1 CCP sees Sino-US relationship at ‘lowest point since establishment’
U.S. Secretary of State Antony Blinken visited the PRC from June 18 to June 19. While in Beijing, Blinken met with Xi Jinping, CCP Central Foreign Affairs Office director Wang Yi, and PRC foreign minister Qin Gang.
CCP sticks to its guns
The senior PRC officials who met Blinken mostly reiterated the CCP’s stance on the Sino-U.S. relationship, including:
- The bilateral relationship should remain stable and “fundamentally guided by the principles of mutual respect, peaceful coexistence, and win-win cooperation.”
- Both sides should adhere to the “common understandings” reached by Xi Jinping and President Biden at the Bali G20 summit in “letter and spirit.”
- Taiwan is a “red line” issue for the PRC and the U.S. must not support “Taiwan independence.”
Noteworthy points brought up by the individual officials include:
- The “China-U.S. relationship is at the lowest point since its establishment.”
- The PRC hopes that the U.S. “will adopt an objective and rational perception of China, work with China in the same direction, uphold the political foundation of China-U.S. relations, and handle unexpected and sporadic events in a calm, professional and rational manner.”
- The Taiwan question is “the core of China’s core interests, the most consequential issue and the most pronounced risk in the China-U.S. relationship.”
- The official PRC readout of the Qin-Blinken meeting noted that Blinken invited Qin to visit the U.S. and the latter agreed to do so at “a mutually convenient time.”
- Wang noted that Blinken’s visit to Beijing “comes at a critical juncture in China-U.S. relations,” and that “a choice needs to be made between dialogue and confrontation, and cooperation and conflict.”
- Wang said that bilateral relationship is “at a low point,” and underscored that “the root cause is U.S. misperceptions toward China, which has led to misguided China policies.” Also, “it is necessary for the United States to reflect upon itself, and work with China to jointly manage differences and avoid strategic surprises.”
- Wang demanded that the U.S. “stop playing up the so-called ‘China threat,’ lift illegal unilateral sanctions against China, stop suppressing China’s scientific and technological advances, and not wantonly interfere in China’s internal affairs.”
- Wang said that there is “no room for compromise or concession” on the Taiwan question.
- The world is “developing and the times are changing,” and “needs a generally stable China-U.S. relationship.”
- “Planet Earth is big enough to accommodate the respective development and common prosperity of China and the United States.”
- The U.S. and the PRC should “help make the world, which is changing and turbulent, more stable, certain and constructive.”
Biden admin. further ‘thaws’ the Sino-U.S. relationship
The Biden administration also publicly stuck to its current approach to the PRC.
According to a State Department readout of Secretary Blinken’s China trip:
- Both sides had “candid, substantive, and constructive discussions on key priorities in the bilateral relationship and on a range of global and regional issues.”
- Blinken “emphasized the importance of maintaining open channels of communication across the full range of issues to reduce the risk of miscalculation,” and the U.S. will “responsibly manage” competition with China “so that the relationship does not veer into conflict.”
- Both sides will “continue discussions on developing principles to guide the bilateral relationship” per Biden and Xi’s discussions in Bali.
- Both sides “welcomed strengthening people-to-people exchanges between students, scholars, and business,” including “working to increase the number of direct flights between the two countries.”
- Blinken called for “working together to disrupt the global flow of synthetic drugs and their precursor chemicals into the United States, which fuels the fentanyl crisis.”
- Blinken addressed the PRC’s “unfair and nonmarket economic practices and recent actions against U.S. firms,” discussed the U.S. “de-risking policies,” and raised “concerns about PRC human rights violations in Xinjiang, Tibet, and Hong Kong, as well as individual cases of concern.”
- Blinken “underscored the importance of maintaining peace and stability across the Taiwan Strait and reiterated there has been no change to the U.S. one China policy, based on the Taiwan Relations Act, the three Joint Communiques, and the Six Assurances.” At a press conference, Blinken said, “We do not support Taiwan independence.”
- Blinken said that the two sides should work together on “transnational challenges,” such as “climate change, global macroeconomic stability, food security, public health, and counter-narcotics.”
