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July 25, 2022 Special Dispatch No. 10094

Chinese Think Tank Research Report: 'We Should Have No Illusions About The Comprehensive And Intensified Ideological Game Between China And The United States, And Must Make A Full Preparation'

July 25, 2022
China | Special Dispatch No. 10094

On May 30, 2022, the Spring 2022 China-U.S. Forum was hosted online by the Chongyang Institute for Financial Studies of Renmin University of China, organized by the China-Russia People-to-People Exchange Research Center of Renmin University of China and the China-US People-to-People Exchange Research Center, and co-hosted by Guancha.cn. At the conference, a research report titled "Large-scale Encirclement and Suppression: Assessment of the Progression of U.S. Policy toward China and China's Response since the Russian-Ukrainian Conflict" was released. A number of well-known experts, scholars, and industry leaders jointly participated in the seminar.


Scholars participating in the event. (Source: Guancha.cn)


Cover report (Source: Guancha.cn)

Following is the text of the report:[1]

"Executive Summary"

"The Russian-Ukrainian conflict has not slowed down the full-scale competition between the United States and China. Recently, the United States proposed 'integrated deterrence' against China, accelerating the pace of its comprehensive strategic containment of China. As of May 16, the United States has carried out about 24 repressive actions against China, which are reflected in the fields of economy and trade, finance, ideology, military science and technology, and geopolitics. The United States' strategic competition against China has gradually become a competition in every way, spanning multiple categories. On a foundation of continuous pressure on China in the fields of economy, trade, and finance, the United States has incorporated more ideological factors into the competition. Called 'integrated deterrence', the United States has in fact started a campaign of 'large-scale encirclement and suppression'.

"The current pattern of strategic competition between the United States and China can be summarized into five points: Stepping up efforts to build an 'Indo-Pacific Economic and Trade Circle' to contain China; simultaneously taking both long and short positions, putting financial pressure on Chinese enterprises; attacking and slandering China in the field of ideology; provoking the Taiwan issue using 'salami slicing tactics'; and continuously suppressing China's development in the field of military science and technology.

"In the coming period, the direction of Sino-U.S. relations will be affected by two factors. The first is the rise and fall of the economic strength of China and the United States. As the economic gap between China and the United States gradually narrows, China's strength in the game against the United States will increase day by day. The second is the difference in political ideas between China and the United States, which is embodied in the struggle between the United States' 'hegemonism' and China's concept of 'a community with a shared future for mankind'.

"Overall, the Biden administration continues to believe that competition still comprises the main part of Sino-U.S. relations, and that the basic thinking, basic strategy, and tough stance towards China should not fundamentally change in the near future. The probability of an all-around 'showdown' between China and the United States is growing.

"Analysis of the current situation shows that the future Sino-U.S. game presents three possibilities of high, medium, and low intensity. The first is a high-intensity game: China and the United States move towards a comprehensive military confrontation. The second is of moderate intensity: China and the United States gradually move towards a comprehensive decoupling. The third is a low-intensity game: Sino-U.S. tensions become the norm.

"China must attach great importance to the issue of public confidence and market expectations caused by the possibility that the gap between the economic aggregates of the two countries will 'not decrease, but instead increase' in 2022. While implementing the established policies of the CPC Central Committee, more attention should be paid to the following aspects:

"1.To step up the formulation of anti-containment and anti-sanction plans in the fields of economy, trade, and finance, and strengthen cooperation in digital governance.

"2.To focus on China, stepping up the formulation of strategies and plans for developing a strong financial system.

"3.We should speed up the process of becoming energy independent and formulate a 'three-step' strategy for energy substitution.

"4.To take the initiative to set an agenda and gradually set the pace of the Sino-U.S. public opinion war.

"5.To talk to the outside world more about the danger of 'Taiwan independence', and strictly prevent the United States from 'using Taiwan to contain China'.

"6.To strengthen military science and technology by establishing an independent, autonomous, and controllable key technology system as soon as possible.

"In response to Biden's all-out competitive offensive against China, China should give up its fantasies, make every effort to prevent the possibility of a final showdown of high-intensity military confrontation, and take the initiative to shape Sino-U.S. relations while adapting to the new normal of tension between China and the United States. On the basis of competition between China and the United States, China should demonstrate its sense of responsibility as a major country by seeking the possibility of Sino-U.S. cooperation. China should establish the consciousness of a community with a shared future for mankind, forming cooperative consensus on key issues, promoting the effective implementation of global governance, especially global data governance, and jointly creating a better future for mankind."

"Foreword"

"The conflict between Russia and Ukraine has not slowed the pace of the United States' containment of China. On the contrary, as Russia is held in check militarily, politically, and economically by the West, the pace of the United States' turn to a comprehensive strategic containment of China is accelerating. Taking 'using Ukraine to contain Russia' as a model, some U.S. think tanks have even called for provoking a war in the Taiwan Strait to achieve the goal of 'using Taiwan to contain China'. In the early summer of 2022, on the 100th day of the Russian-Ukrainian conflict, the Sino-U.S. Relations Research Group of the Chongyang Institute for Financial Studies, Renmin University of China, sorted out new trends in U.S. competition with China that, coupled with the impact of the epidemic, has been accelerating since the Russian-Ukrainian conflict, based on long-term tracking. Three possible scenarios for the game between China and the U.S. in the near future were proposed, and practical suggestions on economy, trade, finance, military, and science and technology are put forward."

1. "The Russia-Ukraine Conflict Has Not Slowed Down The United States;' 'Large-Scale Encirclement And Suppression' Of China"

"Since February 2022, the United States has deployed various arrangements to step up its overall strategic competition with China. On February 4, the U.S. House of Representatives passed the America COMPETES Act of 2022. Besides the support and subsidies for specific U.S. industries, some of the China-related rhetoric is steeped in a Cold War mentality. Since the outbreak of the Russia-Ukraine conflict, the strategic competition of the United States against China has been comprehensive and occurring at multiple levels. On the basis of continuous pressure on China in the fields of economy, trade, and finance, more ideological factors have been incorporated.

"On May 26, U.S. Secretary of State Blinken delivered the most comprehensive speech on China policy since the inauguration of the Biden administration, clearly stating that China is the biggest competitor of the United States and that the U.S. will continue to pursue a competitive strategy against China. Using China's so-called attempt to disrupt the international order as an excuse, the United States takes the moral high ground and uses the method of 'integrated deterrence' purportedly to maintain peace. Blinken also put forward a new three-part strategy of 'invest, align, and compete' to win over allies and partners. This multipronged approach to comprehensively suppress China starts an 'encirclement' campaign against China. It can be predicted that in the next decade, the United States will suppress and contain China with even greater intensity."

"(1.1) Stepping Up Efforts To Build The Indo-Pacific Economic And Trade Circle To Contain China"

"The U.S. has always promoted economic security as an important part of its national security. The Biden administration has clearly realized that if the high-tech and industrial chain is not 'de-Sinicized' step-by-step, then the U.S. will have to bear a high cost in strategic confrontation with China. Therefore, at the beginning of Biden's presidency, it was clearly stated that economic security is national security, and that the U.S. will limit and reduce the commercial dependence of the U.S., Europe, and East Asian allies on China. The United States will attempt to reduce the economic cost of strategic confrontation with China, and suppress the rise of Chinese industry and high technology.

