Republican Congressman Says Bipartisan, Ally and Private Sector Consensus Needed on China

Hill said the U.S. and its allies were too slow to recognize how China's approach was changing, how fast it was happening, and the implications of the new stance. "And today, we’re not on the same page as to how best to respond," he said. "And in our private sector, motivated principally by the siren song of enormous population and a growing middle class, in my view, was complacent about having its supply chains and critical prospects too reliant on China. In my view, the financial and legal long-term risks were not sufficient, and not to mention the business risks associated with China’s surveillance culture and its gross human rights violations."

He acknowledged that not everyone agreed with former President Trump's tariff approach, but said that it was a wake-up call to the private sector -- as was the pandemic and the way that China has ended the one-country two-systems approach in Hong Kong.

"Secretary of State [Antony] Blinken got it about right when he described the U.S. posture towards China as competitive when it should be, collaborative when it can be, and adversarial when it must be," he said.

He said it's essential that Republicans and Democrats are committed to finding the right framework for U.S.-China relations, and that that framework "must also reflect a consensus that’s supported by America’s private sector, principally its multinational firms." He said the administration must also do the hard work of trying to reach consensus on how to approach China with European and Asian allies.

Supply chain resiliency has to be part of this approach, he said, and moving away from just-in-time, lowest-cost sole sourcing is part of that. "Building America’s supply chain capacity outside China will take years, maybe even decades, but American businesses have experienced now two major disruptions in business in a short period of time between the trade disputes with China and the proliferation of COVID-19. This is one way we can slowly and in small increments separate from China while building economic resilience in areas like Central and South America or Southeast Asia."

Hill also pointed to human rights as an important plank of the framework, and noted that Congress has passed "multiple bills related to the treatment of the Uyghurs, and materials coming out of the Xinjiang province, where 45% of the globe’s polysilicate is produced for solar panels, and 84% of China’s cotton is cultivated. It’s my hope that U.S. companies that have footprints in Xinjiang will not continue to stick their heads in the sand while the world learns more and more every day about the ongoing genocide against the Uyghurs."

Stephanie Segal, the lead author of the report, said that an analysis of the benefits of any particular kind of engagement with China is always going to be subjective.

Panelist David Rank, a former deputy chief of mission at the U.S. Embassy in China, said that a lot of the debate in Washington has been focused on tariffs, sanctions and decoupling, where he thinks the U.S. should think more about how to shore up its technological advantages. "As we think about the U.S.-China relationship … I thknk it’s important to think about the country over which we should have the most influence," he said.

Rank said when he worked in Beijing, he tended to hear from U.S. companies that were having trouble with Chinese economic policies. But now that he's a consultant, he hears from companies that are in China because they're making money there, and he's hearing from companies that tried to shift work to Vietnam to avoid the trade war, but are now going back to China because they found Vietnam "a tougher place to do business."

Segal said that's why the report only talks about narrow detangling, because "the two economies are so closely integrated."

Remco Zwetsloot, a research fellow at the Center for Security and Emerging Technology think tank, said that when it comes to AI, one of the areas where folks are concerned about Chinese abuses, restricting access to China over U.S. data or algorithms is difficult. But hardware, particularly the chips needed for that hardware, is more possible to control through export controls.

Segal said one of the ways to analyze how effective any restriction would be, including export controls, is to determine how likely allies would be to go along.

Rank said that although the Biden administration is taking a more ally-centric approach to trade, he said there are challenges to getting on the same page with the European Union, because in a lot of ways, the U.S. and European interests "are really different."

He said he hopes the U.S.-EU Trade and Technology Council arrives at conclusions, instead of being "a long, drawn-out talk shop."