[Opinion] The 'Corona Chicken Game': The True Intentions of the US and China

Seungchan Park, Professor of Chinese Studies at Yongin University
Director of the China Business Research Institute

The relationship between the U.S. and China is rapidly cooling. The nerve-wracking tension over global hegemony between the two countries is escalating to its worst state again due to the novel coronavirus disease (COVID-19) crisis. Recently, the clash between the U.S. and China over China's enactment of the Hong Kong National Security Law appears to be intensifying. President Donald Trump's criticism of China seemed to have taken a pause after the U.S.-China Phase One trade agreement on January 15, but with the surge of COVID-19 cases in the U.S., it has risen sharply once again. This can be summarized into three main reasons.

First, it serves as a shift in focus amid the flood of criticism toward the U.S. administration's failure to respond to COVID-19 domestically. The U.S. economy is falling due to having the highest number of COVID-19 cases worldwide. Ultimately, public dissatisfaction and criticism are spreading into rallies and protests. Second, with the November presidential election approaching and President Trump's approval ratings declining, he aims to consolidate his support base through a strong anti-China policy. As the gap in support rates between Democratic candidate Joe Biden and Trump widens, Trump seeks to highlight Biden's connections with China and rally the public to join the anti-China camp. Third, the anxiety that China might outpace the U.S. in the vaccine development race is making President Trump more impatient. Currently, about 110 COVID-19 vaccines are under development worldwide, with eight institutions already in human clinical trial phases, half of which?four institutions?are in China. This is why President Trump cannot help but feel rushed.

From the U.S. perspective, attacking China on sensitive issues such as Hong Kong and Taiwan is a significant burden in many ways. The Hong Kong and Taiwan issues are red lines that China must defend until the end. If the U.S. crosses these red lines, China will immediately retaliate, with the first step being non-compliance with the Phase One trade agreement. This could deal a fatal blow to President Trump's reelection campaign. Under the Phase One trade agreement, China committed to purchasing $109.7 billion worth of U.S. industrial and agricultural products over two years, with most of the product origin regions being key constituencies for President Trump, making this a serious concern.

Due to the COVID-19 variable, China is unlikely to fully implement the Phase One trade agreement, and it is possible that China sought to exploit the ambiguity in the agreement's criteria for purchase expansion. Based on the agreement's figures, the purchase targets are $77.7 billion for industrial products, $52.4 billion for energy, $33.9 billion for services, and $32 billion for agricultural products. It is judged that implementation in agricultural products and service sectors such as intellectual property royalties will be difficult. Especially for agricultural and fishery products, the 2020 target requires imports to increase by 227% compared to the previous year, and by 159% in 2021, which is challenging under current circumstances.

There may have been a negotiation psychology to carry the issue through until the November U.S. election and, if the situation is unfavorable, to attempt import expansion in the second year. However, if the U.S. crosses China's red lines classified as core interests, the situation will become urgent. If China loses to the U.S. on the Hong Kong and Taiwan issues, domestic issues such as Xinjiang and the Uyghurs may also collapse. Should the U.S. infringe upon China's red lines, China would not hesitate to engage in full-scale confrontation with the U.S. Ultimately, China might promise early implementation of the Phase One trade agreement before the U.S. election in exchange for the U.S. respecting its red lines. The problem lies with South Korea. It must optimize its leverage to act as a balancing pivot between the U.S. and China.

Park Seung-chan, Professor of Chinese Studies at Yongin University / Director of the China Management Research Institute