Defrosting the cold war with China

Biden and Xi urgently need to go to a couples counselor to air their grievances, identify mutual interests, and commit to the process of getting to maybe.

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SOURCEForeign Policy in Focus

Chinese leader Xi Jinping arrived in the United States this week to participate in the annual Asia-Pacific Economic Cooperation (APEC) meeting. He also met one-on-one with President Joe Biden.

But it hasn’t been exactly a red-carpet kind of visit.

For one thing, because the two leaders will be talking in San Francisco, their confab will generate very little of the pomp and circumstance of a U.S. president welcoming a foreign dignitary to Washington. Second, the focus of Xi’s visit is the APEC meeting. He’ll be absorbed in wooing the other 20 members of the group, which works on facilitating trade and investment in the larger Asia-Pacific region. The APEC region, after all, is responsible for nearly half of all global trade.

But perhaps most importantly, and ominously, the United States and China are not exactly on great terms at the moment.

In addition to the deterioration in security relations—the U.S. shootdown of the Chinese balloon, the increasing tensions in the South China Sea—the two countries have been involved in a low-intensity trade war and a tit-for-tat brawl on advanced technology. The United States has imposed an escalating series of export controls on semiconductors, artificial intelligence technology, and the like. This summer, China retaliated by restricting exports of gallium and germanium—it produces 90 percent and 60 percent respectively of these two rare earth elements—to essentially zero.

Pundits and media commentators, following the lead of the Biden administration, have worked hard to lower expectations for the Biden-Xi meeting.

“We’re not talking about a long list of outcomes or deliverables,” a senior administration official told reporters. “The goals here really are about managing the competition, preventing the downside risk of conflict and ensuring channels of communication are open.”

Sounds to me like the first meeting at the office of a couples counselor. Since the Trump presidency, everyone has been talking about the “decoupling” of China and the United States. It’s really too bad that Biden and Xi don’t have the services of a third-party facilitator who can help the couple sort through their problems.

But wait: how about if I offer to fly out to San Francisco to mediate?

True, I’m not a licensed therapist. But some of my nearest and dearest are, and their professional wisdom has inevitably rubbed off on me. Plus, I think I have some good ideas of how to prevent the United States and China from falling into a messy divorce.

Getting to Maybe

My clients have built a strong relationship that has stretched across five decades. They come from very different backgrounds, so it’s only to be expected that they will have some conflicts. But even while they were bickering with one another, China and the United States set a new record in trade in goods last year (though it has declined a bit since then). Like any successful couple, they have become dependent on one another while preserving a good deal of independence.

During their first visit with me, I will encourage Biden and Xi to start out by acknowledging what’s working well in the relationship.

My guess, however, is that the two will soon fall to griping.

Beijing is angry about the tariffs that Donald Trump imposed during his presidency and that Biden hasn’t lifted, which China pegs at an average of 19 percent compared to the 7.3 percent that China imposes on U.S. products. It’s not happy about the export controls on advanced technology that the United States and European Union have levied. And it really doesn’t like the way that Europe and the United States have put pressure on manufacturers to stop relying on China for critical raw materials.

Washington, meanwhile, has accused China of ripping off the intellectual property of U.S. firms. It’s beyond annoyed that China has been using advanced technology to upgrade its military, and it’s concerned as well about China’s human rights record. It puts Chinese tariffs on U.S. goods at somewhere between 15 and 25 percent.

Both countries have other complaints. The United States worries about China’s military actions in the Taiwan Strait and the South China Sea, its military alliance with Russia, and its efforts to gobble up critical resources in the Global South. China is furious at how the United States is building alliances—such as the “Quad” with India, Japan, and Australia—designed specifically to contain China’s ambitions. Another major irritant is the aggressive actions that U.S. military craft take near China’s borders. And don’t get Beijing started on the double standard that the United States maintains on human rights where Washington basically looks the other way at Saudi and Israeli violations but holds China strictly to account.

Complaining is not the royal road to reconciliation. Biden and Xi have to listen to each other to make any progress. That’s certainly what administration officials mean when they say that both sides have to commit to “ensuring channels of communication are open.”

But let’s face it: listening isn’t enough either.

Identifying Mutual Interests

If couples have children, they have an obvious mutual interest in raising the family in a healthy environment.

Biden and Xi don’t have any children in common. But the trade between the two countries functions as a kind of offspring of the relationship. And let’s face it: my clients are really screwing up with that particular kid.

