A note from the US and the Americas Programme at Chatham House.
The US-China relationship will continue to define international politics for at least the next decade. This will not only have profound consequences for geoeconomics, national security, global governance and democracy, it will also challenge leaders in Europe and Canada and place considerable pressure on the transatlantic partnership. In this paper, Dr Kurt M. Campbell dispels the notion that the US and China are in a Cold War, but he also stresses that the ‘sheer size and signature fusion of China’s authoritarian capitalism and digital surveillance will likely expert a pull to autocracy.’
This paper is the second in our series on the significance of China for the transatlantic partnership. We are grateful for this very important contribution. Dr Campbell served as the Assistant Secretary of State for East Asian and Pacific Affairs, 2009-13 and is widely credited as being a key architect of the 'pivot to Asia.'
The first paper in this series, by Professor Roland Paris, former senior adviser on global affairs and defence to the Prime Minister of Canada and professor of international affairs at the University of Ottawa, argued that attitudes towards China among Canadians have hardened since the two countries became locked in a diplomatic dispute in late 2018. And though Canada has a strong interest in managing tensions with China, ultimately it will align with the United States.
The papers are part of a series of events and publications by the US and the Americas Programme at Chatham House. Participants in this project have contributed their views on whether the COVID-19 pandemic has changed national understandings, narratives, and foreign policy debates on China.
We would like to thank the Konrad Adenauer Foundation (Konrad-Adenauer-Stiftung) for its generous support of this multi-year project on China’s rise and the future of the transatlantic partnership.
This project is being directed by Dr Leslie Vinjamuri and Marianne Schneider-Petsinger at Chatham House
By Dr Kurt M Campbell
The United States is now in the midst of the most consequential rethink of its foreign policy since the end of the Cold War. And although Washington remains bitterly divided on many issues, a rare area of apparent consensus across the political aisle has emerged around the need to pursue a more robust approach when it comes to China. There is an uneasy sense, shared by Democrats and Republicans alike, that ‘engagement’ is now behind us but it is unclear what lies ahead.
Policymakers, strategists and commentators are in the early stages of debating the future of US-China policy. And now, in the wake of a pandemic that has seen US-China relations plummet to their lowest levels since normalization, it has become conventional wisdom that what comes after engagement is, in effect, a new Cold War.
The Cold War analogy is a powerful and resonant concept, but it is also historically inapt and strategically ill-fitting. Most fundamentally, the Cold War was an existential struggle. But beyond that, American strategy was based on the belief that the Soviet Union would one day crumble under its own weight – an assumption that is unlikely in China’s case. Substituting China for the Soviet Union suffers from two paradoxical shortcomings: Beijing is less threatening than Moscow was, but it is also more competitive, and both of these facts should inform US strategy.
US policy must acknowledge that China is not the Soviet Union and that the two countries are going to have to deal with one another as major powers. The right way forward will meld elements of a sustained commercial competition and military vigilance with necessary political dialogue and cooperation on global challenges. In other words, what Washington should seek to achieve is what Jake Sullivan and I termed a ‘steady state’ last year in an article in Foreign Affairs – that is, a clear-eyed coexistence with Beijing in the military, economic, political and global governance domains that recognizes a competitive relationship need not be an adversarial one.
Beyond the Cold War analogy
The historian Odd Arne Westad has described the US-Soviet rivalry as ‘a bipolar system of total victory or total defeat’ that was ‘intense, categorical, and highly dangerous.’ This does not capture the US-China relationship. While the risk of conflict in Asia’s hotspots is serious, it is by no means as high nor is the threat of nuclear escalation as great as it was in Cold War Europe, where American military doctrine envisioned the tactical use of nuclear weapons to offset Soviet conventional superiority. The present competition has not unleashed proxy wars or produced rival blocs of ideologically-aligned states preparing for armed struggle.
Although the US-China relationship is nowhere near as dangerous as the US-Soviet rivalry, China represents a significantly more challenging competitive proposition given its economy is far larger, more technologically advanced, and more dynamic than the Soviet economy. It is also better able to wield its economic power for strategic influence given its willingness to embrace the forces of globalization and interdependence, though largely on its own terms. China is now the top trading partner for more than two-thirds of the world’s countries. Unlike the US-Soviet relationship. Washington and Beijing are still connected by economic, people-to-people, and technological linkages. These ties also exist between China and much of the world, which complicates a determination of whether particular states are aligned with the United States or with China.
