Working toward responsible competition with China

U.S. Deputy Secretary of State Wendy Sherman meets Chinese State Councilor and Foreign Minister Wang Yi in Tianjin, China in this handout picture released July 26, 2021. U.S. Department of State/Handout via REUTERS

The announcement that Presidents Joe Biden and Xi Jinping will meet in a virtual summit before the end of the year have raised prospects that Washington and Beijing can begin to set “guardrails” to prevent U.S.-China competition from tipping into outright conflict. Despite Biden’s emphasis in his speech at the United Nations General Assembly that the United States is “not seeking a new Cold War or a world divided into rigid blocs” and Xi’s statement that disputes should “be handled through dialogue and cooperation,” the intensifying rivalry between the two states has been very much in the spotlight. The current trajectory of U.S.-China relations and trendlines in the Indo-Pacific are concerning, and wise leadership on the part of Washington, Beijing, and the middle powers of the region will be essential to prevent a drift toward zero-sum conflict.

Still no modus operandi for U.S.-China relations

Since coming into office, the Biden administration has proposed that the United States will simultaneously confront and compete with China, while seeking cooperation in areas of common interest. Beijing, however, has rejected this framework, making the case that Washington should not expect China’s cooperation on issues like climate change as long as it continues to challenge China’s policies elsewhere. Chinese leaders have expressed that the “ball is in the U.S. court” to rectify its “misguided policies.” This past July, Beijing presented U.S. Deputy Secretary of State Wendy Sherman with “three bottom lines” and “two lists.” Included in these are demands that the U.S. must refrain from criticizing China’s domestic system and its policies toward Hong Kong, Xinjiang, Tibet, and Taiwan, and that all sanctions, tariffs, and export restrictions imposed on China be removed.

This counterproposal harkens back to President Xi’s calls for a “new type of major power relations,” which was first proposed to the Obama administration in 2013 and urged the two sides commit to “no conflict and no confrontation,” “mutual respect,” and “win-win” cooperation. At the time, the Obama administration resisted this framework for several reasons, including concerns that Beijing would interpret U.S. endorsement of the concept as blanket acceptance of China’s “core interests.” Today, there is zero chance that such a proposition would be accepted in Washington given heightened threat perceptions of China among policymakers and the general public.

Negative perceptions of China have not only spiked in the United States, but throughout the Indo-Pacific and beyond. Beijing’s “wolf warrior diplomacy,” coupled with its rapid military expansion, aggressive positions in the East and South China Seas, and its use of economic coercion have pushed several states, namely Australia, Japan, and India, that even just a few years ago sought to maintain good ties with both China and the United States, to lean decisively toward the latter. In fact, Beijing’s heavy-handed behavior in the Indo-Pacific has served as a principal force for the growing profile of the Quad and the creation of the AUKUS security pact, both of which China has condemned as U.S.-led containment schemes that threaten peace in the region.

It’s unclear how much self-reflection, if any, is happening in Beijing. While there must be sober diplomats and policy experts who realize China’s wolf warrior approach has backfired in many cases, there is likely little, if any, space for such views to be expressed given the popularity of the Chinese Communist Party’s nationalistic appeals that it will not tolerate “foreign bullying,” and the deep resentment among Chinese leaders and the general public of the increasingly hardline policies adopted by the U.S. and its allies and partners toward China.

The rise of competing coalitions: Boon or bane for the region?

While China’s sharp criticism of the Quad and AUKUS is expected, a number of Indo-Pacific states have also expressed anxiety about the growth of multilateral pacts that at their core seemed to be aimed at countering China. Some, like South Korea, have been careful to avoid explicitly embracing these groupings. The Association of Southeast Asian Nations (ASEAN) states have communicated concerns about the rise of other multilateral mechanisms overshadowing their own. Malaysia and Indonesia, in particular, have voiced concerns about AUKUS triggering an arms race and exacerbating the security dilemma in the region.

