The Trump administration has over the past four months outlined the United States’ Strategic Approach towards the People’s Republic of China. The approach has been further elaborated by four high ranking officials of the administration covering economic, strategic, intelligence and foreign policy threats from China to the United States. The strategy document and its elaboration by the four officials are an extension of the ‘principled realism’ as outlined in the National Security Strategy of the Trump administration. However, the need to check the growing assertiveness of China is not new and can be traced to the Obama administration. As the United States increasingly identifies China as a strategic competitor, the next occupant of the White House, would likely continue with the strategy of principled realism towards China.
On 20 May 2020, the White House released a report in accordance with the FY2019 National Defense Authorization Act, titled ‘United States Strategic Approach to the People’s Republic of China’. The report details the whole-of-government strategy with respect to the People’s Republic of China (PRC) and stated that, “The Administration’s approach to the PRC reflects a fundamental re-evaluation of how the United States understands and responds to the leaders of the world’s most populous country and second largest national economy.” The report states that the United States policy towards PRC since 1972, when it established diplomatic relations, was premised on the hope that the relationship would lead to larger economic and political openings in the PRC and a more open society. The report noted that the United States underestimated the will of the Chinese Communist Party (CCP) to constrain reform in China. The CCP has instead exploited the free and open rules based international order and reshape the international order in its favour. To counter this growing challenge from China, the American administration has adopted a competitive approach having two objectives; the first objective is to strengthen and improve the resilience of American institutions, alliance and partnerships to withstand the challenges that are presented by the PRC. The second is to compel the PRC to cease or reduce its actions that are harmful to the national security of the United States, its allies and partners. The document highlighted the challenges that the PRC poses:
Economic Challenges- It highlighted the unfair practices used by China to advantage it first, such as, pressures to transfer technology, unauthorised cyber incursions into US firms’ database, place restrictions on US companies’ abilities to licence on market terms, etc. It also talked about the theft of Intellectual Property Rights (IPRs). On the One Belt One Road initiative (OBOR) it stated that China has used its economic leverage to extract political and economic concessions from countries. The United States views the OBOR projects as an effort by China to expand its political influence and increase its military access across regions.
In explaining the CCP’s ideology and global ambitions, NSA O’Brien stated that, “the CCP is a Marxist-Leninist organisation. The Party General Secretary Xi Jinping sees himself as Josef Stalin’s successor... As interpreted and practiced by Lenin, Stalin, and Mao, communism is a totalitarian ideology.” He highlighted that, the CCP aims to have complete control over the lives of the people of China, by exercising control over their economic and political activities. He also stressed that the CCP is also physically trying to control the people while also ensuring that their thoughts are also not against the CCP through propaganda and control over access to information.
Propaganda plays an important role in dominating political thought for the CCP. This has meant mandatory study sessions on communist ideology, control over all media and jailing independent voices of bloggers, activists etc. China is investing billions in overseas propaganda operations and is trying to influence information that American citizens receive about China. It is pressurising companies such as Delta, Marriott, etc. to remove references to Taiwan; it is forcing universities from not hosting talks by the Dalai Lama and is using its financial and market to censor Hollywood. Apart from propaganda, China is also using trade to coerce compliance from other states. This also includes using its position as leader of international organisations such as head of four specialised UN agencies to accept and promote Beijing’s views on international issues. They are also compromising the security of these organisations by pushing them to install Chinese telecommunications equipment in their facilities while aiding Chinese companies to sell their products.
The approach of the US administration has been to: a) prevent companies such as Huawei that answer to the CCP’s intelligence and security apparatus from accessing US citizen’s personal and private data, b) designated the U.S. operations of 9 Chinese state-controlled propaganda outlets as foreign missions, placing reporting requirements and visa restrictions, c) place restrictions on Chinese government entities and companies that are complicit in China’s campaign of forced labour, arbitrary detentions, repression and high technology surveillance, d) leave the World Health Organisation (WHO) to protest its co-optation by China. Instead of funding the WHO, the administration will use that money to work directly with frontline workers in developing countries, e) the United States has limited the use of students’ visa by members of the People’s Liberation Army (PLA) to come to the United States to steal its technology and IPR from universities and lastly, f) halt the investments of U.S. Federal employee retirement funds into PRC companies.
