Biden Plans to Build a Grand Alliance to Counter China. It Won’t Be Easy.

Biden Plans to Build a Grand Alliance to Counter China. It Won’t Be Easy.

The president-elect wants a coalition of democracies to pressure Beijing to curtail what he sees as unfair practices; Xi Jinping has been thinking along the same lines

With tensions between the U.S. and China rising on many fronts, President-elect Joe Biden will take office aiming to align Western democracies to broadly pressure Beijing, a clear break with President Trump’s go-it-alone approach.

Chinese President Xi Jinping has been thinking along the same lines and is a step ahead, setting up an overt competition for global leadership. He has been busy in recent years trying to draw traditional U.S. allies into China’s economic orbit.

Moves this week by both Washington and Beijing are forcing China higher on the Biden agenda. Upon taking office he’ll need to decide whether to overturn recent Trump administration actions. They include delisting Chinese telecommunications companies on the New York Stock Exchange, banning transactions with Chinese-connected apps, including the Alipay payment platform, and blacklisting China’s largest computer chip maker and other firms.

He will also need to decide how hard to press Beijing over its broad crackdown on civil liberties in Hong Kong.

At the heart of Mr. Biden’s China policy is what he calls a Summit of Democracies that would seek to establish a clear alternative to Beijing’s autocratic rule, said Biden senior advisers interviewed during and after the presidential campaign. The U.S. will also try to organize smaller groups of democracies to tackle specific issues such as advanced telecommunications and artificial intelligence.

For Mr. Biden, resetting America’s China policy means rejecting the current administration’s approach.

Mr. Trump fought with allies on trade and security issues as he took on China and brought actions domestically that have been tied up in the courts, including seeking to shut down or force the sale of the Chinese-owned TikTok video-sharing app in the U.S.

Even so, Mr. Trump changed the tenor of the U.S.-China relationship by confronting Beijing on a number of issues. He also helped shape a growing consensus in Congress and the public that China isn’t just a competitor but also a threat to American global leadership.

Mr. Biden argues America needs to bring multilateral pressure to bear. Otherwise, Beijing can pit one country against another by offering preferential access to its vast market.

“China always saw an escape hatch through their economic relationships with others,” said Jake Sullivan, Mr. Biden’s choice for national security adviser. “Only by closing off those escape hatches would you get China to curb their trade abuses.”

Given the lure of the vast Chinese market, Mr. Biden could face a tough time convincing allies to sign up for a united front against Beijing. China and the European Union, for instance, recently reached an investment treaty. U.S. allies say they can’t be sure of America’s long-term commitment to an international alliance, given four years of a unilateral approach.

China’s leaders will try to ease the tension with the U.S. that deepened during the Trump administration, according to Chinese officials. Beijing plans to dispatch its top diplomat, Yang Jiechi, to Washington shortly after Mr. Biden is sworn in to explore how the two countries could cooperate, said people with knowledge of the matter.

Short-term, there is a trade war to tend to. One issue is what price China is willing to pay—if any—for the U.S. to lift tariffs on about $370 billion in Chinese exports to the U.S. Biden advisers said the president-elect won’t roll them back soon. He plans to analyze the impact of the levies on the American economy and consult with allies before acting. Business groups that opposed the tariffs now say he should negotiate for concessions.

Beijing seems willing to wait. “Biden will sooner or later launch a renegotiation of the trade deal, as the current agreement is unrealistic,” said Shi Yihong, a foreign-policy adviser to the central government, referring to China’s purchasing targets. “A renegotiation is also in line with China’s wishes.”

Longer-term, Mr. Biden’s multilateralist strategy will be informed by one view he does share with the Trump administration, that China poses a broad challenge to U.S. economic and political leadership in the 21st century. The president-elect criticizes Beijing for robbing U.S. companies of technology, unfairly subsidizing its state-owned firms and suppressing human rights.

Some advisers who worked with him in the Barack Obama administration, during which Washington cooperated with Beijing over the global financial crisis and other issues, now say the era of engagement is over, although they still look to Beijing for help on climate change and other Biden priorities.

“The trick is to navigate this in a way where we have all the tools we need to succeed in these various competitions with China,” said Antony Blinken, who served the Obama administration and is Mr. Biden’s choice for secretary of state, “but at the same time keeping open channels to cooperation where it’s in our interest.”

China's economy has made up ground against the U.S. largely because of increased trade.

Flagship effort
Mr. Biden’s flagship effort will be his Summit for Democracy. It is designed, he wrote in Foreign Affairs magazine last year, “to renew the spirit and shared purpose of the nations of the free world.” The plan is modeled after a 2012 nuclear-security summit President Obama convened to limit the spread of nuclear material.

Mr. Obama’s summit included China’s leader. Mr. Biden’s is designed to exclude Mr. Xi and other authoritarian leaders.

During the campaign, Mr. Biden talked of creating “a united front of friends and partners to challenge China’s abusive behavior.” Although some former Obama China experts doubt he will describe the summit that way, it would be a clear message from the meeting.

Biden advisers said they also will push more focused forms of multilateralism. Mr. Sullivan, the Biden national security adviser, named the Plaza Accord of 1985 where the U.S. and its allies intervened to weaken the dollar as a successful model of international economic cooperation.

He praised the American-Japanese-Australian pressure on China to lift its stranglehold on rare-earth minerals needed to manufacture high-technology products. Mr. Biden’s choice for U.S. Trade Representative, Katherine Tai, led the Obama administration’s rare-earth push.

The Biden team plans to recruit leading democracies for alliances on technology issues, his advisers said, including development of new telecommunications technologies that will lessen dependence on 5G equipment from Huawei Technologies Co. Biden advisers complain that the Trump administration’s efforts to block Huawei haven’t succeeded because the U.S. never developed an effective 5G alternative.

Several proposals would block sales to China of advanced semiconductor-manufacturing technology, dominated by firms in the U.S., Japan and the Netherlands, to try to keep Chinese semiconductor makers several generations behind.

“There’s a division in the world between techno-democracies and techno-autocracies,” Mr. Blinken said. “The techno-democracies have not done a very good job of organizing ourselves.”

A growing backlash among U.S. allies against aggressive Chinese behavior could play into Mr. Biden’s multilateralist hand. Beijing’s tightening grip on Hong Kong and bellicose diplomacy have added to tensions.

Rhetorically, at least, the Biden team has made clear it will make human-rights issues a priority. “The Biden-Harris administration will stand with the people of Hong Kong and against Beijing’s crackdown on democracy,” Mr. Blinken tweeted Tuesday night after Hong Kong police arrested opposition politicians.

Practically, the president-elect’s options are limited. Mr. Trump largely ignored Hong Kong and other democracy issues, such as Chinese repression of Muslims in the western region of Xinjiang, for much of his tenure, though during the past year, his administration sanctioned Hong Kong officials involved in the crackdown and blocked exports of cotton from Xinjiang, among other actions. Mr. Trump didn’t take more drastic steps, which would be available to his successor, including cutting off Chinese banks from the dollar or seeking to delink the Hong Kong dollar from the greenback, which would likely hurt U.S. financial institutions in China.

One alternative that has been widely discussed: The U.S. could allow easy immigration for Hong Kong residents caught in the crackdown.

Some Biden advisers believe that the new administration will be as divided on human-rights issues, as the Clinton administration was at the start. Eventually President Bill Clinton stopped pressing China on human rights and focused on building economic relations.

Potential reluctance
Potential partners might be reluctant to sign up for a U.S. effort to take on China after four years of Trump unilateralism—and with the possibility Mr. Trump or another similar politician could regain the presidency in 2024.

“You’d be asking countries to forgo opportunities in the only major economy in the world that’s growing to do what?” said Jorge Guajardo, a former Mexican ambassador to China who now advises companies on the China market: “To ally with the U.S., which has proved to be an unreliable partner.”

A summit invitation list also could be controversial. Including Taiwan would infuriate Beijing. Adding India, despite the government’s mounting sectarianism, would raise questions about attendees’ democratic bona fides; leaving out India would weaken any alliance.

“India will not accept conditionalities or stipulations by the U.S. in order to join hands against China,” said Sreeram Chaulia, dean at O.P. Jindal Global University’s School of International Affairs, in Sonipat, India.

The Trump administration regarded international economic conclaves as do-nothing events that diluted U.S. interests. A senior Trump official said the Biden team risks getting trapped in talk-a-thons, rather than taking the lead.

“You take steps that no one else is willing to take and they follow you,” said the official. “It’s like a Slinky moving down a staircase.”

And Western nations fear alienating Beijing and its market. The EU completed a bilateral investment deal with China in late December after seven years of negotiation. That put Mr. Xi in a stronger position with the new U.S. administration and served as reminder that it couldn’t take European support for granted.

Mr. Sullivan seemed to acknowledge the changed circumstance in a Dec. 21 tweet before the deal was finished: “The Biden-Harris administration would welcome early consultations with our European partners on our common concerns about China’s economic practices.”

To get European nations on board, the U.S. would need to lift steel tariffs imposed by the Trump administration, said trade experts. But backing off would outrage some of industrial unions and their Democratic backers.

China’s agenda
Beijing is pursuing its own multilateral agenda to further draw U.S. allies into its economic orbit. Beijing once preferred dealing one-on-one with trading partners, figuring its economy would give it an edge. The trade battle with the Trump administration has prompted a rethinking.

Mr. Xi sees multilateral approaches as more productive, Chinese officials said. China has stepped up efforts to work through international organizations including the World Trade Organization and United Nations. “If you control the rules,” said an official with knowledge of the leadership’s thinking, “you can control the game.”

In addition, China has offered to share its Covid-19 vaccines with African nations in a bid to uphold itself as a benevolent world power.

In November, Beijing signed a regional trade pact, the Regional Comprehensive Economic Partnership, with 14 other nations, including Japan, South Korea and Australia. Beijing’s interest in completing the pact grew with each trade sanction from the Trump administration.

Chinese officials would tell Japanese counterparts their trade deals gave them leverage over the U.S. by giving Tokyo alternative markets, said an Asian diplomat involved in the talks. “They now look at RCEP as their leverage over the U.S.,” the diplomat said, because the pact will boost trade between China and its member countries even if the U.S. continues to weaken its economic ties to China.

Recently, Mr. Xi said China would “favorably consider” joining an 11-nation Asia-Pacific trade pact the Obama administration championed, the Comprehensive and Progressive Trans-Pacific Partnership. That agreement would require China to allow free flows of data across its borders and revamp its state-owned companies—the kind of changes the Trump administration couldn’t get Beijing to accept in bilateral trade talks.

In 2017, Mr. Trump pulled the U.S. out of an early version of the deal, then called simply the Trans-Pacific Partnership, complaining it was a job killer. The pact has become so toxic with labor unions and Democratic lawmakers that Mr. Biden says it needs to be renegotiated before he would consider joining.

Beijing is capitalizing on the irony of considering joining a pact with standards set by U.S. negotiators but rejected by a U.S. president. Skeptics question Beijing’s willingness to make the necessary changes, saying it could be a way to tie up the West in negotiations.

Mr. Xi does see it in his interest to revive a working relationship with the U.S. president, according to Chinese officials. As he tries to ensure a tradition-busting third term, they said, he knows he will be judged internally on how he handles U.S. relations.

Still, Beijing is eyeing the new administration warily, seeing Mr. Biden’s reference to Mr. Xi as a “thug” as a warning sign, said Chinese officials. While Mr. Xi wants to improve relations, he has also made it clear he is intent on building Chinese power and modernizing its economy.

From Mr. Xi’s perspective, sovereignty issues take precedence. He has asserted control over Hong Kong and Xinjiang—both of which China considers internal issues—despite criticism from abroad and has empowered his diplomats to strike back forcefully against anyone seen as smearing the country.

The biggest potential flashpoint remains Taiwan, which China views as a renegade province. Last year, the Chinese military stepped up exercises targeting the island, but there is no sign Beijing is preparing an invasion.

Tariff tensions
Mr. Biden must fit the tariff conundrum into his new-multilateralism strategy. The Trump administration assessed tariffs on $370 billion of Chinese goods, three-quarters of what China sends the U.S. annually, during a two-year trade war. That culminated in a deal signed a year ago in which China agreed to dramatically increase purchases of U.S. goods, although it has so far fallen short of its pledged shipments.

The Business Roundtable, an association of America’s largest companies, and other business groups—China’s traditional allies in Washington—want Mr. Biden to use tariff elimination to get concessions from China on issues that eluded the Trump administration, including subsidies for Chinese firms and predatory behavior by state-owned companies.

The Biden team hasn’t made commitments to new talks. That is yet another thing for Mr. Biden to discuss with allies first, Mr. Sullivan said: “He’s not going to lock himself into a particular approach.”

One question is whether Mr. Biden will accept calls by former Clinton Treasury Secretary Larry Summers and others to hold an early Group of 20 leaders’ summit to hammer out ways to boost the global economy and deal with the pandemic. That would be modeled on the G-20 session Mr. Obama organized shortly after he took office in 2009 to combat the financial crisis.

A G-20 would give a starring role to China and probably include an early meeting of the Presidents Biden and Xi. The outreach would suggest a different direction in U.S. policy than a united front against Beijing.

Charlene Barshefsky, the former Clinton Trade Representative who negotiated China’s entry into the WTO, warns against an early Biden-Xi meeting. “Given the strategic implications—bilateral, regional, and global,” she said, “this is a complex exercise, not a photo op.”