In a press conference, Blinken said:
- “With regard to crisis communications and military-to-military channels, this is also something that I raised repeatedly during this trip … And at this moment, China has not agreed to move forward with that.”
- “In terms of those objectives that we set for this trip – establishing open communications channels, directly raising issues of concern, exploring cooperation in places where it’s in our mutual interest to do so – we did all of that on this trip. But progress is hard. It takes time.”
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Signs that the Biden administration is endeavoring to “thaw” the Sino-U.S. relations emerged around the period of Blinken’s China trip:
June 16
NBC reported that the Biden administration has been “slow walking” certain decisions in recent months “from planned restrictions on investment in China to declassifying intelligence about the origins of the coronavirus” as officials “sought to mend relations with Beijing.”
“They want to calm the waters with China,” NBC cited a former U.S. official with knowledge of the administration’s deliberations as saying.
When NBC asked the Biden administration why it had not released more information about the PRC spy balloon that traversed the U.S. mainland, an administration official said, “I would not anticipate the release of sensitive information regarding the analysis of the balloon debris.”
June 17
President Biden told reporters before traveling to Philadelphia, “China has some legitimate difficulties unrelated to the United States. And I think one of the things that balloon caused was not so much that it got shot down, but I don’t think the leadership knew where it was and knew what was in it and knew what was going on. I think it was more embarrassing than it was intentional.”
Biden also said that he was “hoping that over the next several months I’ll be meeting Xi again and talking about legitimate differences we have but also how there’s areas we can get along.”
June 19
1. Secretary Blinken told NBC after his China trip that the PRC spy balloon chapter “should be closed.”
2. President Biden told reporters that he thinks that the Sino-U.S. relationship is on the “right trail” and he felt that progress had been made. Biden also praised Blinken for doing “a hell of a job.”
3. Blinken told CBS that there is a possibility of Biden and Xi meeting at the APEC summit in San Francisco in November.
From equal footing to ‘supplicant’?
On June 19, PRC state media published a photo of the Xi-Blinken meeting that showed Xi Jinping seated at the head of a large conference table, with the U.S. delegation seated to his right and senior PRC officials on his left. Observers contrasted the shot with PRC state media photos of Xi and Trump administration Secretary of States (Rex Tillerson in 2017, Mike Pompeo in 2018) and Microsoft co-founder Bill Gates’s meeting with Xi on June 16, 2023, and noted that Blinken came across as a supplicant to Xi; in the latter photos, Tillerson, Pompeo, and Gates were seated on level and much closer (only a small table separating them) to Xi.
Also, photos of Blinken’s arrival in Beijing showed that the CCP did not arrange a red carpet for him when he walked down from the plane.
CCP lashes out at Biden’s ‘dictator’ comment
During a fundraiser on June 20, President Biden said, “The reason why Xi Jinping got very upset in terms of when I shot that balloon down with two boxcars full of spy equipment in it is he didn’t know it was there … That’s a great embarrassment for dictators, when they didn’t know what happened.” Biden also said that China has “real economic difficulties.”
In response, PRC Foreign Ministry spokeswoman Mao Ning said during a regular press conference that Biden’s remarks were “extremely absurd,” “extremely irresponsible,” and “a blatant political provocation.” The foreign ministry, however, did not include Mao’s remarks in its official transcript of the press conference.
Kremlin spokesman Dmitry Peskov also said that Biden’s remarks contradicted Blinken’s efforts to lower tensions with the PRC and described them as “incomprehensible.” Peskov told reporters, “These are very contradictory manifestations of U.S. foreign policy, which speak of a large element of unpredictability.”