For these reasons, the twenty-first century competition with China fundamentally occurs on a different scale and stage than that with the Soviet Union. China is a more creative and comprehensive competitor, and its weight is greatest in the economic, technological, and soft power realms, in contrast to the arms races that defined the US-Soviet rivalry.
The range of debate
All of this calls for a fundamentally different strategy than that employed during the last superpower contest. Of course, it also calls for a shift in strategy from the post-Cold War emphasis on cooperative engagement. That shift is underway, as a consensus builds that the US approach to China needs a more competitive edge. But competition is not itself a strategy.
Some have implicitly proposed a kind of twenty-first century containment. This strategy is a repackaging of Washington’s Cold War grand strategy, which held that the United States need only remain vigilant with its allies, push back against expansionism, and wait for its rival’s inevitable collapse. Such a strategy would not be particularly effective today. Despite China’s poor demographics and slowing economy, China’s Communist Party appears adaptable, and its fusion of data collection together with mass surveillance and artificial intelligence complicates collective action against it. Strategy cannot be based on the expectation it will collapse.
At the other extreme is a strategy of accommodation through a grand bargain. This would concede China a sphere of influence in Asia, and while it may appear to be a clear-eyed application of political realism, it is in reality no more tenable than containment. It would require stark and irreversible US concessions, such as abrogating US alliances or even the right to operate in the Western Pacific, for speculative promises. It would also do long-term harm to American workers by ceding the world’s most dynamic region to China and damage American allies and values by leaving the fate of the region to negotiating teams from Beijing and Washington.
There is another way forward that starts from the premises that neither collapse nor condominium are tenable end-states. It recognizes that great power politics is not a problem to be solved; it is a condition to be managed. And it turns the focus from end states to steady states across military, economic, political, and global governance domains to find a form of evolving and complex co-existence.
Each of these four domains is surveyed below, and particular attention is paid both to the varying degrees of debate and consensus within each as well as to the question of how best to proceed in light of the general approach outlined above.
The military question
While the Cold War was a global contest, the risks of military competition for the United States and China are likely to be confined to the Indo-Pacific. For any kind of steady state to be possible, China will need to accept that the United States will remain a resident power in the region and retain its alliances and regional military presence. For its part, the United States will need to recognize that American military primacy will be difficult to restore given geography and the reach of China’s anti-access/area-denial capabilities and that the best strategy forward is one focused on deterrence.
To achieve this steady state, Washington should pursue a two-pronged strategy that focuses on replicating and then exceeding elements of US-Soviet crisis management – which were in some ways more mature than US-China structures – and shifting the American military towards the kinds of low-cost, high-impact investments that boost its capacity for deterrence.
To the degree there is debate, it is over the question of whether US-China crisis management should be pursued or can even be successful, with many pointing to the unhappy and undeveloped history of previous efforts over the last three decades. There is also some lingering debate over how global China’s military ambitions might be and to what extent the United States should seek to frustrate them. In contrast, there is rich consensus on the idea that the United States should emphasize military deterrence over primacy. Indeed, this view is shared both by former Trump administration officials and those in the Democratic Party.
The geoeconomic question
In contrast to the Soviet Union’s focused on military power, China has wisely understood that geo-economics is the central zone of competition in the twenty-first century. In this domain, there remain robust debates in the United States not only on the principles that should guide the US response to China’s geo-economic statecraft, but also on how specifically those principles could be implemented.
It is widely appreciated in the policy community that China’s challenge is greater in this domain than the Soviet challenge: China is at the centre of global supply chains, the top trading partner of most states, and highly interdependent with the United States. There is also growing consensus on the principle for the US response: namely, that Washington’s focus should be on a steady state of managed reciprocity. The ultimate objective is to ensure that China understands its continued access to major markets worldwide will be dependent on greater market openness at home.
Most would also agree that, to arrive at this steady state, Washington needs to pursue three lines of effort. First, it needs to reinvest in itself. The kinds of Cold War-era public investments in science, infrastructure, and education widely understood then to have salutary economic and strategic benefits need to be reapplied today to industries like clean energy, biotechnology, and artificial intelligence. This is the area of perhaps greatest consensus on handling the economic challenge posed by China.
