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How are the fluctuating tensions between Washington and Beijing over Taiwan expected to affect Israel? On January 13, William Lai, the leader of the Democratic Progressive Party (DPP), was elected president of Taiwan. A few days earlier, for the first time in four years, the United States-China Defense Policy Coordination Talks took place in Washington, marking the end of a prolonged round of tension between the two powers, which had peaked in August 2022 when the speaker of the US House of Representatives visited Taiwan. Taiwan is a major point of friction in the already tense relations between the two powers. Managing the disagreements between them has broad implications, including for Israel. The ongoing strategic rivalry between the two superpowers—the United States and China—is the most important geostrategic factor of our time. The two countries are vying for technological dominance and control over resources, that will shape our future, and infrastructure that is critical for civilian, economic, and military purposes. The United States and China are also competing for global influence by forming partnerships and trying to influence world order, including its values, institutions, and mechanisms that regulate it. Can they shape the rules of the competition between them without spiraling into a military conflict that would have devastating global consequences? Taiwan may be the most volatile flashpoint in the complicated relationship between the two powers. For China, the “reunification” with Taiwan is one of its “core interests”—a top objective and a flagship issue in its foreign policy. Although the United States has repeatedly declared that it is committed to the “one China” policy, it is also an ally of Taiwan. The United States has warned China to refrain from making unilateral, aggressive moves vis-à-vis Taiwan, while supplying Taiwan with military resources to deter China and prevent a forceful takeover. Since assuming power in 2013, President Xi Jinping of China has repeatedly emphasized Taiwan’s unification with China as a key objective. During a meeting with President Joe Biden in November 2023, President Xi said that China “prefers” a peaceful unification, but he did not dismiss the use of force. On the eve of Taiwan’s 2024 elections, President Xi further stated that unification is “inevitable.” The tensions between the powers over Taiwan had escalated following the previous elections on the island in 2020. During this period, senior American officials visited Taiwan, and the United States and Taiwan signed weapons deals in August and September of that year, followed by a marked increase in Chinese military aircraft penetrating the island’s air defense identification zone and crossing the “midline” between the island and mainland China. China’s perception of encirclement was further heightened by the United States’ strengthening of its alliances and initiatives in the Indo-Pacific region (such as QUAD, AUKUS, and IPEF) and by the increased diplomatic pressure exerted on China, through boycotting the 2022 Winter Olympics and protesting its human rights record. But even during this period, despite rising tensions, the two nations maintained ongoing communications, including the Alaska talks in March 2021—although they were notably tense—and the meeting between the presidents in November of that year. The tension peaked in April 2022, when then Speaker of the US House of Representatives Nancy Pelosi announced her intention to visit Taiwan. China strongly protested, and the White House even recommended Pelosi to reconsider her visit due to concerns about potential military escalation. Pelosi refused and proceeded with her visit in August, delivering a speech at the Taiwanese legislature and advocating for increased American–Taiwanese cooperation. In an article published in the United States before her visit, Pelosi wrote that “at a time when the world faces a choice between autocracy and democracy . . . it is essential that America and our allies make clear that we never give in to autocrats.”   In response to Pelosi’s visit, China held a large-scale military exercise that disrupted air and maritime traffic in the region and released a white paper emphasizing “The Taiwan Question and China’s Reunification in the New Era.” Furthermore, as a countermeasure to Pelosi’s visit, the Chinese Ministry of Foreign Affairs announced that it was suspending all dialogue and cooperation with the United States, including dialogues between the military commands, the ministries of defense (DPCT), and the maritime military coordination (MMCA), and cooperation in the fields of illegal immigration, criminal legal assistance, transnational crimes, counternarcotics, and climate change. In November 2022, presidents Biden and Xi met in Bali, Indonesia, in an attempt to put the relations between the two powers back on track. After the meeting, the White House issued a statement announcing that the United States will continue to compete actively with China, but the two countries must manage their competition responsibly, without letting it escalate, while maintaining open channels of communication and continuing to cooperate on global issues such as climate change, counternarcotics, debt relief, health, and food security. Regarding Taiwan, the United States reiterated its commitment to the one China policy but strongly opposed China’s aggressive actions, which violate peace and stability in the Strait and in the entire region. The Chinese also released a statement, noting that President Xi highlighted that Taiwan is a core Chinese interest and constitutes a red line that is nonnegotiable in the relations between the two countries. It was anticipated that the year 2023 would begin on a more positive tone, with US Secretary of State Antony Blinken’s scheduled visit to China in February. The visit was canceled when a Chinese balloon was discovered floating over US territory for a week until the US Air Force intercepted it. Although the White House at first tried to downplay the incident, with President Biden initially referring to it as a “minor breach” and said that the Chinese government was unaware of the issue. China claimed that a weather monitoring and research balloon had strayed off course. Public pressure, however, led the administration to cancel Blinken’s visit. Subsequently, the US Department of Commerce imposed restrictions on six Chinese companies linked to balloon and aviation technologies that are used by the Chinese military, requiring that they receive special approval to access American technology. In April and May, China retaliated at a relatively low bar by imposing sanctions on a US member of Congress who visited Taiwan and sentenced an American citizen living in Hong Kong to life imprisonment, for alleged espionage for the United States. These actions reflect the efforts of both China and the United States to take focused, restrained measures, to avoid escalating tensions. The absence of a strong reaction from China to the establishment of a select committee within the US House of Representatives, focused on examining the US–China strategic competition, suggests that China sought to prevent further escalation of the conflict.   Efforts to end the crisis and restore talks were renewed in May 2023 when the head of the CIA met with his Chinese “counterparts.” In June, US Secretary of Defense Lloyd Austin and Chinese Minister of Defense Wei Fenghe met on the sidelines of the Shangri-La conference in Singapore. Secretary of State Blinken’s anticipated visit to China took place later that month. In July, US Special Envoy for Climate John Kerry and Secretary of the Treasury Janet Yellen traveled to China, followed by a visit of US Secretary of Commerce Gina Raimondo in August. These high-level meetings concluded on a note of cautious optimism, with both sides acknowledging “progress” but not a “solution,” as the purpose of the meetings was to stabilize relations rather than to resolve the issues in dispute. In September 2023, Secretary of the Treasury Yellen and Chinese Finance Minister He Lifeng launched two new working groups on economic and financial issues. Moreover, Pentagon officials and their Chinese counterparts met and discussed the US Department of Defense’s cyber strategy, followed by a meeting of the American and Chinese presidents in San Francisco in November. The American efforts to renew the military dialogue between the two countries was initially met with refusal by China until December, when General Brown, the chairman of the Joint Chiefs of Staff, spoke with his Chinese counterpart General Liu Zhenli. In early January 2024, a few days before the elections in Taiwan, the annual Defense Policy Coordination Talks between the two countries were held at the Pentagon for the first time in four years. These developments reflect China’s acute sensitivity toward the Taiwan issue and its willingness to take significant measures against perceived violations of its One China Policy, especially by the United States. Despite numerous disputes, the growing rivalry between them, the defiant measures, and the reciprocal sanctions, these events highlight that the two powers recognize the importance of keeping channels of communication open. This dialogue is crucial for pursuing shared interests, resolving disputes, and minimizing the risk of military escalation that could have far-reaching consequences for both nations as well as the global community. The ongoing tension between the United States and China over Taiwan also has implications for Israel. First, the increasing friction between the powers has accelerated the formation of two opposing camps and has limited Israel’s ability to maneuver between them. As demonstrated (again) since the outbreak of the war between Israel and Hamas, the United States is Israel’s greatest friend and its most important strategic ally. While China is an important economic partner of Israel, its policy is not that of a friend, and its oppositional stance toward Israel has the potential to cause significant damage. The United States expects its allies to stand by its side and to align more closely with its policies vis-à-vis China, especially concerning advanced technologies and critical infrastructure. Failing to meet US expectations could strain US–Israel relations. Second, a military escalation between the United States and China would also have global economic consequences, seriously disrupting supply chains of raw materials and essential goods crucial to Israel. Finally, the US administration recently linked the military aid granted to Israel to that of both Taiwan and Ukraine, framing them as three democracies under threat. While this linkage underscores the US commitment to its allies, it also creates constraints and interdependencies. The attention and resources that the United States currently allocates to Israel and to the broader challenges in the Middle East could be compromised if the United States faces serious military crises elsewhere in the world, and this could have far-reaching impacts on Israel.

