Two Countries, One System

Aug 18 , 2015

Can China and U.S. Rebuild “Grand Consensus”?

President Xi Jinping is to pay his first state visit to the United States in September. As both parties busily prepare for the visit, China and the US are still engaged in fierce wrangling over such issues as the South China Sea and cyber security. Since spring 2015, there has been a debate over America’s China strategy in the US, with some scholars urging the US government to fundamentally rethink US strategic traditions since the 1970s that have been followed by eight presidents.

In the past five to six years, Sino-US relations have witnessed frequent ups and downs. More important, the two countries’ judgments about each other’s strategic intentions and orientations have both been edging toward the negative. A fundamental reason for such momentum is a loosening of the “grand consensus” between China and the US that has run more than three decades. Consolidating and upgrading the “grand consensus” is of crucial significance to stabilizing Sino-US relations in the future.

Consensus on Integration-Engagement


The so-called “grand consensus” here refers to a kind of agreement between the two countries on the most fundamental strategic matters, which include: What kind of a country each of them wants to be, in what ways will each pursue the fulfillment of national goals, what kind of a country each wants the other to be, and in what manner each chooses to treat the other.

After the thaw in bilateral ties in the early 1970s, the core of American strategy toward China has been “engagement”, namely to incorporate China into the US-dominated international system through close interaction in such areas as politics, economy, and military and social affairs. On one hand, “engagement” realizes America’s own strategic and economic interests, on the other hand it hopes to shape China’s strategic direction: embracing market economy in economy, drawing closer to Western models of democracy in politics, and becoming a supporter and collaborator of American “leadership” in international affairs.

In this period, China’s US strategy could be summed up as “integration” : Realizing modernization through integration with the West-dominated international system. China has participated in major international mechanisms, accepted main international rules, and become highly integrated with the rest of the world both economically and socially. At the same time, the Chinese government has kept the initiative in its own hands, and adhered to its “four cardinal principles” in the process of integration, remaining highly vigilant about potential security risks resulting from opening up to the outside world.

In short, by the end of 1978, with one wanting to “blend in” and the other wanting to “incorporate”, China and the US had formulated a “grand consensus” regarding Chinese integration with the international system. “Integration” and “incorporation” are not the two countries’ ultimate strategic goals. With the US wanting to reshape China, and China wanting to hold onto its own characteristics, the two have profound differences. Yet the Sino-US divergence over ultimate goals had not been imminent pending China fulfillment of its integration into the international system. The “grand consensus” has since ushered China and the US through such difficult moments as the Taiwan Straits crisis, the US bombing of the Chinese embassy in former Yugoslavia, and the EP-3 incident. Despite such crises, the two countries have managed to restrain their disputes to those crises themselves, avoiding suspicions about each other’s fundamental strategic intentions and orientations.

Loosening of Grand Consensus

Since China joined the World Trade Organization in 2001, the nation has by and large fulfilled its historic mission to “blend in”. China has achieved a rapid rise while maintaining its own political system and development mode. Meanwhile, the existing China-US “grand consensus” began to loosen, contradictions over ultimate goals have begun to become increasingly prominent. In a 2005 speech on “responsible stake-holders”, then US Deputy Secretary of State Robert B. Zoellick proposed that US China policy needed to transcend “engagement”. Over the past decades, more and more people in the US have come to believe the presumption of the “engagement” strategy was wrong: China wouldn’t change itself with the US “engaging” it. Americans complain that China hasn’t changed politically, its government continues to play an outstanding role economically, and becomes increasingly assertive diplomatically. Many Americans feel they have gotten penalized for “pulling in” China. The debate over Washington’s engagement with China since spring 2015 has just been the extension and intensification of that process.

The loosening of strategic consensus has not been unilateral. In the past dozen years, against the macro backdrop of the Chinese intellectual spectrum moving leftward, stimulated by such incidents as the Taiwan Straits crisis, the US bombing of Chinese embassy in former Yugoslavia, the EP-3 incident, and the interruptions of the torch relay for the Beijing Olympics, both Chinese intellectuals and the general public are increasingly inclined to “say no” and be “unhappy”; Chinese society has displayed more profound worries over whether the country could realize continuous peaceful development within the current international framework, with some people worrying about “energy wars” and “financial warfare”. In circles of intellectuals engaged in international studies and reporting, the concept of “de-Americanization” has been repeatedly discussed and widely accepted, indicating that the US is gradually moving from a central position that was to be followed and imitated to a more equal and “ordinary” one.

Economic and trade ties are often called the “ballast” of Sino-US relations. In fact, only a “grand consensus” that is acceptable to and genuinely believed in by both Chinese and US leaders as well as the two peoples can be real “ballast”. As a result of the loosening of the previous “grand consensus”, the disagreements and conflicts between China and the US over specific issues can easily upgrade into worries about each other’s overall strategic intentions. Therefore, although no high-intensity crisis like the embassy bombing or EP-3 incident has occurred between China and the US in the last decade, the competitive and confrontational aspects of Sino-US relations have become even more conspicuous.