The tariffs in particular have not benefited either side. They have cost U.S. consumers a huge amount of money, to the tune of $1.4 billion a month (by the end of 2018). Through 2021, that added up to $48 billion that consumers shelled out in extra cash. According to a 2020 Brookings report:

The tariffs forced American companies to accept lower profit margins, cut wages and jobs for U.S. workers, defer potential wage hikes or expansions, and raise prices for American consumers or companies. A spokesperson for the American Farm Bureau stated that “farmers have lost the vast majority of what was once a $24 billion market in China” as a result of Chinese retaliatory actions.

U.S. businesses are well aware of how much these tariffs—and other practices—have damaged their own bottom line. Perhaps that’s why business leaders are hosting Xi in San Francisco at a $2,000 a plate dinner.

It’s harder to know how much China has been affected by the tariffs, though one study concluded on the basis of a reduction in the intensity of night-time lighting in China that local economic activity has shrunk. However, China has probably not suffered as much as the United States, since its U.S.- bound exports decreased by only 8.5 percent (compared to a decrease of 26.3 percent of China-bound exports from the United States) and its exports to the rest of the world increased by 5.5 percent (compared to an increase of only 2.2 percent for U.S. exports to the rest of the world).

Then there’s the matter of the global commons. A couple that spends less time and energy squabbling can turn their attention to improving their own house or even the surrounding neighborhood. To do so, however, they have to stop wasting resources on feeding their mutual grievances.

Both China and the United States devote enormous sums to countering perceived threats from the other side. It’s hard to separate out precisely what percentage of the nearly trillion-dollar military budget is allocated to this particular bilateral dispute, but safe to say it’s a lot. China spends somewhere between $225 billion (Beijing’s figures) and $300 billion (outside estimates). It’s likely that at least half of that combined figure—around $650 billion a year—is being poured down the drain of “preparedness” for some future battle between the two superpowers.

If China and the United States engaged in threat reduction—and then proceeded to arms control—that would free up a lot of money that could go, for instance, toward addressing climate change. Fortunately, it looks like the two countries are going to restart face-to-face climate discussions, which could help pave the way for some future reallocation of resources.

The couple could team up to work on other resource questions. The United States and China are competing furiously to secure critical raw materials throughout the world. What if they cooperated instead on research on recycling and less mining-dependent alternatives? The United States and China are both guilty of over-fishing (with China the more serious culprit). What if they led a global effort to manage ocean resources more responsibly?

Of course, it’s not my job to tell clients what to think or do. But therapist bias is a real thing, and I never claimed to be licensed. Maybe I can steer them toward what I think are more useful ways of working together as a couple.

One tactic is to get them to talk about the various threats that they view in common. My clients are both worried about unpredictable leaders—aside from themselves, naturally—who could start a nuclear war or unleash a pandemic. They are also worried about religious fundamentalism. They are both concerned about the collapse of the Russian government and its replacement by fratricidal chaos (there’s no lack of countries that fall into this category).

The list of potential  common projects is immense. But how can the two sides overcome a trust deficit to re-establish a health working relationship?

How About Some Olive Branches?

When a couple doesn’t trust each other, someone has to make a first attempt at reconciliation, however modest. It might be an apology or the purchase of some flowers or a promise, finally, to watch a baseball game together.

As therapist, my bias is revealed through my leading questions.

“With the presidential election coming up next year,” I ask Joe Biden, “what are you most worried about?”

“The economy,” he says, curtly.

“Can you be more specific?”

“Prices shooting back up.”

“How can you best prevent that?”

He looks impatient. “Well, there’s the Federal Reserve, and the interest rates, and the – “

I’m shooting meaningful glances at Xi, who is glowering in his chair. “And…?”

“Yes,” Biden begrudgingly agrees. “The economy is still taking a hit from the tariffs.”

“Which means?” I prompt.

Biden glances at Xi. “I suppose we could consider a partial reduction of some of the tariffs if…”

“If…?” I ask.

“If he does something in return.”

I turn my attention to Xi. “What do you think?”

“We could consider a partial reduction of some of the tariffs if…”

“If…?”

“If he does something in return,” Xi says.

“Those rare earth element export controls have to go,” Biden says.

“And so do the controls on AI chips,” Xi says.

The horse-trading begins in earnest. In short order, the clients have drawn up a preliminary agreement on tariffs and export controls.

It’s a start.

Next week, they’ll meet again in my office and we’ll practice our affirmations. We’ll do a short exercise involving gratitudes.

Then we’ll move on to saving the planet.

FALL FUNDRAISER

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