Watch on YouTube A drone attack that killed three American troops and wounded at least 34 more at a base in Jordan has increased fears of a widening conflict in the Middle East – and the possibility that the U.S. may be further drawn into the fighting. President Joe Biden vowed to respond to the assault, blaming Iran-backed militias for the first U.S. military casualties in months of such strikes in the region. But to what extent was Iran involved? And what happens next? The Conversation turned to Sara Harmouch, an expert on asymmetric warfare and militant groups in the Middle East, to answer these and other questions. What do we know about the group that claimed responsibility? Al-Muqawama al-Islamiyah fi al-Iraq, which translates as the Islamic Resistance in Iraq, has claimed responsibility for the drone attack. However, the Islamic Resistance in Iraq is not a single group per se. Rather, it is a term used to describe an umbrella organization, which, since around 2020, has included various Iran-backed militias in the region. Initially, the Islamic Resistance in Iraq emerged as a response to foreign military presence and political interventions, especially after the 2003 U.S.-led invasion of Iraq. The Islamic Resistance in Iraq acted as a collective term for pro-Tehran Iraqi militias, allowing them to launch attacks under a single banner. Over time, it evolved to become a front for Iran-backed militias operating beyond Iraq, including those in Syria and Lebanon. Today, the Islamic Resistance in Iraq operates as a cohesive force rather than as a singular entity – that is to say, as a network its objectives often align with Iran’s goal of preserving its influence across the region, but on a national level the groups have their distinct agendas. The collective is notorious for its staunch anti-U.S. posture and dynamic military campaigns, such as a recent two-day drone operation targeting American forces at an Iraqi airbase. Operating under this one banner of Islamic Resistance, these militias effectively conceal the identities of the actual perpetrators in their operations. This was seen in the deadly Jan. 28, 2024, attack on Tower 22, a U.S. military base in Jordan. Although it is evident that an Iranian-supported militia orchestrated the drone assault, pinpointing the specific faction within this broad coalition remains elusive. This deliberate strategy hinders direct attribution and poses challenges for countries attempting to identify and retaliate against the precise culprits. What do they hope to achieve in attacking a US target? Iranian-backed militias have been intensifying attacks on U.S. forces in recent months in response to American support for Israel in the Israel-Hamas conflict, and also to assert regional influence. Since the beginning of the conflict in October 2023, Iranian-backed militias have repeatedly struck American military bases in Iraq and Syria, recently expanding their attacks to include northeastern Jordan near the Syrian border. The deadly assault on Jan. 28 marks a significant escalation, though – it is the first instance during the Israel-Hamas war that American troops have been killed. Where is Tower 22 – the US base hit in drone attack? Three American troops were killed at a camp in Jordan near the Syrian border.   The attack in Jordan forms part of a strategy by Iranian-backed militias to counter Washington’s support for Israel in the Gaza conflict. But it is also aimed at advancing a wider goal of pushing U.S. forces out of the Middle East entirely. By coordinating attacks under the Islamic Resistance in Iraq, these groups are trying to display a unified stance against U.S. interests and policy, showcasing their collective strength and strategic alignment across the region. What role did Iran have in the attack? Iran has officially denied any involvement in the drone strike. But the Islamic Resistance in Iraq is known to be part of the networks of militia groups that Tehran supports. Iran, through the Islamic Revolutionary Guard Corps’ Quds Force, has provided such militias with money, weapons and training. However, the extent of Iran’s command and coordination in specific incidents like the Jordan attack remains unclear. At this stage, more concrete evidence is necessary to firmly implicate Iran. As Iran expert Nakissa Jahanbani and I recently explained in an article for The Conversation, Iran’s strategy in the region involves supporting and funding militia groups while granting them a degree of autonomy. By doing so, Iran maintains plausible deniability when it comes to attacks carried out by its proxies. So while Iran’s direct involvement in the attack has not been definitively established, Tehran’s long-standing support of groups like the Islamic Resistance in Iraq is well documented, playing a significant role in the regional conflict dynamics and geopolitical strategies. What options does the US have to respond? It isn’t clear how the U.S. intends to respond to the attack. The Biden administration faces complex dynamics when it comes to responding to attacks linked to Iranian-backed militias. While a forceful military strike is an option that the Biden administration appears to be looking at, targeting Iran directly on its own soil is fraught with risks and may be seen as a step too far. Even when targeting Iranian interests or personnel, such as the assassination of Quds Force General Qassem Soleimani, the U.S has conducted these actions outside Iranian territory. Iran’s denial of direct involvement in the attack further complicates the situation and makes it less likely that the U.S. attacks Iran in retaliatory strikes. But adopting a targeted approach, such as striking militia leaders outside of Iran, raises questions about the effectiveness of U.S. tactics in deterring Iran and its proxies. This strategy has been employed in the past, yet it has not significantly curbed Iran’s or its proxies’ aggressive actions. The concern is that while such strikes are precise, they may not be enough to deter ongoing or future attacks. The key to the strategy’s success may rest in identifying the most influential factors, or “centers of gravity,” that can effectively influence Iran’s behavior. This means determining key leaders, critical infrastructure or economic assets, which, if killed, destroyed or seized, could substantially alter Iran’s decision-making or operational capabilities. The Biden administration’s need to balance a strong response with the geopolitical consequences highlights the difficulties of navigating a tense and evolving situation. How might the attack affect the wider Middle East conflict? How the U.S. responds could reshape the Middle East’s geopolitical landscape and influence the dynamics of proxy warfare in the region. A strong military response from Washington might deter Iranian-backed militias from future attacks, but it could also provoke them into taking more aggressive actions. In the short term, any U.S. retaliation – especially if it targets Iranian interests directly – could escalate tensions in the region. It could also exacerbate the cycle of tit-for-tat strikes between the U.S. and Iranian-backed forces, increasing the risk of a broader regional conflict. And given that the attack’s pretext involves the Israel-Hamas war, any U.S. response could indirectly affect the course of that conflict, impacting future diplomatic efforts and the regional balance of power.

