Former Biden administration official Peter Harrell recently argued that with regard to reform of China's economic practices (and political system), the original plan was to hope that economic ties would be enough, but when that didn't work the Trump administration imposed tariffs for this purpose:
For many years, the strategic paradigm of U.S. trade policy toward China was defined by the hope that economic ties would persuade China to continue on a course of gradual economic and political liberalization. By the mid-2010s, it was clear that this paradigm had failed, prompting Trump to impose sweeping tariffs in a bid to generate negotiating leverage to compel China to change its economic model. China responded to the tariffs, initially with retaliatory tariffs on U.S. exports like agricultural products, and ultimately Trump offered tens of billions of dollars in assistance to U.S. farmers to offset the impacts of Chinese tariffs. Later, China offered a handful of concessions as part of a “Phase 1” trade deal, largely to avoid a threatened future tariff escalation. However, China steadfastly refused to make more fundamental changes to its economy and market, and there is no evidence that China’s willingness to reform has increased in the years since.
People hoping for China to evolve on its own in terms of economic and political liberalization may have been looking at South Korea and Taiwan as models. That wasn't totally unreasonable, but the parallels between South Korea/Taiwan and China are limited, so a similar path for China may not have been likely.
With regard to economic liberalization specifically, rather than wait for China to change on its own, a more active strategy of pushing for economic reform was probably necessary in the years after China joined the WTO. That would have been a good foreign policy priority for the U.S. at that time.
Actually, it would still be a good priority for the U.S., as I'm not sure Chinese economic liberalization is a U.S. priority even now. As I recently wrote in a short piece for the Baker Institute, it seems clear that the Section 301 tariffs have not accomplished much on these issues. Perhaps they were intended for this purpose, but unilateralism of this sort has not had much success in the past, and the evidence is accumulating that it still does not work very well. Section 301 tariffs might be a way to protect U.S. producers from Chinese competition, but they aren't doing much to induce policy change in China.
As an alternative, I think WTO complaints would be more effective, although of course it does not seem likely that USTR will bring such complaints any time soon. Australia, the EU, and Japan have had a few recent complaints against China, but the big systemic issues related to non-market practices have not not addressed. It's hard to figure out what everyone's strategy is here, but as I see it, China made some broad commitments when it joined the WTO, and it seems like it could be useful to try to hold China to them. Here's how I concluded the Baker piece:
Sometimes “toughness” is judged by attitude, but results are what matter most. It is increasingly clear that U.S. unilateralism is coming up short on effectiveness. China committed to obligations tougher than any unilateral measures, and yet successive U.S. administrations have underutilized WTO enforcement — with the Biden administration totally abandoning it.
This is a mistake. If we are serious about pushing China to play an appropriate role in the world trading system — one commensurate with its status as an “upper-middle-income country” — we should make this a priority and hold China to the obligations it agreed to.