The nature of contemporary international relations determines that it is quite unlikely for real military conflicts or Cold-War-style all-round confrontation to occur between China and the US. But once the momentum of the past few years persists, it is impossible to completely exclude the likelihood of a “new cold war” between the two countries. Like in the present-day US-Russia relationship, despite their serious strategic confrontation, they have by and large maintained normal ties in economic and trade as well as social realms. Once that happens, US China strategy may turn from “engagement supplemented by hedging” of the past 35 years to “balances supplemented by cooperation”. Subsequently, Chinese US strategy will evolve from “integration supplemented by hedging” to “counter-balance supplemented by cooperation”. It might be too early or too pessimistic to declare Sino-US relations have reached a “tipping point” or a “strategic crossroads”. Yet undeniably, the relationship has been moving in a worrisome direction in the past two or three years.

Reassurance for New Consensus

Compared with 35 years ago, the background conditions for Sino-US relations are dramatically different. China’s economy has grown from 12% of that of the US into today’s nearly 60%, and may surpass it in about 10 years. China has not only blended into the international system, but also put forward such new concepts as “Asian outlook on security” and such new proposals as the “One Belt and One Road” initiative, turning from a follower into one of the proactive leaders in the international system.

With such a new background, the past “grand consensus” indeed can no longer explain the present or guide the future. In fact, the Chinese proposals of “peaceful development” and “new-type major-country relationship” as well as the American proposals of “responsible stake-holders” and “strategic reassurance” in the past dozen years were all fresh statements on Sino-US relations put forward, consciously or unconsciously, against the backdrop of the declining relevance of the old “grand consensus”.

Since the past “grand consensus” between China and the US centered around “China’s accession to the international system”, in the future, the two countries might enhance and upgrade the existing consensus and formulate a brand-new “grand consensus” over the understanding that “China and the US will pursue common development within the same international system”. Or in brief, “Two Countries, One System”.

For that, China and the US need first to make strategic judgments on some essential matters.
China needs to make judgments about the nature of the existing international system: Can such a system accommodate China’s peaceful rise or even “peaceful transcendence”? Does China have other viable development paths outside this system? China has made great progress inside this system in the past 35 years, can it continue to develop in the next 35 years, or will it eventually reach a certain “glass ceiling”? Did the disintegration of the former Soviet Union and Japan’s economic stagnation in the 1990s result from their own internal problems, or from the nature of the international system and the conspiracy of the hegemon inside the system? Such judgments will finally determine our basic strategic orientations regarding the current international system and the US.

If “intra-system rise” remains China’s best choice, then even though China has not participated in the structuring of many parts of the system, it will need to act in accordance with existing rules inside the system, take full advantage of the rules, reform the system by means of the rights the system has bestowed on it, and accept the potential harm that the rules may inflict upon its concrete interests.
The most important strategic judgments for the US are: What is the proper attitude toward China, a rising country that is ideologically divergent, may outgrow the US in size, and is profoundly interdependent with the US? Should the US continue its engaging stance and embrace China’s rise within the current system, or take an exclusive, competitive stance? Will a policy of containment or balance against China be feasible? Will it be in the US’ best interests if China voluntarily or involuntarily leaves the existing international system?

If the US genuinely believes another country may peacefully, legitimately transcend itself, it should then get rid of its obsession with the idea of “never be the second”, and accept the possibility of being “peacefully transcended” by other countries. Security-wise, it should wean itself from the addiction to absolute security, and accept relative security when necessary. Ideologically, it needs to restrain the self-confidence that American values and systems are universally applicable, and agree that they may be applicable to the US only, and that it is best for other countries to independently explore development paths and modes that best serve their own needs.

After making clear their respective judgments and reaching a consensus, China and the US need to further confirm their acceptance of the “grand consensus”, through a series of specific policies, and “reassure” each other. Priority No.1 for the moment is how the US can convince the Chinese side that it has no intention to sabotage China’s political security, does not conspire to damage long-term development of the Chinese economy, is willing to give China reasonable space in international mechanisms (such as the IMF), avoid “knee-jerk reflex” style reactions to new mechanisms China has spearheaded (such the AIIB), and welcome China to join US-led new mechanisms (such the TPP). The Chinese side needs to convince the US side that China is willing to pursue development and resolve conflicts with other countries in accordance with international norms, has no intention to push the US out of Asia, and is willing to let the US join the international mechanisms it has proposed.

“Common development inside one international system” means the two countries can engage in limited competition inside the system, but the competition has to be partial, and must have a bottom line, not targeted at “eating up” each other. China and the US need to help each other to build mutual confidence. Neither needs to worry that the other side may become the reason for its own failure. That means China and the US should seek effective cooperation, not only to realize mutual benefits, but also to jointly play a leadership role for the maintenance and reform of the system.

The debate in America on China strategy will not stop until the end of the general election in 2016, but outcomes of the debate may not necessarily be negative. Even without such a debate, problems in Sino-US relations are still there, and call for solutions. Such a debate is actually also necessary in China. And Chinese intellectuals in the field of strategic studies should actively pursue dialogue with their American counterparts. Hopefully China and the US can rebuild “mega consensus” through profound consultation and dialogue, and realize the mid- and long-term stability of bilateral ties.

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