U.S.-China Relations: The Obama-Xi California Summit

Presidents Obama and Xi Jinping will meet on June 7-8 for six or more hours of talks at the former Annenberg Estate in California.  This format is unprecedented in the history of U.S.-China relations.  Normally, U.S.-China leaders’ meetings have wide ranging agendas and very little time to cover them.  Thus, each leader has to stick pretty much to his opening statement and prepared talking points – there is little if any time for real give-and-take.  The California summit, by contrast, will allow ample time to pursue topics in depth, including an extended exchange of views.  This format evidently reflects Xi’s considerable confidence that he can handle the dynamics of an open-ended discussion.

Purposes:

Perhaps the most important purpose of the summit is to enable each leader to develop a serious sense of the other.  If it goes well, each will at the conclusion effectively say to himself, “I get that guy.  I understand his top priorities, his fears, his political constraints, and how he thinks about the big issues.   I think I can do business with him.” Of course, there is a possibility that one or both will conclude that he cannot really “read” or trust the other, in which case the future relationship will also reflect that reality.  Personal chemistry between leaders means a lot in major power relations. 

Beyond providing a chance to develop mutual personal understanding, the summit discussions will address the key issues in U.S.-China relations.  This is not a venue in which to strike agreements that can be rolled out as “deliverables” to the press.  Rather, it is an opportunity to reach accord on the process and substance of future efforts on key issues.  A successful meeting will have the presidents agree on follow-up activities and foci that will move their cooperation beyond what was previously possible.

To illustrate key issues and possible outcomes:

North Korea: Agree to a sustained high level dialogue between both military and civilian representatives on future potential contingencies on the Korean peninsula and how each side would view them.  The U.S. and China have never held such a dialogue.  Given uncertainties about future developments in North Korea, it is past time to begin.

Cyber security: President Obama needs to lay out to Xi Jinping what the U.S. knows about the scope and scale of Chinese theft of secrets from the U.S. private sector and his evaluation of the costs that these Chinese activities are imposing on U.S. jobs, competitiveness, investment, and innovation.  It is not at all clear how much Xi knows about this or what his thinking about cyber issues actually is.  Obama should make clear that this issue will impose a real cost on U.S.-China relations if Xi is not able quickly to reduce very substantially organized Chinese efforts to steal secrets from the American private sector. 

President Obama should, though, be careful to differentiate clearly distinct issues in the cyber world.  There is little utility in complaining about Chinese efforts to steal U.S. political and military secrets – all nations do that, and none would ever agree to limit these efforts.  He should also highlight the importance of cooperation to defend against attacks on critical infrastructure by terrorist organizations that threaten both of our countries.  And he should encourage U.S.-China cooperation on combating criminal activity that utilizes cyber tools – money laundering, financial scams, child pornography, etc.

In short, in the cyber arena there are areas where the U.S. and China share interests, areas that are not worth trying to negotiate because neither side will agree to serious restraints, and areas where we disagree strongly and need to make progress.  It is important to keep these distinctions clear to have a potentially productive exchange.

Two additional considerations are important in this discussion of cyber issues.  First, cyber space is so new that there is not even agreement on basic terminology, such as what constitutes a “cyber attack.”  Since states have a legal right of response when they are attacked, it is important to reach an understanding of what clears the bar to qualify as a “cyber attack” (e.g., espionage by itself does not, while using cyber tools to produce destructive kinetic outcomes in most cases presumably does). 

Second, President Obama needs to be sensitive to the reality that, from a Chinese perspective, the United States nearly owns the cyber arena.  America has the most advanced tools and capabilities, and the Chinese political and financial systems largely run on American software.  China assumes the U.S. uses that huge capability to its advantage.  That is a perception that will be part of the equation in any serious cyber discussion.

