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Foreign Policy

Light at the End of a Bumpy Tunnel?

Jun 18 , 2020
  • Wang Jisi

    President, Institute of International and Strategic Studies, Peking University

US China chess.jpg

The heat of summer has come, and so has the fever in relations between China and the United States.

Since the novel coronavirus began its rampage in early 2020, China-U.S. ties have been further strained. Washington has introduced a series of China-related policies and congressional bills have aimed to curtail Beijing’s authority, power and international influence. U.S. officials and members of Congress are increasingly vocal in their denunciations of China on almost every issue. In particular, the Trump administration attacked Beijing for alleged disinformation on the COVID-19 pandemic, which had a high rate of infections and fatalities in America.

Speakers for China’s Foreign Ministry, as well as official media, have fought back by revealing America’s deplorable performance in coping with the pandemic. U.S. Secretary of State Mike Pompeo was named by CCTV as a “public enemy of mankind.” More recently, China’s media spared no effort to report on racial discrimination, police brutality and social injustice behind the riots and protests around the United States triggered by the killing of a black man, George Floyd, by a police officer.

The deterioration of China-U.S. relations is not confined to rhetorical battles but shows more ominously in actions related to bilateral trade, high technology, cybersecurity, Taiwan, Hong Kong, the South China Sea and other issues. To an alarming extent, economic, financial and technological links between the two countries have been decoupled, although the damage has not yet been felt devastatingly in the two societies. Some Chinese and American commentators warn that the relationship is in free fall. Indeed, once China-U.S. ties get loose and out of control, it will be more difficult for the world’s two largest economies to regain momentum in the post COVID-19 era. Recovery of the global economy will be retarded, and arms races and geopolitical conflicts will likely intensify.

People often draw parallels and contrasts between China-U.S. ties today and Soviet-U.S. ties in the Cold War period. In my view, China-U.S. ties today may be worse than the Soviet-U.S. relationship, since the latter was at least “cold.” Relations between Moscow and Washington have remained essentially stable for more than four decades despite a few sporadic “hot” moments like the Cuban missile crisis in 1962. Those two superpowers were separate from each other politically, economically and socially and were actually unable to influence each other’s domestic affairs. Contact between Washington and Moscow was rather superficial and involved little love-hate emotion.

By contrast, the China-U.S. relationship is now suffering from forceful disengagement after steady progress in engagement for four decades. The sentimental and material losses caused by the heated quarrels and grudging decoupling between the two sides — in particular during the pandemic period — are sensationally more distressing than the analogy of the Cold War. One remaining question is whether the China-U.S. rivalry will last longer and cost more for both sides than the Soviet-U.S. standoff.

It is urgent for China and the United States to avoid a complete free fall in relations. There must be floors or bottom lines that stay in place to stop the relationship from falling into an abyss.

Around 2014 when Beijing was searching for a “new model of major country relationship” with Washington, Chinese officials repeatedly stated that strategic mutual trust, economic and trade cooperation and humanitarian exchanges are the three pillars underpinning the China-U.S. relationship. To borrow ideas from this statement, I believe there are three bottom lines that should be upheld in today’s China-U.S. relations. 

Peaceful solution to all disputes 

The first bottom line is that no matter how serious the competition between the two countries may be, it must be handled by peaceful means, not resorting to armed conflict. It is unrealistic at this stage to expect China and the U.S. to build genuine strategic mutual trust, but at the very least each side should try to convince the other that it would never take the initiative to provoke a war — including not only nuclear or conventional war but also unconventional war such as cyberwar, space war or biochemical war. There is no denying that the Chinese and U.S. militaries are preparing for the worst, which they are designed to do; in recent years each has made the other the main imaginary enemy. This trend will continue for a long time to come.

Fortunately, the militaries of China and the U.S. have maintained close contact even in the face of poor political communication. In August 2017, the military command systems of the two countries signed the Joint Staff Dialogue Mechanism. This document is expected to play an important role in crisis management between the two militaries.