The Trump machine has once again dominated the media environment across the world. But don’t rule out America’s other electoral races in the US Congress, which will prove pivotal to US foreign relations. For observers of American politics, the onset of 2024 marked the commencement of the much-anticipated election year. Though political tensions in the US have not mellowed much in the last decade, the international community has ramped up its commentary on the predicted presidential rematch. Less covered in the media are the 438 house seats and 34 senate seats up for grabs in US Congress. Foreign audiences often confuse congressional powers with presidential powers. Though there are many, the most misperceived pertain to Congress’s ability to control the national budget and defence spending, declare war, and ratify treaties. With the potential for such a large shift in the electorate, the outcome of the Congressional elections is potentially a more significant issue than even another Trump presidency and will undoubtedly include important issues such as aiding Ukraine in its war against Russia, sustaining American commitments in the Indo-Pacific, and pushing back against China. Campaign strategists for both the Democratic National Committee (DNC) and Republican National Committee (RNC) are acutely aware of the power that Congress can wield. For many of the individual campaigns – some 472 – strategists are required to lean on the spectacle of the presidential election and what is called the “coattail” effect. Popular presidential candidates or political party leaders attract votes for other candidates in his or her party and influence down ballot races. This becomes notably easier in a US election landscape where, in some states, voters can click a single “straight-ticket” button to vote at the top of the ballot. This instantly votes for every down ballot race (Presidential, Congressional, local, and otherwise), on the basis of political party. While it may seem as though Americans are more divided along party lines than ever, polls increasingly indicate that the political tumult that has encompassed high-level candidates over the last several election cycles has caused a rise in independent and indecisive voters. A survey conducted by Pew Research in September 2023 found that a record number of (28 percent) of Americans are expressing unfavourable views of both parties. This figure is similar (nearly 33 percent) for young voters who are undecided on who they will vote for in the 2024 elections. As the research on undecided voters continues to accumulate, a crucial question is how consequential the coattail effect will be for congressional elections. Senatorial elections unfold on a six-year cycle, introducing a staggered re-election pattern. This leads to certain election years showing a greater preference for one party in the Senate compared to others, as not all seats are up for re-election simultaneously, and contested seats are occasionally situated in states with strong partisan leanings. This election round, with 34 seats on the ballot, it is the Republican’s election to lose. While Democrats presently hold a slim 51-49 majority in the body, the electoral landscape suggests that Republicans are poised to retain all 11 of their currently held seats in staunchly red states. The Democrats face a more challenging landscape, with all 11 of their seats situated in contested states, along with 2 independents in states that remain uncertain. The Republicans are favoured to pick up at least two seats, with a majority of polls showing a 50-47 Republican control. The House race will be much more unpredictable. Congressional House members must campaign every two years, and with such numbers, the House races are not skewed by which seats are up for grabs or affected by the electoral college. For this reason, the House race is considered much more of a reflection of American political sentiment. It’s authorities cover the defence budget, the regulation of trade and tariffs, and the allocation foreign aid, among other important roles. On this basis, the House plays a pivotal role in shaping how the US government engages with its foreign allies. In a scenario where a polarising candidate such as Trump secures the presidency and the Senate, the balance of government can still be influenced by the outcomes of the popular vote for the House. If the majority of voters support a Democratic House, Democrats will have the ability to impede the Trump administration’s decisions on these critical issues for at least the next two years. The House races will serve as the definitive indicator of the success or demise of the coattail effect. Out of the 435 seats, 218 seats are required to control the House. The Democrats are expected to secure around 204 seats, with Republicans around 211. The remaining 20 highly contested seats, then, will determine who controls the lower house. With Republicans favoured to win the presidency and the Senate, this nail-biting unpredictability will be the difference between a smooth sailing Republican government and a bureaucratic deadlock until 2026. Of course, polls have been wrong in the past. For the time being, the Democrats (as well as the rest of America and the world) have much to be concerned about. Even if a party fails to gain the White House, the coattail effect will still be useful in mobilising party voters for lower-level races. Partly for this reason, spending on congressional and presidential races from external sources has reached US$318 million, marking a 600 percent surge compared to this same period in 2020. As a strategic financial approach, strategists will look to big and small donors who contribute to the presidential race to influence outcomes in down ballot elections. This fact that Congressional races will be influenced by elites and other powerful entities underscores the necessity for the general public to closely monitor and engage with these electoral contests. The substantial impact congressional races will have on American foreign affairs emphasizes the attention the international community must pay to broader electoral outcomes. Often overshadowed by the reality tv-esque drama of presidential elections, the powers vested in the US Congress are equally, if not more, consequential for global affairs. In 2017, and again in 2018, the Trump administration sought to defund the Department of State and would have succeeded if not for Congress. Similar scenarios are envisioned for Trump 2.0, particularly on the Ukraine question. Though comprehending the intricacies of down-ballot races and the coattail effect is a challenge, it stands as one of the most substantial stabilisers for foreign nations seeking to foster lasting relations with an unstable United States. By actively learning and being more conscious of the distinctive powers held by the president, in comparison to other bodies, the international community can facilitate more accurate and resilient policy responses.

