Global China

Technology

Leads: Jessica Brandt and Chris Meserole

Technology is perhaps the most intense realm of competition between the United States and China today, and artificial intelligence (AI) is central to that contest. By developing state-of-the-art capabilities in AI, China seeks to achieve strategic advantage over the U.S. and its allies. It also aims to leverage new forms of AI-enabled surveillance and repression in ways that strengthen its illiberal model of governance—both within China and around the world. Although democratic countries have started to push back, with rising calls for greater AI investment and the development of robust AI principles, China nonetheless threatens to outpace the U.S. and its allies in AI research and standards-setting.

The consequences of U.S.-China competition over AI and emerging technology extend far beyond the digital domain. At stake are core democratic values that underpin free and open societies. Fortunately, there are steps that the United States, working in partnership with other democratic governments, can take to safeguard democracy and liberal values in an age of AI.

This working group will consider:

Research and Development

• How can the United States advance AI research and development to maintain and sharpen its edge in key areas, from chip design and fabrication to deep learning architectures to human-machine teaming?
• How can Washington ensure that democracies take the lead in privacy-preserving machine learning, explainable machine learning, and AI safety? What can the U.S. and its democratic partners do to ensure that the next generation of AI technologies have democratic values – such as privacy, transparency, and verifiability – baked in by design?

Trade and Investment

• What measures can Washington adopt to ensure that United States and allies remain one to two generations ahead in semiconductor manufacturing and other high-end hardware? What steps can it take in coordination with allies to increase the probability of maintaining China’s dependence on imports of AI chips?
• How can the U.S. and its allies increase fabrication capacity outside of East Asia and increase the resilience of semiconductor supply chains?

Talent

• How can the United States deepen its bench of AI talent, from top-tier researchers that push forward the state-of-the-art in both AI algorithms and hardware to engineers and developers that can deploy AI at scale?
• What kinds of immigration policies and partnerships (between public and private sectors, and between governments) could support that goal?

Standards and Norms

• How can the United States and its democratic partners set international rules of the road for AI that support democratic values?
• How can democratic governments engage strategically in AI standards setting processes without turning them into a locus of geopolitical competition?

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New dynamics in US-China relations

Lead: Ryan Hass

China is both America’s foremost competitor on the world stage and a potential contributor to addressing global challenges that the United States and its partners are not able to manage effectively without China’s involvement. The relationship is tilted toward long-term systemic rivalry, but it is not an exclusively rivalrous relationship. There also is deep interdependence between the United States and China across a range of issues. It remains too soon to determine whether these interdependencies will mitigate or intensify rivalry. The verdict likely will need to be viewed on a case-by-case basis.

These dynamics make the modern U.S.-China relationship unique in the international system. Devising effective policy prescriptions will require new thinking about how the United States should navigate its relationship with China.

To drive the development of new policy thinking for America’s approach to China, this working group will examine several central questions as well as other issues that are derivative of them. These include:

• What are America’s most fundamental interests in its relationship with China and what are desirable but secondary interests with China? In other words, what must the United States achieve and avoid with China? What are other worthy goals that merit policy focus, but that fall below “must have” priorities with respect to China?
• What are the most effective strategies for advancing these “must have” priorities with China? What is the proper balance between working to create external incentives and disincentives that move China in America’s preferred directions, and dealing directly with China to influence how they define and pursue their interests? How does direct diplomacy with China impact America’s ability to create favorable external conditions for influencing China’s choices, and vice versa?
• What – if any – historical lessons can be drawn from past instances of great power competition and applied to the modern conduct of U.S.-China relations? Are there lessons from the history of U.S.-China relations that could inform America’s approach toward China going forward?
• Where – if at all – does the United States derive benefit from its interdependence with China, and where is it vulnerable from its interdependence with China? What more can the United States do to limit vulnerabilities?

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Strategic issues

Lead: Michael O’Hanlon

China is now without doubt the world’s number two military power. Its defense spending, even if still only a third of America’s, is triple that of any other country. It is modernizing its forces with a range of advanced technologies while preparing a nuclear weapons buildup that could make it a near-peer of the United States by the nuclear metric within a decade or so. The U.S. Indo-Pacific Command believes it plausible that China could attempt a forced reunification with Taiwan by the latter years of the 2020s; whatever Beijing’s actual plans, Taiwan politics interject an additional element into the strategic equation, beyond the ability of either Washington or Beijing to control.

