China should chase "all possible cooperation" with its Asia-Pacific and European trading partners to counter pressure from the US, which has recently doubled down on building a Western front against Beijing, says a Chinese think tank.

The country should strengthen its global trade and investment landscape on all fronts to reduce dependence on the US, according to a report issued on Wednesday by the Beijing-based Chongyang Institution for Financial Studies at Renmin University of China.

"US containment and suppression of China will not change, especially the hi-tech blockade and moves to lock China within small circles under a 'democratic country' ideology," the report's authors say. "[The Biden administration] has gone further than Trump in gathering allies to contain China."

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The report's publication came ahead of the second US-EU dialogue on China on Thursday, co-chaired by US Deputy Secretary of State Wendy Sherman and Stefano Sannino, Secretary-General of the European External Action Service.

A senior US State Department official said in a press statement previewing the US-EU dialogue on China on Wednesday that a "robust" statement from the dialogue was expected, covering a wide range of topics. "This reflects the increasingly convergent US and EU outlook on [China] and its increasingly concerning behaviour," said the official. "And it shows the effectiveness of our approach to rebuild our alliances and partnerships as we compete with the People's Republic of China (PRC)."

The comments mark the latest move in Washington's diplomatic offensive against Beijing, following a renewal of the trilateral partnership with the EU and Japan in November, a new agreement on steel and aluminium with the EU in October and Aukus - a trilateral security pact with Australia and the United Kingdom - established in September.

President Joe Biden's approach to countering Beijing marks a departure from the Trump administration, which was criticised by EU politicians and business leaders for adopting a unilateral rather than a multilateral stance on geopolitical, military, trade and technology issues. The EU has also said that the phase one trade deal between the US and China under Trump amounted to "managed trade", which squeezed EU business in the world's second-largest economy.

"We have certainly consulted with the EU on our approach to trade issues with the PRC," the US official said. The official said Thursday's meeting would focus on economic and technology issues, human rights, multilateralism, disinformation, security, and how to pursue "results-oriented cooperation" with the PRC where interests align.

The US and EU have shared concerns about state-owned enterprises [in China], broad level playing field issues and "economic coercion" which the two sides see from China, the official said.

The Chongyang Institution report calls on China to keep its trade size with the EU at least 10 per cent bigger than the size of US-China trade, and to continue to push for an unfreezing of the bilateral investment treaty with the EU.

"Our strategy should not only focus on China and the US but should unfold on a global scale so that we can better deal with trade relations between China and the US," He Weiwen, a senior fellow at the Chongyang Institution, said in the report's release conference.

"[We] should expand more cooperation with our Asian neighbours, Europe and countries along the Belt and Road Initiative, so that we will have more confidence in the economic and trade struggle with the US," he said.

The report says that China should adhere to its own narrative on the basis of multilateral rules rather than the self-claimed "international rules" flagged by the US. The report also calls for trade-related talks between China and the US to come under the umbrella of the World Trade Organization. China must also seek deeper cooperation with Japan, South Korea and Europe in semiconductors, aviation transmitters and industrial robots.

The report states that China's rate of trade growth with Asean and the EU is now ahead of the US.

Huo Jianguo, the former head of a think tank under the Chinese Ministry of Commerce, said on November 18 that after failing with "decoupling" moves, the US had decided to build alliances against China. He said Beijing should not become embroiled in a war of words though and instead focus on strengthening its own economy.

"Given China's economic size, as long as our own growth remains stable, there is nothing others can do to you," he said.

Meanwhile, Wang Wenbin, a spokesman for China's foreign ministry, said at a press conference on Thursday that the parties concerned needed to abandon a cold war mindset. "The practice of setting up a small circle with ideological lines is not conducive to world peace and stability, harms others and harms oneself, and the loss outweighs the gain."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.

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