In an article previewing President Biden’s meeting with China’s Xi Jinping this week, Treasury Secretary Janet Yellen said the U.S. has “a pragmatic economic strategy: one that protects our vital national security interests while seeking a stable and healthy economic relationship” with Beijing. But in the perilous and fast-changing world of late 2023, Beijing doesn’t seem interested in that sort of balance. From supporting other authoritarians’ military efforts to trying to displace the U.S.-led global financial system, Mr. Xi is undermining the security of America and its allies. But China’s weakening economy offers an opportunity to win meaningful changes in Beijing’s policies. It will take a hard-line approach to get China’s attention.
Mr. Xi certainly won’t be soft in negotiations. He knows two major wars have sapped America’s diplomatic and military resources—in part because of China’s efforts.
Mr. Xi has tried to create an alternative to the Western financial and economic system created by the Bretton Woods Agreement. A major component of Beijing’s program is undermining the U.S. dollar as the world’s reserve currency and principal medium of global payments. That system—in combination with Western dominance of high-tech industries—allows the U.S. and allies to enforce sanctions.