CvT: Sept. 2, 2020

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Driving Off a Cliff Over US-China Strategy

Written by: TCG Contributors

As the US-China relationship continues to careen into the dark, a singular question weighs on the minds of diplomats and business leaders alike: “Where is the bottom?”

The reality is that there is little chance that a master plan exists – for either country. To say that no one knows, not even the most senior decision makers on either side who are caught in an endless game of high-stakes cat and mouse, is an understatement. Equally concerning is the fact that many, especially on the US side, have conflicting goals and narratives even within the same camp, which in itself gives weight to the notion of disarray.

A History of Discontent Brought an Unstable Present

As disjointed as US policy on China may appear, the country has, if nothing else, made its grievances against Beijing clear through the Section 301 report, scattered indictments, WTO cases, the list goes on. While the US may be driving the bilateral relationship’s downward spiral at the moment, China had long played the role of the instigator. Indeed, years of relative inaction from China on various US asks has resulted in diminished influence for those wishing for more positive engagement with China relative to China hawks for the foreseeable future. Perhaps this trend will hone those conflicting goals and narratives into a consistent policy approach, but, worryingly, consistent does not always mean “good” when it comes to foreign policy.

As far as China is concerned, Beijing’s goals can be attributed to the pursuit of power, respect, self-reliance, and prosperity. Yet how to achieve this is still less clear than Five-Year Plans would lead one to believe. That China is not a monolith is a long-standing cliché by now. Despite limited visibility as to what really goes on behind closed doors in the Politburo, it can at least be said that China has its own hawks and doves. Were only our crystal balls able to peer into the fog of Chinese politics, perhaps we would see diverging opinions on what to do about the nation’s ‘US problem,’ but in all likelihood, the divergence no longer matters as much.

Mirroring the relationship between the hawks and doves across the Pacific, consistently erratic behavior from the US has left doves in China without a soapbox to stand on. Internal assurances from would-be reformers that the bilateral relationship can be restored is now likely beginning to fall on deaf ears. At one time, liberals (the economic right) in China privately and quietly welcomed certain kinds of pressure from other nations such as the US in order to fuel their own political agendas. Their fuel is quickly running dry. This new inability for doves on both sides to connect is new territory for the bilateral relationship since its establishment during the Nixon administration. There are those who say peaceful engagement has failed for the US, but this is only telling one side of the story. After all, it was anything but inevitable that China looks far less like North Korea than it once did.

Misaligned Value Propositions

It is, however, apparent that some items on the US’ wish list would not have been solved within a reasonable period of time without a new approach. Indeed, the bilateral relationship has been, and continues to be, unbalanced. Specifically, the “wish list” from the US is a lot longer than China’s own corresponding list. While China would prefer not to be criticized on issues related to human rights or challenged on territorial claims, concern for such items is hardly unique to the United States. Surely China has more skin in the game when considering India’s thoughts, for example, on border disputes in the Himalayas than commentary on the same matter from US officials. Besides, the meat and potatoes of international criticisms trickle down to fewer and fewer domestic listeners in China thanks to aggressive censorship and propaganda campaigns. The US wish list, on the other hand, is far more personal, and largely consists of items specific to China. “Don’t mobilize your government to steal IP” and, “stop skirting WTO rules” are both popular requests that apply to few other countries. Yet, from a value-added standpoint, why should China oblige? What does it stand to lose by continuing its behavior? More importantly, what does it stand to gain?

Over the past few years, the US has begun asking itself these questions, too, and has come to the conclusion that China’s behavior would likely continue. Patrick McGuinness famously said, “In diplomacy there are two kinds of problems: small ones and large ones. The small ones will go away by themselves and the large ones you will not be able to do anything about.” The quote is, of course, less relevant for countries like the US and China. Since China until recently had few requests from the US, there was little to negotiate. This is no longer true. The US has quickly, and arguably at great cost, morphed itself from a version of itself that China always wanted into a version China decidedly does not want. While the recoil caused by this shift is still up for debate, as far as gains are concerned, only future generations will be able to tally the numbers.

Regardless of how we got here, the US is at least newly endowed with additional diplomatic leverage against China, and China now has something to gain – or, perhaps, something not to lose – in its dealings with the US. The US-China relationship is complicated, and neither party is easily extricated from the other. The medium-term strategy should already be clear: the US hopes to gain leverage over China in order to drive behavioral change. The Phase One trade deal is an example of this success. China is now serious on agricultural purchases, IP reform, and other areas, and even though the Chinese government insists “it was going to do these things anyway,” the truth is that it might have taken years. 