To avoid a head-on confrontation over the Taiwan Strait, the U.S. must honor its commitment to the “One-China” policy, which has been sustained since the establishment of diplomatic relations in 1979. Washington should state that it will not support Taiwan independence. 

In turn, Beijing should continue to commit itself to a “one country, two systems” approach to achieving peaceful reunification with Taiwan.

The Anti-Secession Law that the People’s Republic of China passed in 2005 declares: “In the event that ‘Taiwan independence’ secessionist forces should act under any name or by any means to cause the fact of Taiwan’s secession from China, or that major incidents entailing Taiwan’s secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted, the state shall employ non-peaceful means and other necessary measures to protect China’s sovereignty and territorial integrity.”

Cross-strait relations today, though not satisfactory and involving some risks, have not necessitated non-peaceful means to solve the Taiwan issue.

On the South China Sea dispute between Beijing and Washington, the two sides should stick to the principle of demilitarization. China and the Association of Southeast Asian Nations (ASEAN) have been engaged in talks for a code of conduct, a document that will lay the foundation for a future solution to their different territorial claims in the South China Sea. The United States should welcome this process.

Both China and the U.S. support denuclearization of the Korean Peninsula and should consult each other to defuse any possible flashpoint there.

A cyberwar between the two countries could be as catastrophic as military conflict; they should, therefore, conduct serious discussions to circumvent such a possibility. 

Maintaining economic cooperation 

The second bottom line is to maintain a certain scale of economic and trade cooperation and preserve financial stability. Because of the trade war launched by the U.S. against China and other political reasons, bilateral trade volume and two-way investment have declined in the past two years, and the decoupling of cooperation in the field of high-technology has become a reality.

In the foreseeable future, it is unrealistic to expect economic and trade cooperation to become the “ballast and propeller” of bilateral relations, as Beijing expected in earlier years. However, a complete decoupling of bilateral economic relations and technical cooperation would not be in the interest of either party. The key strategic question is: In what areas and to what extent can and must economic and trade cooperation be sustained?

It is notable that the China-U.S. phase-one trade deal reached on Jan. 15 is still being implemented. Because of the impact of COVID-19, it may be difficult to fully implement the agreement in 2020. However, there is no reason to retreat from the principled consensus reached by the two sides.

Take soybeans as an example. Nearly 90 percent of China’s soybeans need to be imported. As long as American soybean farmers are willing to produce and sell soybeans at a reasonable price, why should China not purchase large quantities of U.S. soybeans in accordance with the phase-one agreement? The same may be said of other U.S. agricultural products, such as pork and corn.

A stark fact also worth noting is that without the cooperation of U.S. technology companies like GE, China’s large commercial aircraft, the C-919 and C-929, might not be able to operate in the foreseeable future. If China does not buy Boeing aircraft from the U.S., no other aircraft manufacturer, including Europe’s Airbus, will be able to fill the gap in the Chinese aviation market. China already has about 600 Boeing aircraft, which also need technical maintenance, including spare parts. To this extent, the bottom line of China-U.S. cooperation in civil aviation is likely unbreakable. American businesses may never accept the loss of this incredibly huge commercial resource.

If iPhones could no longer be bought and used in China because of deterioration in China-U.S. relations, it would cross users’ bottom line.

Similarly, Walmart stores, Marriott hotels, KFC, McDonald’s and Starbucks in the Chinese mainland are all U.S. brands operated by Chinese merchants. Maintaining these brands and learning their management approaches and the rules of the market economy are important channels for economic reform in China.

A few U.S. politicians want U.S. companies to divest from China and reduce bilateral trade. China should do just the opposite. In recent years, it has taken many steps to open up its economy and encourage foreign investment. This policy is a blow to such U.S. politicians, not a concession to their pressure.

