Aaron L. Friedberg, an expert on the international relations of Asia and professor of politics and international affairs at Princeton University, joins James M. Lindsay to discuss the emerging U.S.-China strategic rivalry, the Trump administration's planned tariffs, and what the tariffs could mean for global trade partnerships.
LINDSAY: Welcome to The President’s Inbox, a Council on Foreign Relations podcast about the foreign policy challenges facing the United States. I’m Jim Lindsay, director of studies at the Council on Foreign Relations. This week’s topic is the emerging U.S.-Chinese strategic rivalry. With me this week to discuss U.S.-Chinese relations is Aaron Friedberg. Aaron is a professor of politics and international affairs at Princeton University, where he’s taught since 1987. He co-directs the Woodrow Wilson School’s Center for International Security Studies. From 2003-2005, Aaron was deputy assistant for national security affairs in the office of the vice president. After leaving government, he was appointed to the defense policy board and the secretary of state’s advisory committee on democracy promotion. Aaron has written widely and well on various topics in international relations, including a book entitled A Contest for Supremacy: China, America, and the Struggle for Mastery in Asia, though I’ll also do a shout-out for his first book The Weary Titan: Britain and the Experience of Relative Decline, 1895-1905. I think there’s many parallels with what we’re witnessing today. But Aaron, thank you for joining me here.
FRIEDBERG: Thanks very much, Jim, it’s good to see you.
LINDSAY: I just mentioned the terrific books you wrote, and I do mean they’re terrific. But you also recently wrote a piece in Survival Magazine, which I think, especially in the beginning, sums up quite nicely the issues that people in the United States, in the White House, outside the White House are grappling with. And that’s the future US-Chinese relations. And you note, I think quite accurately, that the Trump administration has painted China as a strategic competitor, and that is a term you see used frequently. And you ask a really nice series of questions: why is such a competition necessary, what are its stakes, what are China’s aims in this intensifying rivalry, and how do its leaders intend to achieve them, and how should the United States define its goals and reshape its strategy in response? I think that’s the great set of questions. So let’s sort of dive in, and give us your sort of diagnosis for the current state of U.S.-Chinese strategic competition. I said its emerging, but perhaps its already emerged?
FRIEDBERG: Yes. I think it’s actually been emerging for twenty-five years. It’s just taken us a long time to fully take on board that that’s what’s happening. We have to back to the end of the Cold War and look at the strategy that we put in place at that time to try to deal with China. And our assumption, I think, was that by engaging with them we would encourage them essentially to become more like us, become a status quo power—
LINDSAY: Responsible stakeholder was the term of the day.
FRIEDBERG: Responsible stakeholder, that’s what the Bush administration called it. Welcome them into the international system, give them a stake in upholding it, encourage a process of market-driven economic reforms, and eventually set in motion the processes that would lead to economic liberalization.
LINDSAY: The virtuous cycle—
LINDSAY: That economic growth would create a middle class demanding political rights and it would sort of all turn out well.
FRIEDBERG: That’s right. And that a democratic China would be much easier for us to deal with.
LINDSAY: And, so what happened?
FRIEDBERG: It hasn’t worked out.
LINDSAY: Well, why hasn’t it worked out? Is it a case it hasn’t worked out because the whole theory was mistaken from the get-go? Is it because its actually going to unfold on a longer time scale? Some other alternative?
FRIEDBERG: It’s possible that it will unfold on a longer time scale. I think you can’t rule that out. I think the problem with the theory on which the strategy was based was that it underestimated the resourcefulness, the resolve, the ruthlessness of the Chinese Communist Party, and the determination of its leaders to maintain their exclusive grip on domestic political power. And everything they’ve done and everything they do now, both domestically and internationally, is driven by that desire. And if you think about that theory, the assumption at the end of it was that they would relax and be willing eventually to allow political competition and maybe to step aside for popularly elected rulers. I don’t think they ever had any intention of doing that. They may have tried to persuade us that eventually that would happen but it’s pretty clear now that they have no intention of doing it.
LINDSAY: So how much of this is a function of the Communist Party, and how much is it is a function of the singular ability of one Xi Jinping?
FRIEDBERG: I think it’s the Communist Party, and that Xi Jinping is the latest manifestation of the ideology that underpins the party, which is essentially Leninist in its belief in the vanguard party that has to lead and guide the country, and it’s a particularly unique Chinese version of that ideology. But he’s representative of that, he’s not a unique figure and he’s not a real break with the past.
LINDSAY: So you see Xi Jinping as somebody, if he had personally not succeeded, somebody else would’ve come to the forefront in China trying to go down this exact road?
