27 Sep 2021 23:17 IST

Huawei deal offers illusion of US-China progress

A giant screen on top of a Huawei store shows images of Huawei Technologies Chief Financial Officer Meng Wanzhou, while broadcasting a CCTV state media news bulletin, outside a shopping mall in Beijing, China.   -  REUTERS

Washington has walked away from an extradition fight with Meng Wanzhou, one in a series of concessions.

Washington’s decision to abandon an extradition fight with Huawei’s Meng Wanzhou for alleged fraud was a tough call. Her return to the People’s Republic after nearly three years detained in Canada was followed by the immediate release of two Canadians that Beijing imprisoned. But the deal hands President Xi Jinping a domestic propaganda victory that will only encourage more of the same behaviour, without reducing fundamental tensions.

The Department of Justice’s decision to drop bank fraud charges against Meng, the daughter of Huawei’s founder, may seem like low-hanging fruit with little economic consequence. Meng did admit to some wrongdoing, yet as far as China’s elite is concerned, this sends the message that they — and their children — are untouchable abroad. It may also reinforce Chinese “wolf warrior” diplomats’ conviction that they can outlast American negotiators on other fronts. If President Joe Biden’s administration isn’t frosty enough to let two luckless Canadians moulder in jail, would it take casualties to defend Taiwan?

Short-lived relief

The concession is one in a quiet, unilateral series. The US government has also abandoned a push to ban Chinese social media apps TikTok and WeChat, and ended an admittedly troubled investigation into Chinese researchers with military links. Chinese student-visa applications approvals are rebounding. Biden may hope to get Xi on board for the upcoming UN Climate Change Conference in Glasgow in November and deliver a win to his environmentalist constituency.

Yet the Chinese leader has already committed to become carbon neutral by 2060; reducing dependence on imported fossil fuels and cleaning up its air are in the country’s interests. Elsewhere, Beijing is accelerating policies to reduce its dependence on foreign imports, the private sector is being subjugated to state priorities, and consumption and services are being deprecated in favour of manufacturing. The People’s Republic did increase its purchases of US agricultural products, but China has failed to meet its purchase commitments under the “phase one” trade deal. For its part US tariffs affecting two-thirds of exported Chinese goods remain in place alongside targeted sanctions, and it is arming Australia with nuclear submarines.

The deal should be celebrated for humanitarian reasons. But anyone who thinks it will lead to warmer relations, economically or otherwise, will soon be disillusioned.