Diplomacy at the Floor

Sep 1, 2023

On November 14, 2022, on the sidelines of the G-20 meeting in Bali, US President Joe Biden and Chinese President Xi Jinping affirmed their mutual desire to put “a floor” under the US-China conflict. That attempt, which was initially derailed by the surveillance balloon incident of early February, has since gathered momentum this summer with a flurry of high-level US diplomatic missions to Beijing. What do these efforts portend for a still fraught relationship between the world’s two superpowers?

The first three missions—those of US Secretary of State Antony Blinken, Treasury Secretary Janet Yellen, and Climate Envoy John Kerry—were long on ceremony but short on substance. There were cordial meetings between US cabinet officials and their Chinese counterparts but little in the way of actionable deliverables. The fourth meeting—this week’s visit by US Commerce Secretary Gina Raimondo—was different. The two sides finally took some concrete steps in agreeing to set up a dual-dialogue based framework—one effort, a commercial working group focused on trade and investment and the other, an export control enforcement information exchange. The first exchange on export controls took place on August 29 in Beijing. The first meeting of the commercial group is supposed to take place in the US in early 2024. The intent, according to a US Commerce Department readout of Raimondo’s meeting with her Chinese counterpart (Wang Wentao), is for in-person meetings of the commercial group to occur twice a year.

On the surface, this appears to be good news. But that’s only by comparison. Considering the dire state of a deeply conflicted US-China relationship, any form of engagement is an improvement. Unlike leading China hawks in the US Congress, such as Mike Gallagher, Chairman of the new House Select Committee on China, whose strident views on “zombie engagement” argue against any form of dialogue with China, I believe that communication is a necessary, albeit not sufficient, condition for a restoration of trust.  As I argue in Chapter 13 of Accidental Conflict, without a rebuilding of trust, conflict resolution is all but impossible.

In the same sense, I do not believe that calendar-specific dialogues conducted only once or twice a year are the answer. My proposal for a US-China secretariat envisions a full-time operation of collaborative troubleshooting and problem solving staffed by large complements of US and Chinese technocrats.  Of course, it is possible that the new working groups just established may be sowing the seeds of a more robust architecture of engagement along the lines of a permanent secretariat, but I’m not holding my breath for that to occur.

The deeper misgiving I have with the Raimondo-Wang working group agreement pertains to the substance of what these two efforts is aiming to accomplish. The ill-defined objectives of the new commercial group, which the US Commerce Department says are  “to seek solutions on trade and investment issues and to advance US commercial interests in China,” pale in comparison to the robust agenda for action of the former US-China Joint Commission on Commerce and Trade. The JCCT, which was established in 1983, met annually 27 times until it was terminated by the Trump administration in 2017. Unlike the new group that was just set up during the Raimondo visit, the JCCT consisted of sixteen active working groups that covered a wide range of issues, from agriculture and pharmaceuticals to intellectual property and the environment. In other words, the new effort falls far short of the well-established and more robust framework of engagement that was previously in place before the onset of the US-China trade war.

But a far bigger problem is that the new dialogue framework ignores the far bigger elephant in the room: national security considerations in an era of civilian-military fusion. This is where the US is attempting to draw a sharp line in a very fuzzy debate—namely, the distinction between de-risking and decoupling.  In an August 31 interview on CNBC, Secretary Raimondo was adamant on the dubious clarity of this distinction. I fear she doth protest too much. She is correct in bemoaning the complexity of the US-China relationship.  Yes, it would be far easier if the two trading partners could roll back the clock and simply exchange Chinese-made shoes and toys for US Treasuries. Alas, those days are long gone, as is the innocence of what started out as a “marriage of convenience” between the two nations.  While the new working groups are better than nothing, they do little to lift the US-China conflict off the floor.

You can follow me on Twitter @SRoach_econ

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