In this Issue
1. EU-China Relations: On a Downward Trajectory
2. Transatlantic Cooperation on China: Developing Gradually
3. U.S.-China Relations: Sharpening Competition
4. China’s Power and Ambitions: Striving for Global Primacy
5. Economic and Technological Competition: Increasing Uncertainty
1. EU-China Relations: On a Downward Trajectory
“European Parliament votes to ‘freeze’ investment deal until China lifts sanctions”
Stuart Lau, POLITICO, May 20, 2021
In short: European Parliament freezes ratification of CAI until Beijing lifts sanctions.
On May 20, the European Parliament voted overwhelmingly in support of freezing the legislative process for ratifying the EU's Comprehensive Agreement on Investment (CAI) with China, until Beijing lifts sanctions against EU lawmakers. The motion was passed by 599 MEPs, with 30 votes against and 58 abstention. According to the motion, the Parliament took the position that "any consideration of the EU-China Comprehensive Agreement on Investment, as well as any discussion on ratification by the European Parliament, have justifiably been frozen because the Chinese sanctions are in place", Stuart Lau reports. It also demands that "China lift the sanctions before dealing with CAI, without prejudice to the final outcome of the CAI ratification process," and says MEPs expect the European Commission "to consult with Parliament before taking any steps towards the conclusion and signature of the CAI."
“The EU-China Comprehensive Agreement on Investment. An in-depth reading”
Weinian Hu, CEPS Policy Insights, May 2021
In short: Why ratification of the CAI would still be worthwhile.
Striking a different note from most commentators on the EU-China Comprehensive Agreement on Investment (CAI), this paper finds that the Agreement does deliver on the EU’s negotiation mandate. It notes that much criticism of the CAI surfaced before the provisional agreement was actually published. In her text-based analysis, Weinian Hu, Research Fellow at CEPS, considers how the CAI lifts the barriers to market access that European businesses have been confronted with, advances the EU’s WTO reform agenda on a number of procedural requirements in a WTO-plus manner, and locks in the EU’s values under international commitments on sustainable development. It acknowledges, however, that the prospects for ratification of the CAI by the European Parliament appear remote at present because of the sanctions China has imposed on some MEPs. China should therefore consider lifting these sanctions as soon as possible, as a first step towards relaunching the EU legislative process to ratify the CAI.
“The EU and China: Sanctions, Signals, and Interests”
Sven Biscop, Egmont – Royal Institute for International Relations, May 20, 2021
In short: Effective sanctions should be reserved to deal with Chinese actions that directly affect the vital interests of the EU itself or that threaten international peace and security.
The EU’s current sanctions against China can only serve a signaling purpose, without any hope of effecting short-term change, argues Sven Biscop, Director of the Egmont Institute’s Europe in the World Programme, in this policy brief. The EU can and must continue to speak up for human rights, in order to maintain the norm and underscore that violating human rights is abnormal. But the question remains: are sanctions the best of way of signaling this? His answer: “The EU and the Member States can in effect signal their human rights concerns to China (and Russia) loudly and clearly without all the time resorting to symbolic sanctions, by consistently and publicly condemning violations. Effective sanctions, i.e., further-reaching and aimed at actually inducing a change in policy, ought to be mostly reserved to deter, or to retaliate against, actions that directly affect the vital interests of the EU itself or that threaten international peace and security.”
David Hutt, Internationale Politik Quarterly, May 26, 2021
In short: With sanctions in place and the CAI on ice, there is no prospect of improving relations between Brussels and Beijing.
EU-China relations are on a downward trajectory, political journalist David Hutt notes in this article. The sanctions by both sides represented a turning point, a fork in the road with few avenues back, for the very simple reason that the situation they created was so obvious beforehand. Some observers argued that China shot itself in the foot with its retaliatory sanctions. That may well be the case, but for reputational reasons, Beijing had to react in the way it did to the EU sanctions. Indeed, it responded the same way to US sanctions around the same time. “Beijing only shot itself in the foot if it had genuinely believed progress in EU-China relations could be made. Reading the temperature accurately, it realized that there was (and now is) little to be done to improve relations. We haven’t quite sleepwalked into the situation today, but a sense of inevitability does pervade EU-China relations over the past 12 months.”
“Rethinking German policy towards China. Prospects for change in the post-Merkel era”
Noah Barkin, Chatham House, May 2021
In short: Germany is struggling to redefine its relationship with China. Change seems inevitable.
