China and the U.S.: A Marriage of Convenience

Jan. 1 marked the 30th anniversary of the establishment of diplomatic relations between the People’s Republic of China and the United States. While President Richard Nixon and Mao Zedong opened the door, it was President Jimmy Carter’s secret negotiations with Deng Xiaoping that normalized relations 30 years ago.

Over the past three decades, the relationship has transformed dramatically and has arguably become the world’s most important one among major powers. Today relations are the best they have been since the disruptive events of 1989.

Cooperation between China and the United States is imperative to global and regional order, and the two sides are cooperating on a wide range of global issues. This reality is a reflection of how far the relationship has come since 1979. Thirty years ago it was a shadow of its current cast. Consider the following dimensions of changes.

The financial relationship has become the most important one in the world. Trade has grown from $2.5 billion in 1979 to over $400 billion in 2008. The United States is China’s single largest national trading partner (the European Union is collectively larger). Nearly all the American Fortune 500 companies do business in China, investing in more than 50,000 Chinese enterprises with a paid-in total of more than $50 billion. Wal-Mart alone, if it were a country instead of a company, would rank as China’s seventh largest trading partner.

Meanwhile, China has become America’s largest creditor, amassing $585 billion in U.S. Treasury bonds by September – a figure that may have swelled to over $700 billion by year’s end (China also purchases U.S debt instruments through third countries, which analysts say could bring the total closer to $1 trillion).

Interdependence binds Chinese and American societies together. Several million Chinese passport holders live on “green cards” and work in the United States, and many commute regularly between the two countries for business. Thirty years ago there were no Chinese students studying in American universities; this academic year there are 67,000, while there are 11,000 Americans studying on China’s campuses.

The intergovernmental relationship has never been broader or more deeply institutionalized. Thirty years ago the first agreements were signed drawing the two bureaucracies into contact – today there are more than 60 bilateral dialogues and working groups in existence. The most important of these are the Strategic Economic Dialogue and the Senior Dialogue on Global Issues. The communication in these dialogues is professional and cooperative.

At a higher level, the two presidents communicate frequently by secure telephone and meet 5-6 times per year at international meetings.

Although the two countries shared a common enemy with the former Soviet Union back in 1979, and worked effectively together to counter Soviet expansionism, in reality the relationship was limited to Asia, as China had little or no presence in other regions of the world. Not so today, as Beijing is a global player on all continents.

Beijing’s global presence is largely commercial, diplomatic, political (with local parties), and increasingly in an array of “soft power” cultural instruments.

As a result, China and the United States are bumping up against each other in new regions of the world – Africa, Latin America, Central Asia, Middle East. This is only going to continue, and it behooves both sides to better understand the other’s vital interests in these third areas.

The Taiwan issue, which has plagued the relationship over the years and has brought the two nations to the brink of war several times since 1950, has shown significant signs of amelioration since May 2008. Even before Ma Ying-jeou’s election as Taiwan’s president, which started the trend, Washington and Beijing worked effectively to contain his predecessor (Chen Shui-bian) from provoking a major crisis through his pursuit of independence for the island.

The two countries have certainly had their share of crises and misunderstandings over the past 30 years (and continue to have differences in several policy areas), but each one was defused without deteriorating into conflict. Both countries are nuclear powers and are keenly aware that a conventional military conflict would not be easily contained. Just as the United States and China can contribute much to peace and stability in Asia and the world, so too do they share the capacity to destabilize and destroy the world should an adversarial relationship occur. This is one reason why bilateral military exchanges (currently suspended) are so important to strategic stability.

After three, often rocky, decades of interaction, the United States and China seem to have settled into a “mature marriage,” where mutual respect, mutual interests, and an awareness of the negative consequences of an adversarial relationship bind the two together. In this marriage divorce is not an option. Having achieved this level of interdependence, hopefully the next 30 years will bear real fruit of bilateral, regional, and global cooperation.