US-China Relations at 40

2019 should be a year of celebration; it marks 40 years since the establishment of diplomatic relations between the United States and China. Bilateral trade and investment between the two countries has grown exponentially from $5 billion in 1980 to $710 billion in 2017; student exchange and tourism numbers have soared; and peace has been maintained in the Asia-Pacific. Yet, over the past several years, trade tensions have risen to an all-time high; there is talk of military conflict over Taiwan and in the South China Sea; concerns have flared in each country over the political influence of the other; and the two countries have launched an all-out competition to define the values and norms underpinning the international order. In a number of respects, the current bilateral relationship is under more stress than at any time since the normalization of relations.

This deterioration reflects the collapse of two implicit understandings that have underpinned the bilateral relationship for the past 40 years: First, that both Beijing and Washington would minimize near-term disputes around areas of conflict, such as trade, Taiwan, and human rights, in order to preserve a façade of accord and work quietly to advance cooperation over the longer term; and second, that they would operate within a paradigm of “engagement,” in which the United States would help China develop the domestic norms and institutions that would enable it to be a positive contributor to the current international system. As a result, the U.S.-China relationship was defined as much by an ability to “manage” enduring frictions as by real advances in cooperation. Today, however, Washington is no longer willing to maintain the illusion of progress in hopes of future substantive cooperation, and China is no longer willing to be tutored by the United States on how to reform at home and engage abroad.

Ultimately, the 40th anniversary of the normalization of relations between the United States and China is likely to be heralded as the year in which the relationship realizes a new normal rooted in a new set of understandings. One feature is almost certain: a more open embrace of conflict and competition. This competition is also likely to involve other countries, as both the United States and China seek outside support for their respective visions. What is less clear, however, is whether either country has the political foresight and wherewithal to develop additional understandings that will help prevent this competition from hardening into a cold war or triggering a military conflict.

The Managed Relationship

For the United States, engaging China has been a consistent theme of the bilateral relationship since well before the establishment of diplomatic relations in 1979. And for much of that time, engaging China equated to changing China. As early as the 1950s, U.S. Secretary of State John Foster Dulles delivered a set of three speeches in which he articulated the view that the United States should work to engender peaceful evolution (to democracy) in communist countries – through support for opposition forces, cultural subversion, and information warfare. Along these same lines, even before becoming president, Richard Nixon laid out his vision for China in a 1967 Foreign Affairs article: “We simply cannot afford to leave China forever outside the family of nations, there to nurture its fantasies, cherish its hates and threaten its neighbors. The world cannot be safe until China changes. Thus our aim, to the extent that we can influence events, should be to induce change.” President Jimmy Carter, while arguing that the United States and China should make their differences “sources not of fear, but of healthy curiosity; not as a source of divisiveness, but of mutual benefit,” nonetheless believed that U.S. foreign policy should be rooted in its moral values.

In one form or another, U.S. administrations expressed a desire that China reform and a belief that the United States could contribute to that process. There was a clear link between Nixon’s commitment to bring China into the international system and Dulles’ notion of peaceful evolution. President Bill Clinton, for example, in arguing for China’s entry into the WTO claimed:

Of course the path that China takes to the future is a choice China will make. We cannot control that choice; we can only influence it. But we must recognize that we do have complete control over what we do. We can work to pull China in the right direction or we can turn our backs and almost certainly push it in the wrong direction. The WTO agreement will move China in the right direction. It will advance the goals America has worked for in China.

Robert Zoellick, who served as deputy secretary of state during George W. Bush’s administration, delivered perhaps the fullest articulation of engagement’s ultimate objectives in his keynote address at the National Committee on U.S. China Relations’ 2005 gala. Zoellick outlined a set of emerging challenges posed by China’s rise: a lack of transparency in supporting bad actors on the global stage, a failure to protect foreign intellectual property, a mounting U.S.-China bilateral trade deficit, and a potential for China’s desire for “predominance of power” in Asia to cause conflict. The solution to these problems rested not only in addressing China’s behavior on the international stage but also in transforming China’s political system at home: “Our goal… is to help others find their own voice, attain their own freedom, and make their own way… Closed politics cannot be a permanent feature of Chinese society. It is simply not sustainable. China needs a peaceful political transition to make its government responsible and accountable to its people.”