FRIEDBERG: Well I think if you go back before Xi Jinping, Hu Jintao—a weaker leader and also probably one with less of a strategic vision and less self confidence—but he was doing many things that Xi Jinping has now intensified. I mean he was maintaining tight state control of the economy, he was beginning to pursue a somewhat more assertive foreign policy, he was using the so-called patriotic education system to instill a nationalist sentiment in the Chinese population, maintaining control of the internet, cracking down on minorities, all of this stuff. Xi Jinping has taken it to the next level, but it’s a continuation of trends that were visible before.
LINDSAY: I would imagine even if you went back to Deng Xiaoping, somewhere in Deng Xiaoping’s sort of thinking was this idea that China would emerge and the Communist Party would avoid being sort of drawn into this virtuous cycle as the Americans saw it. I noted that his recommendation to his father was bide your time and hide your brilliance, which suggested that at some point, your time would be up and you could let your brilliance shine, you wouldn’t necessary follow what people in Washington wanted you to do. You mentioned this has really been going on for twenty-five years. Why in your estimation has it taken so long for, let’s call it official Washington to wake up to the challenge China poses? Because my sense is that over the last decade, there really has been a sea change in terms of how foreign policy— people on either side of the aisle and across the ideological spectrum view Beijing.
FRIEDBERG: I think that’s right, that’s my impression as well. It’s something that I think future historians are going to puzzle over because, in retrospect, it’s not so obvious why people took a long time to realize this. Not everybody failed to realize it, although the consensus really was along the lines that I suggested. I would say it’s a combination of sort of accumulation of evidence regarding essentially the absence of these changes. So it’s become increasingly clear that China is not liberalizing politically, Xi Jinping drives the nail into the coffin, obviously, but that was becoming evident even before.
LINDSAY: It would be my sense that the Chinese government is making it harder for Chinese academics to leave the country and go to conferences, likewise making it harder for people that they think might undermine our discipline to enter China.
FRIEDBERG: Yes, they’re tightening up in every conceivable way. Again, some of this was set in motion before— tightening up on non-governmental organizations in every respect, on the internet. But, so there’s an accumulation of evidence in that regard. Accumulation of evidence regarding China’s assertive or aggressive external policy—so I think particularly what they’ve been doing in the South China Sea, the East China Sea to Japan—gives a kind of tangible quality to their new and aggressive policies, and it makes clear that they don’t accept the status quo, at least not in East Asia. The Belt and Road initiative too, I think, has that quality. Ongoing military buildup. I think the thing that’s probably tipped the balance is the growing concern in the business community and in Congress is the future economic relationship with China because that was always the bedrock, that was always the stabilizing factor when other things went wrong, there was still a strong and solid group—
LINDSAY: We were going to get rich.
FRIEDBERG: We were going to get rich and we were going to do well by doing good. We were going to get rich, but we were also going to transform China. And that consensus has broken down. And that, I think, is why were beginning to see a pretty dramatic shift towards a much darker view of China.
LINDSAY: So what exactly is the nature of the competition? What is the US and China competing over? What are they competing over in your view?
FRIEDBERG: There is a regional dimension to this, there is a global dimension to it, there is an economic dimension to it, and there is now clearly an ideological dimension to it. And those overlap and it’s difficult to separate them out. But, I think in the region, by which I mean not just the Asia Pacific, but the 360 degrees around China, so including Eurasia, eastern Eurasia. China’s leaders, I think, for some time have wanted to reestablish China, as they would see it, as the dominant power in that region. And the only competitor for that position is the United States, so in order to achieve that position of preponderance, they have to weaken and eventually push out the United States. And I think that has become clear under Xi Jinping, but it’s been an objective for quite some time. Economically, and in technology particularly, China’s leaders for some time have wanted to transform the country into a leading economic and technological power. They want to not linger behind and build lower, value-added products but they want to be at the cutting edge of technology.
LINDSAY: That’s the whole Made in China 2025 initiative.
FRIEDBERG: Yes, that’s a part of it but it’s even bigger than that. But yes, so there’s that. At a global level now, China’s leaders were always very cautious about putting themselves in competition, or seeming to be putting themselves in competition with the United States. They used to say, well we just want to become a moderately well-off country and so on. Well now it’s clear that they see themselves closing rapidly with the United States, even more rapidly than many of their theorists or strategists had believed. And they’re scrambling a bit to figure out what their global role is going to be. But they’ve also made it clear that they don’t accept the legitimacy of the existing international structures and institutions, many of them. They continue to use or to exploit some of them, but they clearly want to change the world in various ways that would reflect their own interests and values.