"The Biden administration uses the 'competition, confrontation, and cooperation' triad to define U.S.-China relations, with competition and confrontation as the main factors; cooperation is supplementary. In his speech on May 26, Blinken further proposed a three-way strategy of 'invest, align, and compete. While investing in its own long-term domestic competitiveness, the United States focuses on enlisting and organizing its allies and partner countries to establish an 'anti-China alliance' with the intention of 'forming a group' to restrict China's economy and trade. Since the beginning of the Russian-Ukrainian conflict, the tendency of the United States to 'form a group' to contain China in the economy and trade field has become more obvious.

"First, the United States has stepped up the layout of the Indo-Pacific Economic Framework (IPEF). Since the Russian-Ukrainian conflict began, the United States has intensified the formation of the 'Indo-Pacific Economic Framework' aimed at excluding China. In February, the Biden administration issued the first Indo-Pacific Strategy report since taking office, which has become the security and economic policy of the United States in the Indo-Pacific region. The content targets China from every direction, hyping up the 'China threat theory' and exaggerating various 'threats' posed by China to the United States and countries in the Indo-Pacific region.

"During the special U.S.-ASEAN summit held on May 12 and 13, the United States again mentioned the Indo-Pacific Economic Framework and announced it would provide $150 million of assistance to ASEAN, in an attempt to woo ASEAN and obstruct its cooperation with China. On May 20, Biden began his trip to Japan and South Korea. On May 23, while in Tokyo, Biden officially announced the launch of the 'Indo-Pacific Economic Framework', with the United States, South Korea, Japan, India, Australia, New Zealand, Indonesia, Thailand, Malaysia, the Philippines, Singapore, Vietnam and Brunei comprising the 13 initial member countries.

"The purpose of the U.S. push for the Indo-Pacific Economic Framework is 'to enable the United States and its allies to set rules that ensure American workers, small businesses, and ranchers can compete in the Indo-Pacific region'. The four key pillars of IPEF are digital and traditional trade, improving supply chain resilience, clean energy, and fighting corruption. Most importantly, in terms of the supply chain, the United States plans to establish an early warning system, map supply chains for key minerals, improve traceability in key sectors, and coordinate efforts to diversify supply from an integrated supply chain that excludes China. In fact, this reveals that the United States wants only to control key resources, key sectors, key technologies and key supply chains in the Asia-Pacific region through IPEF; to destroy the existing China-centered production network and industry chain in the Asia-Pacific region; and to promote economic decoupling and 'de-Sinicization' to push China out of regional supply chains.

"On May 24th, the United States, Japan, India, and Australia held the 'Quadrilateral Security Dialogue' (Quad) summit, which launched an initiative to protect maritime borders and unite the three key regions of the Pacific Islands, Southeast Asia, and the Indian Ocean into a unified Indo-Pacific region. This shows that the U.S. aims to shape the geopolitical landscape, and monitor and contain China's maritime activities according to its will.

"Moreover, the United States is attempting to build on its Indo-Pacific strategy, further advancing the alliance strategy and elevating the level of the 'quadrilateral mechanism' (political alliance) between the United States, Japan, Australia and India. The U.S. is also attempting to strengthen the traditional U.S.-Japan, U.S.-South Korea, U.S.-Australia and other bilateral alliances; to establish a trilateral security partnership (military alliance) between the U.S., the UK and Australia; to strengthen the cooperation of the 'Five Eyes' (intelligence alliance); to deepen the U.S.-ASEAN partnership; to actively court allies and partners to unite against China; and to seek the formation of exclusive cliques. The United States is building an anti-China 'encirclement' in an attempt to contain China's development space and consume China's development resources.

"Second, the United States is forming a 'semiconductor alliance', trying to win over allies such as Japan and South Korea to establish a chip development and manufacturing system without China's participation. At the end of March 2022, the United States proposed to Samsung and SK Hynix of the Republic of Korea; Toshiba and Renesas of Japan; MediaTek, TSMC and ASE of Taiwan; as well as Intel, Qualcomm and Micron of the United States the launching of an initiative to form the so-called 'Chip4' semiconductor alliance.

"The alliance aims to control the entire semiconductor industry chain including material supply, chip design, chip manufacturing, packaging and testing by uniting leading semiconductor companies in Japan and South Korea with Taiwanese companies such as TSMC and ASE, creating a high-tech network and supply chain which excludes China. This will further encircle and block the development of China's semiconductor industry. The United States will 'precisely decouple' from China in the field of cutting-edge science and technology, and as a result, delay China's industrial upgrading and economic development, while monopolizing technological advantages to strengthen its own economic hegemony.

"Third, the United States will impose targeted sanctions on specific enterprises. The U.S. is constantly sniping at Chinese high-tech firms. In addition to seven supercomputer entities and Jiangsu Tianyuan, the U.S. Federal Communications Commission (FCC) has added China Telecom Americas and China Mobile International to its 'entity list'. The U.S. is preparing further restrictive measures against Hikvision, a Chinese surveillance camera company, in what would be the first such sanctions against a large Chinese technology group; and will carry out investigations on Chinese automobile enterprises. A comprehensive investigation will be conducted into whether large Chinese auto companies are using key U.S. technologies, including whether they use U.S. software technology, whether they use U.S. core equipment, and whether they use U.S. raw materials, so as to suppress the development of China's auto industry, especially the new energy vehicle industry.

"Fourth, the United States is coercing China to cut off Sino-Russian economic and trade exchanges. The U.S. intentionally regards the normal trade between China and Russia as support for Russia. Using this as an excuse to attack China, the U.S. then threatens that China cannot help Russia evade the sanctions, otherwise it will make China pay the price. Since the Russian-Ukrainian conflict began, the United States has rallied its allies to impose sanctions on Russia, while threatening China to stop cooperation with Russia in various fields.

"In March 2022, the United States twice threatened that China should sanction Russia. White House Press Secretary Psaki said that the friendly diplomatic relations between China and Russia had made the outside world fearful. If China did not comply with sanctions against Russia, the United States would retaliate against China. Two days after Psaki's comments, the U.S. Secretary of Commerce threatened to suspend supplies of equipment and software to China if its domestic companies did not comply with U.S. controls and sanctions imposed on Russia. If China had refused to act on this matter, it would surely have ushered in a fatal blow for Chinese companies."

"(1.2) Simultaneously Taking Both Long And Short Positions, Putting Financial Pressure On Chinese Enterprises"

"In 2022, the financial game between China and the United States entered the practical level.

"One way is the suppression of Chinese companies through the capital market. China Concepts Stocks have been the focus of the financial game between China and the United States in recent years. After the Russian-Ukrainian conflict began, the U.S. Securities and Exchange Commission (SEC) frequently included Chinese concept stocks firms on the 'pre-delisting' list. On March 10, 2022, in accordance with the 'Holding Foreign Companies Accountable Act', the SEC included five China Concepts Stocks firms on the list of firms at risk of delisting. These Concepts stocks plummeted collectively, which spread to Hong Kong stocks and A shares. The names of two groups of companies were announced on March 23 and 30, including companies such as Baidu and iQiyi. In April, two more groups consisting of 29 companies were announced, including Li Auto, Zhihu, and Ke Holdings Inc. On May 5, 88 were added to the list, including Pinduoduo, JD.com (Jingdong), NetEase, Xiaopeng (XPeng) Motors, China Mobile, Bilibili, and others. This is the sixth group of 'pre-delisting' names of China Concepts Stocks the SEC has released in 2022. At present, there are more than 250 China Concepts Stocks in the US stock market, and a total of 128 companies spanning 6 groups have been included in the list. Over half of Chinese concept stocks firms are now 'pre-delisted'.

