Where China-US Relations are Heading

Even before Joe Biden entered the White House in January 2020, he had summarized his “three Cs” policy towards China: competition, cooperation and confrontation. In general, the president has continued the approach to Beijing of his predecessor, Donald Trump, adding some of his own touches such as restoring relations with American allies and partners including the members of the North Atlantic Treaty Organization (NATO), a significant upgrading of the Quadrilateral Security Dialogue (the Quad) to contain China, expanding restrictions on trade and technical cooperation with China, and focusing on difficult issues such as Hong Kong and Xinjiang to stigmatize China in in the American and global media. 

Of course, Biden is somewhat different from his predecessor. In recent months, diplomatic channels between the two countries have resumed, including the appointment by both sides of new ambassadors. Normal contacts are now going on, including meetings between senior diplomats and high-level consultations on finance, trade and commerce, and climate change. At the UN Climate Conference (COP26) in Glasgow in November, the US and China issued a remarkable joint statement asserting their intention to step up cooperation to address global warming during this crucial decade.

Capping the months of revival was the virtual summit between Biden and Chinese leader Xi Jinping, which resulted in some good news as both sides underscored the importance of their bilateral relationship for the world and the need for smooth and efficient communications to prevent conflicts, particularly military ones, intentional or unintentional. As US national security adviser noted in a session the morning after the leaders met, the two discussed the need for “common-sense guard rails” to prevent miscalculations.

Changes in the geopolitical and geo-economic positions of China and the US since the end of the Cold War and through crises including the 9-11 terrorist attacks in 2001, the global financial crisis of 2008-09, and the ongoing Covid-19 pandemic have brought new variables and dimensions to the relationship. It is not just about the two countries anymore. During the second term of the administration of US president Barack Obama, for example, Washington launched its “pivot to Asia” strategy and pursued the Trans-Pacific Partnership (TPP) free-trade agreement.

For its part, China – the second largest economy in the world – has emerged as not just a powerhouse manufacturing base but a major power with global influence and advanced technological prowess. Beijing has promoted and refined its signature foreign economic policy – the Belt and Road Initiative (BRI) – to assist countries around the world with the development and financing of infrastructure projects. 

The pandemic should have been a time for countries to put aside their differences and join hands to deal with global common challenges, but instead it has exacerbated political extremism and geopolitical divisions. The Trump administration blamed China for Covid-19, using it as a diplomatic wedge and as a way to stir up anti-China sentiment. When it took office in January 2021, the Biden administration had the opportunity to readjust American foreign policy and the US’s China strategy, but due to American domestic politics and the prospect of the 2022 mid-term elections and the presidential contest in 2024, Biden continues essentially to keep to Trump’s approach. 

David Shambaugh, Professor of political science and international relations at George Washington University, believes that the deterioration of US-China relations is "systematic" and "structural". In the future, the model and dynamics of US-China relations will be confrontation, competition and pressure. The challenge is how to manage the tension and avoid turning the relationship into a comprehensively hostile one.

The future of China-US relations

In their bilateral relation, the US and China have shifted from engagement, particularly in trade and economics, to focusing on competition and confrontation, with some room for discussion and cooperation, notably on climate change. For the US, most pressing are domestic challenges and the country’s future competitiveness with China across a host of economic and strategic spheres.

Biden's opposition to China's military activities in the South China Sea was inherited from the Obama Asia-Pacific and Trump’s Indo-Pacific strategies, while in trade, science and technology and people-to-people exchanges, Biden is clearly emulating Trump's decoupling approach. In terms of diplomatic security, Washington has restored relations with allies and partners around China, aiming to encircle China. The launch of the AUKUS partnership bringing together Australia, the UK and the US to cooperate in building a nuclear submarine program for Australia and collaborating on strategic technologies is an example. Washington has also upgraded the Quad, convening one virtual and one in-person summit last year, and sought to build an alliance of democracies to challenge the growing influence of authoritarian powers such as China and Russia. In early December, Biden hosted a virtual Summit for Democracy, in which Taiwan participated. An in-person gathering is in the works for this year.

Countries and regional groupings will naturally consider their relationships with China and US based on their own interests. It cannot be all as the US wishes. For example, China is the largest trading partner of Japan, India and Britain, as well as of ASEAN and EU. The haphazard US withdrawal from Afghanistan and Washington’s muscling in on Australia's submarine deal with France to launch AUKUS have had a negative impact on the image of the US as a reliable ally and partner, which had already been dealt severe blows during the Trump administration.

