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In Joe Biden’s first week as president, Beijing has mostly kept the muzzle on its “Wolf Warriors,” the pack of senior Chinese diplomats who earned that nickname during the Trump years for their howling denunciations of the United States. But late Wednesday, Cui Tiankai, China’s ambassador to Washington, issued a warning growl.
“Treating China as a strategic rival and imaginary enemy would be a huge strategic misjudgment,” he told an online forum, according to Reuters. “To develop any policy on the basis of that would only lead to grave mistakes.”
The remarks were the first major pronouncement by a senior Chinese official on U.S.-China relations since Biden took office. Cui stressed that China sought peaceful co-existence and cooperation with the United States. He urged leaders from both nations to resolve differences through dialogue. But he added a blunt ultimatum: on matters of sovereignty and territorial integrity, China will not yield.
“China will not back down,” Cui said. “We hope the United States will respect China’s core interest and refrain from crossing the red line.”
Cui’s statements follow a week of consistent messaging by senior Biden officials that the new administration has no intention of softening Trump’s hard line on China. On Friday, newly appointed U.S. Defense Secretary Lloyd Austin reaffirmed in a phone call to his Japanese counterpart, Nobuo Kishi, that the U.S. opposed “any unilateral attempts to change the status quo in the East China Sea,” and would respond to any attack on the Senkaku Islands in accordance with the U.S.-Japan Security Treaty. The uninhabited rock outcroppings are controlled by Japan but claimed by China, which refers to them as the Diaoyu Islands.
On Tuesday, Gina Raimondo, Biden’s nominee for commerce secretary, told Congress that the U.S. must develop a “whole-of-government response” to combat unfair Chinese trade practices and vowed to use the full powers of her office to protect America’s telecommunications network from “Chinese interference.”
In testimony before the Senate Foreign Relations Committee Wednesday, Biden’s nominee for ambassador to the United Nations, Linda Thomas-Greenfield, assailed China as threat to U.S. values. “I see what they’re doing at the United Nations as undermining our values, undermining what we believe in. They’re undermining our security. They’re undermining our people and we need to work against that,” Thomas-Greenfield said. “I will be working aggressively against Chinese malign efforts in New York.”
In the interval between Biden’s victory and the inaugural, many Chinese experts spoke giddily of a “reset” of U.S.-China relations under the new administration. The Biden team’s recent rhetoric makes clear that’s not in the cards.
And in at least one respect, Beijing sees Biden’s approach to dealing with China as a bigger threat than Trump’s. A common refrain of the Biden team is that, unlike Trump’s go-it-alone China policy, the new president vows to work in coordination with U.S. allies. To Chinese leaders, that sounds like code for pursuing a Cold War “containment strategy” to China similar to the U.S. standoff with the old Soviet Union. Cui warned that U.S. efforts to build a global coalition to increase leverage over China could create “new imbalances.”
It’s easy to dismiss the barrage of indignant rhetoric on both sides as political theater. But the more it escalates, the greater the risk that one day this war of words could erupt into a very real war between the two most powerful nations the world has ever known.
To help readers visualize that possibility, WIRED magazine this week engages in an extraordinary thought experiment. It’s devoted its entire February print issue to an excerpt of 2034: A Novel of the Next World War, a new book by novelist Elliott Ackerman and Admiral James Stavridis. It’s fiction but vividly and plausibly imagines how geopolitics, technology, and human miscalculation can spin out of control—and what can go wrong when Beijing and Washington start crossing each others’ “red lines.”
More Eastworld news below.
Clay Chandler
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
Restructuring
Ant Group, the embattled fintech giant and Alibaba-affiliate, is planning on undergoing a major restructuring that will turn it into a financial holding company overseen by China’s central bank, according to the Wall Street Journal. The move would bring Ant Group under the watchful eye of China’s central government, and would turn the company into a shell of what investors hoped it would be before Chinese regulators quashed plans for its blockbuster IPO in November. The move would also signal that Beijing is reining in the power of Jack Ma, the Ant Group and Alibaba founder recently who appeared in public for the first time in months, after speaking out against China's banking system last year. Wall Street Journal
#BoycottReliance
Two of India’s most powerful billionaires—Reliance Industries’ Mukesh Ambani and the Atani Group’s Gautam Adani—have become embroiled in a months-long protest movement by farmers in India who oppose proposed laws to reform the corporate and contract farming industry. Ambani and Adani may not be poised to directly benefit from the new laws, but to the protesters, the pair have become symbols of how the country’s government allegedly prioritizes the interests of the country’s business elite over its average citizens. Fortune
Asia’s tech underclass
Asia’s digital economy has boomed amid the pandemic, but not everyone has shared the wealth equally. E-commerce and food delivery giants like South Korea’s Coupling, Indonesia’s Gojek, and China’s Ele.me profit from a large and growing class of delivery drivers and contract workers that are being increasingly overworked to meet increased demand. But recent deaths among contract workers have prompted scrutiny from social media users and governments across the region, sparking hopes that working conditions will improve for Asia’s tech underclass. Nikkei Asian Review
Science fiction or true crime?
