Washington’s Lopsided Approach to Competition With China

Ahead of the U.S. presidential elections later this year, the political divide within Washington seems to be growing ever wider. Yet days before the end of 2023, Capitol Hill showed remarkable unity in pushing forward a defense bill worth over $886 billion, which included $14.7 billion to boost defense in the Indo-Pacific.

For Democrats and Republicans alike, China is clearly seen as a threat that transcends party politics. The question is whether that alone is enough for U.S. victory against Beijing, in whatever way Washington policymakers define a win for the United States.

For there is yet no clear definition of what the end goal of strategic competition between the world’s two largest economies might actually look like. While some U.S. legislators may argue that a win would be a collapse of Communist Party rule in China, such voices are few and far between. The broader bipartisan consensus as reflected in the Pacific Deterrence Initiative is to provide financing to counter Chinese aggression, including bolstering support for Taiwanese forces. Meanwhile, the Indo-Pacific Campaigning Initiative would also allow the United States to move forward with AUKUS and with an eye to allow sales of nuclear-capable submarines to Australia down the line.

In short, the United States is prepared to continue supporting efforts to boost its presence in the Indo-Pacific despite the ongoing war in Ukraine and heightened concerns about the longer-term consequences of the Israel-Gaza conflict. Yet U.S. acknowledgement of the need to confront a longer-term systemic conflict with China has considerable hurdles, not least the fact that tensions with Beijing are hardly limited to military confrontation alone. Whatever the broader objective of longer-term relations with China may be, it will be in play for the foreseeable future and extend to the economic, technology, diplomatic, and political as well as security realms.

The Biden administration has been quick to recognize, too, that the United States cannot compete effectively against China alone. Since taking office in 2021, the Biden White House has made clear that it is committed to developing partnerships and alliances with like-minded countries in the Indo-Pacific. The latest defense policy bill has led to greater confidence among U.S. allies and partners in the region about U.S. military commitment to the Indo-Pacific that goes beyond mere rhetoric. As a result, 2023 is ending on a high note in terms of expanding and expanding the Asian security network led by Washington.

In contrast, the gap between U.S. economic and military leadership widened still further in 2023. The Indo-Pacific Economic Framework (IPEF), which had been launched the previous year as a flagship initiative to bolster U.S. economic presence in the region, flailed as U.S. appetite to pursue a shared vision on digital trade ultimately faltered. It was one issue to have India decline to be part of the digital trade negotiations in the first place. But the fact that Washington backtracked on an initiative that it had launched itself the previous year has led to a questioning of U.S. economic engagement, let alone leadership, in the Indo-Pacific.

As competition between Washington and Beijing continues to intensify over advanced technology in particular, the race to establish rules that will ultimately govern the future of growth and competitiveness is intensifying. In order for the United States to be at the forefront of defining the rules of technology governance and innovation, it will need the support and buy-in of other advanced economies, especially Japan, South Korea, and Taiwan as well as key western European nations. To that effect, the failure of IPEF to initiate talks on developing  high-standard digital rules was a lost opportunity to unite key regional countries to agree upon shared standards that would define their future growth trajectory. It also ultimately weakens the ability to have a united front to confront Chinese efforts to develop its own rules and standards.

The outcome of the U.S. presidential elections will invariably impact the foreign policy not only of the United States itself, but for all key U.S. partners and allies worldwide, including the Indo-Pacific. U.S. financial as well as rhetorical commitment to the region is expected to continue on the military front as strategic competition between Washington and Beijing persist. But for the countries in the region itself, the need for shared rules of economic engagement and standards for protecting critical technologies will be seen as key for their future growth.

Reinvigorated efforts for the United States to advance a strategic economic vision to protect critical technologies, promote innovation, and established a common framework for economic engagement will be one of the highest priorities for the Indo-Pacific in 2024.