Reassessing U.S.-China Relations

Competition, confrontation, or collision course? A new report peers into the future of the world's most consequential bilateral relationship

By Orville Schell, Susan Shirk, and Ankit Panda July 31, 2019

Carnegie Reporter Fall 2019 Emerging Global Order

Are the United States and China on an irreversible path toward confrontation? Which country bears greater culpability for the ongoing decline in bilateral ties? How should the United States respond?

To probe these questions and the nature of China under President Xi Jinping, we turned to three experts who’ve investigated the U.S.-China relationship extensively.

Orville Schell, the Arthur Ross Director of the Asia Society's Center on U.S.-China Relations, is a decades-long observer of China, author, journalist, and former dean and professor at the University of California, Berkeley.

Susan Shirk is research professor and chair of the 21st Century China Center at the School of Global Policy and Strategy at the University of California, San Diego. She previously served as deputy assistant secretary of state (1997–2000), responsible for U.S. policy toward China, Taiwan, Hong Kong, and Mongolia.

Together, Schell and Shirk are the cochairs of the Asia Society Task Force on U.S.-China Policy comprising several top U.S. experts on China’s politics, economy, and foreign policy. A February 2019 report offers prescriptions for U.S. policy toward China and is a successor to a March 2017 report.

The discussion was moderated by Ankit Panda, a senior editor of the Asia-Pacific affairs magazine the Diplomat and an adjunct senior fellow at the Federation of American Scientists.

Carnegie & China: Some Background

By Stephen Del Rosso, Program Director, International Peace & Security

With proper safeguards in place, technology Beginning in the mid-2000s, the Corporation began to focus on China — today, the U.S.’s primary “peer competitor” — in earnest

How We Got Here

ANKIT PANDA: How do you explain the current lurch in the United States toward great power competition with China? The Trump administration recognized it and called it that. But even before that, there were calls to move in this direction, in this increasingly confrontational posture toward China. So, where is this all coming from?

In the last five to eight years, we’ve seen increasingly assertive, even aggressive behavior by China abroad and a much more pronounced preference toward authoritarian controls at home.

— Orville Schell

ORVILLE SCHELL: Over the last 10 to 20 years, American policy has had an ever-changing mix of carrots and sticks with China, trying to engage it and interact with it. And sometimes the relationship had begged pushback in areas that we thought were counter to our interests.

But, in the last five to eight years, we’ve seen increasingly assertive, even aggressive behavior by China abroad and a much more pronounced preference toward authoritarian controls at home. This has really stressed the relationship, challenged the notion of “engagement” and has put us at an inflection point in how the U.S. should respond.

PANDA: Reading the report, it seems fair to say that the prescription at the core, along several of the topics that are addressed — from economics and human rights to security issues — is that on balance there is today a need for a more confrontational U.S. approach toward China, while not writing off engagement altogether.

SUSAN SHIRK: I wouldn’t say confrontational. More competitive, for sure. So, we accept that the relationship has become more competitive, and we need to be firmer, while still specifying the specific areas where we want China to make changes. So, negotiate in a sensible way, a clear way, in order to test whether or not there’s flexibility on the Chinese side, and also still keeping the door open to cooperate on important global issues, like climate change, refugees, global health.

PANDA: The concern that I have is, in discussing many of these more competitive approaches toward China, do we end up feeding into a narrative within China that it is indeed the West and the United States that are seeking to stem China’s rise? This is often the narrative that you’ll hear out of Beijing. So, how can we move toward this more competitive approach and avoid feeding into that narrative in China?

SHIRK: That is a great question. It’s a crucial question in our diplomatic efforts. We make very clear what are the problematic actions that China has taken that are increasingly out of line with global norms and are highly detrimental to American interests and values, but also not just to us. We have this backlash around the world, especially in advanced industrial countries. So, we need to be clear that this is not just an across-the-board hostile attitude toward China.

