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Xi’s Frustration at Biden Grows With Skepticism of ‘Guardrails’

(Bloomberg) — Back in November, before the latest downward spiral in US-China ties, Xi Jinping cast himself as a statesman in a meeting with Joe Biden.

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Saying both nations need “a responsibility for history,” Xi appeared to play ball with US calls to “compete vigorously” with China while establishing “guardrails” to avoid conflict. After speaking with Biden for more than three hours in Indonesia, Xi said “competition should be about learning from each other” and referred to agreements around Taiwan as “the most important guardrail.”

This week, as top Chinese officials gathered for the National People’s Congress, Xi stopped playing nice. On Monday, he called on the private sector to help overcome “comprehensive containment and suppression by Western countries led by the US” — unusually direct criticism of his largest trading partner.

Some 24 hours later, Xi’s new foreign minister, Qin Gang, explicitly rejected the US’s characterization of its relationship with China. At his first major press briefing since starting his new role, Qin declared that US competition “means to contain and suppress China in all respects” and establishing guardrails “means that China should not respond in words or action when slandered and attacked.”

“If the United States does not hit the brakes, but continues to speed down the wrong path, no amount of guardrails can prevent derailing and there will surely be conflict and confrontation,” Qin said.

While he ended on a more positive note, saying China would continue to pursue a “sound and stable” US relationship, the comments show mounting frustration in Beijing after an alleged spy balloon obliterated any goodwill from the Xi-Biden meeting. US lawmakers have pushed a barrage of measures aimed at denying China advanced technology and boosting relations with Taiwan, making it harder for Chinese officials to justify any move towards a detente.

“China still very much would like to repair this relationship, but the Chinese public cannot stand this constant bombardment at Congress and government at all levels,” said Henry Wang Huiyao, founder of the Center for China and Globalization, a policy research group in Beijing. . “China has to respond strongly.”

Chinese stocks ended lower after a volatile session on Tuesday as investors assessed economic data and Qin’s comments on the relationship with the US.

The CSI 300 Index of onshore Chinese equities reversed an early gain to finish 1.5% lower, capping its worst day since Dec. 20. The Hang Seng China Enterprises Index, a gauge of Chinese stocks traded in Hong Kong, ended 0.4% lower after jumping 2.4% earlier amid a rally in shares of state-owned companies.

Rare Protests

For Xi, the annual NPC session is no time to look weak — and this year is particularly sensitive. Only a few months ago, he watched as rare simultaneous protests took place in major cities demanding the end of strict Covid policies, with some demonstrators even calling for the downfall of Xi and the Communist Party.

While China’s economy is set to rebound from last year, Xi still faces a host of structural issues including mounting debt, an aging population and over-reliance on real estate and investment to boost growth. On top of it all, he’s also still searching for technological breakthroughs that could help China get around more aggressive export controls by the US.

“It’s now very much the time for them to try to blame the US, that it’s behind these problems,” said Alfred Wu, associate professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy. “It will be very difficult for the US and China to find common ground.”

In a landmark speech last year, US National Security Advisor Jake Sullivan said the US was now looking to maintain “as large a lead as possible” over competitors in certain technologies such as computer chips, clean tech and bio-technology. He noted that export controls “can be a new strategic asset in the US and allied toolkit to impose costs on adversaries, and even over time degrade their battlefield capabilities.”

In addition to those tools, for the first time the US administration is also now considering restricting US investment into certain sectors in China. And lawmakers are moving to restrict access to Bytedance Ltd.’s TikTok app on the grounds that it can be used to gather user data or serve as a propaganda tool.

The US views these moves as necessary to counter China’s growing economic and military might, particularly in light of Russia’s invasion of Ukraine and worries that Beijing will one day seek to take Taiwan by force — a prospect Qin did not rule out on Tuesday, while saying China wanted a peaceful resolution.

‘Good Faith’

To China, all of the US actions are aimed at containment rather than competition. Qin likened the US version of competition to an Olympic race in which one athlete is trying to trip or injure another one.

“My interpretation is not that China is opposed to the concept of guardrails in the US-China relations, but rather that Beijing increasingly doubts that Washington is acting in good faith when it calls for efforts to stabilize the relationship,” said Joe Mazur, a Beijing-based analyst with consultancy Trivium China. “Simply put, Qin is calling on the US to back up its stated commitment to stabilizing the relationship with concrete action.”

After the alleged spy balloon incident roiled US-China ties, Biden said he would call Xi, but so far both sides have continued to trade barbs. Instead, positions appear to be hardening.

Seeing the US position as intractable, now “China is doubling down and doesn’t seem in the mood for compromises or any reconciliation,” said Dylan Loh, assistant professor of Chinese politics at Nanyang Technological University in Singapore. “It’s a very worrying time for the rest of the world.”

–With assistance from Zibang Xiao and Sarah Zheng.

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