On March 18, the US Secretary of State and National Security Advisor will meet with their Chinese counterparts in Anchorage, Alaska for an initial exchange of views. Rumors have swirled over the agenda and aims of the meeting, but it is very unlikely to move the relationship. It is too early for that, and the impact of this first face-to-face is likely to be marginal. What is achieved may not be immediately apparent to the wider public.
As the US presidential election nears, profound foreign policy questions hang in the air. The debate for the cameras has been about who is tougher on China. That is political theater, not the question that matters. Leadership means not toughness for its own sake, but good policy effectively communicated so smart citizens, businesses and friends abroad can rally around liberalism rather than settle for an authoritarian second-best. Biden’s China plans are starting to come out. There are elements of good policy that would improve upon the blustery and increasingly dangerous Trump-era China record, but there is also a considerable dose of the current administration’s nativism that may sound like strength but is unhelpful. Those serious about counter-balancing China’s weight in the world need a workable strategy, not just tough talk.
As the COVID-19 pandemic thrashes the global economy, a key question is how outbound financing for China’s Belt and Road Initiative (BRI) will be affected. Before the crisis China’s policy banks were already reducing new BRI loans. Now there is much speculation about Beijing opening the door for its institutions and firms to go on a buying and lending spree, given global needs and lower prices for assets. The question is whether China’s financial system permits that, given China’s ongoing domestic challenges and the need to prioritize investment at home. China’s long-term strategic answer to that is uncertain, but three short-term dynamics are clear:
