As Beijing finally congratulates Biden, China looks towards closer economic ties with the US
- The Chinese leadership is seemingly looking to avoid the risk of antagonising the president-elect, with whom they need to work to reduce bilateral tension
- But while Beijing is cautiously optimistic that a Biden presidency will be more manageable, Trump will be missed – for reasons ironic and sincere
“We respect the American people’s choice,” foreign ministry spokesman Wang Wenbin said at a news briefing. “We congratulate Mr Biden and Ms Harris.”
The foreign ministry previously merely noted Biden’s announcement that he had won, with Chinese state media addressing him as the US presidential candidate rather than using the title of president-elect.
Beijing had apparently intended to wait for complete clarity over the election results, as President Donald Trump has vowed to contest them in court and still refuses to concede.
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But by ending their reticence, Chinese officials are seemingly signalling that holding out any longer runs the risk of antagonising Biden, with whom Beijing needs to work to reduce bilateral tensions.
However, Wang added that “we understand the US election results will be confirmed based on US law and procedure”, which is clearly aimed at placating Trump even though his legal challenges are virtually unwinnable.
Zhu Guangyao, a former deputy finance minister who was deeply involved in China’s economic and trade talks with the Obama administration, said at a webinar on Wednesday that Beijing and Washington should work together again to tackle urgent and important issues – from coordinating fiscal policies for confronting the global economic downturn, to battling the raging pandemic.
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People on the streets of Beijing react to Biden's US presidential election victory over Trump
John Thornton, an American banker who has for decades been a key player in US-China back door diplomacy, told the same forum that Xi and Biden should have an early face-to-face meeting to work out their differences and reduce bilateral tension.
In the short term, however, Chinese officials are still likely to keep a low profile when it comes to commenting on Trump’s defeat, for fears of incensing the outgoing president and spurring him to do more damage to US-China relations in his remaining two months in office.
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One of their concerns is Taiwan, with reports suggesting that US marines have been on the island training Taiwanese troops in the past week, though the Pentagon on Wednesday described the reports as “inaccurate”. Beijing has long insisted that the presence of American soldiers in Taiwan would constitute a “red line” that could drastically escalate cross-strait tensions.
Concerns in Beijing were further raised after Trump fired defence secretary Mark Esper on Monday and three other senior Pentagon officials resigned on Tuesday, while Washington also drastically ramped up arms sales to Taipei last week.
It is hardly a coincidence that on Wednesday Chinese and American armed forces began three days of meetings held via videoconference to discuss controlling the Covid-19 pandemic, humanitarian aid and disaster prevention, which could help calm fraying nerves.
There is no doubt that once Biden comes to power, Chinese officials will try to repair the damage and seek to resume a broad-based dialogue so as to put a floor under the near-free fall in relations during Trump’s time at the helm. So far, most regular official communications between the two countries have stopped.
Ironically, however, Trump will be sorely missed by a broad spectrum of mainland Chinese people.
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Take Tesla for example. China had pulled out all the stops to help Tesla build its giant modern factory in Shanghai in terms of land development, recruitment of workers, bank loans and other financial services that were rarely offered to wholly owned foreign enterprises.
On the other end, people with nationalist leanings gave him the ironic Mandarin nickname of Chuan Jianguo – which roughly translates to “Build the Country Trump” – for his unpredictable and erratic leadership that has deeply divided the US, hurt its standing in the world, and alienated its Western allies. They have seen an America in decline, and the chaos Trump has created has in fact bolstered support for Xi’s autocratic rule and helped build up China. Jianguo, or “build the country”, was a very popular Chinese name back in the era of Mao Zedong.
Meanwhile, Biden, who has decades of foreign-policy experience, has gone from a China supporter to a China hawk of some sort as getting tough on Beijing has become one of the few things that can win bipartisan support in a deeply divided US.
But his approach is most likely to be different to that adopted by the hardened China hawks in the Trump administration, who are bent on pushing the two countries into a new cold war.
Biden reportedly boasted that he spent more time with Xi than any other foreign official, with the two sharing 25 hours of private meals and logging 24,000 miles of travel together. But Xi has changed – he is no longer the same person with whom Biden spent so much time while they were both vice presidents of their respective countries.
Late last month, just a week before the US presidential election, Xi unveiled an ambitious blueprint to build China into “a modern socialist country” by doubling the size of its economy by 2035 and envisioning a new economic cycle focusing on home-grown technology and domestic consumption. Analysts have interpreted his call for technological self-sufficiency as China’s intention to reduce its reliance on imported technology, particularly from the US. That is certainly true, but that does not mean China will stop opening up.
As the calls for decoupling with China remain strong in the US, Beijing plans to forge further economic interdependence with Washington.
The latest data shows that despite the trade war and political tensions, economic and financial links between the US and China are still relatively strong.
Reuters reported on Tuesday that Chinese companies’ stock-market listings in the US reached a six-year high in 2020, and advisers expect the trend to accelerate in the year ahead in expectation of a stable regulatory regime under a Biden presidency.
In the first nine months of the year, China’s exports to the US actually rose 1.8 per cent, helped by massive hikes in medical supplies.
China will also continue to expand its imports from the US, particularly agricultural products, regardless of political developments. The latest official data shows that China is falling short of fulfilling the purchase target through September this year made under the phase one trade deal, reaching only 53 per cent. The raging pandemic may have been a factor.
Meanwhile, China will try to maintain the inflow of total foreign direct investment at an annual level of between US$130 billion and US$150 billion, and is also expanding its opening up to overseas portfolio investments through stock connect and bond connect schemes.
All these will allow foreign businesspeople and investors, from the US and elsewhere, to have a bigger stake in China’s domestic market and its expanding middle-class population of 400 million, making it harder for Beijing and Washington to decouple.