This speech was followed by remarks of FBI Director Wray on 7 July 2020 at the Hudson Institute. Speaking on the threat posed by the Chinese government and CCP to the economic and national security of the United States, he identified the “…greatest long-term threat to our nation’s information and intellectual property, and to our economic vitality, is the counterintelligence and economic espionage threat from China. It’s a threat to our economic security—and by extension, to our national security.” He gave examples of Chinese hacking into American companies’ databases to gather sensitive personal information of millions of American citizens. This theft is not restricted to data of citizens but also works actively to undermine the United States health care organisations, pharmaceutical companies and academic institutions.
FBI Director Wray states that China wants to surpass the United States in economic and technological leadership and become a superpower by any means necessary. To achieve this goal China uses a diverse range of techniques from cyber intrusions and theft to physical theft by corrupt trusted insiders or with the help its own people. China uses not just its intelligence services but also stated owned enterprises, private citizens, researchers and graduate students to steal innovations from the United States.
Director Wray, identified five threats to the United States from China. One, China is engaged in economic espionage as it realises it needs cutting edge technologies to surpass the United States. It steals American intellectual property and then uses it against the very same American companies it victimised, thus cheating them twice. It is enticing Chinese scientists to secretly bring American innovation and technology even if it means stealing just knowledge back to China under the ‘Thousand Talent programme’. Two, China is using clandestine efforts to hack into American databases to develop its artificial intelligence (AI) tools. It is also using social media sites to target Americans and steal sensitive information. The third threat identified is in academia. Apart from the Thousand Talent Programme that is being used to steal research from American universities, China is using such research to gain leverage and undercut American universities, research institutions and companies blunting national development and costing American jobs. Another threat is the manipulation of American citizens or what has been called ‘malign foreign influence’. This is done through subversive, undeclared, criminal, or coercive attempts to sway government’s policies or distort public discourse on a particular issue. China uses its economic powers to push Chinese preferences on American officials. It uses American companies and academia that wants legitimate access to Chinese markets and partners to influence American officials to support Chinese preferences such as on the status of Taiwan, the Dalai Lama etc. Lastly, China is violating international order of well settled norms and rule of law.
The response to these threats has been to use tools such as traditional law enforcement authorities and intelligence apparatus to protect American companies, universities, computer networks, ideas and innovations. “The FBI is opening a new China-related counterintelligence case about every 10 hours. Of the nearly 5,000 active FBI counterintelligence cases currently underway across the country, almost half are related to China.” The FBI is also working with its partner agencies within the United States and abroad to respond to these challenges. Director Wray was of the opinion that the threats requires a ‘whole of society’ response and China and the United States are “fundamentally two different systems” (emphasis added) with China doing all it can to exploit American openness.
Attorney General William Barr on 16 July 2020, in his remarks on the economic campaign of China stated that “The PRC is now engaged in an economic blitzkrieg—an aggressive, orchestrated, whole-of-government (indeed, whole-of-society) campaign to seize the commanding heights of the global economy and to surpass the United States as the world’s preeminent superpower.” The centrepiece of this effort is the CCP’s ‘Made in China 2025’ initiative, which is a plan to dominate high tech industries such as robotics, advanced information technology, aviation and electric vehicles. This initiative backed by unfair advantage to Chinese firms is a threat to the United States technological leadership. The initiative is a state-led mercantilist economic model in which the Chinese government has titled the balance in its favour through predatory and often unlawful practices. Attorney General Barr stated that these practices include, currency manipulations, traffics, quotas, state led strategic investments and acquisition, theft and forced transfer of intellectual property, state subsidies, espionage, dumping and cyber-attacks. He stated that, China also wants to dominate key trade routes and infrastructure (including digital infrastructure) in Eurasia, Pacific and Africa. The fear is “of allowing the world’s most powerful dictatorship to build the next generation of global telecommunication networks or 5G.
