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Spectators display a huge Chinese national flag during the Nanning International Arts Festival of Folk Songs, the gala show for the opening of the ninth China-ASEAN expo, in Guangxi province September 21, 2012. Picture taken September 21, 2012.  REUTERS/Stringer (CHINA - Tags: SOCIETY TPX IMAGES OF THE DAY) CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA - GM1E89M19VY01
Order from Chaos

Responsible competition and the future of U.S.-China relations

Seven critical questions for strategy

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Over the last two years, a near-consensus has crystallized among China-watchers that Washington and Beijing are locked in a great power competition over vital economic and security interests. As a result, this narrative holds, the United States must adopt a hard-nosed approach to address the growing challenge that China’s rise poses to its standing in the world. 

While there is little doubt that China’s domestic turn toward authoritarianism and its foreign policy assertiveness pose growing challenges to American interests, the gathering momentum toward thinking about U.S.-China relations in the context of inescapable confrontation raises more questions than it answers.

As observers of and participants in these quickly-evolving debates on the future of U.S.-China relations and the role of the United States in Asia, we believe that an important set of questions remains to be answered. Below we identify seven questions that the China-facing policy community is now debating as it grapples with how the United States should respond to challenges being posed by China’s rise. In many cases, these major questions beget research agendas of their own. If the United States seeks to craft a durable and comprehensive strategy for its role in Asia and relationship with China, experts and policymakers must interrogate these debates.

1What are China’s national ambitions?

China’s leaders have been transparent about the fact that they seek to restore the country to a position as a great global power economically, technologically, militarily, and politically by midcentury, in effect, returning to its self-perception of its historic position in the international community. Some experts see China’s objectives as defined by declared “core interests”: preserving the Communist Party’s (CCP) grip on power, protecting territorial integrity and sovereignty, and upholding China’s economic and social development.

China’s ambitions appear to include a quest to become a major power that is wealthy, strong, influential, and respected. In other words, a country that escapes the middle-income trap through technological innovation; has a military capable of defending China’s territory and protecting its access to resources and markets; can shape international rules and norms to serve its interests; and whose political and economic models are internationally accepted.

There is little debate that these objectives require Beijing to be a leader in Asia. A critical question, however, is whether China’s core interests and economic and major power objectives require it to substantially weaken the U.S. role in the region, or whether it can accept a strong American presence, so long as it is able to preserve its form of governance and protect its “core interests.” The answer is crucial to determining the compatibility of the two countries’ interests.

2What kind of regional environment does China need to achieve its ambitions in Asia?

China seeks a regional environment that is conducive to and does not jeopardize its “core interests” while it continues to ascend. China has generally pursued a risk-averse strategy and seeks to avoid direct conflict with the United States, given that conflict could derail China’s development. It is possible, however, that although China seeks to avoid great power confrontation now, U.S. and Chinese interests will become more incompatible over time as China moves closer to its national objectives, e.g., consolidating control over contested territories, harnessing technological advances to suppress dissent and tighten social control, and deepening the Communist Party’s influence over economic decisions.

It is possible…that although China seeks to avoid great power confrontation now, U.S. and Chinese interests will become more incompatible over time.

Although arguably the most worrisome flashpoint between the United States and China remains Taiwan, the CCP presently seems to have confidence in eventual unification. So long as any effort by Taiwan’s elected leaders to pursue de jure independence is not imminent and CCP legitimacy is not jeopardized, Beijing may continue to judge that the costs of forcible unification outweigh the benefits of the attempt, preserving some form of an uncomfortable cross-Strait balance.

An under-scrutinized line of inquiry, however, is whether China needs to achieve uncontested regional hegemony to realize its national ambitions, and what that condition would look like if it did. Regional hegemony suggests a condition in which no other power in Asia can dominate China militarily, giving Beijing the ability to enforce some degree of regional hierarchy with itself at the top. Experts tends to agree that China is already pursuing some form of regional hegemony, whereby it wields influence over other states and has some ability to set rules within the region. China’s leaders have long denied that the country seeks hegemony, however, so its prospective requirements are only beginning to come into focus through an analysis of Beijing’s behavior and vague statements of intent.

In all likelihood, China will probably continue to pursue a policy that seeks to reduce the role of human rights norms and liberal democracy in international order, or at least to insulate itself from them. It will also likely continue to proffer new rules and institutions, as with the Asia Infrastructure Investment Bank, which it will continue to revise, or on internet governance, where it seeks to set standards in a currently ungoverned space.

A central question for the future of the region is to what extent China’s vision of regional hegemony requires it to weaken or eliminate U.S. alliance relationships and America’s military presence and diplomatic influence in the Asia-Pacific region, especially close to its borders. If, as China’s anti-access, area denial (A2/AD) strategy implies, Beijing seeks to expunge the U.S. security presence from its maritime periphery, China and the United States would likely find themselves in zero-sum security competition. If, on the other hand, a U.S.-free Western Pacific is an ideal, but not a necessity, this aspect of rivalry may be mitigated somewhat.