In this context, it is essential to mitigate the risks of U.S.-China war over Taiwan in particular. Other military contingencies involving China, for example those in the so-called gray zone, are worrisome too, ranging from the South China Sea to the East China Sea. Nor can the possibility of direct U.S.-China conflict be dismissed should there be another Korean War. But in terms of issues that could grow directly out of the U.S.-China relationship, and that both sides take seriously enough to make the prospect of high-end warfare credible, the Taiwan issue stands out. For China, Taiwan is a matter of national unity and righting historical wrongs. For the United States, it is about protecting a crucial democratic friend, and perhaps also reducing the odds that China could gain a strategic asset.

This working group will address military, strategic, and arms control dimensions of the U.S.-China relationship with a particular eye on the Taiwan challenge, since the latter is the most fraught security problem in the broader relationship. Our group seeks to explore the following questions:

• What is at stake in a U.S.-China war, including what are the implications if China successfully annexes Taiwan?
• What steps can be taken to prevent escalation to general war or nuclear war if a U.S.-China conflict over Taiwan begins?
• What are the kinds of improved deterrent strategies and warfighting strategies for the United States and allies that would mitigate these risks—to include different U.S. defense postures in the region, improved innovation and modernization strategies for the American armed forces, and a better-developed concept of “integrated deterrence” as that incipient concept is now being discussed at the Pentagon and beyond?
• What are the options for strategic arms control that could help cap China’s expected nuclear buildup?

Our broader work will include research on the strategic and military significance of Chinese incorporation of Taiwan into its territory as well as work on integrated deterrence and on forecasting war outcomes over Taiwan. Our group will focus on strengthening U.S. responses to the Taiwan security challenge in particular.

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Great powers

Lead: Jim Goldgeier

In the strategic competition with China, U.S. alliances and partnerships in Europe and the Indo-Pacific play an important role in enhancing American power. On the other hand, China’s relationship with Russia provides an opportunity for both of those countries to work together to counter and undermine the long-standing U.S.-led international order. In the past, many analysts have been skeptical of the potential for deep cooperation between two countries that have had difficult relations historically. However, the overwhelming desire of the leaders in both nations to work together to counter American dominance has brought them increasingly closer together in recent years.

The United States has sought to forge a closer partnership with another of the great powers, India. The Indo-Pacific Quad, which includes the United States, Australia, India, and Japan is increasingly an important forum for American policy in the region.

Finally, Europe wields power globally by enhancing the role of the European Union, which is powerful on international economic issues while remaining weak as a security actor (although the massive and unprovoked Russian military assault against Ukraine in February 2022 stimulated calls for much greater European efforts on defense). China’s investments in Europe, especially in technology, have concerned the United States in its role as the leading power in NATO, whose interoperability might be compromised by China’s efforts in this area.

This working group will examine the impact of China’s relations with Russia, India, and Europe on Sino-American relations and the U.S. response. It will also explore whether the great powers can cooperate on common global challenges such as climate change, pandemics, and nuclear non-proliferation. It will address the following issues:

• How are China’s relations with other great powers creating opportunities and challenges for Beijing as it pursues its foreign policy objectives vis-à-vis the United States, and what will this mean for U.S. relations with the great powers?
• How have China and Russia developed their deep partnership, and what are the main areas in which the two countries cooperate? How does the Sino-Russia relationship enhance each country’s power globally and vis-à-vis the United States? In addition to analyzing the sources of their deepening partnership, the group will explore the areas of tension that remain in the relationship and ask whether there are ways for the United States to exploit those tensions.
• In what ways do China’s relations with India create opportunities and challenges for the United States? Where do Indian perceptions and approaches toward China converge with those of the United States and where do they diverge? Keeping in mind that India is not a U.S. ally, how should Washington see and respond to China-India contingencies such as an escalation in their border crisis, or the question of the Dalai Lama’s successor?
• What are the differences within Europe regarding relations with China, and can the United States and Europe develop common approaches to respond to Beijing’s economic, political, and military challenges? How important is Europe for America’s China policy?

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Indo-Pacific

Lead: Mireya Solis

The Indo-Pacific is the world’s most dynamic economic region and is home to several mature democracies with advanced technological capabilities which are long-time allies or close partners of the United States. As developing Asia continues to make strides with an outward looking economic model, the vast majority of the world’s middle class is expected to live in this region. But the Indo-Pacific is also bedeviled by security challenges: rising tensions in the Taiwan Strait, North Korea’s intensified nuclear and missile programs, and the military coup in Myanmar. The Indo-Pacific is evolving in one more fundamental way: the rewiring of the lines of security and economic cooperation. The American hub-and-spoke alliance system is increasingly operating in tandem with networked security arrangements such as the Quad, AUKUS, and a host of issue-specific bilaterals and trilaterals. The economic architecture is also experiencing profound change with the emergence of mega trade agreements and the proliferation of national security controls over international economic transactions.