China, for its part, participated in, and at times greatly valued, this process of engagement (although not necessarily the evangelism around democracy). As a number of studies have documented, in areas as wide-ranging as trade, public health, and the environment, the United States and other advanced economies trained Chinese officials, helped develop many of the country’s laws and regulations, and supported Chinese civil society. China’s economy flourished as it gradually opened to greater levels of foreign investment, and civil society expanded dramatically throughout the 1990s and 2000s as partnerships were forged between Chinese domestic nongovernmental organizations (NGOs) and their foreign counterparts. At one time, foreign NGOs and foundations provided well over half of the funding for China’s rapidly developing environmental NGO movement. U.S. NGOs actively trained Chinese political activists interested in advancing concepts such as free and open elections.

Moreover, the Chinese government actively sought ways to reassure the United States and other countries that as its economic and military power increased, it would not pursue a path of military dominance nor seek to upend the established world order. Throughout the mid-2000s, the words of former senior CCP official Zheng Bijian concerning China’s “peaceful rise” were widely cited as evidence supporting Beijing’s desire to maintain the status quo in the international system. Of course there were discordant voices that questioned the utility of the peaceful rise concept. Some Chinese believed that it improperly limited Beijing’s choices with regard to Taiwan; force, they argued, should not be off the table as a means of resolving the question of Taiwan’s status. Others considered it “demeaning” that China would attempt to subordinate its interests to placate the United States.

At the same time, where Chinese and U.S. interests clearly diverged, the two countries often developed alternative but parallel narratives. The clearest example has been the effort by Beijing and Washington to manage their differences around the status of Taiwan. Even as Carter abrogated diplomatic recognition of Taiwan in favor of formal ties with mainland China, shortly thereafter Congress passed and Carter signed the Taiwan Relations Act. The act called for the United States to provide arms and defense services adequate for the self-defense of Taiwan and ensured that the United States and Taiwan would maintain cultural, commercial, and other “unofficial relations.” In 1984, when President Ronald Reagan traveled to Beijing and met with Premier Zhao Ziyang, the official Chinese record of the visit acknowledged that Reagan “stressed his intention to continue arms sales to Taiwan and was an ardent defender of Taiwan’s independence,” but nonetheless noted that the president “listened with great care to a nine point Chinese plan for absorbing the island state.” At the same time, Chinese television simply deleted Reagan’s references to the need for democracy and belief in God.

The value of engagement as defined largely by the United States began to be questioned by Beijing as early as 2008. The global financial crisis and seeming collapse of the U.S. economy marked a turning point for many Chinese, who no longer considered the United States’ system as worthy of emulation. As Vice Premier Wang Qishan told U.S. Treasury Secretary Hank Paulson: “You were my teacher, but look at your system, Hank; we aren’t sure we should be learning from you anymore.” At least one leading Chinese economic official called publicly for the world to consider a new global currency to replace the dollar as the world’s reserve currency. China’s peaceful rise narrative also lost currency during this time, replaced by a more forceful set of foreign policy voices that began to envision China as the dominant player in the Asia-Pacific. In part in response to this new-found Chinese assertiveness, the Obama administration in 2011 also articulated a more forward leaning presence in the Asia-Pacific, outlining a new U.S. strategy – the pivot or rebalance – that envisaged a greater degree of U.S. military, economic, and political engagement in the region. The competitive elements in the relationship accelerated significantly, however, with the advent of Xi Jinping as general secretary of the Chinese Communist Party in 2012 and the election of Donald Trump as president of the United States in 2016.

Enter Trump and Xi

After four decades of managed conflict, Chinese President Xi Jinping and U.S. President Donald Trump have introduced a new dynamic into the U.S.-China relationship. There is little interest in papering over differences, developing parallel narratives, or subsuming conflict in the near term in the hopes of promoting cooperation over the longer term. Within the United States, “engagement” as a strategy for inducing change in Chinese behavior at home or abroad is no longer discussed seriously. Yet even as this new, more competitive bilateral relationship emerges, the foundations for managing it have yet to be established.

