US-EU-China Competition: Key Quotes
A reference guide for key quotes and speeches from American, European, and Chinese officials with links and some context.
Contents:
US National Security Advisor Jake Sullivan
US Treasury Secretary Janet Yellen
US Commerce Secretary Gina Raimondo
European Commission President Ursula von der Leyen
US President Biden
Biden-Xi Summit in Woodside, California
November 16, 2023 press conference after the summit
On competing with China “vigorously” and “responsibly”:
The United States will continue to compete vigorously with the PRC. But we’ll manage that competition responsibly so it doesn’t veer into conflict or accidental conflict.
And where it’s possible, where it is in our interests are — coincide, we’re going to work together, like we did on fentanyl.
That’s what the world expects of us — the rest of the world expects, not just in — people in China and the United States, but the rest of the world expects that of us. And that’s what the United States is going to be doing.
“Dictator” comment:
Q And, Mr. President, after today, would you still refer to President Xi as a “dictator”? This is a term that you used earlier this year.
THE PRESIDENT: Well, look, he is. I mean, he’s a dictator in the sense that he — he is a guy who runs a country that — it’s a communist country that is based on a form of government totally different than ours.
Biden’s 2024 State of the Union address
Part on China:
For years, I’ve heard many of my Republican and Democratic friends say that China is on the rise and America is falling behind. They’ve got it backwards. I’ve been saying it for over four years, even when I wasn’t president.
America is rising. We have the best economy in the world. And since I’ve come to office, ourGTB[GDP] is up, our trade deficit with China is down to the lowest point in over a decade. (Applause.)
And we’re standing up against China’s unfair economic practices.
We’re standing up for peace and stability across the Taiwan Straits.
I’ve revitalized our partnership and alliance in the Pacific: India, Australia, Japan, South Korea, the Pacific Islands. I’ve made sure that the most advanced American technologies can’t be used in China — not allowing to trade them there.
Frankly, for all his tough talk on China, it never occurred to my predecessor to do any of that. (Applause.)
I want competition with China, not conflict. And we’re in a stronger position to win theconflict[competition] of the 21st century against China than anyone else for that matter — than at any time as well.
US National Security Advisor Jake Sullivan
At the Special Competitive Studies Project Global Emerging Technologies Summit
This was the speech right before the October 7, 2022 export controls targeting China’s advanced semiconductor industry
And we are facing a competitor that is determined to overtake U.S. technological leadership and willing to devote nearly limitless resources to that goal.
Sullivan sets out an explicit US policy to limit China’s technological progress:
On export controls, we have to revisit the longstanding premise of maintaining “relative” advantages over competitors in certain key technologies. We previously maintained a “sliding scale” approach that said we need to stay only a couple of generations ahead.
That is not the strategic environment we are in today.
Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible.
“On Renewing American Economic Leadership”
April 27, 2023 speech at the Brookings Institutions
Sullivan’s diagnosis of US problems looks remarkably similar to China’s views on “America’s decline”:
First, America’s industrial base had been hollowed out.
The vision of public investment that had energized the American project in the postwar years—and indeed for much of our history—had faded. It had given way to a set of ideas that championed tax cutting and deregulation, privatization over public action, and trade liberalization as an end in itself.
There was one assumption at the heart of all of this policy: that markets always allocate capital productively and efficiently—no matter what our competitors did, no matter how big our shared challenges grew, and no matter how many guardrails we took down.
Now, no one—certainly not me—is discounting the power of markets. But in the name of oversimplified market efficiency, entire supply chains of strategic goods—along with the industries and jobs that made them—moved overseas. And the postulate that deep trade liberalization would help America export goods, not jobs and capacity, was a promise made but not kept.
Another embedded assumption was that the type of growth did not matter. All growth was good growth. So, various reforms combined and came together to privilege some sectors of the economy, like finance, while other essential sectors, like semiconductors and infrastructure, atrophied. Our industrial capacity—which is crucial to any country’s ability to continue to innovate—took a real hit.
The shocks of a global financial crisis and a global pandemic laid bare the limits of these prevailing assumptions.
The People’s Republic of China continued to subsidize at a massive scale both traditional industrial sectors, like steel, as well as key industries of the future, like clean energy, digital infrastructure, and advanced biotechnologies. America didn’t just lose manufacturing—we eroded our competitiveness in critical technologies that would define the future.
Economic integration didn’t stop China from expanding its military ambitions in the region, or stop Russia from invading its democratic neighbors. Neither country had become more responsible or cooperative.
Sullivan on the “China shock”:
For example, the so-called “China shock” that hit pockets of our domestic manufacturing industry especially hard—with large and long-lasting impacts—wasn’t adequately anticipated and wasn’t adequately addressed as it unfolded.
Sullivan on “modern industrial strategy”:
A modern American industrial strategy identifies specific sectors that are foundational to economic growth, strategic from a national security perspective, and where private industry on its own isn’t poised to make the investments needed to secure our national ambitions.
It deploys targeted public investments in these areas that unlock the power and ingenuity of private markets, capitalism, and competition to lay a foundation for long-term growth.
