Topic: Policy

China is closely watching the US election, but senior Chinese officials understand that elevated US-China tensions will be an enduring trend – no matter who is in the White House.

If Donald Trump wins a second term, the risk of new disruptive US sanctions against China should ease in the very near term (i.e. the next three months) but heighten as time goes on. If Joe Biden proves victorious, the opposite would be true.

Last week’s US Commerce Department announcement banning WeChat in the US was seen as a severe move, but in reality, it was the softest possible interpretation of the Executive Order (EO) from August 6.

Xi Jinping has been relatively quiet in public on the question of China’s approach to the US and the overall US-China relationship. This is likely because he has no good options when it comes to dealing with the US, and silence preserves flexibility. However, recent signaling suggests that Xi wants China’s diplomats to firmly hold the line, and that new compromises or new concessionary offers are unlikely.

With US-China relations at a generational nadir – and still declining – and with China now emerging into a post-coronavirus stance, Beijing’s relationship with Europe is top of mind for China’s leaders. Chinese leaders appear desperate to secure political and economic connectivity with the Europeans – and their large markets, and their advanced technology – given that nothing is certain anymore with the Americans.

With 75 days to go before the US election, the US-China relationship looks to be entering a new phase. The rollout of disruptive new China policies by the Trump administration has reached a dizzying pace; nothing is off the table.

China’s reaction to the US closure of the Chinese consulate in Houston is in keeping with its previous strategy of matching US moves, but not escalating. All signals and messaging from the Chinese side indicate a preference for dialing down tensions, but Beijing does not have a willing partner in DC for pursuing this goal.