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How Will the Coronavirus Implicate U.S. – China Relations?

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Authors: Chan Kung and Yu(Tony) Pan* 

To know the impact of the novel coronavirus (Covid-19) on the U.S.-China relations, one must first understand the state that the U.S. – China relationship prior the outbreak. China’s relationship with the United States was already in a rough spot. The rivalry between both countries has gone from one about a specific content in a policy in tactical sense to one concerning the formulation of a policy itself, or the strategic level. As of late 2019, both countries were rapidly developing towards a phase of “strategic co-opetition” with one another, increasingly developing into the aspects of competition and even confrontation.

Following the occurrence of the Covid-19 pandemic, ANBOUND’s research team believes there are couples of things worth taking note of the U.S.-China relationship.

One, on an economic level, the United States and China may decouple from one another “non-strategically” as the pandemic has inadvertently exposed some of the hidden risks in the supply chain. It is now believed that the pandemic could potentially cause globalization to experience a halt or in worst case scenarios, suffer a reversal. There are two reasons to that – First of all, the pandemic has effectively caused the global economy to experience a complete stop. In the words of global economy, it is easy to put the brakes to the economy, but resetting it on the hand, is a huge and arduous journey because the market requires time to recuperate from the shock as well as all supply chains need to be in complete sync with one another in order to ensure the reset can happen smoothly and without interference. This brings us to the second reason, that is the second layout of the supply chain in the post-pandemic. The pandemic has brought many risk factors to the supply chain this time around, particularly in the areas of global distribution and supply chain management. With the outbreak getting finally over in China, the overall focus for many multinational corporations in the country now lies in fine tuning its supply chain so as to ensure they are better equipped to face any risks in the future. Unfortunately, this will only encourage investors to perform further withdrawals of capital from the Chinese market, specifically U.S. capitals. Simply put, the market that serves as an underlying foundation for trade relationship will weaken. As such, the decoupling between both countries is inevitable, and will certainly happen quicker than one realizes.

Two, the “co-opetition” is currently at a critical turning point and it is expected that further “competition (and confrontation)” will be the new norm between U.S. and China, largely because both countries aren’t willing to put aside their major differences to cooperate. While the U.S. may have aided China against Covid-19, the U.S. officials’ remark about how the novel coronavirus may help revive the American industrial scene has upset China greatly. Furthermore, both parties are now pointing fingers at one another given the contagion has escalated into a full-blown pandemic. A high-ranking U.S. administrative official was caught saying something along the line “the pandemic happened because Wuhan did not do a good job at containing it properly early on.” Meanwhile, U.S. President Donald Trump publicly dubbed the novel coronavirus “Chinese Virus”. In response to all the accusations, China’s Foreign Ministry Spokesperson, Zhao Lijian clapped back on social media claiming the virus originated from the U.S. army who came to Wuhan sometime back. It should be noted that ANBOUND does not take side on this. Rather, what we would like to point out is the exchange of verbal blows speaks of a major shift happening between both countries, and it reflects in their trade relationship too. In essence, both governments are foregoing bilateral relations at this point. Truthfully speaking, the U.S. and China were never fully on good terms, though they have always kept their relationship “respectable” so to speak. The current situation, however, is much different and it seems that the “philosophy of struggle” is no longer a form of strategic thought, but a specific policy that is expected to deepen the rift between U.S. and China, thereby leading to further confrontations and weakening the flexibility of foreign policies.

Three, the clash between both countries extends to its social as well as cultural scenes too and decoupling from these two aspects could cause the U.S. and China to enter a “cold war-like confrontation”. The “Thucydides Trap”, or the belief that war arises when a rising power threatens a ruling power, has been a heavily discussed topic within the U.S.-China policy scene in the 21st century. There are considerable economic, cultural and social ties that exist between the two countries that sets it apart from the US-Russia relations, which means a full-scale confrontation is very unlikely to happen. That being said, the fact that things have come to “decoupling” does speak a lot about how things are slowly waning in the U.S. and China, especially on a social and cultural level. At the time of the article’s writing, there already has been many reported cases of xenophobia towards Asians, especially ethnic Chinese living in the American society, with a portion of it involving physical violence. This in turn has caused many in China to respond aggressively and negatively towards the Americans. Despite both country’s communities having legitimate reasons to be upset with one another (like how the Americans and Chinese share differing views on those who wear a mask), ANBOUND believes that most of the negativity arose as result of the fear-arousing pandemic, which has caused both sides to cling onto their ideals of “nationalism” frantically. Clearly, the U.S.-China relation is falling apart at political and social level, all in the name of “nationalism” and such antagonism can bring about many irreconcilable differences.

Four, the pandemic has stirred up yet another problem, and that is the Chinese who have yet to fully assimilate into the American society, overseas Chinese (American Born Chinese in this case) and foreign exchange students included, further threatens the U.S.-China relations. It was previously thought that these group of people would have been key to bridging the gap between both communities and in doing so, promote racial harmony between one another. It is unfortunate that time has shown this is ineffective and have only caused further gaps to appear between them, so much so as leading to a cultural clash, which brings us back to the topic of how it is becoming increasingly harder to resolve any conflicts happening between both communities.

Five, the pandemic has brought a buffer period for the U.S.-China relations, interestingly enough. Even if the U.S.-China trade relations were to take a turn for the worse and become more confrontational, both countries would lack the time and resources to properly sort out any foreign policy-related matters in 2020. For starters, the highlight of the year is centered around the control and prevention of the epidemic as well as the US Presidential Election that is quickly becoming a hot topic amongst American politicians, which means one can expect little to no drastic movements or changes this year; Also because it wouldn’t do China any good to instigate any confrontation or conflicts presently. Another thing that we at ANBOUND wish to stress too is that any containment efforts that the U.S. raises against China requires the support of its allies to be effective, though the outcome remains very much uncertain. Why? Because Trump is destroying the very alliance system that is making the country whole and the cracks are beginning to show. Plus, the U.S.’ allies located in the Asia-Pacific and European region are currently in no place to partake in the matter either, as they themselves are having a hard time keeping up with the pandemic too. Given the state of things domestically and internationally, it is expected that the U.S. and China will face further instability that can’t be explained in its relationship, which may push “Phase Two” of the trade agreement to a later date though all of this may very well just be the calm before the storm.

And last but not least, the Belt and Road Initiative or BRI, which after being in the works for six years, is now reaching a key point and is urgently needing structural adjustments. Since the second half of 2019, the U.S. has been actively involving Europe, Japan, India and Austria to build an alternative to the BRI that is expected to span across Eurasia. Meanwhile, China’s domestic economy has begun deviating from its “new normal”, a result of the immense pressure calling for the BRI to undergo major changes though like what we have discussed in our previous articles, this is unlikely to happen as the U.S. and its allies lacks the capacity to do so given what short period of time they have, thus providing the aforementioned “buffer period” that the BRI desperately needs for the time being. Another thing to note, Europe is steadily turning into a red zone for the pandemic, which provides an opportune moment for China’s public diplomacy. If China can change Europe’s perception of itself, then the BRI would have one less challenge to face in the future.

Final analysis conclusion:

The U.S.-China relations have been largely affected by the epidemic as a whole and the bilateral relationship that both governments have worked so hard to keep afloat is now perpetually being replaced by a series of confrontations. What more, such events have led China to make a series of changes towards the country’s strategic direction on a feedback-upon-feedback level, domestically at least. Judging by the progress of things, it’s only a matter of time before both countries will eventually descend into another cold war and the ultimate deciding factor in that lies in whether the U.S. can maintain influence over its allies, which is something China will have play into when responding to U.S.’ containment efforts towards the country. 

*Mr. Yu(Tony) Pan serves as the associate research fellow and the research assistantof Mr. Chen Gong, Founder, Chairman, and the Chief Researcher of ANBOUND. He obtained his master’s degree at George Washington University, the ElliottSchool of International Affairs; and his bachelor’s degree in University ofInternational Business and Economics in Beijing. Mr. Pan has published pieces invarious platform domestically and internationally. He currently focuses onAsian Security, geopolitics in Indo-Pacific region and the U.S.-Sino Relations.

Founder of Anbound Think Tank in 1993, Chan Kung is now ANBOUND Chief Researcher. Chan Kung is one of China’s renowned experts in information analysis. Most of Chan Kung‘s outstanding academic research activities are in economic information analysis, particularly in the area of public policy.

Americas

Hardened US and Iranian positions question efficacy of parties’ negotiating tactics

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The United States and Iran seem to be hardening their positions in advance of a resumption of negotiations to revive a 2015 international nuclear agreement once Iranian President-elect Ebrahim Raisi takes office in early August.

