Will the Arrival of a Biden Administration Lead to a Better U.S.-China Relationship?
—Toward Cooperative Rivalry

The U.S.-China relationship has continued to go downhill since the advent of the Trump administration in 2017, as symbolized by the trade and high-tech frictions and the confrontation over human rights and national security. With Democratic nominee Joseph Biden's winning the U.S. election held in November 2020, attention is focusing on which way the U.S.-China relationship will go as a result of the change of government.

In an article contributed to the March 2020 issue of the Foreign Affairs magazine titled "Why America Must Lead Again: Rescuing U.S. Foreign Policy After Trump," Biden expressed a willingness to cooperate with China on some issues while insisting that the United States should take a tough stance and strengthen cooperation with its allies to push back against the country. Specifically, Biden argued that the United States must form a united front with its allies and partners in responding to illicit Chinese economic activities, including the theft of U.S. technology and intellectual property and the continued provision of subsidies to support state-owned enterprises' unfair advantages and to secure control over future technologies and industries, as well as human rights problems. On the other hand, he asserted that on issues of mutual interest, such as climate change, nuclear non-proliferation, and global public health, Washington should pursue cooperation with Beijing (Note 1).

Here, I will look into what the incoming U.S. administration's China policy will be like based on Biden's past remarks and the Democratic Party's policy platform worked out in preparation for the 2020 presidential election and other documents.

Even after the inauguration of a Biden administration, the United States is expected to continue to regard China as a "strategic competitor," as it did under the Trump administration.

Learning from the failure of the policy of "engagement" previously adopted toward China, the Trump administration viewed that country as a "strategic competitor." On this point, the White House stated as follows in a document titled "United States Strategic Approach to The People's Republic of China," announced on May 20, 2020 (Note 2).

"Since the United States and the People's Republic of China (PRC) established diplomatic relations in 1979, United States policy toward the PRC was largely premised on a hope that deepening engagement would spur fundamental economic and political opening in the PRC and lead to its emergence as a constructive and responsible global stakeholder, with a more open society. More than 40 years later, it has become evident that this approach underestimated the will of the Chinese Communist Party (CCP) to constrain the scope of economic and political reform in China. Over the past two decades, (China's) reforms have slowed, stalled, or reversed. The PRC's rapid economic development and increased engagement with the world did not lead to convergence with the citizen-centric, free and open order as the United States had hoped. The CC has chosen instead to exploit the free and open rules based order and attempt to reshape the international system in its favor. Beijing openly acknowledges that it seeks to transform the international order to align with CCP interests and ideology. The CCP's expanding use of economic, political, and military power to compel acquiescence from nation states harms vital American interests and undermines the sovereignty and dignity of countries and individuals around the world.

To respond to Beijing's challenge, the Administration has adopted a competitive approach to the PRC, based on a clear-eyed assessment of the CCP's intentions and actions, a reappraisal of the United States' many strategic advantages and shortfalls, and a tolerance of greater bilateral friction."

As the tough stance adopted by the Trump administration toward China is shared by both the Republican and Democratic Parties, it is expected to be maintained by the incoming Biden administration as well.

On the foreign policy front, in a departure from the Trump administration's isolationist policy and unilateralism, Biden argues that the United States should return to and resume active involvement with international organizations and work with its allies to exert pressure on China.

Under the Trump administration, the United States withdrew from the Trans-Pacific Partnership (TPP), UNESCO, the United Nations Human Rights Council, the Paris Agreement, and the Iran nuclear deal. In the midst of the COVID-19 pandemic, the Trump administration also announced that the United States will pull out of the World Health Organization in July 2021. Moreover, trade friction is heating up between the United States and not only China but also other countries, including U.S. allies. Against this backdrop, the United States has failed to form a united front to push back against China.

In contrast, under a Biden administration, the United States is likely to return to the WHO and the Paris Agreement and exercise its initiative at international organizations to address international issues. The "Advancing American Interests" chapter of the Democratic Party's new policy platform emphasized the need to use U.S. allies in the Asia-Pacific region to counter China's challenge to the U.S.-led global order and its growing influence (Note 3). Under Biden's leadership, the United States is expected to strengthen its relationships with existing allies, including Japan, South Korea and Australia, and deepen strategic partnerships with India and Southeast Asian countries.

On human rights and national security, the confrontation between the United States and China is expected to persist under a Biden administration.

Until 2019, the Trump administration remained reluctant to criticize Chinese behavior regarding Xinjiang, Tibet, Hong Kong, Taiwan, and the South China Sea. However, after the onset of the COVID-19 pandemic in the United States, that attitude changed altogether. The Trump administration signed a series of laws—Uyghur Human Rights Policy Act (June 2020) and the Hong Kong Autonomy Act (July 2020)—each of which provides the legal basis for imposing sanctions on Chinese government officials on the grounds of human rights violations. Meanwhile, in October 2020, Secretary of State Pompeo designated Assistant Secretary of State Robert Destro (in charge of democracy, human rights, and labor) to concurrently serve in the post of the special coordinator for Tibetan Issues, which had been vacant since the inauguration of the Trump administration.

