View profile

Wei To Think Again: Washington's 2022 To-Do List on China

Weifeng Zhong
Weifeng Zhong
Happy New Year, Watchers of U.S.-China Competition!
To those who signed up recently, welcome to Wei To Think Again, my bi-weekly personal letter on U.S.-China competition. This is for the folks seeking how to think about the nuances in U.S.-China relations intelligibly.
If you haven’t done so, please sign up here. If you’re already in the loop, please help us grow in the new year by forwarding the letter to a friend.

Biden <3 Trump's China Policy
When President Biden first took office, many thought he would be soft on China, but I predicted the opposite. I argued in a National Interest piece last February that the general trajectory toward greater U.S.-China competition was already set before former President Trump entered the picture and that Biden’s China policy would not be an “Obama 2.0.”
But a year later, I’m nevertheless surprised by how much Biden’s China policy looks like a “Trump 2.0.” A recent piece in WIRED has a comprehensive list of all the Trump-era China measures that Biden has kept in place and/or built upon. Many of them were first put under some sort of review during the president’s early days in office before they were more permanently embraced by his administration—often through inaction.
A Year In, Biden’s China Policy Looks a Lot Like Trump’s
But inaction is an action, just not a wise one in an intense and complex competition with the world’s second largest economy. Awaiting Washington in 2022 is an increasingly assertive and ambitious Beijing, and the Biden administration ought not to kick the can down the road any further.
2022: The Year of Making Tough Trade-offs
The “China challenge” for America is about striking a balance between two considerations: the plenty and the security. Engagement with China in areas like trade and investment significantly benefits the U.S. economy (the plenty). But with economic gains comes Beijing’s authoritarian influence that, as policymakers and the public have come to realize, increasingly compromises our liberal-democratic institutions (the security).
We’re at a crossroads with this challenge because during U.S. administrations before Trump, the plenty took priority over the security. But Trump’s China policy was overly protectionist—think across-the-board tariffs on Chinese imports—forgoing too much plenty for too little security.
What the Biden administration needs to do is get the most bang for its buck in the plenty-security trade-off. An effective strategy would mean identifying areas where the CCP’s behavior is posing legitimate security risks to our society and finding solutions that harm Americans’ economic freedom and individual liberties the least. In 2022 and beyond, the United States should face these tough trade-offs head on, not cling to the status quo.
Washington's Top-Five To-Dos in 2022
While there’re many to name, here are the five most important issues regarding China that policymakers should tackle this year.
(1) China’s Open-Source Surveillance on the West
Beijing is never shy about its ambition to harvest big data for intelligence purposes both at home and abroad. A recent Washington Post report on how Beijing amasses data from Western social media details an alarming tip of the iceberg.
Liberal democracies are aware of this challenge. Richard Moore, head of the United Kingdom’s MI6, bluntly called it “data traps” in a recent interview. But the problem, as I’ve written in a previous letter, is that America and its allies are still responding to the challenge by relying on stealing and keeping secrets to generate intelligence. The time to change that is now.
Wei To Think Again: The Limits to Spying
(2) Trade Policy Toward China After the Phase 1 Deal
Biden has kept much of Trump’s trade policy toward China in place. Now that the phase 1 deal has expired and China has fallen short of its promises by far—duh!—what are the next steps?
I would argue for lifting the tariffs—at least those on goods that do not pertain to national security—which have been hurting the U.S. economy without changing any Chinese behavior. I know there’s not much appetite for that inside the Beltway, but Candidate Biden back in the 2020 election actually agreed with me until his campaign walked that back, as pointed out by Reason at the time.
Joe Biden Said He Would Scrap Trump's China Tariffs. Or Did He?
(3) The Holding Foreign Companies Accountable Act
That’s a 2020 law intended to confront a years-long thorny issue: Chinese companies on U.S. stock exchanges have long refused to comply with the audit review process required by U.S. law. Wall Street turned a blind eye for the plenty, and that has compromised the disclosure quality of America’s capital markets. The new law threatens to delist those companies if they still refuse to comply, and the Securities and Exchange Commission recently established a framework for implementing the Act.
If the enforcement of the law is vigorous and fair, it may strike a good balance because it could uphold the integrity of America’s capital markets without closing them off to Chinese participants—as long as they play by the rules. My Mercatus colleague Andrew Vollmer, a former Deputy General Counsel of the SEC, has elaborated on this point when addressing components of the law.
Senate Bill Would Deny U.S. Securities Trading to Chinese Companies
(4) The Uyghur Forced Labor Prevention Act
This bill, signed into law before the holidays, intends to stop the importation of any goods mined, produced, or manufactured wholly or in part in China’s Xinjiang that are made with forced labor. A key part of this new policy is a “rebuttable presumption”: Imports from Xinjiang are presumed to be made with forced labor unless they are demonstrated otherwise with clear and convincing evidence.
What makes “clear and convincing evidence” matters a great deal because not all goods from Xinjiang are made with forced labor, and it could risk over-killing the plenty if rebutting the presumption is too hard.
But readers of my earlier letter on this issues may also recall that forced labor exists elsewhere in China by transferring people out of Xinjiang. Recent research by Sheffield Hallam University’s Laura Murphy and associates also uncovered the cotton “laundering” phenomenon—forced-labor-made but unfinished cotton from Xinjiang getting into global supply chains through third countries. These indirect channels should be taken into account when implementing the new law, as those goods are nevertheless made “in part” by forced labor in Xinjiang.
Laundering Cotton
(5) U.S. Policy Toward Taiwan
In my last letter, I explained why the current U.S. policy toward Taiwan, commonly known as “strategic ambiguity,” no longer works. I argued that, to sustain peace in the Taiwan Strait, the Biden administration should move to “strategic clarity,” making clear the U.S. intention to intervene if China attempts to take over Taiwan, or not.
Wei To Think Again: The Age of Strategic Ambiguity Is Over
This issue may come to a head sooner than you think because 2022 is an important year for Chinese politics. When the CCP convenes its 20th congress in the fall, President Xi Jinping will all but certainly assume his third five-year term. At such a critical juncture, Beijing will likely continue to tighten its grip at home and pursue hawkish foreign policy abroad, especially on the issue of Taiwan. After all, the last thing Xi would want during a sensitive transition is to show even a slight weakness to his opponents.
Contact Me
Forward this to a friend, contact me with your feedback, or both!
Did you enjoy this issue? Yes No
Weifeng Zhong
Weifeng Zhong @WeifengZhong

A bi-weekly personal letter on U.S.-China competition and why the nuanced matters often require us to think again.

In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Created with Revue by Twitter.