US China Relations: Diplomats Meet – And Talk Past Each Other

Well, at least they met?

After political and protocol wrangling symbolic of the troubled relations between China and the USA, Wendy Sherman, the US Deputy Secretary of State, was permitted to visit Tianjin from July 25-26, and meet her counterparts. And the meetings lived down to expectations. This article is a summary of important US China news in July 2021.

The State Department at one point cancelled the China leg of Sherman’s Asia trip. Vice Foreign Minister Xie Feng set out lists of remedial actions that Washington must take to get relations back on track. The US should not challenge, smear and seek to subvert China’s socialist system with Chinese characteristics, should not interrupt China’s development or interfere in its sovereignty, Foreign Minister Wang Yi told her.

A day later, in Singapore, US Defense Secretary Lloyd Austin said Washington did not seek a military clash with China but would challenge China’s assertive activities in the Asia-Pacific. “We will not flinch when our interests are threatened,” he said. “Yet we do not seek confrontation.”

Heading in the other direction was China’s new Ambassador to the United States, Qin Gang, who on arrival in Washington declared that the China-US relationship faces “not only many difficulties and challenges but also great opportunities and potentials (sic).” Those challenges remained ever-present in July.

The US and allies condemned China for big-time interference, as Washington mustered an unusually broad coalition of countries to accuse China of a global cyberespionage campaign, claims angrily rejected by Beijing. The US blamed the Chinese government for a string of ransomware and cyberattacks, including an enormous hack on Microsoft Exchange earlier this year, and compromising more than a dozen US pipeline operators nearly a decade ago.

A long-running US-China dispute over Beijing’s import controls on rice, wheat and corn has been reignited at the WTO, adding to trade tensions between the world’s two largest economies, said the South China Morning Post. Yet the pair are shipping goods to each other at the briskest pace in years, reported Bloomberg, making the world’s largest bilateral trade relationship look as if the protracted tariff war and pandemic never happened.

But one sector is certainly hurting: China’s plans to tighten restrictions on overseas listings of Chinese companies could threaten more than $2tn worth of shares on Wall Street, and make Chinese firms reconsider US listings, thereby hitting a lucrative trade for American banks, reported the FT.

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