Recognizing this anxiety and the need to have a positive vision that extends beyond countering China, the U.S. and its fellow Quad members have developed a remarkably comprehensive agenda for the group that places a heavy emphasis on providing public goods to the region and includes efforts on COVID-19 vaccines, regional infrastructure needs, and combating climate change. China, too, has sought to cooperate with ASEAN states on many of these same areas. And in a neighborhood where vaccines are in short supply and significant investments in infrastructure are needed to tackle poverty and climate change, a boost in attention and resources could be a boon for the region.

Despite this silver lining to the competitive dynamics in the region, the growing chasm between China and the U.S. and its closest partners has also made it harder to tackle challenges for which coordination and joint action are indispensable. Notwithstanding Beijing’s protests about the potential nuclear proliferation risks posed by AUKUS, a nuclear arms race is already underway in the region with North Korea continuing to build its nuclear and missile program, and China rapidly expanding its own nuclear arsenal and strategic capabilities with an eye on great power competition with the United States. A workable roadmap for the denuclearization of North Korea or the adoption of arms control measures to reduce the risks of nuclear war are only possible with Washington and Beijing working together. Thus, while growing interest and engagement in the Indo-Pacific may bring some benefits to the region, more public goods will not lead to a more prosperous region if the toughest security challenges are left to the wayside.

Preventing a drift toward zero-sum competition

Looking at the recent trendlines, there is a real potential for the United States and China to drift into a fraught, zero-sum relationship. When both sides see less value in preserving their relationship, space for diplomacy to manage bilateral and global challenges will naturally diminish as well. While there’s no silver bullet to reverse this trend, it will take leadership and action on the part of all parties in the region to ensure that the world does not sleepwalk into a great power conflict. This week’s meeting between U.S. National Security Advisor Jake Sullivan and China’s top diplomat, Yang Jiechi, which was described as “more meaningful and substantive” than previous engagements, news of the Biden-Xi summit, and U.S. Trade Representative Katherine Tai’s reference to “durable coexistence” while outlining the Biden administration’s approach to the U.S.-China trade relationship are all encouraging developments. But many more steps will be needed to erect the scaffolding for “responsible competition.”

First, Beijing must stop demanding a return to some mythical past of U.S.-China relations when all was harmonious. America and China have never seen to eye-to-eye on all issues, but in past decades attempted to work constructively together in some areas, while maintaining sharp differences in others. Beijing should not characterize cooperation on shared challenges as “favors” to Washington or potential vehicles for tradeoffs in other areas. It should smooth the way for its bureaucrats to substantively engage with their American counterparts for its own benefit.

Washington should continue to seek a multifaceted relationship with China — engaging in healthy competition with Beijing and confronting its unfair or coercive behavior when necessary; pursuing good faith negotiations where the two sides have a mix of conflicting and converging interests, like trade and arms control; and persistently pursuing cooperation to address common challenges. Striking a balance among the “three c’s” will be difficult but critical. And wise leadership will be necessary to ensure that being “tough on China” does not become an end, but one of multiple means to foster a genuinely free, open, inclusive, and prosperous Indo-Pacific.

Setting up guardrails to compete and coexist peacefully in years ahead will take great efforts by diplomats on both sides. This will require not just establishing a broad working framework for the relationship, but also getting into the weeds to identify issue areas and domains where the lack of rules and norms are exacerbating the risks of escalation and finding ways to address these gaps. In addition, existing risk reduction and crisis management mechanisms, such as codes of conduct and hotlines, should be examined for effectiveness and improved upon.

Finally, middle powers can play an essential role by continuing to call attention to regional needs and spearheading multilateral initiatives to advance peace in their neighborhood. While Beijing and Washington may be reluctant to accept proposals coming from the other’s capital given the current state of relations, they may be more receptive to cooperative initiatives from third parties. Middle powers should seek to capitalize on their distinct equities and interests, such as managing maritime disputes for littoral states or seeking peace on the Korean Peninsula for Seoul, to rally the necessary stakeholders for joint action and move trendlines in a more positive direction.