Event Recap – U.S.-China Relations: Past, Present and Future

March 16, 2017
Susan Shirk

At a time of greater competition and strategic rivalry between the U.S. and China, what basic posture should the U.S.-China policy have? Should the U.S. adopt a tougher policy toward China than before, or an accommodating position on China’s rising power in the Asian Pacific?

To address this question, Susan Shirk, Research Professor and Chair of the 21st Century China Center of the School of Global Strategy and Policy at the University of California in San Diego, together with Orville Schell of the Asia Society, convened a group of respected China experts to review America’s past China policies, and distill lessons and directions for American future policies toward China. She reported the task force’s findings after an 18-month study and many unfettered conversations among these experts.

Since President Nixon, the U.S.-China policy posture has been what many call “engagement and hedge.” (Shirk preferred to call it “engagement from a principled position of strength.”) Despite very different values and political systems between the two countries, the U.S. government has tried to find ways to get along with China and to build foundations for cooperation on a multitude of fronts. In fact, according to Shirk, the U.S. “not only welcomed China’s rise, but sponsored China’s emergence onto the world stage” by facilitating its transition from a planned to a market economy, encouraging it to be a responsible stakeholder of the world system and giving it a seat at the table in many international organizations. In the 1980s and ’90s, both governments were flexible enough diplomatically to adjust to each other's constraints and achieve many common objectives, as demonstrated in the case of dealing with India’s nuclear threat in the late 1990s, when Shirk was working in the State Department in the Clinton administration. At the same time, the U.S. has maintained its military alliances in the Asia Pacific, giving the U.S. and its allies confidence to work with and influence China from a position of strength.  

Throughout the past four decades, China always has had to combat a perception and a serious worry of many foreigners that it would challenge the world order and “show its true colors” after it amasses sufficient capabilities. Under Qian Qi-chen, Vice Premier (1998-2003) and Foreign Minister (1988-1998), China was able to reassure other countries about its friendly intentions through credible actions, including settling border disputes with its neighbors and cooperating with the U.S. on many global issues.
 
However, this relatively benign picture changed markedly around 2008-2009. China became more assertive of its maritime rights in the South China Sea, provoking confrontations with several neighboring countries. This change of behavior could be motivated by the need of rallying domestic support for the top Chinese leadership, but it re-enforced the anxiety around the world that China’s intentions are not as peaceful as it claims them to be. China’s policy and attitude toward foreign firms operating in China has also changed. Through establishing competition laws and exploiting its market power, it forces technology transfer from foreign firms to domestic firms, and has set up many non-tariff barriers for foreign firms’ operations in China, thereby losing a critical lobbying voice for China in the U.S. Congress.

In addition, China has intensified political repression over civil society, especially in the media and legal professions. Foreign journalists and NGOs find it more restrictive to operate in China. While Shirk recognized that only China can decide its policies on human rights issues, she admitted that it is hard to argue that the American engagement policy improved the human rights situation in China. Although China generally moved in the right direction for many years in terms of improving its legal system and expanding personal freedoms, the trend in recent years is worrisome.
 
Why is 2008-2009 an inflexion point for China’s change of behavior? Shirk thought that the reasons are much more complex than a simple attribution to China’s increasing capabilities and the widespread repercussions of the 2008 global financial crisis. Just as importantly, Shirk pointed to the policy impact of the collective leadership under President Hu Jintao (2002-2012) and the shift of emphasis in China’s economic policy to state-led economic growth by nurturing state-owned enterprise (SOEs) champions at the expense of making the business environment more difficult for foreign firms. Furthermore, the collective leadership under Hu resulted in fragmentation of policy initiatives among the bureaucracies without overall cohesion and orchestration from the very top leaders. This contributed to China’s overreaching in the South China Sea. Meanwhile, several key policymakers in the Development and Reform Commission (发改委), the most powerful economic policy-making body, were transferred directly from Shanghai, the bastion of SOEs. With a mercantilist mentality, these policymakers effectively tilted the playing field in favor of SOEs, against foreign firms.

In conclusion, Shirk did not think China’s rising power itself a problem, but China's deliberately creating political and economic barriers between the two societies problematic. She urged the U.S. government to be absolutely clear about its national interests vis-à-vis China and to preserve the fundamental stability between the two countries through maintaining the “one-China policy” and the U.S. alliances in Asia Pacific. She warned that any radical deviation from these conventions will de-stabilize this important bilateral relationship.

Shirk, however, also called for greater firmness in the U.S. response to China’s actions that harm U.S. interests, credibly signaling American resolve and principles. At the same time, the U.S. should be open to offer reciprocity and respond positively to China’s progress in economic policies and civil society. Shirk emphasized the importance of keeping high-level communications between the two governments, especially given the concentration of the Chinese leadership at the top.