The major threat to the United States is China’s effort to surpass it in cutting edge AI technology, which can be used to further curtail freedom as well as its applications in the military and to gather intelligence. China is also monopolising the trade in rare earth materials, which plays an important role in the development of AI technology, as well as other industries such as electric cars medical devices, military hardware, etc. He also highlighted that the United States is now dependent on China for vital goods and services such as medical goods and pharmaceuticals. It has done so by using various methods like pressurising American companies to give up technology and form joint ventures with Chinese companies, by regulators using discriminatory practises against American firms, and American firms being forced to set up bases in China where their intellectual property is more vulnerable to theft. American companies are unwilling to bring formal trade complaints against China for fear of retaliation and denied access to its vast markets. In fact, he stated that the CCP is engaged in efforts to cultivate American business executives to help further their political goals. As such negotiations are not highlighted in the public domain; the CCP wants to use American companies to get favourable response from American political leaders by targeting a particular industry in a particular state.
In terms of a solution, it was proposed that American corporate should not view themselves as lobbyists for the CCP to gain market access. But they need to be aware of how they might be used, and how their efforts on behalf of a foreign company or government could implicate the Foreign Agents Registration Act (FARA). The FARA does not prohibit any speech or conduct but requires that those who are acting as foreign agents identify their relationship publically and register with the Justice Department. If individual companies are afraid to take a stand then they may take collective action as was recently demonstrated as PRC implemented the national security law in Hong Kong, US tech companies refused to comply with government request for user data. American companies and academic institutions have to hold firm and hold compliance with the CCP.
Expressing similar sentiments, on 23 July 2020, Secretary of State Mike Pompeo in his speech on communist China and the Free World’s Future stated that, “We must admit a hard truth that should guide us in the years and decades to come, that if we want to have a free 21st century, and not the Chinese century of which Xi Jinping dreams, the old paradigm of blind engagement with China simply won’t get it done. We must not continue it and we must not return to it.” The United States engagement with China has not led the latter to become more open, prosperous, and freer at home and present a less of a threat abroad. Echoing the sentiments of the speakers before him he reiterated that China has stolen American intellectual property, sucked its supply chains and made key water-ways unsafe for international commerce.
Secretary Pompeo stated that the approach must be built on the understanding that “America can no longer ignore the fundamental political and ideological differences between our countries, just as the CCP has never ignored them… the only way to truly change communist China is to act not on the basis of what Chinese leaders say, but how they behave. And you can see American policy responding to this conclusion.” (emphasis added) America has to change the way it and its partners view the CCP. China threatens international agreements and by insisting on fair trade practises America companies can protect their IPR. The United States Department of Treasury and Commerce is also sanctioning and blacklisting Chinese entities and leaders who abuse human rights of people. Americans must become aware of how their supply chains are behaving inside China. Further, the U.S. Department of Justice is ensuring that Chinese students and employees who come to the United States on student and for visa are actually normal students and workers and not agents sent to steal intellectual rights. The Department of Defence has increased its freedom of navigation exercises in the East and South China Sea and Taiwan Strait and created a space force to deter Chinese aggression. The U.S. Department of State announced the closure of Chinese consulates that are hub of spying and theft of intellectual property. The department is also working through ‘in-person diplomacy’ by engaging with Chinese people who support freedom and democracy. Secretary Pompeo acknowledged that, America does not expect all nations to approach China the United States. Every nation would have to act and come to its own understanding of how to engage with China while protecting it sovereignty and economic prosperity. Nonetheless, all nations can insist on reciprocity, transparency and accountability. He clarified that, this isn’t about containment as understood during the Cold War. Unlike the USSR, China is already within the borders of the United States as part of its economy. Thus the United States faces a complex problem unlike it has ever faced before. It, therefore, needs a collective approach perhaps a new grouping, a new ‘alliance of democracies’ to overcome the challenges posed by the CCP.
The Trump administration is re-evaluating its approach to China. It has termed China as a ‘strategic competitor’ and has recognised the need to address the long-term competition which requires a whole of government approach guided by the approach of ‘principled realism’. The strategy document and the remarks by the four head of institutions suggest that the United States is open to ‘constructive, result oriented engagement and cooperation with China where their interests align.’ The stress has been laid on working with the Chinese people who enterprising and want freedom but the United States needs to be cautious of the CCP. It needs to work with the party and leaders based on reciprocity and transparency and commitment to its agreements.
