Finding Firmer Ground A Report on U.S.-China Relations
Produced by The Carter Center
Civil Society Engagement Learn the Benefits of by President Jimmy Carter Read the Foreword

Finding Firmer Ground:
The Role of Civil Society and NGOs in U.S.-China Relations

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Table of Contents

The Carter Center

Report Introduction

By Yawei Liu, Susan Thornton, and Robert A. Kapp

Little more than four decades ago, President Jimmy Carter and Vice Premier Deng Xiaoping resolved to establish full diplomatic relations between the United States of America and the People’s Republic of China. Until that fateful moment in December 1978, ideological conflict between the United States and the Soviet Union had spilled into Asia, bringing the United States into armed conflict and confrontation with China on the Korean peninsula and in Vietnam. Building on the initial steps undertaken by their predecessors, Richard Nixon and Mao Zedong, at the beginning of the 1970s, Carter and Deng normalized relations not only to pursue shared concerns over the Soviet threat, but to advance the goal of peace in Asia and reap the benefits of commercial and cultural relations. 

As policymakers and scholars now assess the merits and legacy of U.S.-China engagement, the positive results remain clear. In the four decades since normalization, the Asia-Pacific region has remained free from international war. Engagement contributed to the steady decline and collapse of the Soviet Union, which brought about an end to the Cold War. It facilitated the growth of a prosperous relationship spanning trade, tourism, and investment, along with cultural exchanges that brought the American and Chinese people closer together. Over time, engagement between the U.S. and China has also fostered cooperation across multiple international fronts, including nonproliferation, anti-piracy, peacekeeping, and development assistance. 

Engagement also enabled China to become an indispensable part of globalization, laying the groundwork for Chinese entry into the World Trade Organization in 2001. It contributed to the rise of hundreds of millions of Chinese out of poverty and transformed the collapsing economy of the late 1970s into the world’s second largest one by 2010. Chinese students and scholars were able to study and conduct research in the U.S.; many of them stayed in America and became naturalized citizens. America also benefited immensely from this engagement. Its economy pivoted increasingly to the high-technology sector. Universities in the U.S. boomed from the massive infusion of Chinese students. American research institutions flourished from the talent and contributions of Chinese researchers working alongside their multinational and American peers. A growing stream of Chinese investments into the United States created new jobs across sectors of the U.S. economy, and affordable manufactured goods from China continue to benefit the lives and pocketbooks of many ordinary Americans.

However, as the early decades of U.S.-China engagement transformed the landscape of bilateral relations, it has become clear that the U.S. and China saw the end goal of engagement in deeply distinct terms.

Contrary to many Americans’ expectations, China’s growth and global integration has not brought political liberalization. Instead, China has become increasingly ambitious, assertive, and authoritarian. China’s abusive treatment of ethnic minorities, its violation of the principle of “one country, two systems” in Hong Kong, its heavy-handed approach toward Taiwan, its coercive behavior toward foreign nations perceived as unfriendly, its continuing neglect of rules in international trade and investment, its failure to address privacy and security concerns related to data collection and internet technology, and its lack of transparency regarding the COVID-19 outbreak have all been cited in the U.S. as causes of sharp decline in the bilateral relationship. Consequently, public opinion among U.S. citizens and members of Congress has lurched downward in recent years.

The U.S. under President Donald Trump has also contributed to the rapid deterioration of bilateral relations. By late 2017, what was initiated by the Obama administration as a “pivot” to Asia has increasingly become an effort to contain and decouple from China. Abandoning bilateral dialogue in favor of unilateral action, the Trump administration launched a protracted trade war, stoked popular fear about an ascendant China, closed cultural and educational exchange programs, ejected journalists, shuttered the Chinese consulate in Houston, and magnified concerns amongst Chinese political elites that the U.S. is seeking to overthrow the Chinese Communist Party itself. Now, discussions abound in the U.S. that it is entering a new Cold War with China. 

However, the relationship between the U.S. and China should not be compared to that between the U.S. and the Soviet Union before the USSR’s collapse in 1991. The Washington-Moscow confrontation was a battle between truly different systems of political and economic governance. That Cold War, though, was characterized by the near-complete absence of people-to-people exchange and the complete absence of economic interdependence. Isolated as America and the Soviet Union were from one another, there were few opportunities for mutual interests, personal contacts, and economic exchange.

By contrast, the U.S. and Chinese economies remain deeply interconnected. Ideological competition does not play an outsized role in the relationship, and while military apprehensiveness and political disagreements are emerging more frequently, visions of a future of peaceful coexistence and cooperation have not yet disappeared.

As President Carter described in the foreword of this report, intolerance of criticism and a mutual lack of self-reflection lie at the heart of the deteriorating U.S.-China relationship. Both nations struggle with severe domestic problems related to racism, injustice, repression, and economic inequality. At the same time, both nations react harshly to criticism from one another. China regularly castigates the U.S. government for allegedly interfering in China’s internal affairs. For its part, the U.S. dismisses Chinese criticisms of its behavior on the basis that China is a “Marxist-Leninist” dictatorship and therefore unworthy of respect.

As President Carter wrote in his 2018 Washington Post op-ed titled “How to repair the U.S.-China relationship — and prevent a modern Cold War”:

“Americans must acknowledge that, just as China has no right to interfere in U.S. affairs, we have no inherent right to dictate to China how to govern its people or choose its leaders. Though even countries with the closest of relationships may critique each other at times, such engagements should never become directives or edicts; they should rather serve as a two-way street of open dialogue. China’s achievements in sustaining economic growth, alleviating abject poverty, and providing developmental assistance to other countries need to be celebrated. At the same time, we cannot ignore its deficiencies in Internet censorship, policies toward minorities and religious restrictions — which should be recorded and criticized.” [1]

It is no secret that countless issues of domestic and international concern require American and Chinese attention. How can both nations preserve the benefits of stable interaction, cooperate on pressing matters of international concern, and engage in open dialogue and self-reflective criticism? In light of each nation’s intransigence, how can the U.S. and China reverse the current trend toward decoupling?

The Carter Center, with generous support from the Ford Foundation and the National Association of Chinese Americans, assembled a small group of scholars, researchers, and professionals from the U.S. and China to ponder this challenge and develop ideas aimed at meeting the crisis. With official engagement at a near standstill, this report specifically examines how Chinese and American civil society, including nongovernmental organizations, might improve cooperation, dialogue, and management of security risks between the U.S. and China.

We believe this report distinguishes itself from many other reports produced by U.S.-based think tanks and research institutions for the Biden administration. First, the primary goal of this report is to provide pragmatic, future-oriented, and actionable proposals for nongovernmental organizations, including educational institutions, think tanks, and broader civil society. Second, this report is binational in nature. It employed independent teams in the U.S. and China to effectively capture the unique perspectives of each side. Third, this exercise will be repeated each year with an evaluation and assessment of the evolving changes in the bilateral relationship with new recommendations for civil society in both countries.

The “engagement” of the coming decade will, by definition, not be the “engagement” ignited by President Carter and Vice Premier Deng more than 40 years ago. It will be a new paradigm of engagement rooted in altered circumstances, novel aspirations, transformed insecurities, and promising opportunities. Americans and Chinese must continue to “engage” culturally, educationally, economically, and financially.

This report looks back with respect and admiration on the decision of America’s and China’s leaders to restore normal diplomatic relations after a 30-year hiatus that witnessed war, economic isolation, and the bitter evaporation of long-standing contacts between the American and Chinese people. Its recommendations seek to contribute to an updated vision of U.S. engagement across the next century.

[1] https://www.washingtonpost.com/opinions/jimmy-carter-how-to-repair-the-us-china-relationship–and-prevent-a-modern-cold-war/2018/12/31/cc1d6b94-0927-11e9-85b6-41c0fe0c5b8f_story.html

Report Methodology

The primary goal of this report is to provide recommendations for Chinese and American civil society as to how the bilateral relationship can be preserved and how engagement can be expanded. Although civil society is understood differently in the U.S. and China,[1] it can be broadly defined as organizations which are “generally non-profit distributing and self-governing, and operate in the public sphere.”[2] For the purposes of this report, these include non-governmental organizations, business and trade associations, think tanks and research institutes, philanthropic and religious missions, and educational institutions. Notably, the Chinese authors involved in this report felt strongly that their research should focus on recommendations for the Chinese and American governments.

In developing these recommendations, this report employed a unique framework inspired by the American and Chinese diplomatic communities to identify, classify, and prioritize bilateral and international matters of concern. This intellectual exercise helped guide the authors in selecting which issues were analyzed.

Academics, professionals, and researchers from both the U.S. and China were first recruited into two independent teams to draft the report in parallel. One team consisted of authors residing in the People’s Republic of China, while the other team consisted of authors residing in the United States of America. Each team was tasked with identifying and categorizing bilateral and international issues into three broad categories: (1) issues over which the U.S. and China have mutual interest in cooperation, (2) issues over which the U.S. and China should conduct dialogue, and (3) issues over which the U.S. and China must commit to peaceful management of their disagreements. Each team identified the issues categorized independently of one another, and items in each category were left unranked.

Once categorized by both teams, the lists were exchanged, and mutually convergent issues were identified. Convergent issues constituted the foundation of this report. Each list can be found on the methodology page.

[1] We acknowledge that the Chinese conception of civil society differs somewhat from that of the US, see page 3-4 of Elizabeth Knup 2019, “The Role of American NGOs and Civil Society Actors in an Evolving US-China Relationship,” https://www.cartercenter.org/resources/pdfs/peace/china/china-program-2019/knup.pdf

[2] Ibid., 3.

The Case for Cooperation: Advancing National and Global Interests by Empowering NGOs

By Nat Ahrens and Matthew Chitwood

Cooperation has been a central component of the U.S.-China relationship since relations were normalized in 1979. However, neither side has cooperated simply for cooperation’s sake. Broad-based cooperation has served the self-interests of both sides, ranging from trade and investment to security issues, from scientific research and student exchanges, to tourism. Cooperation has also functioned as critical ballast, steadying a relationship fraught with political, economic, ideological, and security tensions.

Today, with U.S.-China relations spiraling to their lowest point since normalization, the extent of cooperation has contracted and become politically toxic. Politicians on both sides of the Pacific fear that their domestic bases will see them as “weak on China” or capitulating to “Western hegemonic powers.” American hawks and Chinese wolf warriors dominate the headlines, vilifying the other side and drowning out pro-engagement voices.

When cooperation is mentioned, it is rarely more than an afterthought tacked onto a long list of grievances, while those who promote cooperation are viewed as intentionally or naively overlooking the thorny aspects of the relationship.

There are strong arguments against unfettered, blanket cooperation between the United States and China. Economic and technological interdependence have revealed vulnerabilities that present real threats to the security of both nations. Both governments have stated that economic security is a core part of national security, moving the trade relationship into a more strategically competitive arena. Competition around emerging technologies has also increased tensions, as not only do they enhance economic competitiveness, but also bestow military advantages. Conflicting strategic interests, especially around the South China Sea and Taiwan, are exacerbated by underlying ideological conflicts and issues of national identity. As relative power shifts across all aspects of the relationship, both countries are experiencing an increase of friction that is expected to continue.

For the United States, China’s rise suggests it will supplant international norms and challenge the global order. Ideological differences also result in hard-to-reconcile human rights issues that cannot be fully isolated from other aspects of the relationship. Abuses in the Xinjiang Uyghur Autonomous Region and Hong Kong have made cooperation on other areas difficult for the United States. China’s use and facilitation of digital surveillance tools worldwide strengthen anti-democratic forces that are anathema to American political and social values.

From China’s standpoint, the United States seems intent on suppressing China’s growth and changing its system. This includes calling for regime change and using language perceived to drive a wedge between the Chinese Communist Party (CCP) and the Chinese people, both considered by China as inappropriate interference in its internal affairs. This sort of rhetoric increased dramatically during the Trump administration and served to solidify long-standing suspicions in China about U.S. intent.

But despite the many competitive and contentious areas of the relationship, it is in both countries’ best interests to cooperate on some issues. The United States and China both have national interests in stopping illicit drug trafficking, combatting piracy, and maintaining stability on the Korean peninsula. But there are also some issues that extend beyond respective national interests to an ethical and moral imperative of cooperation for the global good. Climate change and global pandemics are two such issues.

During the Cold War, the United States and Soviet Union not only managed to cooperate with each other on public health[1], together they led the world to eradicate smallpox.[2] Where government-to-government cooperation was limited, scientific and health NGOs bridged the gap. If Soviet-American cooperation was possible during the Cold War, certainly the United States and China can cooperate now. The United States and China have already overcome significant differences in order to address the global financial crisis, outbreaks of SARS and Ebola, and the production and consumption of hydrofluorocarbons.[3] Now, with more pressing global needs, the two countries should turn their collective attention to climate change and pandemic prevention.

Cooperation on Climate Change and Pandemic Prevention

Climate change and pandemics present two of the greatest challenges to global stability, both independently and as tipping points for other potential crises. Both have spillover effects on economic growth, political stability, national security, debt, and migration. Aside from world war and nuclear catastrophe, we are hard-pressed to find two issues with more potential for causing global misery. Without U.S. and Chinese leadership and cooperation on climate change and pandemics, the entire world is at risk of becoming less prosperous, hospitable, and secure.

Cooperation in these areas is critical, but the current geopolitical environment makes it challenging. The United States and China need to make efforts to build a firewall around these areas, protecting them from the contentious areas of the relationship. While there is a good argument for some issues to be linked—human rights abuses in Xinjiang and trade in cotton goods or surveillance technology, for example—critical areas such as climate change and pandemic prevention should not be held hostage to other competing interests. Despite domestic political headwinds in both countries, these are not zero-sum, but rather true examples of win-win cooperation.

Despite the overwhelming rationale for cooperation on these issues, the geopolitical reality is that even with the change in U.S. administration, tensions between the U.S. and China are likely to increase, making cooperation difficult. The U.S. Congress remains focused on both real and perceived threats to American dominance and will place practical limits on White House attempts to make cooperative overtures to Beijing. Much of this will be justified. The extensive list of issues to deal with, from Taiwan and the South China Sea, to human rights abuses in Xinjiang and Hong Kong, to trade disputes and competition in emerging technologies, makes competition and confrontation the more likely framework for relations. Similarly, Beijing may be making rash assumptions about American decline in a manner similar to that in the aftermath of the 2008 global financial crisis, leading to overconfidence and excessively nationalist rhetoric.

Even more daunting is the fact that respective domestic politics hinder the most meaningful action on climate change and global health.

In the United States, both climate change and COVID-19 have become politicized to a degree that makes substantive action difficult. Caught up in the hyper-partisanship of American politics and hindered by a federal system that places key authority in the hands of states, climate change is a highly complex collective action problem that the U.S. system of government is not particularly well positioned to tackle. And one of the greatest tragedies of the Trump administration may be the politicization of public health measures to contain the COVID-19 pandemic.

In China, home to half the world’s coal capacity, it is proving a challenge to reduce fossil fuel usage while simultaneously spurring economic growth and preventing a further drop in employment. Even while the government makes bold commitments to become carbon neutral by 2060, coal-fired power plants are financed and built domestically and abroad by China at an increasing rate.[4] On pandemic prevention, the Chinese government has been reluctant to increase transparency and cooperation, appearing more interested in shifting blame than identifying the origins of the virus and preventing future outbreaks.[5] The Trump administration’s focus on blaming China for the pandemic has also painted China into a tight corner in terms of their willingness to increase transparency and cooperation.

While climate change and pandemics are two of the greatest challenges faced by both the United States and China, and neither of these is solvable without the cooperation of the other country, the unfortunate political reality is that it may take time for the two governments to come together on these issues.

Still, there are important actions that each country can take independently that require minimal cooperation from the other. Moral imperatives aside, climate change presents economic and national security risks to both countries. It is in each of their best interests to take steps to mitigate and adapt to global warming. In this low-trust geopolitical environment, both countries should focus initially on domestic green jobs and the potential for new areas of economic growth, rather than depending solely on commitments in global agreements.

The Biden administration’s elevation of climate change to a top priority, along with rejoining the Paris Agreement, will certainly be important, but in terms of measurable decreases in emissions, the near-term effects are likely to be limited. Instead, framing American action in terms of retaking a seat at the global leadership table and spurring domestic job growth should be top priorities. Restrictions on oil and gas companies’ methane emissions should also be retightened.