Second, it will need to work with allies and partners across Asia and Europe to set new standards define a new set of standards to address issues that the World Trade Organization cannot easily solve, and in so doing, create hard choices for China. Through sheer gravity, such an arrangement might induce Chinese reform. But some on both the left and the right believe that our own disputes with allies, including Japan, Korea, and the European Union, cannot be postponed. Others argue that multilateral approaches should proceed through the WTO rather than through ad hoc arrangements. Still others will differ on the composition of any multilateral agreements. For example, should a next-century trade agreement take on board European privacy standards or the looser US alternatives? The question of how to work with allies and to what end is now emerging as a critical focus of efforts in the economic domain.
Third, there is now acknowledgement that the United States should pursue a policy of selective decoupling — disengaging in sensitive technologies essential to national security while permitting regular interaction in trade and investment in those that are not. Aside from a few on the far left and right, most agree that Washington’s objective should not be a Cold War-style division of the world into alternative economic camps but instead to sustain its leadership in critical technologies and to retain a nodal role in the technological networks central to twenty-first century competitiveness.
But there remains considerable debate on how to implement decoupling, and many of these turn on different empirical assessments of how interlinked the United States and China are in particular industries. Those who favor a minimal approach to managed decoupling generally believe that the United States will isolate itself if it is not careful; those who favor a bolder approach generally believe that the state and market together can bend supply chains around the world in directions favorable to the United States. And the contours of this debate shift depending on the specific issue under consideration as well as the US policy tool that is being contemplated. Far greater work and research – both in consultation with industry and scientific experts – is needed in this area to build consensus.
The systems question
In the coming contest of systems, most agree now that the steady state for Washington should be to focus on advancing the appeal of its democratic model and of universal human rights outside of the context of US-China competition. Even so, the United States should avoid a Cold War-style approach that saw it see its relationships with other states through the prism of their relationship to a rival government.
There is significant debate over how ideological the China challenge may be. While some argue that China seeks to export its system, others strongly deny that it has any such interest. Many debate just how easily applicable China’s digital authoritarian tools are in countries with less available labor for implementing such systems, fewer resources for funding them, or inadequate technical expertise to maintain it.
This debate in many ways misses the mark. Regardless of which of these camps is correct, China’s sheer size and its signature fusion of authoritarian capitalism and digital surveillance (seen in its darkest form in Xinjiang) will likely exert a pull towards autocracy. The debate should acknowledge this reality and the fact that this gravitational pull towards autocracy will affect American interests. Accordingly, values must remain a focus of US policy even if Beijing is not pursuing a Soviet-style export of its system.
The global governance question
Finally, in global governance, the goal will be to maintain cooperation amid competition. Many believe the latter precludes the former, but even as adversaries, the United States and the Soviet Union found ways to cooperate on issues like space, disease management, the degradation of the ozone layer, and protocols to limit the exploitation and militarization of the global commons. Accordingly, across issues like climate change, nonproliferation, and management of the global economy, the steady state should be for both countries to operate on the basis that cooperation is not a concession but a fact of life.
There is debate on whether and how this is possible. Many are of the view that it will not be. Indeed, the United States has historically sought to cooperate first and compete second with China while Beijing has become quite comfortable competing first and cooperating second, frequently linking – either explicitly or implicitly – offers of cooperation to US concessions in areas of strategic interest. This pattern is sometimes interpreted in one of two ways: either that cooperation with Beijing is futile and should be abandoned, or conversely, that cooperation is so important that areas of divergent interest with Beijing should be downplayed to make progress on areas of convergent interest – particularly climate change.
Going forward, a more nuanced approach may be to stress that China can no longer see the United States as a demandeur on problems that Beijing too has a fundamental interest in solving. Accordingly, Washington should be careful to avoid a reputation as an ‘eager suitor’ on key global issues, which paradoxically can actually reduce the scope for cooperation by creating unnecessary issue linkages. Standing firm and imposing costs can be more productive for Washington than allowing such linkages. The way forward is not to give up on cooperation or downplay areas of conflict, but rather to better – and more consistently – sequence them and avoid issue linkage.
Achieving these steady states and ensuring that they advance American interests is a task that will require the United States to embed its China strategy in a robust network of relationships and institutions – not only within Asia but across the world, and not only with other states but with the full range of actors shaping global political, social and economic change in the world. While much of the current discussion of US-China competition has focused on its bilateral dimensions, Washington’s ultimate advantages both during the Cold War and in today’s contest with China lies beyond the bilateral. The combined weight of USallies and partners, and the American capacity for connectivity in a networked world, can shape China’s choices across all domains – but only if Washington deepens each of these relationships and works to tie them together.
Chatham House does not express opinions of its own. The opinions expressed in this publication are the responsibility of the author(s).