After the meeting between United States President Joe Biden and his Chinese counterpart Xi Jinping, in November, the U.S and China have managed to stabilise their relationship from the free fall it was in through 2023, beginning with the spy balloon episode. The new year could bring new turbulence arising from the outcome of the elections in Taiwan and the fact that it would be an election year in the U.S. where both parties are vying to show how tough they are on Beijing.
One sign of the efforts to manage the relationship without confrontation was visible in the recent virtual meeting between their top military officials, General Charles Q. Brown, and General Liu Zhenli. China broke off military contact following former U.S. Speaker Nancy Pelosi’s visit to Taiwan in August 2022.
The U.S. had been seeking such a meeting for a while, but was foiled by the sanctions it had placed on the Chinese Defence Minister, General Li Shangfu, in 2018. With the latter’s purge last month, the way opened up for the meeting between the two U.S. and Chinese defence officials and a restoration of the normal dialogue between the two militaries.
Taiwan’s polls, tech export
A big challenge could arise almost immediately into the new year arising from the January 13 elections in Taiwan. The candidate of the ruling Democratic Progressive Party, Lai Ching-te is leading at the polls, something that China has made clear it does not particularly like. Efforts, no doubt, aided surreptitiously by Beijing, have pushed for a victory of the Opposition which leans towards China, but as of now it seems that the Taiwanese are not likely to change course. Lai is the deputy to the current President Tsai Ing-wen and is likely to keep pushing for Taiwanese sovereignty and partner the U.S. closely.
Another issue that will play out in the year is ever-tightening U.S. restrictions on technology export, especially that of semiconductors to China. Ten days ago, the U.S. Department of Commerce said that it would launch a survey of the U.S. chip supply chain and national industrial base to address national security concerns from China-sourced chips. This process would also aid in the Administration’s funding of domestic semiconductor industry.
The Chinese Embassy in Washington protested noting that the U.S. had “been stretching the concept of national security, abusing export control measures, engaging in discriminatory and unfair treatment against enterprises of other countries, and politicizing and weaponizing economic and sci-tech issues”.
In October, the Biden Administration issued an update to its existing restrictions on exporting advanced Artificial Intelligence (AI) to China and other countries. The move was aimed at preventing China from acquiring cutting-edge chips to develop AI technologies such as large language models that power applications such as ChatGPT, but U.S. officials say they also have military uses. To prevent Chinese startups from filling the void in AI chips in China, the U.S. also included two Chinese chip startups, Biren and Moore Threads, to the U.S. blacklist.
In retaliation, Beijing exercised its lever as the supplier of rare earth metals needed for chip production. In July, China placed restrictions on some gallium and germanium products. In December, restrictions were placed on several types of graphites and a ban imposed on the export of technology for making rare earth magnets and technologies for extracting and separating rare earths. China is the world’s top processor of rare earths, accounting for 70% of the world’s production.
U.S. elections, prospects
But the biggest unknown in U.S.-China relations in 2024 will be the outcome of the U.S. presidential elections and a possible re-election of Donald Trump as President. The Biden policy on China has followed on from the break that was effected by its predecessor Trump Administration.
But many of the tougher measures against China today came in the Biden term. Importantly, Mr. Biden’s China policy was more systematic and surefooted. His marshalling of allies such as South Korea and Japan, cementing the Quad (Australia, India, Japan, the U.S.) and creating AUKUS (Australia, the United Kingdom, the U.S.) could not have given the Chinese much geopolitical comfort.
But even so, the return of Mr. Trump could prove to be their worst nightmare given his chaotic persona. Dealing with Mr. Biden and stabilising ties would provide much needed breathing space for the ailing Chinese economy. Mr. Biden had made it clear that he was seeking a managed competition that would prevent confrontation.
Given the nature of the U.S.-China competition, there are also other areas which could unexpectedly gain salience. One of them is growing tensions in the Philippines and China in the South China Sea near the Scarborough Reef and the Second Thomas Shoal. On December 10, the U.S. State Department spokesman said that the U.S. would stand with the Philippines and that the provisions of their mutual defence pact would kick in if there were armed attacks on Philippines armed forces, government vessels and aircraft and even the Coast Guard.
Speaking in Washington DC in mid-December, U.S. Secretary of the Treasury Janet Yellen, one of the architects of the Biden Administration’s China policy, said that the two countries would not be able to resolve all their differences and avoid shocks, but the aim was to make “our communication resilient…[to] prevent misunderstanding from leading to escalation and causing harm”.
Manoj Joshi is Distinguished Fellow, Observer Research Foundation, New Delhi
