U.S.-China Relations in 2020: Enduring Problems and Emerging Challenges

Editor's Note: On September 9, Andrew Small, Senior Transatlantic Fellow at the German Marshall Fund of the United States, delivered testimony in front of the U.S.-China Economic and Security Review Commission concerning: “U.S.-China Relations in 2020: Enduring Problems and Emerging Challenges.”

The COVID-19 pandemic represents another inflection point for China’s geo-strategic position, bearing comparison with the global financial crisis and its aftermath. Beijing’s behavior and the international response to it, however, are markedly different from a decade earlier. The post-2008 period saw the take-off in Chinese assertiveness that has continued, in escalating forms, to the present day. But it also entrenched China’s global reputation as a source of economic stability when the chips were down. In addition to Beijing’s constructive handling of the financial crisis itself and the sovereign debt crises that followed, its domestic stimulus ensured that the Chinese market remained an engine of growth amid downturns elsewhere, while China’s willingness to provide financing and investment was a source of relief from the austerity pressures many governments faced. Although China was certainly seen as benefiting from the crisis, it was not seen as exploiting it. The effect was to reinforce the perception that Beijing would advance its revisionist interests slice-by-slice rather than in a destabilizing fashion, particularly when the global system faced major shocks.

The contrast with China’s handling of the COVID-19 pandemic is stark. Beijing’s belligerent diplomatic, economic and military behavior throughout the crisis has been apparent on a striking number of fronts. Its politicization of the provision of medical supplies has engendered considerable resentment, particularly given that the Chinese government is widely perceived as culpable for the failure to contain the original outbreak. In many cases, Chinese debts are now seen as a major part of countries’ economic troubles, particularly given that Beijing’s opaque, highly bilateral approach to negotiations has inhibited their ability to gain relief from other lenders.