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| 11 February 2023 | Welcome to our 1,430 newly joined SCMP Global Impact readers who signed up in the past week. | Dear Global Impact Readers,
Look, up in the sky. It’s a bird, it’s a plane, it’s … a balloon.
The sighting and subsequent shooting down of the Chinese balloon by a US F-22 fighter jet came at a time when relations between Beijing and Washington seemed to be heading in the right direction.
After Joe Biden and Xi Jinping met last year, US Secretary of State Antony Blinken was about to head to Beijing for a rare visit before the US spotted what it has called a Chinese surveillance balloon over its airspace.
China insisted it was an errant weather observation aircraft with no military purpose. Whatever it was, a sidewinder missile sent it crashing into the Atlantic Ocean.
In this issue, Daniel Kwan, our China news editor, looks at what one of the more unusual incidents means for US-China relations.
Andrew Mullen
Deputy Editor, Political Economy
Has the bubble burst on US-China relations?
The talk was “open and candid”, according to US President Joe Biden, when asked about his meeting with Chinese President Xi Jinping in Bali ahead of the G20 summit in November.
“So we covered an awful lot of territory. And - and I must say that he was as straightforward as he has been with me in the past. And I - I think that we understand one another, which is the most important thing that can be done,” Biden said after his lengthy meeting with Xi, while also announcing that he would be sending his top diplomat, Antony Blinken, to China to continue the conversation with Beijing.
The mending of their frayed relations – largely frozen in the past three to four years – appeared to warm further in January when Chinese Vice-Premier Liu He and US Treasury Secretary Janet Yellen met in Switzerland ahead of Blinken’s planned visit.
Analysts – in China and the United States – were then generally hopeful that the two superpowers were ready to repair their damaged ties and move on. Or to at least, as Biden has said many times, to establish “guardrails” in their relationship and work together in areas where the two countries share common interests.
But such hopes were dashed about a week ago – on the eve of the Blinken’s trip - when a Chinese balloon entered American airspace. Blinken postponed his visit saying its presence amounted to “a clear violation of US sovereignty” despite China's explanation that it was a scientific research vessel that had drifted off course due to “force majeure”.
Just two days after Blinken postponed his visit, a US F-22 Raptor shot down the balloon after it had traversed over the continent into US territorial waters.
This happened despite a call by Wang Yi, China’s top diplomat, that China and the US should handle the “accidental incident” in a “calm and professional manner”.
Initially, both sides kept their rhetoric diplomatic, with Blinken saying he still plans to visit China when conditions allow. China, meanwhile, reiterated its calls for calm and communication to control differences.
That raised hope that the controversy would be over soon and that both sides would tread carefully to avoid an escalation.
But it was then revealed that a phone call by US Defence Secretary Lloyd Austin to Chinese counterpart Wei Fenghe after the downing of the balloon was rejected. A Chinese defence ministry spokesman later explained that China turned down the request because the “seriously erroneous approach” by the US “did not create a proper atmosphere for dialogue and exchanges between the two militaries”.
The two sides then traded barbs, with the US saying it had no plans to return the remnants of the balloon, while China stressed it was Chinese, and not American property. Chinese ambassador to France, Lu Shaye, told French media that it would be “pointless” for Blinken to visit given the circumstances.
The most tell-tale sign of how fragile the China-US relationship has become came on Tuesday when both Biden and Xi delivered speeches celebrating their countries’ strength and superiority, stressing competition and showing little willingness for compromise.
How the saga, which now threatens to undo much of the goodwill created by the meeting in Bali, will unfold remains to be seen. While a visit by Blinken to China will unlikely happen in the next few months, both sides may keep the conversation going in multilateral meetings.
