The US contest with China

here was hope that the growing contest between the United States and China while Donald Trump occupied the White House would ease somewhat when Joseph Biden, the 46th US president, moved take the helm. What is different now is that the new administration is moving with greater planning than was the case when Trump governed. There are several fronts on which the United States is deeply engaged. It has energised the concept of the Indo-Pacific “quad” first proposed by former Japanese Prime Minister Shinzo Abe.

There is greater focus on slowing down China’s technological advance by denying it access to American science. And, the Trump approach to use trade as a weapon for bringing China in line with the West is being continued. But there is one major difference. While under Trump’s “Make America Great Again”, MAGA, the United States wished to walk alone, Biden would like to bring along with him European powers. The situation officialdom in Washington believes it must confront was neatly summed up by Robert E Lighthizer who was the US trade representative in the Trump administration. He was commenting on the US Innovation Act passed as a bipartisan measure by Congress.

“This legislation is fundamentally important because winning our contest with China is vital for our future,” he wrote in an article for The New York Times. America “has the largest economy in the world, the best armed forces and the most robust science and technology ecosystem, but China is using all the tools available to overtake us. We must use all the tools in a free democratic system to prevail.” The legislation calls for $200 billion to bolster scientific and technological innovation, $52 billion to rebuild capacity to make semiconductors, and a supply-chain resiliency programme to bring back to the United States manufacturing of personal protective equipment, medicines and other key products needed to fight the Covid-19 pandemic.

When the disease was at its peak in 2020-21, the United States ran out of a number of essential goods that were needed by hospitals and clinics to deal with the patient-load. Some of the needed supplies were brought in from China. Lighthizer, when he was a senior official in the Trump administration, was a strong advocate of using tariffs on trade as an instrument for bringing in line countries that were working against American interests. “The notion that tariffs are bad is counterproductive,” he wrote in his NYT article.

“They have been effective tool of economic policy since the beginning of the Republic. They can offset unfair subsidies by foreign governments and industrial policy; break reliance on foreign suppliers; and raise import cots, thus encouraging companies to bring jobs back to the country. To the extent that tariffs might raise consumer prices (which is debatable), that is small price to pay to achieve a strong manufacturing base and secure access to critical supplies.” Lighthizer, in other words, was arguing against conventional and widely accepted economic doctrine. One approach Washington adopted, both under Presidents Trump and Biden, was to bring India into the American orbit. This may be the strategy, but it won’t be easy to execute.

As the British discovered when they ruled over India, the local culture was not easy to work with. Those among the rulers who wrote about their experiences called it the “babu way of work”.” Now that the Americans are getting very close to India, they too are discovering that dealing with official India is not easy. One good example of this is the foot dragging by the Indian bureaucracy and its political system about the sale of the old American consulate in Mumbai to Adar Poonawala, the owner of who runs the Serum Institute, the world’s largest manufacturer of vaccines based in Pune, a city close to Mumbai. The building was built in the 1930s by the Maharaja of Wanekar, one of the Indian princes who lost their states after the British left their colony and India became independent.

The United States struck a deal with Poonawala in 2011 at a price of $110 million but has not been able to consummate it. According to one newspaper account, “Earlier this year when Secretary of State Antony J. Blinken was up for confirmation in Washington, he was hit with a strange question about a piece of property 8,000 miles away on the Arabian Sea. Lincoln House, a former maharaja’s palace and U.S. consulate in Mumbai was supposed to have been sold six years ago for $110 million. Ever since, the United States has been trying to transfer the property to one of the richest families in India.”

The dispute is “an unnecessary irritant in bilateral ties,” said Senator James Risch in a written question to Secretary Blinken. Whether this issue was raised by the diplomat during his recent visit to New Delhi has not been revealed. During the visit, Blinken promoted the idea of making the quad operational. This would draw India closer to the United States, Japan and Australia with the objective of containing China’s growing influence in Asia. Lending substance to the idea will not be easy in the highly bureaucratic decision-making in India.

China was not sitting idly as the sentiment against it became stronger in the United States. It had correctly read that public opinion played an important role in fashioning public policy. It reacted strongly to the way the American media covered the damage done by heavy rains that came down in the closing days of July. Commentary on several social media sites in China took up the government position that the coverage in the Western press was “fake”, “biased”, “slandering” and “evil.” They alleged that foreign reporting on the floods devastation focused on the damage instead of the rescue efforts by the government and the public.

The Foreign Correspondents’ Club of China said in a statement that it was “disappointed and dismayed at the growing hostility foreign media in China, a sentiment underpinned by rising Chinese nationalism sometimes directly encouraged by Chinese officials and official entities”. It is clear that the policymakers in Washington who are working to contain China’s influence in Asia did not fully factor in the consequences of the United States withdrawal from Afghanistan. China moved fast to fill the vacuum created by the pullout of American troops. Beijing invited a high-powered Taliban group to meet China’s senior leaders in the port city of Tianjin near Beijing.

The Chinese are working hard to build a network of roads, railways, and fiber optics connections to develop links with the landlocked countries of Central Asia including Afghanistan. The China-Pakistan Economic Corridor is an important part of this initiative. CPEC is a game-changer for Pakistan. It would link Pakistan not only with the western provinces of China but also with the resource-rich Central Asian states. Gwadar is on the way to becoming one of the more important ports of Asia. The deepening contest between China and the United States may have some unintended positive consequences for Pakistan.