SCHELL: Pushing back against China does sometimes excite nationalist chauvinistic forces within China. We should be mindful of that. But it also can serve to support those elements within China, including all of those returned students and other people that actually do have an active, or at least incipient, liberal temperament, who are being completely ignored now by their own government. They are now feeling quite lost and bereft of any support or any contact. So, it’s a paradox.

A Decoupling Ahead?

PANDA: Let’s talk a bit about the ongoing dispute between the two sides over Huawei, beginning with the arrest of Meng Wanzhou in Vancouver, Canada, which has really inflamed nationalist passions in China, where the company is seen as the crown jewel of Chinese high-tech self-sufficiency. Is this the spark that will ignite a broader process of decoupling between the West, the United States included, and China in the high-technology sector?

SCHELL: Several months ago I visited the Huawei headquarters in Shenzhen. It is a pretty extraordinary company. They’re doing some very innovative, creative things and their world market reach is impressive. However, if there is one area where decoupling is probably advised, and I think my task force colleagues would agree, it is probably in the world of 5G.

Why? Because, 5G is the technology of the future, on which all other technologies will sit. Because China’s political system, values, and goals are so different from ours, this may be one of the areas where we have to kind of reset the two systems. China has its notion of Internet sovereignty — that it should be free to regulate the Internet as it sees fit within its borders. Maybe 5G is one of those areas where this is a national security concern that compels us to decouple from them. But this does not mean every area of technology is one where we should sort of throw up an impermeable membrane and separate ourselves.

SHIRK: One of the big unanswered questions is, can we limit this emergence of two separate networks, in a sense, to 5G and still maintain the integration that’s been so mutually beneficial, and for the whole world, in other technologies? Or, will it spill over, and not just to AI, but also to robotics, biotech, biomedicine? To me, that would be absolutely tragic. So, that’s why we’re hoping in the United States that everybody takes a deep breath, thinks about costs and benefits, and defines the national security risk of technological integration very narrowly and not expansively.

PANDA: One of the central ideas at the core of the economic recommendations in your report is the idea of reciprocity: that China provide to American firms the kind of regulatory environment that Chinese firms are seeing in the United States. We’re far away today from that reality, especially in the technology sector with Chinese initiatives like Made in China 2025.

The problem is, the Chinese party-state is too strong, and the market forces and civil society are too weak.

— Susan Shirk

SCHELL: At the heart of the matter lies this question of reciprocity and reciprocity is not something that China’s done very well on over the last few decades, even during the reform era. Perhaps this failure grows out of its sense of being a victimized society, a country that is still owed something because of the predations of the great powers in the past. Whatever it is, this lack of reciprocity has distorted our relationship and thrown the playing field out of level not just for business, but in many other realms of interaction. And that’s a problem. For instance, in the media, things are way out of balance. China has television networks, newspapers, magazines, and websites in the U.S., and we have no comparable outlets in China.

SHIRK: The problem is, the Chinese party-state is too strong, and the market forces and civil society are too weak. That’s why Huawei, even though it is a private company, can’t assure the rest of the world that it won’t do the party’s bidding if they were to call on it. There’s just no way, because there are no legal protections for them as a private firm.

The Party and Its Ideology

PANDA: The question of ideology is central to our current debates about the nature of the relationship between the United States — and open societies writ large in the West — and China.

This comes back to a trend within China domestically, since the 17th Party Congress — even before Xi — of the country becoming an intensely more ideological place. Recently, U.S. intelligence leaders offered an assessment that China’s leaders increasingly seek to assert China’s model of authoritarian capitalism as an alternative and an implicitly superior development path abroad for countries. Is this dynamic already playing out in front of our eyes?

SCHELL: This is one of the reasons why we’re at such an inflection point, because all of these things you’ve just mentioned are now coming into play. The U.S.-China relationship, which was once trying to engage toward a more convergent future, is now diverging and putting our two countries in a more contentious state where each side is defending its own system, values, economy, and civil society against the so-called predations and incursions of the other. This dynamic puts us in a very lamentable situation, one in which the blame rests largely with the Chinese.

