Beijing holds its breath on Biden

Editorial | Mary Ma 22 Jan 2021

Joe Biden signed a raft of executive orders to reverse many of Donald Trump's domestic policies shortly after being sworn in as America's 46th president.

But what, in particular, will Biden do in relation to China?

Like the rest of the world, Beijing is keen to know.

Almost as soon as Biden took the oath, Beijing policymakers could not wait to do two things to assess the response of the new administration.

First, the Chinese foreign ministry announced a long sanction list, starting with the former US secretary of state Mike Pompeo and 27 others. It accused them of "planning, promoting and executing" moves to interfere in China's internal affairs. The sanction affects their family members too.

Then, three Chinese telecom giants - China Mobile, China Telecom and China Unicom - took identical steps in asking the New York Stock Exchange to reverse its decision to delist them from Wall Street.

The sanctioning of Pompeo and the others was meant to be more than just an eye for an eye.

If the retaliation was made in the Trump administration's final hours, Pompeo might have responded to it and spared his successor Antony Blinken the trouble. The issue now rests squarely on Blinken, Biden's top diplomat.

Immediately, a spokesman for Biden's national security council called it "unproductive and cynical" to sanction ex-officials. The reaction was restrained and low profile.

As Pompeo and the others sanctioned belonged to the former administration, it is not in the Biden administration's interest to make a serious issue out of it.

In contrast, the Chinese telecom companies' demands to stay on Wall Street were substantial.

The move would allow Beijing to find out how far Biden or his treasury secretary Janet Yellen were willing to restore their economic ties. That is where the true stakes lie.

Will the new administration give a fast response to the requests?

During a recent public forum, one mainland academic said that, during the time before Trump, Sino-US differences were usually resolved within two months or so with help from Chinese friends on Wall Street.

Two months or so may be the time frame needed to draw such observations, and there is no question that Wall Street will act as the lobbyists.

Whenever a new administration is sworn in, a new chapter of policies opens.

But it should be noted that Blinken, as Biden's top diplomat, openly embraced many of his predecessor's policies during his confirmation hearing in the Senate.

In particular, he agreed with Pompeo's 11th-hour determination that Beijing committed genocide in its treatment of the Uyghur people in Xinjiang, to which Beijing has voiced objections.

Meanwhile, the usually dovish Yellen was more hawkish than expected when answering Senate questions about China, calling Chinese trade practices "abusive." She said she was prepared to "use the full array of tools" against them.

The curtain has just been raised. While Sino-US ties will be different, nothing can be taken for granted.

Let's monitor how the NYSE reacts first.



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