The attacks on shipping in the Red Sea is a test for the US’ Indo-Pacific strategy to deal with China In a House Armed Services Committee hearing in March 2023 on the US posture and security challenges in the Middle East and Africa, it was acknowledged that “…President Biden’s decision to unilaterally and unconditionally withdraw all US forces from Afghanistan has undermined our national security.” The developments of the past few weeks in the Red Sea have made this assertion seem prophetic. Yemen’s Houthi rebels have strategically positioned themselves to exploit less monitored zones in the Red Sea and the broader Arabian Sea. With numerous naval vessels navigating this critical route linking the Mediterranean and the Arabian Sea, countering the Houthi rebels and their assaults on global shipping has become exceedingly challenging for the US. The Houthi rebels have connected these attacks to the ongoing conflict in Gaza, tying the halt in hostilities along shipping lanes to a ceasefire negotiation between Israel and Hamas in Gaza. Their strategy involves increasing attacks on ships and holding them as leverage to prompt the US to pressure Israel for a ceasefire. The timing of the Houthi actions aligns with Israel’s focused operations in southern Gaza and a waning Congressional backing in the US for continuous financial support for overseas conflicts. Tactically, the Houthis see an opportunity to open a third front in the maritime domain, even as the Israeli air defence systems are overwhelmed by combined rocket attacks of Hamas and Hezbollah in the north and south. In an offensive barrage last week, the Hezbollah carried out six attacks in eight hours. In the maritime domain, the Houthis have carried out multiple UAV, rocket and missile attacks targeting a dozen merchant ships in the larger Indian Ocean. Iran has conducted attacks on US and Israeli vessels in the region as well. A recent attack on an Israeli vessel off the west cost of India near Veraval is a red flag for safety and security of the Sea Lines of Communication (SLOC) in the Indo-Pacific. With unmanned aerial vehicles and use of other technological capabilities, the attacks on ships could be rapid, discreet, damaging and, most of all, with little or no accountability. Often, the vulnerabilities associated with international strategic choke points have always been assessed from the perspective of State complicity, resting States’ conviction on limited capacities of non-State actors to exact huge costs. If anything, the Red Sea crisis shows that even with little but calculated external support, non-State actors could indeed significantly disturb the predictability of global supply chains and bring merchandise flow to a halt. The economic impact of increased attacks in the Red Sea is already being felt, as many ships have begun to avoid the route through the Red Sea and prefer the longer route around the Cape of Good Hope in Africa. This has caused worries of delay in the global freight markets and pricing concerns in energy dependent countries beside the security concerns for shipping companies such as Maersk. Since the Israel-Hamas war began, the US Central Command has been active in preventing a slew of UAV attacks by the Houthi rebels. For the US, the situation developing in the Red Sea presents a combination of political, economic and strategic challenges. The ongoing Israeli operation in Gaza has politically isolated the US at the global level as the only country to oppose a UNSC ceasefire resolution. The political heat from the Israel-Hamas war is being felt at home with dwindling youth support for President Biden as presidential elections near. The economic costs of the two wars – one in the Middle East and the other in Ukraine – is already tearing the US Congress apart. At the strategic level, coordinated attacks on international shipping threatens to force a rebalancing of the US force posture in the Indo-Pacific. The US currently has two aircraft carriers positioned in the Middle East since the Israel-Hamas war began. While a strong US military presence in the region may have prevented the war from spreading through the region, any additional and long-time concentration of force posture in the Gulf may be detrimental to Washington’s Indo-Pacific intent. Indeed, America’s Indo-Pacific strategy is being tested in the Middle East through five core ideas. Firstly, the recentring of US forces in the Middle East contradicts the intended pivot towards Asia. Secondly, the attacks orchestrated by the Houthis and Iran highlight the unpredictable threats that can disrupt supply chains in the region. Thirdly, the US faces challenges in executing counterterrorism and counterpiracy efforts in the Indo-Pacific, especially while collaborating with allies. Moreover, integrating the Middle East into an Indo-Pacific connectivity project appears increasingly challenging. Lastly, China’s refusal to join the US in protecting the Red Sea shipping lanes reveals Beijing’s divergent strategy for engaging with the Middle East from that of the US.

“Originally published by Homi Kharas at Brookings Future Development on 21 November 2023,” “Middle-class life satisfaction rests on two pillars. The first is the idea that hard work and self-initiative will lead to prosperity. The second is that thanks to this prosperity, the children of middle-class families will enjoy even more opportunities for the good life. Both pillars are shaking.” Joining the middle class has been a ticket to the good life for two centuries now, a history I trace in a new book “The Rise of the Global Middle Class.” The American Dream, the glorious years of European reconstruction after World War II, miracle economic growth in Japan and other East Asian countries, Xi Jinping’s great rejuvenation of the Chinese nation, and India’s software revolution each brought hundreds of millions of people into the ranks of the global middle class. Today, thanks to this progress, most of the world, upwards of 4 billion people, enjoy a middle-class or better lifestyle for the first time ever. Yet, across the world there is a clear sense of disquiet in the middle class. In the U.S., Princeton economists Anne Case and Angus Deaton have documented the prevalence of “deaths of despair” due to suicides, opioids, and alcohol poisoning among non-college educated white middle-class males. The Japanese have coined a specific word, karoshi, to describe deaths due to overwork among salaried professionals. China is seeing a campaign of tang ping, or lying flat, to protest the “996” expectations of employers—9 a.m. to 9 p.m. 6 days a week. India ranks 126th out of 137 in the rankings of the 2023 World Happiness Report. What is amiss? Middle-class life satisfaction rests on two pillars. The first is the idea that hard work and self-initiative will lead to prosperity. The second is that thanks to this prosperity, the children of middle-class families will enjoy even more opportunities for the good life. Both pillars are shaking. The first is threatened by the effects of technological change on jobs. The foundations of the second are being undermined by climate change, pollution, and the destruction of nature. For most of history, technology has changed the nature of work by reducing repetitive, routine, and manual labor. During COVID-19 and the ensuing recovery, many workers changed occupations. Those with good jobs, requiring cognitive, non-routine tasks, did better than those engaged in manual, repetitive tasks. There are pathways to high-wage work, but, as my Brookings colleagues Maria Escobari and co-authors have shown, access to these paths is unequal, and that is creating stress and mental health problems for many middle-class workers. Stepping-stone occupations that serve as a bridge between low-and higher-wage occupations, and even high-wage occupations themselves, are increasingly under threat from artificial intelligence. When the Writers Guild of America went on strike in May 2023, they demanded that ChatGPT be used only as a research tool, not for actual script writing, the creative process that is at the heart of their jobs. The wobbly second pillar of middle-class satisfaction is that young people are worrying that the mass consumption of the middle-class is responsible for unsustainable levels of greenhouse gas emissions, pollution and species extinction. On current trajectories, children born today will live in a world that is at least 3 degrees warmer than pre-industrial levels. The impact of such changes, according to the best available science, is terrifying. “Is a middle-class lifestyle consistent with a livable planet? Thankfully, the answer is yes, but only if there is significant change in economic policies.” This science forces the middle class to confront an existential question. Is a middle-class lifestyle consistent with a livable planet? Thankfully, the answer is yes, but only if there is significant change in economic policies. Consider the case of Switzerland, one of the richest economies in the world. The Swiss emit only 5 tonnes of greenhouse gases per person per year, less than one-third the U.S. level. One reason is that Switzerland buys a lot of electricity from France’s nuclear reactors. But on other measures, too, such as building efficiency, moving people on electric trains and buses, and insulating homes, the Swiss middle class outperform many of their peers. True, this is not enough. The 5 tonnes must be reduced to zero by 2050, but Switzerland’s case shows that most of the current levels of carbon emissions are not tied to middle-class standards of living but simply to bad or thoughtless policies in rich countries that can be readily corrected. In similar vein, pollution is a man-made problem, not a necessary corollary of high living standards. In its current form, recycling is not effective. A new concept of a circular economy offers much more promise. The idea is to “design out” waste and pollution, recycle materials and regenerate nature. One of the first problems the circular economy concept is tackling is the issue of plastic packaging. Because of its ubiquity, plastic continues to accumulate in our oceans (and increasingly in our bodies). There are, however, alternative materials that can be used for packaging, and already the European Union is on track to make all packaging recyclable by 2030. A third area of concern is human encroachment into nature. The current global system of food production is based on expanding croplands to grow feed or as pasture for animals, especially cattle and sheep. This system has a double cost. It contributes significantly to greenhouse gas emissions, and it destroys wildlands and biodiversity. The simplest option would be to encourage the middle class to switch to a vegetarian diet. If this magically happened in the world, a land area stretching from Alaska to Tierra del Fuego could be returned to nature. In a less extreme version, if beef and lamb were taken out of our diets, an area the size of North America could be re-wilded. These examples are not offered as realistic policy options in the medium term. They do, however, serve to make a point. If the middle-class is serious about preserving nature, it will require a major change in diet. That could come about through taxes on land-intensive foods or through technology—lab-grown meat is available but only at a higher price point, and it has yet to scale. The common theme in these threats to a middle-class lifestyle is that the values of hard work and personal responsibility that are the hallmark of middle-class success are no longer enough. Policymakers are caught in trying to deliver higher living standards to their citizens and more sustainable living standards for their children. There are long-run strategies where economic growth and sustainability go hand-in-hand, but no countries have yet shown how to manage the transition onto these low-carbon pathways in a rapid, credible way. So the future is uncertain, and the middle-class, which hates uncertainty, will remain disquieted until they are clear about how to best secure the lifestyles and progress to which they have become accustomed.