SHIRK: Someone in the U.S. government said to us recently in the last couple of days in Washington: “It’s like the Chinese government forgot that we read Chinese.” Because what they say domestically about the West and the United States has increasingly emphasized their hostile intentions toward Western ideas — how universal values have no applicability to China. Whereas, previously, that was not the message under Jiang Zemin or even the first term of Hu Jintao.

So, now we have teaching more Marxism in the schools and more — what I’ve called virtuocracy — promoting people on the basis of political loyalty. All of this makes China a much more ideological type of system today than previously. So, it’s understandable that we react warily. We’re alarmed by this. But the challenge is, we want to defend our own values, but we don’t want to make decisions ideologically. We want to make decisions in a way that will actually get China to make some changes if they can.

SCHELL: If they can.

SHIRK: If they can.

SCHELL: I have a slightly different interpretation. I don’t think China is as ideological now as it once was. It’s kind of stripped away the Marx from the Marxist-Leninist modes of thought and kept the Leninism. So, what’s Leninism all about? Party organization that emphasizes sheer good old-fashioned authoritarianism: namely, order, hierarchy, discipline, orthodoxy, speaking-with-one-voice, party-controlled democratic centralism.

So, it’s not so much that China has an ideology that it’s voicing, but an authoritarian organizational system that they view as a kind of training model. Basically, they’re experimenting with the idea that maybe they have a way to develop that’s better than the messy train wrecks of democracy that they see around the world.

Larger Than Life A live image of President Xi Jinping is projected on a screen in the Great Hall of the People in Beijing, as delegates listen to the Chinese leader's speech during the closing session of the National People's Congress, the annual meeting of China's legislature, March 20, 2018. (Photo: Kevin Frayer/Getty Images)

Values and Competition in the Trump Era

PANDA: You’ve both spoken about values and interests, which are the fundamentals of any country’s foreign policy, certainly here in the United States. However, we are presented with the unique circumstance where I think the assumptions about continuity across party lines in this country, about what American values and interests were, have come under serious interrogation, at least at the level of the president himself.

The American bureaucracy continues to operate much as before in most cases, but I think in our system it matters who the president is and what the president says. Certainly, our allies take that to heart.

SHIRK: There’s a demand in China for changes in Chinese domestic policy, as well as to a certain extent foreign policy. So, at least at the elite level, people are hoping that gaiatsu — that foreign pressure — might drive another wave of domestic reform in China.

But I think around the world, the Trump administration’s contempt and mistreatment of our allies and friends around the world, and its abdication from international institutions, has been very damaging in terms of our influence on China’s choices.

Incidentally, I think Donald Trump is a lot more popular in a lot of ways in China than he is in the United States. People in China just think he’s a businessman, and he’s a really good negotiator. We’re a lot more critical of that.

SCHELL: I would agree that Trump’s pushback against China was called for, given the changing equation and the way in which China was becoming more assertive, aggressive, overweening, and how it was pushing out abroad. But on the other hand, there’s so much about the Trump administration that is destructive to the whole fabric of America’s leadership role in the world with its allies that it’s hard to view it as a whole policy.

The 2000s: An Inflection Point?

SHIRK: The luster of American market democracy was damaged by the global financial crisis of 2007–2008 and by the failures of our own regulatory system, the financial system, and also of the invasion of Iraq and the way we handled the North Africa and Middle East democratic movements, the Arab Spring — so that liberals in China found it harder to have their perspectives heard on how a society should be organized. Their voices were less influential in the domestic debate ever since 2008.

PANDA: Orville used the term inflection point to describe our present turn toward competition with China. Was the global financial crisis, in a way, the first inflection point? It coincided with the second term of Hu Jintao and the broader shift in Chinese foreign policy toward greater assertiveness overseas. Do you see that as something that we maybe missed at the time?

SCHELL: Yes. I think that was the point where we got the first whiff of Chinese triumphalism and the emergence of China’s overweening arrogant ambition, that it could project itself in a global way, because actually America was turning out to be something of a paper tiger. Since then, it turned out that our economy recouped, and we got back into balance. But the 2009 economic crisis was the beginning of China’s dreams of grandeur.

