Are the political winds in Washington starting to shift on China?
Published 11 April 2023
As divided as Washington may be, taking a hard stance against Beijing seems to be something both parties across the aisle can agree on. From spy balloon to trade policy, how the Biden administration addresses these issues are indicative of Washington’s attitude towards Beijing. To address China’s growing economic and security capabilities, the US should leave the political posturing for another day.
Conventional wisdom in Washington holds that the only thing Democrats and Republicans agree on is the need to confront China more forcefully on trade and strategic issues. This has been a rare area of bipartisan cooperation, paving the way for the successful passage of the CHIPS and Science Act and the Inflation Reduction Act, both of which were intended - at least in part - to help the US compete more effectively with China.
While the conventional wisdom continues to be broadly true today, some initial cracks in the Democratic-Republican China consensus appear to be forming. Perhaps not surprisingly, the pursuit of partisan political advantage has crept into substantive policy discussions, exposing potential fault lines between the parties on their approach to China. What happened?
Elections and a balloon
The 2024 US presidential campaign is - unofficially at least - already underway. This unfolds against the backdrop of a divided Congress, with Republicans assuming control of the House of Representatives at the start of the year, while the Democrats retained a majority in the Senate. Both sides have their sights set firmly on securing control of the White House and both chambers of Congress in 2024.
With these dynamics in place, the legislative and governing process often becomes as much about scoring political points as it is about actual policy. A premium is placed on drawing contrasts that can be translated into electoral strategies. With some notable exceptions, agreeing with your opponents is not seen as a winning strategy.
These political realities have created a highly combustible environment. A large balloon that became visible to Americans on the ground near a military base in Montana last month provided the spark. The Biden administration decided to allow the alleged Chinese spy balloon to traverse a large portion of the continental US before shooting it down off the coast of the Carolinas, claiming that it would have posed a public safety risk to bring it down overland.
Republicans were quick to seize on the balloon incident as evidence of Biden being “soft” on China. Typical responses included Republican Senator Rick Scott, who said that "Xi is blatantly spying on America because he does not fear or respect Joe Biden”, and his Republican colleague Tom Cotton, who accused Biden of “coddling and appeasing the Chinese communists”.
Criticisms and disagreements have started to chip away at the previous consensus on China, as each side senses useful political contrasts that can be drawn. The respective political lanes each will pursue are coming into sharper focus. Democrats are responding to the perceived threat from China by emphasizing investments and subsidies to bolster US competitiveness and fulfill US worker-centric campaign promises. Republicans are generally less enthusiastic about what they see as “handouts” and stress instead “toughness” on military and security issues, which historically play better for the GOP with voters.
Consider the following issues in which Democrats and Republicans are diverging. The tone is becoming more overtly political:
Democrats and Republicans have been largely united in their support for tightening controls on advanced technologies, especially semiconductors, exported to China. There has been near seamless continuity in the policy approach taken by the previous Republican administration of Donald Trump and the current Democratic administration. The announcement of even more draconian restrictions by the Biden administration in October last year drew widespread Republican support.
Since then, Republicans have charged that the Commerce Department has been lax in enforcing the restrictions and approved far too many licenses that permit US companies to export sensitive technologies to China. Most of the recent restrictions don’t ban exports to China outright; rather, they require the US company to apply for and secure a license from Commerce.
The Republican-controlled House Foreign Affairs Committee launched a three-month probe into the conduct of the Commerce Department and is considering legislation that would move authority for enforcing technology restrictions to the Pentagon. These criticisms feed the political narrative the Republicans are working hard to establish in the mind of voters: the Biden administration is failing to adequately “stand up” to China.
The Biden administration has argued that the technologies involved are immensely complex and that crafting and implementing effective regulations that won’t cause equal if not greater damage to US economic interests take time. They countercharge that the Republicans are playing politics with highly sensitive policy issues. Representative Mike McCaul, one of the leading Republican voices calling for tougher enforcement, offered a different perspective: “Our government doesn’t have time to complain that these problems are tough. We need solutions.”
Chip subsidies align with priorities for Democratic base
The bipartisan CHIPS Act includes roughly $52 billion in subsidies to encourage semiconductor production in the US. The Commerce Department recently released the specific rules that will govern exactly how and on what terms the subsidies will be distributed. Several requirements align neatly with domestic policy principles on which the Democrats are expected to base their 2024 campaign. For example, companies receiving subsides will be “encouraged” to utilize Project Labor Agreements (PLA) which position unions to strongly influence pay, benefits, and rules. Unions are a core constituent of the Democratic base and will need to be energized for the 2024 election. Companies receiving subsidies will also have to provide day care services, paid leave, and “caregiving support” to employees. These are longtime progressive Democratic goals that can now be presented to voters as Biden administration “accomplishments” in the run-up to the election.
Most of these social policy prescriptions are anathema to Republicans and they have predictably responded with pointed rebukes. Republican Senator Mitt Romney accused President Biden of “jamming woke and green agenda items into legislation we pass”. The initial bipartisanship on the CHIPS Act is being replaced by clashes over progressive social policy being woven into its implementation. It remains to be seen how effectively the Republicans can push back against these policies, but it is already clear that the fight against so-called “woke-ism” will be a cornerstone of the GOP’s 2024 campaign strategy.
Republicans also question the wisdom of adding costly mandates to company operations when the purpose of the CHIPS Act is to make it more cost-efficient to produce semiconductors in the US.
Bipartisanship still holds on some issues
There continues however to be areas in which Democrats and Republicans still appear to be united. The common thread tying these issues together is the lack of an obvious political upside in taking an oppositional stance. Pending bills that would ban Chinese purchases of US farmland, especially near US military installations, enjoy bipartisan support. Potential screening of outbound US investments in China, although scaled back from initial plans, appears on track with few major fault lines between the parties. And Democrats and Republicans alike have been sharply critical of the potential surveillance vulnerabilities posed by TikTok.
A toxic mix: political expediency and serious policy
For the time being, the unusual alignment between the parties on China policy is mostly intact - although important fissures have started to appear. As the election cycle heats up, and political calculations intensify, watch closely to see if these cracks widen into full-blown fault lines. If so, US policy towards China could become just another arena in which the two parties slug it out for political advantage.
Realistically speaking, policy-making in the US – even on issues with the greatest strategic and economic importance – will never be free from political considerations, a point recently acknowledged by Commerce Secretary Gina Raimondo. When asked if implementation of the CHIPS Act could get tripped up by politics, she replied: “You always worry. Washington’s unpredictable. And politics is crazy.”
When it comes to China, however, the politics should be minimized. The interjection of electoral calculations and partisan positioning into the process will not improve the likelihood for insightful or effective policy outcomes.
China will not sit still and could be the beneficiary of any US missteps. Li Keqiang, China’s Premier at the time, signaled in early March that Beijing will ramp up its bid to join a massive Asia-Pacific trade pact the US abandoned, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Misguided policy emanating from Washington could open doors for Beijing. It also has the potential to ultimately rebound to the detriment of both countries and the wider global community.
Democrats and Republicans need to keep their eye on the ball, focus on addressing the challenges raised by China’s growing economic and security capabilities, and leave the political posturing for another day.
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