Overall, considerable work remains to be done to explore whether China is committed to pursuing some version of Chinese regional hegemony and what methods it would use in seeking to do so.  Complicating this agenda is the fact that China’s leaders may not have fully settled on what Beijing’s regional requirements are, or on how aggressively to pursue them at this juncture—some of China’s strategy is almost certainly based on opportunism.

3What are the United States strategic requirements in Asia, and vis-à-vis China?

A central goal of U.S. strategy in Asia has been to prevent a hostile hegemon from dominating the region. Since the 19th century, U.S. strategy has been designed to ensure that the region remains open to commerce and that it does not serve as a source of direct threats to the American homeland. Unimpeded military access has been viewed as necessary for upholding these goals and maintaining the credibility of American alliance commitments.

In the 21st century, the requirements of upholding these objectives has shifted somewhat. We would no longer expect a rising power like China to make its ascent known through territorial conquest or overt economic subjugation. It is not necessarily the case, however, that the United States requires exclusive regional hegemony to achieve its national objectives, just as it also does not require regional partners to align exclusively with the United States and against China.

If the United States seeks to retain security, economic, and political access and influence in the region, it can accomplish its objective of preventing a hostile hegemon from dominating the region without forcing regional alignment decisions, as such a strategy may create countervailing resistance among local states. The United States does, however, need to maintain the integrity of its alliances and its strategic position in the First Island Chain to protect them.

On economics, the United States continues to have an interest in a bilateral relationship with China that supports growth, as well as in securing investment and migration from Asia. China will continue to be an engine in all three areas in the next 5 to 10 years. But Washington also has an interest in ensuring that the economic relationship with China is grounded in shared rules and standards. Washington similarly has an interest in working with allies and partners in Asia to update rules and standards to address 21st century challenges to the international trade regime, and through such efforts, to sharpen pressure on Beijing to accept and abide by such rules and standards.

The United States also would benefit by improving increasingly-sclerotic institutions like the World Trade Organization (WTO), which has been taxed by China’s inclusion. Importantly, in the coming decades several Asian economies will outpace China’s economic growth rates. India is unlikely to establish itself as a region-wide player on the order of Beijing, but rapid growth by it, Vietnam, the Philippines, and Indonesia, will give each of these countries an incentive to ensure their place in integrated supply chains. Asia will not be multipolar according to all power metrics, but could move gradually in that direction in economic terms.

Unless analysts have a sense of the requirements of Chinese regional hegemony, they won’t be able to evaluate how much China’s requirements conflict or are compatible  with U.S. interests. Put differently, it may be possible that there is some form of “regional bipolarity” that is not exclusive and could satisfy both countries’ strategic objectives in Asia. Without doubt, this state of affairs would likely entail a good deal of managed competition for years or decades.  Without knowing more about China’s precise requirements, though, such a state of the world is hard to define or evaluate, and American analysts will reasonably be tempted to conduct “worst case” analysis of China’s regional aspirations. Regardless of how China’s regional requirements come into focus, however, U.S. policymakers should clearly define U.S. interests with the objective of protecting them.

4To what extent is U.S.-China competition ideological?

Experts agree that there is some ideological component to U.S.-China competition, but have not yet defined the precise role of ideology in the relationship or in future strategy. There are numerous features that distinguish the current U.S.-China dynamic from U.S.-Soviet competition during the Cold War, but experts are only beginning to grapple with the exact implications of ideological and regime-type differences for competition.

The Worldwide Threat Assessment of the U.S. Intelligence Community states:

China’s leaders will increasingly seek to assert China’s model of authoritarian capitalism as an alternative—and implicitly superior—development path abroad, exacerbating great-power competition that could threaten international support for democracy, human rights, and rule of law.

While this warning merits serious consideration, several useful cautionary warnings also bear heeding. U.S. policymakers should distinguish between the ideological orientations of the Chinese Communist Party and the Chinese people, and that changing China’s political system from the outside has not been—and should not become—an indicator of U.S. policy success. Nonetheless, in the absence of reform to China’s political model, there may be an irreconcilable ideological tension between the United States and Chinese governments that will place downward pressure on the relationship and on some forms of international order.

The United States and China have managed ideological differences over their domestic governance models for the past four decades and may be able to do so going forward. However, China’s use of artificial intelligence applications for domestic surveillance technology—and Beijing’s export of such practices around the world—may also place a sharper edge on ideological tensions in the relationship going forward, as ideology appears to find a technological vector. A profoundly important question for future analysis is whether China is exporting a positive, ideological vision with which the United States must compete directly, or whether it is using ideologically defensively—essentially as a tool for regime survival. The answer would likely have implications for American policy, and U.S. strategists must consider both possibilities as they contemplate the role of human rights, democratic values, and the liberal model more broadly in any future regional strategy.