We’re faced with what is likely the greatest morally urgent crisis coming out of China since possibly June 1989.

— Ankit Panda

A Moral Urgency

PANDA: We’ve talked a bit about values and their role in American foreign policy, and it’s always that tension between where you place human rights and other values-based issues on the agenda.

Unfortunately, with this administration, human rights appear to be a particular bête noire, not only on the China agenda. That’s distressing, because we’re faced with what is likely the greatest morally urgent crisis coming out of China since possibly June 1989, which is the mass incarceration of up to, and possibly more than, one million ethnic Uighurs in Xinjiang in forced reeducation camps. China has acknowledged and justified these camps under the excuse of fighting the three evils of terrorism, separatism, and religious extremism.

Civil society and journalists have been at the vanguard of focusing on this issue, but how do we move the needle?

SCHELL: I do think you point out a real inconsistency, that our government is somewhat remiss in supporting these most fundamental principles of the American policy. The great strength of the American system is that we don’t just depend on the presidency.

There are other agencies in the government, and of course, there is civil society — universities, think tanks, NGOs. These are incredibly important voices and institutions that, even when the U.S. government runs off the tracks, can keep the United States viable.

SHIRK: Based on my own experience in government, it is so frustrating that our diplomatic efforts to improve the real human rights situation on the ground in China have been so limited in their effectiveness.

It just reflects the great political insecurity of China’s Communist leaders, their lack of legitimacy, their fetish for control, and so they just overdo it all the time. They just feel if they lighten up or if they allow the legal system to really operate independently, which they do somewhat in the economic domain but not so much in other domains, that somehow the whole house of cards will collapse. So, it’s just extraordinarily difficult.

Opacity and Hubris

PANDA: A lot of what we’ve talked about depends on how well we understand the Chinese leadership. It’s something that op-ed writers the world over, analyzing the trade negotiations, pretend to have: a great insight into exactly what is being thought at the highest levels of China’s leadership. But, if we’re humble, it seems far from clear.

SHIRK: I think the Chinese party-state’s fetish for secrecy is really harmful to it, because it makes it harder for them to make credible commitments, because they want to keep the process — the decision-making process — secret. Even from their own people, mostly from their own people. But that means internationally, we also can’t read it.

One of the big problems with the secrecy is our image of China is too monolithic. So, we just are always asking the question: What does China want? We don’t know the answer to that question. The only voice we hear is the voice of the official spokespeople of the foreign ministry or the ministry of defense, the PLA, or Global Times.

Then, people say China wants this, China wants that. In fact, there’s so much more diversity on a bureaucratic basis, different bureaucratic agencies, as well as different interest groups. We really still don’t know that much about it. It’s very difficult to penetrate.

SCHELL: In the last couple of months I’ve been with many American intelligence agencies, and they are just as bewildered by what is happening in China as we are. They’re asking us what we think is going on, and we’re asking them what they think is going on.

The truth is, more than any time in my life — even during the Mao era, where we were looking through the glass darkly from outside — we knew more about what was happening in terms of the factional disputes and leadership struggles than we do now.

SHIRK: Xi Jinping, since he ascended the throne, has kind of taken ownership of all domestic and international policy. So, in a way, the good news about that is we know whom to hold responsible. If you just look at what he’s done, there’s no sign that he’s really committed to market reform and opening.

SCHELL: Because of the reaction he’s elicited around the world, which is quite unfavorable, Xi Jinping’s turn toward greater authoritarianism could, if he’s not very careful, bring the whole house down on the China economic miracle.

What an immense tragedy that would be, and what a horrible legacy for someone who was bent on rejuvenating China. If in fact this immense accomplishment, the “China economic miracle,” was undermined by a narrow-minded, retrograde system of Leninist government within Beijing, it would be an enormous loss to the world.

SHIRK: Hubris.

SCHELL: Hubris and ignorance of the outside world. ■

Conversation recorded at Carnegie Corporation of New York’s headquarters in New York City on February 7, 2019.

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