Estou cada vez mais estarrecido com a cegueira, a miopia,os equívocos monumentais que estão sendo cometidos pelos EUA ao pretenderem equiparar a China a uma nova União Soviética, praticando uma política de Containment que não vai dar certo.
Paulo Roberto de Almeida
The New York Times – 8.6.2021
Senate Poised to Pass Huge Industrial Policy Bill to Counter China
The broad support for the bill highlights how competition with Beijing is one of the few issues that can still unite both political parties.
David E. Sanger, Catie Edmondson, David McCabe and Thomas Kaplan
Washington - Faced with an urgent competitive threat from China, the Senate is poised to pass the most expansive industrial policy legislation in U.S. history, blowing past partisan divisions over government support for private industry to embrace a nearly quarter-trillion-dollar investment in building up America’s manufacturing and technological edge.
The legislation is expected to pass by a large margin. That alone is a testament to how commercial and military competition with Beijing has become one of the few issues that can unite both political parties.
It is an especially striking shift for Republicans, who are following the lead of former President Donald J. Trump and casting aside what was once their party’s staunch opposition to government intervention in the economy. Now, both parties are embracing an enormous investment in semiconductor manufacturing, artificial intelligence research, robotics, quantum computing and a range of other technologies.
And while the bill’s sponsors are selling it in part as a jobs plan, the debate over its passage has been laced with Cold War references and warnings that a failure to act would leave the United States perilously dependent on its biggest geopolitical adversary.
“Around the globe, authoritarian governments smell blood in the water,” Senator Chuck Schumer, Democrat of New York and the majority leader, warned in a recent speech on the Senate floor. “They believe that squabbling democracies like ours can’t come together and invest in national priorities the way a top-down, centralized and authoritarian government can. They are rooting for us to fail so they can grab the mantle of global economic leadership and own the innovations.”
Mr. Schumer and the bill’s other sponsors have steered clear of the phrase “industrial policy,” knowing that would revive a 30-year-old debate about whether the government was picking winners and losers, or championing certain industries over others. That argument goes back to the days of the Reagan administration, when the biggest threat to America’s semiconductor and auto industries seemed to be Japan, and the federal government started some small-scale initiatives, including one called Sematech, to reinvigorate the semiconductor industry. (The federal government’s participation in Sematech ended a quarter-century ago.)
In an interview on Friday, Mr. Schumer pushed back on the idea that the United States was seeking to back industrial champions, as China does. “Industrial policy means we’re going to pick Ford and give them money,” he said.
“This means we’re going to invest in quantum computing or A.I. or biomedical research, or storage, and then let the private sector take that knowledge and create jobs,” Mr. Schumer said, adding later: “These are the areas of dominance that we need research in, and these are the areas of potential industrial growth; great job growth.”
One difference from the debate in the 1980s is that Japan is both an industrial competitor and a military ally. China, of course, is a rising geopolitical rival, and that has changed the nature of the debate. No one argued in the 1980s that Japan would use its largest companies as a tool for surveillance or a potential weapon of war; that is exactly the concern about China.
“The commercial and military distinction is eroded in China’s case,” said Senator Chris Coons, a Delaware Democrat who co-sponsored several bills that have been folded into the legislation. In China, “almost all the big companies are elements of state power and tightly connected to the central government, which largely has financed their dramatic rise.”
What is most striking about the legislation is the degree to which the projects that the bill funds closely parallel those in China’s “Made in China 2025” program, which funnels huge government spending into technologies where the country is seeking to be independent of outside suppliers. The Chinese government announced its initiative six years ago.
The result, many experts say, is that the bill may accelerate the decoupling of the world’s largest and second-largest economies, even as each worries about how dependent it is on the other. Beijing fears that it will be reliant for years on foreign sources for the most advanced chips and cutting-edge software; Washington has the mirror-image worry that China’s dominance in 5G technology will give Beijing the ability to cut off American telecommunications.
The shift to limit the intertwining of the two economies may also be sped by steps like the one President Biden took on Thursday, when he issued an executive order barring Americans from investing in Chinese businesses that support China’s military, or that manufacture surveillance technology used in ethnic or religious repression.