After years of viewing China primarily as a lucrative market, Germany is in the process of rethinking its relationship with what is now its largest single trading partner. Concerns over a growing dependence on the Chinese market, together with Beijing’s increasingly authoritarian tilt at home and more assertive behavior abroad, are driving this reassessment, writes Noah Barkin in this paper. While Chancellor Angela Merkel has resisted pressure to choose sides between the U.S. and China, particularly when it comes to economic ties, whoever succeeds her following the September 2021 election will be confronted by a changing domestic and international landscape. Germany will find it increasingly difficult to stay on its current path of seeking close political and economic relations with both the U.S. and China. At home, a cross-party coalition of lawmakers and an increasingly China-critical media and civil society are demanding that Germany take a tougher line on human rights abuses. Abroad, the hardening positions of some of Germany’s closest allies – not just the U.S., but also the UK, Australia, Japan, India and Canada – are likely to raise the pressure on Berlin to confront the strategic challenges posed by China more forcefully. Germany’s stance will be crucial in shaping Europe’s broader response to China and will be an important factor in determining the success of U.S. President Joe Biden’s efforts to forge a transatlantic agenda, and a broader coalition of democratic nations, to push back against China.
Xue Qing, The Diplomat, May 25, 2021
In short: China has made serious mistakes in crafting its Europe policy, resulting in the current rift.
In the past several months, the China-EU relationship has deteriorated to its lowest point since 1989. As Beijing based journalist Xue Qing argues in this opinion piece, this outcome was not inevitable. China has made at least three serious mistakes in its policy on the EU: First, it failed to treat the EU as a serious political and security actor. The EU is a superpower in many aspects. It is a strong economy and an important shaping force of the international order and is trying to play a more decisive role in geopolitical games, demonstrating its growing ambition. This should have been ample notice to Chinese policymakers. But they have been looking down on the EU and failed to recognize European power and ambition. Second, China failed to take the EU’s normative appeals seriously. The EU, for decades, has been underlining the importance of values such as democracy, human rights, and rule of law in its external relations. Its relations with China are not an exception. But Beijing seems unable to understand and often does not care about the EU’s normative concerns. Third, Beijing failed to develop a more sophisticated diplomacy with the EU. “China behaves like an ostrich burying its head in the sand, refusing to fix its unpractical view and policy on the EU and recognize the important divergences between the two. But unfortunately, these divergences will not vanish because of China’s ignorance. Instead, they will accumulate and eventually lead to greater trouble.”
Daniel S. Hamilton, Asia Europe Journal, June 12, 2021
In short: The CAI is unlikely to survive in its current form, if it survives at all.
The Comprehensive Agreement on Investment (CAI) that was borne but not formally blessed by China and the European Union in late December 2020 is unlikely to survive in its current form, if it survives at all. In fact, there is good reason to believe that the CAI is DOA – dead on arrival – due to EU sanctions and Chinese countersanctions related to China’s persecution of its Uyghur minority; criticism of the negotiated agreement; and changing political calculations by Beijing and among EU member states. Against this backdrop, Daniel S. Hamilton, Director of the Global Europe Program at the Woodrow Wilson International Center for Scholars at Johns Hopkins University, concludes: “There is little reason to believe that either side will step back this year from what have now become incompatible positions. As a result, CAI is DOA.”
2. Transatlantic Cooperation on China: Developing Gradually
In short: The first high-level EU-U.S. dialogue on China refined common positions.
On 26 May, European External Action Service Secretary General, Stefano Sannino, and U.S. Deputy Secretary of State, Wendy Sherman, held the first high-level meeting of the EU-U.S. dialogue on China. According to the official joint press release, “the two sides reiterated that the EU’s and the United States’ relations with China are multifaceted and comprise elements of cooperation, competition, and systemic rivalry. They highlighted issues of shared concern, including ongoing human rights violations in Xinjiang and Tibet, the erosion of autonomy and democratic processes in Hong Kong, economic coercion, disinformation campaigns, and regional security issues, in particular the situation in the South China Sea. They discussed the importance of Taiwan’s meaningful participation in the work of international organisations, including World Health Organization forums and the World Health Assembly. They also discussed pursuing constructive engagement with China on issues such as climate change and non-proliferation, and on certain regional issues.” The two sides decided to continue meetings in this dialogue at senior official and expert levels to discuss reciprocity, including economic issues; resilience; human rights; security; multilateralism; and engagement. The next high-level meeting will take place in winter 2021/2022.
“Team Biden renews transatlantic vows”
David M. Herszenhorn, POLITICO, May 27, 2021
In short: Deputy U.S. Secretary of State Wendy Sherman sees a strong diplomatic marriage between the EU and the U.S.