China’s Ministry of Commerce did say Beijing still welcomes a visit by Yellen. But with the stakes so high, both China and the US have much to lose if the relationship is not managed carefully. |
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| Let trade be the ‘stabiliser’ to China-US relations after balloon saga, senior Chinese diplomat says | | • | Senior Chinese diplomat in Washington hopes business will make good use of China’s opening-up, regardless of latest controversy | | | • | Xu Xueyuan says the incident should not be allowed to offset efforts by both sides to maintain stability in their relations |
| Trade is the “stabiliser” of China-US relations and should not be overshadowed by the balloon controversy, a senior Chinese diplomat in the United States told a virtual gathering of businesspeople from both countries on Wednesday. Xu Xueyuan, chargé d’affaires at Beijing’s embassy in the US, said the “accidental and occasional event of a civilian airship straying into US airspace” had created new difficulties in China-US relations. Read more |
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| China’s top diplomat urges US to ‘avoid misjudgment’ over balloon controversy | | • | Wang Yi tells US secretary of state both sides need to ‘manage and control differences’ | | | • | Blinken calls surveillance balloon’s presence in US airspace ‘a clear violation of US sovereignty and international law’ |
| China’s top diplomat, Wang Yi, has called for speculation and misjudgment to be avoided after an “accidental incident” – the detection of a suspected Chinese surveillance balloon over the United States – led to the postponement of US Secretary of State Antony Blinken’s trip to China. Wang, a member of the Communist Party Central Committee’s Politburo, told Blinken in a phone conversation late on Friday that both nations had communicated on how to handle the latest controversy in a calm and professional manner. Read more |
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| Balloon downing deepens fault lines in China-US relations: analysts | | • | Both sides will need to tamp down their rhetoric to avoid further unnecessary fallout, Chinese observer says | | | • | The episode highlights ‘the essential fragility and fraught nature of Sino-US relations’ |
| Washington’s decision to shoot down a Chinese balloon on the weekend will deepen the gulf of suspicion between the two powers, making it much tougher to improve the worst bilateral ties between them for decades, according to analysts. The US sent an F-22 fighter jet to bring down the balloon with an Aim-9X Sidewinder missile on Saturday after the Pentagon claimed the unmanned airship was surveilling strategic sites in the country. Read more |
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| US lawmakers urged to boost trade blocs, alliances after Chinese balloon row | | • | Top concerns about Washington’s efforts amid Beijing’s competitive advances aired at House hearings by financial services and armed services panels | | | • | Biden administration should renegotiate Comprehensive and Progressive Agreement for Trans-Pacific Partnership, ex-Trump official says |
| The Chinese balloon shot down last week by the American military became a main talking point at a US congressional hearing on Tuesday about economic challenges from Beijing, in which former government officials urged lawmakers to bolster ties with allies and trade blocs to counter China’s growing influence. A witness who advised former president Donald Trump said the US should return to an Asia-Pacific free trade bloc Trump withdrew from, while an ex-Biden administration official called on Washington to work closely with partners and “throw sand into the gears” of Chinese efforts to build an alternative international payment system. Read more |
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| China-US ties: will spy balloon fallout bring ‘instability’ to Southeast Asia? | | • | Many Southeast Asian states receive investment from the US and also trade in American services, which enables them to produce items they sell to China | | | • | Disruption to this system could hurt Southeast Asia at a time when the region is grappling with inflation and economic contractions, an analyst said |
| Southeast Asian countries are wary that the US-China fallout over the spy balloon saga could inject instability in the region at a time it faces inflation and economic slowdown, analysts said, as distrust widens between the world’s two largest economies. The US military on Saturday shot down what it said was a Chinese surveillance balloon that last week crossed into North American airspace, including over sensitive military sites. China insisted it was an accident involving a civilian aircraft and threatened repercussions for Washington’s “overreaction”. Read more |
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| China not expected to escalate row over downed ‘spy balloon’ | | • | Beijing has criticised the decision, but defence analysts generally believe it will not seek tit-for-tat revenge | | | • | Many in China regard the use of the F-22 to bring down the balloon an overreaction, but experts say it made sense from a technical point of view |
| Beijing is unlikely to escalate tensions following the shooting down of a suspected spy balloon, according to military analysts, who said the decision was probably taken with an eye on American public opinion. Many in China may regard the decision to use the US Air Force’s most advanced fighter, the F-22 Raptor, as unnecessary but the observers said the move made sense from an American perspective. Read more |
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| US expects to learn about China’s surveillance balloons, White House says | | • | Waiting to shoot it down allowed for ‘a better understanding to study the capabilities of this balloon’, National Security Council spokesman John Kirby says | | | • | Beijing maintains that the unmanned airship was for civilian research and has said the same about another Chinese balloon traversing South America |
| Analysis of the Chinese balloon shot down on Saturday will yield “valuable” information, a White House spokesman said on Monday, also confirming that the US had been investigating previous incursions by Chinese aircraft into US airspace before last week’s incident. “We came into office aware that the Chinese were continuing this programme of spy balloons and that they were continuing to try to improve … this military capability,” National Security Council spokesman John Kirby said, referring to the administration of US President Joe Biden, who took office in 2021. Read more |
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| When did China first know its balloon was in US airspace? | | • | Beijing says notification from the United States prompted immediate checks and call for calm | | | • | Second airship over Latin America also belongs to China, foreign ministry says |
| China suggested on Monday that it first knew one of its balloons had entered American airspace after it was notified by the United States. Asked when Beijing found out the balloon was in US airspace, Chinese foreign ministry spokeswoman Mao Ning said the country started its assessment after the US told it about the incident. Read more |
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In our next issue, we will look at the latest on China’s property sector, which is seen as a key pillar amid the ongoing economic recovery efforts.
We welcome your feedback. Email me at globalimpact@scmp.com. Plus, be sure to check out our China news feed for the latest news and analyses.
All the best, | Daniel Kwan China News Editor |
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