While some Republicans have balked at the bill’s costs — a $52 billion subsidy program for the country’s semiconductor firms and another $195 billion in scientific research and development — most are still signing on. And that has created concerns that the legislation, a classic Washington mash-up of other bills that has grown to more than 2,400 pages, may be longer on cash than real strategy.
Mr. Schumer rejected that contention in the interview.
“When the government invests in pure forms of research, down the road it creates millions of jobs,” he said, citing investments in the National Institutes of Health and the National Science Foundation.
His Republican co-sponsor, Senator Todd Young of Indiana, argues that the ideological orthodoxies of his party have been swept away by the realities of how China funds its “national champions” like Huawei, the telecommunications giant that is wiring nations around the world with 5G networks capable of directing traffic back to Beijing.
“We can’t be wedded to old doctrines and shibboleths,” Mr. Young said in an interview. “The world has changed. Our economy has changed. The needs of our country have changed.”
Senator John Cornyn, a conservative Texas Republican who has been critical in the past of government funding of industry, said of the semiconductor funding, “Frankly, I think China has left us no option but to make these investments.”
And Senator Mark Warner, Democrat of Virginia and the chairman of the Senate Intelligence Committee, where he has focused on China’s moves to dominate global telecommunications networks, argues that without a robust domestic industry, the United States has no way of enticing allies away from Chinese suppliers.
The bipartisan agreement is jarring in an era of partisan bitterness. But some things never change: The bill has been a godsend to lobbyists. In addition to many parochial projects inserted in the legislation in a bid to win broader support, there is a round of funding for NASA that seems likely to benefit Jeff Bezos’ space venture and another provision that doubles the annual budget of the Pentagon’s Defense Advanced Research Projects Agency.
The bill is gaining support after years in which the United States has objected to government subsidies for private industry — whether it was Airbus in France or Huawei in China.
“We’re making an attempt to punish China and their bad industrial policies,” said Sage Chandler, the vice president of international trade at the Consumer Technology Association, a trade group. “But rather ironically, we punish them and then start to copy exactly what they’re doing in a number of ways.”
The semiconductor funding is intended to both boost domestic manufacturers and lure the best of the foreign semiconductor manufacturers to open new, advanced manufacturing in the United States. Mr. Schumer has already pressed several companies to start building in upstate New York.
Intel, a pioneer in microprocessor technology that has since fallen behind in many arenas, said in March that it would invest $20 billion to build two new factories outside Phoenix, where it already has a significant presence.
The plants will allow Intel to build semiconductors for other chipmakers, known in the chip industry as “foundries.” Right now the largest foundry of all is run by Taiwan Semiconductor Manufacturing Company — which provides many of the semiconductors for 5G phones and other high-speed cellular technology. The company is an oddity, because part of its facilities in Taiwan supply China’s manufacturers, and others supply the West’s.
That dual-supplier status has played into the struggle between Beijing and Washington over preserving Taiwan’s de facto independence at a time of rising concern that President Xi Jinping of China might try to take the island by force. American intelligence officials believe that Mr. Xi is hesitant to make such a move partly out of fear that the company’s fabrication lines might be destroyed, an outcome that would also upend much of China’s computer and telecommunications strategy. The risk, one intelligence official said recently, was “just too great” for Mr. Xi.
But no one wants to rely on that geopolitical calculation. So the Trump administration, in its last year in office, began wooing Taiwan Semiconductor to build bigger facilities on American soil. The company says it has started building a chip fabrication plant, also in the Phoenix area, for advanced semiconductors. The project has received local financial support in Phoenix, but the company declined to say how much government funding has come through overall.
Some of the funding in the bill would go toward persuading foreign semiconductor manufacturers to open facilities in the United States — an approach similar to one taken by China, but in which it has made comparatively little progress.
When President Moon Jae-in of South Korea visited the White House last month, both Seoul and Washington committed to joint projects for semiconductors and the complex batteries used in electric cars. But while South Korean corporate executives traveled with Mr. Moon, there were no announcements of concrete investments, an indication that luring foreign manufacturers would remain a challenge.
