Foreign Affairs: The Case for a New Engagement Consensus

In October 2014, I hosted an American friend who has extensive policy experience and is considered a leading China hand. Over dinner in Beijing, I asked him, “Do you think the ‘engagement consensus’ still holds in Washington?” My question was laced with a sense of hidden anxiety, given the rather animated debate surrounding China that was then unfolding in U.S. policy circles. “Of course!” he answered unequivocally. My friend’s assurance allayed the apprehensions I harbored about the U.S.-Chinese relationship. Neither of us would have thought at the time that in just a few years, the consensus that successive U.S. administrations adopted after normalization—the belief that as the United States engaged China comprehensively, China would liberalize not only economically but also politically—would vanish altogether. It turns out that we are not the only ones who were mistaken. In a visit to Peking University in November 2019, Henry Kissinger, one of the principal architects of U.S. engagement with China, acknowledged that he, too, was surprised by the precipitous deterioration in U.S.-Chinese relations.

Now, a new consensus has taken hold in the U.S. foreign policy establishment: U.S. analysts increasingly define the U.S.-Chinese relationship in terms of strategic competition. And as hawks in Washington vocally advocate economic and technological decoupling, hard-line voices in China believe Washington is bent on containing China and keeping it down at all costs—and that China must fight back. The COVID-19 pandemic has further exacerbated tensions.

But a new Cold War between China and the United States is not inevitable. Structural arguments about predetermined rivalry miss the fact that agency as much as structure accounts for the recent downturn in U.S.-Chinese relations. Addressing the agency factors—including some of the cognitive failures that drive them—might help policymakers avoid pitfalls ahead. To that end, it is essential to understand the Chinese perspective on the sources of U.S.-Chinese tensions—even if some elements of that perspective may be contested by American analysts. Only if the two sides better understand each other’s perspectives can a new approach to engagement emerge.

Ultimately, a new engagement consensus should be built upon what might be called the “G2RS”: a vision of the United States and China as a G-2 of responsible stakeholders. In a G2RS world, China and the United States would continue to hedge against each other, but they would manage their differences and compete in a calibrated, constructive manner. Rather than engaging in a rivalry that divides the world, the two powers would lead the world as responsible stakeholders.

A NEW CONSENSUS

There is a long-standing debate about structure and agency in international relations. When it comes to U.S.-Chinese relations, most analysts seem to take the structural explanation for granted and therefore accept strategic competition as a given. However, there are at least two problems in the structural explanation. For one thing, it struggles to explain the recent precipitous shift in U.S. views of China. More important, it creates a sense of inevitability that can turn rivalry into a self-fulfilling prophecy: American hawks think that the United States must urgently preempt Chinese power, while Chinese nationalists believe that they must prepare for inevitable U.S. containment efforts.

Arguments that focus on individual agency, by contrast, can point to cognitive errors—attribution bias, for example—that reinforce rivalry. In the Cold War American officials pursued expansive measures for U.S. security with little mind to how such moves would be seen in Moscow and proceeded to attribute Soviet responses to aggressive motives (and vice versa). The same dynamic holds in contemporary interactions between China and the United States. Consider it from a Chinese perspective. When Washington imposes sanctions on rivals, it considers such actions legitimate and rules based; when Beijing does, Washington accuses it of resorting to bullying and intimidation. When China follows the United States, its NATO allies, and Japan by establishing a base in Djibouti, Washington assumes Chinese expansionism but points to its own bases as pillars of peace. U.S. policymakers ascribe aggressive intentions to Chinese actions that are very similar to the United States’ own actions, driven by its own security calculations.

In an influential speech in September 2005, U.S. Deputy Secretary of State Robert Zoellick urged China to become a “responsible stakeholder.” Four years later, in the wake of the 2008 global financial crisis, former National Security Adviser Zbigniew Brzezinski went a step further and proposed an “informal G-2, or Group of Two” between China and the United States. Indeed, China’s continuous rise since 2008 has transformed the international order. A number of leading strategic analysts both in China and elsewhere argue that a bipolar system, with Washington and Beijing as its two predominant powers, is emerging. A G2RS approach would amalgamate elements of Zoellick’s and Brzezinski’s concepts into a new engagement consensus. It would not indicate an exclusion of other stakeholders or, as some critics might suggest, the creation of a grand condominium of the world. Rather, it makes the United States and China the two pillars of a global effort to address shared challenges and uphold global stability. It could help bring about a new global order that is more stable and less conflictual than one defined by a new Cold War.

