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China braces for worst as it becomes punching bag in US election

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Published in Political News

With Beijing already becoming a top target in the U.S. election campaign, President Xi Jinping’s government is resisting any move that could backfire on the world’s second-largest economy.

China’s restraint was on display last week after President Joe Biden blasted Beijing as “xenophobic” and vowed to triple tariffs on Chinese steel and aluminum exports, during a campaign stop in a swing state where rust-belt jobs are on the line.

On the same day, Washington opened a probe into its rival’s shipbuilding sector, causing stocks of Chinese firms in that industry to tumble. Congress also fast-tracked efforts to force TikTok to divest from its Chinese parent ByteDance Ltd., by bundling the decision into an aid bill that passed Saturday.

China’s response to all this has been relatively muted. In a largely symbolic measure, Beijing imposed tit-for-tat tariffs on propionic acid, an export market worth $7 million to America last year, according to customs data. Officials brushed off the shipping probe as being about “domestic politics,” and deflected criticism of their immigration policies, asking if Biden was really talking about the U.S.

After a meeting between Xi and Biden in November “the Chinese understood that U.S.-China relations would not be perfect, but was an improvement relative to last year,” said Zhu Junwei, a former researcher in the People’s Liberation Army who is now director of American research at Grandview Institution, a Beijing think tank. “China is learning to be more practical, more pragmatic — to compartmentalize different areas.”

Chinese policymakers already battling a protracted property crisis and weak demand at home have scant incentive to escalate tensions. Beijing is relying on the buoyant American consumer as it leans on exports to hit its annual growth goal of about 5%.

 

Another reason for moderation: The latest U.S. measures have minimal immediate impact. China sells little of the targeted metals to the U.S., and the shipbuilding probe will take time. The Senate still needs to approve the TikTok bill, and the company could file an injunction if Biden signs the proposal.

Senior White House officials are seeking to keep communication lines open to maintain guardrails on the relationship. U.S. Secretary of State Antony Blinken will arrive in China this week, where he will spell out how Chinese companies’ support for Russia’s war machine is impacting European security, according to a senior U.S. official.

His trip comes on the heels of Treasury Chief Janet Yellen’s visit to Beijing earlier this month, and the first phone call between China’s new defense minister and his U.S. counterpart.

While Beijing might be able to dismiss largely symbolic tariffs, the prospect of TikTok being acquired by an American entity does appear to be worrying China. Behind the scenes, Chinese embassy workers are quietly meeting congressional staff to lobby against the bill, Politico reported Wednesday.

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