American companies that could be in line to receive money from the legislation include large businesses like Micron Technology and Texas Instruments, one of the founding players in the American chip business. But the allocation of funds to specific companies will not be decided by the administration until after Congress approves the bill.
Already, there are signs of tension over who will benefit. The chip shortage that has hit the American automobile industry, impeding production, has also exposed disagreements in what kinds of semiconductors the federal government should be funding.
Automakers need what are essentially commodity chips — the ones that power dashboard maps and monitor engine operations. Members of the Senate Commerce Committee approved $2 billion in additional funding for the bill aimed at addressing the industry’s concerns.
But giving priority to the auto industry could come at the expense of investing in more cutting-edge semiconductors, those that use the smallest circuitry and would power next-generation products.
Scott Lincicome, a senior fellow at the libertarian Cato Institute, said the bill was touching off a feeding frenzy in the tech sector. “Lobbyists for giant companies see this, and they’re going to be sure to exploit it,” he said. “This is a very good time to be seeking subsidies for any industry in the technology space.”
The debate, so far, has not dwelled on the lessons of past successes and failures in government efforts to back new technologies. Instead, it has been focused on not losing ground to Beijing, often reflecting the will of Mr. Schumer, one of the Democratic Party’s loudest China hawks for decades, who is determined to use his new status as the majority leader to push the legislation through.
“The bill is not perfect. There are elements I could do without,” said Senator Roger Wicker of Mississippi, the top Republican on the Commerce Committee. “And there are parts that I wish were included. But on the whole, this is a necessary step to keep our nation competitive.”
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The New York Times – 9.6.2021
Senate Overwhelmingly Passes Bill to Bolster Competitiveness With China
The wide margin of support reflected a sense of urgency among lawmakers in both parties about shoring up the technological and industrial capacity of the United States to counter Beijing.
Catie Edmondson
Washington - The Senate overwhelmingly passed legislation on Tuesday that would pour nearly a quarter-trillion dollars over the next five years into scientific research and development to bolster competitiveness against China.
Republicans and Democrats — overcoming their traditional partisan differences over economic policy — banded together to endorse what would be the most significant government intervention in industrial policy in decades. It includes federal investments in a slew of emerging technologies as well as the semiconductor industry.
The 68-32 vote reflected the sense of urgency about the need to counter Beijing and other authoritarian governments that have poured substantial resources into bolstering their industrial and technological strength.
The lopsided margin of support for the 2,400-page bill was the result of a series of political shifts by lawmakers jolted to action by the pandemic. Virus-related shutdowns led to shortages of crucial goods that highlighted the country’s dependence on China, its biggest geopolitical adversary. Nineteen Republicans, including Senator Mitch McConnell, Republican of Kentucky and the minority leader, voted in favor of the legislation.
Policymakers have moved to increase domestic production capacity. Passage of the legislation came hours after the Biden administration announced new steps to strengthen American supply chains.
The nations that harness technologies like artificial intelligence and quantum computing and “innovations yet unseen” will shape the world in their image, said Senator Chuck Schumer, the Democratic majority leader and a longtime China hawk who helped spearhead the bill.
“Do we want that image to be a democratic image? Or do we want it to be an authoritarian image like President Xi would like to impose on the world?” Mr. Schumer said. “Either we can concede the mantle of global leadership to our adversaries or we can pave the way for another generation of American leadership.”
The legislation is likely to face stiffer headwinds in the House, where top lawmakers have expressed skepticism about its focus on bolstering emerging technologies.That debate played out in the Senate, which ultimately watered down the original ambition of the bill to accommodate those objections.
The measure, the core of which was a collaboration between Mr. Schumer and Senator Todd Young, Republican of Indiana, would prop up semiconductor makers by providing $52 billion in emergency subsidies with few restrictions. That subsidy program will send a lifeline to the industry during a global chip shortage that shut auto plants and rippled through the global supply chain.
The bill would sink hundreds of billions more into scientific research and development pipelines in the United States, create grants and foster agreements between private companies and research universities to encourage breakthroughs in new technology.