After U.S. Deputy Secretary of State Wendy Sherman met with Stefano Sannino, Secretary General of the European External Action Service in Brussels on May 26 for the first U.S.-EU dialogue on China, she praised the partnership with the EU. “We are so lucky to have the European Union as a partner in what we do,” she said, according to David Herszenhorn. In a briefing with reporters, Sherman acknowledged that inevitably there would be policy differences and some allies might occasionally bristle at the U.S. leadership role. But overall, she described the transatlantic relationship as a love story, even comparing it at one point to her own marriage. “I was joking to someone earlier,” Sherman said. “I've been married to my husband for 41 years. We have many divergences. There are many things on which we do not agree. But we have managed to find our way forward because there's much more on which we agree than on what we disagree." She continued: "And so no, our interests will not always align perfectly. But we have so much more in common with each other than we have with some of the challenges and challenging people and countries outside. That is what is driving us forward because we know we are stronger together than when we are apart.” As Herszenhorn’s colleague Sturt Lau commented on these remarks: “This is precisely the transatlantic cozying up that Beijing has sought to avoid.”
“My trip to Europe is about rallying the world’s democracies”
Joe Biden, Washington Post, June 7, 2021
In short: Biden calls on European democracies to join forces with the U.S. in competition with China.
Ahead of his trip to Europe, U.S. President Biden presented his vision of transatlantic renewal in an opinion piece in the Washington Post. Previewing meetings with G7 and EU leaders as well as Russia’s President Vladimir Putin, Biden promised to demonstrate “the capacity of democracies to both meet the challenges and deter the threats of this new age”. “Whether it is ending the covid-19 pandemic everywhere, meeting the demands of an accelerating climate crisis, or confronting the harmful activities of the governments of China and Russia, the United States must lead the world from a position of strength.” At the same time, he called on European democracies to join forces with the U.S. in economic and technological competition with China. „We will focus on ensuring that market democracies, not China or anyone else, write the 21st-century rules around trade and technology.“ For him, “this is a defining question of our time: Can democracies come together to deliver real results for our people in a rapidly changing world? Will the democratic alliances and institutions that shaped so much of the last century prove their capacity against modern-day threats and adversaries? I believe the answer is yes. And this week in Europe, we have the chance to prove it.”
“Will Europe sign up to Joe Biden’s plan to counter China?”
Demetri Sevastopulo, Sam Fleming and Michael Peel, Financial Times, June 7, 2021
In short: The EU has become more skeptical about China, but some leaders worry about Washington’s new Cold War rhetoric.
Since taking office in the White House, U.S. President Joe Biden has articulated one foreign policy goal above all others: to work with allies to restrain China. Yet although the EU has taken a tougher stance toward China in recent months, it continues to have different economic and strategic priorities than the U.S., and there is a constant risk that these differences will come out in the open, write Demetri Sevastopulo, Sam Fleming, and Michael Peel in this article. The key issue Biden is facing, therefore is how to translate the European change in mood into tangible cooperation. While Washington and Brussels share many concerns about China, they have different views on how to respond. Moreover, several European leaders − most notably German Chancellor Angela Merkel − are wary of U.S. Cold War-style rhetoric directed at China.
“Transatlantic Trends 2021.Transatlantic opinion on global challenges”
Bertelsmann Foundation and The German Marshall Fund, June 7, 2021
In short: New survey shows: China is viewed "more as a rival than a partner" by the majority in most countries surveyed on both sides of the Atlantic.
This report by the German Marshall Fund and the Bertelsmann Foundation includes the results of surveys conducted in 11 countries representing all corners of the transatlantic community: Canada, France, Germany, Italy, the Netherlands, Poland, Spain, Sweden, Turkey, the United Kingdom, and the United States. Divided into five chapters, it provides a detailed picture of transatlantic public opinion on core and contemporary issues: the transatlantic relationship; international security and defense; trade, economic, and technology policies; relations with China; and global challenges. The chapter on relations with China shows, among other among other things, that China is considered “more a rival than a partner” by the majority in nine of the eleven countries surveyed. The perception of China as a rival prevails particularly in Canada, the United States, and western Europe.
The chapter “Relations with China” can be separately accessed here.
Carbis Bay G7 Summit Communiqué: Our Shared Agenda for Global Action to Build Back
In short: The G7 leaders issued a communiqué criticizing China for its economic practices and human rights violations.
At the G7 summit in Cornwall leaders issued an ambitious program demonstrating unity and purpose in addressing some of the world's most difficult challenges. Although China is mentioned only a few times, implicit concerns about Beijing’s policies are included throughout the extensive document. Many paragraphs pertain to challenges from China, even though it is not named. The statement refers to China directly in the context of the need for transparency on the origins of COVID-19, challenging non-market practices and respect for human rights, especially in Hong Kong and Xinjiang: “With regard to China, and competition in the global economy, we will continue to consult on collective approaches to challenging non-market policies and practices which undermine the fair and transparent operation of the global economy […] At the same time and in so doing, we will promote our values, including by calling on China to respect human rights and fundamental freedoms, especially in relation to Xinjiang and those rights, freedoms and high degree of autonomy for Hong Kong enshrined in the Sino-British Joint Declaration and the Basic Law” (§49). The communiqué references China indirectly in many other areas, including forced labor, coal-fired power plant construction, climate, tech standards, infrastructure development, arbitrary detention, media freedom, freedom of religion, etc. In addition, it includes important statements on the Taiwan Strait and the East and South China Seas: “We reiterate the importance of maintaining a free and open Indo Pacific, which is inclusive and based on the rule of law. We underscore the importance of peace and stability across the Taiwan Strait, and encourage the peaceful resolution of cross-Strait issues. We remain seriously concerned about the situation in the East and South China Seas and strongly oppose any unilateral attempts to change the status quo and increase tensions” (§60).
“US and Europe converge on historic rebuke of China”
Stuart Lau, POLITICO, June 14, 2021
In short: For the first time ever, G7 leaders mentioned Taiwan and the need to eradicate forced labor.
Leaders from the G7 countries admonished China for its human rights abuses and unfair economic practices − creating the strongest collective warning the group has sent Beijing since President Xi Jinping’s rise to power nearly a decade ago, Start Lau reports. The final statement, issued at the end of the G7 summit, directly mentions a number of contentious issues that will roil Beijing − everything from the crackdown in Hong Kong, to encroachment on Taiwan to the use of forced labor in Xinjiang. It also calls for another international study into the origin of the coronavirus in China, and goes after China’s Belt and Road initiative, a global infrastructure development project, offering a $100 billion alternative the countries claim will offer countries less predatory loans and better climate standards. “While many of the G7 countries had previously directed these concerns toward China individually, the collective document is significant in showing a further linking of the U.S. and Europe to better counteract China’s economic and political rise. It’s also a diplomatic win for U.S. President Joe Biden, who came into office in January hoping to win over European allies to a more confrontational stance on China.”
“NATO - Brussels Summit Communiqué”
In short: NATO summit designates China as presenting “systemic challenges”.
The North Atlantic Treaty Organization (NATO) held its 31st summit in Brussels on June 14. The NATO members issued a communiqué highlighting the “threat” presented by Russia and the “challenges” posed by China. “Russia’s aggressive actions constitute a threat to Euro-Atlantic security," the communiqué reads. On China, the statement said: “China’s growing influence and international policies can present challenges that we need to address together as an Alliance. The statement added that the NATO members "will engage China with a view to defending the security interests of the Alliance.” (§3). In addition, NATO leaders designated China as a systemic rival to the Alliance: “China's stated ambitions and assertive behaviour present systemic challenges to the rules-based international order and to areas relevant to Alliance security. We are concerned by those coercive policies which stand in contrast to the fundamental values enshrined in the Washington Treaty. China is rapidly expanding its nuclear arsenal with more warheads and a larger number of sophisticated delivery systems to establish a nuclear triad. It is opaque in implementing its military modernisation and its publicly declared military-civil fusion strategy. It is also cooperating militarily with Russia, including through participation in Russian exercises in the Euro-Atlantic area. We remain concerned with China’s frequent lack of transparency and use of disinformation. We call on China to uphold its international commitments and to act responsibly in the international system, including in the space, cyber, and maritime domains, in keeping with its role as a major power” (§55).
“NATO leaders see rising threats from China, but not eye to eye with each other”
David M. Herszenhorn and Rym Momtaz, POLITICO, June 14, 2021
In short: Tough words about China in NATO summit communiqué, but less consensus on among allies about what to do.
Boasting of restored unity thanks to the arrival of U.S. President Joe Biden, NATO leaders declared that China poses increasing dangers to the security of Western democracies. But they also revealed deep disagreements over the urgency in confronting Beijing, or even if it should be NATO’s role at all, report David M. Herszenhorn and Rym Momtaz. In their closing communiqué, the leaders used remarkably forceful language to describe China as now their most troublesome rival after Russia − given Beijing’s fast-expanding nuclear arsenal, stepped-up military cooperation with Moscow, and increasing use of disinformation. “China’s stated ambitions and assertive behavior present systemic challenges to the rules-based international order and to areas relevant to Alliance security,” the leaders wrote. “We are concerned by those coercive policies which stand in contrast to the fundamental values enshrined in the Washington Treaty.” The historic shift in focus comes partly at the urging of U.S. President Biden, who has made clear he sees China as a growing threat. NATO Secretary-General Jens Stoltenberg stressed that China was “not an adversary” but posed challenges that must be answered, and he insisted that NATO was not shifting operations to Asia but protecting itself close to home.
EU-U.S. Summit statement: "Towards a renewed Transatlantic partnership"
European Council, June 15, 2021
In short: EU-U.S. summit strengthens prospects for transatlantic cooperation on China.
