U.S.-China Policy Update, June 29, 2023
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U.S.-China Policy Update, June 29, 2023

Brownstein Newsletter, June 29, 2023


What to Watch: June 28-30

Secretary Yellen to Travel to Beijing. Unnamed Biden administration officials have reported Secretary of the Treasury Janet Yellen is planning to travel to Beijing in early July for meetings with CCP Vice Premier He Lifeng and other senior CCP officials. The long-anticipated trip had been delayed following the discovery of a Chinese surveillance balloon in U.S. airspace in February, with Yellen noting in April that it would take place at “the appropriate time.” Yellen’s visit would be the second by a U.S. cabinet member during the Biden administration, with Secretary Blinken visiting Beijing from June 18–19. News of Secretary Yellen’s trip came shortly following reports that the Treasury Department and other federal agencies were close to finalizing a long-anticipated outbound investment executive order, which would cover certain investments in key technologies central to U.S. economic competition with China, including semiconductors, artificial intelligence and quantum computing. The dates of the visit have yet to be confirmed.

Biden Administration Weighing Semiconductor Export Restrictions. Unnamed Biden administration officials have reported the Department of Commerce is considering a ban on the export of U.S.-manufactured semiconductor chips with artificial intelligence (AI) applications to Chinese customers without a license. The rule, which would follow earlier export restrictions on advanced semiconductors and semiconductor manufacturing equipment announced in October 2022, would aim to restrict AI development by Chinese companies, a key area of economic competition between the United States and China. It would also follow China’s recent ban on the use of chips manufactured by U.S. semiconductor company Micron in critical infrastructure projects in China. While the Department of Commerce has not announced a timeline for the rule’s implementation, Biden administration officials have indicated the rule could be announced as soon as July. The administration is likely to release the rule after Secretary Yellen’s upcoming trip to China in order to avoid creating additional tensions with Beijing.

Netanyahu Formally Announces China Visit. Israeli Prime Minister Benjamin Netanyahu announced on June 27 he would travel to China in July, where he is expected to meet with President Xi Jinping and other high-level CCP officials. The visit follows tensions between the United States and Israel over the Biden administration’s calls for a two-state solution with Palestine, as well as criticisms of the Netanyahu administration’s handling of judicial reforms. China has also recently taken a more expansive role in Middle East diplomatic affairs, recently mediating a normalization agreement between Saudi Arabia and Iran, which has led to multiple observers positing that U.S. influence in the region could be shifting to China. Prime Minister Netanyahu noted that the Biden administration was notified that the visit would take place “one month ago,” adding in a statement that the United States “will always be Israel’s most vital and irreplaceable ally.” A date for the visit has yet to be announced.

China Issues Statement of Support for Putin Following Wagner Insurrection. China issued a statement in support of Russia’s government on June 25, following the abortion of a rebellion by Russian paramilitary organization Wagner Group that resulted in the group’s exile to neighboring Belarus. China’s Ministry of Foreign Affairs noted the insurrection was “Russia’s internal affair,” adding that China would support Russia “in maintaining national stability and achieving development and prosperity … as Russia’s friendly neighbor and comprehensive strategic partner of coordination for the new era.” Outside observers have argued that China’s diplomatic partnership with Russia may be strained as a result of the rebellion, which indicates dwindling political stability in the country. However, President Putin’s ability to form a ceasefire with Wagner forces within a matter of hours may allow the Kremlin to argue any future inner turmoil as a result of the Ukraine invasion will not result in Russia becoming unable to meet its obligations to China and its other diplomatic partners. On June 27, Fu Cong, Chinese Envoy to the European Union, noted that China would support Ukraine’s aims of reclaiming its territorial integrity in principle, saying, “I don’t see why not” when asked whether China supported Ukraine’s goals, which include reclaiming Crimea and other annexed territory. Cong clarified that China respected “the territorial integrity of all countries,” saying “that’s what [China] agreed” when it established relations with the former Soviet Union. Cong also noted that territorial disputes would “need to be negotiated and resolved by Russia and Ukraine.”