“When future generations of Americans cast their gaze toward new frontiers, will they see a red flag planted on those new frontiers that is not our own?” Mr. Young said during a speech on the Senate floor. “Today, we answer unequivocally, ‘No.’
“Today we declare our intention to win this century, and those that follow it as well,” he added.
President Biden hailed the passage of the legislation on Tuesday shortly after the Senate approved it, adding that he hoped to sign it into law “as soon as possible.”
“We are in a competition to win the 21st century, and the starting gun has gone off,” he said in a statement. “As other countries continue to invest in their own research and development, we cannot risk falling behind.”
will try to rally young voters of color behind the For the People Act.
While the legislation’s centerpiece is focused on bolstering research and development in emerging technologies, it also includes major trade and foreign policy measures.Those would again allow for the temporary suspension of tariffs on specific imports and would call on the Biden administration to impose sanctions on those responsible for forced labor practices and human rights abuses in and around the Xinjiang region of China.
With Mr. Schumer intent on using his power as majority leader to push the legislation through and lawmakers eager to attach personal priorities to the bill, the package moved swiftly through the Senate, picking up provisions as diverse as a fresh round of funding for NASA and a ban on the sale of shark fins.
Eager to steer money to existing programs in their states, lawmakers shifted much of the $100 billion that had been slated for a research and development hub for emerging technologies at the National Science Foundation to basic research, as well as laboratories run by the Energy Department. The amount for cutting-edge research was reduced to $29 billion.
Members of the House science committee have signaled a desire to continue in the same vein, introducing their own bill that eschews the focus on technology development in favor of financing fundamental research in a series of less prescriptive fields, including climate change and cybersecurity.
“Rather than having faith that unfettered research will somehow lead to those innovations needed to solve problems, history teaches that problem-solving can itself drive the innovation that in turn spawns new industries and achieves competitive advantage,” Representative Eddie Bernice Johnson, Democrat of Texas and the chairwoman of the House Science Committee, wrote.
Some House Democrats have also derided the parochial projects that were inserted into the Senate bill in a bid to win broader support. While many of them were added after extensive hearings, such as a round of funding for NASA with terms that are likely to benefit Jeff Bezos’s space venture, several were attached to the legislation with little or no debate, such as a provision to double the annual budget of a Pentagon research agency.
The concerns in the House, paired with complaints among some Senate Republicans who argue that the legislation was rushed and did not take a tough enough stance on China, mean that knitting together a compromise bill that can garner enough support in both chambers is likely to be difficult. Negotiating such a deal is all but certain to prompt yet another frenzied round of lobbying on a bill that is one of the few considered likely to be enacted this year.
But the overwhelming vote on Tuesday reflected how commercial and military competition with Beijing has become one of the few issues that can unite both political parties — and how deeply lawmakers are determined to override legislative paralysis to meet the moment.
That consensus has emerged as Republicans, following the lead of Donald J. Trump, have dropped their customary skepticism of government intervention in the markets and embraced a much more activist role to help American companies compete with a leading adversary.
In a stark reflection of just how much some conservatives have evolved on the issue, eight Republicans joined with Democrats on Tuesday to support keeping in the legislation a prevailing wage requirement, known as Davis-Bacon, aimed at semiconductor companies.
“This type of targeted investment in a critical industry was unthinkable just a couple years ago, but the need for smart industrial policy is now widely accepted,” said Senator Marco Rubio, Republican of Florida. “I hope my colleagues will recognize a strong American work force is similarly important to the future of our nation.”
Senator John Cornyn, a conservative Texas Republican who has been critical in the past of government funding of industry, said the semiconductor subsidies had become a necessity.
“For everything from national security to economic policy, there’s a clear and urgent need to reorient the way our country views and responds to the challenge from China,” he said.
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Project Syndicate, Praga – 8.6.2021
Making America Global Again
If the United States is to protect and rejuvenate its economic foundations and approach autocracies like China and Russia from a position of strength, its strategy cannot be merely trans-Pacific or transatlantic. Instead, America must openly source its approach from across the democratic world.
