China Economy

Biden's pick for foreign policy head affirms a push to get allies on board with U.S. policy on China

Key Points
  • On Monday, Biden announced he intends to nominate Antony Blinken as secretary of State. If confirmed, the appointment puts Blinken at the front lines of Biden's China policy.
  • "One of the things that this picking signifies is that Biden will almost certainly make good his promise to re-engage U.S. allies," Isaac Stone Fish, a senior fellow at the Asia Society, said in a phone interview.
  • "Trump has already seriously wounded China-U.S. relations. Although the Biden ... and his team are very familiar with China, they cannot avoid these problems," said Shen Yamei, deputy director and associate research fellow at state-backed think tank China Institute of International Studies' department for American studies.
Deputy Secretary Antony Blinken chairs the Strategic Track Plenary Session during the seventh U.S. China Strategic and Economic Dialogue at the U.S. State Department in Washington DC, June 24, 2015.
Chris Kleponis | AFP | Getty Images

BEIJING — As names emerge for President-elect Joe Biden's Cabinet, the new U.S. administration looks intent on working with allies to negotiate with Beijing.

On Monday, Biden announced he intends to nominate Antony Blinken as secretary of State. If confirmed by the Senate, the appointment puts Blinken — educated in France and deputy State secretary under President Barack Obama — on the front lines of Biden's China policy.

"What Blinken has done throughout his career (is he) has built relationships with U.S. allies," Isaac Stone Fish, a senior fellow at the Asia Society, said in a phone interview. "One of the things that this picking signifies is that Biden will almost certainly make good his promise to re-engage U.S. allies."

By working with other countries, many analysts expect the U.S. can build more leverage in negotiations with China.

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Under President Donald Trump, the U.S. shifted from Obama's approach of engagement with Beijing to a tough stance focused on reducing the trade deficit with China. The Trump administration slapped tariffs on billions of dollars' worth of Chinese goods, and used the same tactic against key trading partners such as Mexico and the European Union.

Just before the global coronavirus pandemic, China and the U.S. reached a temporary truce in January with the signing of a phase one trade agreement whose highlights included increased Chinese purchases of American goods. Analysts expect a yet-to-be discussed phase two trade agreement would tackle long-standing complaints by foreign businesses about unfair competition against China's state-dominated system.

The U.S. should engage China in a way that results in action, Blinken said during a Chatham House webinar on April 30 about "U.S. Foreign Policy in a Post COVID-19 World." He added that the U.S. can make a big difference by showing leadership through participation in international institutions, which Trump has generally pulled the U.S. away from.

Blinken was also optimistic about finding ways for the two countries to develop a better relationship.

"My sense is that if we're working together with our partners, if we are insisting that Beijing live up to its responsibilities, we're going to get a lot further than this almost schizophrenic veering back and forth between confrontation and abdication that we've seen over the last two or three years," he said during the webinar.

More engagement, tougher policy

Both Chinese and U.S. analysts expect a Biden administration will look beyond trade to a range of issues from the dominance of state-owned enterprises to human rights. Back in May, Blinken also said he would support using sanctions in response to Beijing strengthening its control on the semiautonomous region of Hong Kong with a national security law.

"Trump has already seriously wounded China-U.S. relations. Although Biden ... and his team are very familiar with China, they cannot avoid these problems," said Shen Yamei, deputy director and associate research fellow at state-backed think tank China Institute of International Studies' department for American studies. That's according to a CNBC translation of her Mandarin-language remarks.

However, she expects China may take a backseat to domestic U.S. issues and rallying of allies in the first several months of Biden's administration. As for Blinken, Shen anticipates he will maintain a policy of engagement, while noting a shift from focusing on just trade will mark "a new situation for China."

Beijing was slow to congratulate Biden on his election win. Trump refused to concede the election and attempted to dispute the results with multiple lawsuits.

"I don't think China will be celebrating (Blinken's nomination)," said Richard Fontaine, chief executive officer of the Center for a New American Security (CNAS), a Washington, D.C.-based research organization. Fontaine previously served as foreign policy advisor to Sen. John McCain.

"The new administration, I think, is going to take a more skeptical view of China than, certainly, the Obama administration did," Fontaine said Tuesday on CNBC's "Street Signs Asia." "I think you're going to see a long-term competition between the United States and China. And the crowd that has been named so far, I think, is squarely in that area to do it."

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Among other nominations, people familiar with the matter told CNBC the president-elect has chosen former Federal Reserve Chair Janet Yellen for Treasury secretary, pending Senate confirmation. Biden's pick for U.S. Trade Representative was not yet clear as of midday Tuesday, Beijing time.

The Treasury secretary and U.S. Trade Representative have headed U.S. negotiations with China on trade under the Trump administration.

Tom Rafferty, regional director for Asia at The Economist Intelligence Unit (The EIU), said in an email that if Yellen is confirmed as Treasury secretary, she will likely be less inclined to pursue Trump administration measures such as sanctions and regulation on Chinese investment in the U.S.

Rafferty added that tariffs will not likely play a prominent role under a Biden administration, but the Democratic party will need to consider the political implications for attracting Trump supporters in future elections. "A selective lifting of tariffs on consumer goods remains possible in our view, however," he said.

China is keeping its options open

While a Biden administration is expected to partner more with U.S. allies, Beijing is stepping up efforts to build relationships with other trading partners.

Earlier this month, China and 14 countries signed the Regional Comprehensive Economic Partnership (RCEP), the world's largest trade agreement. The pact — which does not include the U.S. — covers just under a third of the global population at around 30%.

On Friday, Chinese President Xi Jinping made a rare public comment about China's interest in potentially joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The deal was previously known as the Trans-Pacific Partnership, which Trump withdrew the U.S. from immediately upon inauguration in 2017.

Separately, this week, Chinese Foreign Minister and State Councilor Wang Yi is set to visit Japan and South Korea.

The world will not wait for China-U.S. relations to progress, China Institute of International Studies' Shen said. "China's opening is on two sides, one is to the U.S. and the other is to the world. If on one side we face pressure, then we will open more to the rest of the world."

— CNBC's Saheli Roy Choudhury contributed to this report.