And that brings us to the last piece, which is the ideological dimension. For a while, after Tiananmen in 1989, the killing of a large number of Chinese student demonstrators by the Peoples Liberation Army, I think that was a near death experience for Deng and his colleagues. They really looked into the abyss and saw the possibility that the CCP might be displaced, and in my view they became even more determined to hold onto political power. And they started doing a number of things, I mentioned the patriotic education system, but also cracking down in various ways. But they also, I think rather cleverly, let people in the West believe that they were, in fact, headed eventually towards political liberalization. And they didn’t talk about an ideological competition. And indeed, for a long time, even now, well there’s not really an ideological competition. But in their view, in the view of the leadership, there’s always been one. Because they saw us and see us as a crusading liberal democratic power that’s determined to undermine them, to weaken their legitimacy and eventually to see them displaced.
LINDSAY: Well we didn’t hide that.
FRIEDBERG: We didn’t.
LINDSAY: That was in all the president’s speeches. You worked for George W. Bush, he made it quite clear that he thought that opening up markets were going to undermine the Communist Party and bring freedom to the Chinese. Same as Bill Clinton, same as Barack Obama.
FRIEDBERG: Well Bill Clinton gave a speech on this same platform, with Jiang Zemin, his counterpart at the time, in which he said you’re on the wrong side of history. He didn’t mean it as a threat, it was sort of “Come on in the water’s great, it’s not so bad.” I’m sure that’s not the way Jiang Zemin heard it. What’s changed, I think, in the last decade and now very clearly under Xi Jinping is that China’s leaders—and I would say this probably began to become more evident after the global financial crisis in 2008—I don’t think they feel any longer the need to say “Oh we have to learn from you and eventually we may follow your path.” Now they say, “You guys don’t have all the answers. In fact, we may have better answers than you do on economics and also on politics. Look, your political system is divided and unable to reach consensus. We’ve got a better way.” And so they no longer pretend, as I think they were before, that they are eventually going to follow in our footsteps. And they are beginning to present themselves to the world—Xi Jinping did this last fall in a speech at the party conference—as an alternative model. One that combines prosperity and sort of market-driven economics with authoritarian political control. So there is now a clear ideological dimension to this.
LINDSAY: So we have competing interests, competing visions. Is there, in your view, any way to reconcile those competing visions, or is it a case of one country is going to get its way and the other isn’t?
FRIEDBERG: I think there may be a possibility for convergence on some issues. People in the West have said this and have held on this hope for a really long time. And frankly, I think the convergence has been quite limited. People have said we have a joint interest in dealing with terrorism, or we have a joint interest in dealing with nuclear proliferation, we have a joint interest in maintaining economic growth, dealing with climate change, and so on.
LINDSAY: This was the argument in the Obama administration in particular. That they were concerned about Chinese predatory trade practices but those were sort of put on the shelf because they wanted to get cooperation terrorism, on climate change, and on some other issues.
FRIEDBERG: And to some degree that was true in the Bush administration after 9/11 particularly about terrorism and proliferation. And there has been some, but I don’t think the cooperation has panned out nearly to the degree that people had expected or hoped that it might. That doesn’t mean there’s no possibility for convergent interests. And I think both parties have a strong, shared interest in avoiding war. And that’s perhaps the most important thing. If nothing else, they realize both that it would be a disaster for them.
LINDSAY: Well, can they avoid that though? I mean, you’re familiar with the Thucydides trap. Graham Allison, who you know well, has a book out, a very troublesome book about where this competition is headed.
FRIEDBERG: I think we can avoid, certainly, all out war or nuclear conflict, and probably direct armed conflict. I mean after all, we did that with the Soviet Union for forty years. And many people would have seen that as a similar kind of situation if you go back to the early stages of the Cold War, maybe not by the time we got to the end of it. Moreover, I think as important and useful as that idea is, I think there’s a sort of Thucydides trap-trap, which is to say if the problem is framed in this way where either we have to cooperate and sort of ease the way for China to assume a greater role in the world, or we’re going to blow up the world and fight a catastrophic thermonuclear conflict with them, I think that’s a false choice. We obviously want to avoid the one, I’m skeptical there’s a lot of room for accommodation because the things the Chinese leadership wants, certainly in the region and probably globally, are not things that we’re going to want to give them. To me that means we’re heading into an intensifying competition, and out of that there can emerge a kind of dynamic stability, just as there was during the Cold War, and we’ll see, it could go on for some time. I think it probably will.
LINDSAY: Let’s talk about the region because that’s where the competition is most obvious. We have the South China Sea, which China has claimed as its own sovereign territory, the Nine-Dash Line, many parts of the South China Sea are very far away from mainland China, claimed by the states that, the littoral states in the South China Sea. And the Chinese have been going and taking essentially rocks and spits and atolls and manufacturing islands and then militarizing them. Why is that a problem for the United States?