Anne-Marie Slaugher and Kazumi Hoshino-MacDonald
Washington, DC - The liberal international order remains trapped in the twentieth century. As autocracies like China and Russia increasingly develop spheres of cooperation, the United States is responding by building or strengthening regional groupings of its own, from NATO to the Indo-Pacific Quad (the US, Japan, Australia, and India). But America should instead take a global approach that focuses on values and visions rather than on countries.
Emerging strains of authoritarianism pose new challenges to democratic aspirations from Crimea to Taiwan. In both Eastern Europe and East Asia, proliferating “gray-zone” warfare tactics are jeopardizing countries’ territorial integrity, open trading systems, democratic elections, technology supply chains, and the rule of law. These illiberal threats are no longer just European, American, or Asian issues. They target all open societies, international human rights, and democracy itself.
Unfortunately, America’s post-1945 international frameworks are ill-suited to fostering a common conversation among liberal societies. The G7, NATO, the European Union, and the Quad are too regionally disparate to forge a strong global response.
Consider the issue of semiconductors. The most advanced play a foundational role in emerging technologies such as biotech, quantum computing, and artificial intelligence, and are produced almost exclusively by the US, the EU, and their Asian allies. But semiconductor manufacturers depend on a global system of talent and trade in which China is deeply embedded. No democratic forum currently exists to generate consensus on international standards, export controls, or industrial cooperation.
The US, the EU, and their democratic Asian allies, which have technologically sophisticated economies and high standards of living, together account for roughly half of global GDP. But if the US is to protect and rejuvenate its economic foundations and approach autocracies from a position of strength, its strategy cannot be merely trans-Pacific or transatlantic; it must be openly sourced from across the democratic world.
US President Joe Biden’s administration has, or at least had, a vision of global democratic cooperation, but one focused on countries more than issues. Secretary of State Antony Blinken and author and pundit Robert Kagan called in 2019 for the establishment of a “league of democracies.” Likewise, during the presidential transition, Biden announced his intention to convene a “Summit of Democracies” during his first year in office. But the administration stumbled on the rock that trips up all such efforts: the difficulty of defining who belongs to the liberal democratic club. It has thus renamed the gathering the “Summit for Democracy,” and apparently postponed it until next year.
Rather than focusing on democracy itself, the summit should emphasize the underlying values that liberal democracies cherish: an open society, the rule of law, representative government, economic opportunity, privacy, security, freedom of expression, justice, and equality.
To that end, the US should consider how to work with smaller states to convene countries in support of specific democratic norms and standards on important issues. Jared Cohen of the Council on Foreign Relations and Richard Fontaine, the CEO of the Center for a New American Security, argue that such “microlateralism,” a combination of “small-country leadership and large-state participation,” can be a “key instrument in the United States’ collective-action toolkit.”
Developing a code of best practice for open societies’ pandemic responses might be an easy starting point. Taiwan, for example, has been among the most successful in countering COVID-19, despite its proximity to the Chinese mainland and lack of vaccines. Biden’s national security adviser, Jake Sullivan, recently praised Taiwan’s handling of the pandemic, noting that the US has “a lot to learn” from the country’s ability to combat disinformation and tackle the challenges of an interconnected democratic society. The US could turn to New Zealand to lead or co-lead a gathering of states committed to developing a set of principles or a code of conduct for tackling pandemics. This could be named after the host city, like the Kyoto Protocol on climate change.
Such a forum should not be restricted to governments. Civil society, academia, industry, philanthropy, and religious organizations are all force multipliers for democratic dynamism. During the COVID-19 pandemic, institutions such as Johns Hopkins University and vaccine developers like Pfizer-BioNTech have been invaluable in immunizing society from disinformation and the virus, respectively. The vibrancy of these non-governmental actors is one of liberal democracies’ unique strengths vis-à-vis authoritarian systems.