Concern among supporters of the agreement to curb Iran’s nuclear program which former US President Donald J. Trump abandoned in 2018 may be premature but do raise questions about the efficacy of the negotiating tactics of both parties.

These tactics include the Biden administration’s framing of the negotiations exclusively in terms of the concerns of the West and its Middle Eastern allies rather than also as they relate to Iranian fears, a failure by both the United States and Iran to acknowledge that lifting sanctions is a complex process that needs to be taken into account in negotiations, and an Iranian refusal to clarify on what terms the Islamic republic may be willing to discuss non-nuclear issues once the nuclear agreement has been revived.

The differences in the negotiations between the United States and Iran are likely to be accentuated if and when the talks resume, particularly concerning the mechanics of lifting sanctions.

“The challenges facing the JCPOA negotiations are a really important example of how a failed experience of sanctions relief, as we had in Iran between the Obama and Trump admins, can cast a shadow over diplomacy for years to come, making it harder to secure US interests,” said Iran analyst Esfandyar Batmanghelidj referring to the nuclear accord, the Joint Comprehensive Plan of Action, by its initials.

The Biden administration may be heeding Mr. Batmangheldij’s notion that crafting sanctions needs to take into account the fact that lifting them can be as difficult as imposing them as it considers more targeted additional punitive measures against Iran. Those measures would aim to hamper Iran’s evolving capabilities for precision strikes using drones and guided missiles by focusing on the providers of parts for those weapon systems, particularly engines and microelectronics.

To be sure, there is no discernable appetite in either Washington or Tehran to adjust negotiation tactics and amend their underlying assumptions. It would constitute a gargantuan, if not impossible challenge given the political environment in both capitals. That was reflected in recent days in Iranian and US statements.

Iranian Spiritual Leader Ayatollah Ali Khamenei suggested that agreement on the revival of the nuclear accord was stumbling over a US demand that it goes beyond the terms of the original accord by linking it to an Iranian willingness to discuss its ballistic missiles program and support for Arab proxies.

In a speech to the cabinet of outgoing President Hassan Rouhani, he asserted that the West “will try to hit us everywhere they can and if they don’t hit us in some place, it’s because they can’t… On paper and in their promises, they say they’ll remove sanctions. But they haven’t lifted them and won’t lift them. They impose conditions…to say in future Iran violated the agreement and there is no agreement” if Iran refuses to discuss regional issues or ballistic missiles.

Iranian officials insist that nothing can be discussed at this stage but a return by both countries to the nuclear accord as is. Officials, distrustful of US intentions, have hinted that an unconditional and verified return to the status quo ante may help open the door to talks on missiles and proxies provided this would involve not only Iranian actions and programs but also those of America’s allies.

Mr. Khamenei’s remarks seemed to bolster suggestions that once in office Mr. Raisi would seek to turn the table on the Biden administration by insisting on stricter verification and US implementation of its part of a revived agreement.

To achieve this, Iran is expected to demand the lifting of all rather than some sanctions imposed or extended by the Trump administration; verification of the lifting;  guarantees that the lifting of sanctions is irreversible, possibly by making any future American withdrawal from the deal contingent on approval by the United Nations Security Council; and iron-clad provisions to ensure that obstacles to Iranian trade are removed, including the country’s unfettered access to the international financial system and the country’s overseas accounts.

Mr. Khamenei’s remarks and Mr. Raisi’s anticipated harder line was echoed in warnings by US officials that the ascendancy of the new president would not get Iran a better deal. The officials cautioned further that there could be a point soon at which it would no longer be worth returning to because Iran’s nuclear program would have advanced to the point where the limitations imposed by the agreement wouldn’t produce the intended minimum one year ‘breakout time’ to produce enough enriched uranium for a bomb.

“We are committed to diplomacy, but this process cannot go on indefinitely. At some point, the gains achieved by the JCPOA (Joint Comprehensive Plan of Action) cannot be fully recovered by a return to the JCPOA if Iran continues the activities that it’s undertaken with regard to its nuclear program…The ball remains in Iran’s court, and we will see if they’re prepared to make the decisions necessary to come back into compliance,” US Secretary Antony Blinken said this week on a visit to Kuwait.

Another US official suggested that the United States and Iran could descend into a tug-of-war on who has the longer breath and who blinks first. It’s a war that so far has not produced expected results for the United States and in which Iran has paid a heavy price for standing its ground.

