US realizes important to get China-US economic relations back on track

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European countries have their own plans, while welcoming American leadership and resuscitating transatlanticism but without jeopardizing their cooperation with China. They will gently follow Washington’s calls to crack down on China. Cooperation in the business community will not be shaken because companies will vote with their feet.

The CNN reported that the seven leaders expressed serious differences over how best to approach China at a G7 summit session, with Germany and Italy in particular, as well as European Union leaders , opposed to a confrontational approach with China.

As the New York Times Underlined, there is “anxiety” in Europe in general about US policy. Ian Lesser, vice chairman of the German Marshall Fund in the United States, reportedly said: “Just what will happen in the midterm elections? Trumpism will prove more durable than Mr. Trump. What will follow in American politics?

Likewise, Europeans are well aware that the trade war has seriously damaged the United States. According to an Oxford Economics study in January this year, the cost of the trade war to the United States was around 0.5% of GDP in 2018-19, around 245,000 jobs and $ 88 billion in income. real household. If the scenario escalates, U.S. GDP will decline by $ 1.6 trillion over the next five years and result in 732,000 fewer jobs being created in the United States in 2022.

Indeed, the Biden administration also realizes that it doesn’t make sense to simply seek conflicts with China or be blindly intransigent, as the United States must always coordinate with China on issues such as this. than trade and regional order. This was the signal for Secretary of State Antony Blinken’s appeal with senior Chinese foreign affairs official Yang Jiechi on June 11, on the eve of the G7 summit in Cornwall.

The State Department reading projected Blinken’s appeal as a fine example of the selective cooperation with China desired by the Biden administration. But the Chinese reading pointed out that Beijing is clinging to its main concerns.

Read also : Senior U.S. and Chinese diplomats clash publicly in first face-to-face talks under Biden’s presidency

The United States realizes that if it crosses China’s red line on the Taiwan issue, it will pay a heavy price to the detriment of its own interests. Basically, he hopes to keep Beijing in the game without risking the long-term interests of the United States. That is, for all intents and purposes, the Biden administration respects China’s red line and wishes to maintain flexibility in its handling of overall relations with Beijing.

This is very important, because both sides know that the Taiwan issue is the most vital indicator for Beijing to observe the dynamics of Sino-US relations.

Once again, last Thursday, in the run-up to the G7 summit, Chinese Minister of Commerce Wang Wentao and US Secretary of Commerce Gina Raimondo had a “frank and pragmatic” exchange of views on relevant issues of mutual interest. in the business sector. Interestingly, this was the third discussion in a two-week period initiated by senior US economic and trade officials with their Chinese counterparts in the run-up to the G7 summit.

Chinese Vice Premier Liu He held a virtual meeting with US Treasury Secretary Janet Yellen on June 2, and Liu also had a telephone interview with US Trade Representative Katherine Tai on May 27. Indeed, John Kerry, Biden’s climate envoy, had met Xie Zhenhua. , special envoy of China, during his visit to Shanghai (April 14-17.)

Thursday’s Chinese statement on the conversation between the two trade ministers said it was a “frank and pragmatic” exchange on relevant issues of mutual interest in the business sector and that the two sides have agreed to promote pragmatic cooperation in trade and investment, while maintaining working communication. .

Earlier, a Chinese spokesperson told a press conference that Beijing and Washington have resumed “normal communication” in the economic and trade fields, and will work together to solve “specific problems” in a practical way for producers. and consumers. All of this only underscores that the United States has recognized the importance and the need to put Sino-American economic trade relations back on track.

Meanwhile, even as the United States stepped up its Cold War rhetoric against China in the G7, China was deploying its own powerful countermeasure. Last Thursday, China’s highest legislature passed the Anti-Foreign Sanctions Law, the first of its kind, offering strong legal support and guarantees to China against unilateral and discriminatory measures imposed by other countries.

The new law empowers the Chinese State Council to create its own sanctions against any organization or individual who participates in the formulation, decision-making or implementation of sanctions against China. In effect, this gives Beijing the legal framework to target entities that willfully damage China’s reputation through smear campaigns.

Read also : China urges US to stop “smearing” CPC and lift trade sanctions

Clearly, this decision testifies to an increasingly confident China on the international scene. If China previously didn’t have the economic might or the political will to fight back against US sanctions, it now has that capability. Historically, China has only responded to sanctions with case-by-case countermeasures. But China is now stepping into the sanctions game, making it clear that the United States and its allies will no longer have a monopoly on sanctions as an instrument to impose their specific political values ​​on China.

In the words of one Chinese commentator, “By moving from an ad hoc response to a fully-fledged legal framework, China has also demonstrated its willingness to promote the rule of law in its relations on the international stage. This follows instructions from President Xi Jinping to use the rule of law to defend China’s sovereignty. It is also an essential counterweight to what has been variously described as a “long-arm jurisdiction” … Whether the United States and its allies prefer to accept it or not, Iran and the DPRK (North Korea) are Sovereign States … China now has a stable and predictable framework for responding in kind.

President Xi Jinping had already signed the bill on Friday in a big signal to the G7 summit that even hysterical tirades or a smear campaign (like the Wuhan laboratory hypothesis) in an orchestrated manner could lead to sanctions. Chinese.

Beijing noted for the record that the G7 communiqué is “the most systematic condemnation and interference against China by the great Western powers”. But his language is visibly “softer”. Clearly, while a collective tone against China was possible in the G7, Washington failed to get the G7 to slander China. In short, the final communiqué turns out to be a product dominated by the United States with everyone’s compromise.

All the empirical evidence is against a coordinated Western movement, let alone unified hostile action against China. The bottom line is that while European countries may have “systemic” differences with China, their economic relations with China are competitive and they also have strategic cooperation needs.

Interestingly, according to China Central Television, Blinken also acknowledged in his phone call with Yang on Friday on the eve of the Cornish summit that the series of contacts between the United States and China over the past few weeks have been beneficial for bilateral relations and the United States. looks forward to intensifying contacts and exchanges with China at all levels.

Blinken reportedly said the United States adheres to the one-China principle and abides by the three Sino-US joint communiques and hopes to maintain communication and coordination with China on major international and regional issues.

The wording of the G7 communiqué on the Taiwan issue confirms that the United States wants to maintain flexibility in its management of Sino-American relations. This is a very important indicator.

Courtesy: Indian Punchline

(The first part oF this essay entitled G7 and China: Fault THEines in the Wworld Oorder is here.)


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