The most profound change in the Indo-Pacific, undoubtedly, is the emergence of a peer competitor for the United States: China. Chinese capabilities and ambitions have grown substantially to become the second largest economy in the world, largest trading partner for all regional economies, and a formidable military power with sizable and non-transparent defense expenditures. It is in its near abroad, that China’s influence is felt more intensely: from its expansive claims in the South and East China seas, border conflicts with India, and the more frequent use of economic coercion on regional actors; to landmark connectivity initiatives such as the Belt and Road initiative aiming to close the infrastructure finance gap and secure China’s leadership in the region.

As the United States charts its path to retain its essential role as a preeminent Pacific power, it must first get its priorities right. This working group will seek to address the following questions:

• What are the set of core U.S. national interests that should result in strategic and well-resourced Indo-Pacific initiatives? How are they distinguished from desirable but secondary objectives?
• What are the range of Chinese actions in the Indo-Pacific that challenge U.S. security and economic interests as well as those that leave room for coordination and cooperation?
• The success of the U.S. Indo-Pacific strategy will hinge on the administration’s ability to work with Asian counterparts. What are the interests and national security strategies of key regional players which include but go beyond the usual ‘like-minded’ group: Japan, South Korea, India, Taiwan, Vietnam, and Philippines?
• What are the opportunities and challenges that a networked Indo-Pacific presents for U.S. national strategy: from the skillful management of the security minilaterals, to the perennial search for rebalancing U.S. regional strategy with a compelling program of economic engagement?

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Regional influence and strategy

Lead: Madiha Afzal

Through its Belt and Road Initiative, China has established influence across the following three regions: South Asia, the Middle East, and Africa. The United States cannot (and does not want to) compete dollar for dollar in countries where the Belt and Road Initiative is making large investments in infrastructure. Yet, there are investments, trade relationships, and markets that countries on the receiving end of China’s infrastructure investments seek from the United States that are qualitatively different from what China offers.

This working group will first seek to define China’s role in these three regions and highlight the factors that determine its influence. Second, the group will focus on America’s policy choices in response to China’s economic investments and security relationships in these regions: what is current U.S. policy, what is America doing right, and where can it improve?

Some questions this group will explore include:

• How can we define China’s economic and security influence and role in the Middle East, South Asia, and Africa? What are the key dynamics and salient issues at play in China’s relationship with the region? In particular, how do politics, economics, security dynamics, as well as regional and geo-political considerations intersect in defining China’s relationship with the region and its strategy toward it? What role has the U.S. relationship with the region in turn played in affecting China’s influence and strategy? What are the trend lines when it comes to China’s relationship with regional countries, and what are the major challenges, roadblocks, or gaps in these relationships?
• How does current U.S. policy respond to Chinese influence and strategy in the region? To what extent do China, the United States, or the region see the region’s relationships with China and the U.S. as zero-sum – both in terms of economic and security relationships? What is the range of America’s policy options given its own interests in the region – in terms of both economic and security strategy – and where can it improve on current policy choices?

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Global order and governance

Lead: Bruce Jones

Over the past two decades, China has engaged in a fast-paced, sustained program of military expansion and modernization. This has captured the imagination and heightened the concern of strategists and policy-makers in Asia and the United States, and to a lesser extent Europe. But China is not just a growing military power; it’s also increasingly intent on wielding a combination of diplomatic and economic tools to challenge or reshape the terms and conditions of global order and global governance. And like Britain and the United States before it, it increasingly views its challenge to the primacy of the status quo power and its growing influence in global order and governance, as two sides of the same strategy.

China has already made a major bid for influence in the instruments of international economic governance. Here, China has shifted from being a rule-taker to a rule-shaper. This, combined with its extensive set of development, infrastructure, technology and energy investments and loans—not just in the developing world, but in emerging markets in Latin America and the smaller economies of Europe —is giving China a major platform for leverage and influence within globalization itself, and on global issues.

Now, it’s also increasing its influence in the instruments of international security governance as well—including around core concepts like sovereignty, the role of alliances, of democracy, freedom of navigation—and in that set of international institutions that provide the regulatory undergirding of globalization.

This working group will:

• Highlight the major dimensions of Chinese influence within key global (and powerful regional) frameworks and institutions, and their strategies for achieving it; and parse the distinction between those areas where increased Chinese influence is injurious to U.S. interests and Western values, those where it is not consequential, and those where it is constructive;
• Examine China’s strategies in those global fora that are seeking to develop frameworks for the global governance of under-regulated domains, especially technology (in conversation with the working group on tech) and space;
• Propose U.S. and Western strategies for response. That includes both techniques for pushing back against growing Chinese influence, but also possibly strategies for advancing the use of global order frameworks as devices for helping to manage the bilateral relationship.

