U.S. Secretary of State Mike Pompeo met on Tuesday with his counterparts from Australia, India and Japan, a group known as ‘The Quad’ to show unity in calling out China’s recent aggressive actions. Pompeo is not alone in accusing China’s Communist Party of “exploitation, corruption and coercion.”
The Cipher Brief spoke with our expert, Ambassador Joseph DeTrani for a clear overview of the U.S. - China relationship as part of our post-threat conference virtual series. Ambassador DeTrani is former Special envoy for Six Party Talks with North Korea and he served as CIA director of East Asia Operations during his more than two decades with the CIA. DeTrani also served as Associate Director of National Intelligence and Mission Manager for North Korea, Director of the National Counter Proliferation Center, and as a Special Adviser to the Director of National Intelligence.
Our conversation has been lightly edited.
The Cipher Brief: Let’s start with your overall view of where we are with China today in terms of national security threats and opportunities for strengthening the relationship.
Ambassador DeTrani: US-China relations are extremely important, not only for the United States and China, but also for our allies and our partners in East Asia and beyond. There are many irritants in the relationship: with regard to COVID-19, China was egregiously slow in sharing information, they lacked transparency, and that incited a lot of concern. Other irritants include intellectual property theft, activities in the South China Sea, China’s ‘re-education’ camps, their actions against mosques in Xinjiang, and the Hong Kong security legislation.
There are a number of issues that speak directly to the tension and bilateral relationship with China. If we could re-institute a robust dialogue in the security and economic dialogue that we had in the eighties and nineties, which was substantive and meaningful, we could get these issues back on the table for discussion.
Let’s peel back a bit to the 1972 visit between President Nixon met with Chairman Mao zedong and signed the historic Shanghai Communique. Mao was interested in President Nixon’s 1972 visit because of the Soviet threat to China at the time. China was building underground cities, concerned that the Soviets were going to use their nuclear weapons on China. The rapprochement between the United States and China in 1972 was key. The U.S. spoke of One China, but also of peaceful resolution between Taiwan and China. In 1979 the U.S. normalized relations and Congress made it very clear to the administration that we could not forget Taiwan. That’s why the assurances the U.S. has given to Taiwan via the Taiwan Relations Act exist. The U.S. continues to provide defensive weaponry to Taiwan so that they have the capability of defending themselves; issues between Taiwan and China have to be resolved peacefully.
With normalization of relations with China in 1979, both countries came together and worked on the Soviet threat, particularly in regard to what the Soviet Union was doing in Afghanistan. There is no question that our work together is what led to the unraveling and imploding of the Soviet Union in 1991.
We also did a lot of work on counter proliferation, counter terrorism, international terrorism, and a myriad of other issues going. There was that element of the Deng Xiaoping era to hide your capabilities and bide your time- and that’s not what we’re seeing with Xi Jinping’s China. No one is hiding capabilities or biding their time. They’re in a rush to implement Made in China 2025. They want to be foremost in robotics, artificial intelligence, information technology, and quantum computing, and this is a different philosophy.
When we moved from the eighties to the nineties and into the 2000s, we started seeing a strong nationalistic China. When their Belgrade embassy was accidentally bombed in 1999, there was a sense in China that the U.S. purposely targeted the Embassy, which was not the case. We saw China’s entry to the World Trade Organization (WTO) the following year in 2000. With Xi Jinping, we see a very clear stance in the Belt and Road initiative and the Asian Infrastructure Investment Bank, making it very clear that China has a global leadership role.
Going back to those irritants: economically, we are interdependent. We have more than $600B in trade together. The U.S. supply chain has to be diversified because so much of it right now is dependent on China. It might not be realistic to decouple, but we can and must diversify our supply chain. Conversely, China’s supply chain depends heavily on the U.S., for microchips and other components for its IT industry. Also, If we should end up in a cold war with China, we will have to look to our allies and partners, in and beyond the Indo-Pacific region.
Ambassador Joseph DeTrani, Former Special Advisor, ODNI
There is a whole list of issues related to cooperation between our respective countries, but I think we have to assume China’s on a path. A lot of people have bought into the nationalism and the literature about the Peloponnesian War and how a rising power will overtake an established power, as Sparta did with Athens. A number of people in China, because of what is being promulgated by the Chinese Communist Party, believe it is inevitable that they will eventually overtake the U.S.
Many in the U.S. certainly do not have that view. We see China as a strategic competitor, but when you talk about innovation, advances in science and technology, that is who we are. That’s why there are over 300,000 Chinese students in the United States. We’re a country of immigrants and a liberal democracy- we’re a shining light. That’s why people come to this country.
There’s a lot to this relationship with China that has to go right because it affects so many people in our respective countries and beyond.
The Cipher Brief: Give us a sense of what you see in the future in regard to your statement that you don’t see Chinese superiority over the U.S. as inevitable.
Ambassador DeTrani: Having spent a number of years in China in the eighties and nineties, my view is that there’s a sense that the U.S. is on the defense and that the U.S. is moving away from the global community and its leadership responsibility.
