How is the relationship between the United States and China and where does the current tension come from?

(CNN Spanish) — They are still first-rate trade and economic partners, but for years the news about the United States and China has spoken of growing geopolitical tension in the midst of a global rivalry, and the world is anxiously anticipating the possible moment when the two major economic powers enter into open conflict.

What is the relationship between the United States and China, the two leading powers in the world, and why do they seem to have entered a spiral of tension?

The beginning of current relationships

When Mao Zedong proclaimed the People’s Republic of China in 1949, after the communist forces had triumphed in the civil war, the United States did not recognize the legitimacy of his government and maintained its relations with the Republic of China, whose leaders and followers went into exile in Taiwan. .

During World War II (1939-1945), the United States and the Republic of China, which controlled all of China at the time, had been allies against the Empire of Japan.

China holds military exercises after Pelosi’s visit 1:30

In fact, Taiwan, as the Republic of China is known, occupied one of the five permanent seats on the UN Security Council for the countries that won that conflict (the list is completed with the United States, the United Kingdom, France and the Soviet Union).

The situation began to change in 1971, when the member countries of the UN recognized the legitimacy of the People’s Republic, which came to occupy that seat.

And in 1972, US President Richard Nixon paid a historic official visit to China, shaking hands with Mao Zedong.

What had changed?

Despite being communists based on Marxism-Leninism and initially close partners, China and the Soviet Union, the main rival of the United States, came into conflict in the 1960s over their different views on communism and the relationship with the world, and a history of border problems. And in the midst of that disagreement, China and the United States began a rapprochement.

In 1979 the countries established formal diplomatic relations, and the United States moved its embassy from Taipei, Taiwan, to Beijing, completing recognition of the legitimacy of the People’s Republic.

global partners

Mao had died in 1976, and his eventual successor Deng Xiaoping undertook in later years a process of modernization, market reforms and trade opening to the world, the so-called “socialism with Chinese characteristics”.

What happens between China and Taiwan? 3:31

And in those reforms, the United States would have a central role for China’s economy as the main destination of its manufactured products, and the main origin of its technology imports.

Hand in hand with “socialism with Chinese characteristics” that accelerated in the 1980s and 1990s, the country made a real leap: in 2010, the Chinese economy became the second in the world, only surpassed by the United States; and in that period almost 800 million of its inhabitants will cease to be poor, as the government regularly highlights based on poverty thresholds established by the World Bank (less than US$ 1.9 a day).

And what kind of partners are the United States and China now?

According to its Census Bureau, in 2021 the United States exported US$151,442 million worth of goods to China, and imported US$504,935 million worth of goods from the same country, giving a negative balance of its trade balance of US$353,493 million. By total volume of exports and imports, the United States is China’s main trading partner, and also conversely, China is the United States’ main partner, (although China comes in second place if all the countries of the European Union are counted). , which together are the main partner of the United States).

China is also the third destination for US exports (with 9.1% of the total), behind Canada (16.2%) and Mexico (14.6%), according to 2020 data from the Observatory of Economic Complexity , while 19.5% of US imports come from China, its main supplier. According to its Office of the Trade Representative, the main products that the United States sells to China are electrical machinery, soybeans, fuel and precision instruments.

What happens between China and Taiwan? 3:31

On the other hand, the United States is the main destination of China’s exports, with 16.5% of the total, and the third largest origin of its imports with 7.91%, behind Japan (8.57%) and South Korea (8.5%). The main products that China sells to the United States are electrical machinery, machinery in general, toys, sporting goods, furniture and textiles, among others.

trade tensions

The United States and China have had a long history of trade tensions, especially due to the balance of trade between the two countries. From 1985, when the exchange was very small, to the present, where the countries are first-rate trading partners, this has always been negative for the United States.

Washington has also repeatedly accused Beijing of currency manipulation, that is, maintaining an artificially low exchange rate to favor exports and discourage imports. During a G20 meeting in South Korea in 2010, then-Treasury Secretary Timothy Geithner called for strong measures to get emerging markets, especially China, to appreciate their currency.