It helps enable American business to do what American business does best—innovate, scale, and compete.
This is about crowding in private investment—not replacing it. It’s about making long-term investments in sectors vital to our national wellbeing—not picking winners and losers.
And it has a long tradition in this country. In fact, even as the term “industrial policy” went out of fashion, in some form it remained quietly at work for America—from DARPA and the Internet to NASA and commercial satellites.
Sullivan on technology controls and China:
We’ve implemented carefully tailored restrictions on the most advanced semiconductor technology exports to China. Those restrictions are premised on straightforward national security concerns. Key allies and partners have followed suit, consistent with their own security concerns.
We’re also enhancing the screening of foreign investments in critical areas relevant to national security. And we’re making progress in addressing outbound investments in sensitive technologies with a core national security nexus.
These are tailored measures. They are not, as Beijing says, a “technology blockade.” They are not targeting emerging economies. They are focused on a narrow slice of technology and a small number of countries intent on challenging us militarily.
“On the Future of U.S.-China Relations”
January 30, 2024 speech at the Council on Foreign Relations
Sullivan on China’s view of itself and the US:
We determined that the PRC was the only state with both the intent to reshape the international order and the economic, diplomatic, military, and technological power to do it. We saw that the PRC sought to “catch up and surpass” the United States in high technology; that it was pursuing the largest peacetime military buildup in history; and that it was more repressive at home and more assertive abroad, including in the South and East China Seas as well as the Taiwan Strait. We saw the PRC working to make the world more dependent on China while reducing its own dependence on the world. And we saw it taking steps to adapt the international system to accommodate its own system and preferences.
We also saw something that really stood out, which is that the PRC believed the United States was in terminal decline — that our industrial base had been hollowed out, that our commitment to our allies and partners had been undercut, that the United States was struggling to manage a once-in-a-century pandemic, and that many in Beijing were openly proclaiming that “the East was rising and the West was falling.”
Sullivan pulling back on previous wording:
These steps are not about protectionism, and they’re not about holding anybody back. They’re critical for our national security over the long run.
Sullivan turning the “China’s rise, America’s decline” narrative on its head:
For years, economists were predicting that the PRC would overtake the United States in GDP either in this decade or the next. Now those projections are moving further and further out. And with the PRC facing its own set of challenges, some say that moment may never come.
US Treasury Secretary Janet Yellen
November 9, 2023 speech before meeting China’s Vice Premier He Lifeng
As I’ve said, the United States has no desire to decouple from China: A full separation of our economies would be economically disastrous for both our countries, and for the world.
April 5, 2024 speech with the American Chamber of Commerce in Guangzhou
“Unfair economic practices”:
We’ve seen the PRC pursue unfair economic practices, including imposing barriers to access for foreign firms and taking coercive actions against American companies. I strongly believe that this doesn’t only hurt these American firms: ending these unfair practices would benefit China by improving the business climate here. I intend to raise these issues in meetings this week.
China’s “overcapacity”:
I’m especially concerned about overcapacity, which members of the Chamber identified as a concern in the Chamber’s recent survey as well. Overcapacity isn’t a new problem, but it has intensified, and we’re seeing emerging risks in new sectors.
Specifically, direct and indirect government support is currently leading to production capacity that significantly exceeds China’s domestic demand, as well as what the global market can bear. I understand these policies may be driven by domestic development objectives. But overcapacity can lead to large volumes of exports at depressed prices. This can undercut the business of American firms and workers, as well as of firms around the world, including in India and Mexico. And it can lead to overconcentration of supply chains, posing a risk to global economic resilience. This will be a key topic in discussions with counterparts in the coming days.
Overcapacity also poses challenges for Chinese firms and industries and can impact China’s productivity and growth. I believe addressing overcapacity—and more generally considering market-based reforms—is in China’s interest. As I’ve said before, China is too large to export its way to rapid growth.
US Commerce Secretary Gina Raimondo
On US Competitiveness and the China Challenge
Over the past decade, China’s leaders have made clear that they do not plan to pursue political and economic reform and are instead pursuing an alternative vision of their country’s future. They are committed to increasing the role of the state in society and the economy, constraining the free flow of capital and information, and decoupling economically in a number of areas, including many technology sectors of the future. They have firewalled their data economy from the rest of the world. And they are accelerating their efforts to fuse their economic and technology policies with their military ambitions.
As China’s economy has grown in size and influence, so too has its commitment to using non-market trade and investment practices in ways that are forcing us to defend our businesses and workers – and those of our allies and partners. China’s reprioritization away from economic growth toward national security and its assertive military behavior means that we have to rethink how we protect our national security interests while also promoting our interests in trade and investment.
China’s “manufacturing-driven innovation”:
While we watched China become a world leader in manufacturing and reap the massive benefits of manufacturing-driven innovation, the U.S. economy became less competitive and overly dependent on China for an increasing number of critical technologies and goods. It is worth noting, by the way, that China achieved its success through massive state support of its industries. COVID opened our eyes to the long-term risk for both the private sector and the American people of this over-dependence on China and the need to rebuild domestic manufacturing and innovation.