No Way Out for the Disgruntled Passenger

Plans for domestic localization efforts and shifting of diplomatic and trade ties will unquestionably account for China’s approach to relations with the US going forward. This is not to say, however, that such trends are new. While the US has proven to be an unreliable and dangerous trade partner for China over the last couple years, various Beijing initiatives that would have naturally decoupled and bifurcated China from the West have been around for a quite some time now. These include cyber security measures, media and content controls, discriminatory procurement policies, localization of manufacturing, aversion to international standards, China-specific financial infrastructure, data localization efforts – the list goes on, and each pre-dates the trade war. Due to the uncertainties on what China is able to achieve in mitigating its exposure to the US, the long-term strategy US policymakers would like to seek remains unclear. Perhaps it is the same in Beijing.

Apart from work in each of those areas, China is very much in the passenger seat. It has primarily been reactionary to the majority of developments in the US-China relationship since President Trump took office and is the only country of the two constantly calling for de-escalation through rhetoric and action. Since the establishment of the PRC, China has always viewed foreign policy from a realist lens, and would be unlikely to behave in this way unless it felt it was in a weak position.

If the US has a long-term grand strategy in mind, it is not readily apparent. Considering that the US Departments of State, Treasury, Commerce, and USTR have taken inconsistent approaches thus far amid President Trump’s capricious rhetoric, the puzzle pieces point to a void in unified long-term strategy. Until a coherent long-term strategy forms, it would be wise to expect more action from the US to rebalance its relationship with China and gain additional leverage. Until China feels it is in a stronger position or shores up its reliance on the US for trade, it will remain in the passenger seat while the US drives the two nations, blindfolded, into unprecedented territory.

A Grand Strategy: How Diplomacy and Traditional Alliances Will Decide US Hegemony in Southeast Asia

Written by: Alex Hurley

With a standing army of 975,000 soldiers and US$266 billion of military expenditures in 2019, China continues to reshape the military landscape of Southeast Asia and challenge the conventional assumption of US military superiority in the region. As evidenced by recent tensions in the South China Sea, most notably in August 2020 through the People’s Liberation Army’s volley of “carrier killer” missiles in response to US military surveillance, Beijing is committed to defending its perceived territorial claims and limiting Washington’s influence in the Indo-Pacific region. 

A Rising Power in the East

A recent report from the US Army War College’s (USAWC) Strategic Studies Institute (SSI) examining the American military position in Southeast Asia suggests China’s strategy of containment and armed deterrence is working. Researchers at the USAWC have found that ongoing PRC investment in cutting-edge military technologies, such as the development of China’s anti-access and area denial (A2AD) perimeter and long-range DF-26 anti-ship ballistic missiles, and the creative employment of military assets, such as the installation of military platforms on strategically-located coral reefs, has led to the PRC’s political-military advantage within the region. This rapid modernization of  the PLA’s military has led USAWC experts to conclude that an armed conflict between the world’s most powerful nations could lead to US defeat. 

Simulated war games by the Pentagon in 2020 support the findings that Beijing’s recent military initiatives could significantly challenge US hegemony in the region. China’s strategic use of unconventional tools of warfare or “gray zone” actions such as information warfare, economic coercion, and the use of paramilitary forces represent a significant obstacle for Washington, which relies on its strength in global diplomacy, commerce, and conventional military power to maintain geopolitical influence. Allegations of foreign interference in the 2016 US presidential election, targeted disinformation campaigns surrounding the coronavirus pandemic, and fears of unsustainable indebtedness for countries that partner with China’s One Belt One Road (OBOR) initiative reflect a series of hybrid new threats which obfuscate the source of political provocation. Without a transformation in military and foreign policy strategy and systems in place to recognize and identify gray-zone actions, Washington’s use of conventional military might will miss its mark.    

Understand, Plan, Act

The solution to these hybrid threats and the emergence of China’s military power is simple: a grand strategy. The adoption of a consistent set of values and ideals which drives US foreign policy is a necessary first step to combat unified competitors who seek to redefine the landscape of global relations. Washington can then use established diplomatic practices to define and influence behavior that threatens the balance of power in Southeast Asia and rely upon historic alliances with Japan, South Korea, and Australia. 

Maintaining a strong military presence coupled with improved statecraft can allow Washington to influence other nations and their conflicts, which ultimately may increase American stature in a region where head-to-head military engagements between the US and China would lead to “mutually assured destruction.” If Washington takes more decisive action to marry political operations with military strategy and re-asserts the importance of diplomatic relations alongside a grand strategy, Beijing will face a transformed adversary that can challenge the PRC’s supremacy in Southeast Asia. 