"The second tactic is the public threat of imposing financial sanctions against China. On March 17, Marco Rubio and other congressmen proposed the so-called 'Crippling Unhinged Russian Belligerence and Chinese Involvement in Putin's Schemes (CURB CIPS) Act, saying that if China circumvents SWIFT and continues to cooperate with Russia in the financial field, the United States will sanction China, taking steps such as freezing or terminating any U.S. accounts and property related to Chinese financial institutions. Jake Sullivan, United States National Security Advisor to President Biden, also stated that the United States is closely monitoring the level of economic or material support China provides to Russia, and has told China that helping Russia to evade sanctions will result in the consequences of secondary sanctions. It is evident that after robbing Russia's overseas assets, the United States is ready to take action against China's overseas assets.

"The third is to restrict U.S. companies' investment in Chinese companies. As early as 2019, the Trump administration was considering delisting Chinese companies from U.S. stock exchanges and studying how to limit U.S. financial firms' investments in Chinese companies. After Biden took office, he tightened restrictions on U.S. capital flowing into China and expanded the list of Chinese companies prohibited from U.S. investment.

"According to a report by the U.S. 'Politico' website on March 7, 2022, security officials, led by Sullivan, have been urging Biden to issue an executive order that would bar U.S. banks and funds from investing in Chinese tech companies and start-ups. Although the executive order was put on hold due to opposition from officials from the Department of the Treasury and the Department of Commerce, under the situation of increasingly fierce competition between China and the United States, there is no guarantee that it will not be introduced in the future."

"(1.3) Attacking And Slandering China In The Field Of Ideology"

"The Biden administration uses ideology as a weapon to attack China, follows and amplifies the Democratic Party's usual Value-based Diplomacy, constantly changes the means of ideological penetration, and uses agenda-setting and hot topics to rile up the public. Under the guise of 'freedom and human rights, democracy and the legal system, and fair trade', a series of United States attacks on China have been 'justified'. The fundamental purpose of this is that the Biden administration hopes to win widespread support in public opinion for American hegemonism and unilateralism in the ideological field. Ever since the conflict between Russia and Ukraine began, the ideological rhetoric and actions of the United States against China have become more aggressive.

"One such example is the resort to the usual trick of 'anonymous disclosure'. Time after time, false information has been released into the US media, such as 'Russia and China communicated in advance', 'China plans to provide military assistance to Russia', and 'the United States informed of Russian military movements in advance'.

"A second instance of U.S. ideological rhetoric is the spread of the 'China Responsibility Theory', slandering China by stating it 'acquiesced in the escalation of the conflict between Russia and Ukraine' and 'condoned the war'. The United States threatened that China 'will bear the consequences of Russia's invasion', portraying China as a 'conspirator' and an 'accomplice', binding China and Russia into a new 'axis of evil'.

"The third is that the United States is winning over Europe to deal with China in the ideological field, portraying itself as a mediator of conflicts, while falsely claiming that China is 'irresponsible, immoral, and standing with the aggressor', so as to drive a wedge into the relationship between China and the E.U. The United States deliberately ignores China's call for talks to promote peace and accuses China of failing to condemn and sanction Russia in order to force China to choose sides. The United States and Europe have jointly accused China and Russia of undermining international rules and order.

"The fourth is spreading the 'China Winner Theory', falsely claiming that China 'watches in safety while others fight, then reaps the benefits when both sides suffer', 'hopes to benefit from geopolitical changes', 'will become the winner in the Russian-Ukrainian conflict', and so on.

"The fifth example of aggressive rhetoric is forcibly linking the Russian-Ukrainian conflict with the Taiwan issue, stirring up the fallacy of 'Ukraine today, Taiwan tomorrow', and deliberately blurring the international consensus that the Taiwan issue is China's internal affair. The United States has been sending former high-ranking officials to visit Taiwan to express support. The 'quadrilateral mechanism' of the United States, Japan, India, and Australia loftily expressed that 'the events in Ukraine are not allowed to arise in the Indo-Pacific', forming and tightening the 'Indo-Pacific encirclement network' that suppresses China.

"The sixth example is blaming China for the current rise in global food prices, believing that China adheres to the strategy of food self-sufficiency and hoards a large amount of 'unnecessary' food, causing a rise in food prices. China is jointly criticized by Japan, an ally of the United States.

"The seventh action is deliberately interfering in China's internal affairs in the name of 'protecting human rights'. The United States has defamed and criticized China with accusations of human rights violations, imposing visa restrictions on Chinese officials involved in the 'suppression' of ethnic minorities, religious groups, dissidents, and other human rights violations, both inside and outside China and in the United States. It can be seen that the ideological attack from the United States is comprehensive and dynamic, constantly evolving alongside the development of events, and has fresh content corresponding to each stage. It is an all-around and continuous attack."

"(1.4) Provoking The Taiwan Issue Using 'Salami Slicing Tactics"

"The United States believes that Taiwan has significant geopolitical value. If China is unified, the 'first island chain' built by the United States along the line from South Korea, Japan, China's Taiwan, to the Philippines after the end of World War II will be cut off at the center, and will allow China to have a stepping stone to enter and exit the Pacific Ocean. This will pose a threat to U.S. interests in the region. Therefore, the United States frequently stimulates friction in the relationship between the mainland and Taiwan, thwarting the pace of China's reunification. Since the U.S. began pushing the Russian-Ukrainian conflict to heat up, it has also continued to do a similar thing to Taiwan, making inappropriate analogies between the Russia-Ukraine incident and cross-strait relations, as well as sending wrong signals to Taiwan in order to achieve the purpose of containing the great rejuvenation of the Chinese nation.

"In terms of military affairs, on the one hand, the United States has made a fortune by selling weapons and equipment to Taiwan. On the other hand, it is hoped that by 'arming Taiwan', the Taiwanese military's 'ability to respond' to the People's Liberation Army will be improved. Firstly, arms sold to Taiwan are becoming more powerful. Among the three arms sales to Taiwan after Biden took office, two occurred within two months before and after the Russian-Ukrainian conflict arose. On February 7, the U.S. State Department approved arms sales to Taiwan worth about $100 million, containing equipment and services required for the Taiwanese military, such as the 'Patriot' missile system. On April 5, Samuel Paparo, commander of the United States Pacific Fleet, stated that 'the United States cannot relax its commitment to defend Taiwan and support Taiwan in strengthening its self-defense capabilities'. On May 2, the United States proposed to include 'other more precise weapons' in its sales to Taiwan, including the 'HIMARS' system, and even clearly informed Tsai Ing-wen that in the future, arms sales to Taiwan will only include weapons that can be used in sea and air operations, which is obviously aimed at the mainland.

"Secondly, military patrols are becoming more frequent. On March 17, the Arleigh Burke-class guided-missile destroyer USS Johnson crossed the Taiwan Strait and drew much attention from the public in a vain attempt to send a wrong signal to the 'Taiwan independence' forces on the island. On April 16, after the USS Abraham Lincoln aircraft carrier strike group left the waters of the East China Sea, the United States military dispatched a large number of fighter jets, with the cooperation of two KC-135 tankers, to hang around the waters near Taiwan for 7 hours. On April 26, the Arleigh Burke-class guided-missile destroyer USS Sampson crossed the Taiwan Strait. Once again on May 10, the guided missile cruiser 'Port Royal' sailed through the Taiwan Strait and attracted much attention.