Only if the United States and China better understand each other’s perspectives can a new approach to engagement emerge.

Just as the old engagement consensus provided an intellectual framework for U.S. policy toward China over four decades, G2RS would provide an overarching intellectual framework for U.S.-Chinese relations in the decades to come. It offers a basis for managing differences, pointing the way to the kind of “grand bargain” articulated by Wang Jisi, a prominent Chinese international relations scholar. Such a bargain would entail Washington’s commitment to not subverting China’s political system in exchange for Beijing’s commitment to refrain from challenging U.S. primacy or toppling the existing international order. Sober-minded Chinese strategists regard this idea as reasonable.

A new engagement consensus would require both Washington and Beijing to abandon a zero-sum mentality and instead conceive of power as a positive-sum game. As the political scientist Joseph Nye notes, thinking in positive-sum terms means not thinking of one’s power over others but thinking in terms of power shared with others to accomplish joint goals. Conceiving of power in positive-sum rather than zero-sum terms is crucial to arriving at global solutions to pressing global challenges such as pandemics or climate change.

The new consensus would also ensure that competition remains within some limits or is otherwise “managed,” as former Australian Prime Minister Kevin Rudd recently argued in Foreign Affairs, preventing competition from slipping into unbridled confrontation. In his speech at the World Economic Forum on January 25, 2021, five days after Joe Biden was sworn in as the 46th U.S. president, Chinese President Xi Jinping stated that China and the United States should engage in “fair competition,” or competition for “excellence in the racing field,” rather than “beating each other on the wrestling arena.” In his remarks at the Munich Security Conference on February 19, 2021, U.S. President Joe Biden declared that although competition with China will be “long term” and “stiff,” he categorically ruled out “pitting East against West” or returning to the “rigid blocs of the Cold War.” Indeed, a new engagement consensus would not view China as the “other” that must be transformed, integrated, and led into a U.S.-dominated order, thus rectifying a key fallacy of the old consensus. It would allow for an order in which the United States and China would coexist while continuing to compete in a constructive and positive-sum way, rather than in a confrontational, zero-sum manner.

THE REAL DANGER AHEAD

A new engagement consensus would not mean an end to hedging strategies. Hedging has always been an element of U.S.-Chinese engagement, offering a prudent insurance policy and a way to continue to shape the other side’s behavior. The United States hedged against China through the 1990s, the first decade of the twenty-first century, and the early years of the second decade. (U.S. President Barack Obama’s signature “pivot to Asia” was essentially a hedging strategy, as its key pillars included both cooperative elements such as engagement with China and competitive instruments such as alliance enhancement and balancing.) But the administration of U.S. President Donald Trump moved much closer to neo-containment, a new Cold War strategy advocated by U.S. hawks. A new engagement consensus would allow a return to a more traditional hedging approach that also allows for cooperation.

Indeed, China is already pursuing a hedging strategy that aims to minimize strategic risks and shape U.S. policies. China’s hedging strategy can be seen in its deepening relations with the Association of Southeast Asian Nations (ASEAN), the Shanghai Cooperation Organization, and Russia. The relationship with Russia is especially illustrative. Despite calls by some Chinese strategists to form a Chinese-Russian alliance, Beijing has repeatedly and explicitly ruled out such an option. Indeed, Beijing has pursued the strategy of jieban er bu jiemeng (forging a partnership without forming an alliance) and insisted that the China-Russia comprehensive strategic partnership of coordination should be characterized as “not aligned, not confrontational, and not targeted at any third party.” Beijing has strengthened bilateral ties with Moscow as part of its hedging portfolio. Unless Washington increases its strategic pressure on Beijing and Moscow to such an extreme that both states feel compelled to consolidate a formal alliance, China and Russia will continue to pursue a hedging strategy but avoid entering an outright alliance.