For China, the commitment to be carbon neutral by 2060 is a substantial pledge. Previously, China chafed at the notion that it should have to reduce emissions to the same degree as developed nations who are responsible for most of the stock. But, as the world’s largest emitter of fossil fuel carbon dioxide, achieving this goal will require reducing its dependence on coal, while at the same time coping with rising energy demand and downward pressures on employment.

On the pandemic and global health fronts, the White House has rightly rejoined the World Health Organization (WHO). Despite its imperfections, maintaining a seat at the only global organization specifically tasked with addressing pandemics is an almost de minimis expression of U.S. leadership and the best way to effect change. Reform is best pushed from within the organization. Additionally, joining COVAX, if the Biden administration can get Congress to agree, would send an important message to the world about America’s return to the global stage. Increasing staffing of U.S. health officials and scientists in China is also low-hanging fruit.[6]

The Chinese government, in turn, should approve the visas of U.S. health officials and scientists as the Biden administration re-staffs these vacancies. The Chinese government should also improve cooperation with the WHO and be more responsive to WHO requests for information than they were in January 2020.[7] Recriminations against reporters and medical professionals who spoke out about the pandemic should stop. While China implemented strong measures in response to the COVID-19 outbreak, retaliation against outspoken citizens and the lack of transparency reduces the effectiveness of domestic and global responses to this and future health crises and also diminishes China’s credibility and reputation.

However, the fact that government-to-government opportunities for cooperation are limited does not preclude important cooperative progress on these critical issues. While the high-level actions recommended above would send important signals about global action on climate change and public health, it is not governments, but nongovernmental organizations (NGOs) that are responsible for much of the substantive work on these issues. While the term “NGO” is used differently in the U.S. and China, we use an expansive, literal definition of nongovernmental organizations to include educational and research organizations, nonprofit organizations, foundations, hospitals, and public and private companies.[8] These organizations remain the best channel for making near-term progress. Therefore, one of the most effective measures governments can pursue is to create a more positive and enabling environment for NGOs to continue cooperative action. 

The Role of NGOs in Cooperation

Over the last fifty years, NGOs have served as the backbone of ever-evolving U.S.-China relations. Starting in the 1970s, people-to-people exchanges and scientific and technical collaboration began to shape the U.S.-China relationship. Since then, the flows of scientists, academics, students, businesspeople, and non-profit employees have grown and propelled tremendous positive changes on both sides. Businesses and trade have created more prosperity and jobs for both countries. Research collaboration has accelerated scientific progress. Educational exchanges have promoted mutual understanding. And environmental nonprofits have combated wildlife trafficking, protected the ocean, and kept climate change at the top of the agenda. While policymakers often focus on governmental power, it is the non-governmental sectors that have been responsible for most of the social and economic gains, and, as noted by Elizabeth Knup of the Ford Foundation, for playing a major role in “framing and shaping the contours of the Sino-US relationship.”[9]

Even as relations have spiraled downwards, NGOs have remained a critical channel for cross-Pacific engagement. Thanks to years of cooperation and trust among international colleagues, while political friction has taken its toll on exchanges, robust collaborative infrastructure remains relatively intact. And NGOs remain vital to making progress in areas of mutual interest, such as climate change and pandemic prevention. But continued progress in each area will depend to a great extent on how freely NGOs are able to cooperate across borders.

Key Obstacles to NGO Cooperation

In recent years, the operating environment for NGOs has become increasingly constrained. Chinese and American government actions have made cooperation more challenging than in the past, and security pressures have increased risk aversion for participants on both sides. While in some cases the government actions are justified—such as cracking down on industrial espionage, restricting sensitive technology exports, and pushing back on human rights abuses—in many cases the incremental decrease in risk is dwarfed by the dramatic loss of benefits.

Obstacles in China

The Chinese government is impeding cooperation by tightening restrictions on foreign and domestic NGOs, raising the prospect of arbitrary detention, and engaging in cyberattacks and industrial espionage against U.S. organizations.

The Foreign NGO Law

The “Foreign NGO Law,”[10] as it is known colloquially, has tightened restrictions on the activities of all non-Chinese NGOs in China, thereby limiting collaboration across the board. These restrictions apply not only to NGOs with a permanent presence in China, but also to overseas NGOs seeking to conduct programs, projects, and other “temporary activities”[11] in China. There are several aspects of the law in particular that inhibit NGO activities and should be addressed in order to stimulate greater cooperation.

First, the lead authority shifted from the Ministry of Civil Affairs to the Ministry of Public Security, signifying the primacy of security concerns over cooperative benefits. It has, in essence, announced to all actors that NGOs are first and foremost a security threat—“hostile anti-China forces”—rather than a source of positive contributions. This central role of the police, along with the wide scope of activities covered by the new law, and vague language around threats to national security or social stability, have raised concerns among foreign NGOs that anyone could be targeted for doing work deemed a threat by the CCP.

For foreign NGOs resolved to operate as a permanent legal presence in China, one of the biggest challenges is the complex and bureaucratic registration process. They must find a professional supervisory unit (PSU), a Chinese government agency willing to sponsor and approve all operations. But PSUs may be held responsible for foreign NGO “misbehavior,” so most are hesitant to expose themselves to unnecessary risk. In particular, small NGOs have had little success registering due to the complex bureaucracy and difficulty securing a PSU.[12] Whether these NGOs are willing and able to comply with the burdensome and intrusive reporting and auditing requirements is another question.

However, the difficulty in planning and executing temporary activities has had an even greater impact on the reduction of cooperative non-governmental programs.[13] Since the law came into effect in January 2017, just over 3,000 temporary activities have been approved. It is not clear how many activities were conducted prior to the law, because no such designation existed, but anecdotal evidence suggests there were many multiples more.[14] The registration process is time-consuming, complex, and requires a willing Chinese Partner Unit (CPU), such as a state organ, a public institution, or a social organization. The law requires that CPUs submit the formal application and also use their bank account to fund any activities within mainland China. The result is that Chinese partners are often unwilling to undertake the hassle of registering or, like PSUs, are risk-averse and conclude that the risks outweigh the potential benefits of cooperation. With current circumstances leaving it untenable to apply for every minor activity, foreign NGOs are left operating without permission or simply not operating in China at all. For many foreign NGOs and Chinese partners, the cost of engagement is simply too high. 

To further complicate matters, Chinese NGOs face intense scrutiny over foreign-source funding. The additional reporting requirements and cloud of suspicion that results from accepting foreign funding serve as strong disincentives to international cooperation. This threatens to undermine the positive work they have been doing both with and independent of foreign partners.

Retaliatory Detention and Hostage Diplomacy

The threat of arbitrary detention has weighed heavily over the international NGO community ever since Michael Kovrig and Michael Spavor, two Canadians working for international NGOs in China, were detained in December 2018. The detentions are accepted by many to be retaliation for Canada’s arrest, on behalf of the United States, of Meng Wanzhou, Huawei’s CFO on charges of bank fraud related to U.S. sanctions on Iran. This threat escalated in October 2020 when The Wall Street Journal reported that the Chinese government had threatened retaliatory detention of American citizens for U.S. arrests of Chinese military-affiliated scholars.[15] Even prior to COVID travel restrictions, anecdotal reports were widespread of academics, think tank policy experts, and businesspeople refusing to travel to China because of the threat of arbitrary detention. The State Department gave further credence to that concern with the publication of an official travel advisory.[16] The fear of arbitrary detention may be the single greatest hindrance to cooperation moving forward.

 In a similar vein, the Chinese government and security apparatus has a history of retaliating against individuals and organizations that voice perspectives contrary to those of the government or CCP.[17] The goal of such retaliation—often achieved—is to quiet voices of dissent. It does so not only at great personal cost to those directly affected, but also at the indirect expense of missed opportunities for cooperation and the diminution of Chinese soft power. Recent developments in Hong Kong, especially those stemming from the passage of the Hong Kong national security law,[18] have made these fears even more widespread.

Cyberattacks and Industrial Espionage

Long a source of bilateral tension, cyberattacks and industrial espionage attributed to China further threaten to constrain the political will for cooperation and opportunity for NGO engagement. The Obama administration’s 2015 Cyber Agreement represented substantial progress and, for a period thereafter, commercially focused attacks appeared to decrease.[19] In recent years, however, the quantity and magnitude of China’s attacks and theft of trade secrets have continued to grow.[20] This past summer, the U.S. Department of Justice indicted Chinese hackers believed to be connected with China’s Ministry of State security for targeting medical research groups focused on developing a COVID-19 vaccine.[21] These attacks, heightened by the perception of state complicity, threaten to derail areas of critical collaboration. If state-sponsored hacking and industrial espionage continue to be waged against the United States, it becomes very difficult to build a firewall around opportunities for collaboration in global health and climate change.

Obstacles in the United States

The United States is impeding cooperation by its restrictive immigration policies, politicization of cooperation with China, and inadequate education of nongovernmental actors about security threats.

Immigration Policy

The flow of talent between the United States and China has benefited both nations, increasing knowledge, generating economic gains, and strengthening social ties. Recently, increased American visa restrictions, initiated in response to alleged threats to U.S. national security, have adversely affected the ability of Chinese citizens to enter and stay in the United States, reducing the social and economic benefits of immigration and impeding the ability to cooperate.

Recently, the U.S. has imposed visa restrictions on Chinese graduate students in sensitive technology sectors with national security applications and on researchers with military ties. It has also reduced visas for state-controlled media outlets, tightened restrictions on members of the Communist Party and those affiliated with the United Front Work Department (UFWD), and sanctioned some officials named as responsible for policy measures related to crackdowns in Xinjiang and Hong Kong. To a certain extent, these measures seem prudent. However, these restrictions also negatively affect scholars beyond these parameters, including critical STEM researchers, by barring their entry or encouraging their emigration because of fears of undue scrutiny by federal law enforcement. It has also negatively influenced American soft power, with many Chinese students no longer viewing the United States as a safe country in which to pursue their education.

Prudent visa policy is necessary to protect against legitimate economic and national security threats, including against intellectual property theft and economic espionage. The challenge, however, is to mitigate risks while still allowing exchanges that are in American interests. A completely risk-free immigration policy is not possible, and should not be pursued as our primary means of security enforcement.

At the same time, Chinese visa policies are certainly not free from blame. Chinese restrictions on visas for foreign journalists and critics of Chinese policies are especially troublesome and noteworthy.[22]

Politicization of Cooperation

The politicization of engagement with China is also problematic. A number of outspoken American politicians and pundits have vilified efforts at cross-Pacific cooperation, framing cooperation with China as anathema to love of country. The Trump administration has amplified this rhetoric through its simplistic attempts to push back on all aspects of the China relationship, rather than taking a more nuanced approach. This has made it difficult for all types of organizations, from private companies to academic research centers to nonprofit organizations, to work with China in good faith without facing domestic criticism.

The U.S. Department of Justice’s “China Initiative” has taken some meaningful steps to protect Americans against malicious cyber activities, espionage, and theft of trade secrets. But the framing of this initiative has also led to the racial profiling of Chinese-Americans and Chinese citizens, particularly among students and those in research and technology fields. The politicization of COVID-19, including the Trump administration labeling of COVID-19 as the “China virus,” has only heightened these tensions, with xenophobic attitudes affecting not only Chinese-Americans, but Asian-Americans more broadly. To be clear, there are very real threats that are effectively addressed under these Department of Justice policies, but the U.S. government should be able to advance American security without resorting to xenophobic attitudes and stoking racial tensions. We should also note that China, too, has politicized cooperation by its state-controlled media’s steady drumbeat of “Western anti-China forces” seeking to undermine the CCP. This narrative, along with attempts to shift blame for COVID-19 onto the United States, sows distrust and exacerbates anti-China rhetoric in the U.S.[23]

Inadequate Preparation for the Risks of Cooperation

Cooperating with China invariably involves working with China’s political system. This may include members of the CCP, “influence organizations” such as those affiliated with the UFWD, and even organizations like think tanks or universities, which, unlike their American counterparts, are mostly state-affiliated.[24] A recent report identified 600 organizations in the United States linked to the UFWD, spread throughout the business community, educational institutions, and media.[25] Organizations seeking to shape favorable perceptions of China through covert or coercive means have been the source of concern for members of the U.S government and security apparatus for years, but insufficient effort has been made to educate Americans engaging with China, both at home and abroad, about these hazards. Well-intentioned and unsuspecting players become susceptible to security risks if they are not educated about the Chinese political and security system and the potential risks of blind engagement.

In recent years, the Departments of Justice, Education, and Defense all have put pressure on nongovernmental actors to cease interactions with CCP-affiliated organizations and to increase transparency about foreign funding. Universities, research organizations, nonprofits, and private companies are now scrambling to take protective steps and measures to reduce the risk of these interactions, but a better job of education and attention to security is still required. Without adequate training, China’s influence operations pose a genuine threat not only to American organizations and national security, but also to the broader prospects and will for U.S.-China cooperation.

At the same time, shuttering all cooperation with Chinese organizations that are affiliated with the CCP or UFWD is short-sighted and detrimental to American interests.  The U.S. government should focus on educating Americans for secure, effective engagement rather than discouraging or banning interactions altogether. The Chinese government should also realize that these efforts at influence threaten the foundational openness with which American institutions operate and from which China benefits.

Recommendations

Though many obstacles complicate the U.S.-China relationship, we can—and should—create spaces for cooperation that will promote our national interests and make further progress on issues of global concern. This does not mean setting aside all our differences or betraying our values. Nor does it mean everything needs to be done together. But we can identify shared goals and maintain open channels of communication as we work to achieve our aims.

To overcome the current standstill and advance official engagement, we recommend that the U.S. and Chinese governments (1) focus cooperation on climate change and global health and (2) create a more enabling environment for nongovernmental cooperation.

1. Focus cooperation on climate change and global health.

There are obvious, early-harvest gains to be made on climate change and global health—actions that the Biden administration has already signaled it will take. President Biden has, as promised, rejoined the Paris Climate Agreement and the WHO on the first day of his presidency. He has appointed John Kerry as ‘global climate change envoy’ and he plans to increase staffing of American public health officials in China. The Chinese government, which has already committed to the Paris Agreement, will be rolling out key policies in the upcoming 14th Five Year Plan to achieve their recent pledge to become carbon neutral by 2060.

But the broader political environment is not conducive to bold cooperative action on these issues. In order to make headway, the two governments first and foremost must take action to:

Build a firewall around climate change and global health as pillars of critical cooperation. Both governments should encourage engagement in these areas, despite political pressures on the overall relationship and on other issues. By the same token, building a firewall around these issues also means not using them as bargaining chips in a larger political deal. When conflicts in other areas do arise, governments should actively reinforce messaging that prevents climate change and global health cooperation from suffering collateral damage. De-escalating the inflammatory political rhetoric on both sides is critical. Further efforts also need to be made to de-politicize the issues themselves. Both countries have strong, existential interests in addressing these global challenges. Doing so requires the United States and China to differentiate between constructive and harmful interactions so that not everything is viewed through an antagonistic, ideological lens that inhibits collaboration between nongovernmental actors. Disagreements over origins of the COVID-19 virus and government response, for instance, should not preclude joint efforts to coordinate responses to future pandemics, including disease reporting, information sharing, expert exchanges, and negotiating supply chain agreements and norms.

Strengthen the mechanisms of cooperation around climate change and global health. The U.S. and China should create high-level frameworks to identify shared goals and lay out long-term visions for climate change and global health. These frameworks, possibly similar in concept to the 2008 U.S.-China Ten-Year Framework for Cooperation on Energy and Environment, would help define the parameters of cooperation, encourage Track II initiatives, and develop action plans that help nongovernmental organizations engage on these issues. Summit meetings between the U.S. and China specifically focused on climate change and global health would also send a clear signal to subnational governments, public-private partnerships, businesses, and academic institutions that cooperation in these areas is back on the agenda, even with ongoing tensions in other areas. If presidential meetings are not politically feasible or too difficult to limit to these discrete issues, then meetings at the vice-presidential and ministerial levels could be effective alternatives.[26]

Protect climate change and global health efforts from malicious cyber-activities. Progress in this area is critical to improving broader mechanisms of cooperation. If malicious cyber activities and industrial espionage continue at their current pace, cooperation is unlikely to get off the ground. Similar in concept to the Obama-Xi 2015 Cyber Agreement[27], high-level emissaries should meet to designate areas of cooperation off-limits to espionage and to reinforce previous commitments. Public health and climate-related organizations should be expressly protected. This could function as a standalone agreement or be incorporated into a sector-specific framework as suggested in the bulletpoint above. Though difficult to enforce, if successful, this model could expand into other areas of cooperation to protect against industrial espionage, hacking, and other malicious cyber-activities.