"Politically, the position on Taiwan has become increasingly vague. Biden formally signed the 'Consolidated Appropriations Act, 2022' passed by the U.S. Congress on March 11. According to the bill, Taiwan's color on the official United States map will be different from that of China in the future. On March 30, 196 bipartisan members of the U.S. House of Representatives jointly launched an initiative and sent a letter to the Biden administration to invite Taiwan to participate in the 'Indo-Pacific Economic Framework.' On May 5, the U.S. State Department's website updated and revised the 'Fact Sheet of U.S. Relations with Taiwan', and deleted the previous version's statements about 'acknowledging the Chinese position that there is but one China and Taiwan is part of China' and 'the United States does not support Taiwan independence'.

"On May 12, the United States co-hosted the Second Global COVID Summit with a select group of countries, to which Taiwan was invited. During his visit to Japan on May 23, Biden said that he was 'willing to defend Taiwan militarily', while continuing to maintain 'strategic ambiguity' about Taiwan. From upholding the one China policy in the three China-U.S. Joint Communiques, to challenging China's sovereignty over Taiwan in the Taiwan Relations Act and the 'Six Assurances', to a series of moves by the U.S. towards Taiwan after the Russian-Ukrainian conflict, it can be seen that the U.S. has the obvious intention of further inflaming the situation across the Taiwan Straits. The United States continually provokes China with its salami slicing tactics on the Taiwan issue."

"(1.5) Continuously Suppressing China's Development In The Field Of Military Science And Technology"

"The United States regards China and other countries as important competitors in the military field. Meanwhile, it regards science and technology as the source of power to maintain the powerful combat effectiveness of its military, and maintains its military strength by increasing technological input in the national defense and military field. The National Defense Strategy released by the U.S. in 2018 clearly showed that China and Russia are the main strategic competitors, and proposed the three goals of reforming the system of the Defense Department, strengthening cooperation and attracting more allies, and building more lethal armed forces.

"At the same time, it promised to make large-scale capital investment in the three cutting-edge technologies of autonomous weapon systems, artificial intelligence and machine learning. In addition, the series of documents such as the 'Department of Defense Cyber Strategy', 'Department of Defense Digital Modernization Strategy', 'Department of Defense Artificial Intelligence Strategy' and 'Department of Defense Cloud Strategy' released later all reflect the determination of the United States to shape technological competitiveness in the military field. Since the Russian-Ukrainian conflict began, the United States has continued to increase its restrictions on China's military technology.

"First, there is the continuous strengthening of the containment of the development of China's semiconductor industry. On the one hand, the United States has attracted the return of the semiconductor industry through incentive policies; on the other hand, it has suppressed the development of China's semiconductor industry by restricting investment, strengthening export control, banning the purchase of equipment and products from some Chinese enterprises, and raising tariffs. The United States is comprehensively encircling and annihilating China's semiconductor industry chain. As the hardware foundation of electronization, chips are known as the 'nerve center' of informatized equipment. Their shortage will affect the development and application of precision weapons, and greatly weaken the combat effectiveness of informatized equipment. According to statistics from the General Administration of Customs, from February to March 2022, the amount of chips imported by China from the United States dropped from about 18 billion yuan to 12.5 billion yuan year-on-year, and the growth rate dropped from 166% to negative 30%.

"Second, there is the risk of shutting down the artificial intelligence platforms to China at any time. At present, only a few enterprises in China, such as Baidu, persist in developing autonomous and controllable artificial intelligence platforms. Most of the basic infrastructure used in civilian smart systems is secondary development and innovation based on open source systems in the United States. If a full-scale conflict breaks out between China and the United States, and the United States shuts down the basic AI platform service system to China, China's increasingly intelligent digital economy ecosystem will face serious challenges.

"Third, the United States is promptly stepping up efforts to deploy a blockade against China's integrated air and space information network. At present, the United States is accelerating the construction of the National Defense Space Architecture (NDSA). When completed, the architecture will form a rigorous, precise and round-the-clock surveillance network over China's airspace. Part of the NDSA tracking layer is the current SpaceX's Starlink. As of February 3, 2022, SpaceX had launched 2,091 Starlink satellites, out of a planned total of 42,000 (the low-Earth orbit can hold up to 60,000 satellites). The completed Starlink system in its entirety, combined with the NDSA system, will pose a major threat to China's aerospace information network.

"Fourth, the United States tries to limit the cultivation of talent in China's military science and technology field. In April 2022, Microsoft Research Asia (MSRA) stopped recruiting students from the 'Seven National Defense Schools' [that is, seven schools identified as national defense industrial colleges, namely Beihang University (a.k.a., Beijing University of Aeronautics and Astronautics), Harbin Institute of Technology, Northwestern Polytechnical University, Nanjing University of Science and Technology, Harbin Engineering University, and Nanjing University of Aeronautics and Astronautics], as well as students from Beijing University of Posts and Telecommunications. Under this provision, if an MSRA faculty member wants to recruit a student from a university on the banned list, he or she needs to give a special reason, and even if the student is accepted, he or she cannot use the university to co-publish a paper.

"To sum up, the United States has put its ideology of 'integrated deterrence' against China into practical actions. From policy formulation to 'large-scale encirclement and suppression' against China in various fields, everyone knows that the United States intends to contain China.

"According to statistics, since the outbreak of the Russia-Ukraine conflict, the United States has introduced repressive policies against China... There are about two dozen repressive actions against China..."

2. "Three Possibilities For The Future Game Between China And The United States"

"In the coming period, the direction of Sino-U.S. relations will be affected by two factors. The first is the contrasting change in the economic strength between China and the United States. At present, China has already become the second largest economy in the world, and its comprehensive national strength is increasing day by day. At the same time, its economic tenacity continues to increase. In the face of the severe impact of the Coronavirus epidemic, China has demonstrated a good ability to resist risks. The digital economy, driven by the new generation of information technology, is becoming an important growth point for the high-quality development of China's economy, and it has set off a new round of technological revolution on a global scale.

"It can be said that the economic gap between China and the United States is gradually narrowing, and China's strength in the game against the United States is gradually improving, which is regarded by the United States as violating its interests to a certain extent. The United States adheres to the inherent mindset of hegemonism and unilateralism. It holds a hostile and oppressive attitude towards the rise of emerging economies represented by China in order to maintain its status as 'economic hegemon'.

"The second is the difference in political ideology between China and the United States. Based on hard economic and military power and soft cultural power, under the guise of 'human rights', the United States has shaped its people's perceptions of hegemonic thinking, geopolitical preferences, and racial prejudice. The long-established imperialist and hegemonic view of the world imperial order has made the American people more hostile to China. Based on the concept of 'harmony without uniformity', China upholds the idea of resolving disputes through dialogue under the framework of the United Nations, and is committed to building a community with a shared future for mankind in the era of globalization. The competition between China and the United States is not only the competition of economic, technological, and military strengths, but also the competition of the construction of the global political order based on concepts and values."