In the high-tech field, the U.S. government has made every effort to crack down on Huawei Technologies in the name of national security. Huawei has fought back against sanctions by working with U.S. companies and other technology partners overseas. Ren Zhengfei, the founder of Huawei, has responded to American pressure by saying, “Our interests are always along the same line as those of Google.”

Huawei’s more than 30 U.S. suppliers have been negotiating with the U.S. Congress and the Trump administration since last year in an effort to ease the sanctions. Huawei insists on multichannel communications with U.S. media, enterprises, government agencies and legal departments, and uses the law to handle disputes. As long as Chinese companies stick to the principle of linking up with their U.S. counterparts and strive to take a bigger place in global industrial chains, Huawei and other Chinese companies will surely survive.

In the field of international finance, China’s financiers certainly do not want to see the U.S. dollar occupying a hegemonic position in the world forever. However, it is wise and necessary for China to hold a certain amount of long-term U.S. Treasury bonds. China will also respect the status of the U.S. dollar as the world’s main reserve currency for many years to come.

Some days ago, it was reported that in order to punish China’s behavior in the fight against the COVID-19 pandemic, the U.S. may default by canceling China’s purchase of Treasury bonds directly or refusing to pay interest on the bonds. When the news came to light, it immediately stirred up heated debates that threatened the global financial market. Such a violation of international financial rules would cause irreparable financial and credibility losses to the U.S. 

Keeping up humanitarian exchanges 

The third bottom line is to resolutely safeguard people-to-people and cultural exchanges between China and the U.S. After more than 20 years of retirement, Julia Chang Bloch, the first Asian-American to hold a U.S. ambassadorship, has devoted herself to the cause of China-U.S. educational exchanges. In March 2020, she wrote in the Global Times that “through the ups and downs of China-U.S. relations, both countries have reached a consensus that the bonds forged by thousands of students across the Pacific Ocean should not be jeopardized.”

She said 360,000 students from China are currently attending U.S. colleges and universities, with annual spending in the United States of $15 billion.

It was reported that Washington was considering banning or restricting Chinese citizens from studying in the U.S. on the grounds of national security. In Bloch’s view, this would be a short-sighted decision that deviates from the U.S. international education tradition and foreign policy. Humanitarian exchanges are now the last pillar of China-U.S. relations and must not be dismantled.

According to the U.S. census, the Chinese-American population in the U.S. currently exceeds 5 million, of which 2.2 million were born in China. In 2017, 3.2 million Chinese tourists went to the U.S., spending $35 billion in total that year on travel and tourism-related goods and services. A total of 2.3 million American tourists set foot in China in 2017 alone. Forcibly preventing population movements and cultural exchanges between China and the U.S. through political means not only brings huge economic and cultural losses to the two countries but also violates humanism and personal freedom. 

The development of China-U.S. relations is currently facing enormous obstacles and a possible retrograde phase. This difficult situation may last a couple of years or a couple of decades, and people need to be fully prepared for this possible new normal.

But no matter what happens, the huge material foundation, spiritual wealth and human resources accumulated since the establishment of diplomatic ties 41 years ago will not be destroyed in an instant. The deep exchanges and cooperation between China and the U.S. are driven by strong internal forces in both societies that are a major feature of China-U.S. relations. Bilateral relations should not be simply shaped by the U.S.; China must and can do a lot.

We can see that those born in the 1990s and the 2000s who want to study and communicate in each other’s countries are among those who place their hopes on cooperation. This group also includes more than 1 million middle-aged Chinese-born entrepreneurs and intellectuals in the U.S. and millions of people in our two countries and around the world who can benefit from bilateral cooperation. Many senior diplomats and social elites in the two countries are working hard to stabilize bilateral ties.

It is only a matter of time and opportunity for China-U.S. relations to return to a normal track, so long as the above three bottom lines are sustainably upheld and an overall breakdown of bilateral ties is prevented. Perseverance and confidence are needed, but a bright light can be seen at the end of the tortuous and bumpy tunnel if you look for it. 

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