U.S.-China Tension Only Set to Get Worse: ‘There Is No Off Ramp’

(Bloomberg) -- With Donald Trump and Xi Jinping both focused on ramping up domestic support in the wake of the pandemic, the bottom is rapidly falling out of U.S.-China relations. And few in either Washington or Beijing seem in the mood to stop it.

U.S. lawmakers are pushing the president to hit China with sanctions or other measures for its increasing grip on Hong Kong and human-rights abuses toward minority Muslims in Xinjiang. China, meanwhile, has vowed to punch back at the U.S. while moving ahead with national security legislation over Hong Kong, which prompted Secretary of State Michael Pompeo to declare the city was no longer sufficiently autonomous.

And that's just this week. Top leaders in the world's biggest economies are sparring on everything from the coronavirus and 5G networks to Taiwan and academic research. Their warships are tailing each other in the South China Sea, their companies are facing obstacles to invest and their journalists have been targeted with tit-for-tat visa curbs. A trade deal signed in January is looking increasingly at risk.

The debate over whether the U.S. and China are in a Cold War will only intensify in the coming months as both leaders focus primarily on appealing to their own virus-weary citizens in a bid to retain power: Trump in the November election, and Xi during a Communist Party conclave in 2022 that effectively serves as a leadership contest.

“There is no off ramp for the moment for the U.S. and China, for the pretty obvious reason that neither is looking for one,” said Richard McGregor, a senior fellow at the Lowy Institute in Sydney and author of “The Party: The Secret World of China's Communist Rulers.” “The U.S. feels it is playing catch up in muscling up to Beijing, a debate that will only be sharpened in a presidential election year. And China under Xi is programmed not to take a backward step.”

Officials in both capitals occasionally still pay lip-service to cooperation. At a briefing in Beijing to conclude China's annual legislative session, Premier Li Keqiang said both sides should cooperate and respect each other's interests.

“We have all along rejected a Cold War mentality,” Li said. “Decoupling between the two economies will do neither side any good and will also be harmful to the world.”

Still, political pressures in Washington and Beijing are quickly making it unpopular to call for a detente.

Trump, who won the 2016 election on the back of a campaign strongly critical of China, has made ties with Beijing a focal point in 2020. He's sought to blame the virus on Beijing, said he didn't want to speak with Xi and claimed the U.S. would “save $500 billion” if it cut off ties with China.

“Essentially they have robbed Hong Kong of their freedom,” Larry Kudlow, the director of the National Economic Council, said in a CNBC interview on Thursday. “We can't let this go unnoticed and they will be held accountable for that. If need be, Hong Kong may now have to be treated the same way China is treated.”

Trump has also sought to paint former Vice President Joe Biden as soft on China, prompting the presumptive Democratic nominee to also ramp up the rhetoric against Beijing. The anti-China measures that have been voted on recently in the U.S. Congress have all enjoyed near unanimous bipartisan support.

‘Suicidal'

Beijing's leadership, under pressure since January for an initial slow response to the outbreak, has responded aggressively to any international criticism of its response, with foreign ministry officials and state media pushing alternate narratives alleging that the virus started in the U.S. Xi's government has also irked the European Union with its heavy-handed pandemic response, and hit Australia on trade when it called for an independent investigation into the virus origins.

The rhetoric with the U.S. is becoming so heated among China's hawks that some in Beijing are contemplating worst-case scenarios like nuclear war. Gao Zhikai, a former Chinese diplomat and interpreter for ex-Chinese leader Deng Xiaoping, said “it will be suicidal to expect that any armed conflict between China and the United States will be contained in conventional sphere for long.”

“Getting along with each other is the only realistic and honorable option between China and the United States,” Gao said. “No one in Washington should be allowed to indulge in any fantasy that they can keep battering China and hold China to ground without consequences.”

Competition Intensifies

The chances of outright military conflict between the two nuclear powers remains slim despite the heightened posturing. But threats of further visa restrictions and competing company blacklists undermining the few remaining bright spots in ties.

While talk of a U.S.-China Cold War ignores critical differences such as high levels of economic interdependence, the relationship is increasingly competitive in the military, economic, technological, institutional and even ideological realms, according to Charles Edel, a former State Department official and senior fellow at the University of Sydney's United States Studies Centre.

“Competition is not the same confrontation -- nor is it a call to conflict,” Edel said. “Rather it is a reflection of the necessity of democratic nations to challenge the authoritarian model being promoted by China.”

Avenues for de-escalation are also increasingly sparse. With the exception of on-again, off-again trade discussions, there are no formal talks between Beijing on domains ranging from military-to-military relations to cybersecurity. Even beneath the surface, there are few signs of the kinds of backchannel contacts that have helped Beijing and Washington in the days going back to Henry Kissinger's secret visit to Beijing in 1971.

‘We've Not Yet Seen the Bottom'

“There's been no private communication and contact between the two sides. Where should we go from here?” said Zhu Feng, dean of the Institute of International Relations at Nanjing University. “This is a vicious cycle, pushing China-U.S. relations to the brink of losing control.”

Bonnie Glaser, who directs the China Power Project at the Center for Strategic and International Studies in Washington and has advised the U.S. government, said that Beijing has “written off the U.S.” and “they're not listening anymore.”

“This is a worrisome time, especially as the U.S. goes into the presidential campaign in earnest over the next six months,” she said. “China's just going to be a punching bag. So I think the relationship is going to deteriorate further and we've not yet seen the bottom.”

©2020 Bloomberg L.P.

With assistance from Bloomberg