"(2.1) In Their High-Intensity Game Of International Relations, China And The United States Are Moving Towards A Comprehensive Military Confrontation. This Will Include Within It Five Specific Areas Of Conflict"

"One is full-scale cyber warfare. In recent years, the United States' National Security Agency has been launching large-scale cyber operations around the world, including a number of cyber-attacks targeting China. With China's embrace of the digital sphere, a large number of internet products and services are being used in various fields such as finance, communication, and transportation. Therefore, the Internet will be the main battlefield of the Sino-U.S. war. For example, the United States can completely disconnect China from the Internet, systematically attack China's financial networks, implant hidden viruses into China's networks to collect Chinese information, damage China's key information infrastructure, steal important data, and abuse information technology to conduct large-scale surveillance on China, etc. And weapons of cyber warfare in the U.S. are getting more and more advanced.

"Recently,  a Chinese company, Qihoo 360 Technology Co. Ltd., issued a report which disclosed the technical characteristics of the NSA's cyber weapon, the Quantum attack platform, which was aimed at targets inside of China.

"Quantum attack is an advanced network traffic hijacking and attack technology specially designed by the NSA to target other countries' Internets. This technology has already passed the engineering and automation process. In particular, if the digital Renminbi is widely used in the future, China's national currency system will become an important target of the United States. Such attacks can paralyze China's currency system, and its significance in national military confrontation is obvious.

"The second form of conflict is full-scale conventional warfare. For example, the United States is militarily provoking China's sovereignty in the South China Sea and stepping up its arms sales to arm Taiwan, after which it could launch wars in the South China Sea and the Taiwan Strait. Recently, the United States has continuously conducted military activities in the South China Sea and the Taiwan Strait. Both China and the United States hope to expand their military presence in the South China Sea. China is the largest country bordering the South China Sea, and the South China Sea has a significant impact on China's core and major interests, including territorial sovereignty, maritime rights and interests, and maritime channels. The United States attaches great importance to its maritime dominance and freedom of navigation in the South China Sea. Since the end of World War II, the United States has maintained the most powerful military force in that area.

"As China's strengths in military, economic, and other fields catch up with the United States, the United States believes that China will challenge the United States' maritime dominance in the Indo-Pacific region with the South China Sea as its core, and establish a China-led Indo-Pacific order. At the same time, the United States has repeatedly said that unless there is a war between China and the United States, China already has 'the ability to control the South China Sea under any circumstances.' As the competition between China and the United States in the South China Sea increasingly intensifies, the number of maritime encounters has also gradually increased.

"On March 28, 2022, the United States and the Philippines conducted the largest military exercise since 2015 on the island of Luzon in the Philippines, escalating tensions in the Taiwan Strait. Recently, the Taiwan Strait has been embroiled in a new round of tensions. The United States has shown its support openly for the Taiwanese authorities in the areas of politics, law, diplomacy, military affairs, and the economy. It wants to incorporate Taiwan into its own Indo-Pacific strategic system, and use Taiwan to provoke tensions with mainland China, thereby containing and depleting China's regional influence. The United States' intention to obstruct China's development and rise is very clear.

"The third area of conflict is space warfare. The Russia-Ukraine dispute shows the importance of command of the air and outer space. Therefore, in a full-scale military confrontation between the US and China, command of the air and outer space is likely to become the main focus of competition. Near space–the area between traditional aviation and aerospace– has gradually become a new battlefield for air and space warfare. Because near space connects aerospace and aviation, it can greatly expand the scope and depth of the aerospace battlefield and support seamlessly integrated air and space combat operations, so it has a high degree of strategic importance. Near-space vehicles can effectively relay and connect air-to-ground information through early warnings, reconnaissance and surveillance, communication support, electronic countermeasures, navigation and positioning, etc. Since near-space vehicles can easily achieve supersonic long-distance flight, this makes them the new favorite among long-range fast strike weapons.

"The fourth area of conflict is nuclear war. Both China and the United States are major powers with nuclear weapons. If the comprehensive military confrontation between China and the United States in the future cannot be reconciled, they will eventually face the risk of nuclear war, but the possibility remains relatively low. The US nuclear policy is clearly offensive and focuses on deterrence. In recent years, the United States has successively withdrawn from the Anti-Missile Treaty (ABM), the Intermediate-Range Nuclear Forces Treaty (INF), and other arms control legal instruments, refused to ratify the 'Comprehensive Nuclear-Test-Ban Treaty,' and continued to advance the deployment of global anti-missile systems, deploy land-based intermediate missiles in Europe and the Asia-Pacific region, and sell nuclear submarines to Australia.

"In May 2022, the United States played up the risk of China's nuclear deterrence for the purpose of strengthening its own nuclear force. But China has always adhered to the nuclear strategy of self-defense, has always maintained the scale of its nuclear force at the minimum level required for national security, and has always adhered to the policy of not being the first to use nuclear weapons at any time and under any circumstances. China has also given clear commitments to unconditionally not use or threaten to use nuclear weapons against non-nuclear-weapon states and nuclear-weapon-free zones.

"It is worth noting that on January 3, 2022, the leaders of the five nuclear states of China, France, Russia, the United Kingdom, and the United States issued a joint statement on preventing nuclear war and avoiding an arms race. One of the most important principles reaffirmed by the joint statement is that a nuclear war 'cannot be won and must never be fought,' a principle that reveals that nuclear weapons are by their nature a deterrent against war, not a weapon of war. The recognition of this basic fact by the five nuclear-weapon states is of great help in maintaining global strategic stability and reducing the danger of nuclear war.

"Considering the U.S.'s comprehensive competition strategy against China, the U.S. will not subside in its malicious attacks on China on the nuclear issue, and will use nuclear war as a gimmick to deter other countries, but the risk of nuclear war is relatively low.

"The fifth area is cognitive warfare. The United States has continuously carried out cyber attacks on the leadership of the Chinese government and Chinese ideological system, undermining the authority of the Chinese government and challenging the unity of Chinese society. Based on open source information from the U.S. military, the U.S. clearly realizes that if the leadership and ideological system of Chinese governmental organizations are not disintegrated, even if the PLA itself has suffered heavy losses, it can quickly recover under a strong leadership system. Therefore, cyberattacks against Chinese government leadership and China's ideological system are more strategically valuable than cyberattacks against the PLA.

"Liebeck, an American information security expert, said that China's highly unified political system is itself a high-value strategic target and that China's long-term stability depends on nationalism and sustained economic growth. Therefore, once China's economic growth rate fluctuates, it can be seen as a strategic opportunity for the U.S. to conduct cyber-attacks in the ideological field and undermine the leadership of the Chinese government. He believes that economic fluctuations will lead to unemployment, so infiltrating communities of young people in China through the Internet can produce a huge cyber-attack effect. The implementation cost of such a campaign would be relatively low, but the strategic significance is even higher than direct cyber confrontation with the PLA."

"(2.2) A Mid-Level Intensity Game Between China And The U.S. Will Gradually Move Towards A Total Decoupling Of The Two Countries"

"The first area in which the two nations will decouple is technology. An analysis of the U.S. technology competition strategy shows that while the U.S. strengthens its own scientific and technological strength internally, it seeks scientific and technological exclusivity externally, maintains control over key technologies, and suppresses the technological innovation capabilities of other countries. That is to say, in the strategic thinking of science and technology competition in the United States, two thinking modes of 'self-improvement' and 'exclusiveness' coexist.