On June 15, the EU and the U.S. held a summit bringing together Ursula von der Leyen, President of the European Commission, Charles Michel, President of the European Council, and U.S. President Joe Biden. It was the first EU-US summit since 2014 and the first visit by an American President to the EU institutions since 2017. The joint statement adopted at the end of the summit covers a range of key points related to China. Both sides agreed to “closely consult and cooperate” their respective China policies, pursuing a multi-faceted approach that includes “cooperation, competition and systemic rivalry.” The statement also echoed the G7 communiqué on concerns regarding Xinjiang, Hong Kong, Tibet, the Taiwan Strait, as well as the East and South China Seas (§ 26). In addition, the leaders agreed to establish an EU-U.S. Trade and Technology Council (TTC) which shall serve as a platform for coordination on technological and trade policies. “Cooperation within the TTC will also feed into coordination in multilateral bodies and wider efforts with like-minded partners, with the aim of promoting a democratic model of digital governance” (§17).
3. U.S.-China Relations: Sharpening Competition
”Reassessment Not Realignment: US-China Relations in the Post-Trump Era”
Rorry Daniels, National Committee on American Foreign Policy, May 2021
In short: In U.S.-China Relations a reassessment of existing policies is more likely than a major realignment.
Following the first official meeting between U.S. and Chinese officials in the Biden administration in Anchorage, Alaska, the National Committee on American Foreign Policy (NCAFP) convened a group of high-level experts on U.S.-China relations to discuss the following questions in a series of Track II videoconferences: What are the opportunities and challenges in restoring diplomacy and communications in the coming year? How should the U.S. and China manage potential regional flashpoints? How can the U. and China cooperate on areas of overlapping interest and manage competition? While the conversation ultimately concluded that the two sides are more likely to adjust existing policy than pursue a major realignment, there is still an urgent need and significant support for restoring basic and regular communication, reaffirming prior commitments, and repairing damage to people-to-people ties. The report, written by Rorry Daniels, NCAFP’s Deputy Project Director of the Forum on Asia-Pacific Security, contains the full record of the discussions, including key takeaways and policy recommendations.
Ryan Hass, Noema, May 20, 2021
In short: The politicization of U.S. China policy carries negative potential side effects.
“We’re in competition with China and other countries to win the 21st century,” U.S. President Joe Biden declared last month during his first address to Congress. Calling on Americans to come together to meet challenges posed by China is currently enjoying strong bipartisan appeal. Amid the fractious partisanship of American politics, China policy has become the most accessible meeting place for Democrats and Republicans. Yet any effort to lean on the external threat of China as a basis for overcoming domestic divisions at home is unlikely to succeed and likely to harm U.S. interests at home and abroad, argues Ryan Hass, former China Director at the U.S. National Security Council under President Barack Obama, in this essay. “If China policy is defined in purely political terms, it will alienate rather than attract allies. If the Biden administration or its Congressional supporters are seen as seeking partisan advantage on China policy, it also could complicate efforts to advance Biden’s ‘Build Back Better’ agenda.” Therefore, the Biden administration would be well advised not to overheat the political discourse on China.
“White House Top Asia Policy Officials Discuss U.S. China Strategy at APARC’s Oksenberg Conference”
Noa Ronkin, Stanford Shorenstein Asia-Pacific Research Center, May 27, 2021
In short: Competition will be the dominant paradigm of U.S. policy toward China.
The U.S. National Security Council’s Coordinator for Indo-Pacific Affairs Kurt Campbell and Senior Director for China and Taiwan Laura Rosenberger described America’s shifting strategic focus on Asia and the Biden administration’s approach to engaging an assertive China at a conference organized by Stanford University’s Shorenstein Asia-Pacific Research Center on May 26. The period in U.S. policy toward China that was broadly described as “engagement” has come to an end, said Campbell. “The dominant paradigm is going to be competition. Our goal is to make that a stable, peaceful competition that brings out the best of us.” Granted, no country is eager to pick sides in the U.S.-China rivalry, he added, and, in the post-Trump era, “one of the biggest challenges of the Biden administration is to try and underscore and reassure allies and friends that we’re going to continue our stabilizing role.” Working with allies and partners is not about building an anti-China coalition, emphasized Laura Rosenberger. “What we are seeking to do is to show that democracies deliver” and work for the benefit of the American people and the world’s people. “That provides a competitive counteroffer” to China’s more coercive ways of engagement with its counterparts and its efforts to reshape rules in ways that threaten democracies. Another important aspect of U.S. policy towards China, said Rosenberger, is “Countering China where we need to and cooperating with China where it is in our interest to do so. We think this is how we can manage competition in a way that will prevent us from moving into conflict but that will allow us to maximize cooperation.” She noted that this approach has already played out in the initial high-level engagements of the Biden team with Beijing.