For his part, Xi Jinping has transformed China’s domestic and foreign policy landscape. He has introduced regressive and repressive policies at home and ambitious and expansive policies abroad, both of which have diminished areas of common ground between China and the United States. At home, Xi has consolidated power into his own hands and reasserted the authority of the Communist Party into everyday Chinese political and economic life. He has also sought to limit opportunities for the international community to influence Chinese political and economic development. The highly restrictive 2017 Law on the Management of Foreign NGOs, for example, reduced the number of foreign NGOs operating in China from more than 7,000 to just over 400. The Made in China 2025 industrialization policy limits opportunities for multinationals to compete on a level playing field in 10 areas of advanced technology, and new restrictions on the internet limit opportunities for Chinese citizens to access information both within China and from outside the country.

Xi has also adopted a far more ambitious foreign policy that seeks to enhance China’s role on the global stage in important new ways that often conflict with U.S. interests. Close to home, Xi has moved from staking claims around Chinese sovereignty in the South China Sea to realizing them. He built up and militarized seven artificial features in the South China Sea, while at the same time rebuffing a ruling by the international Permanent Court of Arbitration that rejected Chinese sovereignty claims. He has also sought to expand China’s economic, political, and military reach through his 2013 Belt and Road Initiative (BRI). The BRI was initially conceived of as a contemporary version of the ancient Silk Road and maritime spice routes, connecting China to the rest of Asia, the Middle East, Europe, and Africa through ports, railroads, highways, and pipelines. Over time, it has evolved to include a digital belt and road, with Chinese firms developing e-commerce, fiber optic cables, and satellite systems. There is a security component, too: China has established its first military logistics base in Djibouti, with more such bases likely to follow.

Perhaps most ambitious is Xi’s effort to promote China as an alternative development model for other countries, different from that of market democracies. While thus far there is no evidence that China is trying to export communism, Chinese officials are providing the technology and training for their counterparts in several developing countries on how to control the internet, manage the media, and silence dissenting voices. Xi has also boosted China’s voice in international institutions and regimes, particularly around issues of human rights, development, and internet governance, as he seeks to reform international norms in ways that more closely reflect Chinese values and ideals.

One of China’s leading scholars of the United States, Wang Jisi, places responsibility for the change in the dynamics of the U.S.-China relationship squarely on China. In an October 2018 interview, he commented:

For over 200 years, the United States has never changed its strategic goals for its relationship with China: free flow of goods and capital, and free flow of information and values. Chinese have always had reservations or imposed boycotts to oppose these two goals. We should criticize and have reason to criticize the United States, but we should realize that China’s own actions have changed Sino-U.S. relations and U.S. perception of China… if we are looking for the cause, it was the change in Chinese policy that led to adjustments in U.S. policy toward China. U.S. policy has changed because China changed.

Yet the traditional understandings of U.S.-China relations did not fully begin to unravel until the election of Donald Trump. Both Trump’s approach to China and his approach to the United States’ role on the global stage have undermined the foundations of the relationship. On the one hand, Trump places little value on the U.S. role in upholding the institutions of the liberal international order. He has withdrawn the United States from the Paris Climate Accords, the International Postal Union, and the United Nations Human Rights Council, and has threatened to withdraw from the World Trade Organization. He views multilateral institutions more as constraints on U.S. power than as vehicles for advancing U.S. interests through global cooperation. As a result, unlike previous U.S. presidents, he does not try to work with China in these or other international institutions. His concerns around Chinese domestic policies are limited to those he perceives as directly infringing on U.S. interests. For example, his administration has attacked Made in China 2025 for creating an uneven playing field for U.S. companies.