China, for its part, responded by accusing the United States in 2012 of keeping the dollar weak through the Federal Reserve’s monetary policy.

Former US President Donald Trump accused China of currency manipulation again in 2019, in the context of his policy of “decoupling” the two economies – the progressive reduction of dependence on the United States for goods, services and supply chains. supply linked to China.

China overtakes the US in foreign investment 1:03

Trump maintained a confrontational strategy with China during his presidency, which was exacerbated by the Covid-19 pandemic in 2020, which the former president blamed on Beijing.

This decoupling attempt became known as part of the “trade war” that the United States and China have faced in recent years and that consists of a battery of reciprocal tariffs on certain goods between the two countries, which the current president Joe Biden seems to be continuing

At the moment, however, little progress seems to have been made in this decoupling, according to data from the Census Bureau: trade between the United States and China in 2016, when Trump took office, was about US$ 578,000 million, it was only reduced to US$ $555.591 million in 2019, at the height of the “trade war”, and in 2021 it was $656.377 million.

Although there have been changes in certain areas, such as telecommunications (with blockades and prohibitions by the United States on Chinese companies such as Huawei, ZTE, and China Telecom), especially in 5G networks.

Geopolitical rivalry: could there be a war?

In the context of these trade tensions, the United States, the leading global power after the fall of the USSR in 1991, and its allies in Europe and the South Pacific have been colliding increasingly in recent years with China’s greater assertiveness. in the region and the world.

US-China relationship: a challenge for Biden 1:42

In 2019 the European Union, a large part of whose members are part of the NATO military alliance together with the United States, declared China in 2019 as its “systemic rival” and global economic competitor.

The United States has not yet produced such a document, but to its recent movements in the commercial sphere is added an endless list of actions and affirmations in the Pacific region: from the Aukus pact with Australia and the United Kingdom, to the security group Quad with India, Japan and Australia and the Five Eyes intelligence alliance (with Canada, New Zealand, Australia and the United Kingdom).

The United States also maintains close relations and military agreements with a large part of the countries that surround China in the Pacific —Japan, South Korea, the Philippines and Vietnam, among others— in addition to Taiwan, and competes for markets and economic positions in other areas. where China acts strongly, such as Latin America and Africa.

This strategy has been described by American and Chinese specialists as one of “containment”, borrowing the term created by George G. Kennan during the Cold War for a similar policy of the United States with the Soviet Union, but it is not clear that Washington has actually officially adopted this strategy.

The containment implied a response from the United States to each expansive action of the Soviet Union in the world, and included everything from the Marshall Plan of economic aid to European countries to the creation of NATO and the practice of economic embargoes, according to a recent article by specialist Deborah Welch Larson in Foreign Policy. Kennan described it as a “long-term, patient but firm and vigilant” process.

The relationship between the United States and China, however, is very different from the one the United States had with the Soviet Union, mainly because of the economic interdependence of the first two, Welch Larson points out, and the military and especially nuclear superiority of the United States over China. China, at the moment.

China or Russia: what is the US diplomatic priority? 1:44

In a Chinese Foreign Ministry statement released in June, the United States was accused of promoting a “threat from China” narrative, in what it calls “an attempt to contain and suppress China entirely.”

While an opinion piece in the Chinese state newspaper Global Times warns that China’s containment strategy “will make it more difficult to solve America’s domestic problems” due to its impact on growth and inflation.

The very close relations between Washington and Taipei are now precisely at the center of the latest escalation with Beijing, after the Speaker of the United States House of Representatives, Nancy Pelosi, visited the island that the People’s Republic considers a rebel province since 1949.

Beijing’s response was important: sanctions against Pelosi, launching ballistic missiles, military exercises and sending warships and planes to the region

This is not the first time that the situation has escalated over Taiwan: in 1996, after the visit of the then president of Taiwan, Lee Teng-hui, to the United States, China also fired missiles in waters near the island and Washington sent two aircraft carriers to the island. area in support of Taipei.

Could the current escalation of tensions lead to an armed conflict, as happened in February in Ukraine? The answer could lie in the economic and diplomatic relations that the United States and China have maintained in recent years.

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