The document is a clear indication of the challenges before the United States vis-a- vis an aggressive and assertive China. While United States-China confrontations have become sharper of late, however, the military, economic and diplomatic challenges were identified before President Trump came to the White House. Elements of present views can be found also in the rebalance and pivot to Asia strategy under the Obama administration. While the wording did not identify China, it was a clear indication that the United States policy had intent to halt China in its assertion in the region. The Trans-Pacific Partnership (TPP) was the economic extension of the pivot policy. President Trump at the start of his term had hoped to establish equitable relations with China. His approach had been different from the previous administration. His conduct of foreign policy led to a withdrawal of the Asian pivot strategy and his views on trade meant that he withdrew from the TPP. However, contestations with China have increased and the response has been most visible in the economic sphere. The United States has time and again called out on China for currency manipulation and unfair advantage being given to Chinese state enterprises. President Trump has placed tariffs of up to 30 percent on Chinese goods. They started with tariffs being placed on aluminium (10 percent) and steel (25 percent) and later included arrange of products from aircraft tires to ball bearing. The first round of trade negotiations has led to China agreeing to open its markets and buy more in manufacturing, services, agriculture and energy to increase 2017 levels by over US $200 billion over two years. It remains to be seen how far phase one of the trade deal will improve trade relations. Over the long term, American companies are looking at alternatives for their supply chains away from China. There continues to be doubts on China’s commitment to protecting intellectual property of American firms and this does not address the issue of unfair advantage to Chinese subsidies to certain industries. The issues are likely to be raised in phase two of the negotiations, which are not expected anytime soon.
In the meantime, the contestation between the two nations has become broader with high technology as a new field of competition. President Trump has issued an executive order prohibiting transactions between Americans and ByteDance Ltd. (a.k.a. Zìjié Tiàodòng), Beijing, China, or its subsidiaries. The company has developed the application TikTok. The order states, “TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the CCP access to Americans’ personal and proprietary information - potentially allowing China to track the locations of federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.” TikTok is in talks with Orcale and Walmart for part ownership of a US subsidiary which would be called TikTok Global. The proposal is that TikToj Global would be majority owned by American with ByteDance having no ownership. The full details of the deal have not yet been made clear. The U.S. department of commerce said if an acceptable deal was not reached it would ban new downloads and updates of TikTok before banning the app completely on 12 November.
A similar executive order has been issues for another Chinese mobile application, WeChat. The United States has also banned the sale of semi-conductors to China, which is a requirement in the high-tech industries. The United Starts controls close to 45 percent of this trade followed by Japan, which is an ally. As China surges to replace the United States in high tech industries such as robotics, AI, electric vehicles, technology will be the new area of conflict between the two nations.
Strategic competition is also on the rise especially in the maritime domain. The United States has increased its Freedom of Navigation (FoN) exercises in the South China Sea and the eastern Indian Ocean Region. It has also increased joint naval exercises with partner nations and alliance members in the region. The United States has also given a diplomatic push by engaging more with Taiwan. In 2016, President Trump had hinted the need to re-visit the ‘One China Policy’ after he had broken with the tradition and spoken to President of Taiwan as President-elect (since 1979, the United States has recognised the One China Policy while maintaining close relations with Taiwan). The recent visit by Health Secretary Alex Azar was the highest-level visit by a member of the administration since 1979 and has invited criticism from China. The Treasury Department has placed sanctions on Hong Kong’s leaders over the new national security laws and President Trump blaming China for the spread of corona virus. Mr. Keith Krach, the Under Secretary of State for Economic Growth, Energy, and the Environment, also visited Taiwan on 17 September 2020 to attend a memorial service for former President Lee Teng-hui, in the Trump administration’s latest move to bolster its support of the island.
The United States has also expressed support for India during the recent confrontation on the Sino-India border. The two nations have since then engaged in join naval exercises and Australia has been invited to participate in next Malabar naval exercise along with the navies of India, Japan and the United States. This would be the first such joint exercise by the Quad navies. President Trump has also expressed that the G-7 grouping needs to be expanded to include new powers such as India, South Korea etc. It is noteworthy that China is not a part of the G-7 grouping and has not been included in the possible expansion. For India, the United States remains a partner but China is its largest neighbour, a stronger economy and a nuclear power that shares an especially close relation with Pakistan. India’s economic relations are tilted in favour of China, which is also militarily stronger. To counter the growing influence of China in the neighbourhood, India is striving to expand its own presence in the region through bilateral and multilateral regional cooperation mechanism.
