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Friday, May 24, 2024

A Year In, Biden’s China Policy Looks a Lot Like Trump’s

On December 10, the US Treasury Department imposed sanctions, including a bar on American investments, on SenseTime, a Chinese artificial intelligence company accused of developing facial-recognition software used to target China’s predominantly Muslim Uyghur community. The move, part of a raft of sanctions introduced on Human Rights Day, prompted SenseTime to postpone a planned IPO in Hong Kong.

Officially, Treasury added SenseTime to its Chinese Military-Industrial Complex (CMIC) list, created under a different name in November 2020 by then president Trump. In June, President Biden removed some companies from the list, added others, and expanded its scope to include Chinese companies selling surveillance technology. On December 16, eight companies were added to the blacklist, including dronemaker DJI and facial-recognition firm Megvii.

The moves show how, despite toned-down rhetoric, Biden has largely maintained Trump’s policies toward China. In some cases, the administration even built on Trump’s signature measures, while paring back policies considered legally vulnerable and increasing the emphasis on human rights.

There have been some departures. In June, Biden revoked the so-called TikTok ban, which had twice been blocked by US judges. The ban would have required the Chinese-owned short-video app to leave the US, unless parent company ByteDance sold TikTok to an American company. Biden then called for a national security review of all foreign-owned apps within 180 days. The deadline for that review passed without any major announcements.

In September, Huawei CFO Meng Wanzhou boarded a chartered Air China flight from Vancouver to Shenzhen, where she was greeted with roses and a flag-waving crowd. Meng, the daughter of company founder Ren Zhengfei, had been held in Canada for three years at the request of US authorities, who accused her of helping Huawei evade sanctions on Iran. Meng entered into a deferred prosecution agreement with the Justice Department, allowing her to return home in exchange for admitting some wrongdoing—and removing a major sticking point in US-China relations.

But the Biden administration has tightened other restrictions on Huawei. Trump had put the Chinese company on a list that generally prevents US companies from doing business with it. US companies must apply for a special license to sell software or components such as microchips to Huawei and others on the list. In March, the Biden administration made it harder for American companies to get those licenses. Several months later, Huawei spun off the smartphone division Honor, so that devices sold outside of China could once again use Google’s Android operating system and other software.

“I don’t see a lot of daylight between the two administrations on national security,” says Nazak Nikakhtar, a former Commerce Department official under Trump.

To a large extent, Biden is penned in because he needs to avoid sparking World War III while not looking “soft” when the US public and Congress hold increasingly negative views of China. And China’s more authoritarian turn under President Xi Jinping—particularly rolling back democracy in Hong Kong and oppressing its Muslim populations—have made it more difficult to reset the relationship. Biden recently said the US would not send any government officials to the Winter Olympics in Beijing in February.

But analysts say Biden has not offered a distinct China policy, except to say the two countries are competitors. “It’s very hard for the Biden administration to move in a high-profile, public, or fast way, because of the political space that’s so narrow on things related to China,” says Susan Thornton, a career diplomat who was responsible for China policy in the late Obama and early Trump administrations.

Thornton says it’s hard to discern the policy behind the bans and restrictions on Chinese company. The Biden administration has said it isn’t trying to contain China, but “if that’s the case, I really don’t understand what we’re doing,” she adds. And it’s a hard case to make when Trump-era tariffs remain in place, and the list of Chinese companies facing trade and investment restrictions continues to grow.

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In his first year in office, Trump fired the first shots of a trade war, placing new tariffs on Chinese goods. By 2020, efforts had spiraled across the federal bureaucracy—at least 210 public actions aimed at China according to numbers compiled by Axios—from tightened visa restrictions to ramped up sanctions and export controls.

Under Trump, agencies such as Commerce and the US Trade Representative developed novel interpretations of their mandates to restrict trade with China. Those measures included barring US companies from selling to certain Chinese companies; imposing export restrictions to sanction people and companies for stealing intellectual property, hacking, and human rights violations; and subjecting companies in third countries to American export controls if their products contain American components or IP.

The Biden administration has largely left Trump’s designations on the books and added its own, if not always with the same volume. In Trump’s final year, 184 Chinese people and companies were added to Commerce’s Entity List; as of mid-December, Biden had added 43. Neither Commerce nor Treasury responded to multiple requests for comment.

The sanctions lists maintained by Treasury prohibit US citizens or companies—and in some cases, foreign banks that do business with US financial institutions—from having any business relationship with the targeted people or companies, and they freeze assets held in US banks. Hong Kong chief executive Carrie Lam said that after she was added to the Specially Designated Nationals list in August 2020, she resorted to stockpiling cash because no bank would do business with her. This year, the Biden administration added roughly as many people and companies to the list as Trump did last year.

Many Trump-era tariffs also remain in place, even as critics argue that US households and firms pay for the tariffs, contributing to inflation. US trade representative Katherine Tai has said that the US will build on existing tariffs until China honors commitments it made before the pandemic to purchase US goods. Companies can petition for exemptions, but a September analysis by the Congressional Research Service shows that most requests are rejected.

Another signature Trump effort, the Department of Justice’s China Initiative, launched in November 2018, with the stated aim of countering economic espionage and national security threats coming from China. The program has faced increasing criticism for its overly broad targeting of Chinese academics and Chinese-Americans, but there are few signs that Biden plans to roll it back.

In July 2020, FBI director Christopher Wray said the bureau was opening a new China-related counterintelligence case about every 10 hours. An FBI spokesperson said those numbers are the most recent publicly available statistics, and referred other questions about the China Initiative to the Justice Department, which did not respond to requests for updated information.

An analysis by MIT Technology Review earlier this month indicates activity may have slowed, but hasn’t stopped, under Biden. The analysis identified 77 cases tied to the China Initiative, including six since the start of 2021. Only about a quarter of the people charged under the initiative so far have been convicted, and many of the cases have little to do with the stated security and economic aims. Instead, many charges involve “academic integrity” concerns, specifically researchers who failed to properly disclose affiliations on forms, the analysis found.

This July, visa fraud charges were dropped against four Chinese researchers who were accused of lying about their work for the People’s Liberation Army, a case that was cited when the US ordered China to close its Houston consulate in July 2020. That consulate remains shuttered, as does the American consulate in Chengdu, which China ordered closed in reciprocity.

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