Why US-China ties show signs of thawing and what it means for India
Why US-China ties show signs of thawing and what it means for India

Why US-China ties show signs of thawing and what it means for India

The economic interdependence between the United States and China is too deep and intense to allow the two countries to pursue traditional Cold War strategies.

The economic cold war between the United States and China triggered by former President Donald Trump is not over yet. The expectations of the US business community and the Chinese government that Joseph Biden’s victory in the presidential election in 2020 would restore normal ties between the two countries have so far remained unfulfilled.

Despite reciprocal tariffs imposed on each other’s exports, trade between the United States and China has grown over the years, and China’s trade surplus with the United States has increased.

The political confrontations between the United States and China over Chinese treatment of the Uighur people in Xinjiang, the destruction of democracy in Hong Kong, flexion of naval muscles from China’s navy in the South China Sea and the East China Sea, the Chinese strongman Xi Jinping’s threats to annex Taiwan military force and a number of other Chinese claims have certainly acidified US-China relations.

President Biden, who mocked Trump’s several foreign policy initiatives, has largely continued his predecessor’s China policy and has often sounded louder towards China. When asked if he would defend Taiwan if China attacked it, he promptly said it was a US commitment. None of his predecessors have said it so openly and clearly. It is another matter that White House officials quickly stated that US policy toward Taiwan has not changed.

When a seasoned politician with decades of experience in the Senate Foreign Relations Committee makes a statement in his capacity as the country’s president, it is not a remark out of hand. Such a remark actually strengthened America’s traditional Taiwan policy – “strategic ambiguity”.

However, President Biden is well aware that there can be no previous relations with China of the Cold War. In contrast to the relationship between the United States and the USSR, the economic interdependence between the United States and China is too deep and intense to allow the two countries to pursue traditional Cold War strategies.

Precisely for this reason, Washington and Beijing have begun to signal their mutual efforts to resolve economic disparities and restore trade ties. In fact, it was the Trump administration that signed a Phase 1 trade agreement with China in January 2020, years after the mutual customs war. While China promised to buy US goods for $ 200 billion, the US expressed willingness to reduce high tariffs on imported Chinese goods.

The Biden administration, despite acute disagreements over political and security issues with China, has also taken a step recently, resulting in a recent virtual meeting between US Trade Representative Katherine Tai and Chinese Deputy Prime Minister Lin He. China, as usual, demanded the removal of tariffs imposed by the Trump administration, and the United States asked China to honor the trade commitments it made in the Phase 1 agreement.

These are relatively low-level interactions that would not have meant much, but for the reported upcoming virtual summit between Joe Biden and Chinese President Xi Jinping. While global headlines these days indicate a new Sino-American Cold War unfolding, Washington and Beijing have embarked on a quiet process to resolve their trade and economic disparities.

What impact can such a development have on India and on India’s developing ties with the United States? First of all, it is important to realize that despite Chinese aggression along the actual control line (LAC) since mid-2020 and strong Indian reactions to Chinese actions, including bans on more than 200 Chinese apps, trade between India and China is moving in a positive direction.

It is a clear signal that both the United States and India refrained from ending economic ties with China despite very serious confrontations in other parts of the relationship. It also indicates the desirability of exploiting the opportunities offered by China while trying to prevent Chinese hegemony that would not be in the interest of any country.

Recent Chinese accidents, allegations and aggressions have begun to meet with international opposition. That India, Japan, Australia and the USA have formed a Quad Forum, that India, Japan and Australia have agreed to establish alternative supply lines for uninterrupted trade in the Indo-Pacific, that Australia, Great Britain and the USA have formed the AUKUS triangle for strategic cooperates that little Taiwan has decided to fight any Chinese invasion, that the EU has told Taiwan that “it is not alone”, that NATO has been able to shift focus on China from Russia, that ASEAN and the EU have developed their own strategies on the Indo-Pacific as opposed to Chinese reluctance to accept the Indo-Pacific construction are just a few indications that China will not be allowed to have an unhindered march towards establishing a Sino-centric order in the region.

It is essential that China’s internal development in recent times also points to the beginning of the end of the Chinese economic miracle, the untrue discourse on “China’s peaceful rise” and China’s attempts to rewrite the rules of international relations. China’s international image has been hit hard by its secrecy over the Wuhan virus, its human rights abuses in Xinjiang, and violations of political and civil rights in Hong Kong.

China today houses a large number of ghost towns, its meltdown of real estate is exemplified by Evergende and other large real estate companies defaulting on the repayment of the loan, its financial obligations due to a large number of state-owned companies defaulting in the same way, large multinational companies that close stores and either move their production facilities to Vietnam and India and other countries or return to Japan, South Korea, the United States and other destinations. Interestingly, more than 600,000 Chinese citizens have sought asylum abroad to escape the over-centralization of policies and lack of freedom.

China is currently facing massive internal challenges, and the CCP under Xi Jinping’s leadership is seeking to further strengthen the party’s control over people’s social and economic lives. While seeking to reduce foreign cultural influences, it is also seeking to change its economic model by adopting a “double circular” economy, meaning a consumer-driven model from previous export-oriented economic models.

India can expect fierce competition between the US and China in the coming years, which would actually facilitate a multipolar Indo-Pacific order. “As the hot Chinese economy cools, India has all the potential to attract foreign investment and exploit it to achieve.”aatmanirbhar“Goal.

The real challenge for India will be foreign misunderstanding on the part of the Chinese government to invoke nationalism at home and hide its domestic failures. Therefore, the current policy of defense modernization and strengthening of the Indo-American Strategic Partnership bilaterally and multilaterally should be the preferred objective.

The author is Professor, Jawaharlal Nehru University. Views are personal.

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