Moreover, these gatherings could disseminate democratic best practices on combating disinformation. Estonia, which developed a multi-faceted digital approach to reinforcing its democratic institutions after a series of crippling cyberattacks in 2007, offers an excellent example of how civic tech can foster resilience to autocratic hostility. Its “digital nomad” visa has allowed citizens of countries from Canada to South Africa to work virtually in Estonia, thereby integrating further private-sector expertise and strengthening cultural ties with other open societies. Such innovative pockets of ingenuity shine a positive light on the value of human freedom and show how developing and diffusing democratic norms can o
The Biden administration is currently preparing for the upcoming G7 and NATO summits, but prominent democracies such as Australia, New Zealand, India, South Africa, Taiwan, and South Korea will not be at the table (although the UK has invited some as guests to the G7 meeting). An effective mechanism for strategizing among liberal-democratic states could help America get its own house in order and provide values-based leadership on human rights, security, tech governance, supply chains, and even global corporate taxation. Emerging or at-risk democracies, seeing opportunity rather than only forced choice, will certainly take note.
US strategy for addressing authoritarian challenges should be global, not regional, plural rather than unitary, and issue-based rather than country-based. Over a century ago, following the last pandemic, America was the engine driving the creation of a new international order. Today, it must lead from the center rather than the front, side by side with many other countries, to seize a unique opportunity to update the model of a more interconnected, inclusive, and democratic global society.
Anne-Marie Slaughter, a former director of policy planning in the US State Department (2009-11), is CEO of the think tank New America, Professor Emerita of Politics and International Affairs at Princeton University, and the author of
Kazumi Hoshino-Macdonald is Senior Associate at WestExec Advisors.
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Financial Times, Londres – 9.6.2021
Will Europe sign up to Joe Biden’s plan to counter China?
The EU has become more sceptical about Beijing but some leaders worry about Washington’s new cold war rhetoric
Demetri Sevastopulo, Sam Fleming and Michael Peel
Washington and Brussels - Ever since he entered the White House in January, Joe Biden has articulated one foreign policy goal above others — to work with allies to restrain China.
After the drama and tantrums of the Trump years, when the US talked tough on China but also picked fights with its closest partners, Biden has been trying to stitch back together Washington’s global coalition, with Beijing as its main focus.
Biden spelt out the project in February when he told the Munich Security Conference that the US, Europe and Asia had to “push back against the Chinese government’s economic abuses and coercion”.
The Biden plan has had some success in Asia, where common ground has been found with countries such as Japan, South Korea and Australia.
But as the president prepares for his maiden overseas trip, he faces the most delicate task yet — trying to coax a wary Europe to work more closely with Washington on China.
Biden will attend the G7 in Cornwall in the UK on Friday, before heading to Brussels for Nato and EU-US summits next week. He will then fly to Geneva to meet Russian president Vladimir Putin.
Beneath the likely statements of unity, Biden will have to deal with an awkward reality, warn diplomats and officials. While the EU has become more hawkish on China, it has different economic and strategic priorities from the US and there is a constant risk of those divisions breaking into the open.
“They are rightly taking into account EU concerns and try to avoid the kind of public and unhelpful stand-offs that the Trump and Pompeo administration cherished,” says one senior EU diplomat. “But the reality is that we are not 100 per cent aligned, and the Chinese know it.”
Several people familiar with the pre-summit negotiations say Biden hopes to forge like-minded coalitions to rebuke China over its crackdown on the pro-democracy movement in Hong Kong, repression of Uyghurs, aggressive military activity in the South and East China seas, and use of economic coercion to retaliate against critics.
The G7 will discuss ways of boosting infrastructure projects in medium and lower-income countries to try to counter China’s Belt and Road Initiative. Meanwhile, the EU and US want to find ways to co-operate on issues such as the sale of sensitive technology to China.
The different capitals are grimly aware of the need to show unity after the bitter brawls of the Trump years, as they try to send a clear message to China that they will be harder to divide.
But Biden will have to tread carefully for fear of alienating allies — most notably German chancellor Angela Merkel — who are wary of cold war-style rhetoric aimed at China. One European official says some EU countries do not like the term “adversary”, which is often used in Washington to refer to Beijing.
Noah Barkin of research group Rhodium Group says that while the US and EU share many concerns about China, they had different views on how to respond. “Europe has its own interests,” he says. “There is not going to be seamless co-operation on China.”
Systemic rival Over the past two years, Europe has gone through a gradual but substantial re-evaluation of relations with China, as leaders respond to the more authoritarian approach of President Xi Jinping, which has been exacerbated by the abrasive tactics of Beijing’s “wolf warrior” diplomats.
