If the U.S. Doesn’t Get China Right, Nothing Else Will Matter

General Michael Hayden, the co-host of The Cipher Brief’s Annual Threat Conference for the past two years, has famously said that the world has been more dangerous in the past, but it has never been more complicated.  He has also said that if the U.S. doesn’t get China right, nothing else will matter.  The Cipher Brief will again be presenting a private briefing on China as part of our Annual Threat Report at this year’s conference, and we are interviewing a number of the most respected China experts in the run-up to that report.

This week, we spoke with Christopher Johnson, who holds the Freeman Chair in China Studies at CSIS.  He is one of the most respected analytic voices on the China issue and has served as a senior China analyst with the CIA as well as in the U.S. government’s intelligence and foreign affairs communities, advising senior White House officials, cabinet officials, congressional and military leaders. 

Today, he’s briefing us.  With China and the U.S. generating consistent headlines over trade issues, espionage allegations, a massive technology race, lunar landings and military build-ups, we asked Johnson to brief us on what he sees as the key aspects of the U.S.-China relationship and why it’s important to get it right.

Johnson: There are two things that are really important. The first is fundamentally figuring out what type of relationship we want to have with China. A big part of that frankly, is understanding in what areas the is U.S. willing and able to accommodate China. The administration tends to refer to the U.S.-China relationship as a competition, but really, it’s more like containment.

Christopher Johnson, Chair in China Studies, CSIS

“China is not the Soviet Union. It’s very different in terms of its economy, its economic heft, it’s population.  There are so many different aspects of the relationship, that a pure containment policy probably isn’t going to be effective.”

We would also need allied support for that, and that’s unlikely to be forthcoming. Allies want to maintain a commercial relationship with them. The question then becomes, what elements of China’s ambition, is the U.S. willing to acknowledge?  We don’t necessarily have to accept them, but at least acknowledge some of their ambitions. That goes a long way.  One example is that the U.S. doesn’t publicly acknowledge the legitimacy of the Chinese Communist Party as the ruling party in China. I understand why we don’t, but it is very meaningful to them.

The second area I’d be advising on is focusing our energies on the areas with China where the challenge is the greatest. For me, that is not influence operations.  It is the competition for the commanding heights of the knowledge-based 21st-century economy.  That’s the game. And the difference is that we have to straightforwardly acknowledge that our economic relationship has transitioned from highly-complementary to competitive. In other words, they need to go exactly where we need to go for their future growth and prosperity, which is new. In the past, they were doing the low-end stuff, but to break through the middle income trap, they’re going to have to move up the global value and supply chain. And that’s where we dominate.

The Cipher Brief: Specifically, you’re talking about 5G and AI and these other things.

Johnson: 5G, AI, quantum, all of those key technologies. Autonomous vehicles, even certain aspects of nanotechnology. And we need to think in terms of the strategic sphere.

Christopher Johnson, Former Senior China Analyst, CIA

“We need to think about things like hypersonic vehicles, where in the past, we made a decision that they were too expensive and maybe not worth the investment, yet the Chinese have been investing heavily. They have an advantage with some of these technologies because they have the ability to invest non-commercially. In other words, they don’t have commercial defense firms that need to make profits.”

Overall, there are a range of issues, but we do need to focus our energies. After that, we need to define, much more clearly than we currently do, our redlines. In other words, what are our bottom lines? The flaw in the last several administration’s approaches to China has been that once those redlines are defined, you have to operationalize them. Do what you say you’re going to do and demonstrate through your actions that the redlines are real.

The Cipher Brief: Going back for a moment to the new economy and some of the issues that you mentioned: 5G, AI, quantum, it seems that the U.S. is operating from a perspective of ‘This is a zero-sum game’, and the rest of the world is operating from a perspective of, ‘We really don’t want to have to choose between the U.S. and China.’ How does the U.S. move forward in the world that you just described, where our economies, the number one and number two largest in the world, are no longer complementary, but are becoming more competitive, and at a time when U.S. intelligence seems to be saying, ‘We cannot operate using any products from China.’ What are your thoughts on that?

