SERIES: Brookings East Asia Commentary | Number 64 of 82 « Previous | Next »

Beijing’s Wish List: A Wiser China Policy in President Obama’s Second Term

Chinese observers of the United States and China-U.S. relations relaxed when U.S. news organizations reported, on November 7 in China, that Barack Obama had been reelected president of the United States. America watchers felt that a period of uncertainty in Sino-U.S. ties that may have accompanied a Romney presidency had been avoided. This does not signify great satisfaction in Beijing with bilateral relations during Obama’s first term or fear of the policies of a President Romney, but rather indicates an expectation that President Romney would have progressed through a learning curve in dealing with China that may have temporarily upset relations.

From the Chinese perspective, Sino-U.S. relations during the first Obama administration deteriorated “from a high start to a low ending,” leaving a legacy of growing mutual suspicion and rising competition between the two countries, especially in the Asia-Pacific region. In spite of the agreement reached between the two sides on building a “positive, cooperative, and comprehensive relationship,” they missed opportunities for more cooperation while mishandling and even misguiding bilateral ties on some points.

The next four years are crucial for Sino-U.S. relations. China will be led by a new leadership that is more self-confident and more attentive to its public opinion. The further narrowing of the power gap between China and the United States will generate more anxiety in Washington. The competition between two countries in the Asia-Pacific may pick up momentum. At the same time, the world’s two largest economies will be required to cooperate and coordinate to promote global governance and address regional and global challenges.

Onus is on the United States

Although China has demonstrated more confidence and tried to take more initiative in bilateral relations over the past several years, it remains largely in a reactive position vis-à-vis the United States, while Washington continues to play a more significant role in shaping ties between two countries. Assuming that this dynamic will continue, the main burden for improving Sino-U.S. relations falls on the United States.

Fortunately, relations with China over the next four years present a lot of opportunities for the United States. China’s new leader Xi Jinping, who paid a successful visit to the United States in early 2012, feels comfortable in dealing with the United States. He wants constructive and cooperative ties with Washington and proposed to develop a new type of major power relationship between the two countries. Economically, China will become even more important to the United States as an export market, source of foreign direct investment, and a major holder of U.S. Treasury securities. Also, as Beijing seeks to play a more active role in international affairs with its rising capability and influence, there will be more opportunities for the United States to work together with China to promote global governance.

Such development requires a wiser China policy in Washington, and has to start with a sound understanding of China and Sino-U.S. relations which will provide an intellectual framework for thinking about and making U.S. policy toward China. First, although dealing with China’s rising power and influence stands at the core of U.S. thinking about China, it is very important that Washington should not put this issue just in a bilateral context, but rather view it against the backdrop of an ongoing global transformation featuring the rise of developing countries and a shift of power from the West to the East. This understanding would help U.S. policy-makers adopt a broader perspective on China’s remarkable development and avoid a narrow and zero-sum thinking.

Second, managing the rise of major powers has never been easy and requires a contemplated grand strategy. The past may provide some useful clues in this regard, but in the era of globalization and interdependence, dealing with this challenge requires more new and creative thinking than in previous epochs. Old thinking leads to the past while new thinking leads to the future. Some U.S. policy-makers may be more familiar with traditional diplomatic strategies and instruments―such as “balance of power,” “alliance,” and “geopolitics”―and may feel more comfortable in applying these ideas to China, but this is not helpful for managing relations with China in the 21st century.

Third, to think about and manage relations between China and the United States, it is crucial to always bear in mind the big picture, and to adopt a strategic and long-term rather than a tactical and short-term approach. Also, as the Chinese like to assess the intention of its counterpart and view any given individual interaction as an integral part of a process to build a long-term connection, it is important to consistently maintain credibility in bilateral engagements. Double-dealing with China may bring about some tactical and short-term gains, but will cost one China’s trust and in the long-run undermine one’s position in dealing with China. This happened during Obama’s first term and should be avoided in the second term.

