In many parts of the U.S., China remains a huge business opportunity despite recent friction. That’s the country where Apple makes its phones and Nike stitches its shoes. U.S. farmers sell soybeans to China and Wall Street investors trade Chinese stocks.
Yet inside the Washington Beltway, China is a security threat. Full stop. It’s one of the few things Democrats, Republicans and most everyone else in the capital agree on.
“An adversarial, predatory Chinese leadership poses our biggest geo-political test,” CIA Director William Burns said in congressional testimony.
“China is a challenge to our security, to our prosperity, to our values,” said Director of National Intelligence Avril Haines.
“We’re focused on our effort to counter the challenge posed by China,” said Defense Secretary Lloyd Austin.
Their boss, President Biden, also talks of an increasingly competitive relationship when it comes to military might, political influence and the race for next-generation technology.
Polls show these hardline views have been gaining ground and a growing number of Americans see China as a rival and think a tough stance toward Beijing is justified.
Yet the two countries still have one of the largest trading relationships in the world. And when you scratch the surface, there is a perceptible gap between how China is viewed in Washington policy circles and how many outside the proverbial beltway think about the country.
A Chinese company sets up shop in rural Alabama
The small town of Thomasville, Ala., with about 4,000 residents, long relied on a single industry — timber — and was often hammered by economic ups and downs.
“Unfortunately, over the years in rural areas without good job growth, the No. 1 export has been our children,” said Thomasville Mayor Sheldon Day.
To jumpstart the economy and create jobs, he looked beyond Alabama. A few years ago, Thomasville beat out dozens of other cities to woo an investment by China’s Golden Dragon Precise Copper Tube Group. The company, based nearly 8,000 miles away in Henan province, makes metal tubes that go in air conditioners and other machines.
In 2014, Golden Dragon built a $120 million plant in nearby Wilcox County.
“There was, even at the time, some stigma associated with recruitment and inviting a Chinese industry to come to your community,” Day said.
But that didn’t bother him. Day went out of his way to make Golden Dragon feel welcome.
“We said, look, let’s make them honorary citizens of Alabama. So we had these real nice proclamations done by the state Senate,” he said.
The company executives from China loved it, he said. He acknowledged that there have been cultural differences. But Day says Golden Dragon has made good on its promises. And the company has continued to invest in the community and created hundreds of jobs.
“I’m definitely somebody who tries to bring people together, who tries to look for ways to do business rather than try not to,” said Day. “I do think that we would be — the whole world will be — a better place if we sit and talk to each other more and do business with each other, break bread with each other.”
The battle for high-tech
So a Chinese company making air conditioning parts in rural Alabama may not set off alarm bells in the national security community. But many are troubled when it comes to high-tech — think 5G wireless, artificial intelligence and quantum computing.
Gilman Louie is the rare person who has a foot in both camps — the Silicon Valley tech camp and the national security camp.
Louie, an American of Chinese ancestry, runs a big venture capital firm in San Francisco called Gilman Louie Partners. He made a fortune in video games. He brought the iconic game Tetris to the U.S. in the 1980s. China’s a huge market for him.
Yet he’s also deeply involved in national security and often visits Washington. He was the first head of In-Q-Tel, the innovation arm of the U.S. intelligence community.
“My job is to introduce the gray between the black and the white.”
Louie plays devil’s advocate on both coasts. In Washington, he tells national security types that they can’t just see China as a threat. He cites Chinese students researching cutting-edge technology at U.S. universities.
“I think Washington needs more tools,” Louie said. “If you had better analytics, if you had better tools, and identified those individuals rather than just having broad strokes, you know, ‘If you were born in China, you’re a national security threat. If you’re ethnically Chinese, you’re a national security threat.'”
But when he’s in Silicon Valley, he warns entrepreneurs about how China may be using their technology.
“You guys have got to open up your eyes. You have to understand where your technology is ending up,” he tells the tech entrepreneurs. “If your technology is ending up with things like facial recognition that will allow an authoritarian regime to pick off ethnic minorities, do you really want, as a brand, to be associated with that?”
Louie sees a complicated balancing act but thinks the U.S. can protect its most advanced technology and still do business with China.
“Let’s not use a sledgehammer to solve all of our problems,” he said. “Let’s be very careful about what we recommend, what we choose, and make sure that we are still providing the level of protection that our companies, and our economy, and military actually needs.”
Agriculture trade remains a big business
Meanwhile, some businesses that are not involved in high-tech or the military say they should be allowed to keep trading widely with China.
“I think a great part of the Midwest would be very happy to get back to the way things were, said Kenneth Quinn, a former U.S. ambassador who’s now working with the Missouri-based United States Heartland China Association.
The group tries to build bridges between middle America and China, promoting cooperation in agriculture, education and culture.
“OK, there are issues in human rights, there are issues of [China’s] military presence in the South China Sea,” Quinn acknowledged. “But let’s treat those separately in a different channel.”
The U.S. Heartland China Association represents 20 states from the Great Lakes to the Gulf of Mexico, all of them big farm states. The group recently held a four-part roundtable on agriculture — think corn, soybeans and pork — a bright spot in trade between the China and the U.S.
“We bring people together to demonstrate that there’s a lot of interest in doing this and that agriculture is kind of a safer place in which to take these steps,” Quinn said.
Biden’s plans come into focus
So far, Biden has largely kept in place the hard-line policies of former President Donald Trump. The Biden administration has maintained trade sanctions, continued U.S. military muscle flexing in the Pacific, and is critical of Beijing’s human rights abuses.
In her first major speech about relations with China, Trade Representative Katherine Tai said this week that the U.S. seeks to reduce trade tensions but is only willing to lift tariffs on a selective, case-by-case basis for now.
“Our objective is not to inflame trade tensions with China, but above all else, we must defend, to the hilt, our economic interests,” she said.
Elizabeth Larus, who teaches Chinese studies at the University of Mary Washington in Virginia, says any economic “de-coupling” between the U.S. and China will be very difficult.
“You can’t just say you’re going to pick up your factory and move all your resources and have a consistent, reliable energy source and the shipping port to get your stuff out at a decent price, and the logistics. China has nailed that down,” said Larus, the author of Politics and Society in Contemporary China.
China’s President Xi Jinping uses this as leverage, she noted.
“One of the goals of this Xi Jinping regime is to to make the world really reliant on China for its supply chain, but not to have China reliant on the rest of the world,” she added. “So that makes it difficult for the businesses.”
Is there a way out of this downward spiral?
“I do not see a de-escalation anytime soon,” she said.
Larus and other China analysts say ongoing friction on the trade front is a certainty, though the world’s two largest economies have no real choice other than to keep dealing with each other.
And on national security questions, like military power or political clout in the Pacific, the trend lines point toward a rivalry that’s only growing more competitive.