‘Indo-Pacific’ plan lacks substance


When Joe Biden announced the “Indo-Pacific Economic Framework for Prosperity” in Tokyo in May during his first Asia tour, he framed it as an economic initiative aimed at facilitating trade, securing supply chain resilience, supporting clean energy and infrastructure, and to combat tax evasion and corruption.

He declared that with this framework, the United States together with 12 other countries “will deliver for all peoples” the vision for an “Indo-Pacific” “that is free and open, connected and prosperous, and secure as well as resilient”.

For all the high-sounding rhetoric, the IPEF is not an economic initiative, nor is it open or connected. The IPEF does not require the US to open its market or provide preferential access for other members. Instead, it demands other members to accept or conform to US rules in the digital economy, and labor and environmental standards. It is the US writing the rules, with the others following. 

And, while it claims to “facilitate” trade and increase supply chain resilience among members, what it actually seeks is to weaken their dependence on China’s supply chains. In other words, it tries to undermine China’s economic influence and create a regional economic bloc centered on the US.

So it is not an economic initiative aiming to promote regional trade and economic integration, but a strategic tool to implement the Biden administration’s “Indo-Pacific strategy” and a strategic wedge to alienate China from its Asian trade partners. 

When the Biden administration developed its “Indo-Pacific strategy”, it learned a lesson from the Donald Trump administration’s failed strategy which prioritized security and military aspects and ignored the economic dimension. 

By launching the IPEF, the Biden administration hopes to construct the missing economic pillar of the strategy, restrain China’s economic influence by offering an alternative to the Belt and Road Initiative, and shore up the support of regional countries for its “Indo-Pacific strategy” to contain China. 

Besides, by emphasizing “high” labor and environmental standards, quality infrastructure, and “high-standard rules of the road” in the digital economy, the Biden administration wants to discredit China’s brands in the overseas infrastructure, e-commerce and technology markets and tarnish China’s image.

So, what should China do to respond to the IPEF?

First, do not rush to respond. Since the Barack Obama administration, the US has put forward a series of economic initiatives such as the Trans-Pacific Partnership, Blue Dot Network, Build Back Better World, the IPEF and the Partnership for Global Infrastructure and Investment, among others. While these dazzling initiatives have caught attention, few have materialized or produced tangible benefits for regional countries. 

Given this lamentable history and the current US domestic political and fiscal atmosphere, there is no reason to believe that things will be different this time. 

And if the Republicans win the mid-term elections and control Congress, which is very likely, the Biden administration’s ability or willingness to implement the IPEF will further be undermined. So, for China, the best strategy is to wait until the dust settles while keeping a watchful eye on it.

Second, advance regional economic integration. For most countries in Asia, economic development is still their top priority and most countries welcome and value China’s trade, investment and market. 

China should continue to utilize its comparative advantages in capital, technology and markets to further promote regional trade and investment liberalization and integration. Besides, it should also engage with regional countries to conduct serious talks on standards, rules, and regulations concerning infrastructure, the digital economy and clean energy. 

Above all, China should step up its engagement with Singapore, New Zealand and Chile on Beijing joining the Digital Economic Partnership Agreement to streamline China’s digital economy with regional partners. China should also engage with Japan, Australia, Canada, and other ASEAN members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership to be admitted into the regional free trade group as soon as possible.

Clean energy, decarbonization and infrastructure are one of the four pillars of the IPEF. However, neither the US, nor any member of the 14-member IPEF is a leader in the clean energy industries. In other words, they have the will, but lack the capacity to develop the clean energy infrastructure. This is where China can help and lead. 

China is the world’s largest producer of solar and wind energy, and the largest domestic and outbound investor in renewable energy. In addition, China is also a leader in global electric vehicles and batteries. 

China’s competence in the clean energy industry makes itself a qualified candidate for regional clean energy infrastructure development. The nation should step up efforts to promote the development of the regional clean energy infrastructure, and if feasible, with members of the IPEF that it is not yet cooperating with.

If the Biden administration is serious about promoting trade and economic development in the “Indo-Pacific” region, China should welcome and seek opportunities to cooperate. But if not, or if it is using the IPEF as a strategic tool to block Beijing’s economic interests and influence, and a strategic wedge to alienate China’s relations with neighboring countries, it will be doomed to failure.

The author is a professor of the Center for American Studies at Fudan University. The author contributed this article to China Watch, a think tank powered by China Daily. 

The views do not necessarily reflect those of China Daily.