There were smiles for the camera, handshakes, warm words and the unveiling of a couple of agreements. But beyond the optics of the first meeting in over a year between the leaders of the world’s two biggest economies, not an awful lot had changed: There was nothing to suggest a “reset” in U.S. and China relations that in recent years have been rooted in suspicion and competition. President Joe Biden hinted as much just hours after the face-to-face talks, confirming that he still considered his Chinese counterpart, Xi Jinping, a “dictator.” Beijing hit back, with foreign ministry spokesperson Mao Ning telling reporters Biden’s remark was “extremely wrong and irresponsible political manipulation.” As a scholar of U.S.-China relations, I believe the relationship between the two countries can be best described as an “enduring rivalry” – a term used by political scientists to denote two powers that have singled each other out for intense security competition. Examples from history include India and Pakistan, France and England, and the West and the Soviet Union. Over the past two centuries, such rivals have accounted for only 1% of the world’s international relationships but 80% of its wars. History suggest these rivalries last around 40 years and end only when one side loses the ability to compete – or when the two sides ally against a common enemy. Neither scenario looks likely any time soon in regards to China and the U.S. How enduring rivalries end China “is a communist country … based on a form of government totally different than ours,” Biden said after his meeting with Xi. That comment gets to the heart of why diplomacy alone cannot reset the U.S.-China relationship. Washington and Beijing are not rivals due to any misunderstanding that can be sorted out through talks alone. Rather, they are rivals because of the opposite reason: They understand each other only too well and have come to the conclusion that their respective world outlooks cannot be reconciled. The same is true for many of the issues that divide the two countries – they are framed as binary win-lose scenarios. Taiwan can be governed from Taipei or Beijing, but not both. Similarly, the East China and South China seas can be international waters or Chinese territory; Russia can be crippled or supported. For the United States, its Asian alliances are a force for stability; for China, they’re hostile encirclement. And both countries are right in their respective assessments. Diplomacy alone is insufficient to resolve a rivalry. At best, it can help manage it. When the US calls, who picks up? Part of this management of the U.S-China rivalry involves finding areas of agreement that can be committed to. And on Nov. 15, Biden and Xi announced deals over curbing China’s production of the deadly drug fentanyl and the restoring of high-level, military-to-military dialogue between the two countries. But the fentanyl announcement is very similar to the one Xi gave to then-President Donald Trump in 2019. The U.S. administration later accused China of reneging on the agreement. Similarly, committing to restarting high-level dialogue is one thing; following up on it is another. History is dotted with occasions when having an open line between Beijing and Washington hasn’t meant a whole lot in times of crisis. In 2001, when a U.S. surveillance aircraft collided with a Chinese jet over Hainan Island, Beijing didn’t pick up the phone. Likewise, during the Tiananmen Square massacre, then-President George H.W. Bush urgently tried to call his counterpart Deng Xiaoping but was unable to get through. Moreover, focusing on what was agreed to in talks also highlights what wasn’t – and is unlikely to ever be – agreed to without a substantial shift in power that forces one side to concede to the other. For example, China wants the U.S. to stop selling arms to Taiwan. But Washington has no intention of doing this, as it knows that this will make the disputed island more vulnerable to Beijing. Washington would like China to end its military displays of strength over the Taiwan Strait; Beijing knows doing so risks seeing Taiwan drift toward independence. American policymakers have long said what they want is China to “change” – by which it means to liberalize its system of governance. But the Chinese Communist Party knows that doing so means self-liquidation – every communist regime that has allowed space for alternative political parties has unraveled. Which is why American attempts to engage China are often met with suspicion in China. As former Chinese leader Jiang Zemin commented, engagement and containment policies have the same aim: to end China’s socialist system. For similar reasons, Xi has shunned attempts by the U.S. to bring China further into the rules-based international order. The Chinese leader saw what happened when Soviet leader Mikhail Gorbachev tried to integrate the Soviet Union into the Western order in the late 1980s – it only hastened the demise of the socialist entity. Instead, Xi calls for a massive military buildup, the reassertion of Chinese Communist Party control and an economic policy based on self-reliance. Actions speak louder … The encouraging words and limited agreements hammered out in the latest meeting between Xi and Biden should also not distract from the actions that continue to push the U.S. and China further apart. China’s show of force in the Taiwan Strait has been sustained for three years now and shows no sign of abating. Meanwhile, Beijing’s navy continues to harass other nations in the South China Sea. Similarly, Biden has continued the U.S. path toward military alliances aimed at countering China’s threat. It recently entered a trilateral agreement between the U.S., Japan and South Korea. And that came two years after the establishment of AUKUS, a security partnership between the the U.S., Australia and the U.K. that has similar aims. Meanwhile, the U.S. administration will continue to tighten the screws on China’s economy through investment restrictions. Biden is well aware that easy flowing money from Wall Street is helping China weather choppier economic waters of late and is keen to turn off the tap. The point of diplomacy This isn’t to say that diplomacy and face-to-face talks are pointless. They do, in fact, serve a number of interests. For both men involved, there is a domestic upside. For Biden, playing nice with China projects the image of a statesman – especially at a time when, due to U.S. positions on Ukraine and the Middle East, he is facing accusations from the political left of being a “warmonger.” And encouraging Beijing to tread softly during the U.S. election year may blunt a potential line of attack from Republicans that the administration’s China policy is not working. Meanwhile, Xi is able to showcase his own diplomatic skills and present China as an alternative superpower to the U.S. and to potentially cleave the Western business community – and perhaps even major European nations – from what he would see as the U.S. anti-China coalition. Moreover, summits like the one in San Francisco signal that both the U.S. and China are jointly committed to at least keep talking, helping ensure that a rocky relationship doesn’t descend into anything more belligerent – even it that doesn’t make them any friendlier.