Johnson: We do have to analyze those issues very carefully, and there’s no doubt that supply chain is a fundamental issue. I think the chief tension that I see in the discussion right now is the tension between whether technological innovation should be driven, or let’s say run through a filter, of national security concern, or commercial concern? Historically, our technological innovation has moved forward based solely on need. Now, with the DIUX list and things like that, a lot of our innovation policy is actually being driven by the Pentagon to some degree. And companies feel that. They’re worried about engaging in certain cooperative activities with China because of the fear of them getting whacked by the U.S. government in that respect.

Christopher Johnson, Freeman Chair in China Studies, CSIS

“I think the fundamental overarching question you have to start with is, ‘Do we actually think it’s feasible in the technology space to decouple?’ Because that’s what people are talking about.  Can we completely separate from them and still remain A) technologically innovative and a global leader, and B) able to sell to people who are not going to be willing to decouple from them? And that gets to the issue of standards and all of these very sticky issues.”

We need to thoroughly consider where are the areas in the technology space where we can allow China to play?  Where we are comfortable?  We don’t get to choose whether they’re allowed to or not. And we need to define the areas where we are not comfortable, where we feel we need to have a completely end-to-end U.S.-friendly, allied-based, supply chain. My guess is that there are actually a fairly few number of those kinds of technologies, where it’s absolutely essential.  Right now, the policy is basically that we should completely separate in all areas not do anything with them involving technology.  I’m not sure that’s feasible in the long run.

The Cipher Brief: Given China’s history, or at least what we know to be China’s history of aggressive data theft, given what seems to be more and more a message coming from parts of the U.S. government, specifically parts of DHS saying, ‘It’s not a matter of can we defend, it’s more now a matter of resiliency and how fast can we bounce back,’ will the U.S. ever get to a point where it can honestly trust China on any level?

Johnson: I wouldn’t use the word ‘trust’. Or if it’s trust, it’s trust but verify. That’s the best you’re ever going to get. And I think China feels the same way about us in a post-Snowden environment, and that’s okay. One thing that I think is under-appreciated, is that we just say to ourselves, “Yeah, it’s really competitive.” That’s fine. That’s how things work, and that’s how innovation breakthroughs happen, and so on. But I think there probably are some areas when you look at some of the more extreme cases, like for example, can Huawei handsets be utilized to create a bot attack? It all seems a bit far-fetched. They’re pretty crummy handsets to begin with. So, my sense is that there are areas where we can work with them or allow them some opportunity and there are areas where we can’t.

I just don’t feel like that space is being very clearly defined. Or if it is, it’s not being defined just with facts. There’s a lot of emotion, and sensitivity and so on that may not be good for us in the long run. We need to think that through very, very clearly and objectively.

The Cipher Brief: What are your predictions on how trade negotiations are going to evolve over the near-term? The 90-day expiration of the truce is on March 1st, so what are your predictions on that, and what are you going to be looking for between now and the G-20 summit in June?

Johnson: I think we are clearly on a pathway toward something here. I think the starting point is that both presidents appear to be much more inclined toward a deal than they were when this thing kicked off, for their respective domestic reasons primarily. In the case of President Trump, I think he’s feeling some heat from the pressure of the shutdown, which certainly seems to be rebounding back on him to some degree.

Christopher Johnson, Former Senior China Analyst, CIA

“Market volatility is always an issue and something that the President seems to pay very close attention to.  This is kind of like North Korea, like sitting down with Kim Jong Un.  This is sort of a signature foreign policy initiative of his. In some ways, the administration is defined by this trade war with China.  If he can’t find a way to win or a way to yes, he’s got a problem.”

I think it’s very clear to the president himself, and many senior administration officials, that if we allow the March 1st deadline to expire and do indeed go to 25% on the tariffs and perhaps slap on another $250 billion, that’s when John Q. Public really starts to hurt, if they haven’t already. There are plenty of farmers and others who are hurting already.