FRIEDBERG: I think it’s a problem for a number of reasons. One is that if China actually is able to exert, as it claims, it will dominate a good portion of the water and airspace off its coast out the so-called first island chain. Which means China will have the say in exploiting the resources that are there, the energy resources, fish, which is an important commodity as well, food. They will also put themselves in the position where they can regulate the use of those waters and that airspace if they are able to enforce these claims, they’ll be able to decide who gets to pass through and who doesn’t. And that’s a direct threat to the prosperity and even the survival of other countries in the region, including our major allies like Japan and South Korea. There’s another factor here which is, I think, an important one. I think part of the reason the Chinese have been pushing this now, it’s twofold. One, I do think it’s a part of an effort on the part of the leadership to gin up patriotic sentiment. Taiwan plays that role too, but you know, for eight years after 2008, with the KMT government in Taiwan, there was less tension between Taiwan and the mainland. That’s also when the island disputes with both Japan and smaller countries in the South China Sea began to heat up. I think they need this. They need a degree of tension to justify what they’re doing and to justify their firm control at home. But the other side of it is, they want to demonstrate our impotence if they can. They want to make it clear to our friends and allies that in the long run, we’re on the way out. We can’t stop China from taking power.
LINDSAY: We’re the declining power.
FRIEDBERG: We’re the declining power and they are both the rising power and the resident power. They’re not going anywhere. The Untied States—
LINDSAY: We can go home.
FRIEDBERG: We can go home and we may. And they’re playing that theme very hard.
LINDSAY: I want to talk a little bit about U.S. interests in the South China Sea, because one of the things you mentioned was how important access to that maritime space is the America’s allies—it is South Korea, it is to Japan, I think also to Australia, I think even to countries that aren’t our former military allies, think Indonesia and Malaysia. However, there are a lot of people that would say that’s their problem, that’s not our problem. Indeed, the president of the United States has taken to referring to our formal treaty allies as so-called allies. And you know, as we’re sitting down taping this speech, the president was in Singapore this week to meet with Kim Jong-un. One of the things he said in his parting press conference was he wanted to get American troops out of South Korea. That certainly sends the message that the United States may be going home, but it also raises the broader question of whether or not there really is an American commitment politically to doing things that may benefit our friends and indirectly us.
FRIEDBERG: A couple of things. One, the use of those waters, of course, is also extremely important to the United States. A large portion of the commerce that passes through the South China Sea every year is bound for the United States or from the United States into the region. So we have a direct and kind of practical interest. We also have a long standing interest in defending freedom of the seas. When people say—
LINDSAY: It’s as old as the republic.
FRIEDBERG: Exactly. I sometimes remind my Chinese colleagues of this. If you want something that the United States has gone to war over—
LINDSAY: The War of 1812.
FRIEDBERG: The War of 1812, you know the Barbary pirates, even World War I, a large part of that. So people shouldn’t forget that. We’re a sea-faring nation, a trading nation, and we have this long-standing commitment to uphold freedom of the seas. So it’s us as well as our allies. It’s true that our friends and allies in the region have a strong interest in this too. Two things. One: some of them at least recognize this and are really stepping up to try and do more. And by the way, it’s not only our friends and allies in the region, but it’s also the European powers. The French, the British have both made statements and sent ships to demonstrate their commitment to maintaining freedom of navigation through these waters. Every trading nation in the world, which is virtually every nation now, has an interest in making sure that these waterways remain open. So, our friends and allies do. They are starting to do more. Some of them, the Australians certainly are, the Japanese very much are, the Indians too have expressed some interest and concern about this. The problem is that not one of those countries and not even, I would say, all of them in combination, if you could imagine how they would be combined, have sufficient capacity to stand up to China now. China is the biggest player on the block—it has rapidly expanding naval and so-called maritime paramilitary forces, coast guard forces that it uses to try to enforce these claims as well. Without the United States, it will not be possible to maintain a balance of power in that region. China will dominate.
LINDSAY: Well that’s one of the obvious things when you travel in the region, as you’ve done a lot of—you hear in Singapore, you hear in Canberra, you hear in Tokyo, you hear in Seoul they very much want the United States to remain active precisely because they don’t want to become tributary states to the Chinese and they’re well aware that China has the capacity to isolate states and put pressure on them. So its hard to get collective action unless you have somebody willing to organize it. And initially, that was the position organized by the United States.
FRIEDBERG: And something has changed here, which is the Chinese now have available to them instruments for exerting leverage, which they really didn’t have as recently has ten or fifteen years ago. The size and weight of their economy gives them a tool that they can use to exert pressure on those who might try to stand up to them. They used it as recently as last year against South Korea, controlling access to their market. And they also—
LINDSAY: This was after the South Koreans agreed to deploy THAAD, Theater High Altitude Defense.
