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Of all the problems that US President-elect Joseph R. Biden Jr. will face when he takes office in January, conflicts with China over technology and cybersecurity may be among the most difficult to resolve.
Disputes over China’s access to technology and US markets have exploded during the administration of President Donald J. Trump, despite the signing of a phase 1 agreement on tariffs and trade less than a year ago.
Chinese tariff cuts and commitments to increase U.S. imports by at least $ 200 billion (1.3 trillion yuan) over two years have been all but forgotten in the frictions over China’s advances in telecommunications development. 5G, social media like TikTok, and alleged ties to the Chinese government.
Part of the shift in focus can be traced to the Trump administration’s anger at the origin and spread of the deadly coronavirus, the effect on the US economy, and China’s poor performance on the Phase 1 deal.
In the first 10 months of 2020, Chinese imports of U.S. products covered by the deal accounted for just 55 percent of targets to date, according to the Peterson Institute for International Economics (PIIE) in Washington.
China’s total purchases of energy products were only about 26 percent of expectations for the period, Reuters said.
Meanwhile, US concerns have been heightened by the security risks posed by Chinese smartphone makers, including ZTE Corp. and Huawei Technologies Co. Ltd., as well as the growing popularity of the video sharing service from TikTok with about 100 million US users.
The companies have denied providing information to the Chinese government and the military.
But the security concerns first raised by a bipartisan report by the House Intelligence Committee in 2012 predate the Trump administration and are likely to continue well into Biden’s presidential term, analysts say.
While the Trump administration imposed severe fines and bans against ZTE in 2017 for surreptitious sales to Iran and North Korea, conflicts with Huawei over similar deals with Iran continue.
Canada has held Huawei’s CFO Meng Wanzhou since December 2018 pending his extradition to the United States.
On December 4, The Wall Street Journal reported that the US Justice Department has been in talks with Meng about a deal that could allow him to return to China in exchange for an admission of “wrongdoing.”
The timelines for a plan to safeguard US data collected by TikTok, owned by China’s ByteDance Ltd., were also extended through a sale of shares to Walmart Inc. and Oracle Corp., the Journal reported separately.
Barring last-minute resolutions from the Trump administration, Biden will have to decide how to handle the cases next year.
Stay the course
But few experts expect major changes in the direction of US policy toward Chinese tech giants.
William Reinsch, a former Commerce Department undersecretary in the Clinton administration, calls both Trump and Biden “tough on China.”
“As for what happens in the short term, I do not expect a dramatic change, do not undo the actions taken so far, at least not immediately, except for a greater emphasis on human rights,” said Reinsch, who is now a senior advisor to the Center for Strategic and International Studies.
In a possible signal of policy toward China, Biden on Thursday named business attorney Katherine Tai as his choice to succeed Robert Lighthizer as the United States Trade Representative (USTR).
Tai is the top business lawyer on the House Ways and Means Committee “with a history of standing up to China,” CNBC reported.
From 2007 to 2014, Tai successfully litigated the United States’ disputes with China at the World Trade Organization, the news agency said.
The US policy toward expanding China’s tech sector is also seen as reflecting bipartisan concerns.
“There would be significant congressional rejection of any rollback of actions that have already been taken,” Martin Chorzempa, a PIIE researcher, told Reuters.
Despite political differences, US policies toward China’s rapidly expanding telecom and tech companies have been a rare area of bipartisan agreement.
“Biden’s likely course stems from the increasingly bipartisan consensus among members of Congress that overly warm relations with China and tolerance of its unfair business practices helped fuel a technology rival that now threatens America’s leadership.” said The Washington Post.
In a Foreign Affairs article earlier this year, Biden took a firm stance on China.
“The United States must get tough on China,” Biden said. “If China has its way, it will continue to steal their technology and intellectual property from the United States and American companies.
“It will also continue to use subsidies to give its state-owned companies an unfair advantage and an advantage to dominate the technologies and industries of the future,” he said.
Coalition building
But a big difference is expected in Biden’s approach to America’s problems with China, calling for a multilateral response to cybersecurity risks after years of unilateral action during Trump’s tenure.
Biden talks of building a “united front” with allies that “more than doubles” the strength of US policies.
“That gives us substantial leverage to shape the rules of the road on everything from the environment to work, commerce, technology and transparency, so that they can continue to reflect democratic interests and values,” he says.
Last week, Biden told New York Times columnist Thomas Friedman that his plan is to gain influence not only by getting America’s allies “on the same page,” but also by developing a bipartisan consensus for “government-led investments. the government in US research and development and infrastructure and education to better compete with China. “
“I’m not going to make any immediate moves, and the same applies to tariffs,” Biden said, referring to the increases imposed by Trump before the Phase 1 deal in January. “I’m not going to hurt my options,” he said.
But building a coalition will take time, in part because the policies of America’s allies toward Chinese tech companies like Huawei have been a mosaic of responses.
In July, for example, Britain changed course and announced that it would ban Huawei equipment from its 5G networks, but the ban will not take effect before next September. Telecom operators will have until 2027 to replace Huawei equipment that has already been installed.
Germany is expected to allow Huawei to build part of its network, according to the Handelsblatt newspaper, while many other nations are reluctant to impose restrictions on Chinese equipment due to its lower cost.
Biden’s approach could require months of diplomatic effort to garner support for US policies and security concerns, a campaign that may extend well beyond the first 100 days of his administration.
Reinsch doubts that coalition building will work.
“The question for me is how long it will keep trying and what will it do when it becomes clear that it is failing,” Reinsch said in an email.
“I give coalition politics a year, maybe longer if it takes any ripe fruit that encourages them to move on,” he said.
But Biden has also focused on competition with China’s telecom providers.
“Note that you have also emphasized the other half of the equation … getting our companies in a better position to compete globally, knowing that while China continues its policies of subsidizing and supporting SOEs (state-owned companies), our companies are going to face them in third markets around the world, “Reinsch said.
“That’s where the real competition will be, not in China or here, and he’s talked about that,” Reinsch said.
In his interview with The Times, Biden indicated that he plans to focus on China’s politics in a matter of weeks rather than months or years.
“It is going to be a top priority for me in the first weeks of my presidency to try to get us back on the same page with our allies,” he said.
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