Over those issues, Biden has adopted similar stances. During the election campaign, he pledged that if elected, he will ensure the implementation of the Hong Kong Human Rights and Democracy Act, which was enacted in November 2019, and meet with the exiled Dalai Lama, who is the spiritual leader of Tibet. Biden called China's mass detention and re-education program for the Xinjiang region's predominantly Muslim Uyghur minority "genocide" and called for an international effort to make a united stand against it (Note 4).

On the Taiwan issue, the 2020 version of the Democratic Party's policy platform mentioned a commitment to the Taiwan Relations Act and a resolve to "continue to support a peaceful resolution of cross-strait issues consistent with the wishes and best interests of the people of Taiwan." Meanwhile, the phrase "We are committed to a 'One China' policy" that was included in the 2016 version of the platform was dropped.

Regarding China's behavior in the South China Sea, while the 2016 version of the Democratic Party's policy platform merely called for the freedom of navigation in the sea, the 2020 version expressed a resolve to resist the "Chinese military's intimidation."

On the economic front, the additional tariffs so far imposed against China may be removed under a Biden administration, but the policy of decoupling in high-tech fields is expected to be retained.

Biden asserts that the additional tariffs slapped on Chinese products are undermining American consumers' interests and that the retaliatory tariffs imposed by China are hurting American farmers and manufacturers, indicating his opposition to the tariff war waged by the Trump administration against China. The incoming Biden administration is expected to seek compromises from China on issues such as intellectual property rights, industrial subsidies, and market entry, in exchange for offering to remove the additional tariffs on Chinese products.

On the other hand, over the past several years, U.S. politicians have made bipartisan efforts to impede technological advances in China. The leaderships of the Democratic and Republic Parties share the view that Huawei and other Chinese high-tech firms receiving unfair support from the Chinese government are posing a global national security threat. The sanctions imposed against these firms, such as export restrictions, are likely to be maintained (Note 5).

While continuing to regard China as a "strategic competitor," Biden and the Democratic Party insist that the United States and China must avoid falling into the trap of a new Cold War and that they must engage in dialogue and cooperation on important international challenges, such as climate change and nuclear non-proliferation.

The China policy adopted by Biden, who is a traditional type of politician compared with President Trump, an unconventional politician, is expected to be conducted in line with the basic rules of foreign policy and to be more predictable. That will reduce the risk that miscalculations by the two countries about each other's intentions will inadvertently trigger a conflict.

The expected easing of tensions between the United States and China under a Biden administration will be good news for multinational companies involved in Chinese businesses. According to the "Post-Election Survey" conducted by the American Chamber of Commerce in Shanghai on November 11-15, 2020, the number of respondent companies that said they were "much more optimistic" or "more optimistic" about the prospect of doing business in China following the results of the presidential election was much higher than the number of respondent companies that said they were "more pessimistic" or "much more pessimistic" (Figure 1).

Source: Compiled by the author based on AmCham Shanghai, "Post-Election Survey," November 19, 2020.

Going forward, the U.S.-China relationship is unlikely to return to the one of all-round cooperation that was seen in the era of "engagement." In place of that, there are three plausible scenarios as follows:

1. (i) Cooperative Rivalry (Note 6)
   The United States and China will maintain a cooperative relationship on issues of mutual interest, such as climate change, illegal drugs, infectious diseases, and counter-terrorism, while continuing to compete with each other without compromise to protect their respective national interests. Rather than trying to contain China, the United States will encourage it to observe international laws and standards through international organizations. The two countries will make every possible effort to resolve bilateral disputes through consultation. Even though some restrictions may be imposed on trade, direct investment and technology transfer in high-tech fields, global supply chains will be spared disruption and the division of the global economy into bloc economies will be avoided.
2. (ii) A New Cold War
   The global economy will be divided into two blocs, one led by the United States and the other led by China. Tighter restrictions on flows of trade, investment, technology, people and information between the United States and China would result in a further decoupling of the U.S. and Chinese economies. Multinational companies will find it difficult to secure optimal resource allocation through the management of global production operations and will be forced to rebuild supply chains. As a result, global trade, direct investment, and, by extension, the global economy will become stagnant.
3. (iii) The Thucydides's Trap
   The Thucydides's Trap refers to the tendency of emerging and existing powers to stumble into war with each other due to their struggle for hegemony. Since 1500, there have been 16 cases in which an emerging power challenged an existing power, and in 12 of those cases, war broke out (Note 7). In this scenario, the confrontation between the United States and China will escalate into a "hot war."

Of the above three scenarios, "cooperative rivalry" mostly fits with Biden's China policy. Since the arrival of the Trump administration, the U.S.-China relationship has deteriorated rapidly, threatening to spiral into a new Cold War and raising concerns that the two countries might fall into the Thucydides's Trap. The arrival of the Biden administration is expected to arrest this trend and provide an opportunity to repair the U.S.-China relationship (Note 8).

The original text in Japanese was posted on December 11, 2020.