The “rising power” phenomenon

Given the current low level of mutual trust between China and the United States, the two nations should start a serious dialogue about their respective visions for the future of bilateral relations. Earlier this year Beijing expressed to Washington an interest in building a “new type of relationship between major countries” featuring “no confrontation, no antagonism, mutual respect, mutual benefit.” The rationale behind this proposal is that if China and the U.S. are to avoid repeating the tragedies of major power politics that have played out so often in history, they need to embrace new thinking and create a new and unique vision for the relationship. This not only coincides with Beijing’s repeatedly stated desire for peaceful development, but also serves to address the biggest challenge confronting Sino-U.S. relations: how to avoid conflict between a rising power and an existing hegemon. The Obama administration should welcome this proposal and sit down with the Chinese to discuss what this means for overall bilateral ties and how they can work together to get there from here.

Today state-to-state interactions between China and the United States occur at three levels: bilateral, regional and global. While bilateral interactions continue to form the basis of overall relations, regional and global interactions are expanding and producing more and more impact on Sino-U.S. ties. A balanced and stable Sino-U.S. relationship should be based on positive interplay among the three levels. In the last two years, however, the Obama administration’s strategy of rebalancing toward Asia has not only heightened the role of regional interactions in Sino-U.S. relations, but also generated negative impact on the other two dimensions, thus affecting the healthy development of the overall relationship. To some extent, the rebalancing strategy has caused imbalance in Sino-U.S. relations. To address this problem, it is desirable that in its second term, the Obama administration will not only give more weight to bilateral and global dimensions, but also reduce the negative impact of its regional policy on relations with China.

Trade and economy

On the economic front, the Chinese side hopes that in the next four years the Obama administration will resist the temptation of protectionism on trade issues, take steps to lower barriers to the export of high-tech products to China, and improve the environment for Chinese direct investment in the United States. Sino-U.S. trade relations experienced their most fractious period over the last four years due to the high unemployment rate and other economic difficulties confronting the United States. As the recovery gradually gains traction and exports to China further expand over the next four years, the Obama administration should exercise self-restraint in launching protectionist measures against China. Although the Obama administration signaled over the past several years its intention to lessen controls of high-tech exports to China, there has been no real progress so far. If Washington can deliver something substantive on this issue in the years to come, it will not only enhance U.S. exports to China and reduce the bilateral trade imbalance, but will also send a positive signal to China regarding American intentions. Finally, in a time when Chinese firms are increasing their overseas investment, the United States should not allow unwarranted security concerns to block Chinese investment; this will not only cause the United States to lose more job opportunities, but also will provoke Chinese retaliation against U.S. investment in China.

Defense

As China’s defense modernization makes steady progress, managing security relations will also be a major challenge for the Obama administration over the next four years. First of all, the United States should not overreact to China’s military development. China has varied and complicated security challenges to cope with. As its economy grows, it can afford to devote more resources to its defense establishment to deal with these challenges. Upgrading its large and relatively backward military machine is both normal and understandable. The United States should not just focus on the kinds of capabilities the People’s Liberation Army (PLA) pursues, but should pay attention to how China will use its military power.

China’s growing defense capability may undermine U.S. military dominance in the Western Pacific and constrain Washington’s freedom to exercise its military muscle in this part of the world, but China’s ultimate purpose is to deter the United States from intervening militarily in adjacent areas like the Taiwan Strait, not to challenge U.S. dominance in the entire Pacific. Secondly, the U.S. military should constrain its tendency to view China as an enemy and treat it as such. For instance, the Air-Sea Battle concept that has been announced by the Pentagon is designed to guide U.S. thinking on fighting a major war in the Western Pacific under the circumstances of the PLA developing its anti-access and area-denial capabilities. If this concept is allowed to reshape the entire U.S. military posture in this region, it will send a strong signal that the United States is preparing for a major conflict with China, just as it did during the Cold War period with the Soviet Union. This will not only invite strong reactions from China, but will also aggravate the regional security environment.

