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Elizabeth Economy, Stephen Orlins (second from left) and Ely Ratner debating whether China is a strategic competitor to the US in New York on Tuesday. ‘New York Times’ columnist Nicholas Kristof (right) is the moderator. Photo: Robert Delaney

China watchers in US debate ‘strategic competitor’ label Donald Trump has pinned on Beijing

  • At a Council on Foreign Relations event in New York, experts disagree about whether the US president’s assessment of China is overblown
  • Singled out for criticism are the Chinese policy meant to produce domestic tech champions and a law making it more difficult for foreign NGOs to operate

Prominent China policy analysts clashed in New York on Tuesday over Washington’s portrayal of the country as a strategic competitor, a designation that has defined US President Donald Trump’s hard-line approach to Beijing since he started a bilateral trade war last year.

“Does anybody bother to point out that Chinese payments of royalties have increased from US$10 billion 10 years ago to US$30 billion now?” asked Stephen Orlins, president of the National Committee on US-China Relations, referring to revenues US companies make from their China operations.

At an event hosted by the Council on Foreign Relations (CFR), Orlins debated Elizabeth Economy, CFR’s director of Asia studies, and Ely Ratner, director of studies at the Centre for a New American Security and former State Department official. The discussion was moderated by New York Times columnist Nicholas Kristof.

Orlins said allegations that China was mainly responsible for the loss of millions of American jobs and corporate revenue were “misstatements” that China watchers had not corrected.

“I don’t disagree that [China is] an economic and diplomatic competitor, but when we brand them a strategic competitor, when have a national defence strategy which says we need to spend what it takes to defeat and deter this revisionist power, that diverts spending from what we really need to compete with China to the strategic side, and punishes social programmes, education and infrastructure investment, which has terrible policy consequences for America,” Orlins said.

In October, US Vice-President Mike Pence issued what some analysts called the harshest rebuke of China ever by a US administration, when he said Beijing’s pressure on self-ruled Taiwan to reunify with the mainland and its loans to embattled Venezuelan President Nicolas Maduro, among other geostrategic initiatives, threatened American security.

Those actions “are only a few of the ways that China has sought to advance its strategic interests across the world, with growing intensity and sophistication”, Pence said in a speech at the Hudson Institute, a Washington think tank. “Yet previous administrations all but ignored China’s actions. And in many cases, they abetted them. But those days are over.

“Under President Trump’s leadership, the United States of America has been defending our interests with renewed American strength,” Pence said, pointing out that Trump had recently authorised “the largest increase in our national defence since the days of Ronald Reagan – US$716 billion to extend the strength of the American military to every domain”.

US Vice-President Mike Pence harshly criticised China in a speech at the Hudson Institute in Washington on October 4. Photo: Joshua Roberts/Bloomberg

The CFR event follows other high-profile warnings about the threat China's economic policies and international infrastructure initiatives pose to the US, and comes as high-level talks aimed at ending the trade war resume in Washington.

Orlins blamed Chinese President Xi Jinping’s government for moves that have alienated American policy analysts who have advised against confrontation with Beijing. Such moves include an industrial policy meant to produce domestic champions in the technology sector and a law that makes it more difficult for foreign NGOs to operate in China.

“Part of the reason we’re not seeing the pushback is that Chinese policies have systematically alienated all of the constituencies that used to be pro-constructive engagement,” Orlins said. “The business community is sick and tired of the promises, which are empty.

“The academic community is tired of the impingements on academic freedom. The NGO community has seen an NGO law that has been terrible for NGOs in China. The constituencies that used to be pro-engagement are not standing up to these exaggerations and misstatements about China.”

China’s law on management of foreign NGOs, which came into effect in 2017, subjects the organisations to government scrutiny with stringent registration and reporting requirements and gives the police broad powers to question their workers, inspect their offices, look into their documents and even seal off their premises and assets.

Economy used the plight of foreign NGOs as an example of the need to treat China as a strategic competitor.

“The assessment [of China] right now is not, frankly, that exaggerated or overblown,” said Economy, whose book The Third Revolution: Xi Jinping and the New Chinese State was recently published.

“You can’t say that, after the passage of the law on the management of foreign NGOs, the number of foreign NGOs [in China] did not drop from over 7,000 to about 400-something,” she said.

“There are facts on the ground, and that’s what we should be dealing with. You can present royalty figures and I can present IP theft figures. Go to China, seek truth from facts on the ground, and then respond accordingly.”

Last week, Republican Senator Marco Rubio proposed legislation that would restrict and tax Chinese investment in the United States to counter Beijing’s “Made in China 2025” (MIC2025) industrial modernisation programme, which includes direct subsidies for domestic companies developing advanced semiconductors.

At the same time, an influential group of former top policymakers co-chaired by Susan Shirk, a former deputy secretary of state in the Clinton administration, presented a report urging a “course correction” for the bilateral relationship.

“We believe that we need to have more pressure and accept more friction in the relationship,” Shirk said, introducing the report. “We need to publicly call out China for its unfair ideological and assertive policies … we need to push back harder against them, and the Trump administration has definitely got that part right.

“The Chinese government has adopted mercantilist, zero-sum policies that advantage Chinese firms at the expense of international competitors and they’re doing this to build their national strength, including their military strength and this huge state-funded effort to make China into a hi-tech superpower is at the centre of that policy,” she said.

China's treatment of foreign companies operating in the country, including policies that force them to transfer technology to their local partners in exchange for market access, is a key point of contention in the trade talks.

A Chinese delegation led by Vice-Premier Liu He is expected to have talks with US officials on Thursday and Friday.

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