The Economist July 17th 2021 BriefingAmerica’sChinapolicy 19
global economy. America cannot try to
contain it as it did the Soviet Union; in
stead Mr Biden wants to counter China’s
influence by increasing America’s own.
The emerging strategy, while still pro
tean, sounds of a kind with Mr Doshi’s pre
scription for “blunting and building”. The
building comes first. Mr Biden’s aides in
variably start any discussion of China
strategy with the need to restore American
greatness after decades of decline. “Rarely
has a great power like the United States
gone on such a detour,” says the senior offi
cial. “It’s tragic.” America must recover
from all that, and invest in itself, Mr Bi
den’s aides say, so that it can deal with Chi
na from a position of strength.
Hence the United States Innovation and
Competition Act, which passed the Senate
in early June packed with spending intend
ed to improve America’s competitiveness.
It would authorise $52bn to boost semi
conductor research and manufacturing in
Americaand $29bn for a new appliedsci
ences fund that would support projects in
advanced materials, robotics, artificial in
telligence and other technologies. It also
contains extra money for going to the
Moon (see International section).
Spending does not have to be aimed so
precisely to be part of the policy. Mr Biden’s
$1.9trn pandemic recovery package, which
passed in March; his multitrillion dollar
proposals for “hard” and “soft” infrastruc
ture; his provisos on buying American: all
can be read as part of a rebuilding policy
aimed at China while also looking to fulfil
lavish campaign promises.
But ambitious as they look in Washing
ton, these numbers cannot compare with
Chinese spending on infrastructure and
industrial policy. And they are shrinking.
The core infrastructure plan has been
whittled down to $600bn in negotiations
with Republicans whose distaste for hand
ing victories to Mr Biden exceeds their ani
mosity to China (though Democrats want
to add back $3.5trn in another package—
see United States section). Republicans
such as Ted Cruz, Marco Rubio and Josh
Hawley, all selfprofessed China hawks,
are unlikely to abandon their party’s oppo
sition to Mr Biden’s domestic agenda when
they have their eyes on his job.
Even if America were united in its ef
forts, though, building back at a rate that
would seriously diminish China’s current
prospects is not possible. Barring a serious
setback, China’s economy will become the
world’s largest within its 1015 year “win
dow of opportunity”. The country’s gigan
tic market will exert, as Communist Party
lingo puts it, a “powerful gravitational
field” far beyond its borders. It will be able
to spend even more on its armed forces.
The country’s investments in research and
development will make its technological
prowess increasingly formidable.
Thatiswhyanantagonisticpolicyre
quireswhatMrDoshicalls“asymmetric
blunting”: waysofundermining China’s
attemptstorebuildtheworldorderthatdo
notcosttoomuch.Militarily,thatmeans
adoptinganapproachof“deterrencebyde
nial”inareasjustbeyondinternationally
recognised Chinesewaters, investing in
stateoftheart weapons to stop China
seizingcontrolofwatersorislands(like
Taiwan)towhichitconsidersitselfenti
tled. Economic blunting tactics include
enforcingexportcontrolssothatAmerican
companiesdonotfuelChina’srapiddevel
opment of critical technologies—a tool
that the Trump administration used to
crippleHuaweiandtoimpedeChina’sbig
gestchipmaker,SemiconductorManufac
turingInternationalCorporation.Political
bluntingincludescounteringChina’sin
fluence intheUnitedNationsandother
multilateralinstitutions.
Sharpenup
Becausesuchstrategiesrequirepartners,
theircultivationisa coretenetofMrBi
den’sstrategy.Hehasbeencourtingother
governments andsorting out old griev
ances.Hehasagreeda suspensionoftariffs
ina 17yearolddisputewiththeeuover
subsidiestoAirbus,anaerospacecompa
ny.Hehasalsowaivedsanctionsonthe
company buildingtheRussianled Nord
Stream2 pipelineasa favourtoGermany,
whichwillbetherecipientofmostofits
gas.Insodoinghesignalledthathisad
ministrationviewspotentialcooperation
withalliesonChinaasmore important
thanconfrontingRussia.InMarchAmeri
caagreedanewdealonfundingforthe
mainAmericanmilitarybaseinSeoul.
Thiscultivationhasbornesomefruit.
InMarchBritain,Canadaandtheeujoined
withAmerica inimposing sanctions on
Chinese officials and entities over Xin
jiang—the first time any other govern
mentshaddoneso.InMaySouthKorean
President MoonJaein,onavisitto the
WhiteHouse,agreedtoa mentionofpre
servingthestatusofTaiwaninthesubse
quentjointstatement.InJunetheg7and,a
coupleofdayslater,anatosummitboth
produced statements recognising the
threatposedbyChina.
Serious blunting, though, requires
more than coordinatedstatements and
(largelysymbolic)sanctions.Herethereis
lesstoreport.BuildBackBetterWorld,or
b3w, a responsetoChina’sBeltandRoad
Initiativeannouncedattheg7summit,has
nonewinstitutionalframeworkorfund
ing.MrBidenhasworkedwiththeg7and
theQuad,a militarygroupingwithAustra
lia,JapanandIndia,tocounterChina’sco
ercive,stringsattachedvaccinediploma
cy.Butthecommitmentsofvaccinedoses
aretinycomparedwiththeneed.Hehas
not as yetput serious resources to his
broader vision of providing middlein
comecountrieswithalternativestotaking
moneyandbusinessfromChina.Congress
wouldnotlethim.
WhereAmericadoesnotlead,itsallies
seemunlikelytogooftheirownaccord.In
MaytheEuropeanParliamentresponded
to China’sbullying overtheeu’s earlier
Xinjiangsanctionsbyfreezingratification
ofaninvestmenttreaty.Butmanygovern
mentsstillwantsuchdealsandare not
lookingfortrouble.OnJuly1stRishiSunak,
Britain’schancellor,calledfora“mature
and balanced relationship” with China,
eyeingtheCity’spotentialtosellfinancial
services into the world’s secondlargest
nationalmarket.OnJuly7thBorisJohn
son,theprimeminister,saidhedidnot
wanttoscareawayinvestmentbecauseof
an“antiChinaspirit”.
EmmanuelMacron,theFrenchpresi
dent,andArmin Laschet,whomaysuc
ceedAngelaMerkelasGermanchancellor,
haveshowna lackofenthusiasmforcon
frontingChina.Smallercountriesfeelsim
ilarly.Notcoincidentally,thenumber of
countrieswithwhichChinasharesmore
tradethanAmericaisfargreaterthanthe
otherwayround(seechart).
There are also American voices op
posedtoa tougherline.Businessesandfi
nancialinstitutionsarelobbyinghardto
maintainaccesstotheChinamarketand
fortheeasingofexportcontrols.OnJuly
7thmorethan 40 progressivegroupswrote
toMrBidenurginghimtodropAmerica’s
“antagonisticposture”towardsChinaand
tocooperateonclimatechange.Suchcalls
are musicto Mr Xi’sears. As MrDoshi
writes, Chinese officials routinely treat
America’swishforprogressonmajorchal
lenges—suchasclimateornuclearnon
proliferation—asopportunitiesforlever
age.China’sdeterminationtolinkissues
Americawouldliketokeepseparatemakes
America’sinterestincordoningoffareas
forcooperationsomewhatmoot.Theyare
notdecisionsit canmakeonitsown.
Theclimatelookslikelytofallvictimto
thisantagonism.Bothcountrieswilllower
Who you gonna call?
Countries which share greater trade* with:
% of global total
Source:IMFDirection
ofTradeStatistics
*Gross merchandise trade,
exports plus imports
100
75
50
25
0
2000 05 10 15 20
China
United States