How to deal with China

How to deal with China

Arrests in Hong Kong and Europe’s trade deal show the West is on the back foot

The world’s democracies desperately need a coherent approach to dealing with China. It is the 21st century’s ascendant power, but also an autocracy that mistrusts free markets and abuses human rights. However, recent events show how ineffective Western policy has become. On December 30th the European Union agreed on an investment pact with China that secured puny gains and gave China a diplomatic coup. The eu did so despite doubts among Joe Biden’s team (see article). New York’s stock exchange banned several Chinese firms’ shares, only to change its mind twice in a few days. Congress has so far failed to pass a bill to protect Uyghurs from forced labour (see article).

As the West stumbles, China is busy cracking down at home and expanding its influence abroad. On January 6th more than 50 democracy activists were arrested in Hong Kong (see article). In November China signed a trade pact with 14 Asian countries, including American allies such as Japan and Singapore. It continues to threaten Australia with its thuggish diplomacy and a partial trade embargo.

The pattern of Chinese assertiveness and Western disarray has become all too familiar. All democracies are struggling to reconcile the conflicting objectives of doing business with a huge and vibrant economy, and protecting national security and human rights (see Chaguan). The Trump administration skewered Western complacency about China’s state-led model, but then detonated the global trading system without proposing an alternative.