2. Create a more enabling environment for nongovernmental cooperation.

Amidst governmental conflict, cooperation among nongovernmental actors remains the best channel to make progress on climate change and public health issues. In order for them to be effective, efforts need to be made to address key obstacles to engagement, including revising China’s Foreign NGO Law, addressing fears of arbitrary detention, preventing the weaponization of visa policies, educating NGOs on the risks of cooperation, and countering xenophobia.    

Revise the Foreign NGO Law. First, China’s oversight authority over foreign NGOs should revert back to the Ministry of Civil Affairs from the Ministry of Public Security to re-frame foreign NGOs as solution partners rather than security risks. The temporary activity permitting process should be simplified and streamlined to reduce the barriers to cooperation. The Chinese government should create an umbrella sponsoring unit to serve as a default Chinese Partner Unit (CPU) to alleviate the difficulty of finding a partner that can navigate the registration and reporting process, and that is willing to answer to the Public Security Bureau. Creating several umbrella sponsoring units in various fields of expertise would be even better. Ultimately, revision of the law should allow for direct registration of NGOs, treating them on equal terms as commercial businesses and eliminating the need for PSUs altogether.

Eliminate the threat of arbitrary detention. The detention of the two Canadian NGO workers has had a chilling effect on nongovernmental cooperation and business investment. This impact will be felt for some time, but the critical first step towards its reversal is for the Chinese government to release Michael Spavor and Michael Kovrig. Governments must clearly distinguish between the affairs of governments and private citizens and deal with each of them through appropriate channels. National security laws should not be used as sweeping, catch-all policies for politically motivated detentions; these laws should be retained for matters that truly impact national security.

Stop weaponizing visa policy. The increased scrutiny the U.S. government has placed on Chinese student visas has been excessive. While students and scholars from some military institutions should be prevented from studying certain technical fields, these cases are the exception and do not warrant recent blanket policies. The reduction of five-year F-1 visas to a single year with limitation on optional practical training is likely to have deleterious effects on Chinese students coming to U.S. universities. Furthermore, visa restrictions based on political affiliation, such as the recent restrictions on Chinese Communist Party members, are anathema to American values and have little practical effect beyond creating enmity and reducing American soft power. With a view to reciprocity, the Biden administration should roll back some of these recent restrictions, while China should cease to weaponize its own visa restrictions towards journalists and scholars. The Chinese government should also allow American scholars and researchers to benefit from longer visa terms.[28] In this regard, both sides should reaffirm their commitments to ten-year visas.

Empower NGOs to resist inappropriate foreign influence. The U.S. government needs to better educate U.S citizens and NGOs on the risks of cooperation with Chinese counterparts, along with mitigation strategies to resist inappropriate foreign influence. Organizations and individuals need to review their oversight and governance practices, with attention to activity reporting, funding transparency, and federal funding guidelines. The federal government should provide a clearinghouse of risks and mitigation strategies, or fund a nonprofit third-party to do so, to help NGOs understand best practices and due diligence. This public resource should also provide background information on Chinese affiliations and state institutions, and advise on managing Chinese requests for engagement. Ultimately, it should strike a balance between being constructive and vigilant, and should prioritize public education over enforcement.

Denounce xenophobia and racism. The U.S. government must make every effort to protect the rights of the Chinese-American community as well as Chinese citizens living or studying in the United States. As President Biden addresses broader racial tensions, he should state unequivocally that discrimination against Chinese-Americans, Asian-Americans and Chinese citizens is unacceptable. Chinese scientists and scholars, in particular, have been the targets of unfair suspicions of espionage based solely on their ethnicity. These individuals and communities have sustained substantial collateral damage as a result of increased tensions with China, in part due to the Trump administration’s policy of indiscriminate pushback on all things China, its scapegoating of China for a wide variety of economic and social ills in the U.S., and its labeling COVID-19 as the “China virus.” President Biden should highlight the positive contributions Chinese-Americans, Asian-Americans and Chinese citizens make every day to the nation and to their communities.

Conclusion

U.S.-China engagement must continue. Addressing climate change and preventing future pandemics are in each country’s national interest and will help avoid spillover effects that would have catastrophic global consequences. While the current political impasse and legitimate areas of contention portend serious challenges in the relationship for years to come, the United States and China need to learn to manage their differences while making positive progress on issues of collective security and global importance.

While governments play critical roles in tackling these issues, it is important to remember that the key drivers of positive change in the relationship are our people. The United States and China must unleash the cooperative and problem-solving power of our businesspeople, scientists, students, artists, and other members of civil society.

To be sure, there are risks to engagement. Both countries must endeavor to strike the difficult balance between protecting national security and facilitating cooperation. But in the areas of climate change and pandemic prevention, the benefits of engagement far outweigh the risks. The U.S. and Chinese governments must rise to the occasion to once again take up the mantle of global leadership and work together—for America, for China, and for the world.

For references, please click here.

Evaluating and Improving U.S.-China Dialogues for Governmental and Nongovernmental Actors

By Dan Japser

Delivering remarks to the U.S.-China Business Council in December 2020, China’s Foreign Minister Wang Yi offered five suggestions to reset U.S.-China relations for the incoming Biden administration. Among these recommendations, Wang proposed that the U.S. and China foster “correct strategic understanding” and strengthen communication and dialogue.[1] Wang’s proposition to strengthen communication and dialogue may be a particularly tough sell to many in Washington who point to the current low point in relations after decades of dialogue as evidence that these exchanges aren’t producing the outcomes the relationship needs. Many cite Beijing’s promised commitments to market reforms that have yet to materialize to show that these dialogues have yielded little substantive change. Furthermore, the notion that dialogue has produced scant results has also supported claims that the U.S. should decouple from China, or that decoupling has accelerated because of unproductive dialogue. As a result, enthusiasm for dialogue has waned considerably in Washington during the the presidential administration of Donald Trump.

Joint statements, records, speeches, commitments, and goal announcements between the U.S. and China, however, paint a more complete picture of what bilateral dialogues have been able to achieve. Over recent decades, quantitative and qualitative evidence indicates that dialogues have produced significant contributions to global health, security, environmental management, and many other fields. The question then becomes: Why is dialogue treated as a failure by Washington? The metrics of success for these exchanges are, at least in part, responsible for some fundamental and persistent misunderstandings. Often, dialogue is judged as a whole and with broad statements about its ability to advance unilateral foreign policy ideals rather than how well they achieve jointly agreed-upon objectives. Commentary and assessments of these exchanges, then, urgently need more standardized and objective methods of evaluation.

As the U.S. and China approach a new juncture in the bilateral relationship, it’s imperative that the two countries accurately assess the contributions of bilateral dialogue as a foreign policy tool. To do so will require clarifying what is meant by “dialogue” and examining the past commitments and results of these exchanges. Given the importance of the U.S.-China relationship for both countries and the world at large, understanding dialogue as a policy instrument is a critical matter of global security. Has dialogue truly failed to produce tangible results? What have been the goals and outcomes of dialogues in the past? What commitments were made and how did each country follow through? How are we measuring the success or failures of these exchanges? Have we calibrated our expectations appropriately? These are the types of questions we will need to address with data-driven and historically accurate answers (as opposed to prevailing perceptions and generalized geopolitical anxiety) to truly understand what the role of dialogue is in the U.S.-China relationship.

Defining ‘Dialogue’

Dialogue as a concept has become a catch-all term, often employed to refer generally to the act of talking to the other side. Consequently, dialogue is often conflated with communication, negotiations, or engagement. At other times, the word is used synonymously with diplomacy as a whole. To assess the contributions of dialogue to U.S.-China relations, conceptual precision in both theory and in practice is necessary. While the meaning of “dialogue” is at times dependent on context, the term does have a (more or less) specific meaning in international relations.

Dialogues in bilateral or multilateral settings refer to a specific type of exchange in which delegations from two or more parties meet for a series of presentations and discussions on a given topic. In practice, these exchanges follow a rough format at three different levels: government to government (Track I), civil society to civil society (Track II), or a mixture of government and nongovernmental parties (Track 1.5). A typical dialogue lasts two or three days and consists of three or four discussion periods. Each discussion period focuses on a specific subtopic of a larger theme and lasts one and a half to two hours. Delegations usually consist of about 10 to 25 participants (for a total of 20 to 50 participants), who then give presentations on their areas of expertise. Each presentation can last from just five to 15 minutes followed by a discussion period after all the presentations are complete. Most often, the agenda will also include time for more informal interactions, such as eating meals together or even sightseeing as a group.

The intention behind these conference-style exchanges is to provide a private space to clear up misunderstandings, identify opportunities for cooperation, manage long-term relations, improve conflict resolution, and build strong professional and personal relationships among the participants. These goals are much easier to achieve in closed-door settings where participants can talk openly without political pressures or the fear of being misinterpreted by the press. Ideally, participants take what they learn about the other side’s perspective and incorporate that into policymaking and analysis. Dialogues can also serve as useful precursors or complements to negotiations by providing a space to explain system differences, outline constraints, and explore potential outcomes to proposed or ongoing negotiations.

In summary, the term “dialogue” denotes an extended meeting between counterparts; it is not the same as communication, engagement, negotiations, or diplomacy. It is a specific diplomatic tool — perhaps best categorized as a type of international exchange — with certain applications and foreseeable limitations. This more precise understanding of the term gives perspective to what outcomes might be possible with dialogues and under what circumstances they can best be utilized.

U.S.-China Dialogues

In the case of the U.S.-China relationship, dialogues have roots in engagements extending back to the 1970s. For example, the U.S.-China Joint Economic Committee (JEC) was created by President Jimmy Carter and Deng Xiaoping in January 1979 to begin economic normalization.[1] In recent years, the scale of these exchanges has oscillated between extensive, including a vast array of government agencies and civil society actors, to minimal, essentially as interactions between only essential points of governmental contact, such as the military, and peripheral exchanges among civil society organizations. Topics of dialogue have expanded over the years along with China’s growing influence and have included diverse issues such as trade, global conflicts like those in Sudan and North Korea, cybersecurity, environmental protections, border controls, drug trafficking, aviation, tourism, food safety standards, humanitarian operations, and infectious diseases. To understand the scale and results of U.S.-China dialogue over the years, the following sections provide an overview of the recent history.

George W. Bush Expands Dialogues

Dialogue structures between the U.S. and China under the George W. Bush administration were refashioned to include two components – the Senior Dialogue (SD) and the Strategic Economic Dialogue (SED). At a press briefing following the first SD in 2005, then Deputy Secretary of State Robert Zoellick stated,

“The purpose of the dialogue is to discuss the strategic and conceptual framework for our relations. And in doing so, to move beyond the operational day-to-day work that we – both countries – are regularly engaged in and to try to integrate across issues so that we can better understand one another’s respective interests, but also domestic considerations.”[2]

At the outset, these dialogues were intended to provide context to everyday diplomacy by allowing the U.S. and China to clarify intentions and perspectives on global affairs. Similarly, the Treasury Department described the purpose of the SED as follows:

“By prioritizing issues in the broader context of our bilateral economic relationship, the SED gives direction and creates momentum for the many existing bilateral mechanisms we use to foster cooperation and resolve concerns across the spectrum of economic issues.”[3]

While these broadly worded purpose statements did not include any easily measurable goals, the SD and SED dialogues did result in significant coordination and tangible results in U.S.-China relations, as well as in important reforms to each country’s domestic policies. A small sampling of outcomes provides insight into the spectrum of early achievements. Successful outcomes included:

> Air services liberalization, which allowed for the doubling of daily passenger flights and gave “unfettered access to Chinese markets by lifting all government-set limits on the number of cargo flights and cargo carriers serving the two countries….”[4] [5]

> Tourism promotion by agreeing to allow group Chinese tourist travel to the U.S. This agreement later allowed for a more than an 80% increase in Chinese tourism to the U.S. in the years that followed.[6] [7]

> Agreement to allow foreign banks in China to offer a range of RMB (renminbi, or currency) services and compete with Chinese banks. U.S. and other foreign banks were granted access in 2007 after the agreement.[8]

> Cooperation around export safety and environmental controls on a range of consumer goods such as food, pharmaceuticals, medical products, alcohol, tobacco, electrical products, pesticides, fireworks, and motor vehicles.[9]

> Cooperation on scientific standard setting such as in metrology which facilitated trade and improved product quality.[10]

Crucially, the SED provided an important touch point in 2007 when China was hit by economic turbulence due to its exposure to the U.S. and global subprime lending markets.[11] When the economic crisis reached global proportions in 2008, the SED provided a readymade venue to discuss a full suite of issues amidst the “global economic and financial stress.”[12]  At these dialogues, both countries charted the course for complementary economic policies and agreed to stimulus packages that helped strengthen recovery efforts worldwide.[13]

Obama Expands Dialogues

Under President Barack Obama, the U.S.-China dialogue structure was redefined as the Strategic and Economic Dialogue (S&ED). The new framework separated into two tracks: a strategic track (which encompassed an array of security issues including military-to-military relations, international conflicts, environmental management, and transportation) and an economic track (which encompassed the full spectrum of trade and commerce issues). The frameworks served as an umbrella to a wide network of sub-dialogues, institutional partnerships, and coordination at the local governmental level. At the S&ED’s inception, the Treasury Department issued a fact sheet which described the goal of the forum as follows:

“Both President Obama and President Hu Jintao of China have placed the S&ED at the center of our bilateral relationship and are committed to delivering concrete, meaningful and sustained progress over time on long‐term strategic and economic objectives through the S&ED.”[14]

Like the structure preceding it, the S&ED’s stated goals were open-ended and, consequently, difficult to measure. Nonetheless, available quantitative data does show that the S&ED saw increased progress on foreign policy objectives and outcomes along both tracks. As depicted in Figure 1, for instance, reported outcomes from the strategic track rose from just 26 in 2010 to 120 by the end of the dialogues in 2016.[15] While these outcomes do not necessarily equate to “concrete, meaningful” progress, the notable increase does reflect growing space for institutional cooperation and/or an increase in the number of issues addressed on a bilateral basis. 

While many of the results from the S&ED are difficult to measure in terms of their on-the-ground impact, a large portion of the outcomes were substantive contributions to global security and economic growth. It’s worth briefly exploring a sample of the dialogues’ successful products to gain a clearer understanding of what these mechanisms can accomplish.

Trump and the Collapse of Dialogue

Initially, the S&ED was refashioned under the Trump administration into the all-encompassing Comprehensive Dialogue (CD), which was separated into four pillars: 1) the Diplomatic and Security Dialogue, 2) the Comprehensive Economic Dialogue, 3) the Law Enforcement and Cybersecurity Dialogue, and 4) the Social and Cultural Issues Dialogue.[38] However, the framework largely fell apart as a result of the increased frictions from the trade war and decreased interest in traditional modes of diplomacy under the Trump administration. By the end of 2020, only a few channels remained open for issues such as trade and military-to-military contacts. Halting the dialogue process set back many of the gains that had been achieved over the prior decade, contributed to an overall decline in the relationship, allowed irritants to go unaddressed, and has made cooperation more difficult to restart.