FRIEDBERG: That’s right. And they punished them for that.
LINDSAY: And they punished them.
FRIEDBERG: And they’ve done that to smaller, less advanced countries like the Philippines. They’re threatening to do it to Australia. They also now are a major exporter of capital, so they have something they can hold out.
LINDSAY: Well this is so-called debt diplomacy.
FRIEDBERG: Yes. That’s a part of it.
LINDSAY: You see it in Sri Lanka, where they borrowed a lot of money and now they’re in hock to the Chinese.
FRIEDBERG: Right. That’s sort of the furthest extension of the use of that tool and the consequences are very clear and it’s starting to sink in that it’s potentially dangerous to take this money. But even short of that, there are a lot of countries in the region and elsewhere, including in Europe and the Middle East and Latin America, where their governments are very eager to get Chinese investment, and the Chinese have some degree of control over that. And they use it as a tool—
LINDSAY: Well, I’ll note that the gentleman most likely to win the Mexican presidential election, Andres Manuel Lopez Obrador, has talked about building a major railroad to connect the Atlantic to the Pacific, and he thinks he’s going to get money from the Chinese to build it.
FRIEDBERG: Well, Chinese companies, my understanding is, control facilities at either end of the Panama Canal. They’re building bridges and roads and infrastructure around the world, including in Latin America. It was only a matter of time, and frankly if we continue to antagonize our neighbors to the south, it would not be surprising if they looked for ways to exert some leverage over us, and one of those ways might be doing more with China. And the Chinese, in the past, again, have been cautious about that, but from the Chinese perspective, they’ve had to put up with us in their backyard for the last hundred-something years and not be able to do anything about it. And now, they’re starting to do something about it in the region, and I think some Chinese strategists believe that this is also a way of responding and pressuring the United States and deflecting our energy and attention away form their theater, their neighborhood.
LINDSAY: I think it’s a major reason why they’re showing up in so many places so far away from the Asian mainland and then showing up with checkbooks in hand. What about the economics— we mentioned a little bit about Chinese aspirations to move up the value chain. That seems sort of an antiseptic way to put it. Another way to put it is, they want to eat our lunch when it comes to high tech and the industries we traditionally have dominated, they want to become the dominant player. How do you see that competition?
FRIEDBERG: They definitely—they want to eat our lunch, they don’t want to have to follow our rules, and they don’t want to have to be dependent on us, and they don’t want to have to take second position to us. They also believe, and have for some time, that technology is the driving engine of modern economic growth, and if you want to be a truly world-class power, you have to be a world-class scientific and technological and engineering power. And they’ve devoted a lot of resources to doing that. And that in itself might not be so problematic, but there are two problems with it. One is the way they’re trying to do it, and the other is the fact that we have these other concerns, strategic rivalry with them. They way they’re trying to do it involves the use of tools of industrial policy which either bend or break the agreements that the Chinese have entered into since the turn of the century and the World Trade Organization, and exploit that for their benefit. They do things to compel foreign companies to transfer technology. They’ve stolen massive quantities of intellectual property from the United States—
LINDSAY: Also our personal data, they stole.
FRIEDBERG: That’s right, they have mine.
LINDAY: Yes, they have mine as well.
FRIEDBERG: They got it from the Office of Personnel Management, anyone who has gotten a security clearance in the last twenty years. So it’s pretty brazen, it’s very brazen. And now they’re also showing up, as you say, with a checkbook, coming through the front door and trying to buy out companies, not only in the United States but also in Europe and elsewhere, that have this leading-edge technology, with the intent, clearly as stated in Made in China 2025 and in other policy documents in China to bring it back to China to develop with subsidies and with protection against foreign competition, industries using that technology back in China. And then to use that protected position to go out into the world and try to outcompete and undersell, and basically, if they can, undermine and destroy competitors in other places, including in the United States. And that is something that does pose a direct challenge now, not only to the United States but to other advanced industrial countries. And that’s one of the reasons why you’re beginning to see, not only in the United States but also in Europe, places that have—
LINDSAY: Oh, the Europeans are very worried about this—
FRIEDBERG: The Germans particularly—
LINDSAY: They’ve made overtures to the White House to try to make common cause, but as one European diplomat put it, told by the White House we’re not interested in your help. They want to do it mono e mono.
FRIEDBERG: Yes, well this is a mistake. And we have a lot to work with now because of Chinese aggressiveness in the region, we have a lot to work with militarily and strategically because of the policies they’re pursuing economically, we have a lot to work with on that front, too, in combination with our friends and allies. If we don’t take advantage of those opportunities, it’s going to be much harder for us to defend our own interests and our own values.
