The Chinese government no longer appears as invulnerable as it did at the height of the global pandemic, and Beijing's major policy changes could alter the calculus in U.S.-China competition.
What's happening: Facing economic headwinds at home and increasingly unified opposition abroad, Beijing appears to be softening its tone and offering some concessions to the international community. China is also emerging from three years of self-imposed COVID lockdowns, following widespread protests.
Why it matters: Tectonic shifts in geopolitical strategy are underway as both Washington and Beijing try to manage superpower competition — and come out on top.
- Poorly managed competition between the world's two most powerful countries could undermine climate change mitigation, fuel a technology arms race, justify expansive surveillance regimes, divide families, exploit other nations, and in a worst case scenario, even result in war.
Driving the news: In November, Chinese President Xi Jinping met with a succession of western democratic leaders for the first time since the pandemic began, striking a friendlier and more conciliatory tone than he has in years.
- Chinese regulators recently offered a major concession to the U.S. by finally allowing Chinese companies listed on U.S. exchanges to fully comply with U.S. auditing requirements, thus ending the risk that the companies would be booted off U.S. exchanges.
- China, like its leaders, also appears to be emerging from three years of pandemic isolation, as zero-COVID policies are scrapped and entry quarantines are reduced. Expats who fled the country during the pandemic will likely trickle back in over the course of 2023, now that harsh lockdowns are a thing of the past.
Meanwhile, the U.S. and Europe are converging in their approach to China, as European leaders have adopted tougher policies more in line with Washington's approach.
- This has strengthened Washington's hand as it can present a more united front in its efforts to blunt Beijing's economic coercion, stop China from taking the lead in emerging technologies, and decouple from Chinese supply chains tainted with forced labor.
Yes, but: Concern is growing in the U.S. that tough-on-China policies may lead to inevitable conflict, and that some kind of course correction is needed.
What to watch: Xi's charm offensive could help persuade more people stateside that U.S. policy on China should soften as well.