Several European countries, including the UK, France and Germany, have become more willing to send navy ships to the South China Sea to reinforce the US message to China about freedom of navigation.
While the US does not expect them to help in the case of a conflict over Taiwan — in contrast to the situation with defence treaty allies such as Japan — the symbolism shows China that the US is not alone.
The EU’s increasingly assertive stance on China was underscored by the European parliament’s recent decision to put ratification of the bloc’s proposed investment treaty with Beijing on ice. That came after Beijing slapped retaliatory sanctions on EU politicians and institutions, in response to co-ordinated punitive measures imposed by the European bloc, the US, UK and Canada on Chinese officials over the treatment of Uyghurs in northwestern Xinjiang province.
The withering of the so-called 17+1 group of central and eastern European states and China is another example of the growing gap between the EU and Beijing. The group, including 12 EU states, was once seen as a way for smaller members to get Chinese investment and time with top officials. Now Lithuania has publicly repudiated the initiative and other EU countries are distancing themselves from it.
Europe’s evolution on China was highlighted in a 2019 paper that described Beijing as a partner and economic competitor in some areas, but called China a “systemic rival” for the first time. Germany’s BDI corporate lobby released an unexpectedly hard-nosed paper the same year that called for a tougher European approach to unfair business practices.
At the same time, Brussels has amassed new tools to defend European interests against perceived overseas threats, especially from China. Among the most prominent recently has been the tabling of legislation permitting the commission to crack down on state-owned enterprises from outside the EU, as well as plans to force companies to end abuses within their supply chains.
Wendy Sherman, US deputy secretary of state, said during a recent trip to Brussels there had been a “sea change” in how Europe viewed China.
“We have made quite a lot of progress with Europe on China,” says a senior state department official. “The co-ordinated sanctions on Xinjiang were a huge deal. If you had asked me six months ago if I thought Brussels, Ottawa, London and Washington would join together on human rights sanctions against China, I would have bet against it.”
Technological front
But the issue facing Biden is how to translate that change in mood into tangible co-operation. In one of the easier challenges, both sides are eager to enhance co-ordination on the selection of top officials for key international bodies to prevent China from gaining more power.
At the EU-US summit, the intention is to launch a Trade and Technology Council to boost co-ordination on 5G, semiconductors, supply chains, export controls and technology rules and standards. This would be a marked shift from the Trump era when Brussels was repeatedly wrongfooted by US presidential initiatives targeting China. Yet while technology is seen as one of the most important areas to counter China, Martijn Rasser, a former CIA expert now at the Center for a New American Security think-tank, warns against expecting quick results given the complexity of global supply chains.
“The semiconductor industry is highly globalised and the supply chains are highly complex. And it also something that just the US and EU cannot sort out,” he adds. “You have to engage with Japan, South Korea, and Taiwan is a key player.”
One EU official cautions that there are still significant ongoing transatlantic differences over technology. The question was whether the EU and US could “get over differences on data protection and big data content, and focus on the conditions that will allow us to prevail technologically in the geopolitical great power competition”, the official says.
Tensions over semiconductors highlight how difficult this will be. The Dutch company ASML dominates the market for the advanced machines needed by Chinese companies to make high-end chips needed for devices such as smartphones.
But ASML has been unable since 2019 to obtain a licence from the Dutch government to export its extreme ultraviolet lithography equipment to China’s Semiconductor Manufacturing International Corporation, the country’s biggest chipmaker, according to people familiar with the matter. Biden on Thursday banned Americans from investing in 59 Chinese companies that included SMIC.
The Netherlands has not disclosed the reason for the licence freeze, but people familiar with the matter say the Trump administration successfully lobbied the Dutch government because of concerns about the potential for EUV technology to help the Chinese military develop advanced weapons.ASML says it fully understands that the Dutch foreign ministry needs time to reach a decision “given the current geopolitical landscape and rapidly changing international legislation”.