Far from being a way for China to string along the U.S. while making no real concessions as some have argued, the above review of successes indicates that the exchanges brought about some important improvements in security and the global economy. In some cases, the dialogues gave high-level direction to existing institutional cooperation and helped agencies “stay ahead of the game” by providing a space to collaborate on emerging issues. For example, outcomes of the S&ED during the Obama years began providing senior level input on cooperation between U.S. and Chinese law enforcement agencies at least four years before the rise of the opioid crisis.[39] [40] Similarly, the bilateral dialogues helped create space for health experts from each country to begin cooperating on infectious diseases 16 years before the COVID-19 pandemic.[41] These gains in global health cooperation were later rolled back by the Trump administration before and during the pandemic, slowing the initial response to the virus and demonstrating the dangers inherent in a decoupling strategy.[42]

The Role of Track IIs and Civil Society

Since the opening of relations between the U.S. and China with the famous “ping pong diplomacy” of the 1970s, the space for civil society exchanges has expanded greatly. These early exchanges helped set the stage for the now ubiquitous Track II dialogues (exchanges between civil society and other nongovernmental parties), which have served a critical role in mediation, trust building, and “back channel” communication. Crucially, Track II dialogues have also served as important telegraphing instruments during moments of crisis, when Track I channels are usually stretched thin or closed off.

For instance, in the midst of the 2008 financial crisis, the U.S. Chamber of Commerce and the China Center for International Economic Exchanges formulated plans to launch the U.S.-China CEO dialogue. The dialogue was launched in 2011 and has since provided a unique space for business leaders to discuss topics of concern at important junctures in the economic relationship. For instance, the dialogue allowed the business community to come together as Xi Jinping’s new government prepared to meet with the Obama administration for the first time in 2013, as well as during critical trade negotiations during the Trump administration. Relatedly, former US Secretary of Commerce Carlos Gutierrez has stated, “As an important window for both China and the US, the Track Two economic and trade dialogue mechanism has ushered in a new chapter in bilateral ties, and has also deepened my understanding of China.”[43]

Track II dialogues have made important contributions in myriad other issue areas as well, such as health, human rights, development, peacekeeping, environmental management, and security. Like Track I talks, the results tend to accumulate over long periods of time. In a review of the lessons learned from civil society dialogues in the nuclear security realm, the Institute for Defense Analysis (IDA) stressed the need to view Track 1.5 and Track II dialogues as long-term investments in security. Their conclusions are worth quoting at length.

“While the value of United States-Chinese Track 1.5/2 discussions on security issues develop only with time and engagement, they are constructive endeavors that should be championed and continued with increased attention. Track 1.5/2 meetings with the Chinese serve many purposes, one of which is to refine understanding over time of China’s nuclear forces and ambitions. They also produce common lexicons, allow each side to explain its anxieties about the other’s positions and behavior, identify and attempt to mitigate misperceptions, keep talks going on sensitive subjects in unofficial channels when they are frozen at the official level, provide a venue to float trial balloons and seek ways to build confidence, and provide useful experience for future generations of analysts and officials.

They also may foster relations (and perhaps even a degree of trust) among participants who return to Track 1.5/2 meetings, although maintaining long-term and continuing professional relations with one’s foreign counterparts while remaining compliant with counterintelligence and export control rules and regulations can be difficult for participants on both sides.”[44]

These conclusions highlight the value of Track II dialogue broadly and call attention to the limitations of civil society engagement on sensitive issues. On the other hand, these exchanges can also be useful for sensitive subjects as nongovernmental participants may be less constrained in their talking points than governmental officials. IDA’s analysis above is verified by the detailed documentation of these dialogues provided by the Naval Postgraduate School. In its 2016 narrative accompanying the Track 1.5 and Track II dialogues on nuclear issues, the authors noted that the Chinese participants became more willing than in prior years to discuss issues such as strategic stability (as traditionally understood by Western experts).[45] This change in understanding by the Chinese side was reported after eight previously documented dialogues — highlighting the need to evaluate results on a long-term, historical basis.

The outcomes of these dialogues, while substantial, are much more difficult to evaluate than their Track I counterparts. Firstly, the vast number and great variety of actors and institutions participating in U.S.-China Track IIs make comprehensive evaluations nearly impossible. Secondly, measuring results can be difficult as Track II dialogues tend to lack goal or purpose statements, instead opting for descriptions of the events or thematic foci. Thirdly, even in well-documented Track II sessions, results of dialogue can be difficult to ascertain: How is one to know that a concept was developed initially and exclusively at one particular dialogue? How can civil society actors prove that the concepts developed were successfully incorporated into policy? At times, civil society actors may be caught between the desire to document outcomes (especially for donors) and the need to maintain confidentiality with policymakers. Rarely are successful transfers between Track II and Track I dialogues acknowledged by officials, and civil society actors may want to cede credit for their proposals in favor of policy or political progress.

Despite these challenges in evaluating Track II dialogues, both sides have, at one point or another, acknowledged the important role civil society actors play. Given the increasing complexity of the U.S.-China relationship and its rising political difficulties, Track II dialogues will continue to be an important channel for experts to improve communication, develop concrete policy proposals, and gain more nuanced pictures of one another. Ideally, these benefits are not only transferred to policymakers but also to the public as Track II participants incorporate their learnings into public communications, which can have an immense bearing on media narratives and public perceptions.

Criticism of U.S.-China Dialogues

Understanding the major criticisms of dialogue is also necessary to improve how the tool is employed in the relationship and how to overcome consistent challenges. Perhaps most crucially, addressing these issues will also help policymakers and dialogue participants set expectations appropriately for these exchanges.

Lack of Follow Through

Critics rightly point out that many commitments made during dialogues were not upheld. Many point to China’s continued lack of intellectual property protections as a prime example of the limitations of these exchanges. At least as far back as 2007, China committed to protecting IP rights and did follow through on a number of key reforms, including the establishment of specialized IP courts and revisions to domestic law. However, 1 in 5 North-American corporations reported IP theft in 2019, and, according to a CNBC Global CFO Council survey, seven out of 23 companies reported IP theft in the past decade.[46] Others have pointed out that the piecemeal reforms are not enough to address the issue, as IP protections would require “a complete structural overhaul” of Beijing’s legal system.[47] Other commitments have achieved considerable follow through, only to later be seen as problematic, ineffectual, or surface level adjustments with little practical impact. For example, the two sides agreed to a pilot auditing program in 2013.[48] The program was heralded as a big step forward in cooperation as it allowed US watchdogs to obtain documents in enforcement cases against Chinese auditors. The watchdog organization (the Public Company Accounting Oversight Board), however, often complained about China’s failure to grant requests; China often cited national security laws as prohibiting access to books and records.[49] As a result, the Trump administration threatened to scrap the deal in 2020 while China countered with a proposal for a new arrangement with U.S. regulators.[50] [51] The program shows how mercurial these commitments can be and how long it can take to truly ascertain the success and durability of any agreement.

Structural mismatches

The vast differences between the U.S. and Chinese governing systems also present an enormous obstacle to successful dialogue. On one hand, commitments made by U.S. administrations that were later overturned by subsequent administrations show the difficulty in dealing with democratic states. Since at least 2007, for example, the U.S. and China made repeated commitments to oppose “trade and investment protectionism.”[52] These prior commitments were not upheld by the Trump administration which launched a trade war with China and cut many existing channels of dialogue.

On the other hand, China’s top-down system of governance presents difficulties with implementing many of the reforms U.S. lawmakers and constituents would like to see (as in the case of IP reforms mentioned above). The hierarchical structure stands in contrast to the bottom-up approach of the U.S. governance model where working level officials flesh out policies, which are then brought to more senior officials for refinement and decision-making. Traditionally, Chinese leaders provide broad directives to lower levels of government, meaning that Chinese working level officials (who may be awaiting direction from the higher levels) are not in the same position as their U.S. counterparts (who are seeking substance to present to their superiors) in many of these dialogues.

Empty promises

Broader criticisms have been leveled against dialogue as well. Some argue that the engagements (especially during the Obama years) did not yield the results the relationship truly needed (or that American foreign policy ideals demanded); thus, these critics argued that China was gaining legitimacy from the talks and could make low-cost commitments with no intentions of enforcing them. Some took the argument further, accusing China of stringing U.S. lawmakers along while advancing its own interests domestically and internationally. However, as we saw in the above review of outcomes, these exchanges provided important spaces to improve understanding and advance significant cooperation.

Recommendations for Future U.S.-China Dialogues

Setting Goals and Measuring Progress

To find stability in the bilateral relationship, both sides will need to employ a variety of diplomatic tools, including dialogue. However, it is imperative that dialogue be understood for what it is: a policy intervention; it is not a “gift to the enemy” but a necessary, low-cost, productive yet limited mode of maintaining peace and security. Dialogue, as we have seen, does have concrete or even quantifiable results; it is a diplomatic instrument that can be evaluated by examining reported outcomes with real-world developments. As with any policy intervention, proper assessment requires that dialogues have clear, measurable goals from the beginning and enough historical data to evaluate results. Therefore, future assessments about what dialogue has or has not been able to achieve should include evidence and data to support the claim so that policymakers can adjust where necessary.

Designing and including measurable goals for dialogues should not be an overly constrictive or unnecessarily exacting process. Dialogues, after all, should be a way to explore new territory in the relationship and the exchanges should not suffer from arbitrary pressure (internal or external) to demonstrate quantitative progress. At the same time, participants can hold themselves accountable with an outline of cooperation and a general sense of how to direct the exchanges. Below are some primary examples of points to include in purpose or goal statements to help make evaluation easier.

> How often the dialogues are intended to happen.

> How many participants are intended to be included.

> The estimated timeline for any outputs or outcomes.

> Intended changes in the scale of cooperation or conflict in the relationship as a result of the dialogue. For example, a goal statement could include aims to “increase traditional security cooperation,” “increase environmental cooperation,” or “decrease incidents of conflict.” The specificity of each goal will likely correspond to the level of dialogue and may necessarily become more specific at working levels.

Given that the effects of dialogues can take many years to fully manifest and the developments may go through periods of rapid progress, inaction, and even regression, assessments should be mainly understood as a momentary snapshot of a dialogue’s results and not necessarily a final evaluation. Dialogues can only be assessed after an appropriate period of time has passed in order to identify whether any necessary knowledge transfers, policy changes, and shifts in practice have truly taken place. The true outcomes of a dialogue or series of dialogues may not be visible for a year, a decade, or even longer in some cases. As such, only in recent years has enough data become available to truly begin evaluating the performance of U.S.-China Track I dialogues. The long-term nature of these instruments means that they must be evaluated on a historical (or longitudinal) basis, and, going forward, it remains essential that dialogues be framed as a long-term investment in security.

As we sharpen our understanding of the role of dialogue, it will be necessary to use a more standardized and exacting vocabulary as well. While this report does not seek to put forward a definitive lexicon for future dialogue, it is necessary to draw attention to a critical distinction in two developments that follow the conclusion of a dialogue. The first development after a dialogue is any commitments, agreements, or direction-setting statements that immediately follow an exchange; for illustrative purposes, we’ll call these “outputs.” The second development after a dialogue is the implementation of those outputs in the form of changes in policy and practice; we’ll dub these “outcomes.” This distinction is not only integral to evaluations of dialogue, but it also prevents a “fudging of the numbers” as it requires analysts to appropriately qualify their commentary on the results of these exchanges and help set expectations accordingly.

Tempering Expectations

Setting expectations is another challenge and requires considerable attention during the drafting of goal statements and descriptions of the dialogues. As stated above, goals should be clear, even if broad, and should be repeated as often as possible in public communications in order to set appropriate benchmarks by which policymakers and independent experts can evaluate the events over the long term. At the same time, the purpose of dialogue — a singular diplomatic tool — should be distinguished from unilateral foreign policy objectives in the same way that the purpose of a hammer (to drive a nail) is distinct from the goal of the foreman (to construct a building).

Independent experts and the media, for their part, have a responsibility to strive for accuracy in their depiction of these exchanges. For example, prior to the Trump administration, dialogues had often been characterized with words like “sprawling,” giving the impression that these exchanges were unwieldy and disorganized. Yet, while the multitude of institutional partnerships involved may have functioned to varying ways, these dialogues appear to have been well-coordinated, generating important and long-lasting cooperative efforts in areas as diverse as global health, nuclear security, drug trafficking, and environmental management. The widespread nature of these dialogues, then, does not necessarily indicate dishevelment, lack of coordination, or some irrational sprint toward embrace. The number of issues the U.S. and China must face is too large to be confined to a limited number of channels. Therefore, at least, moderately sized dialogue structures should be expected and welcomed as they are more likely to produce substantive outcomes.

Norm Setting and Long-term Investments in Dialogue

Dialogues have proved effective spaces for parties to manage relationships, avoid miscalculation and misperception, manage crises, send and receive signals, and discover areas of meaningful cooperation throughout the world. In the case of the U.S.-China relationship, however, dialogues carry an extra layer of significance and serve as important norm setting events. Given the importance of and inherent tensions in the bilateral relationship, U.S.-China dialogues set important examples for world leaders by demonstrating that disputes can and should be resolved through diplomatic means. These dialogues also send an important signal to the world that both countries are committed to peaceful management of the relationship and global affairs. While some have criticized high-level dialogues as performative, with each side repeating the same talking points, it raises the question of why each side feels the need to repeat themselves and whether or not these points are truly being heard and effectively incorporated in decision-making processes. In other words, repetition does not necessarily indicate that dialogue is ineffective; it may indicate a larger challenge in understanding (which is not the same as endorsing) the other party’s world view and “strategic and moral universe.”[53] These exchanges, then, should be understood as valuable information gathering, signal sending, and norm-setting events with long-term payoffs — even when the immediate outputs feel thin.

Diversity and Inclusion

Another essential dimension of dialogues is the issue of who is at the table. The need to ensure gender and minority representation in these settings, and in wider diplomatic engagements, is paramount to the success of individual dialogues as well as the larger state of relations between the U.S. and China. A steadily growing body of literature in recent decades has demonstrated that higher degrees of gender equality in a given society reduce the likelihood of conflict both domestically and internationally.[54] Research has also shown that when women are a part of peace processes, the peace agreements are more likely to remain in place and provisions are more likely to be implemented.[55] One study found that the inclusion of civil society and women’s groups made a peace agreement 64% less likely to fail.[56] Investigations into the correlation between women’s participation and peace agreements have also highlighted that women often have access to populations and settings that men do not; making their input invaluable in security settings.[57] While the U.S. and China are not in a peace process, dialogues are a means of peacebuilding and ensuring a stable relationship. There is no reason to expect that the inclusion of women and minorities in these dialogues would not have the same sorts of impacts as in formal peace negotiations.

Coordinating Among Stakeholders

Intragovernmental Coordination

The sheer volume of issues that must be addressed between the U.S. and China means that there are many institutional stakeholders who must be a part of (or, at minimum, be kept abreast of) the dialogue process. Many executive departments, agencies, bureaus, and offices have their own idiosyncratic worldview and approach the bilateral relationship differently. At times, these views can be conflictual and even undermine one another by sending contradictory messages or actively stymying cooperation in other spheres. For instance, in one of the most thoroughly documented series of Track 1.5 dialogues between the U.S. and China, the U.S. Naval Postgraduate School recounted in its 2016 report that,

“internal U.S. political divisions were seen to inhibit cooperation and complicate relations. The State Department was viewed by Chinese interlocutors as obstructionist on military-to-military relations. USPACOM’s and 7th Fleet’s perceptions of China were viewed as divergent and in conflict with the White House’s and OSD’s views. The delegation also noted   that Congress cancelled a visit by a U.S. aircraft carrier to China.”[58]

Interagency coordination, then, is critical to the success of dialogue. Additionally, “triangulating” the results of these conversations by intentionally working to maintain regular contact between the administration, Congress, civil society, the business community, and the media could help ensure stakeholder buy-in for outputs and help ensure each actor is working toward or, at least, not obstructing important outcomes between other actors.

Civil Society

Civil society organizations play a uniquely critical role in dialogues as they offer a backchannel where messages can be sent with a degree of separation — allowing actors to save face, shield themselves from potential political backlash, or test ideas with independent experts. In the case of the U.S.-China relationship, civil society organizations have played a historically critical role as they were instrumental in opening the diplomatic relationship. For example, the American Friends Service Committee, Bulletin of the Atomic Scientists, Chicago Council on Foreign Relations, Northwestern University, and the University of Chicago began initial dialogues on mainland China as early as 1966. These and similar efforts informed U.S. Congressional attitudes, legislation, and executive polices early in the detente.[59] These Track II dialogues have also proven effective at filling in gaps from Track I conversations, managing expectations, and serving as “transfer mechanisms,” by which ideas are generated in a nongovernmental setting and carried over to official policy via professional networks or public communications.[60]
The U.S.-China bilateral relationship can ill afford to lose the vast network of experienced professionals involved in Track II dialogues and, thus, officials must make every effort to ensure these exchanges are not obstructed by travel restrictions, unwelcoming or hostile remarks, or other official policies that inhibit people-to-people engagement. Further, officials should strive to harvest the outcomes of these dialogues in an objective manner and carefully guard against confirmation biases.

