more concerned with the forced labor issues than the strategic national interests in challenging the Chinese quest for geopolitical and geoeconomic dominance.

 

Already National Security Council spokesperson Emily Horne stated that President Biden has called the oppression of the Uyghurs a genocide, and he stands against it in the strongest possible terms. With the Big Tech and mega money corporations embedded in the Democratic Party and the Biden Administration, it will be difficult for them to challenge China on strategic national interests.

​Global Institutions

The Chinese Communist government is certainly full of smart people who know how to play their cards in the global political landscape for their optimal advantage. And just like everywhere in the world, money talks. Politics 101 says that money can buy political influence. That’s precisely what the Chinese have been doing to developing countries and global institutions.

Granted, the United States also has been doing the same thing. But there are some differences. The U.S. still gives billions in foreign aid every year, and the funding touches all facets of life in other countries including public health, military training, sanitation, and women’s rights. Many developing countries have taken the U.S. assistance for granted.

In contrast, in the past 15 years, China has been plowing “aid” money into developing countries in the forms of megaprojects like airports, roads, and dams. A report published by AidData, a research lab based at the College of William & Mary, finds that China spent $354.3 billion over the 15-year period from 2000 to 2014 involving more than 4,300 projects in 140 countries and territories. It’s still less than the $394.6 billion spent by the U.S. over that same period.

Workers from a Chinese engineering company erect the African Union conference center in Addis Ababa, Ethiopia, in 2010. China paid for the $200 million building as a gift to African Union.

Although the amount was gigantic, little was known about its details because the Chinese government withholds information from the public as they deem it a state secret.  What is known, however, is just 22 percent of the total was spent on official development assistance (ODA), or generally called "foreign aid." In contrast, about 93 percent of U.S. overseas development spending counts as ODA. In addition, the funding doesn’t tend to come with the same kinds of pro-transparency and human-rights-protection strings attached to American foreign aid. This makes it more attractive to corrupt or authoritarian governments. So even if China gives much less aid than America, it advertises better.

 

It is evident that Chinese President Xi Jinping has been busy trying to draw traditional U.S. allies into China’s economic orbit, challenging or undercutting the US global leadership. An appeasement strategy, which is likely Biden’s approach, will not only embolden but also further empower them. On the other hand, Trump’s going alone approach, due to the lack of support from Western economies and the U.S. domestic global firms, although not entirely successful, had some sting in Beijing. The COVID, however, threw the game out entirely, including President Trump.

 

Apart from the potential implications of the Biden family’s ties to China, the real winner in the 2020 saga, including the US presidential election, is China. It’s not surprising that Xi Jinping is the one that sent the first warning to Biden.

Good Readings:

 

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