"In recent years, China has seized the important opportunity of the fourth scientific and technological revolution and achieved a substantial increase in scientific and technological strength. The gap in technological advantages between China and the United States is gradually narrowing, and the United States' position as a 'bellwether' in the field of science and technology has been seriously challenged. Therefore, the 'exclusive' characteristic of the U.S. technology competition strategy has become more and more obvious, and the deliberate prevention of China's scientific and technological rise has gradually increased. This is reflected in the radical 'comprehensive technology decoupling strategy' launched by the Trump administration and the 'small court with high walls' style strategy of technology competition launched by the Biden administration as he terminated Trump's comprehensive decoupling strategy.

"Under the guidance of the strategy of 'Small Courtyard with High Walls,' the path of the United States' decoupling from China's technology is as follows:

"By strengthening domestic technological innovation, the United States will transformed its accumulated technological advantages into technological rights, cut off the supply of science and technology to China, and restricted the development of China's technological industrial chain. On this basis, the United States will transform technical rights into institutional rights, formulate technical standards and competition rules in relevant fields, establish the absolute right to speak in this field, and then master the dominance of science and technology governance.

"In addition, by spreading U.S. values in the field of science and technology to China, the U.S. will increase the influence of public opinion, use 'long-arm jurisdiction' to form an international connection with its various allies, and suppress China's technological development on the grounds of security threats. These practices have led to a growing politicization of technology. However, it cannot be ruled out that the United States eventually adopts a competitive strategy of 'decoupling first and then coupling' in the field of science and technology; that is, to first cut off relations with China decisively, and then reconsider the layout of the linking.

"The second is economic decoupling. The United States has been working on a plan of rearranging industrial chains in recent years. The implementation of industrial chain transfer includes two aspects: first, external transfer, withdrawing the industrial chain from China and transferring it to other regions, such as Mexico, Latin America, Africa, etc., to reduce its dependence on China's product supply in various fields. Another one is the return of the production chain to the United States, supporting the 'return' or 'relocation' of small and medium-sized industries in the United States. The most typical example is in the manufacturing sector, where the United States is adopting the strategy of 'high-end decoupling and low-end coupling'; that is, to promote the return of high-end manufacturing to the United States, and only keep low-end industries in China. It is worth noting that the United States has recently hoped that manufacturing related to traditional infrastructure will return to the United States for the purpose of expanding employment and promoting economic growth.

"On April 18, 2022, the White House Office of Management and Budget released a policy guidance that requires federal agencies to ensure that $1.2 billion worth of new infrastructure projects under the U.S. Infrastructure Act use American-made raw materials by mid-May. In the 17-page guideline, the White House requires that all raw materials used in infrastructure, whether for bridges, highways, water pipes, or broadband Internet projects, must be domestically produced materials, including steel. In addition, the guideline requires the federal government to ensure that the majority of the components of any finished product used in the project are also manufactured in the United States.

"Relevant data show that more than 80% of the industrial structure in the United States is in the service industry, including the financial industry, and industrial manufacturing only accounts for about 10%. U.S. industrial manufacturers rely heavily on imports, while China and the U.S. have a high degree of trade interdependence in the manufacturing sector. Manufacturing-related products such as machinery and transportation equipment are the main components of China's exports to the U.S.. President Biden has hoped to use infrastructure projects as an opportunity to boost US domestic manufacturing and build a 'Made in U.S.A.' brand, so as to gradually change the high dependence of the U.S. manufacturing industries on foreign economies. In the long run, this may have a certain impact on China's export of manufactured products, and make China's manufacturing industry face the pressure of transformation and upgrading. Therefore, if the competition between China and the United States is further intensified and the economic situation in the United States deteriorates, the scope of the decoupling of the United States from China's industrial chain in manufacturing and other fields will be more comprehensive.

"There is also the decoupling of culture. China-US people-to-people and cultural exchanges have gone through stages of normalization and systematization, but have recently taken a hard downturn. Since the Trump administration took office, people-to-people and cultural exchanges between China and the U.S. remained stable at the beginning. However, with the release of the National Security Strategy report, people-to-people and cultural exchanges between China and the US took a sharp turn for the worse.

"In addition to concocting the 'Confucius Institute Threat Theory,' the United States has also taken radical measures in other areas. For example, in recent years, the United States has increasingly scrutinized Chinese students and scholars, and has begun to publicly express that it will limit the admission of sensitive majors in American universities to China. The United States has refused visas, delayed visa applications, revoked visas, investigated and harassed Chinese students, scholars, and scientific researchers, etc., in an attempt to promote a comprehensive decoupling of Sino-U.S. cultural exchanges.

"The Biden administration may bring some changes to China-U.S. exchanges. However, given the political differences, ideological differences, as well as the hostility of the United States' competitive strategy against China, the existing restrictions on cultural exchanges between China and the United States will not be completely lifted, and it is difficult to improve the cultural exchanges between China and the United States in the short term."

"(2.3) The Low-Intensity Game, In Which The Tension Between The Two Countries Could Become Normality"

"The domestic troubles in the United States have intensified over the years. As American politicians want to divert domestic tension for their own interests, they have constantly constructed the 'China threat theory', misleading public opinion by inciting anti-China sentiment to reach a sort of unity. The voting results of some China-related bills showed that a basic consensus has been formed among both of the Republican and Democratic Parties, that they all will take a tough stance on China.

"Judging from the attitudes of the American public, the Pew Research Center's March 2021 report shows that the consistency of the two parties' negative sentiment towards China has further increased, as 67% of American respondents holding a negative view of China, which is higher than 46% in 2018; 89% of U.S .respondents see China as a competitor or enemy now. The Gallup poll found that the number of U.S. respondents who see China as their worst enemy has doubled over the past year, from 22% to 45%. The change in Americans' attitude towards China will profoundly affect the US government's policies towards China.

"Since the outbreak of the epidemic, criminal cases against Chinese people in the U.S. have also increased, and anti-Chinese sentiment in American society has been accumulating. In addition, the United States has clearly said that China is its primary strategic competitor. In the first important national security strategy guidance document issued by the Biden administration in March 2021, the Interim National Security Strategic Guidance, China was mentioned most frequently, 15 times, and the United States would work with its allies in the Indo-Pacific, Europe, and the Western Hemisphere to counter China. It can be expected that the tension in the Sino-U.S. game will become the norm for a long time to come.

"On the whole, the Biden administration still believes that competition is still the main axis of Sino-U.S. relations, so its basic point view on China, its basic strategy and its tough stance towards China will not be changed in a short time. Although among U.S. politicians and academia, the opinions about China are very entangled and contradictory, but if we look at them with the current layout of the U.S. comprehensive competition strategy toward China, we would know that the Biden administration regard China as the 'most severe competitor' and this perception will continue to incite its provocation against China in certain areas. The probability of a comprehensive 'showdown' between China and the United States is rising. How to control the intensity of the 'showdown' will be our key concern.

"From the perspective of China, China-U.S. relations have entered a 'new normal' where competition is the mainstay and cooperation is the supplement. Although the relationship between China and the United States is complicated, no matter from the point view of a community with a shared future for mankind or from the perspective of China's own development, China should try its best to avoid a 'showdown' with the United States in the form of war (whether a cold war or a hot war). At the same time, China should also give up the illusion of 'escaping from competition', actively seek fields and opportunities for cooperation with the United States while adapting to the high tension between China and the United States as a new normal, take the initiative in forging China-U.S. relations, and promote reforming the global governance system together with the U.S..

