China, the US, and Realistic Expectations

Xi Jinping and Donald Trump (White House)

by Daniel Wagner

Deng Xiaoping once said that “the China-U.S. relationship can never be too good or too bad” because it is too important. In other words, meaning the leaders and people of both countries should be realistic about how close their bilateral relationship can be at any given point in time, and they should never let their disagreements get so out of hand that it threatens their general peace and prosperity. Although China recognizes America’s unique position as the world’s sole superpower (for the time being, at least), its political orientation and national pride dictate that it pursue its own political and developmental path. It has also pursued an independent foreign policy that it believes (and would like the rest of the world to believe) is ultimately aimed at achieving peace in Asia and elsewhere. Many countries in Asia, and the world, are highly skeptical about this so-called “peaceful development,” pointing to China’s unilateral actions in the South China Sea as directly contrary to that objective.

China views itself and the United States as “different, but not distant” because Confucian philosophy advocates “accommodating divergent views.” President Xi has repeatedly said that the Pacific Ocean is vast enough to accommodate both China and the United States. He has proposed a new model of international relations aimed at avoiding confrontation and conflict, and respecting one another’s political systems and national interests, while pursuing joint win-win cooperation. That all sounds good on paper. The question becomes whether and how Confucian philosophy may become more consistent with current international law, whether both sides can reach an understanding about how China’s rise may coincide with America’s gradual decline as a global power, and how China’s neighbors will view ongoing territorial disputes in the future. Much will depend on how far all sides are willing to reach across the table and genuinely compromise.

China’s dual strategy of claiming to want to pursue diplomatic negotiations on the South China Sea dispute, while simultaneously continuing its unilateral construction activities on its islands, creates an environment that is not conducive to honest and meaningful negotiation. Maintaining equilibrium—between China and its neighbors, as well as China and the United States—will remain of paramount importance. Sino-US relations will remain the world’s most important bilateral relationship for many years to come, with implications for the entire world. The people of both nations have much more to gain by maintaining a friendly and cooperative relationship with each other, rather than the other way around. It will clearly take a great degree of wisdom, an appreciation of history, and a willingness by all sides to compromise to maintain mutual peace and prosperity.

Washington is really looking for three things from Beijing: play by the same set of rules everyone else is expected to play by, level the playing field with respect to a more equal trading relationship, and act as a responsible global leader by doing its part to promote global development and maintain peace. On its face, there is nothing unreasonable about any of this. , but from the Chinese perspective, it is merely doing things the Chinese way and sees no reason for any other nation to object to its actions.

Beijing, in turn, wants Washington to mind its own business and not interfere in what it considers to be Chinese domestic issues, practice what it preaches and stop being hypocritical about its own rhetoric versus its own actions around the world, and stop trying to impede China’s inevitable rise. There is clearly incongruity between what both are seeking and what either may be prepared to deliver. What differentiates this challenge from that of any other two nations is that both countries need each other in order to prosper and either one can cause insurmountable problems politically, economically, and militarily for the other.

Given the inherent inequity in the two nations’ trading relationship, and Beijing’s ongoing insistence on continuing with its theft of intellectual property and high level cyberattacks, it is up to President Xi to demonstrate that China is willing to modify its behavior. Many in the U.S. government will believe that when they see it-on a sustained and unwavering basis. That appears unlikely. What appears to be more likely is that Beijing will continue doing what it has been doing and getting away with whatever it can get away with.

With China the ascendant power and the US in gradual decline, President Xi has little real incentive to change the Chinese playbook on a wholesale basis. That means that the United States should reset its expectations about future Chinese behavior. The modern trading system does not and cannot prevent China’s state-owned enterprises from blurring the line between commercial interests and national interest. Chinese government funds subsidize and protect Chinese companies as they purchase dual-use technology or distort international markets. To effectively counter more of the same from China in the future, the United States needs a strategy, not merely tactics.

Such a strategy would ideally be executed in conjunction with other large and strong countries opposed to Chinese tactics in the West. The Trump administration’s disdain for collaboration with America’s historical allies, and the institutions it was central to creating in the post-War era, should be replaced with a global alliance of the willing. This is not merely America’s issue or battle, for the same bones of contention Washington has with Beijing are shared, to a greater or lesser degree, by countries around the world. That is the only way Beijing will become incentivized to change its behavior. When America competes with China as a guardian of a rules-based order, it starts from a position of strength.

Although there is some degree of inevitability in the notion that Beijing and Washington will end up as rivals, it is not inevitable, nor is it inevitable that such rivalry must lead to war. Henry Kissinger has opined that the Sino-U.S. relationship should not be considered a zero-sum game, and that a prosperous and powerful China should not, in and of itself, be considered an American strategic defeat. Both countries are compelled to interact. The question is whether they will do so as collaborators or adversaries.

China’s greatest strategic fear is that an external power will establish a periphery capable of encroaching on Chinese territory (which helps explain Beijing’s actions vis-à-vis the South China Sea). America’s greatest strategic fear in Asia is that its interests and military capability will become overwhelmed by another power. A strategy that presumes confrontation in the future might be completely justifiable in the business, military, and cyber arenas, but that does not necessarily imply confrontation if Beijing modifies its behavior to stop stealing intellectual property and level the playing field in the trade arena. By the same token, Washington must understand that China’s rise is inevitable, just as is America’s eventual decline as the world’s leading power. The question is whether superpower rivalry will succumb to historical precedent.

Daniel Wagner is CEO of Country Risk Solutions and author of the new book China Vision.

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  1. The United States is no position to demand anything from the Chinese regarding cyber-attacks or trade practices. The NSA is spying on just about everybody around the world and the CIA conducts cyber-attacks on many nations. The United States entertains the same incestuous relationship with the armament industry as China does with its state-owned corporations. The United States and China are now irremediably linked commercially. The United States cannot do without many Chinese products, and China cannot do without the American market.
    The only viable solution going forward is for both nations to seat down and talk with no precondition. Only through a give-and-take compromise will they be able to resolve their differences for the benefit of both and the rest of the world. It would make sense to associate Europe and Japan to those negotiations at some point.

  2. Daniel Wagner phrases an underlying question as: ‘whether and how Confucian philosophy may become more consistent with current international law’. He then buries in his text these sensible thoughts. ‘From the Chinese perspective, it is merely doing things the Chinese way.’ ‘President Xi has little real incentive to change the Chinese playbook.’ ‘The United States should reset its expectations about future Chinese behavior’. ’Henry Kissinger has opined that the Sino-U.S. relationship should not be considered a zero-sum game.’

  3. In China that I worked and observed, the SUN is on the rise while in many other places sun is setting! The US is not going to have the American and European investors returning their investments back home easily even with imposing high tariffs on their exports in to the US and EU for a long while! The US is pounding its chest because of its old and outdated mentality which is “Man Machismo” backed by a strong military. There are limitations to the military strength as we have seen it for the past 2 decades. The US needs to reset its mentality and behavior and approach others with respect based on mutual interests in order to perhaps regain its leadership position in the world once it has earned the trust of others! And that is a very challenging task like climbing the Mount Everest!

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