The concentration of focus will be on global bodies and frameworks with either a treaty foundation or high prestige – thus, the G-20; UN Security Council; IMF; WTO – and those which play a key role in the regulation of globalization (e.g. World Bank, ITU, WHO, WIPO). But we will also examine Chinese use of diplomatic and economic instruments to shape and in some cases subvert the workings of regional organizations (e.g. the European Union and African Union) that play major roles in the diplomacy of global order and organization.

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Economics and development

Lead: David Dollar

Confrontation, competition, and cooperation between the U.S. and China will affect the environment for global economic growth, especially growth and poverty reduction in the developing world in the decades to come. For most developing countries, either China or the United States is the largest trading partner and access to these enormous markets is a key foundation for prosperity. Distortive trade practices from either one – subsidies that distort trade, dumping, or protectionism via tariffs or non-tariff barriers – reduce development opportunities. Similarly, flouting of World Trade Organization (WTO) rules and decisions by the big players is particularly hard on small and medium-sized economies.

In the financial realm, the United States and China are the key players who create a low-inflation environment for the global economy. Disturbances in the financial system, especially the U.S. one, lead to crises in the developing world. Aside from financial instability arising in the two big economies, there are various external shocks that buffet countries or regions. COVID is a classic current example. As a result of the COVID pandemic and recession, debt burdens that had seemed prudent in many cases are now unsustainable. China is the largest official bilateral creditor to the developing world, mainly via infrastructure loans at commercial interest rates in its Belt and Road Initiative (BRI).

This working group will look at the following issues:

• What role can China play in restructuring debts and ensuring their sustainability? What steps can the United States take to create a stable financial environment as the dominant shareholder in the International Monetary Fund and the home of the largest private capital markets?
• Looking to the longer term, there is a need for more development finance to support infrastructure and other public services. How can global players urge China to make its funding more transparent and concessional, and channel more via multilateral routes such as the World Bank? What actions can the United States take to allow for China and other developing countries to have greater say in these institutions? Will China’s economic slowdown reduce its financing for development elsewhere and otherwise limit development opportunities for its partners?

The working group will produce a set of specific recommendations, some for China and the U.S. to pursue unilaterally and others for them to pursue collaboratively. Ensuring a good environment for development is in the interest of both super-powers because a world of poverty and slow growth is likely to be full of conflict. It will also be a poor foundation for tackling global challenges such as pandemic control and climate change.

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Climate and energy

Lead: Samantha Gross

Implementation of the U.S.-China Joint Glasgow Declaration on Enhancing Climate Action in the 2020s, issued at the Glasgow Conference of the Parties in November 2021, focuses on the degree to which the United States and China will cooperate on climate issues. Hopes were high when President Xi Jinping appointed Xie Zhenhua as China’s special envoy for climate change. Mr. Xie held the same position in the lead-up to the 2015 Paris Agreement, and the joint announcement of the U.S. and China’s Paris Agreement pledges at the end of 2014 was a key event to generate momentum for the Paris process and signal that the two largest emitters were taking it seriously. However, U.S.–China relations deteriorated in the intervening years.

The Declaration is a good start, but is intentionally vague, generally restating the existing commitments and policies of the two countries. However, certain parts of the Declaration, some of which are outlined below, signal greater ambition, especially in areas that are ripe for cooperation between the two nations and that focus on near-term impact.

This working group will examine:

• Broadly, can the U.S. and China find a way to cooperate on energy and climate issues amidst their strained relationship?
• China has not joined the Global Methane Pledge, jointly announced by President Biden and EU President Von der Leyen in September 2021. Methane is a short-lived, but very potent greenhouse gas. Reducing methane emissions can provide outsized near-term benefits in reducing warming, a crucial benefit in a transition that is bound to take time. Can the U.S. encourage China to join global methane emissions reduction efforts?
• Can the U.S. and China work together integrating renewable energy and electrifying end uses of energy? China has been the world’s largest builder of renewable energy capacity for years now and certainly has lessons learned on how to integrate variable renewables into the larger grid. The transportation and industrial sectors are important to both countries and ideally the U.S. and China can work together on technology development and implementation to electrify and decarbonize these two difficult sectors.
• The Declaration also contains references to softer issues, like deforestation and societal benefits of decarbonization, along with technological issues like the circular economy and carbon capture, utilization, and sequestration. Can the U.S. and China work together to make progress on new uses of technology to fight these challenges?

In all of these cases, moving forward will involve bringing in ministries across the central governments and state-level officials in both countries. Both countries have advanced universities and research labs. The key will be developing working level relationships between officials in both countries and building trust, an attribute largely missing from today’s U.S. – China relationship.

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