The meeting at San Francisco between Presidents Joe Biden and Xi Jinping offers a short respite in the broader strategic conflict that both states have been waging since at least 2017. The friends and trade partners of both nations now have an opportunity to employ middle power diplomacy to advocate for their interests and also the moderation of competition. In his book Destined for War: Can America and China Escape Thucydides’s Trap?, Graham Allison provided historical examples of when a status quo power met a rising power and whether and why it resulted in war. Unlike his peer John Mearsheimer, author of the Tragedy of Great Power Politics, who concludes that competition and conflict between the US and China are inevitable due to the structure of the international system, Allison’s book provides a warning to both the US and China that the decisions they make could be positively or negatively consequential, leaving room for agency to be the final arbiter of the fate of bilateral relations. The pre-APEC meeting between President Joe Biden and President Xi Jinping was an invitro international relations experiment testing the premises of Allison and Mearsheimer as to whether US-China strategic competition will be shaped by the agency of leaders or the structure of the system. Superficially, the 15 November 2023 meeting allowed for an agreement limiting the precursors of fentanyl coming into the United States and, importantly, reviving regular talks under what is known as the military maritime consultation agreement. These modest but important agreements followed a throng of high-level cabinet visits to Beijing and reciprocal visits by Wang Yi, China’s foreign minister, that were meant to stabilise US-China relations. These agreements suggest that leaders in both countries can find diplomatic crosswalks to stabilise the relationship in functional areas. It also intimates that other window of cooperation such as climate change, anti-terrorism, transnational disease prevention, and poverty alleviation may be fertile ground for collaboration if leaders choose to move forward. While the modest takeaways from the meeting in San Francisco underscores that agency does have a role in bilateral relations, we should be realistic that they also reflect the deep structural challenges that exist between the United States and China. Moreover, they also represent the intractable nature of the structural challenges in the relationship, placing friends and allies of the United States and major trading partners of China, such as Australia, Japan, Canada, and Southeast Asian nations, with a difficult quandary: How to balance their economic prosperity and stability through a vibrant and beneficial trade relationship with China while maintaining a strong, comprehensive relationship with the United States as it deepens its strategic competition with China? In the US, there is bipartisan consensus that China represents a challenge to US leadership that needs to be dealt with comprehensively. Under the Biden administration, we have seen a systemic, sequential, and allied-first approach to competing with China. It has brought accolades from friends and allies and, predictably, criticism from China that Biden has not only adopted a continuation of policies towards China from the Trump administration, but that his policies are even more severe. The Biden administration has reinforced and reified its alliance partnerships with South Korea and Japan. It then enhanced its commitment to the Quadrilateral Security Dialogue (Quad) and demonstrated substantial leadership in terms of pushing back against Russia’s invasion of the Ukraine. More recently, the Biden administration forged a new trilateral partnership between South Korea, Japan, and the United States, under the so-called Camp David Principles. It also strengthened the quadrilateral security dialogue and its efforts to provide public goods to the Indo Pacific region. And we’ve gradually seen a more coherent AUKUS strategy that aims to create synergy between the UK, Australia, and the United States in the areas of AI research, quantum computing, hypersonic missiles, cyber, and importantly nuclear power submarines. Last, but not least, the adoption of the Chips Act, limiting the sale of sophisticated semiconductor chips to China and the associated technologies, suggests that the United States is not stepping down from its competition with China, but stepping up in the same way that the United States transformed every aspect of its governance following the 911 attacks. Similarly, there seems to be consensus in the Chinese political elite that the US and its allies are intent on containing China and attenuating its development. Xi Jinping’s 20th Workers Party Report at the 20th Party Congress highlighted the concerns China has about its external environment and advocated for strengthening the PLA to deal with separatist forces and external threats, while consolidating it political, social, economic, and ideological systems. Through the Belt and Road Initiative (BRI), the expansion of the BRICS and Shanghai Cooperation Organization, and the advocacy of the Global Development/ Security and Civilization Initiatives, China under the leadership of Xi Jinping is aiming to transform itself, its periphery, and the international system such that all are more conducive to China’s core interests, including preserving its political system. These realities suggest that rather than fostering a reset in bilateral relations, what we are seeing is both China and the United States taking a tactical pause in their strategic competition to amass the resources they need to compete successfully in the Mearsheimer world of great power politics and the maximisation of power. In closed-door discussions on China with Japanese, South Koreans, Australians, Canadians, Southeast and South Asians, as well as Europeans, we hear similar refrains: while China represents a “systemic challenge” in the case of the Europeans and NATO, or is a “disruptive power” in the case of Canada, or as Japan writes in its 2022 National Security Strategy, “the greatest strategic challenge in ensuring the peace and security of Japan and the peace and stability of the international community,” China is also an important and largely irreplaceable economic partner and essential player in dealing with global challenges such as climate change. The question for friends and allies of the United States is how to balance the increasingly difficult and competitive relationship between China and the United States in a way that ensures that they can continue to have strong economic relationships with China while building resilience into their economies and into their economic relationship, such that the economic weaponization of supply chains and the monopolisation of resources cannot negatively affect trading partners of China. Part of these states’ responses to protect their national interests from the structural realities of Sino-U.S. strategic competition will be a middle power diplomacy that aims to shape the competitive nature of the relationship between the US and China. This will be implemented through coordinating their diplomacy and proactively lobbying, insulating, and investing in rulemaking in the realms of security, trade, and international law alongside their like-minded ally the US, but at times also in opposition to the US. This will require investing in diplomatic resources in both the US and China, in the broader Indo-Pacific region, and at the subnational level to forge strong state to state relations to effectively lobby US policy makers to inculcate the interests of allies and friends of the US in their strategic rivalry with China. Similarly, through forging stronger relations with Chinese provincial leaders though trade and investment, middle powers and stakeholders in the US-China strategic competition may be able to have their interests reflected in a moderation of China’s approach to competition with the US.

