Prudence: the only way forward

The writer is a freelance journalist.

With the US decision of the diplomatic boycott of the 2022 Winter Olympics in China, tensions between China and the US are again rising. The White House has announced that it will not send an official delegation to the Games because of concerns about alleged human rights violations in the communist country. This decision has once again dashed the hopes of the complete normalisation of ties between the two global powers.

Statements of US officials and politicians indicate that they want to go tough. White House Press Secretary Jen Psaki, who confirmed the boycott, added that Washington would not contribute to the ‘fanfare’ of the Olympics. Accusing China of committing egregious human rights abuses and atrocities in Xinjiang, she said that the US government did not feel it was the right step to penalise athletes who had been training for this moment, but that not sending an official US delegation to the 2022 Games “could send a clear message”.

China was quick to retort. Its Washington embassy called the boycott a “grave distortion of the spirit of the Olympic Charter”. ‘Reuters’ quoted embassy spokesperson Liu Pengyu as saying, “No one would care about whether these people come or not, and it has no impact whatsoever on the Beijing 2022 Winter Olympics to be successfully held.”

Liu added that no invitation has been extended to US politicians, asserting that this diplomatic boycott simply came out of nowhere. China’s foreign ministry also appeared furious. “The US should stop politicising sports and hyping up the so-called ‘diplomatic boycott’ so as not to affect China-US dialogue and cooperation in important areas,” Chinese Foreign Ministry spokesperson Zhao Lijian said at a news conference.

The decision was expected as President Joe Biden had told reporters last month that he was considering a diplomatic boycott. The Biden Administration had been under pressure for getting tough on the country’s trade rival. It is perhaps because of this pressure that the democratic government is reluctant to lift a number of sanctions imposed by the Trump administration. The boycott is supported by US politicians and influential lobbies, who wanted Beijing to be taught a tough lesson over its alleged violations of human rights. It is the second boycott of the Games that the US carried out. The administration of former president Jimmy Carter, who described human rights as one of his administration’s main concerns while he was in power, boycotted the Olympics in 1980.

The ties between the US and China have not always been cordial. The communist country faced tough sanctions after the 1949 revolution. Washington did not recognise the socialist government for decades, but Sino-Soviet tensions brought China and the US closer during the decade of the 1970s, leading to the recognition of the People’s Republic of China by Washington. This helped China modernise its economy as the country attracted American and Western investments on a massive scale.

American companies rushed to take advantage of the liberal economic policies that the socialist China adopted during the decade of the 1980s. Cheap labour and a conducive business environment were some of the other attractions prompting US and Western companies to move their manufacturing and assembling plants there.

The inclusion of China into the World Trade Organisation (WTO) further boosted its economy, giving it an edge over the US in manufacturing. Economists believe that since the Chinese inclusion in the global trading body, more than 55,000 US manufacturing plants were shut down because the Chinese could produce goods at a far cheaper price than their US competitors could do.

This triggered resentment in sections of the American working classes that threw their support behind the erratic politician of the US, Donald Trump, who promised a number of measures aimed at bringing the plants of American companies back to the country. He announced sweeping concessions for US businesses, encouraging them to invest in the largest economy that used to be the hub of manufacturing. Trump also imposed a number of sanctions against China, besides raising tariffs for Chinese goods.

With the rise of Biden, it was expected that sanity would prevail and the two giant economic powers would reconcile their differences, but it seems that Washington is in no hurry to fully normalise ties with Beijing. Like hawks under Trump, anti-Chinese elements in the Biden Administration are speaking against the communist country. The American security establishment considers China a mortal enemy. CIA Director William Burns described the Chinese leadership as adversarial and predatory that poses a great geopolitical threat to Washington’s interests. Director National Intelligence Avril Haines went one step further declaring China not only a challenge to US security but to its prosperity and values as well.

It is not only these officials but senior personalities in the US administration – and even the top leaders – also appear to be creating the bogey of the Chinese threat, claiming to make hectic efforts to deal with this threat. Some time back, Defence Secretary Lloyd Austin revealed that Washington was focused on its effort to counter the challenge posed by the communist China. Biden has also talked about the increasing competition that the US faces with China in trade, political influence and technology. His administration has been following the same hard-line policies against Beijing that Trump introduced, besides flexing military muscles in the Pacific and raising hue and cry over alleged human rights violations.

But despite this, there are many who believe that permanent tensions or a possible confrontation between China and the US are not realistic because the two countries heavily rely on one another. According to the office of US trade representative, US goods and services trade with China totaled an estimated $615.2 billion in 2020. Exports were $164.9 billion; imports were $450.4 billion. The US goods and services trade deficit with China was $285.5 billion in 2020. China remained the largest goods trading partner of the US with $559.2 billion in the total (two-way) goods trade during 2020.

Goods exports totaled $124.5 billion; goods imports totaled $434.7 billion. The US goods trade deficit with China was $310.3 billion in 2020. Despite all anti-Chinese rhetoric, the communist country was the America’s third largest goods export market in 2020, while it was also its largest supplier of goods imports in 2020.

The two countries have an opportunity to extend cooperation. China seems to have a gargantuan appetite for energy resources with LNG being one of them. The communist country produces gas, but it is still dependent on imports.

According to Nikos Tsafos of the Center for Strategic and International Studies, “In 2016, over nine percent of US LNG went to China, and China ranked third among US customers. China retained this position in 2017, receiving almost 15 percent of US.” But over the years, this fell to zero because of the trade war. It is not only LNG but the two countries heavily depend on each other in other fields as well. For instance, in 2015, foreign input accounted for 12.2 percent – or around $2.2 trillion – of total goods and services consumed in the US.

China was the largest contributing country of those foreign inputs, while American producers of textiles, electronics, basic metals and machinery also heavily depend on China for intermediate and final products. Given this, it is important that the two economic engines of the global economy act prudently, avoiding tensions on one and another pretext as it could be catastrophic for not only the two largest economies but also the global economy.

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