Finding ways to deal with China effectively

The domestic reaction to the Biden White House move has been along expected lines with Democrats hailing the decision and the Grand Old Party slamming it.

For close to three years now the Biden administration has been limping around to fine tune a strategy for the People’s Republic of China, only to find that it is yet to craft one that will secure American national interests and that of its allies and friends in Europe and the Indo Pacific. The latest salvo comes by way of an order that sets apart advanced computer chips, micro electronics, quantum information technologies and artificial intelligence as areas in which American investments
are limited so as not to help Beijing’s military plans and strategies.

The latest fiat is in addition to restrictions already in place on processor chips used in smartphones and other technologies on security grounds which has expectedly brought about a sharp response from China accusing Washington of pursuing “technology hegemony” and demanding for immediate
revocation of an “erroneous decision. Indications from China are that a tit-for-tat is on the cards on grounds that it has the right to safeguard its own rights and interests.

The domestic reaction to the Biden White House move has been along expected lines with Democrats hailing the decision and the Grand Old Party slamming it. “For too long, American money has helped fuel the Chinese military rise”, the Senate Democratic leader Chuck Schumer said; while Republican Senator Marco Rubio maintained that the plan was “almost laughable” and “riddled with loopholes". And a Spokesman for the Chinese embassy in Washington has added his two cents worth saying that 70,000 American companies do business in China and that the recent measures will hurt both American and Chinese businesses besides denting investor confidence in the United States.

Those experts in the know of things argue that Washington’s obsession with chips and artificial intelligence does not fully come to terms with China’s broader strengths in the realm of technology in which the communist giant has made rapid strides. Further the Biden administration, like that of its predecessor, is not coming to a holistic solution to a runaway trade deficit; and that throwing all the marbles into semi-conductors and AI may not fully address the problem.

The width and depth of American business involvement with China will force enterprises to look for novel ways to circumvent restrictions. Just look at how businesses in Europe and the United States are beating Russia sanctions over the Ukraine war; and businesses are all too familiar with the antics of Democrats and Republicans in an election cycle. Now is the time when both parties will start getting into an over-drive with China policies with the Ukraine conflict funding perhaps as a sideshow.

The Biden administration should take a fulsome look at China as a way of reassuring allies and friends in the Indo Pacific that it has indeed a strategy that is sustained by long term commitment. Waving the economic stick every now and then not only risks certain retaliation from Beijing but also jeopardizes countries that are dependent on the China trade for their own economic well- being.









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