The official said that a breakdown in talks could “look a lot like the dual-track strategy of the past—sanctions pressure, other forms of pressure, and a persistent offer of negotiations. It will be a question of how long it takes the Iranians to come to the idea they will not wait us out.”

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Americas

Wendy Sherman’s China visit takes a terrible for the US turn

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Photo: Miller Center/ flickr

US Deputy Secretary of State, Wendy Sherman, had high hopes for the meeting in China. At first, the Chinese side did not agree to hold the meeting at all. The reaction had obvious reasons: Antony Blinken’s fiasco in Alaska left the Chinese disrespected and visibly irritated. This is not why they travelled all the way.

So then the State Department had the idea of sending Wendy Sherman instead. The US government actually needs China more than China needs the US. Sherman was in China to actually prepare the ground for Biden and a meeting between the two presidents, expecting a red carpet roll for Biden as if it’s still the 2000s — the time when it didn’t matter how the US behaved. Things did not go as expected.

Instead of red carpet talk, Sherman heard Dua Lipa’s “I got new rules”. 

That’s right — the Chinese side outlined three bottom lines warning the US to respect its system, development and sovereignty and territorial integrity. In other words, China wants to be left alone.

The bottom lines were not phrased as red lines. This was not a military conflict warning. This was China’s message that if any future dialogue was to take place, China needs to be left alone. China accused the US of creating an “imaginary enemy”. I have written about it before — the US is looking for a new Cold War but it doesn’t know how to start and the problem is that the other side actually holds all the cards

That’s why the US relies on good old militarism with an expansion into the Indo-Pacific, while aligning everyone against China but expecting the red carpet and wanting all else in the financial and economic domains to stay the same. The problem is that the US can no longer sell this because there are no buyers. Europeans also don’t want to play along.

The headlines on the meeting in the US press are less flattering than usual. If the US is serious about China policy it has to be prepared to listen to much more of that in the future. And perhaps to, yes, sit down and be humble.

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Americas

Why Jen Psaki is a well-masked Sean Spicer

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When Sarah Huckabee Sanders showed up on the scene as White House Press Secretary, the reaction was that of relief. Finally — someone civil, normal, friendly. Jen Psaki’s entry this year was something similar. People were ready for someone well-spoken, well-mannered, even friendly as a much welcome change from the string of liars, brutes or simply disoriented people that the Trump Administration seemed to be lining up the press and communications team with on a rolling basis. After all, if the face of the White House couldn’t keep it together for at least five minutes in public, what did that say about the overall state of the White House behind the scenes?

But Psaki’s style is not what the American media and public perceive it to be. Her style is almost undetectable to the general American public to the point that it could look friendly and honest to the untrained eye or ear. Diplomatic or international organization circles are perhaps better suited to catch what’s behind the general mannerism. Jen Psaki is a well-masked Sean Spicer, but a Sean Spicer nevertheless. I actually think she will do much better than him in Dancing With The Stars. No, in fact, she will be fabulous at Dancing With The Stars once she gets replaced as White House Press Secretary.

So let’s take a closer look. I think what remains undetected by the general American media is veiled aggression and can easily pass as friendliness. Psaki recently asked a reporter who was inquiring about the Covid statistics at the White House why the reporter needed that information because Psaki simply didn’t have that. Behind the brisk tone was another undertone: the White House can’t be questioned, we are off limits. But it is not and that’s the point. 

Earlier, right at the beginning in January, Psaki initially gave a pass to a member of her team when the Politico stunner reporter story broke out. The reporter was questioning conflict of interest matters, while the White House “stud” was convinced it was because he just didn’t chose her, cursing her and threatening her. Psaki sent him on holidays. Nothing to see here folks, move along.

Psaki has a level of aggression that’s above average, yet she comes across as one of the most measured and reasonable White House Press Secretaries of the decade. And that’s under pressure. But being able to mask that level of deflection is actually not good for the media because the media wants answers. Style shouldn’t (excuse the pun) trump answers. And being able to get away smoothly with it doesn’t actually serve the public well. Like that time she just walked away like it’s not a big deal. It’s the style of “as long as I say thank you or excuse me politely anything goes”. But it doesn’t. And the American public will need answers to some questions very soon. Psaki won’t be able to deliver that and it would be a shame to give her a pass just because of style.

I think it’s time that we start seeing Psaki as a veiled Sean Spicer. And that Dancing with the Stars show — I hope that will still run despite Covid.

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