The China Challenge – Aspen Institute

By Joel Wong

The Aspen Institute is a global nonprofit organization whose purpose is to ignite human potential to build understanding and create new possibilities for a better world. Founded in 1949, the Institute drives change through dialogue, leadership, and action to help solve society’s greatest challenges. It is headquartered in Washington, DC and has a campus in Aspen, Colorado, as well as an international network of partners.

The speakers are:

Stephen Biegun, Senior Vice President, The Boeing Company; Former U.S. Deputy Secretary of State
Alan F. Estevez, Under Secretary of Industry and Security, U.S. Department of Commerce
Anja Manuel, Executive Director, Aspen Strategy Group and Aspen Security Forum
Eric Schmidt, Chair, Special Competitive Studies Project; Former CEO of Google
Moderator: Demetri Sevastopulo, U.S.-China Correspondent, Financial Times

The discussion revolves around the current state of U.S.-China business relations and the concept of “de-risking” versus “decoupling.” Here are the key points:

1. Robust Commercial Relationship: Despite challenges, the U.S.-China commercial relationship remains strong, particularly in agriculture and consumer products. For example, China imports significant amounts of agricultural products from the U.S.
2. Sector-Specific Dynamics:
   Agriculture: China imports a lot of food from the U.S. due to its own production limitations.
   Consumer Products: No major security concerns; brands like Starbucks and McDonald’s are thriving.
   Entertainment: Facing challenges due to censorship, but cultural connections are important.
   Financial Services: Initially welcomed, but now facing reduced exposure and challenges.
   Technology: The most affected by de-risking and decoupling efforts.
3. De-risking vs. Decoupling: Companies struggle with de-risking due to the unpredictable nature of risks, often leading to a complete decoupling. Clear rules and certainty are crucial for businesses to manage risks effectively.
4. Strategic vs. Non-Strategic Industries: There is a push to clearly define what constitutes strategic industries (e.g., high-end tech) versus non-strategic ones to maintain necessary trade and exchanges while protecting national security.
5. U.S.-China Relationship: Currently, the relationship is cautious, with China observing U.S. political dynamics. The U.S. policy should balance deterrence, competition, and engagement to manage risks and maintain interdependence.

The overall sentiment is that while certain sectors face significant challenges, maintaining a balanced and clear approach to U.S.-China relations is crucial for both economic and strategic reasons.