The Trump administration is looking to end engagement with Beijing, while Joe Biden would probably scrap the US-China trade deal, writes Haik Gugarats
Washington's relationship with Beijing looks likely to worsen, regardless of which candidate wins the US presidential election in November.
US president Donald Trump's administration is considering ending "engagement with China", while his Democratic rival, former vice-president Joe Biden, vows to press Beijing more firmly on human rights and trade practices.
US secretary of state Mike Pompeo is pledging a tougher policy on China in a Trump second term. The decades-long policy of engagement with China has failed and Washington will now work to "change the behaviour" of the Chinese government, Pompeo says. He used the same phrase to describe US policy towards Iran — seeking a change of government in all but name. "We cannot treat this incarnation of China as a normal country," Pompeo says.
Washington is taking steps to decouple the world's two largest economies, by curbing Chinese companies' access to US capital markets and research institutions. It has also ended preferential terms of US trade with Hong Kong, which serves as a base of operations for many US companies accessing markets in mainland China and as a trade financing hub for Chinese companies, including state-owned Unipec and ChinaOil.
Beijing accuses Pompeo of "ideological prejudice and a Cold War mindset". But China is taking similar steps to reduce its exposure to US trade tariffs and sanctions. President Xi Jinping told Chinese business leaders on 21 July that "we must concentrate our efforts on doing our own affairs", making full use of China's massive domestic market.
While China's exports to the US fell by 20pc on the year in January-May, its share of global trade increased by 5 percentage points from January to a record 18pc in May, according to data from UK-based consultancy Oxford Economics.
The latest iteration of the US-China relationship borrows from a Cold War playbook. Washington alleges attempts by Chinese hackers to access Covid-19 vaccine research, and has forced China to close its consulate in Houston, the centre of the US oil industry and the main location for Chinese state-controlled energy firms' US trading operations.
Beijing's measured retaliation involves closing the US consulate in Chengdu in western China. And China appears to have released to the US authorities a Chinese citizen accused of involvement in intellectual property theft, who had taken refuge in the Chinese consulate in San Francisco. But Washington says that all Chinese diplomatic facilities in the US are used to cover industrial espionage.
China first
Anti-China sentiment in the US is not confined to Trump's inner circle. Democratic and Republican lawmakers share the view that China has gained, and the US lost, from a co-operative relationship. Biden faults Trump for ignoring Xi's handling of protests in Hong Kong in pursuit of a "hollow trade deal".
Biden's promise to end "reckless trade wars" may appeal to Beijing. But his administration would probably scrap the recent US-China trade deal, which remains a rare bright spot in the two countries' bilateral relations despite its spotty implementation.
Many Democrats regard the deal as a quasi-Chinese model of government-managed capitalism. The deal requires China to import $69bn of US energy commodities in 2020-21, instead of specifying volumes. US crude exports to China in May were more than five times higher than a year earlier, at a record 1.26mn b/d. But in dollar terms, US crude exports merely doubled on the year to $1.06bn in May.