Our take
1. Statements by Xi Jinping and other senior CCP officials during Secretary Blinken’s trip to China affirm our observation in the June 15, 2023 newsletter, i.e. that the CCP is unlikely to shift away from its belief that the U.S. and the West are determined to “contain, encircle, and suppress” the PRC, and that Beijing should do whatever is necessary to prepare for an escalating “new cold war.” Unless the Biden administration follows up Blinken’s trip with substantial compromises, including rolling back U.S. tariffs on Chinese goods, advanced technology restrictions, and sanctions on PRC officials, future administration efforts at “intense diplomacy” will not alter Beijing’s attitude towards the U.S. nor lower geopolitical risks in any meaningful way given the CCP’s preoccupation with regime security and (justified) paranoia about U.S. “containment.” Biden’s description of Xi as a “dictator” right after Blinken’s China trip has likely further reinforced Beijing’s view that the U.S. lacks sincerity in improving ties with the PRC and is determined to “contain” the CCP regime.
Wang Yi’s remarks in particular indicate that the CCP holds the U.S. as being solely responsible for the deterioration in the bilateral relationship, conveniently “forgetting” that Washington’s efforts to counter the PRC since the Trump administration were largely a response to the CCP’s growing ambitions and threat to U.S. national security and the rules-based international order. Calls for Sino-U.S. relations to be “fundamentally guided by the principles of mutual respect, peaceful coexistence and win-win cooperation” suggest that the CCP would like the bilateral relationship to return to the pre-Trump era of “engagement” where it benefited immensely and was under virtually no pressure from the U.S. and its allies.
The remarks of Xi, Wang, and Qin also indirectly indicate that the CCP is very concerned about the prospect of the regime’s external risks worsening as the Sino-U.S. relationship deteriorates. Beijing has also hinted that Taiwan is the “reddest of red lines” (“the core of China’s core interests, the most consequential issue and the most pronounced risk in the China-U.S. relationship”) for the CCP, which reflects its worries about efforts by the U.S. and its allies to strengthen their support for Taiwan.
2. The Biden administration appeared to have gotten what it set out to accomplish through Blinken’s Beijing trip by easing up on pressuring the PRC since the PRC spy balloon incident, i.e. “maintaining open channels of communication” with the top CCP leadership and facilitating lower-level engagements with China. However, Washington did not succeed in establishing proper “guardrails” through setting up crisis communications and military-to-military channels with the PRC, nor was it evident that there is now a “floor under the relationship.”
The Biden administration’s eagerness to have “intense diplomacy” with the PRC and willingness to put efforts to counter the CCP regime on the back burner just to achieve said goal have likely only strengthened the CCP’s belief that “the East is rising and the West is in decline.” This is underscored by Xi Jinping having Blinken and the U.S. delegation seated at a big meeting table as though they were his mere subordinates instead of giving them a cozier seating arrangement like the those previously granted to Bill Gates, Mike Pompeo, and Rex Tillerson; the propaganda photo signals that Beijing currently views the U.S. under the Biden administration neither as an “old friend” of China, nor a “great power” equal.
Going forward, Beijing will be emboldened to make more assertive plays against the U.S. and its allies in the Taiwan Strait and elsewhere if it deems such moves necessary, and will strengthen its resolve to eventually displace the U.S. as the global hegemon even as it welcomes greater U.S. and Western investment in China. Despite Secretary Blinken’s claim that the Biden administration is “clear-eyed about the challenges posed by the PRC,” the administration’s actions to secure his trip to Beijing are likely to see a very poor return on investment if Washington is looking to improve the bilateral relationship and secure the PRC’s help on “transnational challenges.” The CCP does not respect weakness and will latch upon openings afforded it by the U.S. to steer the bilateral relationship in a direction that allows it to better survive its many crises and lay the groundwork for regional and global domination.
3. We believe that Sino-U.S. tensions have not actually lowered much despite Blinken’s China trip. The bilateral relationship is far more volatile than appearances (including increased diplomatic engagements) indicate as both sides attach greater importance to national security, the Russia-Ukraine war remains unresolved, and China’s economy continues its rapid downward slide. Depending on changes in the aforementioned factors, the Sino-U.S. relationship could very suddenly take a turn for worse as developments unfold.
Businesses, investors, and governments are advised to account for rising political risks in China (including possible Black Swan events) and the PRC’s growing geopolitical risks, as well as prepare for various contingencies.