LINDSAY: You’re a big strategy guy, so help me think if you were trying to fashion a strategy to deal with this competition, taking into account a couple of the things we’ve already mentioned. One is that we do have very different interests, but there are some areas of potential cooperation, and I would imagine part of your strategy is to maximize the chances you get cooperation or maximize the amount of cooperation you get. But at the same time, you have a regime that is sort of driven by an internal logic of survival that is antithetical to the values we hold. It is a country that is able to think strategically, has a long-term plan, has a lot of money to invest, is investing it. Here in the United States, you went through a litany of criticisms of the American political system, the inability to think strategically, political divisions, the fact that our great strength—openness, transparency—being used against us with Facebook ads and trolling and the like. What do you do?
FRIEDBERG: The place to start is, I think, a clear articulation of the nature of the challenge. We need political leaders who can both say we don’t want an out of control competition with China that could lead to war, who don’t resort to the kind of exaggerations which occasionally we’ve had to resort to to mobilize our people. But at the same time are blunt and realistic in talking about the true dimensions and urgency of the challenge, and we have not had that. It ought to be possible for an American president to sort of say both of those things in a single speech, but I’m still waiting, I’ve been waiting for twenty-somewhat for that to happen. I think there’s more receptivity in the public and certainly in Congress.
LINDSAY: Well, I think the public is ahead of the—
FRIEDBERG: I felt that for some time. If you look at public opinion polls going back ten, fifteen years, and you asked, I’m sorry, members of the Council of Foreign Relations and ordinary people on the street, their views about China, the views of ordinary people were closer to reality and I think more clearly recognized.
LINDSAY: Well it also depended on what part of the country you were in. If you were in the upper Midwest, if you were in places like Akron, Ohio or Flint, Michigan, they would give you an earful when it comes to talking about China. But I was always struck, I think in terms of the business community, it began to dawn on them, I’d say at the beginning of his decade, that the sort of land of milk and honey they imagined with the Chinese was not going to come about, that they were having their technology ripped off left and right, and this was not going to end well. But it seems to be taking a really long time to lead to what I would say is commensurate action on the part of official Washington.
FRIEDBERG: Well, here too I think there’s a lot to work with if we had political leaders who were willing and able to do that. So that’s number one. You have to define the threat and the challenge accurately. And then there are a series of things that I think could be done in the diplomatic, military, economic, and informational domains to respond to this challenge in a way that would allow us to protect our interests and preserve our values. Some of those things we’re doing, some of them we’ve been doing for a while, we could improve across the board, in some areas, we’re not doing very well at all.
LINDSAY: What are the most important things to do better, and what are we not doing that we should?
FRIEDBERG: Well just to tick through those if I could, in the diplomatic domain, the most important thing is to mobilize this countervailing coalition, going back to what we talked about a minute ago, the countries that share with us a concern about the implications for their security and autonomy of the growth of China’s power, and to convince them that we’re not going anywhere and that they can rely on us and work with us.
LINDSAY: We should be doing exactly the opposite—
FRIEDBERG: We’re not doing very well on that count. And it could be worse, it could always be worse, we could be pulling out of our alliances. But, loose talk of that is, I think, very dangerous. We could do things to promote our economic ties with our friends and allies like TPP, we’re not doing that. We should also, in my view, be talking about our common values. Because that’s the bond that, whatever problems may be in the relationship, the fact is that these countries almost without exception— there are a couple of exceptions— are, like us, democracies. And that’s really the bond that ties us together. So we should be talking about that. Unfortunately, we’re not, at least not now. In the military domain, we’re doing things, we’re going to spend more money. The Obama administration raised the point, called attention to the challenge that’s posed to our ability to project military power into the Asia Pacific, but then unfortunately didn’t articulate a clear and convincing response to it. So that’s business that’s as yet unfinished. It’s not enough just to spend money, you have to have a strategy. And it’s not enough just to have a strategy, you have to be able to talk about it in ways that reassure your allies and deter your opponents. We’re not doing that.
LINDSAY: This doesn’t seem to be the strategy that President Trump is inclined to carry out. Do you see anyone else on the political map who’s beginning to make this kind of argument?
FRIEDBERG: Well, on the military side he’s certainly talked about increasing the defense budget, and you know he’s talked about a bigger navy and that’s all fine, but by itself it’s not sufficient. Other people on the political map—
LINDSAY: Well ships can go in the ocean so—
FRIEDBERG: And they can leave. So that in itself is not sufficient. We haven’t talked about the economic, political, or informational dimensions but maybe we can come back to that. As to whether there are other figures on the horizon, I think we’re beginning to see a number of people in the Senate talking in what I think is a more sensible way about these problems. And that’s relatively new. For various reasons, I think many people at that level were reluctant to—they may have been concerned about pressure from interest groups, they might have been worried about being perceived as extreme, or anti-Chinese, or whatever it is. Senator Rubio is probably the most outspoken and I think articulate person talking about this challenge and all of its dimensions in the past six to eight months. And I think he was aware of this problem earlier but he’s become more outspoken about it.
