Analyses of issues concerning the strategic confrontation with China were reported to the US Congress.
On November 18, 2021, the annual report by the US-China Economic and Security Review Commission (USCC) to Congress was made public. It is an expert level group, which is authorized to provide private annual reports to the US Congress and President.
It should be noted that Americans have prepared rather extensive document against China. It discussed in details particular aspects of bilateral relations. Special attention was paid to regional stability (including the Taiwan issue), Beijing's 'unfair trade practices', rivalry in high tech areas and a build-up of China's nuclear arsenals.
The document's authors reported immediate threats to the US interests in the context of China's growing influence in various regions of the world, including Latin America and the Caribbean.
Interesting ideas are set out in the document's economic block. The Commission has proposed to restrict US investment flows to China by saying it's necessary to ensure national security. USCC experts consider that it's time to take active steps to reformat monetary and trade relations with China for the benefit of other countries in the Asia-Pacific region. In their view, US investments should not contribute to development of China's military-industrial complex. It's also noted that 'Beijing's tightened control over China's corporate sector' caused massive losses to American businesses.
Specialists propose to solve such a problem by imposing restrictions on the purchase of Chinese companies' shares on the US stock markets. The US regulators are ordered to inform investors in advance about the increasing risks of their cooperation with specific Chinese business entities.
It is recommended to the Congress that a specific structure should be established to monitor and block investment flows to China. As detailed in the USCC report, the US Department of the Treasury is to report annually on the amount of US foreign portfolio investment in China. Increased attention is given to business relations with blacklisted enterprises. It's also proposed to expand the sanctions regime (the authors emphasize that the Chinese actively promote offshore financial services to circumvent US restrictions).
The Commission recommends the establishment of the Inter-Departmental Working Group on Critical Technologies, chaired by the Pentagon chief. Its aim is to review regularly technological advances and to discuss steps to prevent the use of advanced developments for the benefit of China. The main idea is that the US Commerce Department should impose appropriate export restrictions.
The authors highlight the Taiwan question. According to analysts, the People's Liberation Army of China possesses capabilities required for committing armed aggression against Taiwan. Effective measures are therefore required to enhance Taiwan's capability to deter China, with assistance from the USA.
The Congress was called on to support Taiwan's administration by providing funds for purchasing certain categories of products from American suppliers (the initiative was launched by Republican Senators). And in addition, the Congress was requested to provide additional resources to fund the deployment of US missile systems in the Asia-Pacific region. The expert group encouraged the White House to clarify "strategic ambiguity" regarding Taipei. The USCC report also highlights the importance of sending the message to Beijing that Washington, if necessary, is going to respond quite decisively to crises in this region.
The USCC report contained the thesis about Chinese Communist Party's pretensions to global leadership. The intention to show the superiority of own model of public administration, to legitimize and maintain one-party rule lies at the root of such ambitions. At the same time, the report noted a number of structural weaknesses in China's economy, namely, the increasing domestic public debt, imbalances in industrial development, the increasing social inequities, demographic factors (fertility decline and population ageing), environmental deterioration and technological dependency on Western countries.
In general, it may be said that the document contains rather broad range of instruments against China. The generic nature of the text seemed to be sufficiently anti-Chinese. Its terminology clearly demonstrates once again anti-Chinese sentiments and stereotypes deeply rooted in the expert community. And it's quite understandable. The timing of the document's publication is also important - it's just after the US-China summit talks. This gives us reason to say with full confidence that Washington will move further along the path of its rather long and outspoken opposition to China by developing policies and mechanisms to curb the rise of China's economic influence.
The methodical rigorousness with which Washington set out its views towards China, should be also mentioned. And surely, the Chinese side will, as usual, respond to it with maximal restraint.