China’s New Direction: Eight Insights to Evolve U.S.-China Policy

A Corporation-supported report analyzes China’s domestic trends to better assess the threat that China poses to the U.S.

By Carnegie Corporation of New York September 24, 2021

Emerging Global Order

The present moment may be the most challenging time in decades for U.S.-China policy, according to a new report by the Task Force on U.S.-China Policy, making it a critically important time for the U.S. to understand the evolving trends inside China in order to respond effectively. The authors of the report stress that the old U.S.-China policy playbook urgently needs rewriting based on a clearer understanding of the forces behind the actions of President Xi Jinping, the Chinese Communist Party (CCP), and the Chinese government.

The report China’s New Direction: Challenges and Opportunities for U.S. Policy, with support from Carnegie Corporation of New York, assesses the threat that China poses to the U.S. as relations between the countries continue to evolve. It offers eight key insights along with accompanying recommendations for the Biden administration, among them:

1. Politics
China’s handling of the COVID-19 pandemic, coupled with Western blame of China for the outbreak, has strengthened Xi’s position in the CCP and his popularity with the public. Xi’s highly centralized dictatorship has increased pressures for officials to show loyalty and avoid providing objective information about the consequences of policies, creating a propaganda echo chamber with the potential to lead to domestic and international overreaching.

2. Society
Support for the CCP has grown in recent years alongside its targeted retribution against certain groups. The CCP is asserting greater control over the media, tightening its supervision of higher education, and increasing restrictions on civil society organizations.

3. Human Rights
Repression and social control have reached their highest levels in the post-Tiananmen period, especially in China’s peripheral regions such as Xinjiang and Tibet. In Hong Kong, Beijing has crushed autonomous political activity and academic and journalistic freedoms. The CCP has intensified its crackdown on opposition and dissent and extended it to perceived disloyalty, disaffection, policy disagreements, and ideological nonconformity.

4. Economy
China is using large-scale state intervention to increase national economic power and technological independence, which involves mobilizing significant financial support for favored sectors and companies, distorting capital allocation, and corroding fair competition and market-determined outcomes in China and the rest of the world. An increased openness to foreign investments and financial institutions is conditional on them serving China’s developmental goals, one of which is to create an increasing foreign dependence on China’s supply chains and markets.

5. Technology
Chinese policymakers have increased their commitment to becoming technologically independent, especially in strategically essential sectors like semiconductors. Beijing has done more to decouple its supply chain from dependence on the U.S., rather than the other way around.

6. Military
China has expanded its capabilities to fight effectively within the first island chain that runs north to south from Japan and Taiwan to the Philippines, with the aim of deterring and defeating U.S. military intervention in East Asia, especially in defense of Taiwan.

7. Diplomacy
China’s current foreign policy aims to protect its interests; ensure access to global markets, capital, and technologies; and demand international respect for China’s achievements. Economic instruments are the preferred tool to actively shape the global order regarding human rights, internet governance, technology standards, and development finance.

8. Climate Change
U.S.-China cooperation, coordination, and healthy competition will be essential if the world is to achieve the 2015 Paris Climate Agreement objectives, and if China is to achieve its 2060 carbon neutrality goals. While China’s leaders have focused on developing clean technologies and have created financial incentives for climate action within China, the government has been reluctant to aggressively curtail coal use at home and to reduce support for fossil-fuel energy projects abroad if it means acting against the interests of state-owned enterprises.

The Task Force on U.S.-China Policy involves a group of leading China specialists and scholars from across the United States convened by the Asia Society Center on U.S.-China Relations and the UC San Diego School of Global Policy and Strategy’s 21st Century China Center. It has been supported by the Corporation since its establishment in 2015.

To learn more, download the report and watch a related press conference with panelists from the task force.

TOP: Chinese President and Chairman of the Communist Party Xi Jinping is seen on a screen during his speech at a ceremony marking the 100th anniversary of the Communist Party at Tiananmen Square on July 1, 2021, in Beijing, China. (Credit: Kevin Frayer/Getty Images)