Sigrid Kaag, the Dutch trade minister, said last month that the ASML case was under “continuous” review. “It’s obviously a fine line but we want to remain an open trading nation, so we are in continuous dialogue with our allies on this as this is a very particular and?.?.?.?sensitive case,” she said.
Kaag said the EU needs to “team up” with the US to address many points of agreement on China, but that would require the bloc “to get its act together” and co-ordinate better between its various institutions to avoid contradictory outcomes in its China policy.
No binary choice in Berlin
In Germany, which counts China as its biggest trading partner, business opinion has in recent years hardened. Small- and medium-sized companies face a struggle to defend their intellectual property rights from industrial espionage and they are watching Chinese competitors snap up European rivals.
While the US has sometimes criticised Germany’s stance towards China, suggesting that it does not want to jeopardise its exports, German diplomats have publicly criticised China over its treatment of the Uyghurs.
But Merkel has resisted attempts to push Germany into taking a confrontational posture. When she addressed the Munich Security Conference earlier this year, there was an obvious gulf between her and Biden on China.
Merkel was also the main driver behind the EU’s decision to accept Chinese overtures late last year and rush through the previously stalled China Investment Agreem ent the month before Biden was inaugurated.
With German elections in September, Merkel is in the twilight of her career. German politicians including Reinhard Bütikofer, a Green MEP who is one of those under Chinese sanctions, see “shifting ground” under Merkel’s feet as German attitudes towards Beijing change.
Yet the chancellor is not alone in opposing any attempts at economic decoupling between China and the EU. Iuliu Winkler, a Romanian MEP who is a member of the centre-right EPP group to which Merkel’s CDU belongs, opposes any notion of a “binary choice” between the US and China.
As such, diplomats say the US has been wise not to overplay its hand when dealing with the EU.
Internal divisions
At his meetings with allies in Europe, Biden hopes to repeat a similar version of the playbook he used when he convinced his first White House guests — Japanese prime minister Yoshihide Suga and South Korean president Moon Jae-in — to publicly support Taiwan.
“If you look at the approach that Biden took with Suga and Moon, the US is also coming to these summits with asks about Taiwan and China,” says Bonnie Glaser, a China expert at the German Marshall Fund.
But while he put heavy pressure on Tokyo and Seoul over the issue, he is expected to take a lighter touch in Europe due to the more complicated dynamics of dealing with a bloc that is internally divided over China.
“The US will try to make sure that the China language at the G7 is as tough as possible, but it’s not going to blow up the boat by pushing to include something like the Wuhan lab virus leak,” says one person familiar with the plans.
Biden should face the least resistance at the G7 after the group’s foreign ministers recently issued a joint statement with an unprecedented broad criticism of China.
But even in that forum, priorities differ. While the UK, France and Germany have criticised Beijing over human rights, Japan is more concerned about China’s military activity in the South and East China seas, and has not for example put sanctions on China over the situation in Xinjiang.
At the US-EU summit, the two sides will struggle to avoid the perception of continued divisions given ongoing difficulties over areas such as the Boeing-Airbus aircraft subsidies dispute that predate the Trump years. With the administration focusing on his Indo-Pacific strategy, some experts argue that Biden has to make a stronger case for US-EU relations.
“The Biden administration has a pretty good idea of what it wants from Europe, which is to go along with their China policy,” says Tom Wright, a foreign policy expert at the Brookings Institution. “They are less clear about what type of Europe they want. Ultimately, if Biden wants a Europe that competes with China he will have to change how the US thinks about the EU, strategic autonomy, burden sharing, and trade.”
While enthusing about the benefits of deeper co-operation, EU officials and diplomats complain that they have so far only seen a relatively thin array of US proposals for specific outcomes from the summits. They also point to a continued tendency in Washington to announce initiatives without prior consultation with the EU. One example is Biden’s unexpected decision to advocate a waiver of intellectual property rights for Covid-19 vaccines.
While Europeans have strongly welcomed the thaw with the election of Biden, some mutter darkly about what might come in four years, particularly with Trump threatening to run again for the White House.
One official says the European mood was like when Barack Obama was elected after US-EU relations had significantly deteriorated under George W Bush, but “this time with a hangover”.
The official adds: “No one is partying.”
