Understanding China and its future ambitions is a fundamental first step in assessing the U.S.’ options on how to best engage China as an important strategic and economic partner. We asked former Acting Director and Deputy Director of the CIA John McLaughlin to lay out the framework for understanding the challenges of China, which provides the context for the differing perspectives of our contributors today.
The fundamental U.S. policy problem regarding China resides in two key facts: First, China is absolutely certain to be a powerful and important country far into the future. Second, its ultimate character – whether it will be an adversary, competitor, or partner – remains highly uncertain.
In its future dealings with China, therefore, the United States is fated to follow an ambiguous and shifting strategy of hedging against multiple possible outcomes.
- On the one hand, the U.S. must have a defense capability and an Asian regional policy sufficiently robust to hedge against the possibility that China turns out to be a militarily aggressive and expansionist power – well beyond what we have seen so far.
- On the other hand, U.S. economic interdependence with China and its desire for stability in Asia means Washington must take care not to hedge in a way that ruptures relations or creates a “self-fulfilling prophecy.” That is, it should not inadvertently signal to Beijing that the U.S. seeks to deny it the important regional role it is surely destined to play – a hard balancing act because Chinese statements suggest it believes that is precisely what Washington seeks to do.
To say there is uncertainty about China’s future path is in no way to deny that China’s policies are already a cause for concern requiring a firm U.S. response. Calibrating that response is the tricky part.
The U.S. cannot ignore, for example, that in more than three decades of military modernization, China has focused on building capabilities that increase risk for the U.S. military in the event it came into conflict with China over its future actions toward a U.S. ally. China's modernization efforts have centered mainly on creating a more capable blue water navy, a smaller streamlined land army, more sophisticated command-and-control, less vulnerable nuclear forces, and enhanced cyber capabilities.
The U.S. will retain a qualitative edge and in most categories a quantitative one, but China will possess the advantage of geographic proximity and in some categories may match the U.S. numerically if not qualitatively by 2020 – in its submarine fleet for example.
The so-called U.S. “rebalance” or “pivot” toward Asia is designed partly to address these Chinese gains. Under this arrangement, Washington aims to have 60 percent of its naval and air force assets deployed to Asia by 2020. President Obama also reaffirmed in 2014 the U.S. commitment to defend treaty allies Japan and The Philippines in the event of Asian hostilities. And three of the last four U.S. Defense Secretaries have reached out to Chinese counterparts in consultative visits to Beijing.
Meanwhile, China in the South and East China Seas defies the international consensus on maritime and aviation freedoms. Under international law, states can claim territorial waters only 12 miles from shore. China ignores this, building artificial islands atop coral reefs 500 miles from the Chinese mainland and uses this to claim 90 percent of the South China Sea; never mind the claims of at least five other nations, including the Philippines, Malaysia, and Vietnam. And in the East China Sea, China unilaterally declared (but has seldom tried to enforce) an Air Defense Identification Zone, telling nations they need Beijing’s permission to fly through.
Although barely inhabited, these areas are strategically significant for Asians and the United States. Fifty percent of the world’s tanker trade goes through the South China Sea – five times the Panama Canal’s traffic and three times that of Suez. And oceanic energy reserves, by World Bank estimates, could total seven billion barrels of oil and 900 trillion cubic feet of natural gas.
The U.S. has challenged these Chinese actions by sailing a warship inside the 12-mile line around China’s artificial islands and by flying aircraft through the disputed zone in the East China Sea. To underline U.S. resolve, Defense Secretary Ashton Carter recently visited a U.S. aircraft carrier in the South China Sea. For its part, The Philippines succeeded in getting the International Arbitration Court in the Hague to take on its dispute with China, much to Beijing’s chagrin.
Adding to the complexity, all of this occurs against the backdrop of two other developments bound to affect China’s future influence – and ours. Both are initiatives by Chinese President Xi Jinping, who is trying to do the most difficult thing any leader can attempt – transform the country economically while simultaneously pushing to extend its political clout and commercial reach.
On the domestic front, Xi is seeking to shift the country’s economy from one driven by exports and manufacturing to one driven by Chinese consumer demand and the service sector. He appears to have concluded that the old formula – cheap labor producing cheap exports that spurred rising growth and prosperity — is no longer working. This is evident from China’s slumping growth, which at the IMF-projected rate of 6.8 percent for 2015 and 6.3 percent for 2016 is China's slowest GDP growth rate in nearly a quarter century.
Much is at stake here. Although a strong majority of Chinese continue to express satisfaction with their economic circumstances, failure to slow the slide in growth — and eventually reverse it – could over time chip away at popular support for one-party rule. This for years has depended more on steadily expanding tangible benefits for the populace than on ideological commitment to communism.
While this is a sign of Chinese weakness and vulnerability, Xi’s other ambitions give evidence of Chinese innovation – and challenge to U.S. leadership. As Stanford scholar Francis Fukuyama has pointed out, Xi is having success with a series of policies that seek to extend the Chinese development model as an alternative to the U.S. system.
This is most plainly evident in his creation of the Asia Infrastructure Investment Bank (AIIB), a development initiative to which the Chinese have contributed $50 billion. The U.S. has stood aside, but 57 other nations have signed up, including a large number of America’s traditional allies.
This is a rare example, since World War II, of a broadly supported, potentially transformative international initiative that was not the creation of the United States. It shows China is turning into a real competitor – on more than just military hardware and economic indices.
Because of all this, the U.S. will have to remain very flexible in its China policy, constantly prepared to blow the whistle when Beijing pushes past commonly accepted rules of international conduct, but prepared at the same time to reach out positively when our interests coincide.
For the foreseeable future therefore, the U.S. will lack the clarity it has with unambiguous friends or unambiguous foes. It will have to calibrate policy in the murky zone between challenge and engagement.
