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The punctured hopes for a US-China reset

February 6, 2023
in Business
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As fragments of the downed Chinese “spy” balloon hurtled earthward off the South Carolina coast on Saturday so, for now, did hopes for a reset in US-China relations. As divers hunt for remnants of the airship shot down by a US fighter, Beijing officials have accused Washington of an overreaction that has dealt a “serious blow” to ties between the world’s biggest military powers. China provocatively violated US airspace; a planned visit by secretary of state Antony Blinken to Beijing had already been called off. There is a danger the incident could set off a vicious cycle that wreaks severe economic and political damage. But this should be a moment for restraint, not escalation.

Beijing improbably insisted a “civilian weather airship” had been blown off course by high winds while collecting meteorological data, in a case of “force majeure”. US officials said they had confirmed it was a surveillance balloon carrying unusual equipment. It would be surprising if such an incursion was approved by President Xi Jinping, whose recent commitment to improving ties with the US seemed genuine. That opens the possibility that its presence was a result of miscommunication between arms of the Chinese apparatus — or, worryingly, that a hardline faction was attempting to sabotage the reset.

Either way, the timing is unfortunate. Several developments loom that could further strain relations. US officials increasingly worry that Chinese state companies may be assisting Russia’s military effort against Ukraine by providing technology and semiconductors — which may raise pressure for action by the White House. The administration is already expected as early as next month to move to create a body to review outbound US investments into China. And the new Republican House Speaker Kevin McCarthy is expected to ape his Democratic predecessor Nancy Pelosi with a visit to Taiwan this year — though there are better and less inflammatory ways for the US to show solidarity with the self-governing island.

Beijing has called America’s use of force against the balloon “a serious violation of international conventions”. It would be well advised, however, to keep any retaliation low key. As he seeks to manage China’s emergence from its “zero-Covid” policies and rekindle economic growth, Xi has good reason to pursue the thaw he initiated with US president Joe Biden in Bali last November. Biden is under fire from hawkish Republicans at home over the fact that the balloon was shot down only after it crossed the US coast, several days after its presence was revealed.

There are lessons to be learnt from the US-Soviet cold war. The then global superpowers were engaged in frenetic espionage just as the US and China are today (indeed, balloons have retained a place among the panoply of high-tech surveillance means used by both sides). The cold war foes occasionally caught each other in the act, but developed ground rules of sorts. Washington and Beijing similarly need to recognise the economic, political and ideological flashpoints between them, and develop mechanisms to manage the risks while reducing the danger of outright war.

In the cold war, this was achieved, in part, by building contacts between officials at multiple levels. The hope was that Blinken’s visit to Beijing, set to be followed by one by Treasury secretary Janet Yellen, was the next step in a similar process. It is notable that the US has used the word “postponed” in relation to the secretary of state’s visit. The dust from this latest incident must settle, but the Blinken trip should then be rescheduled. The US-China relationship is of too much consequence for the world to allow it to be blown up by the popping of a high-tech hot air balloon over the Atlantic.

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