The Scouting Report Web Chat: U.S.-China Relations at a Crossroads

China’s ascension continues to present policy challenges for both Beijing and the rest of the world. The Chinese government has become more assertive abroad and the recent Pentagon arms sale to Taiwan has been a source of tension with the United States. Additionally, political reforms have stalled and the foreign business climate has deteriorated.

On Wednesday, March 3, Kenneth Lieberthal, a senior fellow and director of the John L. Thornton Center at Brookings, answered questions in a live web chat about the future of U.S.-China relations on issues including trade, climate change, currency, the global environment, and strains over Taiwan. POLITICO’s senior editor, David Mark, moderated the discussion.

The transcript of this chat follows.

12:27 David Mark: Greetings. We’re pleased to be joined by Brookings China scholar Kenneth Lieberthal. Welcome.

12:28 [Comment From Rachel: ] Should the Obama administration stake a stronger stand with China on human rights and trade issues?

12:28 Kenneth Lieberthal: The Obama administration declared early on that it sees a number of issues as of major importance in U.S.-China relations. These include human rights and economic/trade issues. I think the important point is that the administration should remain consistent in its approach to these issues. Basic American policies in these areas are designed to promote, within reasonable boundaries, our values and our interests. There is no reason to shift to a stronger stand on either of these issues now — our current approach builds in flexibility to key concrete actions to developments in China and in our relationship with Beijing.

12:28 [Comment From Danielle: ] All American presidents since 1990 have met with the Dalai Lama, yet President Obama’s recent meeting drew a sharp warning from China that the visit undermined U.S.-China relations. Was China more irritated about this visit than it has been previously?

12:31 Kenneth Lieberthal: It is not clear whether China was “more irritated” now than in previous times. Beijing’s leaders always find any foreign government contact with the Dalai Lama to be particularly irritating. President Obama crafted the meeting to fall within the boundaries of previous such meetings. If China’s reaction was rhetorically stronger than usual, that may reflect the increased sensitivities over Tibet since the spring 2008 troubles and also, perhaps, an effort by Beijing to see whether it can move the needle on some longstanding issues of concern now that it is being seen as a more important global player.

12:31 [Comment From Erin: ] China continues to stand its ground that diplomacy is the best way to resolve the standoff over Iran’s nuclear program. This, despite Russia indicating that they might be willing to go along with sanctions. Is this simply the case of any proposed sanctions threatening the flow of oil and Chinese investments?

12:34 Kenneth Lieberthal: China traditionally opposes use of sanctions primarily because in Beijing’s view such actions typically are either unproductive or counterproductive. In addition, Beijing is trying to build its relationship with Tehran. But this issue is complicated for China, reflecting the country’s increased engagement beyond Asia. Beijing must take into account not only Western views but also those of the Gulf States and of Saudi Arabia, among others. I suspect China will negotiate hard behind the scenes to reduce the scope and water down the severity of a sanctions resolution in the UN Security Council but then will ultimately either vote for it or, at worst, abstain.

12:34 [Comment From Daniel B. Lippman: ] Why is China so obsessed with Taiwan? Shouldn’t the Taiwanese people get to decide if they want to be part of China or not? That only seems fair. And, would you say that China’s continued repression of human rights activists and journalists is a sign of weakness, as in it means that they don’t trust their own people?

12:36 Kenneth Lieberthal: The Chinese revolution had a very strong nationalist content to it. Fundamentally, it was part of a 100+ year struggle to figure out how to make China wealthy and strong after the decline and collapse of the imperial system. The issue of regaining national territory is central to that narrative, and in Beijing’s eyes there is no question that Taiwan is part of China’s territory, ripped away from it temporarily by an aggressive Japan.

12:37 [Comment From Wen Chen, Beijing Review: ] Deputy Secretary of State James Steinberg and Senior White House Asia adviser Jeffrey Bader have landed Beijing on a mission to patch up ties with China. Why now? Is there any specific consideration about the timing? What’s your expectation on this visit?

12:41 Kenneth Lieberthal: Recent months have obviously seen a rough patch in U.S.-China relations. There are opportunities coming up to put things back on a steadier path. These include the Strategic and Economic Dialogue and a possible return visit by Hu Jintao to Washington sometime in late spring or early summer. At the same time, Iran and other issues are sufficiently important to warrant some serious, high level direct discussion. Steinberg and Bader are exceptionally knowledgeable about the U.S.-China relationship and are critical to the policy process on China in Washington, DC. I suspect their visit is to talk things through and to try to work out how to make progress on the most critical issues that require U.S.-China cooperation. This is likely to be done in the context of preparing for the S&ED and for Hu’s prospective visit.