In September 2020, Netflix announced that it would partner with China’s Yoozoo Pictures to produce a blockbuster new show based on The Three-Body Problem, the first novel in a popular science fiction trilogy in China. But in December, Chinese police found that Lin Qi, executive producer on the project and founder of Yoozoo Pictures, had been poisoned to death. Chinese media later alleged that the main suspect in the poisoning is Xu Yao, Lin’s colleague and CEO of Yoozoo Pictures. In the wake of Lin’s death, Yoozoo told Fortune this week that it would forge ahead with its collaboration with Netflix. Fortune
Academic revolt
During U.S. President Donald Trump’s last week in office, federal prosecutors ordered the arrest of Gang Chen, a mechanical engineering professor at the Massachusetts Institute of Technology (MIT). The Justice Department claimed that even though Chen is a naturalized American citizen, he was still loyal to the Chinese government and hid affiliations with government-run institutions in China. Chen pleaded not guilty to the charges, and over 160 MIT faculty members have signed a letter condemning his arrest, arguing that prosecutors were overreaching in criminalizing behavior they consider to be normal academic conduct. New York Times
Coronavirus by country
Japan
Japan’s vaccine drive may be slowed down by paperwork. In contrast to countries like China, India, and Indonesia that have opted for app-based rollouts, Japan is planning to use printed tickets and mail carriers to organize its vaccine drive. Experts believe that the paper-based drive may slow down Japan’s rollout by months but may be unavoidable since Japan’s government bureaucracy has been slow to digitize. Since taking office last November, Prime Minister Yoshihilde Suga has pledged to upgrade the country’s digital infrastructure and bring its government more online, but his efforts may come too little, too late as Japan plans to begin vaccinating its citizens in April. Nikkei Asian Review
Markets and movers
Intel – The American chipmaker announced on Wednesday that it invested $475 million in its plant in Vietnam, allowing it to boost production of 5G products and core processors. The investment is a win for Vietnam’s manufacturing sector, which has benefited from U.S.-China tensions and the country’s successful response to COVID-19. Reuters
RELX – China’s largest e-cigarette manufacturer raised $1.4 billion in its debut on the New York Stock Exchange last Friday at a market capitalization of $35 billion. The company has recovered from China’s 2019 ban of online e-cigarette sales by building a brick-and-mortar sales network. Fortune
Greater Bay Airlines – The new Hong Kong budget airliner recently applied for 104 flying routes, according to Hong Kong's government, marking Greater Bay Airlines' first major step in its launch this year. Property tycoon Bill Wong founded the company and is banking on a recovery in air travel in 2021 after the pandemic inflicted historic losses on global airline companies last year. Fortune
Bytedance – India permanently banned the Chinese streaming giant’s app TikTok along with 58 other Chinese apps this week. India temporarily banned the apps last June amid rising tensions between China and India, and made the move permanent after the government said the apps failed to improve compliance on privacy and security matters. Nikkei Asian Review
Sinopharm – China’s state-backed pharmaceutical giant will likely take Hong Kong-listed China Traditional Medicine Holdings (China TCM) private in a deal worth $3.3 billion. China TCM’s sales boomed in 2020, as consumers sought traditional remedies to combat COVID-19. Deal Street Asia
AMC – The struggling New York-listed movie theatre group, owned by Chinese conglomerate Dalian Wanda Group, was potentially saved from bankruptcy this week. It secured new financing just as retail investors—perhaps inspired by Reddit's wallstreetbets board—helped boost the company’s stock price from less than $5 last week to nearly $20 on Wednesday. The retail investors had reportedly targeted AMC's stock in response to Wall Street betting on its decline. CNBC
Final figure
-9.5%
The Philippines economy shrank by 9.5% in 2020, according to data released by the government on Thursday. The contraction marks the country’s worst economic year on record and was driven by COVID-19 lockdowns and a sharp fall in consumer spending. The economic downturn coincides with the country’s ongoing public health crisis. The country has been one of Asia's worst hit countries by the pandemic, suffering over 10,000 deaths related to COVID-19. Analysts expect the country’s vaccine drive to help its economy bounce back to roughly 5% growth in 2021. Nikkei Asian Review