Third-party States and Actors

As U.S.-China relations continue to involve an increasing variety of issues, there is a corresponding increase in the number of third-party stakeholders who are affected by the bilateral relationship. In regions such as Southeast Asia, Africa, the Middle East, and even Latin America, American and Chinese influence is beginning to overlap or have already overlapped for some time. These third-party regional actors have much at stake in the U.S-China bilateral relationship and can sometimes be caught in the middle, often forced to “choose a side” when considering development or investment models. These actors cannot be viewed as mere proxies by which each country can advance its system or worldview; they must be considered independent agents and necessary voices at dialogues to ensure a well-rounded perspective of outputs and outcomes. Like the inclusion of women and minorities discussed above, including third-party stakeholders, such as representatives of the relevant third-party government bodies and civil society, will build more robust and peaceful cooperative arrangements.

Recommendations for Track II Dialogues

While many of the above recommendations apply to all tracks of dialogue, it’s necessary to highlight recommendations specific to Track IIs.

Evaluating Results

Track II dialogues are notoriously difficult to link to specific policy or practice outcomes, as noted above. While this is unlikely to change given that civil society actors must maintain confidentiality and are not often given attribution from public officials, Track II dialogues can help demonstrate outcomes more effectively by: 1) articulating clear purpose or goal statements; 2) providing, when possible, public and detailed readouts of the events, making sure to highlight any notable progressions in thinking or attitudes; and 3) seeking to evaluate, on a historical basis, outcomes that could be reasonably attributed to or correlated with developments at the dialogue.

Repository for Track II Documentation

Creating a repository for Track II documentation could prove to be a useful exercise for evaluating the long-term contributions of these dialogues. This repository could be maintained and housed by a coalition of civil society organizations from both countries. Collecting the various narratives, press statements, and other reports in one place would have several important benefits. First, it would provide fertile ground for officials and experts to review earlier progress, identify previous challenges, and guide new, non-dogmatic approaches to Track II dialogue. Such a clearinghouse would also help Track II participants ensure the discussion continues to move forward by examining progress across sectors and even borrowing on progress made at other venues. Lastly, these archives could be an invaluable source of data for academics and social scientists examining citizen diplomacy efforts.

Connecting Track II Actors

Like difficulties in inter-agency coordination among offices with distinct worldviews and objectives, Track II dialogues also have an extensive network of civil society actors operating with a wide range of agendas. Typically, Track II participants connect via their professional networks. Many experts circulate among the different dialogues, at times serving as coordinator or co-host and, at other times, serving as invited speakers. While these connections are highly effective, they tend to be issue-specific and/or clustered among politically aligned experts. Currently, there is no singular space for Track II participants of one side to regularly gather and share insights from their dialogues. For example, there is not a conference style annual meeting for American participants of Track II dialogues. Such a symposium could help cross-pollinate ideas among issue areas and experts.

Improving Transfer Mechanisms

Track II participants aspire to move the results of their dialogues to Track I settings. Doing so, however, can prove difficult and the results can be tricky to assess. Providing routinized mechanisms by which officials are given readouts from the dialogues could help ensure officials receive critical messages or signals. Consequently, Track II coordinators may want to establish relationships with relevant government officials and provide them with routine briefings from their dialogues. Ideally, these readouts would be given both in writing and verbally. For example, if a civil society organization hosts an annual dialogue on humanitarian cooperation, the organization could let relevant officials at the State Department, U.S. Agency for International Development, and Department of Defense know they will provide a brief memo recapping the event each year and will follow up with in-person or over-the-phone debriefs when possible. In this way, officials and relevant policymakers can come to expect regular input from civil society actors.

Conclusion

In 2009, at the outset of the S&ED, then Secretary of State Hillary Clinton and Secretary of the Treasury Timothy Geithner co-wrote an opinion piece in The Wall Street Journal. They stated, “Simply put, few global problems can be solved by the U.S. or China alone. And few can be solved without the U.S. and China together.”[61] That statement has only grown more true in the decade that followed, and it underscores the notion that the U.S. and China will need to cooperate on a host of issues — not just the convenient or urgent topics. Dialogue has been and will continue to be an indispensable tool to explore all aspects of the relationship.

The U.S., China, and the world are still reaping some of the rewards of past dialogues and, despite a decrease in enthusiasm for these exchanges and an increase in tension, temporary developments in the relationship should not be confused with final outcomes. Moreover, when the term “dialogue” is differentiated from engagement, negotiations, or diplomacy, we’re also able to gain a fuller appreciation for what has been accomplished by these often fast-paced conference-style exchanges. There should be no doubt that these events have made significant contributions to security and that the entire world benefits from continued dialogue between the U.S. and China. Therefore, all levels of dialogue including governmental and non-governmental participants, must begin to focus on how to improve these policy tools by setting clearer goals, following through on agreed-upon framework structures, and managing expectations appropriately.

For references, please click here.

How Nongovernmental Actors Can Improve Crisis Management in U.S.-China Relations

By Rachel Esplin Odell

There are certain issues in the U.S.-China relationship where the two countries have fundamental differences and where permanent or complete resolution of those differences is unlikely in the short term. These issues include questions related to domestic political regime type, the status and military defense of Taiwan, and U.S. and Chinese military activities in the waters and airspace near China. There may be some room for dialogue on these matters, and long-term trends could create openings for deeper progress on some of these issues. However, in the short term, bilateral government-to-government dialogue on these issues is either off the table or is unlikely to persuade either side to change its underlying, divergent preferences. The United States and China must find ways to manage such areas of the relationship to prevent them from triggering conflict between the two nations, and without fundamentally compromising each nation’s other underlying vital interests and perspectives.

Accepting Coexistence Despite Fundamental Political Disagreements

Perhaps at the most basic level, this requires both governments to accept the premise of coexistence — that despite fundamental disagreements over how countries should structure their political regimes and treat their citizens, neither the United States nor China will seek to overthrow the other’s government through military force or covert action. This does not mean either country will not strongly disagree with actions taken by the other toward its people and seek to influence those actions through persuasion, bargaining, and pressure.

In particular, the United States, despite all its own inconsistencies and shortcomings in the realm of human rights, has a commitment to liberal conceptions of human rights. It is thus unrealistic to expect that it will ignore human rights abuses in China. However, the U.S. government should not go so far as to convert its efforts to persuade or pressure China to implement domestic reforms related to political or human rights into broader efforts to undermine China’s domestic political regime.

Conversely, it is reasonable to expect that the Chinese government will seek to influence Americans to favor positions that serve China’s interests, including through traditional, transparent journalism and social media engagement. However, Beijing should not seek to emulate the tactics used by the Russian government in recent U.S. elections to interfere with democratic processes in the United States through hacking election systems or deliberately seeking to deepen divides and favor certain candidates over others through deceptive social media manipulation.

Improving Management of Potential Military and Security Crises

In the military and security realm, the United States and China have an urgent shared interest in preventing bilateral crises from emerging, managing emergent crises so they do not escalate into broader war, and resolving crises that do emerge so the damage caused by the crises, bilaterally and globally, can be contained and minimized. This shared interest is rooted in the fact that both nations desire to avoid war with one another, in recognition of the dire consequences that could result from military conflict between two major powers with nuclear weapons. Deliberate conflict between the two sides is not inconceivable, especially over Taiwan. However, for the most part the United States and China desire to avoid direct military conflict. They especially want to prevent crises from inadvertently escalating into conflict.

Better crisis management cannot in and of itself prevent conflict or war if either country is intent on engaging in conflict. Nor can crisis management resolve underlying disagreements about fundamental issues that could lead to conflict between the United States and China. There is thus a more primary need for restrained foreign policy decision-making in both countries and for broader strategic dialogue to explore ways the two sides can mutually accommodate one another’s interests.[1] Nonetheless, crisis management mechanisms can help prevent crises from inadvertently escalating to war through dynamics related to sunk costs, lost face, and misperceived signals.

Official U.S.-China Crisis Management Mechanisms

The U.S. and Chinese governments have made some progress in recent years toward establishing stronger crisis communication channels, which are key to effective communication during military crises. The Taiwan Straits Crisis in 1995-96 and the EP-3 incident in 2001, when a Chinese fighter jet collided with a U.S. spy plane near Hainan Island in the South China Sea, prompted both sides to start exploring ways to improve communication during crises. Two important mechanisms for military-to-military dialogue were established during the Clinton administration, including the Defense Consultative Talks (DCT) in 1996-97 and the Military Maritime Consultative Agreement (MMCA) in 1997-98 (discussed in greater detail below).[2] A presidential hotline between the United states and China was also established in 1998. Discussions convened as part of the Defense Consultative Talks resulted in the establishment of a Defense Telephone Link in 2008 during the waning years of the Bush administration.[3] The DCT and MMCA mechanisms were also supplemented with the Defense Policy Coordination Talks (DPCT) established by the Bush administration in 2006.[4]

Ongoing military-to-military negotiations during the Obama administration eventually resulted in an agreement on Notification of Major Military Activities in 2014, wherein the United States and China agreed to notify each other when conducting major military exercises in the Asia-Pacific, issuing major military reports, and enacting major shifts in defense policies. This agreement also contained an annex that expressed a goal to increase mutual observation of military exercises and activities in order to “foster mutual trust and transparency in military affairs.”[5] The following year, the two sides negotiated another annex to this agreement that paved the way for more efficient and timely communication via the Defense Telephone Link during crises.[6] This agreement sought to address concerns that existing military-to-military links would be too unwieldy for use in a fast-moving, emergent crisis situation.[7]

Early in the Trump administration, the U.S. Joint Chiefs of Staff and the People’s Liberation Army’s Joint Staff Department agreed upon a joint staff dialogue mechanism to facilitate high-level communication between three-star officers in each side’s military in order to reduce the risk of miscalculation in crises.[8] While this agreement established an important channel for direct communication between senior military leaders, some observers expressed skepticism that it would actually facilitate urgent communications during a crisis, as opposed to planned formal dialogue.[9] Partly in response to these concerns, the U.S. Department of Defense and Chinese Ministry of National Defense met to discuss crisis communication in October 2020. This meeting helped to kickstart deeper bilateral discussions about how the two sides can follow better crisis management principles and ensure the appropriate communication channels remain open during a potential future crisis. However, soon thereafter, planned meetings under the MMCA failed to materialize due to disagreements between the two sides about the proposed agenda for the meetings.[10]

Resumption of U.S.-China discussions under the MMCA and other existing military-to-military mechanisms, coupled with continued progress toward new understandings about crisis communication, are essential for the two countries to improve their crisis management capabilities. The two sides should also use these mechanisms as venues to commence negotiations over agreements for crisis management in the space, cyber, and nuclear domains, in addition to the air and maritime domains where initial agreements have already been reached (and which will be discussed further below).[11]

In addition, these military-to-military mechanisms should be combined with revitalized official dialogue between civilian officials in the United States and China about how the two sides could implement official crisis management mechanisms. Some of these mechanisms might entail internal improvements to crisis management processes within each nation’s bureaucracies and decision-making structures. Some should consist of strengthened bilateral communication channels and processes.

The Role of Nongovernmental Actors in Military and Security Crises

In keeping with the broader purpose of this report, however, this analysis will focus on the role that nongovernmental entities can play in promoting more effective crisis management. Civil society actors — which include businesses, universities, research institutes, media outlets, think tanks, labor unions, trade associations, advocacy organizations, religious institutions, and other nongovernmental organizations — can play an important role in crises, for better or worse. Many civil society actors in both the United States and China have an interest in the avoidance and wise management of bilateral crises between their respective countries. Disruptive crises and military conflict between the two nations would likely choke off much of the commercial and interpersonal exchange that is crucial to their ability to pursue their organizational objectives of generating profits, promoting innovation, or sharing ideas. These interests can motivate civil society actors to play a constructive role in preventing crises, facilitating bilateral communication during crises, and providing options for crisis de-escalation.

On the other hand, nongovernmental actors can also play a spoiler role, triggering crises through their actions. At times, this may occur inadvertently as these actors pursue their narrow interests in ways that affect the core interests of the other government, potentially provoking strong reactions. One such example includes fishing vessels or offshore oil companies conducting resource extraction in disputed waters in the South China Sea or East China Sea. At other times, some civil society actors may even intentionally engage in behavior that they know is likely to provoke crises or even conflict if they believe that such developments will promote their interests or objectives. For example, some nationalist organizations in Japan, Taiwan, and China have periodically endeavored to stage landings and plant their national flags on the disputed Senkaku/Diaoyu Islands in the East China Sea, seeking, in part, to force their own government to take a more assertive stand in those disputes.

The degree of influence that civil society actors will be able to exert in a crisis for good or ill will be directly related to their degree of power in their countries. Such power is in turn a function of those actors’ relationships to decisionmakers in government and their influence in broader society. Accordingly, civil society actors may have more influence in a democratic society such as the United States, where there are fewer restrictions on the free expression and functioning of nongovernmental organizations, than in a country like China, where the government more tightly controls and monitors civil society. Nonetheless, there is the potential for actors outside of government to play a role in crisis management in both the United States and China, though the ways they do so will differ in each country.

The following analysis first draws upon past research in crisis management to define different types and stages of international crises and discuss the role that nongovernmental actors can play in the different stages of a crisis. The next section explores how consensus principles of effective crisis management apply to civil society actors. It suggests ways that nongovernmental entities can contribute to more effective crisis management and de-escalation — both through exercising restraint during crises and through facilitating crisis communication. The final section analyzes existing mechanisms for managing maritime security crises, and then provides recommendations for how civil society can help lay the foundation for future agreements that can prevent such crises from emerging in the first place.

Concepts and Principles in Foreign Policy Crisis Management

An extensive academic literature on foreign policy crises has developed useful consensus on certain definitions and principles over time. This section first reviews how crisis management experts have conceptualized the different types of international crises. It then distinguishes the different types of interventions that can help to prevent crises from triggering broader conflict at different stages of a crisis arc, ranging from crisis prevention to crisis management to crisis de-escalation. Finally, it briefly previews the role that nongovernmental actors can play in the different stages of a crisis.

Conceptualizing Foreign Policy Crises

A standard definition developed by Jonathan Wilkenfeld and Michael Brecher for the international relations field stipulates that a foreign policy crisis has three characteristics: “(1) a threat to one or more basic values, (2) an awareness of finite time for response to the value threat, and (3) a heightened probability of involvement in military hostilities.”[12] All three of these features are necessary for a “full-fledged crisis” to exist, whereas a “near crisis” may exist when decision-makers perceive a threat to their country’s basic values and a finite window of time for a response but do not perceive a risk of military hostilities emerging from the situation.

Furthermore, one side might perceive the existence of a crisis, but others involved might not. Similarly, one side may perceive a situation to be a full-fledged crisis, while the other side perceives it to be only a near crisis — in other words, the two sides may not share the same perception that a crisis might escalate to military conflict. This mismatched scenario can be particularly destabilizing, as it often results in miscalculation and miscommunication between the two sides. Such dynamics arise because one side is more inclined to take risks that might provoke military action by the other due to a lack of awareness about the other’s willingness to escalate to the use of force.

Beyond full-fledged and near crises, scholars who study international crises have also identified another category of crisis: the “gray zone crisis.”[13] Like a near crisis, a gray zone crisis occurs when decision-makers perceive a threat to their basic values or interests but do not perceive a risk of escalation to military hostilities. In fact, gray zone crises are called such precisely because they involve threats to values and interests that take place below the threshold of armed force. Consequently, these crises are difficult to respond to effectively without significant escalation, which could, in turn, endanger even more fundamental interests. Oftentimes, gray zone crises do not impose quite the same extent of time pressure as a full-fledged crisis or a near crisis. Another defining feature of gray zone crises that distinguishes them from near crises is that they often involve activities that make attribution to a state difficult and unclear. Such activities are often carried out by nonstate parties or proxy actors that are not clearly or officially affiliated with the national government.

