In China, Blinken Tries to Fix the Unfixable

It could almost have been a vacation. U.S. Secretary of State Antony Blinken arrived in Shanghai on Wednesday to be whisked to a basketball game and a dinner of steamed buns atop a balcony overlooking the city’s Ming Dynasty Yu Garden. America’s top diplomat even took time to post on Instagram from Shanghai’s neo-classical Bund, where he lauded the students and business leaders “building bridges and ties between our countries” as the neon lights of the Lujiazui business district twinkled in the background. “Face to face diplomacy matters,” Blinken said, collar gaping.

The tenor was markedly different from Blinken’s last visit to China in June, when bilateral relations between the world’s top two economies had reached a nadir. Although Blinken was granted an audience with Chinese President Xi Jinping, the two sides entrenched their positions over every contention, from the status of Taiwan and American efforts to stymie China’s Technology to human-rights and Xi’s support for Russia’s war in Ukraine. It was only in November that a slight thaw emerged after U.S. President Joe Biden and Xi agreed to resume high-level Military communication after a 16-month hiatus. (A video conference last week between both nations’ top defense officials was their first significant engagement since late 2022.)

Yet substantively, the relationship remains broken. The same day as Blinken touched down for his three-day China visit his boss in the White House signed two pieces of legislation specifically designed to rile his host: one banning TikTok unless Beijing-based parent ByteDance divest the streaming app within nine months; and a $95 billion aid package containing $8.1 billion for the Indo-Pacific, including self-ruling Taiwan, which China sees as its sovereign territory. Both serve as “another reminder just how much separates our two systems and governments,” says Sean King, senior vice president focusing on Asia for consulting firm Park Strategies.

So, what can Blinken achieve? On Friday, he will meet top officials in Beijing including China’s Foreign Minister Wang Yi and, likely but unconfirmed, Xi himself. Blinken will try to push China to stop providing chips and weapons-related materials to Russia’s defense industry. He will also likely rebuke China for aggression against the Philippines, Taiwan, and others in the contested South China Sea. And he is expected to urge Chinese officials to use their burgeoning ties with Iran to calm tensions in the Middle East. Yet it’s unlikely he will make progress on any of these fronts. “Beijing sees just about any U.S. security headache as serving its own interests,” says King, “so don’t expect Xi to do us any favors anytime soon.”

That said, China’s slowing economy does present an opportunity, prompting Beijing to lower its diplomatic pitch amid the dire need to attract foreign investment. China is battling deflation, record youth unemployment, local-government debt equivalent to 76% of GDP, a festering real estate crisis, and a stock market that has lost $5 trillion in value. Washington’s efforts to undermine China’s tech industry through exports controls is particularly damaging when the nation is looking to recalibrate its $17.52 trillion economy toward emerging technologies to drive a new era of growth.

“In a way, China overestimated itself in terms of the strength of its Science and Technology,” says Xu Bin, a professor of economics and finance at the China Europe International Business School. “Maybe you cannot hide anymore but you should not be too aggressive either. I don’t know whether the government has learned their lesson.”

Another question is whether Washington is willing to lessen its measures impeding China’s economy in exchange for progress on less strategic issues. Blinken has repeatedly raised the topic of fentanyl and synthetic opioids—whose precursors are predominantly sourced from China—and which he pointedly flagged in his social media post from Shanghai as the leading cause of death amongst Americans aged 18 to 49. Both sides also appear aligned on the need to tackle Chinese shadow banks, which facilitate capital flight in China as well as money laundering for transnational criminal syndicates including narcotics smugglers into the U.S.

“Whether China and the U.S. choose cooperation or confrontation, it affects the well-being of both peoples, nations and also the future of humanity,” Chen Jining, the Chinese Communist Party secretary for Shanghai, told Blinken on Thursday.

Whether Washington is willing to compromise to make headway on these issues is unclear. But regardless, progress won’t go far toward resetting a relationship set on divergent courses. And there is still the very real risk that things deteriorate further, with possible sanctions on major Chinese banks the “nuclear option” given the cascading effects across the global economy. Campaigning in Pennsylvania last week, Biden called for hiked tariffs on Chinese steel imports, with Chinese EVs also in the spotlight. With reigning in Beijing one of the few points of bilateral consensus, anti-China rhetoric will no doubt intensify from both camps as the U.S. presidential election approaches in November.

Still, in Shanghai Blinken played nice, lamenting to students at the city’s NYU campus on Thursday how educational exchanges between the two countries had fallen precipitously due to “COVID and other reasons,” with only 800 Americans studying in China today from a peak of 15,000 a decade ago. “We’d like to build that back up,” he said. “It’s so important to make these connections.” For many in that room, Blinken’s words will ring hollow. But like two divorcing parents, it never hurts to look friendly.