Climate change.  Air pollution is now a political (and health) issue of central importance in China, and Beijing’s leaders have made clear internally that they will move bureaucratic mountains to take effective steps to deal with this.  The two presidents should agree to give high priority to U.S.-China cooperation on major, high impact projects that will both reduce greenhouse gas emissions and mitigate air pollution in China.  This falls into a political sweet spot on the Chinese side that can benefit American firms, U.S.-China relations, and the effort to reduce greenhouse gas emissions overall.

Stability in Asia:  Asia, the central region for U.S.-China interaction, has been an arena of growing U.S.-China tension and distrust in the past few years.  President Obama sees the US rebalance (“pivot”) to Asia as having China at its center but not as taking China as its bull’s eye.  The rebalance is a region wide integrated economic, diplomatic, and military strategy to assure long term Asian peace and economic progress with full American participation in both generating and benefitting from that outcome.  China is at the center of Asia; inevitably, any regional strategy will have China at its center.  But that is very different from the understanding of many Chinese that this strategy is targeted against China and seeks to complicate, slow down, and perhaps even disrupt China’s rise.  The California meeting is a critical opportunity for President Obama to explain America’s strategy and goals.

Xi Jinping needs to lay out his own core priorities in the region and how he anticipates handling such key issues as maritime territorial disputes.  Xi has played a very active role in shaping China’s regional actions over the past year, and it is important for him to convey how he sees both next steps and longer term objectives.

Ideally, this discussion would lead to an ongoing high level U.S.-China political and military dialogue over respective goals and related force postures in the region, using a five-to-ten year time horizon.  Such a dialogue might mitigate current pressures trending toward an arms race in the region.  It might also make it easier to expand relations between the U.S. and Chinese militaries that, despite some recent enhancements, remain far behind the interactions that have long existed in the nonmilitary aspects of U.S.-China relations.

Economic and trade issues: These issues are important and wide ranging.  U.S. bilateral concerns focus especially on market access and protection of intellectual property (related to cyber security).  Chinese concerns focus on security reviews of investments in the U.S. and on American restrictions on technology exports to China.  These are not new issues.  But President Xi apparently now wants to carry out structural economic reforms in China that should in many cases allow for greater and more effective U.S. participation.  Framing the economic and trade discussion in these terms might make these discussions more productive for both countries.

Multilaterally, the U.S.-promoted TPP negotiations and the Chinese-supported RCEP negotiations[1] each exclude the other country.  The presidents need to discuss their long-term trade and investment goals for the Asia-Pacific region overall  to gain a better understanding of whether these two programs will tend over time to divide the region into distinctive trade regimes or might lead eventually to a common Asia-Pacific platform that will reduce barriers to trade and investment.

Achievements:

As indicated above, the 7-8 June California summit is not intended to produce specific deliverables.  It will be a very important conclave if it simply produces better personal understanding and chemistry and also points the way toward progress along lines discussed above.  Some of the directions from this summit may feed directly into the U.S.-China Strategic and Economic Dialogue that will take place during the week of July 8 in Washington.  Other parts will be followed up in other venues.

Both sides have indicated that they want to set the overall U.S.-China relationship on a path that will prevent a trend toward major power conflict.  But neither side, at this point, has full confidence in the long term intentions of the other.  It could prove very significant, therefore, if this summit also becomes the venue for a more strategic discussion of the future of U.S.-China relations. 

A strategic discussion could begin with a serious exchange of views on how each leader envisages the major threats and forces shaping the world a decade from now – and how each views the role of his own country in dealing with these elements.  A dialogue about enduring and new challenges could clarify fundamental perspectives and concerns and thus help reveal potential areas for major U.S.-China cooperation – as well as those cleavages that time will not reduce.

Such a truly strategic discussion, in short, could provide a perspective that would give added resonance to the more concrete initiatives that may grow out of this summit, increasing the prospect that they will contribute to building greater mutual trust about long term intentions.  This outcome is by no means a certainty – but it is an opportunity that warrants serious attention.

[1] TPP is the Trans-Pacific Partnership, and RCEP is the Regional Comprehensive Economic Partnership.