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China-US meeting in Zurich: A new phase of bi-polar competition?

On 6 October 2021, Yang Jiechi, member of the Political Bureau of the CPC Central Committee and Director of the Office of the Central Foreign Affairs Commission, met with Jake Sullivan, Assistant to the US President for National Security Affairs, in Zurich, Switzerland. The meeting was the fifth offline meeting between the top brass of China and the United States in the course of the year. The two sides met for six hours behind closed doors and agreed to work together to put US-China relations back on the right track of healthy and stable development.

The closed-door meeting between Sullivan and Yang Jiechi followed up on the September 10 call between Biden and Xi Jinping, and was their first face-to-face contact since their heated verbal exchange in Alaska in March. At the meeting, Sullivan raised the U.S. interest in working with China to address major transnational challenges and manage risks to the U.S.-China relationship, while also expressing concern about China's actions related to human rights, Xinjiang, Hong Kong, the South China Sea and Taiwan. Yang Jiechi said that China and the United States should "strengthen strategic communication, properly manage differences, avoid conflict and confrontation, and seek mutual benefits and win-win situations". China is opposed to defining China-US relations in terms of "competition" and demands that the US stop interfering in China's internal affairs on issues related to "Taiwan, Hong Kong, Xinjiang, Tibet, the sea and human rights.

In response to the meeting, Reuters quoted senior US officials as saying that the Zurich meeting was "the most in-depth dialogue the Biden administration has ever had with China" and that some US officials even said that US President Joe Biden and Chinese President Xi Jinping had "reached an agreement in principle "An online summit will be held before the end of the year. The Chinese foreign ministry, on the other hand, said the exchange was constructive and frank, a more neutral statement in line with China's diplomatic rhetoric habits, proving that the two sides remain far apart and have not reached much in the way of substantive results. However, the two sides are highly consistent in implementing the spirit of the September 10 call between the two heads of state and in maintaining strategic communication (on September 10, President Xi Jinping mentioned in his call with Biden that China and the United States are the largest developing country and the largest developed country respectively, and that whether China and the United States can handle each other well is a matter of the future and destiny of the world, and is the question of the century that both countries must answer well). .

Immediately afterwards, on 9 October Beijing time, Vice Premier Liu He, the Chinese lead of the US-China economic dialogue with China, held a video call with US Trade Representative Dyche. According to Xinhua, the two sides discussed three main aspects: firstly, the economic and trade relations between China and the US are very important for both countries and the world, and bilateral economic and trade exchanges and cooperation should be strengthened; secondly, they exchanged views on the implementation of the China-US economic and trade agreement; and thirdly, both sides expressed their core relationship and agreed to resolve each other's legitimate concerns through consultations. It can be seen that the Zurich meeting has played a positive role in the improvement of bilateral relations between China and the US.

In view of the Zurich meeting, Zonghengce shall make three points:

I. Background of the change of US attitude towards China: The US is currently facing a huge crisis and needs to moderate its strategic relationship with China

First, the supply chain crisis. The US is facing a huge supply chain crisis against the backdrop of the continued ravages of the new crown epidemic. A large number of cargo ships are backlogged at ports such as Los Angeles, and billions of dollars of toys, furniture and household electronics cannot reach Wal-Mart, Cosco and other large supermarket chains as scheduled, and the crisis will even spread to Christmas. 

Secondly, the inflation crisis. The US has been experiencing inflation of more than 5% for several months, and supermarkets are not only suffering from shortages of goods caused by the supply chain crisis, but even the prices of food and drink and other household items that can be stocked on the shelves have soared a lot. This is, of course, one of the nasty consequences of the continued handing out of money to the people since the US federal government epidemic - stagflation. 

Again, the debt ceiling crisis. The US national debt has now reached US$28.4 trillion, more than it can service. Just last week, the US House and Senate barely reached consensus on a temporary funding bill with less than four hours to go before the government "shutdown" deadline. The US economy is under double pressure from inflation and debt default, but almost all of the Biden administration's initiatives to boost the economy have stalled in Congress.

Finally, there is a crisis of confidence in the alliance system. Since the woeful withdrawal of troops from Afghanistan and the $66 billion French submarine order, America's European allies have undoubtedly created a new crisis of confidence in the boss. The "Atlanticists" in Europe, who once saw Biden as the saviour of US-European relations, are now embarrassed, even if the disappointment that follows this hope is greater than the simple disappointment of former President Trump.

In sum, the US was unable to find a proper solution to its various crises, either from itself or from its allies, so it had no choice but to seek to ease relations with its "biggest rival" China at that time, which led to the September 10 US-Chinese summit and the October 6 meeting in Zurich.