Highlight Reel: June 14-28

White House

White House Hosts Prime Minister Modi for State Visit. On June 22, Indian Prime Minister Narendra Modi traveled to Washington, D.C., for a four-day state visit, a key part of the Biden administration’s broader efforts to strengthen ties with Indo-Pacific states. During the visit, the two leaders announced the U.S. government would support India’s efforts to increase production of electric vehicles and renewable energy infrastructure and allow some Indian H-1B Visa holders to renew their visas in the United States. Prime Minister Modi also committed to lifting retaliatory tariffs imposed on certain U.S. agricultural products without asking the U.S. government to lift tariffs on steel and aluminum imports, a key priority of the Biden administration’s trade negotiations with India over the past several months. The two officials also announced several initiatives under the umbrella of the newly announced India-U.S. Defense Acceleration Ecosystem (INDUS-X), a framework to facilitate cooperation between the U.S. and Indian defense industries. The visit was the most significant step the Biden administration has taken to court India as a closer ally in the Indo-Pacific region, and showcases the administration’s willingness to overlook negative perceptions of India’s human rights record in an effort to secure its cooperation in any potential escalation between China and the United States. Prime Minister Modi and President Biden also underscored the right to sovereignty in the Indo-Pacific region during the visit, with Modi saying India shared the U.S. vision of a “free, open, and inclusive Indo-Pacific,” referencing China’s claims to sovereignty in the region. However, it remains unclear whether India will pare back its ties with China as a result of the visit. The visit also drew criticism from Democrat members of Congress, with over 70 Democrats authoring a letter on June 20 urging Biden to raise human rights issues when meeting with Modi, and multiple Democrats boycotting Modi’s joint congressional address on June 22.


House and Senate NDAA Bills Pass with China-Related Amendments. The House and Senate Armed Services Committees passed their respective versions of the National Defense Authorization Act (NDAA) for Fiscal Year 2024 on June 22, clearing a key hurdle in the annual defense policy bill. Both versions of the FY 24 NDAA include a variety of provisions meant to bolster U.S. military competitiveness against China. The House NDAA authorizes $874 billion in total defense spending, equal to the president’s budget request. The bill includes $9.7 billion for the Pacific Deterrence Initiative (PDI), an increase of $600 million over President Biden’s budget request; provides multiyear procurement authority for key munitions, including advanced drones and precision-guided missiles; fully funds and encourages the expansion of U.S. joint military training arrangements with Indo-Pacific countries, with an emphasis on U.S.-Taiwan training programs; and reaffirms U.S. support for the defense of Taiwan, among other China-related provisions. The Senate NDAA authorizes $886.3 billion in total spending, a $12.3 billion increase over the president’s budget request, and includes provisions extending the PDI through FY 24 at full funding levels; requiring a waiver for procuring energetic materials from any entity located in China beginning in 2029; establishing a comprehensive training and institutional capacity-building program for Taiwan’s military; and establishing a joint DOD-NNSA program to develop a nuclear-armed sea-launched cruise missile to address the nuclear threat posed by China and Russia, among other provisions. The House version of the bill is expected to move to the floor on July 10. Though most provisions related to China will receive bipartisan support in the House, the broader bill will likely face criticisms from Democratic members over a variety of amendments added to the bill by Republican HASC members related to diversity, equity and inclusion efforts within the Department of Defense (DOD).

Department of State

Secretary Blinken Travels to China. On June 18 and 19, Secretary of State Antony Blinken traveled to China and met with President Xi Jinping, director of the CCP Foreign Affairs Office Wang Yi and State Councilor and Foreign Minister Qin Gang. Regarding the meetings, Department of State Spokesperson Matthew Miller said, “the Secretary emphasized the importance of maintaining open channels of communication across the full range of issues to reduce the risk of miscalculation. He made clear that while we will compete vigorously, the United States will responsibly manage the competition so that the relationship does not veer into conflict.”

