China’s containment conspiracy theories finally come true

The Chinese government has for decades mischaracterized American policies it opposes as a broad conspiracy to “contain” China. China’s containment dreams feature prominently in official criticism of America’s overall Indo-Pacific strategy and on specific issues such as Taiwan, Hong Kong, Xinjiang, the South China Seas, Pacific Islands, the Quad and, of course, human rights.

China’s containment conspiracy theories finally came true, however, when the Biden administration announced its Oct. 7 semiconductor export control policy. The new approach is unabashed containment, albeit in a narrowly defined technical domain, with the explicit purpose of hobbling China’s advanced semiconductor technology progress. 

National security advisor Jake Sullivan stated on Sept. 16 that instead of continuing U.S. policy to maintain a “relative” advantage in advanced computing chips, “we must maintain as large of a lead as possible.” Accordingly, the U.S. will seek to establish absolute technology superiority and prevent Chinese progress on advanced semiconductors both directly and indirectly by denying key semiconductor products and technologies. 

This new policy may be a turning point in U.S.-China relations. This approach departs from the past and establishes an important precedent because it is designed primarily not to manage differences or maintain a level playing field or remain a few steps ahead in a key technology field, but rather to explicitly contain indefinitely Chinese advanced technology development.

To be sure, this change has been a long time coming. Some will say that President Trump introduced containment into the relationship well before Biden took office. But Trump’s policies were more bark than bite. Blustery promises to narrow the bilateral trade deficit, tariff every Chinese import into the United States and reshore manufacturing from China back to the United States were never fulfilled. Trump’s punitive actions against certain Chinese companies were rolled out so hastily that they could not withstand legal scrutiny.

The Biden administration has previously articulated goals that included managing competition with China and shaping China’s strategic environment to favor American interests. Adopting containment as a strategy is another, harsher step along the road toward tension and perhaps conflict. Ironically, China’s “Wolf Warriors” have cried wolf about containment for so many years that they probably failed to notice the new containment reality.

Introduction of containment as a Biden administration policy goal raises difficult questions. First, will Biden limit containment to semiconductors or will he extend the new approach to other technology sectors? One need look no further than the White House’s Critical and Emerging Technologies list for a menu of candidate technologies.  This question is more than academic because House Republicans have promised a sweeping review of technology export control policies if they retake control of the House of Representatives. 

Second, now that Biden has established the precedent of containment as a legitimate U.S. foreign policy goal, will the U.S. be tempted to slide down the slippery containment slope and extend that philosophy to other diplomatic, economic or military realms?

For example, there has been much recent debate about a new outbound investment mechanism that could be introduced through either an executive order or legislation, but the precise scope and purpose have yet to be defined in a final text. Should the purpose simply be to prevent American investors from subsidizing Chinese firms in sensitive sectors? Or should containing foreign competition also be a goal? 

Finally, how will containment affect the psychology of U.S.-China relations? The U.S. is already competing with China for influence in various international fora and contested regions. China sees containment behind every corner, but the U.S. has not characterized its policy in such terms. Moving from an ostensibly competitive posture to a more formalized goal of zero-sum containment would further hasten the downward spiral in bilateral relations and would invite the coercive techniques that China has fine-tuned in recent years. 

The U.S. may find it necessary to blatantly contain some Chinese policies and activities, but the implications – including whether allies will support such measures – need to be considered carefully.

China’s state press responded to the new export controls by observing that “it can only be said that in its efforts to suppress and contain China, Washington has lost its mind and way.” A more apt description of the current policy environment is not whether Washington has lost its way, but rather whether it is ready to deploy an old Cold War strategy updated to meet the China challenge.

Jeff Moon is a China trade and government relations consultant who served previously as assistant U.S. trade representative for China affairs.