Why Biden’s plan to ‘gang up’ on China could backfire badly on the US

If US-centred coalitions are the way forward, then China-centred coalitions are the obvious response, leaving nations caught in the middle and trade disrupted
Beijing is likely to scale up its challenge to US domination rather than backing down

Anthony Rowley

Published: 3:30am, 8 Mar 2021

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The sigh of relief when Joe Biden became US president was palpable. Domestic and global divisions that had been fostered by Donald (the “destroyer”) Trump could, it seemed, be healed and the world could set course towards solving universal problems like pandemics and global warming.

It seems, alas, that this is not to be. No one expected Biden to heal social and political divisions in his own country overnight but there were high hopes that he could prevent the wider world from splitting into two economic and geopolitical halves – an “Amerisphere” and a “Sinosphere”.

Instead, the Biden administration has chosen to build coalitions against China – nominally among those who believe in political freedom and democracy against a repressive autocracy but, in reality, as a means to stem the economic and technological onslaught of the Chinese challenge.

This “ganging up” (politely termed a coalition of like-minded nations) cannot but fail to hinder progress, not only on meeting massive global challenges (such as global warming and disease) but also on rationalising world trade and economic systems.

It is as though the new US president had decided to stave off a possible future resurgence of Trumpism by making his truculent predecessor a senior adviser in the Oval Office. It is also as though Biden had sacrificed a vision of peaceful coexistence with China for cold war political expediency.

This may work in terms of buying time for the US to begin emulating China’s progress in building global supply chains and hard infrastructure – areas where it has fallen badly behind in economic and geostrategic terms – but that can only be at the cost of finding a lasting East-West modus vivendi.

Meanwhile, prospects for reforming the World Trade Organization in ways that would prevent a recurrence of the crude trade war tactics of the Trump era, or of cooperating to make the World Health Organization capable of dealing with chronic pandemics have clearly been diminished.

A China that feels it is being ganged up on by US-led country coalitions will be strongly tempted to react defensively – and aggression is a close relative of defensiveness. This points to a reacceleration of Chinese defence spending and military posturing in Asia and possibly beyond.

But it is the economic implications of the apparent Biden retreat behind protectionist (using the term in a broad sense) barriers that is disturbing. Economic sanctions and tariffs were the option of the Trump era but more subtle protectionism seems to be Biden’s weapon of choice.

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If US-centred coalitions are the preferred way forward, then China-centred coalitions are the obvious response, and the net result will be a painful dilemma for the myriad countries caught in-between. This can only serve to distort trade and fragment supply chains further.

The impact on regional trade arrangements could be as damaging as that on multilateral trade agreements, which have already been badly eroded by a progressive retreat from multilateralism and globalisation over the past decade, and which accelerated rapidly while Trumpian populism prevailed.

Asia could become a principal theatre in which trade friction and fragmentation is played out if, as seems likely, Biden takes the US back into membership of the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a pact from which Trump abruptly withdrew.

China is the biggest economic power within the alternative Regional Comprehensive Economic Partnership (RCEP) agreement among 15 Asia-Pacific nations. These two groupings could become proxies for competition between the US and Chinese spheres of influence, with their common members feeling the squeeze.

A Biden administration more willing to accept China’s rise, and coexist and cooperate economically – while not actively embracing China’s political, governance and “control economy” systems – could have staved off potential tension between these regional trade blocks.

The outcome of the Chinese Communist Party’s National People’s Congress, which kicked off on March 5, will almost certainly reflect these tensions and divisions, with Beijing likely to scale up its challenge to US domination rather than scaling back its ambitions.

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China’s 2021 National People’s Congress opens with Hong Kong’s electoral system on the agenda

Biden’s strategy of building coalitions to contain China is likely to cause Beijing to appear even more ambitious and thus potentially threatening to its neighbours and the world, leaving its Asian neighbours facing the increasingly invidious decision of which side to choose.

It may be that the strategy of the Biden administration is to deliberately encourage China to overreach, forcing an eventual economic collapse, as was the case with Ronald Reagan’s Strategic Defence Initiative (SDI) or “Star Wars” tactic, used in the early 1980s.

But whereas the former Soviet Union, the target of the SDI, was almost bankrupt economically and ideologically at that time, China is a vigorous and fast-expanding economy which, if anything, seems to be growing in confidence.

The tactic could backfire badly on Washington unless Biden stops worrying about Trump breathing down his neck and is willing to put global vision before domestic politics.

Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs