Country Report: China (February 2021)

  • Danielle F. S. Cohen (assisted by Dong Jiaxin)

In the winter of 2020–2021, Chinese analysts contemplated a world in flux, with the COVID-19 pandemic continuing to devastate the United States and the arrival of new leadership in both Japan (in September 2020) and the United States (in January 2021). They assessed how Sino–US competition will impact the future world order and explored how Russia and Japan are developing their foreign policies in response. They analyzed the continuing impact of the 2008 Global Financial Crisis on Sino–US relations and offered predictions for how the new Biden administration will alter the course of the bilateral relationship. Chinese analysts also examined the China–US–Russia strategic triangle and its implications for the Asia–Pacific regional order.

Sino–US Relations and the Future World Order

In a roundtable in Guojia Anquan Yanjiu, No. 6, 2020, a number of Chinese experts share their perspectives on Sino–US relations and the implications of this bilateral relationship for global security and the world order. Shi Yinhong argues that the post-COVID world will be split into a China camp, a US camp, and a large “middle zone.” The China and US camps will be comprised of a few countries that are loyal to each. The majority of countries will fall into the “middle zone”: they will be forced to lean toward one side or the other to advance their own national interests (which side they lean to may vary, depending on the specific issue), while also trying their best to maintain neutrality and policy independence. Many major powers will fall into this category; although they lack the power of China and the United States, they have sufficient power to compel China and the United States to make important concessions on particular issues.

While the ideologies of the China and US camps are rigid, this huge “middle zone” is comprised of a diverse group of states that will gradually reach a consensus: the world is multipolar, the hegemonic struggle is not global, there is a diverse array of major global issues, leadership effectiveness varies depending on the specific issue area, and countries should not form military alliances or long-term alliances with a superpower. Such a vision is somewhat reminiscent of the non-aligned movement during the Cold War, except that Shi envisions the US and China camps as much smaller, and with different membership, than the US and Soviet blocs of that era. For example, he envisions the EU as part of the “middle zone.”

Shi speculates that the main trend of the post-COVID era may be the ideology of this “middle zone,” rather than that of a superpower. If so, states will no longer tolerate hegemonic power politics, but rather will promote the rights and policy independence of the many nation-states and advocate for a more inclusive and egalitarian approach to global public opinion. Given the importance of advanced technologies, Shi posits that it will be difficult for any superpower to maintain an overall advantage across different functional issue areas. Therefore, China should maximize the number of neutral parties and countries willing to join the China camp.

Shi concludes by recognizing that China and the United States have experienced the pandemic very differently. China has borne enormous social and economic costs, in part because of damage to the global economy. The Chinese government must pull back in other areas in order to prioritize economic growth and virus mitigation; its position is weaker than it was prior to the pandemic. However, the United States (along with some of its major allies) has faced substantially higher political and economic costs given its failure to control the pandemic. Consequently, Shi argues, the shift in the balance of power has accelerated abruptly, which creates unprecedented opportunities for China in the military, economic, diplomatic, and ideological spheres.

Compared to other participants in the roundtable, Fu Mengzi is more skeptical about the decline of the United States in the short-term, even in light of the damage wrought by the COVID-19 pandemic. Fu argues that, despite China’s rise, it is too early to say that the world order is characterized by “two superpowers and many strong powers.” Generally speaking, the West is still stronger than the East, the North is still stronger than the South, developed countries still dominate, the speed with which emerging economic powers are catching up to more developed states has slowed, and developing countries still face challenges. Despite China’s rapid economic growth, Fu contends, many of the factors underlying hegemonic US power are still in place: the dominance of the dollar in global financial transactions, massive US military expenditures, US strength in technology and science, and the globally influential American media.

Although the gap between Chinese and US GDP is narrowing, Fu contends that the size of the Chinese economy will surpass that of the United States later than previously expected. China was the only major economy to grow in 2020, but Fu is less optimistic about its future progress. Fu believes that China faces a more challenging external environment than it did when the reform and opening period began. Even though China will eventually become the world’s largest economy, Fu argues this may not occur until after 2035, while its comprehensive power (economic, science and technology, and military) may not catch up to that of the United States until around 2050.

Fu asserts that current international politics can best be understood from a traditional realist perspective. Citing the work of Robert Kagan, he argues that the post-World War II liberal world order and the era of great power peace was just a temporary deviation from the more timeless principles of anarchy, self-interest, and conflict. Currently, the world order is being deconstructed and great power relations are becoming more complex. In contrast to previous eras, however, the world order is being reconstructed not through a single war or major crisis, but through this more gradual, fragmented process. In Fu’s view, multilateralism has become less effective than it was in the past, despite the efforts of international organizations. Trump’s foreign policy accelerated the process of deconstructing the world order that was already under way. As the main architect of the liberal world order, the United States tends to view the weakening of this order as damaging the US national interest—although Fu posits that the United States might view the current situation as an opportunity for a fresh start. Meanwhile, China uses the existing world order to quickly increase its power.

Although Fu believes that China is not yet a superpower on par with the United States, like Shi, he argues the world is shifting toward a bipolar system. The United States seeks to establish a values-led order that squeezes out China, while China has expanded its room for development through the BRI.  The two countries are also competing over technology. However, the emerging bipolar order will differ from that of the Cold War. The competition will be comprehensive, rather than focused on the military, and continued cooperation will be essential. Like Shi, Fu believes that other countries will be less willing to “choose sides.”

In this complicated situation, China must be prepared for Western power to continue to dominate for a long period of time, even as the shift toward a bipolar Sino–US system accelerates. China and the United States may drift away from each other, rather than becoming closer. In this context, Fu argues, China must strengthen its technological and industrial capabilities, build ties and help to develop its neighborhood through the BRI, strengthen relations with a range of countries, and resist Western ideological pressure. Fu concludes that the international community welcomes China’s economic and political ideas as alternatives to those proposed by the United States and the West.

Russian Strategy and Sino–US Competition

In the same roundtable in Guojia Anquan Yanjiu, No. 6, 2020, Jiang Yi assesses Russia’s foreign policy strategy in the context of Sino–US strategic competition and the COVID-19 pandemic. In Jiang’s view, Russian analysts believe that many of the characteristics of the world situation remain unchanged: nationalism and populism are increasing, deglobalization trends are growing, international organizations are proving to be inadequate to the necessary tasks, and the disproportionate impact of the COVID-19 pandemic on the United States and Europe is providing further evidence of their declining competitiveness as the world shifts from the US-dominated post-Cold War period to an era of more diversified power. The biggest change, from Russia’s perspective, is that China and the United States are now “total antagonists.” Whereas Russian–US confrontations focus on geopolitics and international security, Sino–US competition also extends to global economic development, global politics, and ideology. The result is two competing political and economic models: the West promotes liberalism, while China promotes nationalism. This competition will impact the international system and each country within it.

In this context, Jiang contends, Russia has concluded that Sino–US tensions offer Russia its greatest strategic opportunity since 2008 because both China and the United States want Russia to side with them. Nevertheless, Russia does not want Sino–US tensions to result in military conflict or severed diplomatic ties because the resulting instability would harm Russian interests. Unlike the Cold War, Russia does not believe that current Sino–US tensions will result in the formation of two competing blocs. This means that Russia can seek partnerships with other countries without the complication of those countries feeling that they need to coordinate their relations with Russia with their decision to side with either China or the United States. In some areas where China and the United States are competing for influence, Russia can position itself as a neutral third party for countries that do not wish to choose sides between China and the United States; in other areas (particularly the Middle East), Russia perceives that the playing field has been left wide open as Sino–US tensions prevent them from exerting their influence. Russia believes that neither the United States nor China is equipped to focus on the countries of the Commonwealth of Independent States and that Russia presents a good alternative for these countries, which may fear that closer relations with China would bring negative repercussions from the United States. Furthermore, Russia places a high priority on maintaining its traditional geopolitical partnership with India and seeks to prevent India from pursuing closer ties with the United States in response to Chinese pressure. Finally, Russia perceives that Sino–US antagonism means that China is in greater need of Russian support and assistance and that tensions with the West would encourage China to focus more strongly on Eurasia for its continued economic development.

Jiang asserts that China’s increasingly significant global role should drive its policy response. Repeating boilerplate official language, Jiang argues that China must adhere to the strategic direction promoted since the 18th Party Congress and conceptualize Sino–US tensions as a long-term struggle. The United States is playing the long game against China, similar to its approach to the Soviet Union during the Cold War. Consequently, China should focus on long-term success rather than short-term victories. Because most countries are not eager to join either a Chinese or a US bloc, China has an opportunity to build cooperative relations with a variety of different countries. Finally, China should recognize that Russia is an important strategic partner and that Russia can play an important role in China’s efforts to reform global governance and achieve its broad foreign policy objectives.

Japanese Strategy and Sino–US Competition

In another contribution to the roundtable in Guojia Anquan Yanjiu, No. 6, 2020, Xu Wansheng assesses the implications of Sino–US tensions for China’s relations with Japan. Although close US–Japan relations are the cornerstone of Japan’s foreign policy, the shift in relative power between China and Japan means that Japan’s strategic calculus has changed. Japan seeks political benefits and international status from the US-led Western bloc, while also pursuing economic benefits from cooperation with China. When positioning itself in this triangular relationship, Japan seeks to maintain its identity as a “representative of Asian countries” and “bridge between the East and the West,” while also promoting the strategic culture of advocating strength.

Like many Chinese observers, Xu sees the United States and China as engaged in a game of strategic chess that will reshape the international system; Japan, Xu argues, must pick a side. After January 2017, when Trump took office, Japan’s China policy underwent two major changes. The first shift occurred during the second half of 2017, when Abe responded to the uncertainties created by Trump’s America First policy and Sino–US trade tensions by offering conditional support for the BRI, pursued cooperation with China in third-party markets, and used leadership exchanges to strengthen relations. The second shift occurred during the first half of 2020, when the United States increased its strategic deterrence against China in the context of the COVID-19 pandemic. Abe responded by offering clear support for the US policy on the South China Sea disputes, Hong Kong, Xinjiang, and Taiwan, in contrast to Japan’s previously more ambiguous positions. Taken together, Xu argues, these shifts demonstrate that Abe was trying to hedge his bets. Xu contends that since Suga took office in the fall of 2020, Japan has sought to continue Abe’s policies, maintain stable relations with China, and strike a strategic balance between China and the United States. Japan supports a “Free and Open Indo-Pacific,” but must also cooperate with China to maintain economic growth in the context of the COVID-19 pandemic. This piece was written before the November 2020 US presidential election; the new Biden administration’s China policy will clearly influence the extent to which the Suga administration continues to feel that it must choose sides between China and the United States.

In Xu’s view, stable Sino–Japanese relations are even more important given the aggravation of Sino–US tensions. Consequently, Xu argues, China and Japan must cooperate to address the pandemic and build the economy, prioritize high-level dialogues and leadership exchanges, and distinguish between the different strategic concerns of China and the United States regarding the South China Sea, East China Sea, and Taiwan. China must also prepare for sudden shifts in Japan’s China policy and its joint operations with the United States. Most importantly, China should work to ensure that the United States does not negatively influence Sino–Japanese relations.

The Future of Sino–US Relations

In Meiguo Yanjiu, No. 6, 2020, Da Wei and Zhou Wuhua argue that the collapse of neoliberalism since the 2008 financial crisis is a major cause of Sino–US tensions. Although Da and Zhou believe that the Biden administration cannot return Sino–US relations to what they were in the past, they argue that the Biden administration offers an opportunity to stabilize relations and move in a more positive direction. Da and Zhou see neoliberalism not only as an economic philosophy, but also as a political philosophy that emphasizes human rights, democracy, and freedom. This philosophy, which was dominant in the United States from the 1980s until the 2008 financial crisis, drove economic globalization trends and deeply influenced China’s creation of a “socialist market economy.” US support for China’s economic reforms was, for many years, a foundation of the bilateral relationship.

Since the 2008 financial crisis, however, the deep flaws of neoliberalism have become increasingly evident: namely, the inequitable distribution that has occurred within developed countries. Da and Zhou see the elections of both Obama and Trump as pushbacks against neoliberalism thinking from the left and right, respectively. As Americans became increasingly critical of neoliberalism, they began to cast China as the scapegoat for domestic US economic problems. Politically, China and the United States have diverged since China began to promote Xi Jinping’s “socialism with Chinese characteristics for a new era.” The United States further objects to China’s emphasis on state direction of the economy in accordance with its establishment of a “socialist market economy.” Although Sino–US relations seemed to deteriorate rapidly only beginning in 2018, Da and Zhou argue that the old strategic framework had already become obsolete during the Obama years. In their view, it was only the Trump administration’s poor management of these complications that made bilateral relations seem to decline so quickly.

Despite obvious differences, Da and Zhou argue that the Biden administration, like the Trump administration, is focused on addressing the negative domestic repercussions of neoliberal globalization—Biden promises a “foreign policy for the middle class.” This policy links efforts to increase US innovation, expand economic cooperation with other democratic states, and decrease inequality to the United States’ ability to compete effectively with China and other countries. US policy toward China will also be influenced by public opinion. According to a 2020 CSIS poll, 54% of Americans view China as the largest challenge to the United States (only 22% of respondents listed Russia, which ranks second). As a result, the views of China held by the mainstream of the Democratic Party have shifted since Biden left office as vice president: the current Democratic Party is more critical of China’s domestic political system and advocates for a more competitive policy toward China than that of the Obama administration (although not one that will provoke conflict). (Like most Chinese observers, Da and Zhou do not entertain the possibility that changes in China’s domestic political situation have had any influence on US public opinion.) The Democratic Party also seeks the development of a US industrial policy that can effectively respond to China’s economic and technological rise and encourages cooperation with allies and partners to manage China. It is clear, Da and Zhou argue, that the Biden administration’s policy cannot return to that of the past because earlier US engagement policies were built on two fundamental conditions that no longer apply: that the United States was far stronger, on both economic and comprehensive measures, than China, and that China would be either outside the international system or peripheral to it. Today, China’s economy is more than 70% the size of the United States’ and China plays a central role in international affairs. Although Biden’s China policy will be closer to that of Obama than that of Trump, there is no going back to the past.

Looking ahead to the Biden administration, Da and Zhou see new opportunities for more stable US–China relations. The possibility that the two countries will accidentally slide into strategic confrontation or conflict has declined. Rather, Da and Zhou perceive a shift to more “positive competition,” in which the United States adjusts its economic, industrial, and trade policies to address domestic concerns and allow it to better manage the challenges posed by China’s economic rise. Da and Zhou expect Sino–US strategic competition to be focused on more limited and productive channels. The United States will focus on strengthening its capabilities rather than weakening those of China. While technological and economic competition will continue, the two countries will be able to effectively manage their geopolitical competition and will not engage in ideological competition. Da and Zhou are also optimistic that Sino–US relations will become more cooperative as the two countries work together on global issues like climate change and public health. This productive work on issues of common concern may allow for the development of a relationship where competition and cooperation co-exist. Finally, Da and Zhou expect Biden’s China administration to be far more predictable than that of Trump, given Biden’s extensive foreign policy experience and his appointments of career professionals. In sum, Da and Zhou are optimistic that the Biden administration offers an opportunity for a “restart” of the bilateral relationship.

Despite their optimism, Da and Zhou contend that China and the United States must build a new framework for relations to enable the two countries to effectively manage the destructive tendencies of competition. This new framework must have four key components: high-level exchanges and effective intergovernmental dialogue mechanisms; inter-military mechanisms to improve crisis management and build trust; an approach to cultural exchanges that recognizes each country’s areas of concern while preventing security concerns from overtaking opportunities to build relationships; and policies that address business concerns in both countries. Da and Zhou anticipate that Biden’s China policy will operate in the context of a US foreign policy that is more similar to those of the past than that of the Trump administration: a return to multilateralism, an effort to restore the US image as a global leader, and the pursuit of cooperative relations with allies. Nevertheless, given domestic priorities and electoral realities, Da and Zhou caution that even as the Biden administration attempts to stabilize Sino–US relations, it may not act quickly to eliminate Trump’s tariffs or technology policies and may, in the name of human rights, take critical positions on Xinjiang, Hong Kong, Tibet, and Taiwan. Problems may also arise if the Biden administration does not take actions that fulfill China’s expectations that Sino–US relations will improve; Da and Zhou trace challenges in the bilateral relationship since the Obama years to these “expectation gaps” on both sides. To manage the bilateral relationship well, China and the United States must each take the initiative and seek to stabilize and improve relations during this opening offered by the new Biden administration, while also managing their expectations.

China–US–Russian Relations

In Eluosi Yanjiu, No. 6, 2020, Liu Fenghua assesses the triangular relationship between China, the United States, and Russia with a particular focus on their policies and strategy in the Asia–Pacific. Drawing on earlier work on the China–US–USSR strategic triangle, Liu argues that a triangular relationship exists when each country has an independent foreign policy, the behavior of one of the states influences the behavior of the other two, and shifts in any of the three bilateral relationships impact the other bilateral relationships. According to Liu’s analysis, the triangular relationship has gone through two main phases since the end of the Cold War. During the first stage, from 1991–2011, the United States focused on consolidating its position as the sole remaining superpower and on expanding democracy and extending the market economy around the world. Within the triangle, the United States was primarily concerned with preventing Russia’s resurgence. It sought to promote democratic and market reforms in Russia, while also taking advantage of the fall of the Soviet Union to expand NATO into Eastern Europe and increase US influence in the Middle East. By comparison, the United States saw China as a secondary objective. Its policy combined containment and engagement: the US worried that China’s rapid rise would challenge the US-led order in the Asia–Pacific, but was also optimistic that it could successfully integrate China into the existing regional and global orders. China and Russia responded to US containment policies by establishing a strategic partnership based on a shared commitment to territorial integrity (each makes claims to contested territory) and shared opposition to US unipolarity. Liu dates the formation of the post-Cold War China–US–Russia triangular relationship to 1996–1997, when the countries formalized each of the three component bilateral relationships. From this point until 2011, the triangular relationship was characterized by a power distribution of one superpower and two strong powers; US containment, primarily focused against Russia, and secondarily against China; strengthening Sino–Russian cooperation to resist US hegemony; and a limited desire to develop the triangular relationship.

