Pathways Forward for China and the United States

Did the summit meeting between the two presidents, Joe Biden and Xi Jinping, at the Asia Pacific Economic Cooperation (APEC) meeting in San Francisco last November, open new possibilities or will it be seen, in retrospect, as a zenith in this hard period of the relationship? That was the issue that lurked behind all the conversations in a meeting that brought together a score of Chinese and Americans—academics, think-tankers, and former government officials—for two and a half days of intense, moderated conversations.[1]

By Gregory F. Treverton

Note: The views expressed here are those of the author and do not necessarily represent or reflect the views of SMA, Inc.

Both Americans and Chinese were generally pessimistic, though San Francisco did open opportunities. Washington is dominated by a competitive, Cold War mindset, one that is very unhelpful in my view. In the 1970s and 80s, the two countries shared an anti-Soviet view. Now the context for the United States is fear of relative, perhaps absolute, decline, and China no longer can be regarded as “geostrategically innocent.” Both the prevailing narratives about China in the United States seem to suggest increased military preparation: one is that China is rising, bent on dominance; the other that China has peaked, and thus may be tempted to annex Taiwan before it gets weaker.

From the Chinese perspective, the South China Sea (SCS) issues are a legacy of World War II, when Franklin Roosevelt wanted China—then governed by the nationalist Kuomintang party led by Chiang Kai-shek—to take care of the region. For China, the challenge in the SCS is no new foreign occupation. Our Chinese interlocutors saw the Cold War mindset in the United States and worried that we had “securitized” the relationship while failing to deal with new security issues. As so often in our conversation, language and culture mattered. When the United States talks about stabilizing the relationship, it usually means continuing the same policies without a war. For China, stabilizing means a new understanding on the part of the United States. Put differently, China wants to approach the relationship top down, beginning with a framing that is not competitive, while the United States tends to work bottom up, looking for cooperative possibilities despite competition.

Both countries seem “fragile” in that neither can acknowledge the contribution of the other. Sure, the explosion of Chinese manufactured exports, mostly textiles, played a major role in the six million manufacturing jobs the United States lost between 2000 and 2010 (though China lost more jobs); American goods imports from China jumped by a staggering 1,156 percent from 1991 to 2007.[2] Yet that made the United States a partner in raising so many Chinese out of poverty in those years. And for the United States, it meant that poorer American now could buy the clothing that was out of reach afford before. They didn’t know they were the beneficiaries of globalization, or perhaps even what it was, but they were.

Smoke and Fire: Managing Crises

For starters, the Sino-American relationship seems beset with crises that could turn into flash-points—Taiwan and the South China Sea are only the two most prominent. Thus, being able to manage crises—either ones that are so far just smoke or those already afire—seems a precondition for thinking about more positive cooperation. Yet, on the other, the United States and China have not done that badly at crisis management. Their actions are like the line about Wagner’s music, better than it sounds. The Lockheed EP-3 incident in 2001 was a case in point. When the U.S. Navy signals intelligence plane collided with a Chinese jet in international airspace and was forced to land in China with no advance permission, the two countries avoided escalation, and the Chinese commander even allowed the captive Americans to call home to reassure loved ones.

Fentanyl. Of the current crises, the lowest hanging fruit is the fentanyl issue. The precursor chemicals for the drug are not illegal; indeed, they have legitimate medical purposes. But there is no production of those precursors in Mexico, so the cartels get them from China. All this is unknown to most Chinese, and so putting the issue on the agenda in San Francisco was important. If Chinese don’t know the supply chain for fentanyl, still less do they understand how many American families have lost loved ones to the drug. A serious education campaign in China would make sense, as would visible Chinese actions to take their country out of the supply chain, all the more so since the precursors that find their way into the hands of the cartels are not that lucrative an export.

Taiwan. The status of Taiwan remains somewhere between smoke and fire. As so often in international affairs, even the language is fraught: to speak of China and Taiwan implies that the latter is not part of the former; the Chinese are careful to refer to the “mainland” and Taiwan. All the war games suggest that a Chinese invasion would be disastrous: not only would the risk of going nuclear be real, but Taiwan would be destroyed. In an ideal world, the United States and China would seek to reframe the issue in a cooperative form, since both countries depend on those silicon chips made in Taiwan.