“The Secretary addressed the PRC’s unfair and nonmarket economic practices and recent actions against U.S. firms. He discussed U.S. de-risking policies and the historic domestic investments the Administration has made.” The discussions also focused on “maintaining peace and stability across the Taiwan strait.” During the talks, Secretary Blinken said there has been “no change to the U.S. One China policy.”

In an interview, Secretary Blinken said, “the purpose of the trip, at the President’s instruction, was to try to bring a little bit more stability to the relationship, to demonstrate that we’re committed to managing it responsibly—which really is an obligation for us and an expectation that countries around the world have—and to be able to deal very directly with our differences.” Secretary Blinken also defended President Biden’s remarks characterizing President Xi as a “dictator,” saying, “The President always speaks candidly, he speaks directly … and he speaks for all of us” in an interview given shortly following the trip to Beijing.

Secretary Blinken’s trip to China marks the first time a U.S. Secretary of State has visited Beijing in five years. Discussions are expected to continue at a later date when State Councilor and Foreign Minister Qin visits Washington (dates still TBD).

Department of Commerce

U.S. and Singapore Officials Discuss Economic Engagement. On June 16, Department of Commerce Deputy Secretary Don Graves met with Singapore’s Minister for Foreign Affairs Vivian Balakrishnan. The discussion focused on “promoting a peaceful, secure, and prosperous Southeast Asia,” according to the Department of Commerce’s readout of the meeting. The deputy secretary “thanked Singapore for its continued support and leadership in the Indo-Pacific Economic Framework for Prosperity (IPEF).” The deputy secretary confirmed the two countries plan to strengthen their partnership. The meeting comes at a time when the United States is strengthening relationships with allies in the Indo-Pacific region.

Department of Defense

U.S. and Indian Officials Launch India-U.S. Defense Acceleration Ecosystem (INDUS-X). On June 21, U.S. Department of Defense and Indian Ministry of Defense officials launched the India-U.S. Defense Acceleration Ecosystem (INDUS-X) to facilitate cooperation and connectivity between the U.S. and Indian defense industries. INDUS-X features a Senior Advisory Group that oversees bilateral cooperation, industry and academia-led initiatives, and public-private partnerships to sponsor and facilitate collaboration between industry and government stakeholders in both countries. The Department of Defense affirmed INDUS-X’s goal to “catalyze innovation and help equip both countries’ armed forces with the capabilities they need to defend a free and open Indo-Pacific.”

Launched shortly before Indian Prime Minister Narendra Modi’s state visit to the United States, the program continues the trend of increased U.S.-Indian collaboration in the Indo-Pacific as a counter to China’s growing military and economic power in the region.

U.S. Coast Guard Vessel Sails Through Taiwan Strait. Just days after U.S. Secretary of State Antony Blinken’s delayed visit to Beijing, a Legend-class national security cutter, United States Coast Guard Cutter Stratton, passed through the Taiwan Strait. The transit marked the first solo U.S. Coast Guard cutter passage through the Strait since 2017. The Chinese coast guard decried the public announcement of the passage as “public hype,” and Chinese ships tailed the U.S. vessel through the Strait. The United States characterized the passage as “routine” and “through waters where high-seas freedoms of navigation and overflight apply in accordance with international law.” The United States also noted that the ship’s passage was through “a corridor … that is beyond the territorial sea of any coastal State.” The Strait’s median line once marked a de facto maritime boundary between China and Taiwan, despite both sides viewing the Strait as part of China’s single exclusive-economic zone. More recently, Chinese vessels and aircraft have violated the median line and surrounded and followed U.S. ships exercising legal freedom of navigation in the Strait. Earlier this month, U.S. officials released footage of what was deemed an “unsafe” maneuver by a Chinese vessel, cutting across the path of a U.S. ship.

Private Sector
The Atlantic Council
Tech race with China: Toward a comprehensive strategy
June 27, 9:00 a.m.
Wilson Center
Tripolar Instability: Nuclear Competition Among the United States, Russia and China
June 27, 11:00 a.m.

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