Why China would welcome Biden’s multilateralism

Richard Ip January 14, 2021 09:30

There have been numerous discussions about whether unilateralism of the Trump Administration or multilateralism as advocated by the incoming Biden Administration is a better strategy for the US to contain the rise of China.

The problem with multilateralism is a lack of shared interests amongst parties. With this the US has to compromise with allies on any stronger measures against China, while China can easily drive a wedge in any alliances by luring away members via giving commercial benefits. As such, China will likely enjoy a better international environment with more room to manoeuvre under Biden’s multilateralism.

The foundation of multilateralism

In September 2020, Miles Yu, the principal China policy and planning adviser to US Secretary of State Mike Pompeo, commented on President Xi’s advocacy to the United Nations General Assembly of multilateralism by asserting that shared values are the foundation of multilateralism. He went on to criticise China for having a lack of trustworthiness, and stated that the US is to “build an alliance of democracies to counter the China threat”.

However, multilateralism mainly works well with shared interests, not values. Countries with shared values such as democracy, freedom and human rights do not necessarily have shared interests. This in fact discounts the effectiveness of multilateralism.

A still-fresh example is the EU reaching an investment deal with China just right before the end of 2020. The agreement was done despite an earlier call from Jake Sullivan, chosen national security advisor to the incoming Biden administration, on Twitter proposing that “the Biden-Harris administration would welcome early consultations with our European partners on our common concerns about China's economic practices.” Jake’s proposal fell through. Not to mention this investment deal would give EU companies more privileged access to China than their American counterparts.

The deal was reached in the context of high hopes on the restoration of multilateralism in the incoming Biden Administration. As Josep Borrell, the EU’s foreign policy chief wrote on his blog after Biden’s victory in November 2020, “we can…foresee an interest by the incoming Biden administration for close cooperation on China and the challenges it poses in terms of unfair trade practices, security and other issues where we both have concerns...We are ready for that and we can expect the EU-US dialogue on China that we launched only last month to continue, with renewed energy, under the next administration.” Unfortunately, just in the next month, this promise was basically ignored. Here, the EU’s commercial interests triumphed over the US’s geopolitical interests.

Do shared interests exist in Asia?

The US’ multilateralism appears to score better in Asia than in Europe. The sense of a shared interest in containing China is stronger in Asia because this is where China’s military operates. Notably, the US has teamed up with Japan, Australia and India to form a security forum known as the Quadrilateral Security Dialogue, or Quad. The shared interest of Quad members is clear – fend off the potential military threats from China in Indo-Pacific.

Whether or not the Quad will develop into a formal military alliance largely depends on whether the shared geopolitical interest could resist commercial interests with China.

China won't sit still

China knows well that foreign countries and companies can hardly disregard its massive market. Asian countries may feel threatened by an assertive China but at the same time China is their top trading partner. As such, China can easily drive a wedge in any potential multilateral alliances or coalitions through market liberation or preferential trade treatments to outsiders.

Following the EU-China investment deal, China’s Ministry of Commerce Spokesman Gao Feng has already discussed plans for deeper trade arrangement with US allies including Japan, South Korea and New Zealand. All are opportunities for China to weaken any geopolitical alliances with the US, Quad or the Five Eyes alliance alike.

Unilateralism - US can go solo

Multilateralism without shared interests risk strong propositions getting watered down to reconcile parties’ different interests. But the US can always apply unilateral measures when multilateral approaches do not seem viable, in that it is economically powerful enough to force allies into compliance through sanctions.

In 2018, the Trump Administration unilaterally withdrew from the Joint Comprehensive Plan of Action on the Iranian nuclear program to pursue its cause of imposing “maximum pressure” against the Iranian regime. This unilateral action created resentment among European allies. The European Commission then tried to bar European companies from complying with the renewed US sanctions by invoking a so-called “blocking statute” which allows companies to ignore the US sanctions. The commission also tried to establish special payment channels to help European companies trade with Iran. However, these efforts have been largely ineffective in stopping European companies from complying with the US sanctions because they do not want to lose access to banking and financial services in US dollars.

China prefers multilateralism

One thing is clear, the Biden Administration is prepared to abandon unilateralism for multilateralism. China certainly welcomes this change because multilateralism will free China from the relentless, “unconventional” policies and actions inflicted by the Trump Administration so far. With the US navigating through allies with limited shared interests, China also has more opportunities to pick weak spots and attack via diplomacy or trade measures. Although the Biden Administration may win some good impressions from allies with multilateralism, China will likely come out as a winner four years later.

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Richard Ip

The writer is a global political and compliance risk consultant with a special focus on Asia.