"From a global perspective, the current international situation is undergoing profound and complex changes. Such changes and the epidemic are intertwined, and the world has entered a new period of turbulent stage. During such time, countries have become increasingly interconnected, and the destiny of all countries is closely related. Peace and security have become the primary issues facing all mankind. On the one hand, Sino-U.S. relations are the stabilizer of international relations. The normalization of Sino-U.S. relations is of great significance to maintaining peace in Asia and the world. Without the mutual cooperation between China and the United States, there will be no world peace and stability.

"Secondly, as the world's largest developing country and the largest developed country, China and the United States have more than one-third of the world's economic aggregate, and are the most important engines of global economic growth, contributing more than 50% of the world's economic growth, and will effectively involve the whole world into globalization, and form a global economic and trade cooperation system of 'you have me, I have you'. Finally, the world today is facing a series of global problems and challenges such as the continuous recurrence of the Covid epidemic, the hidden crisis of terrorism, the severe climate changes, and the slowdown of global economic growth. To China and the U.S., there are important responsibilities on all of those global issues."

3. "Suggestions For Dealing With The Comprehensive Strategic Competition Of The United States Against China"

"2022 is a year of great significance for the strength comparison between China and the United States. Due to the impact of the Covid-19 epidemic in Shanghai and other regions in China and the conflict between Russia and Ukraine, the downward pressure on China's economy has further increased. The trend of continuous narrowing of the economic gap between China and the United States for more than 40 years is likely to be interrupted for a time, which is bound to encourage the impulse and pace of the United States' comprehensive strategic competition with China.

"The research team of the Chongyang Institute for Financial Studies in People's University of China believes that China must pay attention to the problem of national confidence and market expectations caused by the possibility that the gap between the economic aggregates of China and the U.S. will not further decrease but increase in 2022. In order to implementing the policies and intentions of the Central Economic Work Conference in 2022 and the previous meetings of the Politburo of the CPC Central Committee, more attention must be paid to the following aspects."

"(3.1) Step Up The Making Of Anti-Containment And Anti-Sanction Plans In The Economic, Trade And Financial Fields, And Strengthen Cooperation In Information Governance"

"The first is to respond to the U.S.'s Indo-Pacific economic framework, China should step up its cooperation in the Asia-Pacific region. In the face of the United States' intention to change and destroy Asia-Pacific regional cooperation, China should join hands with ASEAN and other economic partners to adhere to traditional Asia-Pacific regional cooperation. It is necessary to accelerate the implementation of the Regional Comprehensive Economic Partnership (RCEP) and start to negotiate on China's accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), and proactively speed up the process for China to join the Digital Economy Partnership Agreement (DEPA), and seek to restart and signing of the China-EU Comprehensive Investment Agreement to ensure China's important position in the global industrial chain and supply chain.

"The second is to enhance the resilience of the industrial chain and supply chain. China must overall consider risks and benefits, reform its all links in the supply chain with more diversified and larger-scale plans, and deploy more and more new technologies such as artificial intelligence, big data, and cloud computing in the supply chain, and by building a cloud architecture, constructing digital and intelligent systems, improve the operation efficiency of the supply chain, therefore China may prevent some possible risk, and ensure the stable operation of the supply chain.

"The third is to speed up the improvement and promotion of the function of RMB's Cross-Border Inter-Bank Payments System (CIPS), which can bypass the SWIFT system, and actively integrate the Russian-led Eurasian Economic Union and the Sino-Russian-led 'SCO' into this system. China should actively explore the role of digital RMB in improving cross-border payments and facilitating international trade settlement, find ways to integrate 'digital RMB' into this system, and bring other countries to develop digital currencies together.

"The fourth is to prevent the United States from removing China from the WTO. It is necessary for China to improve its internal circulation of the economy, while shifting its focus of trade from Western to Asia and Africa, especially deepening trade cooperation with emerging economies with huge potential and scale such as ASEAN, India, and Vietnam.

"From the perspective of the global economic situation, the digital economy has become a new growth center of the global economy, and digital trade in services is rising rapidly. China and the United States should clarify the boundary of the relationship between the two countries, stick to the minimum of competition and confrontation, keep trying to break through the 'ceiling' of cooperation, and seek the possibility of cooperation in digital governance.

"Specifically, the Covid-19 epidemic has given a chance to the growth of the online economy, and new economic models such as telemedicine, online education, sharing platforms, and smart travel based on digital technology are flourishing. The new economic and trade model represented by cross-border e-commerce and supply chain digitization has promoted the digitization of global economic and trade, thereby bringing the rapid formation of a new paradigm of data transactions across institutions, industries and regions. However, rapid growth of data resources has also raised a series of issues such as localized digital storage, digital security, privacy protection, and anti-monopoly etc. As the two largest economies in the world with the strongest digital capabilities, China and the United States should work together to address the challenges of global data governance and reduce the digital division.

"On the one hand, in the face of the major challenge of global digital governance, multilateral mechanisms will still play an important role. Both China and the United States should actively promote the multilateral mechanism of global data governance, participate in rule-making in the fields of digital currency and e-commerce in international organizations such as G20 and OECD, and jointly promote the introduction of more operable and enforceable specifications for specific applications; On the other hand, China and the United States should actively promote digital economic and trade cooperation in the Indo-Pacific region and promote to make new rules for digital governance.

"As an important engine of global economic growth, the Indo-Pacific region has great potential for the development of the digital economy. For example, India is promoting the digitalization of the agricultural sector, the Philippines is relatively open in terms of data transmission, the scale of electronic payments in Thailand has grown rapidly, and the coverage of e-commerce in Vietnam has expanded. A large number of digital economic agreements and the coverage of digital rules such as digital taxes happened in the Indo-Pacific region. China could make strategic adjustments to the digital 'Belt and Road' initiative and the U.S. digital economy strategy, coordinate the conflicts of interests in the digital economy, weaken the intention of 'confrontation', avoid strategic confrontation in the Indo-Pacific region, and strive to form a positive interaction from competition to competition with cooperation."

"(3.2) We Must Seize The Initiative And Make Strategies And Plans To Build China As A Financial Power"

"Just like the tariffs in the Sino-U.S. trade dispute, Chinese stocks have almost become a financial weapon for the United States to suppress China. In the short term, it is necessary to continue to strengthen communication with U.S. regulation agencies and reach an agreement on Sino-U.S. audit supervision cooperation. At the same time, it is necessary to continue to use Hong Kong as an international financial center as a listing place for Chinese enterprises. In the long run, it is necessary to further improve the endogenous stabilization mechanism of the capital market, continue to promote the reform of the stock issuance registration system, cultivate a multi-level and comprehensive capital market and futures market in China, and attract more companies to raise funds and trade stock futures in China. We must use the financial industry to help China to become a financial power with certain strategies and plans.

"In addition, the flow of capital in China needs to be cautiously controlled, because when facing comprehensive competition with the U.S. China's economic stability would need an independent monetary policy and a stable exchange rate. Under the multiple pressures outside and inside of China, we will inevitably need a loose monetary policy. Such a trade-off in Mundell-Flemming Model allows China to not follow the United States to raise interest rates, and at the same time, will not face excessive pressure of RMB depreciation and capital outflow.

