China Watcher convened a stellar panel on the POLITICO Live platform on Wednesday to unpack the implications for U.S.-China relations posed by Xi Jinping's looming third term as China's paramount leader after next week's 20th Party Congress. That will solidify Xi's rule – complete with creeping totalitarianism at home and an increasingly bellicose foreign policy — until at least 2027, and possibly for life. That panel included: — Sen. JEFF MERKLEY (D-Ore.) —Member of the Senate Foreign Relations Committee and Chair of the Congressional Executive Committee on China — Rep. DARIN LAHOOD (R-Ill.) —Co-chair of the Congressional U.S.-China Working Group and member of both the House Intelligence Committee and the House Ways and Means Committee — SUSAN SHIRK, former deputy assistant secretary of state and chair of the 21st Century China Center at the UC San Diego School of Global Policy and Strategy We talked Taiwan, trade and human rights. I've distilled highlights of the exchange below, edited for length and clarity. And you can access the audio of the entire event here. How can the U.S. maintain support for Taiwan while at the same time not holding hostage cooperation on other key bilateral issues — including climate and counternarcotics — that Beijing has suspended in reprisal for House Speaker NANCY PELOSI's visit to the island in August? LaHood: I don't think we can be bullied by China when it comes to this issue. We've had a long-time policy when it comes to Taiwan: standing up for democracy, standing up for freedom. I understand the Chinese have taken a strong approach to that. I think that probably has more to do with Xi's trying to continue his reign in China than it does actually on those policies. But I also would say we continue to look for tangible results from China…whether it's on the issues related to forced labor and the Uyghurs, or whether it's on issues of their improper trade policies. We've continued to talk to them and argue with them about these policies, the excess capacity they've had, but they continue to abide by a different set of rules and standards from an economic standpoint. Shirk: The objective of our policy toward China should be to see tangible steps that the Chinese side takes to moderate its policies, to take a more pragmatic approach to foreign policy as well as domestic policy and, of course, a peaceful approach to dealing with Taiwan. I think that should be the main objective on Taiwan and everything else. Not to slow China down or trip it up, but to combine active diplomacy with forms of pressure to get tangible results. In my view, we could intensify the diplomacy a bit. Now I recognize that the Chinese side has said, "Well, we won't talk to you so long as Speaker Pelosi's going to Taiwan," but I think we should make our desire and our need for diplomacy a little bit more active, especially after the midterms. What's important is for us also to show that we're open to improving our relations with China should China alter its own behavior. Merkley: We have seen complete violation of the agreement with Britain over Hong Kong. We have seen massive uses of technology to enslave the Uyghurs. We have seen a violation of international waters regarding the Philippines. We've seen the creation of artificial islands to extend their [sovereignty] claims. We've seen the drumbeat of potential aggression towards Taiwan. We have seen economic coercion against international companies. We have seen coercion against countries that had policies that were critical of China. We have seen transnational repression in the form of pressuring individuals who are outside of China threatening them directly or threatening their families back home in China. So, for those who think "Is America changing its policy?" No, it's China that has changed its role in the world in a very threatening fashion, violating many of the things that we hold dear. How desirable or feasible is it for the U.S. to pursue "decoupling," of the U.S. and Chinese economies in order to address a perceived threat of U.S. economic dependence on China? Shirk: We need to think long and hard about decoupling, because in this bipartisan consensus that has been created by China's overreaching, we could overreact in a way that is really going to harm our own competitiveness. We now appear to be in a race to the bottom with China about who can be the most nationalistic, the most restrictive, and yet we talk about our rule-bound global order, our open market economy. But we are actually degrading our own open market economy and perhaps the most important loss is the talent that exists around the entire world in our global knowledge economy, and especially in China. I was just reading that the numbers of Chinese students applying for visas [to study] at American universities dropped 45 percent. Merkley: We should take some lessons from the relationship between Europe and Russia. They thought that economic integration would mean that Putin or whoever governed Russia would never proceed to damage that relationship by cutting off fossil gas. And in fact, he was quite ready to use that as an authoritarian figure who wanted to make his mark on the world. Certainly, Xi is an authoritarian figure who wants to make his mark on the world. And he wants to expand the sense of China as a great player on the international stage. So there is a lot here we have to address — the imbalance of rules, how we give them complete freedom in our country and they have all kinds of rules about how we operate in China that don't allow a fair trade relationship. LaHood : If you go back to 2001 when we brought China into the World Trade Organization, there was an argument to bring them in: they're going to modernize their economy, they're going to become more like other industrialized countries and democracies in the world. And if you look over that 20 plus years, there has been progress made, but there's also been extreme deficiencies. They continue to abide by a different set of rules and standards that every other industrialized country in the world has done. It's hard to decouple. But I think we're going into a new phase when it comes to China. I think you're going to continue to see a movement in Congress — what I would call a Cold War mentality towards China — because we're not seeing the progress that I think is necessary economically from a trade standpoint and from an IP standpoint from China. And I don't see from anything that I've heard from Xi that that is going to change that moving forward. TRANSLATING WASHINGTON — SECURITY STRATEGY TARGETS CHINA COMPETITION THREAT: The Biden administration's new National Security Strategy declares that the U.S. faces a "decisive decade" in countering Beijing's efforts to replace the U.S. as the dominant global superpower, POLITICO's ALEXANDER WARD reported on Wednesday. China "is the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to do it," the administration declares in the strategy. The strategy's China focus echoes elements of Secretary of State ANTONY BLINKEN's China strategy speech in May by balancing the need for competition with U.S. willingness to cooperate on transnational threats including climate change and global health. "This is a message to reassure our allies that we are mindful of the potential downsides of intense competition," said BONNIE GLASER, Asia program director at the German Marshall Fund of the U.S. The Chinese Embassy in Washington, D.C. didn't respond to a request for comment. — STATE WARNS ON CHINA'S ARCTIC AMBITIONS: China shared top billing with Russia in the State Department's new National Strategy for the Arctic Region as twin threats to U.S. interests in the region. "The People's Republic of China (PRC) seeks to increase its influence in the Arctic through an expanded slate of economic, diplomatic, scientific and military activities," the strategy said. China has eyes on the Arctic. "There's shipping lanes, there's natural resources, and governance is in flux in the Arctic regions, so I don't think it's surprising that China is interested," said REBECCA PINCUS , director of the Polar Institute at the Woodrow Wilson Center. "But I don't think it's a top priority…the Chinese government is far more interested in its own backyard." Former Secretary of State MIKE POMPEO sketched a more lurid threat during a Hudson Institute event on Tuesday. "This is a deep grand conspiracy between Russia, China and Iran and other enemies of freedom coming together to use their shared resources in this very region," Pompeo said. Chinese authorities say their intentions are benign. "China will not overstep the mark to meddle in inter-Arctic States affairs," embassy spokesperson LIU PENGYU said in a statement. — BIDEN CHOKES OFF BEIJING'S CHIP SUPPLY: The Biden administration moved late last week to choke off Beijing's supply of microchips used in advanced computing and military applications, issuing two new rules limiting companies from exporting chips and chip- making equipment to China while also pushing allies to do the same. The rules from the Commerce Department's Bureau of Industry and Security will also apply new export license requirements to older and less advanced chips destined for Chinese companies, as well as semiconductor manufacturing equipment from U.S. companies previously not covered by BIS rules, as POLITICO'S GAVIN BADE and BRENDAN BORDELON reported last week. Chinese Foreign Ministry spokesperson MAO NING responded by accusing the U.S . of "abusing export control measures to wantonly block and hobble Chinese enterprises."
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