For US, new challenge from China has unexpected source

America is facing a new China conundrum.

And the latest challenge isn’t from an assertive show of strength by Beijing. It has come, instead, from an unexpected source, at a potentially critical moment – just as the world’s two main rival powers have appeared to be edging toward the kind of diplomatic
reengagement that U.S. President Joe Biden has been seeking, with little success, for the past few years.

It’s the growing signs in recent weeks that China’s seemingly inexorable economic rise is running into head winds: slowing growth, flagging consumer demand, debt problems in the troubled construction sector, and rising unemployment, especially among the young. And the signs, too, of some homegrown irritants for Chinese leader Xi Jinping.

First, late last month, came the sudden dismissal of Foreign Minister Qin Gang, a Xi protégé appointed to the post only months earlier. Then, barely two weeks ago, Mr. Xi replaced the top commanders in China’s elite nuclear missile force.

On one level, none of that is necessarily bad news for Washington. Mr. Biden has centered his increasingly assertive posture toward China on those two areas: economy and security. More specifically, his policy has been aimed at ensuring the United States can outpace China in cutting-edge technology, and, alongside U.S. allies, can constrain an increasingly assertive Chinese military posture.

This week, Mr. Biden is welcoming the leaders of Japan and South Korea for summit talks at Camp David – the latest in a series of moves to strengthen economic, political, and security ties among allies on China’s Indo-Pacific doorstep.

Still, the Biden administration knows that China’s economy, the world’s second-largest, is not about to crater suddenly as a result of its current challenges. Nor is the missile-force shakeup likely to influence the main thrust of Mr. Xi’s security policy: a major military buildup as part of an ever-more-assertive projection of China’s power beyond its borders.

The deeper concern is how Mr. Xi – who has amassed greater personal authority than any Chinese leader since Mao Zedong, on the promise of China displacing the U.S. as the world’s preeminent power – will respond politically to his homegrown difficulties.

The worry is that he could now be doubly keen to project China’s, and his own, strength abroad, and that he’ll view any move toward a diplomatic thaw with America as a sign of weakness.

Mr. Biden himself gave voice to this concern at a fundraising event in Utah last week. Citing China’s economic slowdown, he said, “They’ve got some problems. That’s not good, because when bad folks have problems, they do bad things."

Dim the glimmers of hope?

The reference appeared to be to the risk that China might ratchet up pressure on the island democracy of Taiwan, which Mr. Xi has vowed at some point to “reunite” with the mainland. But the more immediate concern is that China’s domestic difficulties could derail the first real glimmers of hope in many months for diplomatic reengagement.

Alongside a toughened economic and security stance toward China, the Biden administration has repeatedly stressed the need to keep the U.S.-China rivalry from breeding across-the-board hostility, preventing cooperation even on issues of common concern, and even leading to head-on conflict.

American officials have gone to great lengths to emphasize to Beijing that Washington’s tightened trade rules – including an executive order signed last week by Mr. Biden banning U.S. investments in Chinese high-tech firms – are not aimed at affecting China’s economy more broadly, or impeding its growth.

That’s a point Mr. Biden also stressed during his appearance in Utah. And although Mr. Xi has long been signaling skepticism about such assurances – accusing the U.S. earlier this year of seeking the “all-out encirclement” of China – there have been some recent indications he was becoming more receptive to improving the diplomatic atmosphere.

Mr. Xi and Mr. Biden met at last November’s G20 summit on the Indonesian island of Bali – their first face-to-face talks since Mr. Biden’s inauguration as president. Since then, a trio of American Cabinet secretaries, including Secretary of State Antony Blinken, have held talks with their Chinese counterparts.

And in what could prove a key test of Mr. Biden’s success in keeping open a U.S.-China dialogue even on issues of contention, like high-tech trade, Commerce Secretary Gina Raimondo is due to travel to Beijing later this month. Assuming her visit goes ahead without a hitch, the focus will then shift back to presidential diplomacy: Both Mr. Biden and Mr. Xi are due to attend this year’s G20 summit, scheduled for next month in India.

Yet with a number of Chinese government ministers due to travel to the U.S. after that summit, the main measure of any sustained improvement may well come in November – in an expected Biden-Xi meeting at an Asia-Pacific economic summit due to be held in San Francisco.

Still, as Mr. Biden’s forceful, if undiplomatic, remarks in Utah suggested, Washington and its allies may first have to convince a newly reluctant Chinese leader that renewed diplomatic engagement is, far from a reflection of weakness on either rival’s part, in the fundamental interests of both of them.