II. From Anchorage to Tianjin to Zurich: How China turned defence into attack

Round 1: The Anchorage talks: China's prestige.

The U.S.-China talks in Anchorage, Alaska, at the beginning of the year caught the Biden administration off guard, and the U.S. side never expected China to call the U.S. out to its face in such a forceful manner. Even at the first meeting between the US and Chinese leaders after Trump took office (the Sea Lake Manor talks), China was able to offer a $250 billion gift to the old hardline China man; but the new Biden administration, faced with the possibility of a reversal in its attitude towards China, actually gave a headlong rebuke, demanding "equal" dialogue and severely reprimanding the US for a series of misdeeds. Because of Blinken's mishandling of the situation, it was clear that the talks became a battle of prestige for the Chinese side against the US side, and of course temporarily ruled out the possibility of dialogue between the US and China.

Round 2: The Tianjin talks: the first "unequal treaty" the US faced.

On 26 July, US Deputy Secretary of State Sherman and Chinese Vice Foreign Minister Xie Feng met for over four hours in Tianjin Binhai New Area. During the meeting, China made clear three bottom lines: first, the US must not challenge, denigrate or even attempt to subvert the socialist road and system with Chinese characteristics; second, the US must not attempt to obstruct or even interrupt China's development process; and third, the US must not infringe on China's national sovereignty, let alone undermine China's territorial integrity. China has proposed two lists to the US, one demanding that the US correct its erroneous policies, words and deeds towards China, and the other a list of priority cases of concern to China. The Huawei Meng Wanzhou case is on the list. Obviously, one can consider these two lists as "mandatory questions" that China has given to the US, and if it wants to ease relations between China and the US, it must first fulfil the items on the list. From the US perspective, this may be the first "unequal treaty" the US has faced since the founding of the country.

Round 3: The Zurich meeting: a glimpse of improved bilateral relations on the premise of "reciprocity".

After the first two rounds, the Biden administration has basically clarified China's bottom line and its demand to improve US-China relations. However, from the US perspective, it still wants to get a compromise from China at minimal cost (for example, in the case of Meng Wanzhou, the US basically had no cost, but created the bargaining chip out of thin air), so it is not difficult to imagine that the process of fulfilling the Tianjin Treaty must be more difficult than squeezing toothpaste out of the US side. However, the Zurich meeting did release positive signals and showed a ray of hope for the US and China to improve bilateral relations on the basis of "reciprocity".

III.The timing strategy of the US-China game: the US plays fast and China plays slow

Since Trump, the US foreign behaviour pattern has been based on the core principle of "America First", and Biden has not actually changed this. So, although the US sees China as its "greatest strategic adversary", once the US is unable to successfully exploit China, the situation forces it to turn around and squeeze its allies, from the "new North American Free Trade Agreement" between the US, Canada and Mexico to sanctions against "The US has to turn to its allies to squeeze them, from the new North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico, to the sanctions on the Nord Stream-2 gas project, to the blatant submarine deal with France ......, all of which illustrates the above reasoning.

And as far as the current Biden is concerned, the internal and external pressures faced are even greater: internally there are the mid-term elections - the Republicans lost the House of Representatives at the time of the 2018 mid-term elections, and on that day, the Wall Street Journal reported under the headline "US mid-term elections produce divided Congress", and after the 2020 US elections, the Democrats both narrowly took the House and Senate. With the epidemic, inflation, and the debacle in Afghanistan ...... all mixed together, the Biden administration had to moderate relations with China and create political success in order to keep its seat. Externally, there is the new crown epidemic plus China catching up - Biden's goal is to not let China's GDP overtake that of the US during his term, nor to let the US have a major accident such as a debt default.

In summary, looking at both the US and China in terms of timing strategies, it is clear that the Biden administration is more anxious than China, and the longer it fails to make China compromise (either by pressure or negotiation), the more urgent the crisis in the US will be and the more precarious Biden's seat will be; while time is on China's side, in terms of the single event of epidemic control and post-epidemic economic recovery, China's cumulative advantage can be considered a distant second. The big international capitalists who shifted their manufacturing supply chains from China to countries like India and Vietnam last year are probably now regretting their guts.

So, since the US is desperate to negotiate a result, China should play Taiji, there is no harm in the word "delay", the longer it takes, the more the crisis in the US itself, the more strained the relationship between the US and its allies, so that China will have more bargaining chips against the US, and naturally more advantages.

Summary

All in all, if the US-China Anchorage talks were an official declaration of a "bipolar" pattern by the Chinese side, then the Zurich meeting may mark the official formation of this new "bipolar" dynamic, which will be accepted by more and more countries in the international community in the future.

Author: Xia Guo Han

Typesetter: jiyudi