US-China in 2024: One year after the spy balloon incident
US-China in 2024:
One year after the spy balloon incident
WRITTEN BY RORRY DANIELS
12 March 2024
At the start of 2023, the US-China relationship was in jeopardy. The high-profile downing of a Chinese data-collection balloon was the culmination of years of frustration and concern about Chinese surveillance efforts and a testament to how little the US firmly knows about Chinese political decision-making. Yet today, the bilateral relationship is back on track. What has changed and, moreover, can the relatively steady state of US-China diplomatic interaction hold during a turbulent election year in the United States and a transition of power in Taiwan?
Where we were
The spy balloon incident may have been the public nadir of US-China relations during the Biden administration. The way this highly visible symbol of Chinese surveillance churned through the US domestic media cycle left little room for the Biden administration to pursue the agreement on a diplomatic process reached by the two presidents in November 2022 in Bali. US Secretary of State Antony Blinken was supposed to visit Beijing in early 2023 for the first of many high-level meetings planned to restore relationships among the bureaucracies on both sides that would clarify intentions and search for common interests. Instead, accusations flew across the Pacific.
The confusion revealed some critical weak points that needed to be addressed to stabilise the bilateral relationship: first, the pull of domestic politics in the US, particularly in homeland security, amplified the incident itself and restricted the Biden administration’s room for manoeuvre. Secretary Blinken’s visit would have been an open season to fire on the Biden administration for being weak on China — a particularly virulent and not especially constructive element of “bipartisan consensus” in Washington.
While breakthroughs remain unlikely, the test in 2024 is whether the US and China can manage differences quietly and directly while under the political magnifying glass.
Second, there was and remains uncertainty in the US policy community about Xi Jinping’s role in directing the balloon over the continental US. Xi had just come out of a successful and unprecedented bid for a third term in office and was thought to have ousted all of his political rivals. The opacity of the Chinese bureaucracy, baked into its structure, allows Xi to claim his supremacy over all Chinese policy decisions without needing to provide the details of his involvement. However, if Chinese propaganda is successful in promoting Xi as responsible for all decisions, then he is assigned responsibility and intent for any policy missteps.
What has changed as events unfolded
What has happened over the past year is directly relevant to these two points of analysis. First, the Biden administration had to create room, even in the highly charged Washington atmosphere, to stabilise the relationship without capitulating to Beijing. Second, political churn in China over the past year has revealed elements of its domestic political economy, peeling back the veneer of state-driven propaganda to situate Xi’s power — and challenges — within the system.
In both cases, events external to the bilateral relationship have worked in favour of US-China stabilisation. For the US, the 7 October Hamas attack on Israel, Israel’s subsequent invasion of Gaza, and the deteriorating dynamics in the Middle East have piled on top of US commitments to NATO and Ukraine. Even with the world's most advanced and largest defence industry, the US has to devote significant diplomatic resources to managing the escalation of these conflicts. Meanwhile, continued support for Ukraine and how to manage relations with Israel — perhaps the single most sensitive issue in US domestic politics — has shifted the focus of the conversation away from what to do about China.
In the same period, China experienced several rounds of political purges that reached into Xi Jinping’s inner circle. The removal and disappearance of former Foreign Minister Qin Gang and former Defence Minister Li Shangfu — officially for corruption of unknown quantity and quality — have cleared the path for the US to reset the relationship with more familiar interlocutors and remove the barrier of US sanctions on Li that prevented high-level contact. Changing the guards to individuals with more direct relationships with Xi Jinping and the subsequent efforts to prioritise the bilateral relationship through official back-and-forth visits throughout 2023 gave Washington more confidence in Beijing’s sincerity to pursue détente.
China’s slowing economy and weak COVID recovery have also helped soften the sharp edges. Far from prompting blanket aggression, China’s leadership sought to soothe concern at home and abroad through reassurances that China remains a safe and attractive investment environment. The bottom line remains that China’s path to modernisation requires international commerce and benefits from a benign external environment. China’s leadership wants to maintain party control at all costs but has not settled on a strategy that allows the heavy hand of authoritarianism to co-exist peacefully with free market principles. And Beijing does not have endless time to experiment — investors both Chinese and foreign are already settled on diversification and hedging in light of China’s restrictive investment environment and rising costs.
Altogether, these events and the trends that drove them have prompted self-reflection in both capitals about the necessity of a responsibly managed bilateral relationship. What remains to be seen is if the two sides can now build positive momentum on each other’s priorities, preventing upcoming events from throwing the relationship backwards.
What is ahead
In short, there is nothing good for bilateral relations or cross-Taiwan Strait relations. Lai Ching-te takes office in May with a divided government that could push him toward the fringes of his party. The US presidential and congressional elections offer ample opportunities to hype the China threat and attack dialogue and diplomacy as weakness and capitulation. Even if the ruling parties remain, the political transitions in Washington and Taipei introduce new personalities while Beijing recasts its top policy personnel. From May onward, the major risk to manage is how the court of public opinion will affect fundamental policy assumptions that leaders and their key staff are forming to chart the course for the next four-plus years.
The two sides are working on concrete gains to underscore the theory of the case that US-China relations can and should incorporate elements of cooperation alongside competition. But moving big bureaucracies into cooperative patterns not only takes significant resources, including time and attention, but it also involves some risk. Officials on both sides could become further embittered if another balloon incident derails hard-fought progress. Errant campaign comments can be misinterpreted or overinterpreted as signs of bad faith.
Facing these headwinds, the two sides must not lose their big-picture focus on how a functional bilateral relationship supports their national interests. The US may need China’s help or endorsement to broker substantial resolutions to intractable conflicts in Europe and the Middle East. China may need US assistance in plugging holes in its economic strategy. Both countries and the world benefit when the two major powers work together on climate, non-proliferation, and humanitarian aid. While breakthroughs remain unlikely, the test in 2024 is whether the US and China can manage differences quietly and directly while under the political magnifying glass.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Rorry Daniels is the Managing Director of the Asia Society Policy Institute (ASPI), where she leads and oversees strategy and operations for ASPI's projects on security, climate change, and trade throughout Asia. She is also a Senior Fellow with ASPI's Center for China Analysis, and host of ASPI’s podcast “Asia Inside Out”. She is an expert on US-China relations and authored a comprehensive study of the US-China Strategic and Economic Dialogue. She came to Asia Society after over a decade of organising Track II initiatives on US-China relations, cross-Taiwan Strait relations and the North Korean nuclear issue at the National Committee on American Foreign Policy. Follow her on X or sign up for ASPI’s e-newsletter. Image credit: Flickr/The White House.