LINDSAY: Well this is— getting back to the economic strategy or the economic piece of the strategy, there has been movement up on the Hill to try to pass legislation about Chinese investment in the United States, so-called CFIUS legislation, on the Committee of Foreign Investment in the United States. Do you think that those kinds of efforts make sense? Maybe you could explain what they would do.
FRIEDBERG: I think so. And let me just say, first, as a kind of overview or an overarching statement. I don’t we can continue to treat China, any longer, as a normal trading partner. We are doing that, we’re trying to do that in various ways. They’re not, both because of the industrial policies that we talked about a minute ago, and because they are a strategic and military competitor. We have to find some ways to protect ourselves against China, Chinese investment, Chinese activity that’s intended to exploit our openness, in a way that we don’t have to protect ourselves against Japan or Germany or Canada. Part of that, now because of the intense desire of the Chinese to close this technological gap, and because of the fact that we are still ahead in some very critical areas. Part of that effort involves this attempt to buy up companies that are at the leading-edge of technology or have special capacities that China wants.
LINDSAY: In a number of these cases, they’re doing it legally. They go into bankruptcy court and what you do is you get a case, buy a bankrupt company and that gives them access to the patents and technology which they can then use as they wish.
FRIEDBERG: Yes. And they found ways around the existing laws and rules. They’re also doing things like becoming involved in joint ventures and start ups in the United States that have not traditionally been covered by the existing rules and regulations. And they’re doing it through entities in which, in most cases, have some relationship to the party state, either direct or indirect. In fact, almost all of them do have an in direct connection. So they’re not just commercial actors and we need to protect ourselves against that. We need have more oversight of these proposed transactions and tougher rules restricting some of them. I mean it’s not a problem if China wants to buy hotels or buy land, or whatever, that’s fine, but if they want to buy cutting edge robotics or AI or semiconductor technology, we need to look at it very carefully. And I think the presumption in the past has been openness. The presumption in the future probably has to be a greater degree of closure and caution.
LINDSAY: Well I think that assumption was guided by the notion that people weren’t buying companies to use the technology against us. They were buying companies because they were pursuing profit. That’s a very different calculation going forward. So is the policies that the administration is taking toward China on trade likely to solve this issue?
FRIEDBERG: It’s not clear to me exactly what the policies are and what they’re going to be in the longer run. So the CFIUS reform that you mentioned is a Congressional initiative. The Treasury Department and the administration have supported it, but it’s coming from the Congress. And I think more is going to have to come from Congress. The things that the administration is doing on trade with regard to China are pointing off in several different directions. So, tariffs on imports of steel and aluminum on the one hand—which are also being imposed on our friends and allies, which again to me makes no sense because they’re not the real source of the problem—are one thing. And they seem to be a manifestation of the president’s desire to impose tariffs, at least one news account last summer had him screaming, “Bring me tariffs!”
LINDSAY: Yes, “Bring me tariffs!”
FRIEDBERG: Well, they brought him tariffs.
LINDSAY: Well, he’s been screaming for tariffs since at least 1987 in his open letter to the American people.
FRIEDBERG: Yes, and now he’s got the chance to do it. So that obviously has a political motivation and also reflects his preoccupations and his understanding of how trade works. The other part of what’s going on, which I think makes more sense, and it’s driven by the U.S. trade representative and Robert Lighthizer, whose long experience as a trade negotiator is to emphasize and highlight this challenge of the extraction of technology through various means including theft and requirements in American companies to hand over technology in order to get access to the Chinese market and so on. That is, I think, why we recognize now as a real problem and a real challenge. The question is how to deal with it, how to respond to it. And the administration has used part of the trade laws, called Section 301, it hasn’t been used much since the 1980s, to try to go after that unilaterally rather than going to the WTO, the World Trade Organization, and threatening China with tariffs. I think there’s a justification for that, but it’s clear that that in itself is not a solution to the problem, that’s closing the door after the horse has left. There may be some reason to do it for deterrence purposes, to punish companies that have profited in the past and are profiting now from what can be demonstrated to be the theft of intellectual property, to send a message that we’re not going to tolerate that anymore. But in the longer run, that in itself is not going to be sufficient. And it’s not clear that we’re going to follow up on any of these things.