12:41 [Comment From Jonas Parello-Plesner: ] The U.S. would like China to become a responsible stakeholder. Yet many Chinese feel China can’t be a responsible stakeholder and take on a global role in conflict resolution before it can protect its own core interests like Taiwan, Tibet and its borders. On these issues, particularly Taiwan, there are also American red lines. How do we reconcile this?

12:45 Kenneth Lieberthal: I think that Beijing has been somewhat startled at the rapidity with which its global position has strengthened. Its rise from being seen as a regional power to being seen as a global power has been accelerated by the dynamics of the global economic crisis. China is just beginning to develop the posture it will want to take on major global issues. One of the most important questions it confronts is to determine the extent to which it is prepared to contribute to global public goods, beyond taking a very narrowly nationalistic approach to global issue. Beijing appears to be in the early stages of figuring this out, and there are debates almost across the board on the specific policies China should adopt. This is a process that will take a few years to work out; it is a time when diplomacy toward China might, therefore, play a particularly important role in shaping internal discussions there.

12:45 [Comment From Joe Guggenheim : ] Why is economic growth in the United States so anemic compared to China, and what can the United States learn from the Chinese experience?

12:49 Kenneth Lieberthal: It is very difficult to make meaningful comparisons of U.S. and Chinese economic growth. Chinese growth remains primarily extensive, while U.S. growth has long been intensive. The U.S. economy if far more efficient than is China’s and is far more developed across the board. Perhaps the main “lesson” for the U.S. from China is the importance in investing in basic infrastructure, in education, and in policies directed at addressing the most critical other issues the economy faces. The U.S. learned these lessons a long time ago, and they were key to earlier stages of American development. But we in recent years have taken our collective eye off the ball, and China’s recent efforts may serve as a helpful reminder that we need to get back to the basics we have traditionally done so well.

12:49 [Comment From Gary: ] China condemned the recent $6 billion arms sales to Taiwan. Yet, the U.S. has continued to sell arms to Taiwan since diplomatic ties with China were established in 1972. Why the intense response?

12:52 Kenneth Lieberthal: The intense response may be in part tactical. China is very concerned about the potential for the U.S. to offer to sell F-16C/Ds to Taiwan. Beijing may feel that by taking such a strong reaction to this recent package it is making it more difficult to the Obama administration to decide in favor of an F-16C/D sale. There are also other possibilities. For example, feeling stronger and more confident than before, China may be testing to see whether it can push successfully for some modification of U.S. policy on the Taiwan issue. Different people in Beijing may have supported the strong posture on this sale for different reasons.

12:52 [Comment From Kenneth: ] I read an article recently that said that China is ahead of us in building infrastructure because they’re a communist regime. This makes it easier for them to start and complete public projects when the government wants. The U.S., due to being a democracy, is not as capable at undertaking projects because the government has to bend to the will of people and corporations. Thoughts?

12:56 Kenneth Lieberthal: The Chinese system is very effective at building infrastructure. That is not because it is “communist” but rather because it is authoritarian and provides weak protection for property rights and strong incentives for local officials to demonstrate their prowess by undertaking major construction projects. The national government has also thought carefully about the core infrastructure development required to push the economy forward and is providing substantial resources and other incentives to realize their ambitions. Any country with stronger property rights and more effective ways for citizens to constrain government initiatives will have more difficulty than China has in building major highways, railroads, and other infrastructure projects.

12:56 [Comment From Mark, Greenbelt, MD : ] What’s your assessment of the tensions over Internet service in China, Google’s involvement there, and the speculation that the Chinese government is behind denial-of-service attacks in the U.S. and elsewhere?

1:01 Kenneth Lieberthal: The issue of cybersecurity is a particularly difficult one to manage. There is no question, I believe, that cyber attacks originating in China are being directed against U.S. (and other) government agencies, public utilities, corporations, and individuals. Some of these are simply mischievous, some are to steal information, and some are potentially to gain the capacity to damage or destroy our capacity to control our own systems. It is technically very difficult to identify with certainty whether the Chinese government is directly involved in any particular cyber security breach. The Chinese are, of course, not the only ones involved in such activities. This is an area that warrants much greater efforts to see whether it is possible to develop some internationally accepted rules of the road, as the potential dangers of (in some instances unintended) damage are very large.

1:01 [Comment From Barry Smernoff: ] What are the prospects for U.S.-Chinese cooperation on NON-MILITARY cybersecurity?

1:06 Kenneth Lieberthal: The Pandora’s Box is already fully open in the cybersecurity realm, and the dangers are very substantial. For example, densely interconnected networks are so complex that someone launching a particular cyber attack may well be unable to understand in advance the full consequences of that attack. Command and control problems are substantial in the cybersecurity realm in every country. And identifying who is actually responsible for any particular breach is often impossible. There needs, first of all, to be a concerted effort to figure out what aspects of the cybersecurity world are potentially amenable to rules-of-the-road constraints. Once there is a clearer understanding of that, then there should be an effort to think through the policy implications and then to take that to the Chinese (and other major players) to discuss possible approaches to reaching agreement on how to reduce the dangers of unintended consequences in this important sphere.

