HomeBusinessThe US-China relationship is still inching toward a collision.

The US-China relationship is still inching toward a collision.


Yo recently attended the China Development Forum (CDF) in Beijing, an annual gathering of high-level foreign business leaders, academics, former lawmakers and senior Chinese officials. This year’s conference was the first to be held in person since 2019 and offered Western observers the chance to meet China’s new high-level leaders, including the new Premier Li Qiang.

The event also offered Li his first opportunity to meet with foreign representatives since taking office. While much has been said about Chinese President Xi Jinping appointing close loyalists to crucial posts within the Communist Party of China (CCP) and the government, our talks with Li and other senior Chinese officials offered a deeper insight. of his policies and leadership style.

Before becoming prime minister in March, Li served as the CCP secretary in Shanghai. As an economic reformer and advocate of private entrepreneurship, he played a crucial role in convincing Tesla to build a megafactory in the city. During the Covid-19 pandemic, he enforced Xi’s strict zero-Covid policy and oversaw a two-month lockdown in Shanghai.

Fortunately for Li, he was rewarded for his loyalty and did not become a scapegoat for the failure of the policy. His close relationship with Xi also allowed him to convince the Chinese president to reverse zero-Covid restrictions overnight when the policy proved untenable. During our meeting, Li reiterated China’s commitment to “reform and opening up,” a message that was also carried by other Chinese leaders.

Li’s remarkable wit was in stark contrast to the more reserved demeanor of former Premier Li Keqiang, whom we met in previous years when he was prime minister. During our meeting, he made Apple CEO Tim Cook laugh out loud by attributing his upbeat mood to the viral video of Cook being applauded by the crowd during his visit to an Apple store in Beijing. He even joked about a video of US lawmakers questioning TikTok CEO Shou Zi Chew, which also went viral that week. Unlike Cook, he noted, the embattled TikTok boss was not smiling during his congressional hearing. Li’s joke included an implicit warning that while American companies are still welcome in China, the Chinese government may play hardball if its companies and interests are treated harshly in the United States.

Li’s veiled threat captures China’s current attitude toward the United States. Although China’s top economic policy makers often talk about opening up, China’s policies still prioritize security and control over reform. Qin Gang, China’s new foreign minister, took an aggressive stance during his speech at the development forum. Dealing an implicit jab at the US, Qin warned Western aides that while China aims to maintain an open global trade regime, the country would respond forcefully to any attempt to drag it into a new cold war.

In a recent speech, US Treasury Secretary Janet Yellen sought to assuage China’s concerns that the US is trying to “contain” its rise and disengage from its economy. Recent US actions limiting trade with China, she clarified, were based on national security concerns rather than an effort to hamper the country’s economic growth.

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But reassuring China will be difficult when the US reportedly plans to introduce far-reaching restrictions on Chinese investment in the US and US investment in China. To date, Chinese officials have not been receptive to efforts by Yellen and Secretary of State Antony Blinken to establish a dialogue on how to maximize cooperation, minimize areas of confrontation, and manage the growing strategic competition and rivalry of the two powers.

European Commission President Ursula von der Leyen recently delivered a similarly pragmatic speech in which she argued that Europe should “focus on reducing risks rather than disengaging” from China, but also emphasized the many ways in which Chinese policies They represent a threat to Europe. Her speech was not well received in Beijing, and she was effectively snubbed when she visited China with French President Emmanuel Macron in April, while the more accommodating Macron received a red-carpet welcome.

China is now trying to drive a wedge between the European Union and the United States. Since EU-based companies have significant interests in China, many European CEOs attended the forum, in contrast to the limited presence of US business leaders. And Macron’s controversial comments during his April visit, particularly his statement that Europe must not become a “vassal” of the US, suggested the effort may have succeeded. But a subsequent G7 communique reaffirmed the West’s stance on Taiwan and condemned China’s aggressive policies toward the island, and China’s tacit support for Russia’s brutal invasion of Ukraine is likely to deter Europe from succumbing to a charm offensive.

Nouriel Roubini He is Professor Emeritus at the Stern School of Business and author of Megathreats: Ten Dangerous Trends That Imperil Our Future and How to Survive Them.

© Union Project

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