Militarily, the United States is encouraging its allies to expand its capabilities and deployments in the Indo-Pacific to help contain China, use Taiwan to tease Beijing, and help shore up its defense posture along the second island chain that includes Guam and Palau. China's military power has become so strong that it is not afraid of the alliance of surrounding countries with the US. Even a second island chain strategy is not enough to hem in China's military power. Moreover, relevant countries including the closest American allies have their own interests and may not wish to devote financial and military resources wholeheartedly to encircle China.

Economic and trade ties between China and the US are even more complicated. They still play the role of ballast in maintaining some measure of stability to the relationship. Although the Trump administration tried to break up Sino-US trade and even proposed decoupling, the trade volume has increased, especially American imports from China. Since Biden took office, American enterprises and chambers of commerce have appealed to the president to continue trade talks with Beijing and adjust its tariff measures against China as soon as possible. 

With the pandemic still rampant and economic recovery an enormous challenge, China and the United States should put aside their own interests, find common ground and strengthen cooperation. The China-US virtual summit indicated the two countries are ready to restore working relations. Quarrels will be normal, but some diplomacy is much better than none. The Thucydides trap is not inevitable and avoiding it would be in the best interests of all the people in the world.

China’s rapid economic progress has benefited a great deal from economic cooperation with US, but the US gained a lot, too. Over the past 40 years, Chinese and American businesses have profited and people in both countries prospered as a result. American companies found a reliable, cheap and well-trained labor force and versatile manufacturing base, thus reaping remarkable profits. American consumers have enjoyed quality daily necessities at competitive prices, which helped the US avoid the scourge of inflation and other economic difficulties.

The global economy has developed to varying degrees in many countries over the past 40 years, driven by China and US, its two economic engines. The US has played a leading role in science, technology and high-end manufacturing, while the industrialization of American technology has mostly depended on China. China-made or China-assembled products, from shoes to Apple cellphones, go out to the world market. Meanwhile, many countries have found markets for their products in China and US, which has led to the expansion of globalization and complex, yet efficient supply chains.

Since the establishment of diplomatic relations, China and the US both recognized the complexity of their relations. Whenever difficulties appeared, the two countries have always insisted on separating economy from any political or sensitive strategic issues, rarely ever considering military options. Trade and investment have grounded the relationship for decades. Now, there are countless connections, large and small, closely linking the two countries. Once political, military and toxic trade relations are the paramount focus, it will be very difficult to straighten out relations or maintain the peace. This will bring confusion to the world and cause immeasurable concerns.

Still, with the continuous expansion of people-to-people and cultural exchanges, including tourism, cultural and educational exchanges, the two countries have become culturally closer and developed a better understanding – at least until the negative rhetoric soured the atmosphere. Friendship among people is the cornerstone of China-US diplomatic relations. The two countries should strive to avoid interfering in normal people-to-people and cultural exchanges, keeping the geopolitical out of this important sphere of diplomacy.

An easing of tensions?

Over the next several months, tensions between China and the US are expected to ease. Further fruitful communication between China and the United States in various fields will happen, especially in trade and people-to-people exchanges. The attitude of some countries that followed Washington in opposing and curbing China could change their attitudes. There may even be positive signs with regard to the South China Sea and Taiwan Strait. 

Yet, expect the anti-China rage from both political parties in the US to continue – and for some years still. The fundamental contradictions between the two nations are structural and complicated. They will remain so for decades. 

Indeed, it is widely accepted that it is not possible for China-US relations to return to where they were before Trump. The two countries need to explore a new relationship that will be a marked by a complex framework of confrontation, competition, exchange (including over new technology, trade and differences in values) and cooperation (on pressing international issues such as climate change and Iran’s nuclear program).

Stable communication between China and the US, especially at high levels, is essential. These are, after all, the two most powerful countries in the world. In the past, serious conflicts (such as the Korean War) have developed mostly because of a lack of understanding that comes from interaction and consultation. Good communication can prevent or manage conflicts, while poor communication increases mutual suspicion and quite possibly leads to problems not just for the two countries but for every nation involved with them. There is an opening for effective preventive diplomacy now; the opportunity should not go to waste.