1:06 [Comment From joe guggenheim: ] Does China have to worry over balancing the budget and national debt? We in the U.S. are constrained in infrastructure and other needed investments because there is so much emphasis on balanced budgets even when economic conditions require strong continued deficit spending.

1:08 Kenneth Lieberthal: China currently has a far more balanced budget than does the United States, and its government debt as a percentage of GDP is the lowest among all major economies. Thus, as it exits from the economic crisis, it has more degrees of freedom to invest in things like infrastructure without relying on increased taxes than does any other major economy.

1:08 [Comment From james: ] As an American who has lived in China and studied its culture, it is evident that their government will never become fully democratic and they will never give up Tibet/Taiwan struggle. Knowing this, how should our government go about working with a global country who isn’t willing to compromise?

1:13 Kenneth Lieberthal: I agree with your basic comments about China’s ongoing priorities. But this still leaves a lot of room for compromises in order to achieve goals that are in both of our interests. We have, for example, begun to cooperate on development of new clean energy technologies, focusing on projects and research efforts that afford win-win opportunities. China, as the U.S., wants a world characterized by overall stability, vibrant economic growth, and reduced carbon emissions. The Chinese leadership is generally pretty pragmatic in terms of figuring out what compromises and what cooperative efforts need to be made to achieve these types of common goals. If we insist that China become fully democratic as a basis for working with China on addressing major issues, we will not find areas of cooperation with them. But in reality we do not insist on that as a precondition, and the Chinese see cooperation with the U.S. (and others) on many issues as serving their vital national interests.

1:13 [Comment From Jennifer Saunders: ] Do we need more Chinese language and culture education in the United States? Is the corporate world ahead of the government and universities in that regard?

1:16 Kenneth Lieberthal: China’s importance in the world is increasing, and there is every indication that will continue. We certainly should increase the opportunities for Chinese language study in our educational system and should build understanding of China more prominently into our educational efforts, especially at the tertiary level. Corporations are having to do this “on the ground.” There is no substitute for having our educational system provide such opportunities so as to improve the pool of human capital that our firms and government have to draw upon.

1:16 [Comment From Fran: ] Did the Beijing Olympics help bring any long-lasting improvements or change to China? Or was the success only fleeting?

1:18 Kenneth Lieberthal: Unfortunately, Beijing did not use the Olympics to usher in more openness in Chinese society, despite its commitments to do so. I suspect the impact of the Olympics — other than increasing national pride — was therefore relatively fleeting. The games may, of course, have opened the eyes of a number of people around the world to the reality that China is developing very rapidly and is a country of serious consequence.

1:19 [Comment From Robert: ] There has been a lot of talk lately about what the U.S. has done to exacerbate extant tensions with China — speaking out on the issue of Internet freedom, President Obama meeting the Dalai Lama, issuing statements about the RMB-USD exchange rate, etc. Should this be perceived as a change in the U.S. approach to China post-Copenhagen and Liu Xiaobo or simply a coincidental confluence of events that stirred the pot a bit?

1:24 Kenneth Lieberthal: It is, I believe, a misconception to see America’s policy toward China as having toughened suddenly in 2010. President Obama came into office with a very pragmatic approach to China. He saw that U.S.-China cooperation (or at least our not undercutting each other) could be important to handling major global issues more effectively. Having no past experience with China, he determined to spend much of 2009 establishing the basis for a very good working relationship with Hu Jintao and other Chinese leaders. That entailed, among other things, postponing decisions that inevitably would raise tensions (such as Taiwan arms sales) where those decisions could be put back for a period of months without doing harm to other interests. But the U.S. informed the Chinese very clearly during 2009 that early in 2010 we would be making some of those decisions. For example in his November trip to Beijing in 2009, President Obama directly told Hu Jintao that Obama would see the Dalai Lama in early 2010. It is, therefore, incorrect to see these 2010 decisions as a change in U.S. policy. They, in fact, reflect the implementation of a consistent U.S. strategy — and one that the Chinese were well aware of during 2009.

1:24 [Comment From Robert: ] Whatever happened to “strategic reassurance” as explicated by Deputy Secretary of State James Steinberg?

1:26 Kenneth Lieberthal: The term never really caught on as an administration mantra. But the notion of deep discussions that involve candid reviews of both policy considerations and future plans is one that the Obama administration very much is pursuing with Beijing. This is reflected in the S&ED, in the Obama trip to Beijing in November, and (among other efforts) in Steinberg’s current trip to Beijing for consultations.

1:27 David Mark: Thanks for joining us today. Have a good day.