Competing to Win: the Biden Administration’s Policy on China

Tom Watkins served as the Michigan state superintendent of schools, 2001-05, and president and CEO of the economic counsel of Palm Beach County, FL., 1996-2001. He currently manages TDW and Associates, a global business and educational consulting firm. Watkins is a prolific author and public commentator on the U.S.-China relationship, and has been for nearly 4 decades since his interest was sparked by a 4th grade teacher. Some of his other publications can be found here.

General Secretary Xi Jinping often speaks of the great revival or rejuvenation of the Chinese nation, and has done so since his accession to power in 2012. Visions of China’s restoration to the days of imperial China are designed to inspire nationalist fervor and to shake off China’s shame and humiliation during one hundred years of invasion, occupation, and subjugation by foreign powers. 

Since that time, Xi has aggressively asserted China’s evolving strength both internally and externally so that China is no longer seen as a weak power in Asia. Once given by an unprecedented third term at the upcoming 20th Party Congress, which appears a foregone conclusion and will grant him unquestionable authority over one fifth of humanity, some tremble what this new act will mean to the global order and for China’s rise as an economic, military, ideological and technological superpower. 

Will such rejuvenation under Xi’s third term come at the demise of the West, and especially the power of the United States?

Recent Actions by the Biden Administration

President Biden made it clear that China will not overtake the United States on his watch, and is keen to say that “It is never a good idea to bet against the USA.” He has been working smart and hard during his first two years in office to outspend China on innovation, technology and infrastructure to prevent it from overtaking the U.S. to become the world’s most powerful country.

President Biden has taken real and concrete steps to advance American interests and address the rise of China by passing four major pieces of legislation, all of which address long neglected American needs:

● Strategic Competition Act: an attempt to recalibrate U.S.-China relations by enhancing America’s ability to successfully compete in new and emerging technologies and other hotly contested jobs of the future.

● Chips and Science Act: investing $280B to increase the vital domestic semiconductor industry.

● The Inflation Reduction Act of 2022: Targets $369B in spending on green initiatives and energy reforms; $64B set aside to shore up the Affordable Care Act; and nearly $300B towards deficit reduction.

● Infrastructure Investment and Jobs Act: a once-in-a-generation investment in our nation’s infrastructure and competitiveness.

Perhaps most important is the Strategic Competition Act. This bill united a hyper-polarized Congress, and a bipartisan coalition of Republicans and Democrats in Congress have come together to challenge China’s efforts to displace the United States as the world’s technology, economic and military superpower. The challenge is clearly over which nation will ‘win’ as the 21 century unfolds. The bill includes historic investments in American-made semiconductor production, and other efforts to tackle supply chain vulnerabilities, turbocharge American scientific research and technological leadership, and strengthen America’s economic and national security at home and abroad. To be clear, these investments are designed to outcompete China and the rest of the world in the 21st century.

Importantly, President Biden and Congress are providing incentives to ‘on-shore’ strategic goods and services back to the U.S. in ways that create jobs and greater security for our nation. On-shoring is the exact opposite of off-shoring, referring to the relocation of business to a lower-cost location inside the national borders. 

Furthermore, efforts are underway to restrict China’s access to chip-making tools and stopping the sale of advanced chips to China together with a ban on U.S. firms building new chip factories in China for a decade. To leave no doubt the U.S. Commerce department stated, ‘that it is “taking a comprehensive approach to implement additional actions…to protect U.S. national security and foreign policy interests” including to keep China from acquiring U.S. technology applicable to military modernization.’

China has since warned that reprisals are coming for what they see as an attack on its rise. With supply chains already strained, deliberate disruptions in imported parts’ supplies for U.S. manufacturers, and curbs on Chinese purchases of U.S. exports may sting the U.S. economy in the short term. However, the U.S. has been clear that our legislative initiatives are to strengthen the USA’s own competitive hand, not to weaken China. China is not buying this argument. 

Nonetheless, it seems America has been shaken out of a slumber and sees China not as a ‘win/win partner,’ but as a major economic competitor, certainly and ideological, if not an actual military threat.

Blaming and Demonizing China?

Critically, China is correct when it argues that ‘demonizing China’ won’t fix the chronic, deep-rooted political, social, and economic problems that have plagued the United States for decades. These are real obstacles that continue to undermine America’s potential for long-term, healthy development.

Yet investing in America and the American people has the potential for course correction. As an experienced businessman, chief executive, and educational administrator, I have been forceful in my belief that this is the best strategy to counter China’s rise, not simply to stand in opposition to China. If the U.S. has been the wants to remain the ‘world champion’ economy since the end of WWII, then it’s time to invest in America more. Indeed, blaming China is not a plan. 

For example, hearing complaints about how China is ‘not playing by the rules’ and ‘is cheating’ reminds me of my old football and boxing coach when I would whine about opponents. He gave me a whack on the back of my head and told me, “Get back in the game and win!” That is what America is doing under President Biden. 

When it comes to competition, lessons learned in childhood pay dividends throughout life. When I was a Junior Golden Glove boxing champ in Washington, D.C., I won an overwhelming number of my bouts. Every time I climbed into the ring; I was in it to win. Never did I think, ‘I hope I fight to a draw’, or ‘I hope I come in second place’. I always prepared and entered the ring to win, even when the referee and judges didn’t see it my way.  

When it comes to cooperation and engagement, I’m reminded of how my sparring partner was my best friend. Yet, friendship was not on either of our minds when we entered the ring – we were each there to win. After a good fight (and often with a welt under an eye, a bloody nose and lip) we would leave sparring practice as even better friends. We understood that someone was going to win, so we were both prepared – and fought – to be winners. It was inconceivable to think of anything else. 

I understand the argument of Americans wanting the U.S. to maintain its status. As an American I am rooting for my team as well. But I also recognize why 1.4 billion Chinese might want to knock us off our pedestal and gain it for themselves.