Since 2011, the triangular relationship has entered a second stage, during which the United States has focused on containing China and seen Russia as a secondary target. Liu dates the turning point to Obama’s announcement of the US “return to Asia” strategy, which signaled the United States’ growing alarm over China’s rise. Liu believes that Sino–US relations are now characterized by strategic competition. While Liu expects some improvements under Biden, the fundamental US policy of containment will not change. By contrast, Liu sees Sino–Russian relations as a “model” for great power relations. The two countries have cooperated on a range of issues, including the BRI, and, in Liu’s view, are committed to both a UN-centered international order and a global rules-based system. The result is a triangular relationship with significantly different features than that of the earlier period: although the United States is still the strongest power, China has been closing the gap and Russia maintains significant military power. This means that China and Russia can balance against the United States, although this balancing has only been limited to date. Unlike the earlier stage, the United States is primarily focused on China, which it sees as a threat to the US-led order (although Liu declaims any Chinese hegemonic interests) and sees Russian only as a regional power. Sino–US relations are the most crucial bilateral relationship in determining the nature of triangular relations.

Liu contends that these triangular relations influence each country’s Asia–Pacific policy. Since the Cold War, as Japan, China, Russia, and ASEAN emerged as significant powers in the region and the East Asian economy skyrocketed, successive US administrations have prioritized maintaining US influence in the region. Liu predicts the Biden administration may soften some of Trump’s protectionist policies and pursue trade deals with countries in the Asia–Pacific (perhaps by joining the CPTPP or restarting the TPP), while also continuing to contain China through military and political means. At the same time, Liu expects the Biden administration to cooperate with China on regional challenges like the North Korean nuclear crisis. Liu anticipates that, overall, the bilateral relationship will be characterized by competition, with cooperation playing a secondary role.

China’s regional approach has proceeded through two stages since the end of the Cold War. During the first stage, from 1991–2013, China focused on creating a friendly neighborhood in which it could focus on its own development and strengthening. Since 2013, China has promoted the BRI and the “community of common destiny,” while continuing to prioritize regional stability. According to Liu, Xi’s new policy direction was significantly influenced by the Obama administration’s Asia–Pacific pivot, as well as by China’s domestic economic needs. In recent years, China has prioritized regional free trade agreements (such as the recently concluded RCEP) to increase economic integration and advocated for a “new form of great power relations” with the United States.

Russia’s Asia–Pacific policy has gone through the most shifts. In the immediate aftermath of the Cold War, from 1991–1995, Russia focused on Europe and largely ignored its neighborhood to the East. From 1996–2001, Russia began to attach more importance to its relations with countries in the Asia–Pacific, especially China and India, because it saw such relationships as helpful to its effort to oppose US hegemony and counter the expansion of NATO. Between 2002–2013, geopolitics took a backseat to pragmatic economic cooperation, as Russia viewed trade with countries in the Asia–Pacific as an opportunity to strengthen its domestic economy. Since 2014, when the West responded to Russia’s invasion of Crimea with economic sanctions and political containment, Russia has promoted a dual geopolitical and geo-economic approach to the Asia–Pacific: it has strengthened the China–Russia strategic partnership; improved its relationships with India, Vietnam, ASEAN, and Japan; and implemented the “Greater Eurasia Partnership” as a means to enhance its regional economic relationships.

According to Liu, these three countries’ Asia–Pacific strategies, and the triangular relations that underlie them, impact each country’s policies on key issues in regional security: the North Korean nuclear crisis, the US deployment of THAAD (which both China and Russia oppose), the South China Sea disputes (on which Russia has maintained neutrality), and Taiwan. Although Russia is weaker than the United States and China, it is still able to influence regional affairs and plays an important role in maintaining regional security and stability. Liu concludes that as China’s rise continues, the Asia–Pacific regional order will become more “balanced, diversified, and complicated,” with profound implications for the future world order.

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