IN FOCUS
By Keerthana Nambiar 

"New approach to the US-China Trade Relationship"

On 4 October, US Trade Representative Katherine Tai delivered a speech to a US think Tank, the Center for Strategic and International Studies (CSIS) in Washington. Tai made remarks that focused on the new Biden-Harris administration to US-China bilateral trade relationship and how "President Biden will continue to promote our economic interests – and build confidence for American industry." She detailed the evolution of the US-China trade partnership over the decades till date. 

Tai explained the "dual-track" approaches the United States will be pursuing with respect to Beijing, wherein one track focused on the annual high-level dialogues between US and Chinese officials. The other track focuses on the WTO dispute settlement cases where the US "secured victories". Tai stated that "as our economic relationship with China evolves, so must our tactics to defend our interests." The representative outright critiqued China for shaping its own economy at the cost of the US and the rest of the world.

The stormy US-China relations now dominate global debates in all aspects, starting with politics, military, technological development, and trade. When Donald Trump launched the US-China trade war, he imposed $360 billion on goods imported from China, and it was a sudden departure from open markets, which was American trade philosophy. As the new Biden administration stepped in the slow reviewing of tariffs dragged on, and frustrations grew among the business ventures. The hopes to get rid of the tariffs die down with Biden following Trump's footsteps. 

Geopolitics have changed since Biden took power, resulting in a complex intertwining of the economic and security interests. Biden's confrontational attitude towards China and being robust in the competition with China is now a bipartisan stance. Under the leadership of Xi Jinping China has increased its assertiveness testing the tolerance and perceptions of the US and its allies. 

Ambassador Tai's address to the world is the US stance on the cold war between both US and China. The US' current stance with broad outlines and no clear roadmap has put the industries in a more compromising position hence brewing more tensions. 

References

"Remarks As Prepared for Delivery of Ambassador Katherine Tai Outlining the Biden-Harris Administration's "New Approach to the U.S.-China Trade Relationship"," Office of the United States Trade Representative, 4 October 2021

"New US China trade plan leaves industry hungry for specifics," Reuters, 5 October 2021

"US-China trade: expect more carrots and sticks from Biden White House, analysts say", South China Morning Post, 5 October 2021

"US will 'take all steps necessary' to defend itself on China trade," BBC, 5 October 2021

"US Trade Rep Katherine Tai to condemn China's 'unfair trade practices'," CNN, 4 October 2021

IN BRIEF
By Dincy Adlakha and Avishka Ashok

INTERNAL

Chinese government works towards restoring power supply caused by coal shortage 
On 4 October, Xinhua Net reported that the country's energy sector was putting in all efforts to ensure the continuous supply of electricity to the northeast of the country, where at least 20 provinces are suffering from power cuts and electricity blackouts. Numerous residential regions and industrial factories are forced to implement electricity rationing in order to follow the government-sanctioned limit of power usage. The National Development and Reform Commission (NDRC) has now encouraged mid and long-term coal supply contracts in an attempt to deal with the coal shortage that is affecting the economic capacity of the country. ("Xinhua Headlines: China goes all out to cope with power outages," Xinhua Net, 4 October 2021)

Record number of Chinese aircraft approach Taiwan yet again
On 4 October, the Chinese People's Liberation Army sent 56 aircraft near the Taiwanese island for military drills. This is the third time in four days that China has sent aircraft near Taiwan. Monday's incursion followed the statement released by the US State Department suggesting "concern" over the situation. A spokesperson of the Chinese Foreign Ministry, Hua Chunying, said: "China will take all measures necessary to crush any "Taiwan independence." 'Taiwan independence' is doomed to fail." (Liu Xuanzun, "UPDATE: PLA sends 'record-breaking 56 aircraft near Taiwan island in a single day' in consecutive drills," Global Times, 4 October 2021)