Xi Jinping is not hiding his capabilities or biding his time. He has a Belt and Road initiative. He’s reached out with the Asia Infrastructure Investment Bank. He’s reached out to all of those countries in the region and beyond to let them know that they want to be part of the international community and have a leadership role. They want others to join in their economic model, which is, writ large, capitalism, which is great, but their form of governance is something else.
The U.S. has different governance system. We’re a liberal democracy, they are an autocracy. There are elements that speak to a different philosophy and a different vision, but they certainly have a strategy for moving forward.
The U.S. has to come together with a very meaningful strategy that says the U.S. is very engaged and this is what we’ll be doing, not only for the United States, but also for our allies and partners. We’re doing that with our relationships with Japan, Australia, and India in the region. Many are saying this is to contain China, but it’s really to show that the US is still an engaged leader.
Many have said that when we walked away from the Trans-Pacific Partnership, we ceded the playing field to a great extent, and China was prepared to move into it. That’s not true. We don’t have the wolf warrior diplomacy mentality that China has, but we’re still active globally. This is the United States with the Marshall Plan. The United States that is still a leader, but we have closed many of our cultural centers abroad and ended the work of USIS. We’re not good at talking about all of the things we do for our allies and partners, which is much more than China does for theirs. There’s nothing of the predatory nature for the United States that you see with China. That’s not how the United States works, and I think we’ve not been as articulate in making a case for who we are, what we do, and why we will be there for other countries, while China has moved very aggressively in this area.
The Cipher Brief: I think we’ve created a picture that the tense relationship with China is about trade or interactions in the South China Sea or stealing intellectual property, but the challenge of competing with China is much larger and broader than any of those admittedly important things. How well are we doing explaining to the American people the nature of this competition with China and why it really matters?
Ambassador DeTrani: We talk about the South China Sea, correctly so, the militarization, and how China has defied the International Tribunal ruling on the South China Sea, while China continues with its intellectual property theft. Those things permeate, and I think the public understands to a great extent what’s happening, given media coverage. The economic issues regarding the supply chain and its dependency on elements that are coming from China is very important as well. Conversely, China relies heavily on the U.S.
Going back to the 1980s, the U.S. provided China with significant foreign direct investments, while China gained insights into U.S. technology and knowhow through required joint partnerships with U.S. companies. CFIUS, the Committee for Foreign Investment in the United States, now looks at this issue more closely as we’re seeing with Huawei and Tik Tok.
Underlying that is the $600B in trade. It’s the innovation we have here and the intellectual property that comes with significant investment in research and development. That’s the intellectual property we have to protect. Economic interdependence is something that needs to be better explained to the American public. We’ve talked a lot about decoupling, but we really don’t drill down into the particulars and what it would mean to the U.S. consumers. It’s more of an academic discussion.
This is our strong suit- economic competitiveness. China’s using economic diplomacy with the Belt and Road Initiative and the Asian Infrastructure Investment Bank as inroads to get into countries for geopolitical reasons. But this is our strong suit: We’ve always been there for these countries, but we don’t articulate it very well. After the implosion of the Soviet Union, we felt it wasn’t necessary to be out there and that it was inevitable that people would look to the U.S. Now we’re seeing a competitive China, and strategic competition with China is the new game and that has to be better articulated. If we come to the point of economic decoupling, that’s got to be looked at very closely because it will affect consumers on our side, as you saw with the tariffs.
It’s economics 101- comparative advantage. When a certain country has comparative advantage in certain areas, that’s where trade comes into play and our consumers have benefited from it. We don’t need to be putting trade barriers up. These economic issues are very important.
We have to be very careful because if we have the mentality that we will always dominate and be in the lead- we then leave ourselves open. I think China is catching up very quickly. When we talk about artificial intelligence, they have more data than anybody in the world. China is using this data together with artificial intelligence, and they’re using it for their various systems to monitor their own people and do other things in the interest of the state. These are things we have to be mindful of. We have to be a little more dominant and assertive.
The Cipher Brief: What is the one weakness of China that you believe will limit their expansionist interests? We’ve talked a lot about China’s strengths, but is there a weakness that the U.S. might need to pay more attention to in terms of leveraging that against some of their assertiveness?
Ambassador DeTrani: When you have a country where you have to feed 1.4 billion people and you have to have the jobs necessary to take care of the workforce. For those graduating from universities and colleges, you have to have jobs. You have to grow GDP annually by much more than 2% or 3%. China needs to create jobs at a significant level.
There are economic imperatives there that Xi Jinping and the Chinese Communist Party have to confront on a day-to-day basis. When we look at 5,000 years of Chinese history and culture, it is during the times when the government was not able to take care of its people that we saw change. We saw that in the Ming Dynasty and certainly with the end of the Qing Dynasty and the establishment of the Republic in 1911, and then the PRC in 1949.
The economic imperatives are there. Creating jobs is necessary. Providing food is necessary. Dealing with the demographics after a disastrous one child policy is an issue that China continues to address. They’re doing it, but some would say more needs to be done.
I think the Chinese Communist Party is vulnerable on another issue, and that’s relations with the United States. Some in Beijing will look at the leadership and say, “Who lost the United States? Who made the United States our enemy? How did that happen?”
