If he is to set the US economy back on the right path, Joe Biden needs to turn away from his predecessor Donald Trump's anti-China policies. Image: AFP

In light of his decades of experience dealing with the “communist” giant as senator, vice-president and now president, Joe Biden is well aware of the folly of being “tough” on China. Moreover, he needs China’s cooperation to fulfill many of his campaign pledges, including climate policy and economic recovery. To that end, it is sensible for Biden to seek rapprochement with China.

Sadly, however, rapprochement will have to take a back seat because Democrats and Republicans are on the same page regarding foreign policy. They oppose any nation attaining a position from which it could challenge US global hegemony.

The US curbed Japan’s economic rise in the 1980s via the Plaza Accord and played an important role in the implosion of the Soviet Union in the 1990s through an expensive arms race. China is the new “enemy” because it dared to adopt an ideology that proved successful in modernizing its economy, technology and military. Indeed, the US has not encountered a “near peer competitor” like China in all three fields since World War II.

China is therefore considered to be the “biggest threat” to the US and thus must be stopped at any cost. Donald Trump was not the first US president to try to “contain” China’s rise, but he brought the policy front and center, invoking trade and technology wars and initiating the “Indo-Pacific” strategy.

In doing so, Trump sank the US-China relationship to its deepest point since the two countries established diplomatic relations in the 1970s. Trump blamed, without evidence, China for all of America’s ills, including the spread of the Covid-19 pandemic and the economic fallouts it induced.

By playing the “China card,” Trump managed to win the White House in 2016 and support for being “tough” on China. However, his tariffs on more than $350 billion worth of Chinese products slowed US economic growth from more than 3% in 2018 to around 2% in 2019.

But a large segment of the US population, including those (such as farmers) who suffered under his trade war, not only tolerated but cheered Trump’s anti-China policies. Instead of seeing Trump as a wrecking ball, they considered him a “Messiah” preventing the “evil Chinese commies” from “eating America’s lunch.”

Despite Trump’s inept management of the pandemic, his supporters still believed that China manufactured the coronavirus that causes the disease and accidentally released it from a Wuhan lab to infect the world. This absolved him from any responsibility for the many infections, deaths and economic recession.

Against this backdrop, pursuing a softer stance on China could result in a political backlash, which perhaps explains why Biden is continuing with Trump’s trade and technology wars and “freedom of navigations operations” (FONOPs) in the Asia-Pacific region.

Indeed, one could even argue that Biden might want to project himself as “tougher” on China than Trump. For example, Biden attempted to turn the Quadrilateral Security Dialogue, comprising the US, India, Australia and Japan, into an “Asian NATO” to contain China. Biden inaugurated the first Quad leaders’ conference shortly after assuming the presidency.

Biden’s “tough” China policies were probably meant to prevent Trump from running in the 2024 presidential election because of the disasters that the former president’s policies had inflicted on America. The US simply cannot afford another four years of “Trumpism” of wreaking havoc on the country’s economy, social and political divisions, which could tear the country apart.

Yes, the US economy did grow by 6.4% in the first quarter of this year in spite of Biden’s “tough” China policies, but it was because of massive government spending to prop up domestic consumption and bail out businesses. While this policy helped short-term recovery, it could risk long-term economic prospects.

The massive spending has increased the government’s budget deficit and debt-to-GDP ratio, estimated at more than 15% and 130% respectively. These debt figures would limit fiscal-policy effectiveness in dealing with the post-pandemic recovery.

Furthermore, David Goldman of Asia Times reported in a May 12 article that surging used-car sales in April contributed to an annualized inflation rate of 11%. According to Goldman, the worse may be yet to come when price increases in housing and other goods and services come on stream in the Consumer Price Index (CPI).

So Biden’s huge stimulus packages might produce an “economic miracle” in the short run, but they might turn out to be a Trojan horse wrecking the economy.

As fir Biden recruiting “like-minded democracies” in the Asia-Pacific and Europe to curb China’s rise, that policy could risk global security, including America’s own. Instead of backing down on its claims in the South and East China Seas, China has actually hardened its position by developing and producing more lethal weapons.

The latest example is the commissioning of a helicopter carrier, guided missile destroyer and a new class of nuclear submarines in one day in April.

In addition, China is increasing the frequency and intensity of its military exercises. These are clear signals that China will not hesitate to defend its territorial sovereignty with force. Unless properly managed, US FONOP provocations and China’s tit-for-tat measures could lead to a hot war.

On the geopolitical front, China is equally determined to push back against diplomatic assertiveness by the US and its allies, imposing tit-for-tat sanctions and other measures. For example, Beijing did not hesitate to sanction American, European and Canadian politicians and officials after their countries sanctioned Chinese officials for “human rights” abuses in Xinjiang and Hong Kong.

On economics and trade, China seems prepared for a showdown with the US and its allies. A case in point is China instituting the “dual circulation” strategy of designating domestic demand to drive economic growth, further integrating into the global economy, and expanding its highly successful Belt and Road Initiative, all meant to deal with US and European Union decoupling intentions.

With a population of more than 1.4 billion and access to billions more in Africa, Asia and Latin America, the Chinese economy sustain growth without relying on the US and the EU.

Biden probably is fully aware that “tough” policies will not work and may not induce US businesses to leave China. A recent US-China Chamber of Commerce survey showed that more than 60% of US firms plan to increase investing in China and more than 85% have no intention of leaving the Chinese market.

Neither are its EU and Asian allies in lockstep with its “tough” China policies. While some politicians are talking about “deep-freezing” the China-EU Comprehensive Agreement on Investment, others are promoting and seeking its early ratification. “Japan Inc” is lobbying its government to improve relations with China.

The fact is, China matters, being a major contributor to global economic growth and the only major economy that could pull the world out of the Covid-19 pandemic-induced recession. The Regional Comprehensive Economic Partnership and China-EU Comprehensive Agreement on Investment clearly suggest that China is the key to the economic recovery in Asia and Europe.

Many US enterprises, state and local governments oppose Washington’s “tough” policies on China, asking Biden to drop Trump’s trade war and seek rapprochement with the Asian power. They rightly point out that “decoupling” with China would incur more costs than benefits for the simple reason that it is America Inc’s “factory” as well as market.

Besides, China is a formidable military opponent, capable of inflicting unthinkable losses of human lives and property in the US if it came to that.

So why does Biden try to “out-tough” Trump on China? Well, the short and simple answer is US domestic politics and foreign-policy posturing. China is the thread that knits the Democrats and Republicans together, the two parties regularly coming together to pass anti-China policies. Any politician, including the president, would be severely criticized for even mentioning anything positive about the country.

Then there is the domination of US foreign policy by neoconservatives vowing to deny any nation from gaining a position where it can challenge American hegemony. At this juncture, China has emerged as the only country that possesses the economic and military muscles to challenge that position.

That said, there are indications that Biden is seeking a more cooperative relationship with China. He is easing restrictions on Chinese student visas, and is said to favor installing a “hotline” to mitigate future conflicts.

Resetting the US-China relationship is economically, technologically and geopolitically sensible. But US domestic politics, ideology and obsession with global dominance stand in the way.

Ken Moak taught economic theory, public policy and globalization at university level for 33 years. He co-authored a book titled China’s Economic Rise and Its Global Impact in 2015. His second book, Developed Nations and the Economic Impact of Globalization, was published by Palgrave McMillan Springer.