LINDSAY: Well that’s interesting about the 301 process you mentioned, which back in March the administration said he was going to impose tariffs on about $50 billion worth of Chinese goods because of China’s habit of stealing things or coercing, pressuring companies into giving up their technology. We’ve had a series of meetings since then, and there was a potential deal floated last month in which the Chinese were going to get out of the tariffs by agreeing to buy more; exactly how much more American goods is disputed, but to buy more natural gas, buy more soybeans and corn and what have you. And that alarmed a lot of people who otherwise supported the administration’s trade policies vis-à-vis China because it was going after the wrong object. The real object is these trade practices, the state industrial policy, the real state capitalism, which is really antithetical to the kind of trade system that we created. And I’ll note that the administration warned two weeks ago that some time after June 15, it intends to impose these sanctions on the Chinese. So in the near term, we might actually see what’s going to happen; the flames of competition may get turned up a little bit.
FRIEDBERG: Well I think probably the worst possible outcome of this would be a false solution to the problem that would take the form that you just described, which would allow the administration to claim a win and might, at least for a brief period of time, affect the bilateral trade deficit with China, but would not address the underlying structural problems that are the result of Chinese industrial policy. I’m afraid that we may be headed in that direction. That would be an easy out, but it really would let the Chinese off the hook, and wouldn’t solve the deeper problems, and would set us up for more difficulty down the road, but we may wind up going in that direction. WE have a lot of leverage potentially. The ZTE case, which we haven’t talked about yet, where a big Chinese telecommunication company was sanctioned by the United States government, not for these trade issues but for violating U.S. sanctions on Iran.
LINDSAY: Repeatedly violating.
LINDSAY: And knowingly.
FRIEDBERG: Yes. Force the company into closing down basically. And the president since has said that he’s not going to do this, and it’s not clear why or what the thinking is. But, whatever else one can say about that, that shows that in some areas, the United States still has—and other advanced industrial countries still have—very significant advantages over China, and China is still dependent on the United States, in that case, for the high-end semiconductors. They literally couldn’t make these phones that they make.
LINDSAY: Yes, we said you can’t buy these products in the United States, and if you can’t buy them you can’t make your product. It’s hard to stay in business.
FRIEDBERG: Right. If we have that kind of leverage, and I suspect we have that in other areas too, we ought to be using it to try to address these structural issues, not giving it away for nothing or for a handful of soybeans. Because, as important as soybeans are—
LINDSAY: To Iowa, we love you, everybody out in Iowa.
FRIEDBERG: Right. We don’t want to just be a commodity producing country. We want to be, as we’ve been for the last hundred years and more, a manufacturing power and a technological power.
LINDSAY: But I think you put your finger on why it can be very hard to get the outcomes you want, even when you have leverage. Which is, when you apply leverage, some people are going to get hurt because you’re going to get retaliation. And I think, you know the president had his famous tweet talking about how trade wars were good and easy to win. And I think the reality of it is, they’re not. Because, if you’re going to exercise leverage, the Chinese are as well. And you’re going to feel that pain and you have to understand going into this contest that you’re not going to be able to do it on the cheap.
FRIEDBERG: One of the reasons, I think, why the Chinese leadership is confident of their ability to stand up to us on this score is precisely that. And of course, they’re not relying just on the sort of natural forces of various interest groups, lobbying their Congressman, they are actively involved in trying to shape perceptions and encourage activity, political activity in the United States that serves, of course, the interests of some Americans or some groups, but probably doesn’t serve our national interest, but certainly serves China’s interest. This is also a function of our openness and the ways in which China exploits our openness and the openness of our society and our political system; try to shape the perceptions and policies of people in the United States, including our leaders, in ways that support China’s long-term goals and weaken us. And they’ve been pretty effective at it for the last twenty-five years, and I wouldn’t count them out yet because they still have a lot of tools to use to try to exert that influence.
LINDSAY: On that sobering note, we’re going to close up The President’s Inbox for this week. Aaron, thanks for joining me today.
FRIEDBERG: Thank you very much.
LINDSAY: And that was Aaron Friedberg, professor of politics and international affairs at Princeton University. His most recent book is A Contest for Supremacy: China, America, and the Struggle for Mastery in Asia, and the article you wrote that I referred to is called Competing with China, it’s the lead article in the most recent issue of Survival Magazine, and because it is the lead article in Survival Magazine, it’s available for free online at the Institute for International Strategic Studies’ webpage, which is iiss.org.
Please subscribe to The President’s Inbox on iTunes and leave us your review. It really helps. Opinions expressed on The President’s Inbox are solely those of the hosts or our guests, not of CFR, which takes no institutional positions. Today’s episode was produced by Gabrielle Sierra with Senior Producer Jeremy Sherlick. John Perry was our recording engineer. Special thanks go out to Audrey Bowler and Corey Cooper for their assistance. This is Jim Lindsay, thanks for listening.
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