President of Taiwan defends Taiwanese democracy with strong words
On 5 October, in an essay published in Foreign Affairs, Taiwanese President Tsai Ing-wen emphasized that Taipei is committed to its democracy and shall do whatever it takes to protect it from falling. The president warned an aggressive China of the "catastrophic consequences" that shall follow for the whole region if the democracy in Taiwan falls. Analysts have been debating on the threats to Taiwan's sovereignty for long, now. An increased focus has zoomed on the region as China becomes aggressive in displaying its control while the western allies of Taiwan, including the US, continue to stand in opposition to the Chinese actions. (Tsai Ing-wen, "Taiwan and the Fight for Democracy," Foreign Affairs, 5 October 2021)

Hong Kong Chief Executive Carrie Lam denies schedule of anti-foreign sanctions law for the city
On 5 October, Carrie Lam, the leader of Hong Kong, said in a weekly news briefing that Beijing does not have a timetable to extend the anti-foreign sanctions law in Hong Kong. She also said that the status of Hong Kong as an international financial hub would be accounted for by China before implementing the law. The law was introduced in June 2021 in mainland China and was expected to be formally approved in Hong Kong in August. However, the vote was postponed, considering the impact it could have on various international financial institutions and their operations. ("Hong Kong leader says Beijing has no timetable for anti-sanctions law," Reuters, 5 October 2021)

ECONOMY

Chinese property developers' crisis deepens as the ability to replay loans hits new decade low
On 4 October, a report published by Reuters found that the property firms in China were struggling to pay interest on their debts even before the Evergrande crisis worsened the situation. According to the accounts maintained by Reuters based on the data by Refinitiv, the aggregate interest coverage ratio of 21 big, Hong Kong-based real estate developers had fallen to 0.94, the worst in a decade. Additionally, on 5 October, Sinic Holdings joined the list of Chinese developers that have been downgraded by a global rating agency. (Patturaja Murugaboopathy and Gaurav Dogra, "Chinese property developers' ability to repay debt hits decade low," Reuters, 4 October 2021; "Evergrande: Investors kept waiting over 'major' deal," BBC, 5 October 2021)

Atlantic Council and Rhodium Group Report finds China not on track with stated reform goals
On 5 October, South China Morning Post covered a report titled 'China Pathfinder' by Atlantic Council and Rhodium Group. The report mentioned that China is not moving towards its stated reform goal of becoming a market economy. The report found that there had been some progress in becoming an open economy from China's end however, recent years (especially since 2016) have backtracked most of this progress by cracking down on technology and education-related private firms. Hence, the report advises market economies such as the US to establish commercial rules before dealing with China. ("China is not heading toward a market economy, often due to its own policies, report concludes," South China Morning Post, 5 October 2021; "China Pathfinder: Annual Scorecard," Atlantic Council GeoEconomic Center and Rhodium Group, 5 October 2021)

INTERNATIONAL 

Chinese President Xi Jinping congratulates Japan's new Prime Minister 
On 4 October, the Chinese President Xi Jinping sent a congratulatory note to the new Japanese Prime Minister Fumio Kishida. On the same day, Global Times also reported that the cabinet lineup of Kishida had drawn the attention of many since the new cabinet tries to balance its relations with China and the US. A research fellow at the China Institute of International Studies said: "China will keep an eye on whether Kishida administration will try to play 'human rights card' against China in the future, by attentively increasing pressure on China on issues related to Hong Kong and Xinjiang." ("Chinese President Xi Jinping on Monday congratulated Fumio Kishida for being elected Japan's new prime minister," Global Times, 4 October 2021; "Kishida to be tested on balancing Japan's relations with the US, China: observers," Global Times, 4 October 2021)

Chinese Foreign Ministry urges the US to abide by One-China principles
On 4 October, a Foreign Ministry Spokesperson warned the US to not support the Taiwanese call for independence and cautioned the country from creating obstacles in the Taiwan Strait. She said: "Taiwan belongs to China and the United States is in no position to make irresponsible remarks. The relevant remarks by the US side seriously violate the one-China principle and the stipulations of the three China-U.S. joint communiques and send an extremely wrong and irresponsible signal." She also implored the US to strongly abide by the One-China principles on which the US-China relations are based upon. ("China urges US to stop supporting "Taiwan independence" separatist forces," Xinhua Net, 4 October 2021)