On the Chinese side, I think for Xi Jinping, one of his challenges is when you do what he did at the last party Congress in October 2017, where he basically declared himself infallible, a la Mao, the problem with that is you can’t be wrong too many times. Then it doesn’t work. So, he’s on an arc as well where he needs to be able to see when it’s time for him to cash his chips in so that having done so, he can then retroactively claim that this policy was correct from the word go. He has to be very careful not to let this slide off the rails.

There was a relatively decent round of discussions in Beijing, and senior Chinese official Liu He, the vice premier, is likely to come here at the end of the month. So, things are moving, the stars are aligning. I think the big problem is that the Chinese tend to go to their typical playbook, which is ‘What’s the bare minimum we can do here and get back to normal?’ I don’t think that’s going to be sufficient for Ambassador Robert Lighthizer, and maybe not for the president himself.

Christopher Johnson, Freeman Chair in China Studies, CSIS

“They need a purchase program. They need to buy agricultural goods primarily, but also there’s talk of LNG and aircraft and various other things.  They need to make some progress on market access, which is in some ways, is another type of purchase. And then there needs to be movement on forced technology transfer and IP protection. That’s really what it comes down to at the end of the day.”

The U.S. needs to declare some sort of victory by March 1 and then go on to the much more challenging issues of subsides, the structural change we want to see in the Chinese economy, and so on.

The Cipher Brief: One final question. General Hayden and many other Cipher Brief experts, have said repeatedly that if we don’t get the U.S.-China relationship right, nothing else will really matter.

Johnson: I would agree with that.  It’s my long-standing view, but of course I’m biased as a China specialist, but I think the best way to frame it is the U.S.-China piece is always that nagging strategic relationship that we need to get right, and yet we are so often distracted by the tactical, which is terrorism, in my mind. And terrorism is persistent, but it is tactical. It is not a long-range threat. This is an occasional threat that’s awful but unfortunately, as the world’s number one power, we have to manage both. We have to walk and chew gum at the same time. We have to keep our eye on the deep strategy, and we have to keep our eye on preventing attacks. And that’s exceptionally challenging, but we have to do it, and we have to resource it.

That’s the other big issue. And the problem is increasingly that we really will not be able to act anywhere else in the world going forward, even outside of East Asia, without at least taking into account the Chinese part of the equation.

The Cipher Brief: Closing thoughts?

Johnson: Yes.  In many ways, the trade spat, I’d call it, and it still really is a spat more than a war, is a function of a broader deterioration in the overall underlying strategic relationship. I don’t think we are going to get the economic and trade pieces right until we have a serious rethink about the overall strategy.

Christopher Johnson, Former Senior China Analyst, CIA

“From my point of view, the national security strategy is a nice try, but it doesn’t really come to this issue that we started off with, which is where are the places where we are going to allow them to have some space? Basically, if China is ‘a revisionist power, and strategic competitor practicing predatory economics,’ that doesn’t leave a lot of room.”

I think we need to change our thinking. That’s the thing. This is why I don’t like Thucydides Trap and things like this, because the world is different. And that is where I’m with the administration; the idea that this is a return to a great power competition. I think that was a very thoughtful part of the national security strategy. But I don’t think it has to be the Treaty of Westphalia either, or the concert of powers in Europe. We need to think differently, because technology is making things different everywhere.

The Cipher Brief: Well the government’s not immune from having to innovate at the pace of change of our modern world either, so I think that’s a really good point.

Johnson: Great point.

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2 Replies to “If the U.S. Doesn’t Get China Right, Nothing Else Will Matter”
  1. Excellent interview. I wish two aspects of the US-Sino strategic relationship were discussed: South China Sea and emerging technologies. How should the US deal with China over its SCS gambit? What specific technology areas are “red line” areas for the US? Thank you Cipher Brief for another quality discussion.

  2. This is not the new normal. While Trump’s negotiating objectives are far from clear, the US, like Europe, has legitimate concerns about China’s lack of enforcement of intellectual property. That’s not to say that Section 301 tariffs are going to do much good in this regard, but Trump is right that there is a real problem. For its part, China is feeling more pain from these 301 tariffs than the US, but China’s threat to escalate with non-tariff barriers, like regulatory measures, should greatly worry Trump. In short, there’s reason to negotiate.