MNI EXCLUSIVE: Biden Wouldn't End US-China Decoupling:Advisors

--Biden Presidency Would Bring More Cordial Tone, But China, US, Seen Decoupling

Still

     BEIJING(MNI) - A potential Joe Biden presidency could improve U.S.-China

communications and maybe even revive hopes for a Phase Two trade deal, policy

advisors and government sources in Beijing told MNI, but they cautioned that the

trend for the world's two biggest economies to decouple significant parts of

their trade relationship would continue.

     While Beijing, which officials admitted was caught off guard when Donald

Trump was elected in 2016, will be careful not to express any preference ahead

of the November elections, sources and advisors noted that Biden, a

long-standing member of the Senate Foreign Relations Committee, already knows

many top Chinese leaders.

     "When Biden was in office, Xi Jinping was also a vice president in China.

The two sides had pretty good exchanges. It could be said they are familiar with

each other ... The two countries should not have difficulties in terms of

communication," said Lv Xiang, a U.S.-China expert with the Chinese Academy with

Social Sciences.

     "China is not afraid of negotiations. If the two countries could sit down

to talk, with consideration for each other's interests, there should be

results."

     But, while easier a freer flow of communication between Washington and

Beijing could help kick-start stalled negotiations on trade as well as enable

the two countries to more effectively cooperate in other areas such as disease

control and climate change, the general trend of "selective decoupling" cannot

be reversed, advisors and government sources said, pointing to growing rivalry

in areas including high technology and telecommunications.

     --BUY AMERICAN

     In an article in Foreign Policy earlier this year, Biden accused China of

stealing intellectual property and of using subsidies to give state-owned

enterprises an unfair advantage. More recently, he has spoken of promoting

buy-American policies, and of rebuilding U.S. supply chains.

     "We [in the Chinese government] believe competition will get fiercer and

fiercer even if the administration changes. The only difference is whether the

two countries can have some basic cooperation on global issues," said the first

source, asking to remain anonymous.

     But even if the forces of competition inexorably lead to further bilateral

tension, a Biden presidency would still be welcomed in Beijing as bringing a

change from the "almost unacceptable" style of Donald Trump, under whom

relations have hit what Chinese officials regard as the lowest ebb in decades.

Comments by both Trump and U.S. congressman went against the spirit of the "good

environment" emphasised by Chinese officials as necessary for implementation of

agreements under the two nations' Phase One trade deal, a second source said.

     "It is unacceptable to keep negotiations and a trade deal going while

throwing out threats on other fronts," the third source said. Washington has

stepped up criticism not only over Beijing's tightening control over Hong Kong

but also over Xinjiang and claims in the South China Sea.

     --MULTILATERAL APPROACH

     Chinese advisors expect Biden, if he wins in November, to seek more support

amongst U.S. allies for its positions on China, but they added that the more

countries join with Washington, the more constrained it will be in its actions

by the need to seek consensus. At the same time, China would also attempt to

forge its own understandings with friends of the U.S..

     For the moment, Beijing wants to ease tensions with the U.S., the

government sources said, adding that China took the same approach in trade talks

last year. In a speech last week to an online forum attended by think tanks from

both nations, State Councilor and Foreign Minister Wang Yi said the U.S. and

China should identify issues on which they can cooperate, disputes that can be

solved via negotiation, and matters on which agreement would not be possible for

now.

     There is even a possibility that hopes for a more ambitious Phase Two trade

agreement or other bilateral economic agreements, which have recently been

sidelined, might be revived amid a more cordial atmosphere between Washington

and Beijing, government sources said, although they cautioned that this was not

certain.

     Advisors and government sources pointed to the ascendancy of anti-China

hawks in the Washington policy establishment, and said that they would continue

to exert influence on the U.S. government even if Biden takes the presidency.

     "It looks like China and the U.S. have switched positions," said the second

official. "In China, views on the U.S. are quite diversified and both U.S. hawks

and U.S. doves can get their voices heard. But DC is full of China hawks now."

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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