America's Losing China Strategy
After declaring that "America is back" and rejecting almost everything that Donald Trump represented, the Biden administration seemed poised to reclaim the mantle of US leadership within the open market-oriented international order. Yet in its strategy to counter China, it is behaving utterly Trumpian.
WASHINGTON, DC – Despite the cantankerous, polarized atmosphere in Washington, DC, there seems to be bipartisan agreement on one thing at least: that China is a problem, and that the United States must respond to the competitive challenge it poses. With military and economic strength as its main components, the Sino-American rivalry has come to be seen as a contest to determine who will lead the regional and global order.
Economic dynamism is a necessary condition for establishing military strength. For the US to maintain and strengthen its leadership role in the world economy, it must have both allies and a vibrant domestic economy. Why, then, is US President Joe Biden’s administration sponsoring policies that will help China reduce America’s own economic advantage?
Instead of asking how the US can improve its economic performance, the administration is imitating China by letting the government pick winners and losers among technologies and industries. In doing so, it is abandoning traditional US support for the open multilateral trading system, the rule of law, and private enterprise within an appropriate governance framework.