Thomas Wright, The Atlantic, June 9, 2021
In short: Joe Biden is seriously concerned that China might prevail in competition with the U.S.
A few months into Joe Biden’s presidency, key elements of his worldview are hiding in plain sight, writes Thomas Wright, a senior fellow at the Brookings Institution, in this article. In Biden’s view, the U.S. and other democracies are in a competition with China and other autocracies. This is being exacerbated by a period of rapid technological change that could give China an opportunity to leapfrog the United States in certain areas. According to Wright, Biden is seriously concerned that China might win this competition and worries that Xi Jinping’s attempt to make the world safe for the Chinese Communist Party will undermine freedom and democracy, pushing international rules in an illiberal direction and empowering autocrats worldwide. This belief underpins the Biden doctrine. “Some presidents never find a doctrine. Biden has one. In his view, the United States is in a competition of governance systems with China. His response is not about spreading democracy at gunpoint or even democracy promotion per se, but about showing that democracy can deliver − at home and abroad. The question now is whether Biden can bring his administration, the country, and America’s allies along to embed this doctrine in U.S. foreign policy.”
4. China’s Power and Ambitions: Striving for Global Primacy
“The Long Arm of the Strongman. How China and Russia Use Sharp Power to Threaten Democracies”
Christopher Walker and Jessica Ludwig, Foreign Affairs, May 12, 2021
In short: How Beijing and Moscow use influence techniques to undermine open societies.
Democracies have struggled and autocracies have grown in strength in the past decade and a half. During this period, dictatorships have intensified and modernized their systems of repression. Two autocratic powers in particular, China and Russia, have led the way in tightening control domestically, adapting their techniques for the digital era, and exerting greater influence abroad with the aim of making the world safer for autocracy. Democratic countries are now more vulnerable to the use of “sharp power” by authoritarian governments at any other point in the post-Cold War era, Christopher Walker and Jessica Ludwig of the National Endowment for Democracy’s International Forum for Democratic Studies, point out in this article. Unlike “soft power,” with which countries seek to gain influence by winning over hearts and minds, authoritarian governments use “sharp power” by trying to stifle and even censor views abroad that they dislike and by undermining independent democratic institutions. This article explores, how Beijing and Moscow have expanded and refined their sophisticated influence techniques and tactics to undercut open societies.
“The 2020-21 Wilson China Fellowship: Essays on the Rise of China and Its Implications”
Abraham M. Denmark and Lucas Myers (eds.), Wilson Center, May 2021
In short: A tour d’horizon of issues facing U.S.-China relations throughout the Indo-Pacific.
In recent years, the rise of China has transformed the international system, and the downturn in U.S.-China relations increases tensions across a range of issues, from Taiwan to the South China Sea to human rights. Addressing these issues and crafting tailored policy responses will require nuanced and informed analysis of China from the U.S. academic community. With the support of the Carnegie Corporation of New York, the Wilson Center aims to bridge the gap between academia and policy by bringing together a cohort of rising scholars focused on China to undertake crucial, year-long research projects on China in its Wilson China Fellowship. The results of the first cohort's work are featured in this publication. The fifteen essays in this volume offer a tour d’horizon of issues facing U.S.-China relations throughout the Indo-Pacific. They are a superb introduction to the challenges which China’s digital, ethnic, environmental, nuclear, and propaganda policies pose to Asian neighbors and the United States and contain case studies on U.S.-China competition in the Western Pacific, Indian Ocean, South Asia, the Global South, the Arctic, and Antarctic.
Timothy R. Heath, Derek Grossman, Asha Clark, RAND, June 2021
In short: China's international strategy aims to establish the country's primacy in the Asia-Pacific region and to establish Chinese leadership of the international order.
U.S.-China relations have entered a new phase characterized by sharpening competition. How is Beijing trying to outcompete the U.S. and what are its goals? As presented by the authors of this extensive RAND report, China's international strategy aims to establish the country's primacy in the Asia-Pacific region and leadership of the international order. The international strategy presented seeks to achieve this end state through peaceful methods, although it does not rule out the possibilities of militarized crises or even conflicts of a limited scope, such as proxy wars. The core of the proposed international strategy is a reliance on China's economic prowess and diplomatic maneuver to put Beijing into a position of advantage from which it cannot be dislodged by the U.S. A complementary defense strategy would aim to constrain Washington's ability to forestall or prevent its own eclipse by building a superior Chinese military that renders the risks of military conflict intolerably high. A major Chinese military responsibility would be to support diplomatic efforts to shape a favorable international environment by building strong security ties with client states and discrediting or weakening the appeal of the U.S. as an alternative. According to the authors, China's standard for successful competition with the U.S. entails the following conditions by midcentury: (1) War with the U.S. is avoided, although this does not exclude the possibility of militarized crises or conflicts of a limited scope; (2) the U.S. respects China's authority as the global leader; (3) the U.S. largely refrains from harming Chinese interests; (4) China has established primacy across much of Eurasia, the Middle East, and Africa; (5) U.S. primacy has been reduced to the Americas; (6) the U.S. and China manage their differences according to norms upheld by China; and (7) the two cooperate on shared concerns on terms defined largely by the Chinese.
