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Relations between the United States and China will determine the world’s destiny in the twenty-first century. Unfortunately, the world’s two superpowers are headed for confrontation on multiple fronts thanks to divergent views on globalization, Asia-Pacific security, and democracy. While Donald J. Trump is not to blame for this long-building strategic, economic, and political confrontation, his policies have sharpened Sino-American rivalry and guaranteed that relations will get worse before they get better. Together, China’s rise and Trump’s reactions threaten to bury the liberal international order the United States helped to create in the aftermath of World War II. This pessimistic but unavoidable conclusion emerges from a week’s worth of conversations between Chinese and American analysts in Beijing and Shanghai.
For decades, most American commentators argued that globalization would transform China, opening its markets and liberalizing its politics. China has indeed transformed. Its gross domestic product now rivals America’s, and its middle class is 400 million strong. But much of its economy remains closed to U.S. trade and investment and intellectual property theft continues with impunity. In January 2017 at Davos, President Xi Jinping memorably portrayed China as the leading champion of globalization, in contrast with the crimped, insular protectionism of Donald Trump’s “America First.” It was a pretty story. But it ignored China’s continued resistance to exposing itself to the free flow of capital or its industries to foreign competition. Indeed, Xi has embraced a “Made in China 2025” agenda that reinforces the nation’s import substitution policies for the foreseeable future.
Regionally, China is moving assertively to become the dominant geopolitical force in Asia. Xi promised this week that “China will never seek hegemony or engage in expansion.” Its long-term ambition is to dismantle the U.S. alliance system in Asia, replacing it with a more benign (from Beijing’s perspective) regional security order in which it enjoys pride of place, and ideally a sphere of influence commensurate with its power. China’s Belt and Road initiative is part and parcel of this effort, offering not only (much-needed) infrastructure investments in neighboring countries but also the promise of greater political influence in Southeast, South, and Central Asia. More aggressively, China continues to advance outrageous jurisdictional claims over almost the entirety of the South China Sea, where it continues its island-building activities, as well as engaging in provocative actions against Japan in the East China Sea.
At home, meanwhile, China’s totalitarian system becomes more entrenched by the day, as the surveillance state increases its digital reach, as domestic space for independent civil society shrinks, and as citizens navigate an Orwellian existence in which “social credit” scores will determine their life prospects. If any American idealists remained, the scales fell from their eyes this month, when Xi Jinping engineered the elimination of constitutional limits on how long he can serve as China’s president. While Donald Trump himself may envy Xi’s unlimited authority, Xi’s consolidation of power is diametrically opposed to fundamental principles of liberty at the heart of America’s national identity and longstanding aspirations for the world.
On the heels of its nineteenth party conference, the Chinese Communist Party (CCP) is giddy and triumphalist. As China’s economy surges ever onward, the regime seeks to grab the lead from the United States in cutting-edge technologies like artificial intelligence (AI) and the 5G standards that will power the internet of things. Xi is cementing the CCP’s control over China’s destiny, even as the United States descends into political turmoil. “The Party is the highest force for political leadership and the fundamental guarantee of the rejuvenation of the Chinese nation,” Xi declared on Tuesday to the National People’s Congress. “Chinese-style democracy shows advantages over Western model”, the Shanghai Daily explained this week, particularly compared to the United States, which has descended into the “isms” of “conservatism, isolationism, and populism.”
In a recent Foreign Affairs article, two senior officials who served President Barack Obama, Ely Ratner and Kurt Campbell, describe the scale of America’s bipartisan disillusionment with China. The advent of President Trump has sharpened the strategic rivalry between the two countries. Last December’s National Security Strategy identifies China (alongside Russia) as a major “revisionist” power and a leading U.S. adversary. The Trump administration is moving to contain China. It is working with Congress to preserve America’s dwindling edge in AI and other dual-use technologies. And it has declared its support for a “free and open Indo-Pacific” order that (among other things) would provide a platform for the United States to work with major democracies like Japan, South Korea, Australia, and India—as well as non-democracies like Vietnam—to provide a counterweight to a rising China.
But it is in the economic realm where Trump’s resistance to China—and America’s own status as a “revisionist” power—is most obvious. The president campaigned on the premise that U.S. trading partners, with China as lead offender, had played Americans for suckers, destroying U.S. manufacturing in the process. This week the White House signaled that it would impose on China up to $60 billion annually in punitive tariffs for IPR violations, under Section 301 of the Trade Act of 1974. This comes on top of the administration’s plan to impose heavy duties on imports of steel and aluminum. Defenders of the rules-based trading system have bemoaned these actions run directly counter to the principles enshrined in World Trade Organization, bypassing its binding dispute resolution mechanism. Trump’s unilateralism signals his impatience with the process-oriented approaches of his two predecessors, George W. Bush and Obama, and his intent to focus on results—WTO rules be damned.
On one level, Trump’s approach to trade with China is reminiscent of Ronald Reagan’s get-tough strategy with Japan in the 1980s. Frustrated by Japan’s failure to open its economy, Reagan turned away from rules and towards outcomes, compelling Japan to negotiate a series of voluntary export restraints in critical sectors, including semiconductors. (The current U.S. Trade Representative, Robert Lighthizer, served as deputy trade chief under Reagan and led some of these negotiations).
But two differences stand out in the two experiences, as my colleague Ted Alden has told me. First, Japan was a democratic ally of the United States and inherently more susceptible than China to American suasion. Second, Reagan was essentially a free trader who took this unilateral step in the interest of preserving the open trading system in the long run. Trump is nothing of the sort, increasing the risk that his steps will unleash a global trade war that he believes he can win. There is no indication that the president has an endgame in mind, in which the U.S. returns to the multilateral fold.
Trump’s skepticism of multilateral trade agreements also ignores the geopolitical benefits that can redound to the United States from its participation. A case in point here is the Trans-Pacific Partnership. Not only was this a high-standard agreement that merited American support; it also has profound strategic implications by signaling U.S. staying power in the region, as a counterpoint to China. Trump’s decision to renounce it was a strategic blunder of epic proportions that continues to reverberate among U.S. friends and allies.
Despite the different perspectives that my Chinese and American interlocutors expressed this week, they agreed on one point: Sino-American relations are bad and likely to get worse during 2018. The two countries are proverbial ships passing in the night. China is an emerging superpower but has not yet embraced economic and geopolitical responsibilities by liberalizing its economy and investing in regional stability. Xi and his colleagues pay lip service to “win-win” scenarios and speak of the world as “one community” with a “shared destiny.” And yet China continues to free ride economically while throwing its weight around with its neighbors.
The United States, for its part, is a weary titan, no longer willing to bear the burdens of global leadership, either economically or geopolitically. Trump treats alliances as a protection racket, and the world economy as an arena of zero-sum competition. The result is a fraying liberal international order without a champion willing to invest in the system itself.
The takeaway is a depressing one. The liberal international order is in intensive care in Asia and there is no doctor in the house. Geopolitical tensions and economic frictions will limit Sino-American cooperation and could well spill over into other regions (e.g., Southwest Asia) and topics (e.g., counterterrorism) where interests are more aligned. The overriding goal for both sides will be to manage the emerging bipolar balance and its strategic competition so that it does not become a full-fledged Cold (much less hot) War. To navigate this era, the United States will need prudence and wisdom—two qualities not generally associated with Donald Trump.
An early test will come in the next two months when the president is scheduled to meet with the North Korean leader Kim Jong-un. Prospects for success are low, given past negotiations with Pyongyang. Beijing’s willingness to press its ally—and to maintain clear lines of communication with Washington throughout—will shape U.S. perceptions of what it can and cannot expect from China.