The strategy is also evident in Beijing’s daguo waijiao (great-power diplomacy). In June 2014, Chinese President Xi first proposed that the two powers should build a new model of major-country relationship (xinxing daguo guanxi) defined by “no conflict, no confrontation, mutual respect, and win-win cooperation,” an idea that the Obama administration temporarily welcomed and even the Trump administration briefly entertained. The concept, however, seems to have died out as tensions grew. Strategic restraint is in short supply in international politics, yet it is badly needed now.

Arriving at a G2RS world will require strategic reassurance to address Beijing’s and Washington’s burgeoning distrust. China, as the rising power, needs to credibly reassure the United States that it is neither pursuing a sphere of influence by pushing the United States out of East Asia nor aiming to end U.S. global primacy and replace the existing international order with a China-centric, tributary-like system. Meanwhile, the United States should resist pursuing a containment strategy against China and seeking to mobilize the U.S. public and its allies for a new Cold War. In any case, few if any U.S. allies or partners would be willing to choose sides should Washington try to force their hand.

A new engagement consensus would not view China as the “other” that must be led into a U.S.-dominated order.

In a G2RS world, Beijing and Washington would understand that the real danger does not come from revisionist impulses on either side. Rather, the peril lies in the security dilemma—a tragic scenario in which one player’s defensive efforts to bolster its own security are viewed as aggressive and threatening by the other, leading to growing tension and eventually even conflict. Within a G2RS framework, China and the United States would work together to reverse the security dilemma between the two, including in the maritime, nuclear, cyber, and space domains.

Taiwan is among the biggest potential flash points likely to drag Beijing and Washington into a large-scale military conflict. Washington is likely to continue to use Taiwan as leverage for hedging against Beijing, but to avoid a full confrontation over Taiwan, Washington should honor its commitment to the “one China” policy, a cornerstone of the bilateral relationship since 1979. For its part, Beijing should continue to seek reunification with Taiwan through peaceful means—that is, as long as Taiwan does not seek independence, there is no foreign interference that leads to Taiwan’s separation from China, and “possibilities for a peaceful reunification [are not] completely exhausted,” according to China’s 2005 Anti-Secession Law.

In areas such as the South China and East China Seas, Beijing and Washington might not fully agree yet, but they can still strengthen confidence-building measures (such as the Code for Unplanned Encounters at Sea) and crisis prevention and management mechanisms to avoid accidental escalation. Those efforts would position military relations as a truly stabilizing rather than destabilizing force. China and ASEAN countries are concluding a binding code of conduct in the South China Sea, a move the United States should welcome.

A G2RS world would also involve shared responsibilities between the United States and China. Those might include such tasks as nonproliferation, counterterrorism, and peace building in regional hot spots such as Afghanistan.

LOW-HANGING FRUIT

A new engagement consensus would also require creating a new trade relationship that can serve as ballast for U.S.-Chinese relations. Such a trade relationship would call for rectifying the problems in the narrative about China and the World Trade Organization. Nowadays, one of the most popular U.S. narratives about China views Beijing as violating the WTO’s rules, taking advantage of the system, and enriching itself by ripping off the United States. The narrative, perpetuated by politicians and the media, has almost become a widely accepted truth in the United States. Such a narrative, however, grew from a highly politically charged, distorted image of China. Critically reexamining such a narrative is crucial.

After joining the WTO in December 2001, China cut tariff and nontariff measures, relaxed limits on foreign investments, and opened up domestic markets. WTO accession has led China to build a legal system that aligns with multilateral trade rules, contributing to the development of the rule of law in China. China also reviewed and amended thousands of laws and regulations at various levels of government. By 2015, China had cut its trade-weighted average tariff to 4.4 percent, a rate very close to the United States’ 2.4 percent, the European Union’s 3.0 percent, and Australia’s 4.0 percent. Over the years, more than 40 cases have been filed against China at the WTO, and China has complied with all the rulings handed down by the WTO appellate body. Indeed, former WTO Director General Pascal Lamy has graded China an A+ for its fulfillment of WTO pledges, suggesting that it is unfair to paint China as a rule breaker at the WTO.