“China’s Diplomacy Is Limiting Its Own Ambitions”
Ali Wyne and Ryan Hass, Foreign Policy, June 9, 2021
In short: China’s self-imposed problems make it a less threatening challenger than it seems.
U.S. policymakers consider China’s resurgence to be the greatest test yet posed by a rival nation-state to the United States’ security and prosperity. Yet the growing gap between Beijing’s economic heft and its diplomatic aplomb will limit its potential influence, argue Ali Wyne and Ryan Has in this article. China’s self-limiting diplomacy with its more assertively nationalistic diplomatic tone − often referred to as “Wolf Warrior diplomacy” − gives the U.S. breathing room to pursue a foreign policy that is informed but not governed by Beijing’s resurgence. American efforts should, therefore, proceed from both a clear-eyed recognition that strategic competition with China will persist over the long term and a dispassionate appraisal of Beijing’s competitive strengths and liabilities. “The United States can afford to approach that competition with quiet confidence.” Ali Wyne is a senior analyst with the Global Macro practice at Eurasia Group, and Ryan Hass, a senior fellow and the Michael H. Armacost Chair in the foreign-policy program at the Brookings Institution.
“The Clash of Systems? Washington Should Avoid Ideological Competition With Beijing
Thomas Pepinsky and Jessica Chen Weiss, Foreign Affairs, June 11, 2021
In short: Framing U.S. China policy as a competition between democracy and authoritarianism is counterproductive.
The U.S. government should resist the temptation to mirror the ideological insecurity of the Chinese Communist Party (CCP), argue Thomas Pepinsky and Jessica Chen Weiss in this article. Casting U.S.-Chinese competition as a contest between systems overstates China’s ideological appeal and undermines Washington’s ability to engage productively with a wide range of governments in Asia and beyond. Simultaneously defending American values and achieving a peaceful − if competitive − coexistence with China requires a more pragmatic approach. “Even as the Biden administration builds common cause with other democracies, it should invest in keeping China within a more flexible international order. If Chinese leaders conclude that Washington will never allow Beijing to play a leading role on the world stage, it could lead to precisely the kind of all-out confrontation that the United States must strive to avoid as it resumes international leadership.” Thomas Pepinsky is Professor of Government at Cornell University and a Nonresident Senior Fellow at the Brookings Institution. Jessica Chen Weiss is Associate Professor of Government at Cornell University.
Minxin Pei, Project Syndicate, June 11, 2021
In short: Will the Chinese Communist Party live forever?
As the Chinese Communist Party (CCP) prepares to mark its centennial on July 1, the fact that no other dictatorial party in modern times has survived for a century should give China’s leaders cause for worry, not celebration, writes Minxin Pei, Professor of Government at Claremont McKenna College in this article. One obvious reason for the relatively short lifespan of communist or authoritarian parties is that party-dominated modern dictatorships, unlike democracies, emerged only in the twentieth century. The Soviet Union, the first such dictatorship, was founded in 1922. The Kuomintang (KMT) in China, a quasi-Leninist party, gained nominal control of the country in 1927. The Nazis did not come to power in Germany until 1933. Nearly all of the world’s communist regimes were established after World War II. But there is a more fundamental explanation than historical coincidence. The political environment in which dictatorial parties operate implies an existence that is far more Hobbesian − “nasty, brutish, and short” − than that of their democratic counterparts. Therefore, when China’s leaders toast the CCP’s centennial, they should ask whether the party is on the right track with its neo-Maoist revival. If it is not, the CPC’s upcoming milestone may be its last.
“The CCP's next century: expanding economic control, digital governance and national security.”
Nis Grünberg, Katja Drinhausen, Mikko Huotari, John Lee and Helena Legarda, MERICS, June 15, 2021
In short: How will Chinese Communist Party governance look like in the future?
