“It is difficult to see a US reversal of the recent hawkish trends in China policy, given the increasingly negative views on China in the US,” Sylvia Sheng, a global strategist at JP Morgan Asset Management, wrote in a research note this week.
“China is undercutting American companies by dumping products, erecting trade barriers, and giving away subsidies to corporations,” she told the Senate Finance Committee, echoing some of the Trump administration’s biggest criticisms of the world’s second largest economy.
A multilateral approach on trade
Biden “continues to say he wants to approach China via a coalition of other democracies, and that will take time to build,” said William Reinsch, a trade expert at the Center for Strategic and International Studies who served for 15 years as president of the National Foreign Trade Council. “The [China] relationship is too important to ignore, but I don’t see him rushing into anything.”
Navigating tech tensions
Biden will also have to navigate escalating tensions in technology and business. Those likely aren’t going to subside, given bipartisan support for the view that China poses a major threat to US national security.
After targeting telecoms equipment maker Huawei and social media platform TikTok, Trump ratcheted up the pressure on China as his term wound down. During its last few weeks, his administration imposed a series of harsh penalties on Chinese companies that will make it hard for Biden to easily reset relations, even if he wanted to.
Some experts are more optimistic about how Biden might proceed.
“We expect Biden’s team to focus on domestic issues,” Jefferies analysts wrote in a Wednesday research note. “Although Biden’s cabinet candidates have talked tough on China, we believe his strategy would be more consensual and less disruptive to financial markets.”
But others maintain that the prospect of worsening US-China tensions still exist. The consultancy Eurasia Group sees US-China tensions as one of the biggest risks of 2021, adding that Biden will likely enlist allies from the European Union, Japan and India to push back on China.
“The new administration will have some successes — suspicion of China is broadly growing,” wrote Eurasia Group President Ian Bremmer and Chairman Cliff Kupchan in a report this month.