Agreeing to disagree: On U.S.-China ties

Context:

The virtual summit meeting between Presidents Joe Biden and Xi Jinping appeared to underscore in their minds the need for them to find common ground on contentious issues including trade and tensions surrounding Taiwan and the South China Sea.

Relevance:

GS-II: International Relations (India’s Neighbours, Foreign policies affecting India’s Interests)

Dimensions of the Article:

1. Major points of issues in U.S. – China relations
2. Concerns
3. Impact on India
4. Way forward

Major points of issues in U.S. – China relations

Trade

• At the top causing bilateral friction between U.S. and China is trade. The roots for the strained relations lie in China becoming one of the largest world economies and the high trade deficit between the two nations in favor of China.
• The U.S. blames China for practicing unethical business practices like theft of U.S technology and intellectual property and restricting investment in the U.S.
• The U.S. labeled China as a currency manipulator after the Chinese central bank let the Yuan weaken significantly.
• The US-China trade war, which began in 2018 under former US President Donald Trump, has resulted in both nations paying higher taxes to bring in goods from the opposing country.
• The U.S. also banned the use of Huawei equipment by U.S. federal agencies.
• Escalating import tariffs have caused supply chain disruptions that are affecting businesses and individuals worldwide.

South China Sea

• The South China Sea is a major point of contention between the two nations. China claims virtually the entire South China Sea which is opposed by several countries in that region.
• The established rule-based system is being challenged by China’s territorial claims in the South China Sea and its various endeavors to advance into the Indian Ocean region.
• The U.S. considers it to be a violation of the established rule-based system as China is increasing its maritime activities in the South China Sea and the East China Sea. The U.S. opposes any further militarization of the region.

Taiwan

• Another point of contention is the U.S. stance on Taiwan. China considers U.S. relations with Taiwan as a threat to its One China Policy. Similarly, the U.S. stance on Hong Kong and its condemnation of the way the Chinese administration is dealing with the protesters is a point of contention between the two countries.
• The US recognises and has formal ties with China. But it has also pledged to help Taiwan defend itself in the event of an attack.
• The Chinese side indicated that the USA is playing with fire. Such comments signal that China will respond robustly to any western moves seen as strengthening Taiwanese independence, for example through direct arms sales to Taipei.

Human rights abuses against Uighur Muslims in Xinjiang

• The U.S. has always criticized China’s dealing with Uighurs and the U.S. imposed sanctions on Chinese officials, companies, and institutions on the grounds of human rights violations of the minority community in the country’s western Xinjiang region.
• China accused the US of meddling in its domestic affairs.

Concerns

• Over the last two decades, summits between both countries resulted in the issuance of joint statements. The virtual meeting had no such statement release.
• Nor did the meeting end with any agreement to have groups of officials from both sides hold further talks on strategic nuclear issues and conflicts in cyberspace.
• Instead, countries issued their own statements, which looked like catalogues of mutual grievances that offered little room for compromise.

Impact on India

• The China-U.S. tensions are a golden opportunity for India in the economic domain if India is properly positioned. The Indian manufacturing sector is expected to benefit from the tensions between these two countries. The United Nations had said in a report that India is among few economies that stand to benefit from the trade tensions between the world’s top two economies. However, if the tensions continue for too long, this may slow down the economy too.
• Many companies are shifting their manufacturing bases from China to other countries. This is an opportunity for India. If the companies choose to operate their manufacturing centers in India, this may generate employment opportunities for Indians and can help the Indian economy in one way or another.
• Similarly, the tensions may be a good opportunity for Indian exporters as Chinese goods are charged at higher rates in the U.S. However, this also depends on how the Indian currency is placed.
• In the political dimension, the tensions have deep underpinnings for India. Given Indo-U.S. close relations, there is a perception that India is in the American camp which is not good for the Indo-China relationship. India’s membership in the QUAD (Quadrilateral Security Dialogue) is another issue that may invite adverse reactions from China.
• The given situation may check India’s capability to balance its relations with the West and the East. India has to work hard to maintain its autonomy in various domains.

Way forward

The China-U.S. tensions tend to be one of the major threats the world is facing which have far-reaching ramifications for geopolitics. The rivalry between the two countries will not only divide the world into two camps but will create differences among nations leading to an anarchical situation. The tension may lead to an arms race and other adverse developments for the whole world. Hence, it is time that the global community takes measures to reduce the differences between two major powers and pave the way for peaceful coexistence.

-Source: The Hindu