As it approaches its 100th anniversary in July, the Chinese Communist Party (CCP) appears stronger and more confident than ever. The leadership in Beijing is convinced that its own governance model is superior to Western democratic models. Recent tensions over human rights and trade issues have highlighted that European actors need to find ways to deal with an increasingly assertive China under CCP-rule. In this report, MERICS experts cover three key aspects of CCP governance: the integration of the economy under politics, the role of digitalization and the new foreign policy paradigm that puts China’s national security first. In the final chapter, MERICS Executive Director Mikko Huotari analyzes what a globally ascending, but also crisis-driven party state means for European stakeholders. He argues that the world needs to be prepared for a China that engages in a new kind of competition with democratic systems. Under conditions of deep interdependence and global connectivity Beijing sees itself competing for sources of political robustness and economic stability, building up effective state capacity and dealing with what it perceives as existential global risks.
5. Economic and Technological Competition: Increasing Uncertainty
“EU Economic Cooperation with Asia-Pacific. Perspectives of German Business”
Asia-Pacific Committee of German Business, May 2021
In short: Asia-Pacific Committee of German Business calls for stronger EU commitment in Asia.
In this position paper, the Asia-Pacific Committee of German Business (APA) calls for more effective representation of EU interests in the Asia-Pacific region. The paper provides ideas for the implementation of the Indo-Pacific guidelines presented by the German government last year and for the EU's ongoing deliberations on a comprehensive Indo-Pacific strategy. It highlights that German industry views the entire Asia-Pacific region, and not just China, as the growth market of the future. However, a diversification strategy should not be aimed at relocating production from China. Rather, the EU should position itself strategically and resolutely to successfully tap into other growth markets in the region. The APA calls for an active, flexible and confident trade and foreign trade policy of the EU. The APA also calls for clearly addressing relations with China by way of a comprehensive EU Asia-Pacific strategy. Currently, mutual sanctions and a fully negotiated but dormant investment agreement highlight the complexity of the relationship between the EU and China. On the occasion of the publication of the position paper, APA Chairman Joe Kaeser stressed the importance of a strong EU for a successful multilateral China policy: “The EU must significantly increase its geo-economic position to be able to interact on an equal footing with China and the U.S.”
“China’s Economic Rebound: Views from Beijing”
François Godement, Institut Montaigne, June 2021
In short: China had the fastest and strongest post-Covid-19 economic rebound, yet uncertainty remains.
In this policy paper François Godement, Senior Advisor for Asia at Institut Montaigne, provides an overview − backed by relevant figures − of what Chinese economic analysts are focusing on: the country’s macroeconomic policy choices, options to implement the decarbonation pledges and how to address the demographic challenge. The paper puts in perspective the world’s strongest economic rebound, which China engineered after an intense but short phase of COVID-19 lockdown. As exports break records and domestic consumption picks up, are we seeing a sustainable pattern or just a spike? As China’s current economic policies strongly diverge from the policies pursued by all major economies, what are the implications for Europe? One overhanging sentiment is uncertainty. This is also reflected in China’s official statements on the international economy and China in 2021. But the debate also reveals that at least some Chinese experts wish for more proactive policies, whether state-led or based on monetary expansion, implying more support for market incentives for growth.
“Foreigners rush inside the Great Wall”
In short: Globalization was meant to change China. Instead, China is changing globalization.
China’s Covid-era economic strength has silenced last year’s talk of foreign firms needing to diversify and build resilient supply chains outside China. Instead, multinationals are building up China operations, although they see the risks, The Economist reports. That can be profitable: some multinationals earn almost half their revenues in China. But that is because they are operating entirely within the Chinese wall. Experienced executives describe bleak choices. “It is about the weighing of risks,” says one. “The risks of not being here, with the risks of being here.” Meanwhile, public opinion in the West is turning more hostile to a China seen as grimly dictatorial. “Diversification does not make economic sense, it turns out. But politically the world is decoupling. That shock will have lasting effects.”
“The Hidden G2 for Democratic Tech Governance is the EU-US relationship. A Starter Kit
Tyson Barker, DGAP, June 11, 2021”
In short: EU and U.S. forge tech alliance to push back against China’s dominance of the tech sector.
The EU and the U.S. have launched a Trade and Technology Council (TTC) on the sidelines of the recent U.S.-EU Summit, which presents a rare opportunity to jumpstart the EU-U.S. technology relationship. Against the backdrop of rapid technological change, a transatlantic digital technology community could be a 21st-century answer to the Coal and Steal Community – a big democratic project that reaches across borders, knits like-minded communities together in a manner that reinforces shared values, and codifies standards of market access, increased interdependence, and intensified political dialogue. As Tyson Baker, Head of the DGAP’s Technology and Global Affairs Program, argues in this paper, the EU and the U.S. should focus on five interrelated lines of effort: technological industrial policy, deepening the democratic tech space and ringfencing market access for critical technology and data, drafting the digital rule book, ICT connectivity in the Global South as a counter to China’s Digital Silk Road, and digital rights.