On another front, the lasting, frequent and close military surveillance on China by the United States from both air and sea stands as an irritant to bilateral military relations. For the Chinese, it is simply provocative and intolerable. In fact, it gives rise to the PLA’s suspicion of U.S. strategic intentions toward China and also runs the risk of causing some incidents between two militaries in the air or on the sea, as have already occurred in the past. The United States should exercise some self-constraint and ask itself whether it really needs to conduct so many intrusive surveillances on China. It should also curtail such activities in China’s adjacent areas―especially as Sino-U.S. military exchanges grow and increase the transparency about China’s military development.

Asia-Pacific regional policy

The last four years have witnessed growing U.S. diplomatic, economic, and security input to the Asia-Pacific region under the strategy of rebalancing the focus of its foreign relations toward Asia strategy. Although some may hail this as a major diplomatic achievement of the first Obama administration, scrutiny and some adjustments are required in Obama’s second term if U.S. engagement in this region is to be healthy and sustainable.

First, as a major thrust of the strategy is to counterbalance China’s expanding influence in the region, it has heated up disputes in the South and East China Seas, which in turn have caused some tension between Washington and Beijing. While the United States, as a Pacific country, has important interests to pursue in the region, it should not do so at China’s expense. A wise U.S. regional policy should be guided by a recognition of the inevitable increase in China’s influence in its neighborhood as well as a sensitivity to China’s legitimate interests therein. Such a policy will help avoid the creation of a zero-sum game between two countries and lay a solid and sustainable basis for U.S. interests in the region in the long run.

Second, since 2010, the United States has taken a hands-on approach to the territorial and maritime disputes between China and some of its neighbors, such as Vietnam and Philippine in the South China Sea and Japan in the East China Sea, even though these disputes are neither new nor easy to resolve. In the past several years, Vietnam, the Philippines, and Japan have tried to bring in the United States to pressure China on territorial issues in these areas; Beijing responded by standing firm against them, suggesting that such tactics would not work with China. In fact, U.S. involvement in these disputes has served only to inflate some countries’ expectations, entrapping Washington in potential diplomatic and even military confrontation with Beijing that the United States may not want, and causing China to harden its position. Under these circumstances, Washington should avoid taking sides in both rhetoric and action, but rather encourage peaceful means and creative diplomacy on all parts.

Finally, the Obama administration pursued the Trans-Pacific Partnership (TPP) not only to promote U.S. exports to the Asia-Pacific, but also undermine the momentum for East Asian economic cooperation that didn’t involve the U.S. Although this is not the first time that Washington has succeeded in killing some previous initiatives for East Asian cooperation―for instance, the U.S. opposed then-Malaysian Prime Minster Mahathir‘s proposal for the establishment of an East Asian Economic Caucus in the early 1990s, and Japan’s initiative for creating an Asian Monetary Fund during the Asian Financial Crisis in late 1990s―this time is different.

The rise of China as an engine for regional economic growth has greatly enhanced the momentum for East Asian cooperation. For instance, in spite of the flare-up of Sino-Japanese dispute over the Diaoyu Islands and cooling-down of their respective bilateral relationships since September 2012, China, South Korea, and Japan agreed in November 2012 to open the negotiations for a trilateral free trade agreement. Meanwhile, China has also joined hands with ASEAN countries, Japan, South Korea, India, Australia, and New Zealand to establish Regional Comprehensive Economic Partnership (RCEP), which promises to become the world’s largest FTA with a population of about 3 billion and an economic output of $20 trillion. In its second term, the Obama administration may continue to pursue TPP or Asia-Pacific cooperation in general, but it should downplay its ambition to slow down or even derail East Asian cooperation, as such efforts will neither succeed nor benefit the image of the United States in the region.

SERIES: Brookings East Asia Commentary | Number 64