Trump vs. Biden on China: The Potential Policy Perspective

Written by: Zoe Roth

With the presidential election right around the corner, the two US presidential candidates’ stances on foreign policy, namely Sino-US relations, have become a topic of heated discussion. As the bilateral relationship continues to spiral at a concerning pace, each candidate’s China strategy will inevitably become a key focal point of their campaign. Let’s take a look at some of the claims made by the candidates, and the feasibility of their implementation.

Trump Talk

Trump’s approach to China has favored hard-lines and protectionist policy – but at his core, Trump is more a showman and less a China hawk. If re-elected, Trump is likely to continue his hard-line stance on China over the short-term but sue for peace over the mid- to long-term.

  • As the era of American manufacturing declines, having lost 5 million jobs in the industry since 1998, Trump campaigned on the premise of bringing these jobs back from China. While Trump has claimed that America can reshore many of these jobs, decades of globalization have favored a “race to the bottom” for general American manufacturing as the US economy transitioned towards high precision manufacturing and importing high volumes of goods to support a consumer economy. Recovery of the domestic manufacturing industry is unlikely due to the inherent comparative advantages that drive US economic strength. In addition, innumerable US multinational corporations are “in China for China,” pursuing localized manufacturing operations for goods sold in China to the Chinese market. Due to the nature of this approach, reshoring these manufacturing jobs would be impractical. As a result, Trump may be compelled to rebalance the US-China economic relationship by calling for exaggerated terms within the Phase One trade deal and any other subsequent bilateral exchanges that may yet take place.
  • Trump has adopted a starkly protectionist approach to US trade in an effort to rebalance trade with China. From banning Chinese tech firms and strengthening domestic supply chains to blocking US companies that outsource manufacturing jobs from winning federal contracts, Trump has stated his intent to lessen US dependence on China while incentivizing “Buying America.” While there is precedent of Washington successfully attracting American businesses back to the US through tax credits and other business incentives, this kind of approach to trade would drive short-term gains while resigning medium- to long-term global competitiveness for American multinational corporations as production costs rise, economies of scale shrink, and businesses are subjected to a less efficient operating environment, among other inefficiencies.

Biden’s Plan

Though Biden favors engagement with China more than Trump, his occasionally contradictory approach to China is emblematic of an unaligned China strategy within the Democratic party. A Biden presidency done right could reap more fruitful negotiations on the road to normalized relations, but his hardline stance on China’s human rights issues and security infringements could still fan the flames on other fronts.

  • Biden has taken a progressive approach to social issues, and maintains Washington’s current stance on sanctions on China over the passage of Hong Kong’s National Security Law. If elected, Biden is likely to continue imposing economic sanctions on individuals, companies, and financial institutions associated with the undermining of Hong Kong’s effective autonomy from the Mainland. US efforts to penalize China’s bold action towards the former British colony may further spiral bilateral relations, while increased tensions over social issues could spill over into the global economy in the form of reciprocal punitive trade measures on both sides of the Pacific.
  • Biden supports international cooperation on key global security issues like nonproliferation and climate change, viewing these as potential areas of collaboration between the US and China. Though positive engagement between the two nations could open doors for improved relations in the future, the underlying multilateral power struggle between Washington and Beijing over global influence could limit the possibility for warmer relations within the current chilly climate.
  • Under Biden, America would likely seek to repair relations with longstanding allies that share common concerns over Chinese trade practices. While Trump has sought to bargain with China on intellectual property, trade deficit, and security issues independently, Biden may seek to leverage the shared grievances held by many of China’s trade partners within international bodies like the WTO or WIPO to gain more traction in negotiations by having multiple bargaining chips.

Looking Forward

Both candidates recognize the defining role that US-China relations will play in shaping the future of both nations. While Trump and Biden have both spoken on economic protectionism for domestic companies, Biden seemingly favors engagement through discourse while Trump appears committed to a hardline approach – at least for the moment. Regardless, with both candidates standing on shaky ground without a grand China strategy, the future US president-elect will need to first unite a severely fractured political system before making meaningful long-term progress on US-China relations.

Further Reading

Coffee vs Tea

CvT: Oct. 28, 2020

Coffee vs Tea

CvT: Oct. 21, 2020

Coffee vs Tea

CvT: Oct. 14, 2020

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