In the United States, there is a complex process of annual budget adoption for the next fiscal year, which begins on October 1. Budget adoption proceeds according to a certain schedule. Ultimately, by September 30, The House of Representatives and the Senate must introduce 12 appropriations bills of the main government activities for the next fiscal year, and then the president must sign them. In case if all 12 appropriation bills are not passed, an almost complete suspension of the government institutions activities occurs (shutdown). In case if a part of the bills is passed, only those federal agencies that did not receive appropriations will be shut down. Shutdown means that government employees have to take forced leave without pay. Only those institutions that are of critical importance to national security continue to operate. For instance, employees who are responsible for the safety of the US’s nuclear arsenals and monitoring of hydroelectric power plants and energy lines continue to work in the Department of Energy. Also, active military personnel continue to perform their duties. Institutions with special self-financing funds (such as post office, customs) continue to operate in a certain mode. In addition to adoption of annual discretionary spending, the US also has mandatory spending for basic social and several critically needed areas of government activity. This financing is carried out from special off-budget funds and does not depend on annual approval by US Congress, in this way society is protected from the consequences of political struggle to some extent. Social security and healthcare programs, such as Social Security, Medicare and Medicaid, also continue to operate. The US Congress widely uses a tool called a continuing resolutions (CR) for a certain period in the amount that was included in the previous budget to avoid a shutdown. These resolutions become laws after they are signed by the President. Since this kind of resolutions extend appropriations from the previous fiscal year, it interferes with the activities of federal agencies because they have to freeze their spending levels, it also makes it difficult to plan future projects and creates risks for government contractors. A few comments on the history of the issue. Last time when Congress completed the budget approval process on time, before the start of the fiscal year, was in 1997. Since in 1976 Congress transitioned to the modern budget process, based on the 1974 Budget Act, there have been 20 "funding gaps," including cases when funding was not allocated even for a single day. The longest government shutdown in U.S. history lasted 35 days, from December 22, 2018, to January 25, 2019, during the Trump administration. On March 9, 2023, President Joe Biden submitted to Congress the budget proposal for fiscal year 2024, estimating expenses at $6,883 billion (25.3% of GDP) and a budget deficit at $1,846 billion (6.8% of GDP). This year, the budget process became more complicated because in June 2023, lawmakers passed the Fiscal Responsibility Act of 2023 (FRA) to avoid a technical default on the national debt. This law, by suspending the "debt ceiling," established caps on discretionary spending for fiscal years 2024 and 2025. When appropriations for fiscal year 2024 were being discussed in Congress, the provisions of the FRA sparked debates about spending levels. The White House requested an additional $20.6 billion for emergency aid to Ukraine and $12 billion for domestic disaster relief. In August 2023 Joe Biden's administration submitted to Congress a request for additional funding of $40 billion, which included $24 billion for military and humanitarian assistance to Ukraine and other international needs, and $12 billion for domestic disaster relief. The right-wing Republicans in the House of Representatives sought to secure budgetary powers for the administration well below FRA-agreed levels and to include new provisions on border security. The debates continued until Saturday, September 30, when the House of Representatives approved a temporary resolution (335 votes in favor, 91 against, including one Democrat), extending government funding until November 17. The resolution includes disaster relief (a concession to the Democrats) but does not include additional funding for Ukraine (a concession to the Conservatives). The Senate approved the bill on Saturday evening (88 in favor, 9 against). The bill passed through both chambers in just 12 hours, setting a speed record. Joe Biden signed it before midnight, preventing a government shutdown. "It's a total rollercoaster," - Guy Reschenthaler, the Deputy Chairman of the Republican Party in the House of Representatives, commented on the day's events. In the next month and a half, we can expect a new round of struggle over budget expenses. In particular, Senate leadership from both parties issued a joint statement committing to vote for continued funding for assistance to Ukraine in the "coming weeks." On October 3, the House of Representatives for the first time in history voted to remove Republican Kevin McCarthy from his position (initiated by the far-right Republican Matt Gaetz from Florida); members of his own party voted for his removal, accusing McCarthy of seeking support of Democrats to prevent a shutdown. According to official prognosis, the budget deficit is expected to grow relative to GDP. The increasing deficit will significantly increase the federal debt (which has already exceeded $33 trillion) over the next decade, and interest costs to service it will correspondingly increase. Interest payments will jump from $665 billion in 2023 to $1.393 trillion in 2033. The Biden administration and Congress are caught between Scylla and Charybdis: they need to address the problem of a massive budget deficit and national debt while continuing to make budgetary injections to support the economy, socio-economic and defense priorities. All this intensifies the struggle over budget expenditures. The threats of government shutdowns have become a bargaining chip in disputes over budget policy. The decision-making process in the US budgetary sphere is becoming increasingly politicized, undermining trust in the government and does not contribute to solving the problems really facing the country.

Canada's military and defense policy in the Indo-Pacific region (IPR) is centered around three key objectives: promoting peace, security, and stability, including efforts to deter aggression, respond to crises, and enhance defense capabilities; maintaining trade, investment, and supply chain stability; and promoting diversity and inclusivity, financing educational, cultural, and tourism projects. To achieve these goals, Canada has taken a series of steps to increase its presence in the region, expand its participation in exercises with allies and partners, invest in military capabilities, including long-range maritime patrol aircraft and anti-submarine defense systems, and strengthen its intelligence and surveillance capabilities in the region. Enhancing the country's position in the IPR contributes to protecting national interests and increasing the ability to counter regional threats, particularly: - The growing military presence of China, which is rapidly modernizing its armed forces and increasing its influence. - The proliferation of non-state actors (terrorist groups, piracy). - Climate change, leading to rising sea levels and extreme weather events that threaten coastal communities and infrastructure. For example, a significant event in the country's foreign policy and an expression of its efforts to strengthen security in the Indo-Pacific region was the arrival of three Canadian naval vessels in Yokosuka, Japan, on August 28, 2023. These ships, part of Canada's Pacific Fleet, were the first Canadian military vessels to visit Japan since 2019. The visit occurred against the backdrop of increased tension due to China's growing military influence (e.g., military exercises) and North Korea's series of missile tests, including an intercontinental ballistic missile. The primary goal of the Canadian ships' visit to Japan was to participate in joint exercises with regional partners (the United States, Japan, South Korea, Australia, and New Zealand) aimed at strengthening military alliances, expanding security cooperation, and enhancing regional preparedness. Coordination among the armed forces of allies contributes to improved communication, mutual understanding, and operational compatibility when working collectively. It also allows for knowledge sharing and the development of common strategies to address regional security challenges. Firstly, Canada has traditionally focused its foreign policy on the Atlantic and the Arctic. However, this visit signals Canada's growing interest in the Indo-Pacific region, recognizing its strategic importance, and the country's intention to actively contribute to regional stability. Canadian foreign policy is based on the principles of multilateralism and cooperation. Canada prioritizes building partnership relationships, encouraging dialogue, and participating in regional initiatives. It actively engages in regional and international forums (ASEAN, East Asian Summit). Canada also follows the same multilateral principle in defense and security. Deploying naval forces in the IPR aligns with these principles. Secondly, by joining forces with allies and partners in Southeast Asia, such as Japan, Canada strengthens existing security alliances and signals its readiness to cooperate with like-minded countries to maintain regional peace. Simultaneously, Ottawa sends a clear message to China that it intends to develop military cooperation to deter aggression in the region. Furthermore, the Canadian government places increasing importance on developing bilateral relations, promoting trade and investment growth, strengthening security cooperation on issues such as counter-terrorism and maritime security. The presence of Canadian naval vessels will enhance operational compatibility and coordination between allied fleets, bolstering the defense network in the Indo-Pacific region and deterring China from aggressive actions. Canada's Indo-Pacific strategy, approved in 2022, highlights two key regional factors of instability that increase tension and international concerns. Firstly, it is Beijing's ambition to assert its maritime claims in the South China Sea, including the construction of military facilities on disputed land features. Secondly, it is North Korea's missile tests and the development of nuclear weapons. In response to these threats, Canada is taking steps to strengthen cooperation and partnership relations in the IPR. This includes enhancing military presence, conducting joint exercises (for example, the "Malabar 2023" military exercise in August), and participating in diplomatic dialogues. By deploying naval forces, Canada follows in the footsteps of its key allies - the United States, Australia, and Japan, which are also actively bolstering their presence in the region. By combining diplomatic and defense efforts, these countries aim to ensure freedom of navigation and adherence to international law principles. Thus, Canada demonstrates that the government closely monitors the situation and will make efforts to maintain a regional order based on international legal rules and norms. Its presence serves as a signal to China, North Korea, and other potentially destabilizing actors that Canada is committed to regional security principles and is ready to support its allies and partners in countering any potential threats. Ottawa is not only developing and strengthening ties with allies and other regional players but also emphasizes a proactive, consistent approach in implementing its policy in the IPR, a commitment to maintaining peace and stability. The expansion of Canada's naval presence should serve as a deterrent to potential threats, demonstrate solidarity with like-minded countries, and show regional powers that Canada is a reliable ally. The intensification of regional policy is, in part, related to Canada's desire to balance between China and the United States since tension in their relations continues and influences global processes. The Canadian government's policy in the Indo-Pacific region is based on carefully building relationships with both countries, aiming to maintain a balance while advancing its own interests. Cooperation in security and defense, participation in regional initiatives, military exercises, and dialogues aimed at addressing common security issues are significant components of Canada's Indo-Pacific policy, as the country intends to play a more active role in the region. However, the development of this policy will be influenced by the following factors in the medium and long term, which are important for the national interests of the country and its allies: ● Ensuring maritime security: The Indo-Pacific region hosts some of the busiest maritime routes in the world, which are crucial for global trade. Canada is likely to increase its deployment of ships and aircraft, as well as participate in joint exercises with allies and partners to secure these sea lanes. ● Deepening military and political cooperation with allies and partners: Canada is a member of the "Five Eyes" intelligence alliance and has close security ties with the United States, Japan, Australia, and India. These countries, sharing a common interest in maintaining peace and stability in the Indo-Pacific, will expand their cooperation with Canada through joint exercises, intelligence sharing, and participation in joint military operations. Canada's military and defense policy will largely be shaped by the opportunities presented by its allies and partners. ● Investment in military capabilities and increased defense spending to enhance capabilities to address challenges in the Indo-Pacific. The Indo-Pacific region is becoming increasingly unstable, with a growing risk of conflict. Canada will need to adapt its military policy to changing security conditions.