India has taken note of the United States change in posture with respect to China. The National Security Strategy, the Indo-Pacific strategy and the recent document outlining United States Strategy Approach to China, all highlight the competitive nature of relations between the two nations. The need to counter China has led the United States to expect India to ‘choose sides’. Nonetheless, the geopolitics of the region and geography will guide to India’s relations with China. Having said that, the policy as outlined by the Trump administration is indicative of the change in the United States’ outlook towards China, and presents India with opportunities to forge an even stronger relationship. First, as the global pandemic has changed global supply chains and pushed nations and companies to find alternatives, India is a suitable replacement that American companies can explore. India shares the same values of transparency, accountability, equal opportunity to all and rule of law within its economy. India support innovation and enterprising individuals and would be a cost effective and reliable partner. The shift will engage American companies in becoming a partner of the Atmanirbhar Bharat plan. Second, India needs to also highlight the contribution of Indian students and workers to the U.S. economy while addressing the issue of H1B visas for the movement of high skill workers. The Indian American community’s contributions are significant and can be used to further favour a better visa quota for India workers, especially when the United States critically examines visa applications from China.
Third, technology and innovation are the next battleground between the United States and China. The strategy document and the speeches highlight the various means through which China has stolen American innovation and data. The United States has warned nations to not allow Chinese telecommunication companies to establish a base. This provides India to seek collaborations in research and development sector with the United States. India’s digital economy is likely to grow as more and more people gain access to the internet, partnership in this sector with the world’s leading technology innovators would be beneficial to both. This will also add to the people to people relations between the two nations. Fourth, enhanced defence technology cooperation especially in the Indian Ocean region given common threat perceptions are be a take away from the U.S. strategy. However, China may seek to limit India’s rise by continuing to oppose its membership into the Nuclear Security Group (NSG) as it views the growing India-U.S. relationship with concern. It fears that a membership to the NSG would further cement the role of India in the United States policy towards Asia. Lastly, India would like the support of the United States, especially in terms of the diplomatic, political and military support, in its disputes with China. Backing India in multilateral forum on conflict issues such as the recent border confrontation may thwart attempts to raise the internal matters of India such as the Kashmir issue in international forums by China and Pakistan supported by China, as it find India gaining international support.
While the strategy document and the four speeches highlight the direction of the America’s China policy, how it will be implemented will be witnessed only after the Presidential elections in November 2020. It can be argued that the position taken by President Trump on China is a deflection from his domestic challenges of a surging corona virus epidemic deaths and infection rates, public displeasure at his handling of the pandemic, his inability to reopen the economy and a spate of Republican losses in the House elections for the US Congress in the recent past. Nonetheless, the check on China started with President Obama. The pivot to Asia and the rebalance was a strategy to counter China’s rise. The wording under President Trump has become sharper and will likely to continue irrespective of the new occupant in the White House. Joe Biden would not be in a position to change United States’ policy, as China is increasingly being seen as a military, diplomatic and economic challenger. He may change the language of the approach and possibly engage with China on issues of convergence such as climate change, but that will not diminish the fact that China is a strategic competitor for the near and long-term future.
*Dr. Stuti Banerjee, Research Fellow, Indian Council of World Affairs, New Delhi.
Views expressed are personal.
The White House, “United States Strategic Approach to the People’s Republic of China,” https://www.whitehouse.gov/wp-content/uploads/2020/05/U.S.-Strategic-Approach-to-The-Peoples-Republic-of-China-Report-5.24v1.pdf, Accessed on 11 August 2020.
The White House, “The Chinese Communist Party’s Ideology and Global Ambitions Remarks by NSA Robert C O’Brien,” https://www.whitehouse.gov/briefings-statements/chinese-communist-partys-ideology-global-ambitions/, Accessed on 11 August 2020