That certainly wasn’t what Mao was looking for in 1972, or Deng Xiaoping in 1979. If we should go down that road, and hopefully we don’t, the leadership in China would have to be answerable to the people in China because there is strong sentiment in China amongst the people who feel very strongly about the United States and what we represent as a liberal democracy and a model. Again, that’s why there are over 300,000 students coming here every year. That’s why you have immigrants from China coming every year.
These are issues that the leadership has to address because if they don’t address them and they don’t address them well, something like making a mistake with Taiwan- could be disastrous for leadership.
I met Zhao Ziyang in 1986. He was very impressive. He was articulate about economic issues and a close ally of Deng Xiaoping. When I think back to the Taiwan Incident in 1989, afterZhao, the General Secretary of the Chinese Communist Party, came out to show support to the students, he was removed and never seen again. This apparently wasn’t what the party wanted from its leader. And the leader has to be accountable to the party and the people. This is a very important point, because Xi Jinping, through the anti-corruption campaign, apparently has created a number of enemies, some of whom were potential political rivals. There are a multitude of dynamics in China.
The Cipher Brief: Are we getting to the point where U.S. investors are beginning to move away from Chinese companies, and are we seeing reciprocal action from China?
Ambassador DeTrani: I think we are seeing that. There are a number of investors who are very concerned about actions from CFIUS; certainly, Chinese VCs are looking at the U.S. and wondering if this is the time to invest. Maybe we weren’t as scrutinizing as we should have been in the past, but there is a lot of money in China and a lot of money to invest in U.S. startups that really get into some critical technologies. I understand what CFIUS is doing and think it is correct that we need to scrutinize Chinese investments to ensure we protect some of our critical industries, many that affect U.S. national security.
Ambassador Joseph DeTrani, Former Special Advisor, ODNI
On the Chinese side, I don’t think CFIUS actions are affecting U.S. investment in China. In the past, China has not provided a level playing field for U.S. investors, similar to the access we’ve provided to Chinese investors. China looks at our investments very carefully to ensure that we’re not getting into their critical industries. So, I think our investments in China will probably continue.
I think, though, that this could change, depending on changes with the supply chain and less dependence on Chinese products, with reciprocal responses from China. These are issues that will require lots of attention.
This all should be part of our strategic economic dialogue; clarity on where we’re going with CFIUS and, conversely, clarity to U.S. investors in China and the access to markets they have. I do think these are major, necessary moves on the part of the U.S. Treasury with its approach to CFIUS.
The Cipher Brief: How do we balance our own economic interest to continue a robust trade relationship with China against our own national security and policy concerns and should the US try to do a TPP two, or is it too late?
Ambassador DeTrani: I don’t think it is too late to get into TPP. In fact, I would be very supportive of that and I think countries in the region would be very appreciative of the U.S. getting into a TPP two or something of that nature. There’s no question about it.
I did mention the comparative advantage. I think the strength of the bilateral relationship, the trade relationship of $600B that affects both countries and its people. China, with their Made in China 2025, is looking at advanced manufacturing, quantum computing, and artificial intelligence. They’re looking at the high-end industries. That’s where they’re going, and they’ll get there, but we’re already there in most of these areas.
We’re there with artificial intelligence, quantum computing, and robotics. But we have to continue to be diligent and make investments to move forward in those technologies. There is a lot of trade that goes back and forth between our respective countries, such as the agricultural side from the United States with the new trade agreement and the first phase of $200 billion in mostly farm products that would go to China if they move forward with that. There are comparative advantages on both sides that speak to interdependence in a lot of ways, such as the supply chain. Given the major foreign direct investments we have in China, it would be very difficult to decouple our economics from each other at this stage. I personally would argue that decoupling is not the way to go.
The Cipher Brief: What other Indo-Pacific regional states does the US see as being critical allies in the effort to cooperate with and influence China, and how critical are allies in this effort?
Ambassador DeTrani: Allies are key- there’s no question about it. This is where we have to come together with our allies and partners to work on some of these issues. In the Indo-Pacific region, that is South Korea, Japan, Australia, and India. When you look at what’s happening in the Philippines, Indonesia, and Malaysia with the South China Sea, these are partners. We’re invested in these countries and they look to the United States for leadership. They want to know that we are staying the course, we have a strategy, we’re not fickle, we’re not ceding territory, and we’re there. We will be there.
It’s not episodic- it doesn’t depend on every four years. We have a clear strategy and that’s what they’re looking for. They’re not looking for conflict. That’s why they want a peaceful resolution to the North Korea issue with North Korea having 20 to 60 nuclear weapons and intercontinental ballistic missile capabilities, with both short- and long-range missiles.
That is a big concern to everyone in the region and beyond. I think they’re looking to the United States to be active in the region. I think when they look at the tension we have with, for example, South Korea on SMA (cost sharing) issues and the funding issues for our military, they are wondering if we will stay the course.
This lends itself to an element of apprehension with some of our allies and partners. They need to be reassured that we’re there. I can’t emphasize enough that we can’t take our allies and partners for granted. It would be a disaster if we did.
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