"At the same time, we must increase the promotion and implementation of financial information technology innovation. Continue to apply new technologies and increase China's independent control in the financial industry, and form independent research and development capacity for key platforms, key components and key information infrastructure that have a significant impact on business operation and development, reducing external dependence. We must build a China fully controlled and reliable technology infrastructure, and ensure safety for the basic software and hardware of the financial industry from the bottom of IT (CPU, storage, financial equipment, server, network equipment, etc.) to the upper-layer application software (operating system, database, middleware, cloud platform, application software, office software, etc.)"

"(3.3) Accelerate the process of energy independence and formulate a 'three-step' strategy for energy substitution"

"Solving the U.S. energy containment on China requires China to realize energy substitution in the short term and energy independence in the long term, and it is necessary to formulate a 'three-step' strategy. In the short term, formulate a strategy of 'reducing coal, stabilizing oil and increasing gas' to deal with China's resource endowment of 'more coal, less oil and lack of gas', compete with the West for mining rights globally, and actively carry out energy cooperation with countries along the 'Belt and Road' to gradually diminishing the U.S. energy export to China. In the medium term, China needs to introduce a series of supporting policies, involving the fields of law, authentic right and taxation. It is important to set up reasonable economic growth targets to prevent energy shortages, because historically, annual economic growth will bring about an increase in energy consumption. The long-term goal is to focus on the sustainable development of energy, that is, to achieve fully autonomous and controllable energy production by expanding the scale of renewable energy."

"(3.4) Actively Set The Agenda And Gradually Lead The Rhythm In tTe Sino-U.S. Public Opinion War"

"We should have no illusions about the comprehensive and intensified ideological game between China and the United States, and must make a full preparation. First we should give a full analysis on the methods and means of ideological sanctions by the United States, and deconstruct their internal logic, especially its 'lie narrative'. We could use more publicity, education and warning in the whole society, improve the ability of all of Chinese people to see the U.S. ideological offensive and their combat methods, and be able to consciously dissect the real and fundamental purpose behind the U.S. discourse, always keep a clear head and a clear mind, and maintain our strategic focus and not vacillate easily.

"The second is we must pay more attention to the struggle for international discourse rights and strengthen international communication capabilities. The dispute between China and the United States is not only a dispute over ideology, but also a dispute over international discourse power, moral superiority, and global governance rules. Because public opinion and publicity are sort of work that requires timeliness, so Chinese authority needs to relax its control and simplify the approval procedures, and utilize various institutions such as media and think tanks, and let them play more effective roles and release their potential.

"The third is China should brew offense in defense and take the initiative to attack the U.S.. It is necessary to further connect Chinese academic research with reality, focus on application, proactively set an agenda, build up networks and intelligence information capacity, and gradually lead the rhythm of the Sino-U.S. public opinion war."

"(3.5) Tell More About The Danger Of 'Taiwan Independence' To The Outside World, And Strictly Prevent The United States From 'Using Taiwan To Contain China"

"The first is to issue the 'China National Reunification Promotion Law' as soon as possible to counter the 'Taiwan Relations Act' and the 'Six Assurances' of the United States, to promote reunification with a clear-cut legal basis, and to clearly define that any act that obstructs the reunification of China is illegal, and inaction is also illegal. We must eliminate the root cause of Taiwan independence forces.

"The second is that China must increase military expenditure. For decades, China's military expenditure has remained at around 1.7% of GDP, which has always been lower than the world average and far below the U.S. level. Faced with the turbulent geopolitical situation in the world, it is necessary to increase the proportion of military spending to about 2% of GDP, which is close to the world average. Since Taiwan 'rejects reunification by force' and 'relies on foreign countries to seek independence', China's increase of military spending can better achieve the deterrent purpose of 'promoting peace by force'.

"Third, in view of the United States' malicious guidance of public opinion and its attempt to define the potential cross-Strait conflict as aggression, China needs to intensify its external publicity efforts to explain that the cross-Strait issue is China's problem alone and cannot be compared with the problems of Russia and Ukraine.

"Fourth, in response to the U.S.'s repeated provocations such as its arms sales to Taiwan, China can strengthen countermeasures against U.S. defense industry enterprises involved in arms sales to Taiwan in accordance with the Anti-Foreign Sanctions Law. Although these related U.S. enterprises have fewer direct ties to China, U.S. companies in non-military sectors that have indirect stakes in these defense companies or other business ties will be greatly affected if they want to enter the Chinese market."

"(3.6) To Strengthen Military Science And Technology, China Should Establish An Independent And Self-Controlled Key Technology System As Soon As Possible"

"In view of the situation that the United States and other Western countries have jointly implemented technical blockade against Russia in the Russian-Ukrainian conflict, China must prepare for the independence and security of the entire industrial chain in the fields of military science and technology. The following three aspects are the main focus.

"First, in the short term, we should pay close attention to the safety of innovation chains and industrial chains in areas with higher risks of 'technological decoupling', and make contingency plans. In the short term, there are some high-tech products China could not realize its full-control, and it is necessary to make necessary product reserves to avoid excessive impact on the domestic industrial chain and supply chain after 'technology decoupling'.

"Second, in the medium term, China should actively participate in global scientific and technological cooperation and governance, and expand the circle of friends in technical cooperation. China should try to reduce the interference of the United States in China's scientific and technological cooperation with other countries in the world, and firmly follow China's own path of international cooperation in scientific and technological development.

"Third, in the long run, competition in high-tech between China and the United States is inevitable, and China should make necessary preparations for a protracted technological war between the two countries. Especially in the aspect of personnel training and scientific research innovation system, we should be prepared to deal with the situation of a total blockade, so as to ensure that the relevant talents training in our country will not be lost, and scientific research innovation will maintain a dynamic ideological construction, organization construction and system construction."

"Epilogue"

"To sum up, the conflict between Russia and Ukraine has exacerbated the strategic anxiety of the United States toward China. The United States has begun to accelerate the implementing its comprehensive strategic competition with China, and proposed the key content of the so-called 'competition' - 'integrated deterrence' against China: that is, by introducing allies and partners, working in the conventional, nuclear, space, and information fields, taking advantage of America's growing economic, technological, and diplomatic advantages, using a multi-pronged approach to win over all the forces that can be drawn, and forming a joint force to deal with China.

"At the same time, the United States believes that the comprehensive strategic competition with China is not only a competition for national power, but also a competition for political system, the right to speak, and a competition for global governance. While implementing 'integrated deterrence' and 'encirclement and suppression' against China, the United States has also labeled China as a 'challenger of the international order' and a 'disruptor of regional security', thus occupying the moral high ground. This is a major shift in the U.S.'s strategic perception and actions towards China.

"In order to cope with the comprehensive strategic competition and integrated deterrence of the United States, China must prepare well in various directions such as economy, trade, finance, energy, public opinion, military science and technology. The Sino-U.S. Relations Research Group of the Chongyang Institute for Financial Studies at People's University of China believes that China should give up the illusion of avoiding strategic competition with the United States, try to prevent the worst possible military war showdown with bottom-line thinking, and adapt to the new normal of Sino-U.S. tensions. At the same time, actively shape Sino-U.S. relations. Under the new normal of tense competition between China and the United States, we should seek the possibility of cooperation between China and the United States, establish a sense of the overall situation of a community with a shared future for mankind, form cooperation consensus on key issues, promote the effective development of global governance, especially global data governance, and jointly create a bright future for mankind."

 

[1] Guancha.cn/rendachongyang/2022_06_01_642308_s.shtml, June 1, 2022.

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