Prevention, Management, De-Escalation: Interventions at Three Stages of the Crisis Arc

When considering how to prevent crises in the political-military domain from resulting in military conflict, there are three separate but interrelated stages for productive intervention: crisis prevention, crisis management, and crisis de-escalation. Scholars of crises typically focus on the middle of these items — crisis management. This approach involves largely setting aside concerns over the causes of the crisis and the eventual resolution of the underlying conflict that provided the backdrop for the crisis, and instead focusing on the more modest and immediate question of how to prevent a crisis that has already emerged from escalating into conflict. Crisis management focuses on how the two sides involved in the crisis can improve bilateral communication and avoid actions that will back oneself or one’s opponent into a corner with few options for backing down. However, a more holistic approach to crises considers not only how to improve management of emergent crises, but also how to prevent bilateral crises from emerging in the first place, as well as how to de-escalate and end crises after they emerge.

On a most fundamental level, efforts to prevent political-military crises could encompass efforts to resolve underlying disagreements, deconflict clashing strategies, or accommodate conflicting interests. However, prevention efforts are often conceived more modestly, referring to efforts to regularize the operations of military and paramilitary forces to reduce the likelihood that they will have a conflictual encounter with opposing forces, thereby provoking crises. These efforts can include rules of engagement and codes of conduct. Such efforts can to some extent be undertaken unilaterally, with states seeking to improve their command-and-control procedures and enhance training for their frontline forces. However, they also often require bilateral negotiation and dialogue about shared rules that are most likely to prevent crises from emerging.

Although a crisis may be effectively managed in a way that prevents escalation to conflict, it will not necessarily come to conclusion on its own without effective crisis de-escalation, which lies on the other end of the crisis arc. Ending a crisis may entail more fundamental conflict resolution efforts, with states negotiating accommodations of one another’s interests or agreeing to changes in the behavior that precipitated the crisis. However, crisis de-escalation does not require such far-reaching or transformational conflict resolution. On the contrary, it often depends upon both sides’ agreeing to postpone final resolution of underlying disagreements in the interest of defusing the crisis in the short term. Though neither side sacrifices its interests, the two sides’ interest in restoring the bilateral relationship to a more stable and secure footing leads them to find more interim approaches that can de-escalate the situation.

The Role of Civil Society in the Different Stages of a Crisis

Due in large part to the second defining feature of a foreign policy crisis — the government’s perception of an urgent need to respond to a threat to its basic values — nongovernmental entities are often constrained in their ability to play a direct role in managing or de-escalating a crisis, unless they are directly involved in the crisis itself. Time pressures often limit the willingness of a government to look to outside actors for assistance and limit the ability of such actors to exert influence on crisis outcomes. In some circumstances, government officials may deliberately limit the involvement of civil society actors in the crisis in order to prevent unpredictable escalation and preserve both flexibility and control. Thus, civil society actors are usually best positioned to help prevent crises from emerging in the first place, either by avoiding activities that might trigger a crisis or by facilitating dialogue and promoting mutual accommodation that can reduce the stressors that lead to crises. They can also explore options and provide recommendations for reforms, rules, and mechanisms that governments can use to improve their crisis management practices.

Nonetheless, nongovernmental actors can in certain circumstances also play a role in crisis management and de-escalation. Trusted individuals from outside of government can help facilitate communication during a crisis when other channels of communication are lacking — particularly between states where formal diplomatic relations are lacking or severely strained. They can also provide decision-makers with additional pathways for de-escalation by acting as channels for the exchange of compensatory benefits or concessions — such as economic deals or cooperative partnerships — that can help to mitigate embarrassment or loss of position resulting from the crisis. Civil society can also pressure government officials who are escalating or otherwise mismanaging a crisis to change course and de-escalate.

The next section will explore how civil society can assist in facilitating management and de-escalation of crises once they emerge. The final section will then analyze how civil society can help to prevent crises from emerging in the first place, with particular attention to the realm of maritime security.

Translating Crisis Management Principles for Civil Society

The academic literature on foreign policy crises has generated a number of practical principles for how states can more effectively manage crises and facilitate their de-escalation. These recommendations have traditionally focused on steps that could be taken by government actors. However, this literature also has important implications for civil society actors. This section reviews some of the key principles for effective crisis management, before then exploring how nongovernmental actors could apply those principles to support crisis management, thereby promoting their interests and those of the American and Chinese people in international peace and bilateral exchange.

Scholars who specialize in crisis management, especially as applied to U.S.-China relations, have identified eight basic principles or rules of prudence that facilitate more successful crisis management. These principles were summarized in a 2006 volume that resulted from a Track II collaboration between U.S. and Chinese think tanks and university professors that assessed case studies and principles in U.S.-China crisis management.[14] They are:

> Maintain direct channels of communication and send signals that are clear, specific, and detailed.

> Preserve limited objectives and limited means on behalf of such objectives; sacrifice unlimited goals.

> Preserve military flexibility and civilian control, escalate slowly, and respond symmetrically (in a “tit-for-tat” manner).

> Avoid ideological or principled lock-in to positions that encourage zero-sum approaches to a crisis and limit options or bargaining room; do not confuse moral or principled positions with conflicts of interest.

> Exercise self-restraint, and do not respond to all provocative moves.

> Avoid extreme pressure, ultimatums, or threats to the adversary’s core values, and preserve the adversary’s option to back down in a “face-saving” manner.

> Divide large, integrated, hard-to-resolve disputes into smaller, more manageable issues, thereby building trust and facilitating trade-offs.

> Think ahead about the unintended consequences of one’s actions.

Each of these principles can be adapted to develop recommendations for how nongovernmental actors can facilitate more effective crisis management. Many of the following suggestions focus on ways that civil society can collaborate or cooperate with government officials to help manage and resolve crises. Some instead highlight ways that civil society can pressure government actors that are escalating crises or managing them ineffectively to change course and adopt a more constructive approach. Some of these suggestions, especially in that latter category, are more feasible in democratic countries like the United States than in countries like China where civil society and the media are more tightly controlled or restricted by the government.

Facilitate communication and clarify signals. Civil society can help facilitate better communication during crises. Individual nongovernmental actors such as businesspeople, retired officials, or other society leaders that are trusted in both nations can directly fulfill this principle by serving as a channel of communication, especially when normal diplomatic channels are closed. Oftentimes, these nongovernmental channels are less ideal than direct government-to-government communication, as they have the potential to introduce confusion and might not be trusted as authoritative. However, they will generally be better than no communication, especially if there are ways that the individual’s government can signal the authoritativeness of the back channel or confirm messages sent through the back channel with other signals such as public statements or military movements. In addition, civil society actors with deep subject matter and language expertise can also help translate signals sent by an opposing state, particularly by providing more cultural and historical context to ensure the receiving government does not misinterpret those signals.

Preserve limited objectives and sacrifice unlimited goals. Civil society actors can exercise or promote caution in ways that enable the government to maintain limited goals. When crises directly relate to the missions or objectives of nongovernmental actors, those actors may be tempted to use the crises as opportunities to promote their goals by lobbying or pressuring government officials to make expansive demands or not back down. While such an approach is understandable, nongovernmental actors should be careful not to overreach in their demands. In doing so, they may cause the crisis to escalate into conflict, which could actually undermine their objectives or negatively affect their interests in other unpredictable ways. More proactively, civil society actors whose interests are directly affected by the crisis can signal to government officials that they are willing to accept compromise outcomes and sacrifice unlimited goals. Civil society can also pressure intransigent government officials to seek compromise and sacrifice unlimited goals in the interest of preventing conflict. They can exert this pressure through comments in public media or through direct private communication if such channels are available to them.

Maintain civilian control and respond symmetrically. Civil society actors should encourage government actors to pursue diplomatic resolution to crises and avoid pressuring the government to resort to military force. Such measures will help create space for government officials to retain civilian control of crises, which is important as military personnel are often trained to employ more offensive tactics and strategies. In addition, tit-for-tat responses — as opposed to disproportionate responses — are key to prevent rapid escalation of a crisis. Civil society actors should avoid demanding disproportionate responses and, instead, should help the government to identify symmetric responses to actions taken by the other side, advocating such approaches through the media or in direct communications with their governments. If their government is responding disproportionately in ways that are escalating the crisis, civil society actors can also speak out against such approaches.

Avoid ideological lock-in to zero-sum positions. Extreme pressure from domestic audiences often makes it much harder for policymakers to find a path toward the de-escalation of a crisis. Civil society actors, including media and public thought leaders, often play an important role in shaping public opinion before and during crises. They should thus be careful not to promote ideologically rigid framings of a crisis or an opponent that portray the opponent as a fundamental, existential threat to one’s values, rights, or principles. Such portrayals can make government officials feel pressured to take zero-sum positions that prevent mutually acceptable crisis resolution, instead prolonging or escalating the crisis. More proactively, nongovernmental actors can work to counter uncompromising ideological narratives that are presented by government actors or by other civil society actors by identifying the nuances of a particular situation, explaining the perspective of the other country in the crisis, and highlighting potential negative consequences of a zero-sum stance. They can communicate these arguments in the public media or through direct channels if possible.

Exercise self-restraint and do not always respond in kind. Although symmetric responses to actions of the other side in a crisis are preferable to disproportionate reactions, and sometimes are necessary to communicate resolve in protecting one’s bottom line and vital interests, it is also important that crisis actors exercise self-restraint, resisting the temptation to always engage in tit-for-tat responses. As with the third principle, then, civil society actors can help the government to identify opportunities for de-escalation and restraint, advocating such approaches through the media or in direct communications with their governments. They can also use those same channels to express opposition when their government escalates a crisis, in an effort to pressure government officials to adopt a more restrained approach. Likewise, if nongovernmental actors ever find themselves involved as a party to a crisis — such as a gray-zone crisis — they should abide by this principle themselves, exercising restraint and avoiding the temptation to always retaliate in kind when not absolutely essential.

Avoid extreme pressure and preserve face-saving ways for the opponent to back down. It is important that nongovernmental actors avoid pressuring the government to demand that the other side fully accept blame for a crisis as a condition of de-escalation. Such demands can prevent successful management of a crisis and are better postponed for diplomatic negotiation after the immediate crisis has passed — or dropped entirely. Beyond avoiding making such demands, civil society actors can also proactively help government officials find creative ways to save face upon resolving a crisis. They can provide outside options for the government to use in offering compensatory concessions to the other side in exchange for reducing their demands, whether those are privately exchanged or publicly communicated. Public thought leaders in civil society can also help frame potential crisis outcomes in ways that highlight the benefits of de-escalation and the costs of escalation. Such framing can help to counter escalatory narratives promoted either by nationalist voices outside of government or by government actors that oppose compromise.

Divide disputes into smaller issues to facilitate trade-offs. One way to facilitate de-escalation of a crisis and provide opportunities for mutually agreeable resolution is to be creative in considering how one’s interests can be served by partial or compromise solutions. Civil society actors can help brainstorm such pragmatic solutions and recommend them to government actors directly or advocate them in the media. Public thought leaders can speak of discrete aspects of the crisis as distinct issues, rather than framing all of them as inextricably interrelated. If a crisis directly involves nongovernmental actors, they can even separately work to resolve the aspects of the crisis that involve them in order to reduce the magnitude of the two sides’ crisis management task.

Think ahead about unintended consequences. When government actors are in the midst of a crisis, they will often be preoccupied with short-term considerations directly related to their portfolios. They may be less inclined to consider long-term or unintended consequences of the crisis and possible crisis outcomes. Many of those unintended consequences will often directly affect civil society actors, such as businesses, researchers, universities, NGOs, and religious institutions. It is essential that civil society actors communicate their concerns about the potential adverse or unintended consequences of different crisis outcomes to government officials, whether through private channels or public media. Likewise, when nongovernmental actors are themselves actors in the crisis, they should be deliberate in thinking about the unintended consequences of actions they might take to escalate a situation, including exposure to legal liability, as well as broader harms their actions could inflict on society by triggering military conflict.

From Crisis Management to Crisis Prevention: Applications in Maritime Security

The preceding section provided creative recommendations for how civil society actors can apply well-established principles of effective crisis management to help manage and resolve crises that have already emerged. As noted above, however, the period when civil society has the greatest potential to make transformative contributions is before a crisis starts, by generating ideas and creating incentives that prevent crises from emerging in the first place.

This section begins by reviewing existing U.S.-China mechanisms for prevention, management, and de-escalation of maritime security crises. It then provides recommendations for next steps that the U.S. and Chinese governments can take to promote better maritime crisis management. Finally, it identifies gaps in existing official mechanisms and areas where more groundwork needs to be laid before negotiations can take place at a Track I level. It will provide recommendations for how nongovernmental actors can work to lay a foundation for future U.S.-China or broader regional agreements on maritime cooperation and military activities at sea. Such agreements will provide for more fundamental progress that can go beyond existing confidence-building measures to help prevent the emergence of maritime security crises between the United States and China.

Existing U.S.-China Mechanisms for Maritime Crisis Management

Since the late 1990s, the United States and China have established some crisis management mechanisms that aim to reduce the likelihood of direct U.S.-China military conflict at sea and to facilitate urgent communication should a serious maritime crisis erupt. The U.S.-China Military Maritime Consultative Agreement (MMCA) reached in 1998 established a means for coordinating annual dialogues on maritime issues between the two countries’ militaries. The MMCA was specifically established as a mechanism for discussing safety in operational matters rather than for addressing or resolving underlying political disputes. In addition, the Defense Consultative Talks and Defense Policy Coordination Talks mentioned above have also served as venues for Washington and Beijing to discuss issues related to maritime security, including the two sides’ disagreements about international law and domestic regulations governing foreign military activities in exclusive economic zones (EEZ), which extend up to 200 nautical miles from a nation’s coast.[15]

In their first decade and a half, these dialogues facilitated communication but produced little in the way of concrete confidence-building measures. However, in 2014, Washington and Beijing finally reached two important bilateral agreements.[16] One of these agreements was the above-mentioned agreement on Notification of Major Military Activities. In this agreement, the two sides pledged to notify each other when conducting major military exercises in the Asia-Pacific region, when issuing major military reports, and when enacting major shifts in defense policies. The other agreement focused on safety in maritime encounters and was accompanied the following year by a more detailed supplemental set of rules on air-to-air encounters.[17]

This latter bilateral agreement on safety in aerial and maritime encounters built on the International Regulations for Preventing Collisions at Sea (COLREGS) and the Code for Unplanned Encounters at Sea (CUES). The COLREGS were codified in an international convention adopted by the International Maritime Organization in 1972, which both the United States and China have accepted,[18] while CUES is a more recent agreement signed in 2014 by 21 Pacific nations, including the United States and China, at the 14th Western Pacific Naval Symposium.[19] The COLREGS establish rules for how ships must operate under various circumstances to prevent collisions at sea, with provisions concerning safe speeds, head-on approaches, overtaking other vessels, crossing paths, traveling in narrow channels and in traffic lanes, low-visibility situations, towing, pushing, pilotage, anchoring, sound and light signals, and more. Both CUES and the U.S.-China agreement on safety in aerial and maritime encounters explicitly built upon the COLREGS, reiterating its principles and supplementing them with additional guidelines in certain areas, especially with regard to facilitating clear on-site communication among ships and aircraft.