In the world we live in, the Biden administration gets generally good marks for handling the issue. Biden tried hard to persuade Nancy Pelosi not to go to Taiwan, and he apparently persuaded Kevin McCarthy not to. He has, though, strayed from “strategic ambiguity” by saying clearly that the United States would side with Taiwan if it were attacked. If, in the near future, the Taiwanese elections, which returned the incumbent Democratic Progressive Party, (DPP)—no surprise to our Chinese colleagues before the election—are the focus of attention, in the longer term the United States needs to move beyond strategic ambiguity, which is threadbare in any case. Administrations can’t explain it, and Congress can’t understand it.

Given this polarization, crafting a credible Taiwan policy will be no mean feat. Any language China would find acceptable would have to be coupled with tough talks for the China hawks, now populating both U.S. parties. A framing like the following might work: the United States recognizes the Chinese Communist Party as the leader of China (which it has for more than forty years in any case); does not seek the independence of Taiwan; will support any resolution approved by the people of the mainland and Taiwan; and will treat Taiwan’s leaders as respected partners, not national leaders. My impression was that the Taiwan issue is less explosive than it often is portrayed: the DPP government presides over a Taiwan that is more and more self-centered but not reckless enough to seek formal independence.

South China Sea. It has always seemed to me that China’s actions in that region were too much pain for too little gain. The much smaller states of the region know they must defer to the big kid on the block, though they don’t like it. By rubbing their noses in their inferiority, China has earned the enmity of most of its neighbors in that region. My impression from our conversations is that the Chinese don’t really mind our freedom of navigation operations (FONOPS). What they mind is them becoming public, thus requiring China to look tough in response. In this and other respects, my sense is that sophisticated Chinese realize they are riding the tiger in whipping up nationalist fervor. As always in international affairs, serendipity has played a role: after embarrassing collisions by U.S. Navy ships in 2017, transponders emitting constant signals about location became mandatory. So, if the Navy didn’t announce its ship movements, private open-source analysts would do it for them. Before, the Navy wasn’t asked and didn’t tell. Now, the transponders squawk and the public-ness of the response looks like hype to our Chinese colleagues. I am again struck by the cultural differences that run through almost all issues. China prefers secrecy, but American practice virtually compels publicity.

Second Thomas Shoal. Much less noticed, this seems a flammable crisis. The shoal, a reef in the Spratley Islands in the South China Sea, hosts a Filipino ship that was intentionally grounded in 1999 and is occupied by a small garrison of the Philippines Navy. The United States wants the Philippines to handle the issue directly with China, but the danger is that if shooting starts on the Shoal, the Philippines will invoke its defense treaty with the United States.

Korea. Here, our Chinese colleagues were attentive to the strategic change in northeast Asia. What had been a long-term stand-off, if accompanied by a long-term arms race, is now a changed strategic context. Not only has the United States promoted an anti-China coalition including Japan and South Korea, but North Korea has moved closer to Russia over Ukraine, for which China is not to blame but may have no choice but to join.

From an American perspective, the question arises whether the principles of crisis management can be applied to North Korea. Those principles are keeping communications open, trying to pre-cook solutions to crises, controlling escalation, keeping emotions low and being creative diplomatically. All are harder with five parties, not two, and nuclear weapons are discontinuously violent, so surprise is critical and solutions hard to pre-cook. What is creativity, a standing five-party (North and South Korea, United States, Japan, and China)? What about Russia? For me, communication between China and the United States is imperative, for the last thing either of us should want is a scramble for North Korean nuclear weapons should the North Korean regime collapse.

Thinking about What Might Be Possible

Here we started with general principles, and agreed on four:

• Avoid war;
• Cooperate to solve common problems and provide global public goods;
• Work multilaterally to build a system of globally accepted rules; and
• Promote bilateral engagements and manage the competitive aspects of the relationship.

