As U.S. President Joe Biden and Chinese President Xi Jinping gear up for their landmark meeting in San Francisco on Wednesday—their first in a year, aimed at dialing down the temperature between the world’s two biggest powers—the United States’ most comprehensive annual assessment of that bilateral relationship is striking a skeptical note about what can actually be achieved.
“The result of high-level meetings between the United States and China has been merely the promise of further meetings—that is, of more talk rather than concrete actions,” the U.S.-China Economic and Security Review Commission wrote in its 2023 report to Congress, released on Tuesday. “China now appears to view diplomacy with the United States primarily as a tool for forestalling and delaying U.S. pressure over a period of years while China moves ever further down the path of developing its own economic, military, and technological capabilities.”
The annual report of the commission, formed more than two decades ago to provide policy recommendations to Congress on the national security implications of the U.S.-China relationship, provides a comprehensive snapshot of Washington’s relationship with Beijing and makes recommendations to Congress on how to best manage that relationship. The 30 recommendations featured in this year’s report highlight China’s increasingly “aggressive” foreign policy, particularly in technology and information.
“It’s interesting that as Xi Jinping has been preparing the people of China for an increasingly hostile environment, he’s taken a number of actions to make sure that that environment gets more and more hostile,” Carolyn Bartholomew, the chair of the commission, told reporters on Monday.
Here’s what is top of mind for the commission going into 2024.
Technology threats
Technology has dominated the U.S.-China relationship over the past year, from a series of export controls aimed at China’s semiconductor industry to a recent executive order targeting outbound investments by U.S. companies into certain high-tech sectors in China. The former has more than halved U.S. semiconductor exports in the first eight months of 2023, compared with the same period last year, according to the commission, and U.S. businesses continue to dial back or rethink their investments in China.
At the same time, the report said, the resulting move toward non-Chinese suppliers may not “substantially reduce U.S. reliance” on China because a number of suppliers in third countries are owned by Chinese entities.
The commission aims to close more loopholes on that front, including in its key recommendations a call for legislation to increase disclosures by public companies about their exposure to China, a “risk matrix framework” to examine the national security threat of Chinese electronic products, and expanding the authority of the Committee on Foreign Investment in the United States (CFIUS) to review investments in U.S. companies that could help adversaries.
Artificial intelligence is another area of concern that has dominated the international conversation in the past year. Biden’s meeting with Xi could reportedly yield an agreement on the use of AI in military applications, but the report says it’s an area in which China has been significantly building up its capabilities. “China’s military-civil fusion program has made rapid progress in AI for defense applications by leveraging commercial advances,” the report said. “Investment and procurement patterns suggest the [People’s Liberation Army] aims to use AI-enabled weapons systems to counter specific U.S. advantages and target U.S. vulnerabilities.”
The Taiwan question
The possibility of Taiwan being added to the list of global hot conflicts is one that particularly worries the commission, particularly as the island prepares to vote for its next president early next year.
“In an attempt to sway the outcome of Taiwan’s upcoming January 2024 presidential election, China continues to ramp up pressure on the island, seeking to increase its diplomatic isolation and to impose economic costs,” the report said. Along with increased military posturing and the possibility of an economic blockade, China’s increasingly aggressive influence operations around the world are a growing concern. “Politically, Beijing continues to target Taiwan with disinformation and united front work to amplify societal divisions and demoralize the electorate,” the report added.
Several of the commission’s recommendations focus on Taiwan. They include a directive to the Biden administration, via Congress, to discuss plans for economic sanctions on China should it invade Taiwan, an expansion of the Defense Department’s training of Taiwan’s military on U.S. weapons systems, and the creation of a joint U.S.-Taiwan center aimed at countering Chinese disinformation and cyberattacks against the island.
“I think that we have really got to take action that helps to bolster Taiwan’s ability to defend itself,” said Bartholomew, who previously served as chief of staff to former House Speaker Nancy Pelosi.
China’s headwinds
There are also some factors holding China back, chief among them what the commission describes as a “deeply imbalanced economy.” China’s post-COVID economic recovery has been sluggish, and the years of investment in real estate and infrastructure—sectors that have now collapsed—have left it “encumbered with an unsustainable debt burden” and reliant on export-led growth, according to the report. “The deeper, structural nature of China’s economic challenges call into question the future of the country’s investment-led model as well as its overall growth trajectory.”
It could also impede China’s ability to invest in the cutting-edge technologies it needs to compete with the United States, a capability that the commission says is further constrained by China’s education system and its inability to cultivate homegrown talent. A large divergence in the quality of education between urban and rural areas, in particular, has undermined its broader future workforce in technology, the area that China has vowed to dominate.
“Concentration of resources in a few of China’s top universities,” the report said, “has come at the expense of broad-based investments in the country’s education system.” As Bartholomew put it, China’s education system “is really characterized by a few points of excellence in sort of a sea of mediocrity.”