Next Steps for Governmental Negotiations on Maritime Crisis Management

These various agreements have been important steps toward preventing crises and improving each side’s ability to communicate effectively during a crisis. Moving forward, it is important that American and Chinese officials practice using the various existing crisis communication channels on a regular basis so that officials on both sides become accustomed to using them. This will help to ensure that communication via those channels during a crisis is smooth and effective. Via the MMCA and DPCT, the U.S. and Chinese governments should also continue to clarify and resolve remaining differences of interpretation regarding certain aspects of the CUES and the bilateral agreement on safety in air and maritime encounters. In addition, the MMCA should be revitalized to facilitate more delegated and intensive engagements between American and Chinese military professionals throughout the chain of command, not only at the most senior levels.[20]

Beyond these existing agreements, the United States and China should also negotiate new agreements to facilitate improved maritime crisis management. For example, the U.S.-China agreement on safety in aerial and maritime encounters negotiated in 2014-15 only applies to the navies and air forces of the United States and China. However, vessels from the U.S. and Chinese coast guards also frequently interact in the waters of the Western Pacific. China relies on such vessels as its primary means to enforce its legal claims and conduct its fisheries enforcement patrols.[21] Thus, the bilateral agreement on safety in aerial and maritime encounters should be supplemented with an agreement on safety in encounters between coast guard vessels. The two nations’ coast guards committed to pursuing such an agreement in September 2015, but such an agreement has not yet materialized.[22] The Biden administration should return to these negotiations and seek a path forward to an agreement as soon as possible.[23]

Finally, the U.S. and Chinese governments should expand upon their traditional focus on crisis communication mechanisms and operational rules to discuss more substantive principles that could help to prevent crises that emerge at sea (or in any other context) from emerging or escalating. This could build on the eight principles of crisis management synthesized from the U.S. crisis management literature enumerated above. These principles have already achieved a high degree of acceptance among both American and Chinese crisis management experts, including those associated with the People’s Liberation Army. The dialogue on crisis communication between the U.S. Department of Defense and the Chinese Ministry of Defense initiated in October 2020 will provide an important venue for such ongoing discussions. However, it is important that such discussions also occur between the U.S. Department of State and Chinese Ministry of Foreign Affairs, since these agencies are often at least partly, if not primarily, responsible for managing political-security crises that emerge at sea. This may also require the United States and/or China to improve or clarify their own internal military-civilian coordination processes for managing maritime military crises.[24]

How Civil Society Can Lay a Foundation for More Significant Progress

Civil society actors, especially scholar-practitioners at think tanks and universities, can help to facilitate some of these recommended next steps for government. For example, experts in Chinese foreign policy decision-making in both the United States and China could publish research on how Chinese military and civilian agencies coordinate management of maritime security crises. U.S. scholar-practitioners could engage in Track II dialogues with Chinese counterparts to gain insight into this question and then brief U.S. policymakers on their findings.

In addition, there are several other areas relating to maritime security where the U.S. and Chinese governments are not currently well-positioned to pursue agreements, but they could find common ground in the future. In these areas, civil society can play an important role in exploring the potential and laying the foundation for future agreements that could help prevent maritime security crises from emerging in the first place. Two examples will be highlighted here: first, arrangements for joint development of resources and joint marine conservation; and second, shared guidelines for foreign military activities in the exclusive economic zone.

Joint Development of Resources and Marine Conservation. One of the best ways to prevent crises in the South China Sea and other disputed maritime spaces is for claimants in the disputes to develop what the United Nations Convention on the Law of the Sea calls “provisional arrangements of a practical nature” that allow them to share marine resources and administrative authority. Such arrangements most commonly consist of agreements between states to engage in shared management of provisional fishery zones or joint development of oil and gas resources. These arrangements, explicitly designed without prejudice to underlying sovereignty claims or eventual maritime boundary delimitation, can help countries find a way to lower tensions and promote mutual interests in resource extraction from the disputed waters that would otherwise remain out of reach due to the sensitivities of each side.

In a similar vein, claimant states, along with other user states that operate frequently in the region, can work together to develop shared mechanisms for regional marine conservation and marine peace parks. For example, Susan Thornton recommends that the United States, China, and ASEAN conduct a joint survey of the environmental health of the South China Sea and sponsor a joint project for plastic removal, followed by the establishment of a South China Sea environmental resource commission to facilitate joint marine conservation efforts by claimant states and user states alike.[25] Another recommendation that has been developed and advocated by civil society actors and was, at one point, endorsed by the Taiwan government — which controls the largest island in the Spratly group in the South China Sea — is the establishment of a Spratly Islands Marine Peace Park. This park would facilitate sustainable management of the area’s natural resources and “alleviate regional tensions via a freeze on claims.”[26]

While such arrangements would be strongly conducive to preventing maritime security crises and promoting mutually beneficial cooperation, they are also highly complex from technical, legal, and political perspectives. As a result, they present numerous challenges even to those government officials who might be interested in negotiating them. Nongovernmental actors can play indispensable roles in laying the foundations for subsequent government-to-government discussions on these arrangements. Scholar-practitioners at think tanks, universities, and private law firms and consultancies can develop technical proposals, craft legal instruments, and brainstorm political strategies that can be used as the basis for negotiations by governments. Likewise, companies with expertise and interest in resource extraction, and advocacy organizations with commitment to environmental conservation, can work separately — or ideally together — to develop proposals for such mechanisms and advocate them to all relevant governments. In addition to helping governments navigate the complexity of such arrangements, such civil society engagement would also help to build support for governments to pursue mutually acceptable compromise in disputes, acting as a countervailing force against rigid, maximal, nationalist resistance.

Foreign Military Activities in the EEZ. One of the principal underlying sources of tension and primary drivers of crisis instability in the U.S.-China relationship is the lack of agreement and clarity on the rules that apply to foreign military activities in coastal states’ exclusive economic zones. The United Nations Convention on the Law of the Sea is notably ambiguous on this subject, which creates considerable space for countries to assert their own widely diverging rules for foreign military vessels’ operations in their EEZs. Reaching agreement on a set of rules for foreign military activities in the EEZ would help to prevent misunderstanding and miscalculation, enhance transparency and predictability, and reduce the likelihood of operational clashes stemming from different applications of the relevant international law.[27]

Given the long-standing sensitivities on this subject, especially between the United States and China, but also on the part of other nations, this is an area where Track II engagement by nongovernmental experts from a range of nations can play a particularly valuable role in sorting out thorny issues and providing constructive compromise proposals. In fact, such Track II work has already been conducted in the past by the EEZ Group 21, a collection of experts from several countries in the region — including Japan, the United States, China, South Korea, Indonesia, the Philippines, Vietnam, Australia, India, and Russia — convened by the Ocean Policy Research Foundation, a Japanese think tank. The EEZ Group 21 issued a set of recommended guidelines for navigation and overflight in the EEZ in 2005, with hopes that they would be adopted as the basis for negotiation by governments in the Asia-Pacific region.[28] Despite involvement by leading U.S. legal experts, these guidelines were dismissed by U.S. policymakers “due to concerns that they restricted unduly the freedoms of navigation and overflight available in an EEZ.” In response, the Ocean Policy Research Foundation, in consultation with several members of the original group, led an effort to develop a new set of revised principles. These revised principles, issued in 2013, were aimed to address those outstanding concerns in order to gain more support for the principles among states and in regional intergovernmental forums.[29]

These principles represent a promising basis for progress on clarifying key contentious issues related to foreign military activities in the EEZ. However, amid increasing tensions in the South China Sea since 2013, these rules have not yet been adopted as the basis for official dialogue. In their official bilateral dialogues in the years after 2013, Washington and Beijing instead focused on more tactical low-hanging fruit, such as the negotiation of bilateral agreements on mutual notification of major military activities, safety in aerial and maritime encounters, and crisis communication via the Defense Telephone Link and joint staff dialogue mechanism. While these agreements were important, they did not clarify underlying differences of interpretation regarding the range of permissible behaviors of foreign military vessels and aircraft in the EEZ.

In order to resurface these recommendations and place them on the agenda of policymakers, nongovernmental scholar-practitioners could once again revisit the recommendations to evaluate whether they require further revision in light of existing circumstances. They should then organize a more sustained effort to promote the adoption or official negotiation of these guidelines — first, on a bilateral basis between the United States and China, given the central importance of those two states’ agreeing on the appropriate interpretations, and then on a broader regional basis, perhaps through negotiations hosted by an ASEAN-centered institution such as the ASEAN Regional Forum.

Conclusion

As nuclear superpowers with divergent political systems and increasingly frequent military interactions, the United States and China have many fundamental disagreements on issues that do not permit much room for cooperation or even dialogue. At the same time, Washington and Beijing share an existential interest in managing these disagreements and preventing them from developing into political-military crises that could escalate into conflict and war. Nongovernmental actors can play an important role in facilitating better crisis management and de-escalation. They can do so by avoiding actions and demands that could constrain the U.S. and Chinese governments’ bargaining space; by providing communication channels, outside options, and creative proposals to each government; and by encouraging officials to avoid escalation and accept compromise during crises. In addition, civil society can help lay the groundwork for significantly more robust crisis prevention mechanisms by developing detailed proposals that can serve as the basis for negotiations among the United States, China, and other relevant actors, and then by organizing to create sustained support for such proposals.

For references, please click here.

Grandview Institution

Can US-China Strategic Competition Be Managed?

By Zhao Minghao

A New Window of Hope for U.S.-China Relations?

It is widely expected that as president of the United States, Joe Biden will usher in a reset of U.S.-China relations and that any further escalation of tensions between the world’s two largest economies will be averted. Beijing says the confrontational approach pursued by the Trump administration has brought unprecedented damage to U.S.-China ties. China seeks to work together with the Biden administration in recalibrating, if not resetting, the bilateral relationship. As China’s Foreign Minister Wang Yi stated in January 2021, “China-U.S. relations have come to a new crossroads, and a new window of hope is opening.” Wang also stated, “We hope that the next U.S. administration will return to a sensible approach, resume dialogue with China, restore normalcy to the bilateral relations, and restart cooperation.”[1]

In contrast to the Trump administration, Biden and his core foreign policy advisors believe that, while China is not the biggest threat confronting the U.S., it is the U.S.’s most consequential strategic competitor in the long run.[2] From Chinese perspectives, the U.S. under Biden’s presidency does not intend to engage in a new Cold War with Beijing, which former Secretary of State Mike Pompeo, among other key policymakers in the Trump administration, sought to advance. Although the Biden administration will continue to understand U.S.-China relations through the lens of great power competition, Biden’s goal will be to make the U.S. more competitive and engage in positive-sum competition with China.[3] While it is true that under Biden, tensions between the U.S. and China will moderate somewhat, there should be no illusion that the current “red alert” state of relations will unwind automatically with Biden in the White House. This is the perspective of most Chinese policy elites and strategic thinkers.

Indeed, unrealistically high expectations will be counterproductive for U.S.-China relations going forward. Beijing should realize that the Biden administration has its job already cut out when it comes to recalibrating this key relationship. Biden will have to deal with the foreign policy legacies of both the Obama and Trump administrations simultaneously, meaning that he will make sure not to be perceived as ”soft on China.” Therefore, he will selectively inherit some of Trump’s rationale and approach concerning U.S. policy toward China. As the Trump administration drew to an end, the Policy Planning Staff of the U.S. State Department released a report called “Elements of the China Challenge.” This document, guided by Mike Pompeo, aimed to harden narratives concerning China and constrain the incoming administration.[4]

Furthermore, as Biden is occupied with his top priorities of managing the pandemic and its associated economic challenges, he will have limited capacity and political wherewithal to pursue a policy agenda with China. The U.S. is experiencing an internal cold war, wherein “a deeply divided nation, Democrats and Republicans don’t just disagree, they hate each other.”[5] The political polarization in America will add more complexities to U.S.-China relations. Even if Biden inclines to remove any single pressure-inducing measure, he may make himself vulnerable to backlash if he is perceived as being soft on China. Without any doubt, both the Republican and Democratic parties now share substantial common ground when it comes to taking tougher policy approaches to China. This is borne out by the China-related content of the National Defense Authorization Act for Fiscal Year 2021. In a report released in September 2020 by the House Republicans’ China Task Force, more than 400 proposals were laid out to advance U.S. competitive policy toward China.[6] While the group is composed only of Republicans, the report did consult and does reflect the views of some Democrats.

More importantly, Biden will face pressure from within the Democratic Party when it comes to China policy. Jake Sullivan, Biden’s national security advisor, along with a cohort of new-generation Democratic political high flyers, has hardline views on China — views that are even on the same page as Republicans, whose attitude toward the CPC is even more ideologically driven. Additionally, progressive Democrats, such as Sens. Bernie Sanders and Elizabeth Warren, do not view China favorably and have stated that China’s trade practices are unfair and have harmed U.S. workers and the American middle class. The foreign policy approach championed by progressive Democrats puts a premium on geopolitical implications of international economic policies. They are wary that China or other powers may weaponize their economic heft.[7]

Given the above constraints, it will be very challenging for the Biden administration to readjust U.S. policy towards China over the next four years. However, allowing the relationship to drift through inaction may lead to a more disastrous situation. In Beijing’s view, the Trump administration has pushed U.S.-China relations into dire straits. As Wang Yi admitted, the bilateral ties face “unprecedented difficulties.”[8] Many American policy elites are also worried about the gloomy prospects of U.S.-China relations. In November 2020, former U.S. Secretary of State Henry Kissinger even cautioned against military conflict between the two nations and said the risk of such conflict should not be underestimated. In Kissinger’s words, “America and China are now drifting increasingly toward confrontation, and they’re conducting their diplomacy in a confrontational way.”[9] How the Biden administration crafts and implements its China policy will not only influence relations over the next four years, but also determine whether the two powers can achieve “competitive coexistence” in the decades to come. Over the next four years, the shared challenge for Chinese and U.S. leaders is twofold — first, leaders need to properly handle short-term risks and confrontation; second, they need to determine a framework and rules for managing strategic competition between the two countries in the coming decades.   

Major Drivers of U.S.-China Strategic Competition

In December 2017, the Trump administration unveiled its National Security Strategy report and proferred that the U.S. was entering a new era of major power competition. The report stated that China is a “revisionist power” and “strategic competitor” that wants “to shape a world antithetical to U.S. values and interests.”[10] Besides such a rhetorical shift, the Trump administration has exerted much more pressure on China with a series of actions across all aspects of American policy toward China.[11] In particular, Trump launched an unprecedented trade war against China and engaged in a trend of “decoupling” in the U.S.-China economic relationship.[12] New tensions have also flared over the Taiwan issue. U.S.-China frictions concerning maritime Asia, particularly in the South China Sea, still carry the risk of escalation.[13] Furthermore, the United States continues to advance its “Free and Open Indo-Pacific Strategy,” which largely aims to counterbalance the Belt and Road Initiative promoted by China in recent years.[14]

However, U.S.-China strategic competition did not originate with the Trump administration. The American side began to ponder this issue during President Obama’s second term. Key figures, such as Kurt Campbell, who is now serving in the Biden administration, played important roles at the time. To find ways to manage U.S.-China strategic competition requires a deep and nuanced understanding of Chinese perspectives. Many Chinese observers contend that the 2008 global financial crisis was a watershed moment for U.S.-China relations. The crisis, originating from the core of the capitalist world — the United States — not only led to economic difficulties and political dysfunction in the country but also damaged America’s soft power by exposing the flaws in the “Washington consensus.” More importantly, it marked a profound transformation in the international order and set out the global context of simmering competition between China and the United States.[15]

Soon after the global financial crisis, Chinese scholars noticed the changing nature of U.S.-China relations and highlighted the possibility of increasing competition between these two nations. In 2010, a leading Chinese expert on America from China Institute of Contemporary International Relations(CICIR), Yuan Peng, offered his moderate but shrewd assessment. He contended that the United States remains the only superpower in the world, but that its hegemonic foundation had evidently eroded. Despite U.S.-China collaboration in addressing the consequences of the global financial crisis, the two sides also began to compete in an inexplicit manner. As Yuan noted, the structure of U.S.-China relations would become “No. 1 vs. No. 2” rather than “superpower vs. major power.” Yuan even warned of a possible new Cold War between China and the United States.[16]

Different from their American counterparts, Chinese scholars and policy elites tend to take the global context of U.S.-China strategic competition as the starting point of their analysis. In the decades following the global financial crisis, many profound changes have occurred across the international strategic landscape, affecting the global context of U.S.-China relations. In 2018, Peking University Professor Wang Jisi noted that economic globalization has lost its momentum, while nationalism and populism have surged across many countries, particularly in the developed world. World politics was entering a “new era” in which division and competition may extend further.[17] Former Vice Foreign Minister Fu Ying, now serving as chairperson of the Center for International Security and Strategy at Tsinghua University, contended: “Globalism and multilateralism are under attack. The resurgence of geopolitical and power competition, mixed with populism and protectionism, are weakening the bonds built among countries in recent decades.” She highlighted these puzzling changes on the international level when elaborating on U.S.-China tensions.[18]

Regarding the major drivers of U.S.-China strategic competition, there are four approaches in Chinese scholars’ analysis. The first approach is realist in nature and underscores that the closing power gap between China and the United States is a decisive factor in the relationship. This power-centered thinking is closely related to “structural contradictions” (结构性矛盾), which is an important term often used by Chinese scholars in their analysis of U.S.-China strategic competition. For instance, Tsinghua University Professor Yan Xuetong contends that U.S.-China strategic competition is inevitable because of structural contradictions between the hegemon and the rising power. China is closing the gap in its comprehensive national strength, which may be the root cause of increasing competition between the two nations. He attributes the instability of China-U.S. relations to the two powers’ policy of “pretending to be friends.”[19]

The second approach emphasizes how “mutual perceptions” shape U.S.-China strategic competition. Among other Chinese scholars, Nanjing University Professor Zhu Feng contends that mutual perceptions are critical in impacting the dynamic between China and the United States.[20] For example, many Chinese scholars believe there has been a new wave of China threat perception in the United States, which has deepend the anxieties of the American elite toward the rising power China. As Wang Jisi notes, “The Americans are alarmed by China’s expansion of global influence, exemplified by the Belt and Road Initiative, and its reinforcement of the role of the state in economy and society, as well as the consolidation of the Communist Party leadership with its ideology.”[21] From a Chinese perspective, American politics has become more divided and polarized, which may further amplify negative perceptions of China in the country.