As always, the devil was in the details, and in trying to be more concrete, we discussed a dozen possible areas of cooperation, seeking to rank them on three metrics—importance, impact on the bilateral relationship, and plausibility in current circumstances. Two issues that later became important—fentanyl and cyber—we omitted from our first discussion. In the first round, climate change, pandemics, artificial intelligence (AI), arms control, and cooperation on the high seas were deemed most important; arms control, pandemics, and AI most impactful; and climate change, high seas, pandemics, and outer space most plausible.

After broadening the list of items, arms control, pandemics, and fentanyl seemed the best candidates for cooperation. I am skeptical of the arms control item, and not entirely sure what it would comprise. On the big issue, strategic nuclear weapons, the United States argues that China’s modernization has left its arsenal too large to be left out of any Russian-American arms control conversation, while China holds that it is still too small to be included. The suggestion seemed to be that strategy and doctrine might be ripe for Track I—government to government—discussions, while other arms control issues should be left in Track II discussions by private citizens though with government cognizance. The latter might include North Korea’s nuclear forces, tactical nuclear weapons on the Korean peninsula, and the nuclear interests of South Korea and Japan.

Pandemics seems a natural, given both the very high chance of another pandemic, and, to put it gently, the ragged state of cooperation the last time around. I would add AI to the list and was glad to see it come up in San Francisco. Not only do the two countries share an interest in avoiding the most dangerous outcomes, but the two governments have taken very different approaches to the issue, and so might learn from each other. China has centralized oversight of AI, while the United States has dispersed it, deputing various agencies to oversee AI within their domains.

Our conversation, especially about what might be plausible, mirrored the usual tendency to think that cooperation is best built by working on smaller issues, then building toward more important issues as trust grow: hence the suggestion to work on closer Coast Guard cooperation on the high seas. The rub is that the climate crisis is simply too critical not to be central to any dialogue. Quite literally, if humanity is to survive, China and the United States must work together. Doing so is not a choice, it is an imperative.

A looming, hard-to-discuss, issue came up at the edges of our conversation. While China mounted a charm offensive for the foreign private sector at Davos in early 2024, American investors and venture capitalists will be under pressure to decouple from China or at least divide their operations. Electric vehicles (EVs) are an example where Chinese government support was good for China, which now makes a third of all EVs but in a kind of zero-sum way, one that did not lead to mutual economic benefit, especially from the perspective of EV makers in the European Union.

People-to-People Contacts

These, ranging from education and consulates to visas and tourism, are in dire straits after the pandemic, a smoking crisis. President Xi promises to invite 50,000 young Americans to China over the next five years, which seems practically impossible, all the more so given that there are now only 400 U.S. students in China. Small episodes have big effects: witness the Chinese students at Harvard who vacationed in Mexico only to be denied re-entry into the United States. One of our Chinese colleagues had been denied a visa, and there is generally no reason given. Chinese-Americans seem a special target, and sometimes visas are approved but actual entry denied.

More than 100,000 Chinese went abroad before Covid, but now they are reluctant to come to the United States, worried about racism, crime, and limits on acquiring real estate. U.S. education used to be the gold standard in China but is less so now, all the more because a long stay in the United States might make it harder to obtain a government job. Funding is a problem on both sides. So are bureaucratics, visibly on the U.S. side in tension between State and Homeland Security, and even within State: At the same time as Ambassador to China Nicholas Burns was encouraging Americans to visit China, State was issuing a travel advisory. And, in the end, would young Americans want to spend time in China where the government blocks most social media?

Gregory F. Treverton stepped down as Chair of the US National Intelligence Council in 2017. He is now Professor of the Practice at Dornsife College, University of Southern California, Chair of the Global TechnoPolitics Forum, and an SMA Executive Advisor.

[1] The meeting was held under Chatham House rules, meaning no attribution to participants or to the meeting itself. In any event, these reflections are my own alone, and my unnamed fellow participants should not be tarred by association with them.

[2] David H. Autor, David Dorn, and Gordon H. Hanson, “The China Syndrome: Local Labor Market Effects of Import Competition in the United States,” American Economic Review 2013, 103(6): 2121-2122 http://dx.doi.org/10.1257/aer.103.6.2121, p. 2158.