- It was a bad week for China on the world stage.
- President Biden is getting a warm reception in Europe rallying our democratic allies in the G7, the EU and NATO.
- And at home, our squabbling US Senate somehow managed to pass a $250 billion bill countering China.
- This is an opinion column. The thoughts expressed are those of the author.
- See more stories on Insider's business page.
This week the leaders of the Western world turned their eyes toward China, and as a result it was one of the worst weeks for Beijing on the world stage in some time.
In Washington, Democrats and Republicans in the Senate set aside their differences to pass a $250 billion industrial policy bill aimed at preparing US commerce and government for competition with Beijing. And while on a diplomatic trip to Europe, President Joe Biden is reinvigorating our ties to our allies in Europe, the G7 group of nations, and NATO. On the top of the agenda in these meetings is the question of how to counter an aggressive, totalitarian China on the rise.
This comes as every indication points to China moving farther and farther away being an open, even remotely democratic society.
Earlier this week Amnesty International published an in-depth look at life for Muslims living in the Xinjiang Uyghur Autonomous Region, calling it a "dystopian hellscape" where Muslims are terrorized and arbitrarily forced into labor camps as part of "part of a larger campaign of subjugation and forced assimilation." The Times also reported the Chinese government is seizing Uyghur Muslims who flee abroad.
On the economic front, the Chinese legislature rushed through a bill expanding the government's means and methods to retaliate against foreign sanctions including the ability to seize foreign companies' Chinese assets, deny visas, and block the ability to do deals in China. Foreign businesses in the country were caught flat-footed.
At the heart of China's bellicose behavior is the belief, held among many elites in the Chinese Communist Party, that the US and its partners in the West are in a state of decline. This idea took root during the 2008 financial crisis, and then was reaffirmed by the European debt crisis, the election of Donald Trump and his agression towards our European allies, and the United State's handling of the coronavirus pandemic.
To the CCP, our way of life looks like chaos - a cacophony of voices sometimes forcefully pulling our discourse to the right then back to the left. They've convinced themselves that we can no longer organize and unify our societies to do the ambitious things that need to be done to win the future. This week the West showed China signs that - when it comes to countering a strengthening totalitarian power - that may not be the case.
A matter of trust
China squandered a massive opportunity over the last four years. As president, Donald Trump snubbed America's traditional allies and made overtures to the world's thugs and petty dictators. That could have been a moment when China cozied up to Europe as a more stable alternative, instead China wound up alienating the continent with its overbearing behavior.
For example, at the beginning of this year it seemed certain that the European Union and China would sign a trade deal, against the wishes of the United States. But in March, when the EU sanctioned China over its treatment of Uyghur Muslims, Beijing - in keeping with its policy of aggressive "Wolf Warrior" diplomacy - responded by sanctioning members of EU Parliament. This put the EU-China trade deal on an indefinite hold.
That brings us to Biden and his current trip to Europe, where the president is trying to rebuild trust among nations. His administration is working on undoing the tariffs the Trump administration put on its EU partners with an aim to lift them by the end of the year. He is encouraging unity on the European continent, urging UK Prime Minister Boris Johnson to settle his differences with the EU over Brexit and keep the peace on the Ireland-Northern Ireland border. Biden also announced that the US would donate 500 million doses of Pfizer's COVID-19 vaccine to over 100 countries "no strings attached."
Trump's betrayal of our allies left commentators around the world wondering if US-led groups like the G7 would be able to cooperate enough to do hard things again. This week we're seeing signs that they can and will. The first sign was Treasury Secretary Janet Yellen's momentous announcement that the G7 had come to an agreement on an international minimum corporate tax to stop the race to the bottom in taxing the world's richest companies.
And now it appears Biden is also rallying our allies to counter China. Before he left for Europe, Biden met with NATO Secretary-General Jens Stoltenberg at the White House. Addressing the press after their meeting Stoltenberg said China "doesn't share our values." Biden will attend a NATO summit on Monday, and it will produce the strongest statement in its history on NATO's stance on China, according to the Wall Street Journal.
From the comfortable primeval mud
Legendary American diplomat George Kennan - known for outlining the US policy of containing the USSR during the Cold War - used to say that the US people are always about 10 years behind its diplomats when it comes to seeing danger from abroad. Lecturing back in 1950 he compared democracies to a giant prehistoric monster "with a body as long as this room and a brain the size of a pin" that needs to be directly confronted with a problem before it awakens from the "comfortable primeval mud." But when a challenge does gain our attention, Kennan said, the country lashes out with "such blind determination that he not only destroys his adversary but largely wrecks his native habitat."
Perhaps the US has learned something from Kennan. Consider the Senate's passage of a 2,400 page bill aimed at shoring up the US as an economic and technological superpower. The size and scope of the bill shows that our leaders are trying to meet a challenge before it's an emergency.
The bill allocates $52 billion to building up the semiconductor industry in the US in order to decrease our dependence on semiconductors from China and Taiwan. The bill also funds major research, allocating $81 billion to the National Science Foundation from 2022 to fiscal 2026 and $120 billion into technologies like artificial intelligence and quantum computing.
There are also diplomatic and intelligence measures. It bars US diplomats from attending the Olympics in Beijing, and requires the intelligence community to produce a report about China's efforts to influence international bodies like the World Bank, International Monetary Fund, World Trade Organizations and United Nations. It passed the fractious US Senate - sometimes sardonically referred to as Mitch McConnell's "legislative graveyard" - on a vote of 68 to 32.
China responded to the bill saying that it "slanders China" and is "full of Cold War mentality and ideological prejudice."
In a time when the leaders of the richest country in the world are squabbling amongst themselves over whether or not to fund the building of roads and bridges, this bill is a heartening sight. The most important ways the US can counter China are by strengthening itself domestically and by preparing for the worst with its allies. If the giant prehistoric monster hasn't awakened, this week shows that it now at least has one eye open.