As the new year got underway in China, hopes appeared to be running high that an easing of tensions with the United States could unfold in the months ahead.
But when a high-altitude balloon from China carrying a payload the size of three coach buses equipped with what American officials have described as surveillance equipment was spotted over the continental US, visibly hovering above a state with key military assets and ultimately sparking an international incident – it naturally raised critical questions about just what had happened, and why.
Before it was downed off the South Carolina coast by U.S. fighter aircraft on Saturday, the balloon was provocative enough to cause Secretary of State Antony Blinken to postpone a much-anticipated trip to Beijing. But it was also clumsy enough to symbolize China’s immense capacity to blunder — a tendency that President Biden’s team has lately exploited, to devastating effect.
Two years ago, when Biden assumed office, China believed that it was overtaking the United States technologically, intimidating it militarily, and winning the race for global respect and popularity against an exhausted, divided America. Today, in a remarkable turnaround, China is the country that veers between covid-19 lockdowns and casual sacrifice of elders, between clobbering its real estate sector and coddling it, between persecuting its entrepreneurial champions and promising to make nice.
On the foreign policy side, meanwhile, the Biden team has inflicted a series of humiliations on its chief rival.
Start with the semiconductor embargo on China, announced last October by the Commerce Department. This involved a calculated risk: If U.S. allies refused to collaborate, China would import the equipment necessary to produce its own advanced semiconductors, leaving it stronger and more self-sufficient. But on Jan. 27, the administration reportedly secured the backing of the two most important semiconductor equipment exporters, Japan and the Netherlands. China’s ability to pursue artificial intelligence and other advanced military technologies will be curbed.
Next, consider India. Four days after the semiconductor deal, national security adviser Jake Sullivan met with his Indian counterpart and announced a series of ambitious defense and technology partnerships, from quantum computing to more conventional weapons such as jet engines and artillery. The goal is to reduce India’s reliance on Russian armaments and draw it into the U.S. military-industrial complex. That, in turn, will reinforce the Quad, an Asian proto-NATO that also includes two other nations that Biden is helping to rearm, Japan and Australia.
Hot on the heels of the India deal, the White House secured a victory in the Philippines. At the end of the Cold War, the Philippines closed U.S. military bases on its territory, and a partial reopening in 2014 was derailed when Manila opted to make nice with China. But on Thursday, after assiduous prodding by the Biden team, the Philippines expanded the number of sites to which the U.S. military has access from five to nine. That will enhance the United States’ ability to respond to Chinese provocations in the South China Sea — including, in the most extreme scenario, an attack on Taiwan.
Meanwhile, the Treasury Department has also been active. Perhaps for the first time since the emerging-market debt crises of the 1990s, the department has effectively marshalled the International Monetary Fund and the World Bank to reinforce U.S. global leadership.
This opportunity has arisen from China’s odd decision to turn a diplomatic advance into the equivalent of a spy balloon that was both ineffective and embarrassingly visible. Early in his tenure, in 2013, Xi Jinping rolled out his Belt and Road Initiative, an international infrastructure splurge designed to deepen China’s economic ties in Africa and Asia. Many of these projects were financed with loans, with the result that China has rapidly become the largest official creditor to developing countries.
Initially, this looked like a genius Chinese move to win friends and influence people. Now that economic conditions have soured, free-flowing Chinese loans have created the conditions for debt crises in several emerging nations. To make matters worse, China refuses to learn from the Western experience with poor-world debt, which teaches that it’s best to soften payment terms quickly. That way, borrowers have a chance to return to growth and repay some of the money. Plus, they won’t hate you as much.
Zambia is ground zero of China’s self-defeating obstinacy. As part of the Belt and Road Initiative, the African nation’s previous and deeply corrupt government commissioned a hydropower station, two international airports, two stadiums and a railway. Chunks of money disappeared; and when covid hit the world economy, Zambia defaulted. Last year, after the election of a cleaner government, the IMF promised a rescue package on the condition that creditors take a suitable hit: The IMF wasn’t going to pump money into Zambia if the cash was going straight into the pockets of irresponsible lenders. China and its fellow creditors duly promised to renegotiate the debts. Half a year later, China has ensured that the discussions have gone nowhere.
Enter Treasury Secretary Janet L. Yellen. Spotting an opportunity to paint China as the enemy of the poor world, she flew to Zambia last month and called out Beijing as a “barrier” to resolving the debt impasse. Her visit coincided with that of Kristalina Georgieva, the IMF boss, who lectured China on the need to learn a lesson on debt management from the “mature” West. For good measure, World Bank President David Malpass appeared on Bloomberg TV to denounce China’s debt obstructionism.
The shooting down of China’s comic-book spy balloon extends China’s humiliation, and the Biden team deserves credit for pushing back against Xi and turning his aggression against him. But at the same time, the administration must also remember that China remains a major power and that the White House better find ways of working with Beijing. When Blinken eventually does visit, his job will be to combine strength with calm. The thing about cold wars is that you don’t want them to escalate.