At the same time, Trump has rejected any pretense of papering over differences with China or maintaining alternative narratives in order to preserve stability in the relationship. Vice President Mike Pence’s October 2018 speech on China set the tone for the administration’s new policy, portraying China as adopting a “whole of government” approach to competing with and undermining the United States. The president has mounted an open campaign to hold China publicly accountable for all perceived infractions, from cyberattacks to influence operations, and from state-owned enterprise (SOE) subsidies to weak financial governance principles in its Belt and Road lending. Furthermore, the Trump administration is tightening up the regulations governing foreign investment in the United States, strengthening export controls on advanced technology, and exploring ways to limit Chinese students and researchers’ exposure to U.S. labs involved in advanced technology research.

While some of these steps may be necessary given the current environment, it is difficult not to be nostalgic for the moment 35 years ago when President Reagan articulated a radically different vision for U.S.-China partnership:

Today, I bring you a message from my countrymen. As China moves forward in this new path, America welcomes the opportunity to walk by your side… the relaxing of export controls reflects my determination that China be treated as a friendly non-allied nation and that the United States be fully prepared to cooperate in your modernization… to share the knowledge that is America’s key technology – management and science skills to develop a nation.

Conclusion

The U.S.-China relationship has always been characterized more by conflict than cooperation. Only the concerted effort of the countries’ leaders to emphasize areas of cooperation over more fundamental areas of discord have prevented the relationship from deteriorating significantly over time. Yet Trump and Xi have both elevated competition over cooperation, and neither has taken significant steps to diminish the growing tensions in the relationship. Returning the U.S.-China relationship to more stable footing will require both Xi Jinping and Donald Trump to recommit to the importance of the relationship, while at the same time addressing both the proximate causes of concern and the longer-term sources of instability in the relationship.

Given the new reality in both China and the United States, how is conflict best managed moving forward? China holds one important card in its hands. It should relax some of the restrictions that it has placed on foreign engagement with Chinese civil society and undertake long-promised structural economic reforms to level the playing field for multinationals. These steps would contribute to reduced tensions and simultaneously strengthen two of the traditional pillars of the U.S.-China relationship – the U.S. NGO and business communities – that have become less vocal supporters during Xi’s tenure.

The Trump administration, for its part, should ratchet down the China threat narrative it has adopted and reduce the extent to which it frames conflict with China in a bilateral context. It should instead approach areas of tension quietly and methodically, deepening its outreach to like-minded allies and partners. Issues such as intellectual property rights protection, influence operations, and the South China Sea lend themselves to coalitions. Framing everything as a contest between the United States and China enhances the likelihood that China will simply claim the United States is trying to contain it and reduces the chance that pressure will result in China changing its behavior.

Moreover, both sides should work together to mitigate risk. Brookings scholar Ryan Haass has suggested reviving the practice of “no surprises” – a pillar of the “New Model of Great Power Relations” the Obama and Xi administrations outlined in 2013 – to reduce the risk that either side will misinterpret the other’s actions. This would seem particularly important in the context of potential military conflict in areas such as the South China Sea and Taiwan. Particularly as China builds its naval presence, a crisis situation is not a vague hypothetical. In October 2018, American and Chinese warships came dangerously close to a collision in the South China Sea. As Haass points out, the reinvigoration of long-standing risk reduction work-streams would reduce the possibility of miscalculations that could lead to rapid escalation.

Certainly, as some prominent analysts now claim, U.S. engagement with China failed to realize U.S. objectives of changing Chinese domestic and foreign policy. But engagement has not failed entirely, and the United States should retain the elements that serve its own interests. The United States and China should identify a significant global challenge on which the two countries could partner effectively, as Obama and Xi did around the issue of climate change. Possibilities might include standards around development finance or drug trafficking. Cooperation on global issues will not be enough to transform the bilateral relationship but it will be helpful in ensuring that even as the relationship seeks to establish a new, more competitive normal, the world’s dominant powers continue to contribute to the broader global good.

U.S.-China relations has descended to a new normal defined by confrontation and competition. The fundamental underpinnings of the relationship have broken down: Long-term cooperation has been sidelined for short-term political victories, and “engagement” has proved ineffective in many arenas. It is incumbent on the leaders of both countries, however, to take concrete and pragmatic steps to prevent their relationship from hardening into mutually destructive cold war or kinetic conflict.