5To what extent is China a revisionist power, and what are the implications?

Among the expert community, there is strong agreement that China seeks revisions to international rules and norms to accommodate China’s political and economic model, yet this does not require it to create a new international system to replace the post-World War II international order. Primarily, China appears to seek some redefinition of existing concepts around human rights and to proffer new ones for internet governance. At a broader level, Beijing seeks to ensure international acceptance (or non-hostility toward) its state-led economic model and Leninist political model.

In general, China seeks to make the international order friendlier to it, but at least at present, that approach seems to involve revisions to specific issue sets, rather than the wholesale overturning of a system. This approach is consistent with a China that is, in the words of one expert, a “revisionist power but not a revolutionary one.

Nonetheless, moderate revisionism that seeks to change some of the more liberal aspects of the post-World War II order raises significant questions about what a mixed-regime order might look like, or whether Chinese revisions will create alternative forms of order that may be incompatible with existing institutions and norms.  Some in the expert community are concerned that China’s growing global reach and influence will erode the efficacy of liberal values around the world, and with them, the potency of some institutions and rules. American strategists should invest research energy in contemplating the forms a mixed-regime order might take, as well as its implications for U.S. interests, in order to fashion appropriate responses.

6Does China’s state-interventionist economic model militate towards new U.S. policy responses, including decoupling?

It is difficult to argue that there is a sound economic rationale for pursuing holistic economic decoupling.

China appears committed to heavy state involvement in its economy, and prevailing international rules and norms appear ill-equipped to deal with China’s economic model. If there is an effort to update the international rules-based economic order, the United States will have to play a leading role (e.g., through the modernization of the World Trade Organization, or through the United States and China jointly entering a trade bloc with common rules such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership). Fixating on the bilateral trade deficit and pursuing unilateral tariffs against China is unlikely to change Chinese behavior to address American concerns about market access, forced technology transfer, state-directed industrial policies to support national champions, overcapacity, and intellectual property protections.

It is difficult to argue that there is a sound economic rationale for pursuing holistic economic decoupling as a general U.S. government policy. Widespread decoupling would isolate the U.S. economy, but would not necessarily alter China’s own practices, unless the United States could convince China’s other top trading partners to follow the U.S. lead—a seemingly unlikely outcome. Efforts to decouple are unlikely to change America’s overall trade balance with Asia, but would create adjustment costs on production, which would drive up prices on goods and generate inflationary pressure in the United States. Even if overall economic and supply chain decoupling seems infeasible, however, there may be more merit to exploring the relative costs and benefits of partial sector-specific decoupling. The technology and manufacturing sectors may be more appropriate for this, and analysts should study the complex interactive sectoral reverberations that would take place.

7Does U.S.-China competition eliminate the potential for great power cooperation?

As the United States and China become more competitive, they increasingly risk locking themselves in an intensifying security dilemma, where one’s actions make the other feel less secure, and mortgaging remaining forms of great power cooperation as a result. They have faced this dilemma for years, but as leaders in both countries increasingly embrace rivalry, the stakes and risks of that tradeoff mount. Do American efforts to cooperate with China on global issues like climate change or nonproliferation risk emboldening Beijing in other areas? Or does a tack towards confrontation create a self-fulfilling prophecy? There may be some risk in drawing sweeping conclusions about the incompatibility of U.S. and Chinese interests, because doing so diminishes pressure on policymakers in both capitals to manage differences and risks inviting the very sort of spiral discussed here.

For the United States, however, some forms of cooperation with China may coexist comfortably alongside a more competitive approach.

For the United States, however, some forms of cooperation with China may coexist comfortably alongside a more competitive approach. For the next few decades, much of U.S.-China competition will take place inside of Asia, whereas many of the most important agenda items for cooperation are global and include climate change and preventing pandemics and nuclear spread. Cooperation with China on global issues need not limit America’s ability to push back against untoward Chinese behaviors or fashion a regional strategy to defend American interests. Nonetheless, experts must contemplate: Given that the economic relationship was long considered to be a ballast in the relationship and is now at the heart of competition, how can these two powers craft cooperative global agendas that are substantive, salient, and resilient to competition in other areas? If competition is to be managed constructively and in a manner that does not tip the relationship toward a purely adversarial dynamic, this is an essential task.

Conclusion

As the questions raised in this piece illustrate, there remain profound unresolved debates about the scale of China’s ambitions, the nature of U.S.-China competition, and the factors that will shape the trajectory of the bilateral relationship. Although there is a strengthening consensus in the United States for taking a tougher approach toward China, there is not yet unanimity on the American interests that may be at stake in competition, the objectives for U.S. strategy with China and in Asia, or the question of how to prioritize those challenges posed by China’s rise. These are essential tasks if the United States seeks to compete effectively. How the China-facing policy community addresses these questions, and whether Washington coordinates its responses to them with its traditional allies and partners will, in turn, influence China’s evaluation of the durability of America’s strategy for the region.

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