COVID supply chain risk and China:
During the COVID pandemic, we witnessed how the concentration of personal protective equipment manufacturing in China put Americans at risk.
Re-shoring and friend-shoring:
In these areas, we are working with the private sector to re-shore or friend-shore core parts of our supply chains. And we are developing a near real-time “common operating picture” of global supply chains for critical industries so that we can address vulnerabilities as quickly as possible.
“China’s economic coercion”:
Related to this, we are exploring new avenues to defend ourselves and others from China’s economic coercion. Reducing our companies’ dependence on China for core parts of our critical supply chains is one part of the answer, but not the entire answer.
For example, when China cut off trade with Lithuania, we opened our markets to Lithuanian agricultural products and provided a $600 million export credit agreement focused on manufacturing, business services, and renewable energy.
Developing an effective deterrent against this kind of economic coercion is a priority for the Biden Administration, as well as for our partners and allies.
China’s “unfair advantages”:
China’s government employs a range of economic practices that disadvantage foreign companies trying to compete in the PRC market. China’s government also gives unfair advantages to its own industries in ways that displace American workers and businesses – and those of our allies and partners – from the global market. We will continue to press China to address its non-market economic practices that result in an uneven playing field, such as such as its massive support – financial, regulatory, or otherwise – to its state-owned and private firms, forced technology transfer, and egregious intellectual property theft. And we are working with our G7 allies on a shared approach to these issues.
US not “decoupling” from China:
At the same time, we are not seeking the decoupling of our economy from that of China’s.
Meeting with China’s Minister of Commerce Wang Wentao
US industrial policy efforts are “not intended to hinder China’s economic progress”:
However, it is not intended to hinder China’s economic progress. We believe a strong Chinese economy is a good thing. And President Biden has been crystal clear repeatedly on this point; we seek healthy competition with China. A growing Chinese economy that plays by the rules is in both of our interests. That said, we have to make sure there is a level playing field and we will at all times do what we need to do to protect our workers.
Interview with 60 Minutes, aired April 21, 2024
On Huawei and how China is “years behind” the US on semiconductor chips:
Gina Raimondo: Hmm. Well, what it tells me is the export controls are working because that chip is not nearly as good--
Lesley Stahl: It's not?
Gina Raimondo: --it's years behind what we have in the United States. We have the most sophisticated semiconductors in the world. China doesn't. We've out-innovated China.
Lesley Stahl: Well, "we," you mean Taiwan?
Gina Raimondo: Fair.
Gina Raimondo: China wakes up every day figuring out how to get around our regulations. We got to wake up every day that much more relentless and aggressive. So, I bring it every day.
European Commission President Ursula von der Leyen
At the European China Conference 2023
November 16, 2023 speech (with the European Council on Foreign Relations and the Mercator Institute for China Studies)
China’s industrial policy and “overcapacities”:
China's economic trajectory is changing profoundly. The country is heading into a period of slower growth. And economic imbalances in China matter tremendously to us today. In 2022, China's trade surplus with the EU was the highest in history, just below 400 billion euros. Its current global trade surplus is the largest that any country has ever had in history. And this is the intentional result of China's policies. China's industrial policy today is not only creating much more competitive industrial players. Overcapacities in protected industries are flooding global markets and can undermine our industrial base. The paradigms of “self-reliance” and “civil-military integration” have substantial spill-overs for the world. In parallel, China has become less welcoming of foreign businesses. Many European companies in China feel this new climate. 30% of them report a year-on-year revenue decrease. Almost two-thirds expect that their difficulties will increase in the next year. More and more, the imperative for security and control on the economy trumps the logic of free markets and open trade.
Not decoupling but de-risking:
These domestic trends in China are coupled with a more assertive posture abroad, including here in Europe. China has increasingly resorted to trade coercion, boycotts of European goods, and export controls on critical raw materials. Just think about the recent preparation of potential export restrictions on gallium and germanium, which are essential for goods like semiconductors and solar panels. This shows that while we do not want to decouple from China, we do need to de-risk parts of our relationship. And we are building our de-risking strategy upon three pillars. First, defence of our legitimate economic interests. Second, dialogue to address our differences. And third, diversification with our partners.
On Chinese EVs:
And today, there are great concerns about fairness and security vulnerabilities in the clean tech sector, including for example EVs. There is clear overcapacity in China, and this overcapacity will be exported. Especially if overcapacity is driven by direct and indirect subsidies. This will worsen as China's economy slows down, and its domestic demand does not pick up. This distorts our market. And as we do not accept distortion from the inside, we should not accept it from the outside either. This is why we have launched the anti-subsidy investigation on Chinese EVs. Europe is open for competition. Not for a race to the bottom.
“Explicit element of rivalry”:
This leads me to my next point, on China's diplomatic and military posture. China pursues a global order that is sino-centric and hierarchical. It pushes an agenda that downplays universal rules, while championing the primacy of national interests. And this is opposed to our own interests and values. We must recognise that there is an explicit element of rivalry in our relationship. But this rivalry does not have to be hostile. It can be constructive. So, we must be balanced and strategic in our response.