This fall, Senate Majority Leader Chuck Schumer is slated to lead a bipartisan group of U.S. senators to China. The planned trip, like other recent visits to China by high-ranking U.S. officials, is aimed at improving the relationship between the U.S. and China. Such efforts to ameliorate U.S.-China diplomatic relations come amid growing tensions between the two economic giants. They also run parallel to U.S. efforts to strengthen ties with Indo-Pacific countries to limit Beijing’s influence. Take, for example, President Joe Biden’s September 2023 trips to India for the G20 summit and to Vietnam, where U.S. competition with China was a focus of Biden’s discussions. While he was in Asia, Biden made several agreements in science, technology and supply chain security designed to bolster U.S. relations with India and Vietnam. “I don’t want to contain China,” the president told reporters in Hanoi on Sept. 10, 2023, shortly after meeting with Vietnam’s communist party leader. U.S. Reps. Mike Gallagher and Raja Krishnamoorthi echoed similar sentiments during an event held by the Council on Foreign Relations think tank in New York City the following day. But even if the U.S.’s stated goal isn’t to limit China’s global influence, its recent agreements with India, Vietnam and other countries may do exactly that. What US-led G20 deals mean for China The U.S. is actively looking for ways to blunt one of China’s best tools of influence: international loans. During the G20 summit Sept. 9-10 in New Delhi, the U.S. pledged to help reform the World Bank and International Monetary Fund to make them more flexible in lending to developing countries to finance renewable energy, climate mitigation and critical infrastructure projects. Biden committed the first US$25 billion to make those reforms possible and secured additional financial pledges from other countries totaling $200 billion in new funding for developing countries over the next decade. The U.S. also signed onto a deal with the European Union, Saudi Arabia and India that will help connect the Middle East, Europe and Asia through rails and ports. Characterizing it as a “real big deal,” Biden said the rail and ports agreement would help stabilize and integrate the Middle East. These plans are aimed at providing an alternative to China’s Belt and Road Initiative. Commonly referred to as BRI, the initiative is China’s international infrastructure loan program. Over the past decade, Chinese government agencies, banks and businesses have loaned more than $1 trillion abroad, and 60% of the recipient countries are now in debt to these Chinese entities. The U.S. and other countries have long criticized BRI as “debt trap diplomacy.” One study suggests that the trillions of dollars in infrastructure loans to countries by the government and quasi-government bodies in China typically lead to debt problems that the borrowing countries can’t manage. As China grapples with a slowing domestic economy, it may become more difficult for Chinese entities to keep shelling out funding for big-ticket overseas projects. The new U.S.-led agreements that come out of the G20 could fill the coming gap. These G20 plans complement existing Western economic initiatives to compete with the BRI, including U.S. trade pacts for the Indo-Pacific region and the Americas, the EU’s Global Gateway and the G7’s Partnership for Global Infrastructure and Investment. What the US’s agreement with India means for China In their meeting on the sidelines of the G20, Biden and Indian Prime Minister Narendra Modi agreed to deepen collaboration on developing critical and emerging technology, such as quantum computing and space exploration, as well as 5G and 6G telecommunications. This will help India compete with China in the technological arena in the Indo-Pacific. The telecommunications portion of a joint statement by Biden and Modi specifically mentions the U.S.’s Rip and Replace program. It is about helping smaller telecommunications companies rip out technology from Chinese companies like Huawei or ZTE and replace them with network equipment from the West that will protect users’ data. The U.S. has banned Huawei and ZTE equipment from its telecommunication networks, deeming those companies national security risks. The U.S. and India’s pledge to support Rip and Replace is a direct counter to China’s telecommunication technology expansion. What the US’s agreement with Vietnam means for China In Vietnam, Biden elevated the bilateral relationship to a comprehensive strategic partnership, expanding the relationship in everything from economics to education to technology in a country that has long counted China as its top trading partner. The enhanced partnership includes the U.S. providing $2 million to fund teaching labs and training courses for semiconductor assembly, testing and packaging. One company in Arizona and two in California have already pledged to set up semiconductor factories and design centers in Vietnam, and the U.S. artificial intelligence company Nvidia will help Vietnam integrate AI into automotive and health care systems. All these investments will make Vietnam even more attractive to U.S. and Western companies that don’t want China to be the sole source of their supply chain. As Vietnam becomes a key player in the semiconductor market, it will shrink China’s share of the market as well as its regional technological advantage. The U.S. also agreed to provide nearly $9 million to help Vietnam patrol the waters around its borders and beef up port facility security, as well as boost efforts to fight illegal, unregulated and unreported fishing, or IUUF. While not explicitly mentioned, China is the target of this initiative; China and Vietnam continue to be at loggerheads over disputed claims over the Spratly Islands in the South China Sea, and Chinese industrial fishing vessels are the largest culprits of IUUF around the globe. By inking these agreements at the G20 in India and in Vietnam, the U.S. broadened its circle of allies and partners in the Indo-Pacific that can help counterbalance China. Along with similar diplomatic accomplishments by Vice President Kamala Harris at the recent ASEAN summit in Indonesia; security partnerships like AUKUS, between the U.S., Australia and the UK, and the Quad, between the U.S., India, Australia and Japan; increased military sales and training to Taiwan; and the recent Camp David meeting Biden held with Japan and South Korea, the U.S. is building partnerships all across Asia. These actions are aimed at restraining China’s political, economic and military might, even if U.S. leaders don’t explicitly say that is their intention. Regardless of rhetoric, actions speak louder than words.