US and China urgently need to talk about economics

SECRETARY of State Anthony Blinken last year correctly defined the US-China relationship as the greatest challenge of the 21st century, observing that: “Our relationship with China will be competitive when it should be, collaborative when it can be, adversarial when it must be.” Treasury Secretary Janet Yellen then echoed this point.

Blinken and Yellen’s statements represented a welcome, smart and pragmatic framing. But how is it being implemented on the economic and financial front, which should be a poster child for collaboration? To date, one would be hard pressed to offer a positive assessment.

Obstacles abound, making it hard to talk. Neither Democrats nor Republicans wish to be outflanked in hawkishness on how hostile China is viewed. Those seeing China as a “strategic competitor” seemingly go out of their way to caricature engagement as a form of panda hugging or failed effort to promote an open Chinese society. The US has valid reasons to be deeply concerned about the risks posed by China to US national security, not only on defence but in technology, chips, spyware, rare earth minerals and cyberattacks as well as its economic statism, industrial policies and technology theft.