The China-US Equation
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Issue Net Edition | Date : 07 Apr , 2024

The news about the telephonic conversation between the POTUS Joe Biden and Chinese President Xi Jinping on April 2, 2024, makes for interesting reading. Who wanted this discussion is not mentioned but obviously it was Biden who is exploring every avenue to earn brownies in the run up to the upcoming presidential contest in the US in November 2024. It is no secret that despite the game of sanctions-trade-technology, both the US and Europe, as well as allies like Australia have been reaching out to China to improve their economic ties with Beijing.

The White House readout is in the usual diplomatic language: candid and constructive discussion on a range of bilateral, regional, and global issues, including areas of cooperation and areas of difference; both reviewing progress on key issues discussed at the Woodside Summit (military-to-military communication, AI-related risks, climate change and the like); Biden stressing upholding peace and stability across the Taiwan Strait, rule of law and freedom of navigation in the South China Sea; Biden expressed concern over Chinese support for Russia’s defence industry.

The interesting part is the report in China’s Xinhua news agency which states, “Xi Jinping emphasized that the Taiwan issue is the first uncrossable red line in China-US relations. We will not allow separatist activities and external conniving in support of ‘Taiwan independence’ forces to go unchecked.” Xi has cautioned Biden about interfering with Taiwan on earlier occasions as well.

The US has never rebuffed Beijing’s ‘One China’ policy but has continued to arm Taiwan, not without the motive to use it as a proxy against China, notwithstanding the fact that Taiwan is 1/16th the size of Ukraine. In November 2023, Biden signed a $80 million Foreign Military Finance (FMF) deal for Taiwan, which is not a loan. China called it “deplorable” especially since this was the first time that the US gave FMF arms aid to a nation not recognized by the United Nations as a sovereign nation. Taiwan already has orders of more than $14 billion worth of US military equipment.

In 2021, there were reports that US Special Forces had been training in Taiwan for over a year. However, recent reports  indicate that Taiwan’s Defence Minister Chiu Kuo-cheng  “accidentally” admitted that US Special Forces are training the Taiwanese military for potential conflict with China. Speculation is that  the US military would be training Taiwanese forces on small islands close to mainland China, including Kinmen Island – over 160 km from mainland Taiwan but just 4.8 lm from China’s coastal city of Xiamen, which appears to be a deliberate American escalation.

Taiwan has fortified its military base (Gangping Camp) operated by the Republic of China Navy (RoCN) with High-Altitude Electromagnetic Pulse (HEMP)-resistant capabilities; against possible Chinese HEMP attack. The “shielding room” in Gangping Camp is designed and constructed according to US military nuclear protection standards; complete six-sided double-layer zinc-plated steel wall structure, combining outer steel beams and steel columns to block HEMP radiation electromagnetic waves, reducing their force from as high as 50,000 to 5 volts per metre

Recent news indicates that Taiwan is nearing the testing stage of its vehicle-mounted high-energy laser weapon (‘Lightening Protection Project) developed with assistance from the US; the 50-kilowatt laser gun is reportedly comparable to the DE M-SHORAD prototypes mounted on Stryker armored vehicles that the US Army recently sent to the Middle East for testing in the desert conditions.  

By all indications, Xi would like to unify Taiwan with mainland China in his current presidential term. Biden is, therefore, making all out efforts to form more alliances in the region on lines of the Quad and Aukus. China is more likely to attack Japan in the event of US forces stationed in Japan attacking Chinese forces invading Taiwan. The threat to Japan, however, is over-hyped because the US would prefer not to directly engage Chinese forces but let the chosen proxy do so.

With reference to the Biden-Xi telephonic conversation, White House indicates that Biden rejected Xi’s request to lift a sweeping ban on shipments of advanced chips, while Xinhua states Xi told Biden that Beijing “will not sit idly by” if the US  continues to suppress China’s high-tech development. The conversation took place at a time when the US is to take a final decision for reviewing tariffs. Biden will naturally go for additional levies to showcase a hardened stance, being in the pre-election mode. This is despite the fact that China’s chip industry continues to progress despite sanctions and US-led western sanctions on Moscow have strengthened Russia economically and militarily. On the other hand, the economies of European nations are regressing.

America’s war on Russia using Ukraine as proxy is de-industrializing Europe making it more dependent on the US, which is an added aim of Washington. But despite Biden’s plan to industrialize America, it will perhaps take decades to decouple from China. Presently, the reverse appears to be happening. According to Michael Stumo, CEO of the Coalition for a Prosperous America, the US suffered the ‘China Shock 1.0’ after China was allowed into the World Trade Organization (WTO) in 2000. Some 2.4 million US manufacturing jobs were reportedly lost between 1999 and 2011 as a consequence of China’s entry into the WTO. Stumo predicts that the US is in for ‘China Shock 2.0’, similar to what it suffered in early 2000s, with massive influx of cheap Chinese products America will soon witness. Stumo, who monitors trade trends impacting US workers and firms, warns that surging Chinese imports pose a challenge for the US.

In a recent interview, Stumo said, “We’re going to have an auto apocalypse for our companies here if we don’t do something, or a solar apocalypse. We’re building solar here, all the solar tariffs, they’re just climbing right over, they’re undercutting, and they’re taking out the US-based solar companies. So it’s a really bad situation, and it’s going to get worse, and President Biden has to pay attention.” Despite tariffs on imports from China, Chinese firms are finding ways to get around these tariffs, including by shipping their exports through other countries or establishing affiliated factories in Mexico and even in the US.

In December 2021, Erica York, author of ‘Tax Foundation’ criticized both Trump and Biden for maintaining tariffs on Chinese goods, saying, “Tariffs are ultimately paid for in large part by consumers and businesses in the domestic economy, can lead to stagnation as protected industries are shielded from competitive pressures, and invite retaliatory tariffs from other nations that come with additional costs.”  

The Chair of the Senate Banking Committee has urged President Joe Biden to investigate Nippon Steel’s alleged ties to China amid growing bipartisan opposition to the Japanese company’s proposed acquisition of US Steel Corporation. Incidentally, according to the UN Conference on Trade and Development (UNCTAD), India’s trade reliance on China and the EU is has grown by 1.2 percent; despite India’s efforts to cut dependence on China.

Finally, the China-US equation is likely to continue in the same vein – one step forward, two steps back. It would be interesting to witness how it shapes up after the next US President is elected. However, the American propensity for creating more and more hotspots around the world would be to China’s advantage.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Lt Gen Prakash Katoch

is Former Director General of Information Systems and A Special Forces Veteran, Indian Army.

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