Whether China has fulfilled the WTO rules in letter but not in spirit may be debatable. One thing is clear, though: far from being a villain that broke the rules and abused the system, as the popular narrative in the United States suggests, China has largely fulfilled its WTO accession commitments. Many U.S. complaints related to subsidies and industrial policies are actually outside the WTO regime. Therefore, an important discussion involving the new engagement consensus would focus on reforming the multilateral trading system.

Beijing has acknowledged that the phase one trade deal reached between the world’s two largest economies in January 2020 is in line with China’s overall strategy of deepening reform and will help push forward domestic structural reforms in China. The phase one trade deal might help resolve several long-standing disputes between China and the United States, including those related to intellectual property rights protection, technology transfer, the opening up of the financial services sector, the exchange-rate regime, and transparency. Indeed, some Chinese analysts have even likened it to China’s “second accession to the WTO,” since the phase one trade deal might lead to the so-called daobi gaige, which would help pressure Beijing to push domestic reforms forward. The Biden administration is currently reviewing U.S. trade policy toward China. Should the agreements reached in the phase one trade deal be inherited in some form, they may lay the foundation for both sides to resolve remaining disputes on subsidies and industrial policies, thus paving the way for a healthy economic and trade relationship. Instead of pursuing a damaging, complete decoupling of the two economies, Washington and Beijing might be able to relink or recouple their economies on a new basis of reciprocity. Strictly adhering to rules will reinforce mutual benefits and restore the economic and trade relationship as a new basis for a stable U.S.-Chinese relationship.

U.S. policy circles repeatedly portray China’s Belt and Road Initiative and the China-led Asian Infrastructure Investment Bank (AIIB) as initiatives that seek to consolidate spheres of influence at the expense of the U.S.-led liberal international order. The BRI, however, is also part and parcel of China’s hedging portfolio. It is fundamentally based on China’s unique understanding that informal interactions and nonstructured relations among nations will help defuse the tension of the so-called leadership/hegemony dilemma. Therefore, rather than having a geostrategic design resembling a modern tributary system challenging U.S. primacy, the BRI aims to construct an interconnected regional and global network that is non-hierarchical, multi-centered, and inclusive. After a relatively short learning curve, the AIIB has quickly established itself as a high-standard multilateral international financial institution, embracing global standards for its governance structure and lending practices. Robert Zoellick suggested that the AIIB model of being “lean, clean, and green” should be applied to the BRI, an idea shared by many analysts in China. Also, Xi stated at the Asia-Pacific Economic Cooperation Summit in November 2020 that China would “favorably consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).” In other words, the United States might join the AIIB one day, and both the United States and China might join the CPTPP at some point, decisions that could become the building blocks of a G2RS world.

CHANGING COURSE

It is far from certain that a new engagement consensus will emerge. Rather, the opposite might become a reality: extended strategic rivalry that eventually consumes the two great powers in a catastrophic new Cold War. The COVID-19 pandemic has taken a toll on U.S.-Chinese relations, adding new flash points to an already fraught relationship.

Yet it is not too late for Washington and Beijing to set a new course, repair damaged trust, and restabilize the U.S.-Chinese relationship. The two sides can begin with low-hanging fruit such as easing visa restrictions for students and scholars. Moreover, both sides ought to cooperate on international climate governance and COVID-19 vaccination efforts in the developing world, in close coordination with the United Nations, the World Health Organization, and other international stakeholders. Indeed, cooperating on such issues can help point the way toward a new engagement consensus.

Competition between China and the United States should not be about how to contend for primacy or dominate the international system. Rather, the real competition should be about how each side can become a better self. Rather than blaming each other for problems or falling captive to fear, paranoia, misperception, or ideological prejudice, both the United States and China should address their domestic challenges, carry out needed reforms, improve domestic governance systems, and deliver better policy outcomes to their respective citizens.

Ultimately, both Americans and Chinese must ask themselves the same question: Do they want to let suspicion and antagonism define the years ahead or face competition with confidence and patience? If both choose the latter, a new engagement consensus and a new G2RS world are still possible—though far from certain. The stakes are too high for both sides not to try.

Dong Wang is a senior fellow with the George H. W. Bush Foundation for U.S.-China Relations. The views expressed in this publication are solely those of the author and do not necessarily reflect the views of the George H.W. Bush Foundation for U.S. China Relations.