The recent official visit by the Chinese president to Russia and his talks with Russian President Putin have only served to highlight Beijing’s rise as a great power with sway that now extends well beyond Asia. The visit appears to have been “refracted through a prism of both nations’ mutual antagonism toward the United States,” according to analyst Stephen Collinson, and “Washington, watching carefully from the sidelines, poured scorn on the idea of China as a peacemaker in Ukraine.”
But it is undeniable that the United States now faces a significant foreign policy challenge in a scenario where strategic experts believe that attempts are being made to undermine the current international order through the restructuring of it. Collinson claims that the White House launched a public relations counter-offensive during the Xi-Putin meeting because they anticipated bad aspects for the United States in the developing routine. It announced the earlier-than-expected deployment and delivery of US missile systems and contemporary tanks, reinforcing its multibillion-dollar backing for Zelensky’s administration.
In a more concise discussion with CNN’s Christiane Amanpour, John Kirby, the head for strategic messaging at the US National Security Council, outlined the geopolitical implications. This is a “marriage of convenience, not of affection, not of love,” he has noted, adding that “where they intersect is pushing back against the United States and our influence around the world.”
According to Gary Locke, a former US envoy to Beijing, “China is trying to present itself as a sort of new force, standing up against the Western order.” China believes that they ought to have a say in the club’s so-called rules. They also object to the American and European nations’ predominance in the majority of international issues.
It would be wise to keep in mind that the prospect of a military partnership between China and Russia has long interested US officials. While there had long been a geographical and historical rivalry between the two communist hegemons, the Nixon administration’s opening to Beijing in the 1970s was partially based on their attempt to split the People’s Republic of China and the Soviet Union. However, until Putin’s hard turn against Washington over the last two decades, Russia was perceived as posing far less of a danger to the US after the end of the Cold War.
The late George Kennan, a US Cold War policy expert, observed that NATO growth into former Warsaw alliance states in Eastern Europe could drive Russia into Beijing’s embrace. In this context, it would also be relevant to remember his opinion at the time.
The spokesman for China’s Foreign Ministry, Wang Wenbin, has stated that the country will “continue to play a constructive role in promoting a political settlement of the Ukrainian issue” that asks “for a ceasefire and togetherness” despite all the contentious presumptions. However, the US has responded to the idea with skepticism, cautioning that it would enable Moscow to consolidate its geographical advances in the nation. Volodymyr Zelenskyy, the president of Ukraine, has nevertheless stated that any agreement would be contingent on the complete departure of Russian troops from Ukrainian land that is under occupation.
Meanwhile, according to AFP, US Secretary of State Blinken stated that “we have not seen them cross that line” when asked by a Senate Committee whether China has given “lethal aid” to Russia.
However, US businesses and American business organizations are beginning to suffer as a result of the growing uncertainty regarding China, Russia, and Ukraine.
As hostilities between the two largest economies in the world continue to rise, the analyst Jonathan Josephs has noted that the President of the American Chamber of Commerce in China is extremely concerned because this competition is “making business very challenging.” Additionally, it has been reported that there are significant differences between the administrations of the USA and China on a wide range of topics, including the coronavirus, Taiwan, Tiktok, electronics, and the Ukraine.
So, for the first time, “a majority, 55 per cent, no longer regard China as a top-three investment priority — a place where they should spend money to grow their business,” according to the most recent AmCham China yearly poll conducted among its more than 900 members. According to Josephs, “the percentage of people (who) see the uncertainty of bilateral relations as their top challenge in China has increased 10% in the last year to 66%, while the percentage of people (who) think China has become less welcoming to foreign companies has increased to 49%.” This seems to be a controversial premise.
It is important to realize that the US-China alliance has always been centered on commerce. Some of the most prosperous US corporations, including Nike, Intel, Pfizer, and Coca-Cola, are partners of AmCham China. Following the opening of the nation to foreign businesses by then-President Deng Xiaoping in December 1978, Coca-Cola was the first US consumer company to offer its goods in socialist China. Ever since their first cargo of soft drink departed Hong Kong for the mainland in January 1979, Coca-Cola has led the way for US businesses in China.
Additionally, according to AmCham China officials, US companies are “just tired after three years of Covid, travel is getting harder, labor costs are going up, executives aren’t willing to accept assignments in China, political pressure is increasing, and China is becoming a less predictable place to do business.” Nevertheless, it is important to note that despite all of these challenges, figures indicate that last year, direct commerce between the two nations reached US$690.6 billion. This illustrates how significantly the economies of these two nations have an impact on the global economic framework.
Eswar Prasad, a professor of global trade policy at Cornell University and a past head of the China Division of the International Monetary Fund, has specifically called attention to this element. According to him, “the reality is that China does need a lot of products from the US, especially technology products, and the US does have a lot of companies that run their supply chains through China. This is important for the global economy because it’s not just supply chains that these two countries are critical about; the tenor for global trade is set by the relationship between these two countries.” In this context, one must keep in mind that the World Trade Organization (WTO) regulates international trade.
However, the intended remedy has not been observed in this situation. In regards to the duties placed by then-US President Donald Trump as part of the trade conflict, the US Administration strongly refused two decisions in December that had favored China. The US suggested that the duties had been applied over matters of national security that the WTO had no authority to decide, even though it rejected the WTO rulings.
The Peterson Institute for International Economics has noted that “overall, 66.4 percent of US imports from China and 58.3 percent of Chinese imports from the US remain subject to tariffs, with little sign that either side will reduce them.” It would be worthwhile to mention this observation at this point. The US strategy to China in global trade, according to Professor Prasad, “could lead to a deterioration of the rules-based global trading system,” he has cautioned.
Strategic experts have also noted that the deterioration in US-China ties may prompt an increasing number of US businesses to consider shifting their supply networks outside of China. The media has already noted that Apple, which made enormous quantities of iPhones in China and became one of the most lucrative businesses in the world as a result, is now widely considering producing them more in other nations, including India.
Dan Wang, the head economist of Hang Seng Bank China and a resident of Shanghai, has noted that Western companies will still be reliant on China even if they shift their supply lines elsewhere. These other nations will continue to depend on China for their component needs, particularly in fields like semiconductors, renewable energy, and medicinal technology. AmCham China officials have also indicated that the enormous Chinese consumer market has its own dimension and that is why some US firms like McDonald’s, Starbucks, and Ralph Lauren will remain with their own major Chinese expansion plans in the pipeline. Ms. Wang has added that “Beijing still wants US companies to invest in China, and that attitude I do not believe will change anytime soon.”
However, the two countries’ technology-related national security worries are also having an influence on this developing situation. The Biden government has taken an increasing number of steps to try and prevent China from getting US technology, including chip production. This has not gone over well in Beijing, which sees such actions as posing difficulties for the advancement of that nation. China is upset that US coercion has led to restrictions on the Chinese telco behemoth Huawei in many nations, with Germany being the most recent to contemplate taking action. Tiktok, a social media company, has also received threats of a total prohibition in the US and is subject to limitations in the UK.
However, we must not lose sight of the fact that escalating conflicts will only increase unpredictability, which the already precarious global economy does not require.
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