The third approach attaches more importance to the ideological differences between China and the United States. Most Chinese scholars admit that there are fundamental differences in the political institutions and value systems of the U.S. and China, which is an important source of “structural contradictions” in the bilateral relationship. In discussing China-U.S. relations, “Cold War mentality”(冷战心态)and “hegemon mindset”(霸权思维)are terms often used by Chinese analysts and are closely related to ideological factors. These ideological factors will play an increasingly important role in fueling U.S.-China strategic competition, and this trend has become increasingly evident after the 19th National Congress of the Communist Party of China.[22] Given that the Trump administration set its priority on major power competition, some Chinese scholars worry that ideological rivalry like the one during the Cold War might re-emerge. As CASS senior researcher Zhao Mei warns, a new “political correctness” can be found in spreading anti-China discourse in the United States. America’s “neo-McCarthyism” toward China is a truly disturbing trend, and it will bring far-reaching negative impacts on U.S.-China relations.[23]  

The fourth approach views “conflicts of policy agenda” between these two countries as a key driver of their strategic competition. Many Chinese scholars find that the policy goals pursued by the American side are at odds with the ones sought by the Chinese side. This perspective is particularly evident with regard to American and Chinese regional policies toward the Asia-Pacific. Former President of CICIR Cui Liru argues that the “Pivot to Asia” promoted by the Obama administration in high profile has directly made U.S.-China relations more difficult and complicated. America regards itself as the protector of the Asia-Pacific regional order, and it views China as a natural challenger to this regional order. Therefore, U.S.-China strategic competition in Beijing’s home region has to be stormy.[24] The differences and conflicts on the policy priorities between the United States and China go beyond the regional dimension. Guided by the “America First” principle, the Trump administration has brought profound changes to America’s domestic and foreign policies. It takes “repressive retrenchment” as its grand strategy, which not only exerts far-reaching impacts on the liberal international order but also further complicates U.S.-China relations.[25]

What Do the United States and China Compete For?

Most Chinese analysts recognize that there is an emerging consensus across the American political spectrum in revising U.S. China policy and adopting a more competitive strategy toward China, but some disagreements at the tactical level remain. The shifting mood in favor of a post-engagement policy toward China goes well beyond the Trump administration. To some extent, it is a counter-China coalition composed of far-right populists, security hawks, and hard-to-impress radicals that calls for a bellicose approach in dealing with China. U.S. strategic competition against China is extending into all domains. Moreover, in light of profound changes in world politics, such as the greater importance of geo-economics, U.S.-China strategic competition could be full-fledged and cross-domain.

Chinese scholars identify several major domains in which U.S.-China strategic competition is arising. First, economic relations between the two countries have become the focal point of U.S.-China rivalry. In the four decades after the normalization of U.S.-China relations, economic cooperation has formed the core pillar of American engagement policy toward China, which is described by Chinese scholars as the “ballasts”(压舱石)of the bilateral relationship. However, as exemplified by aggressive American trade actions toward China adopted by the Trump administration, the competition between the two nations in the economic arena has been heightened substantially.[26] The rise of China is based on its ever-growing economic clout, and it is understandable for the American side to increase its pressure on China on the economic front when Washington is determined to halt rather than manage China’s ascendancy.

Zhang Yuyan, a prominent economist and expert on U.S.-China relations at CASS, uses the term “confinement” (规锁)to describe U.S. competitive strategies toward China. For America, China is a kind of rival unlike Nazi Germany, Imperial Japan, and the Soviet Union. Given that China is the second-largest economy and an influential trading power in the world, the Cold War-style “containment” strategy will not work with China. The central goal of the United States is to prevent China from moving up the global value chains and becoming an advanced manufacturing power.[27] Most Chinese analysts assert that the “trade war” launched by the Trump administration is in essence a “technology war” with China.[28] Technology is vital not only for China’s quest for strength and wealth but also for long-term competition between major powers. Another focal point in U.S.-China economic competition is their contest on international rules and institutions governing global trade, investment, and finance. The United States, Europe, and Japan might forge a new economic bloc that adopts more coordinated measures to press China, especially as regarding China’s state-owned enterprises.

Second, on the geostrategic level, Chinese analysts hold that the Asia-Pacific, particularly the Western Pacific, is the focal area for US-China strategic competition. Under the Obama administration, the United States implemented the “Pivot/Rebalancing to Asia” strategy, which is viewed by many Chinese strategists as a move to encircle China. In particular, with America’s aggressive intervention in the South China Sea disputes, the prominence of the maritime domain in U.S.-China strategic competition in the region has been raised significantly. Hu Bo, director of the Center for Maritime Strategy Studies at Peking University, analyzes the changes in the balance of power in maritime Asia. He contends that a new strategic equilibrium between the two powers along the waters near the first island chain has emerged, which will be maintained in the coming 10-20 years. Both sides have been increasingly taking tit-for-tat military strategies. The United States has to accept China’s military advantage in China’s coastal waters, and that China cannot diminish the U.S. military preeminence in the vast waters beyond the first island chain.[29]

In recent years, the interplay between China’s Belt and Road Initiative (BRI) and America’s Indo-Pacific Strategy (FOIP) has also become a manifestation of U.S.-China strategic competition on a regional level. Although China sees the BRI as a development-oriented endeavor, the United States, among other regional players, is wary of a China-centric regional order stemming from the project. In Chinese scholars’ analysis, the FOIP is a counterbalancing strategy against the BRI. The FOIP is backed up by a distinct underlying current of maritime power and aims to check the emergence of any potential hegemon from the Eurasian continent from both the eastern and western front lines of the Pacific and Indian oceans.[30] The Trump administration has made substantive efforts to implement the FOIP. In particular, the security-based grouping known as the “Quad,” which comprises America, Japan, Australia, and India, is likely to grow in the future, even to the point of becoming an Asian-style NATO that some Chinese analysts believe Washington wishes to see.[31]

Third, many Chinese scholars contend that there is an emerging competition between the United States and China over international leadership and prestige, which is vital for the evolution of the world order in the coming decades. The “withdrawal diplomacy”(退出外交) undertaken by the Trump administration has brought about not only challenges in sustaining the momentum of international cooperation, but also opportunities for Beijing to enhance its influence in global governance by seeking collaboration with European Union and other major actors.[32] As Fudan University Professor Chen Zhimin, among other Chinese scholars, notes, global governance needs international leadership, but a deficit in international leadership has been lamented for a long time. The Trump doctrine of “America First” rendered the international leadership deficit more acute. Chen argues that China should pursue a facilitative leadership in international affairs while avoiding the mistake of confusing this kind of leadership with hegemonic, self-serving, or coercive strategies.[33]

Other scholars like Nankai University Professor He Kai assert that a quest for greater international prestige might rest at the core of U.S.-China strategic competition. The international prestige of one country is based not only on the capabilities it has but also on the status and respect it gains. In the context of Chinese traditional political thought, international prestige is similar to “rule by virtue” (王道), with “rule by coercion” (霸道) as the opposite.[34] Moreover, “balancing with the international institution” (制度制衡) has become a new feature of U.S.-China relations since the Obama administration. Chinese scholars have attached more attention to the competition between the two nations over international institutions such as the Asian Infrastructure Investment Bank (AIIB). Evidenced by an emphasis on global governance in Chinese foreign policy discourse, Beijing has realized that it is imperative to use its institutional capabilities to effectively protect its economic and investment interests. China’s pursuit of institutional power meets resistance and impediment from the American side. Renmin University Professor Li Wei proposes a theoretical concept, “realist institutionalism,” to analyze competition among major powers, particularly US-China competition, and that at the core of institutional competition is a contest over the provision of public goods.[35]

Managing U.S.-China Strategic Competition

As Director of the Institute of American Studies at CASS Ni Feng notes, America’s National Security Strategy report released in December 2017, as well as a series of policy statements and moves adopted by the Trump administration, marks “the new era of the comprehensive and strategic competition between the United States and China.”[36] Indeed, most Chinese analysts agree that overall U.S.-China strategic competition is very likely to intensify in the long term. To use the words of China National Defense University Professor Tang Yongsheng, U.S.-China strategic competition will be a “prolonged battle”.[37]

It is noteworthy that the new Cold War narrative does serve as an important warning for the long-term development of relations between the two powers.[38] The new Cold War has several similar features to the original one, such as rivalry between great powers and ideological clash, but there are obvious differences between the two. First, the U.S. and Soviet Union belonged to two different international systems during the Cold War, with no economic links between them; whereas, under the so-called new Cold War, the major powers are part of one international system with mutually dependent economic ties. Second, the confrontation between the major powers during the Cold War was manifested in contests of military force. The new Cold War, however, is characterized by geo-economic competition between the major powers. Third, the Cold War was framed as a struggle between the ideologies of capitalism and communism, but the new Cold War is more of a struggle between different development models, with social media and other technologies allowing major powers to exert political influence over rivals. Fourth, there were clear divisions between the two opposing camps during the Cold War, but in the new Cold War rivals can also be friends, and economic partners can be security rivals. Moreover, the new Cold War is characterized by intense competition among the major powers for control of global commons such as the internet and outer space, with contests largely associated with controlling connectivity rather than occupying territory.[39]

Most Chinese scholars contend that U.S.-China strategic competition is unlikely to slide into a new Cold War.[40] Some pundits are relatively pessimistic, such as Renmin University Professor Shi Yinhong and Tsinghua University Professor Yan Xuetong. Shi predicts that the “structural contradictions” between China and the United States might become much deeper, and the possibility of U.S.-China major confrontation and armed conflicts cannot be ruled out.[41] Yan Xuetong emphasizes that ideological rivalry is a key factor that will continue to define the trajectory of US-China relations across the next few decades. In his view, if the ideological rivalry can be managed well, U.S.-China strategic competition could concentrate on pursuing material power, mainly through economic competition and arms racing. If the ideological rivalry becomes a core component of U.S.-China strategic competition, proxy wars would break out. It is quite like the U.S.-USSR clash during the Cold War era.[42]

Therefore, both sides should be fully aware of the possible hazards of the “Thucydides Trap.” America and China have a mutual need to avoid conflict and confrontation, and both need to work together to prevent the relationship from being derailed. Both sides must manage their competition with conceptual innovation and practical measures. In 2012, Chinese senior officials proposed the framework of “New-type major power relationship” (新型大国关系)for guiding U.S.-China bilateral relations. Chinese scholars admit that American responses to such Chinese initiatives were not positive. Nevertheless, Beijing and Washington have to find a plausible framework to manage their competitive coexistence in decades to come, even if it is doomed to be very difficult.[43]

To begin with, both America and China need to adjust their “strategic mindset” and related policies. In other words, mutual accommodation based on a redefinition of their respective national interests and rules for U.S.-China interactions is a necessity.[44] Second, China and the United States should draw a red line for their strategic competition and respect each other’s “core interests.”[45] Third, the economic decoupling between China and the U.S. might result in greater confrontation between the two countries, and U.S.-China economic relations consequently need to be mended. There is great potential for U.S.-China cooperation in strengthening global economic governance.[46] Fourth, China and the U.S. should step up efforts to develop positive interactions in the Asia-Pacific region. Both need to realize that most regional countries are reluctant to pick a side in the event of a China-U.S. standoff. [47]

More importantly, China and the United States should have sustained exchanges on their visions for the international order and make joint efforts to address global governance challenges. In Chinese policy elites’ views, China and the United States have the responsibility to establish an inclusive, open, and rules-based international order, which can guarantee the long-term and healthy development of U.S.-China relations.[48] Shared leadership between the two nations is required for making international institutions updated and efficient. The United States should review its knee-jerk negative response to new international institutions like AIIB initiated by China, while China must ensure such institutions do not become a tool to narrowly serve Chinese national interests. Moreover, the United States and China should work together in areas that suffer from a lack of internationally accepted norms and rules. In particular, cyberspace and outer space are important domains where U.S.-China competition could be aggravated. China and the United States should strive to develop a habit of cooperation and explore new ways to cope with other challenges, such as the weaponization of artificial intelligence. Both countries need to promote new types of cooperation in international peacekeeping, counterterrorism, and public health, among other areas.[49] 

It must be a long-term and formidable maneuver to manage U.S.-China strategic competition. Both sides must work with a sense of urgency. There is indeed no evidence indicating that U.S.-China relations will turn for the better simply because Joe Biden has taken over the presidency. But the opposite is true as well, as there is no reason that we should let slip the opportunity to ease the tensions and strive for a reset. Given the magnitude of the challenge, combined with the difficulties Biden will encounter in carrying out his office, both sides need to work on realistic goals and a road map for resetting bilateral ties. They must put in the time, energy, and political capital needed. Proposed steps include the following: 

> Repair U.S.-China relations by reversing the extreme approaches pursued by the Trump administration. Severing cultural and people-to-people exchanges will fundamentally harm ties, as any cultural decoupling will only serve to aggravate the current rift. China and the U.S. should take measures in tandem to create conditions for bilateral talks, starting with reopening closed consulates, lifting visa restrictions, and ending bans or expulsions of resident journalists.

> Restart bilateral dialogues and strengthen their ability to efficiently handle specific issues. Apart from continuing economic and trade negotiations, strategic dialogues on the diplomatic track should be reinstituted after their hiatus sparked by the Trump administration. The U.S. hopes to pursue a results-oriented relationship with China, but for that to happen, the U.S. must make compromises as well, not just unilaterally make demands of China. Both sides need to improve the quality and professionalism of bilateral dialogues, which is a shared challenge for officials in both countries.

> Push forward pragmatic bilateral cooperation. This should be carried out in light of the domestic political and economic agendas of the respective countries. China has taken proactive steps in market access and intellectual property rights protection. China is also favorable toward the idea of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Both sides should also work out specific plans for cooperation in enforcing the Paris Agreement, developing clean energy, maintaining global financial stability, and advancing nonproliferation. Furthermore, infrastructure, data use and protection, anti-money laundering, and counterterrorism also present room for U.S.-China cooperation.

> Strengthen crisis management mechanisms and avoid military confrontation. This is crucial in the Taiwan Strait, the South China Sea, and other areas. Communication between China’s Joint Staff Department of the Central Military Commission and the U.S. Joint Chiefs of Staff should be enhanced with multilevel crisis communication channels. Both sides need to enhance the crisis control consciousness and ability of frontline military personnel. Under the Obama administration, a consultation mechanism for Asia-Pacific affairs was set up between China and the U.S. Similar arrangements should be organized to avoid miscalculation; otherwise, they face a scenario in which the two countries will slide into conflict because of some “third party factor.”

For references, please click here.

Report Methodology

The primary goal of this report is to provide recommendations for Chinese and American civil society as to how the bilateral relationship can be preserved and how engagement can be expanded. Although civil society is understood differently in the U.S. and China,[1] it can be broadly defined as organizations which are “generally non-profit distributing and self-governing, and operate in the public sphere.”[2] For the purposes of this report, these include non-governmental organizations, business and trade associations, think tanks and research institutes, philanthropic and religious missions, and educational institutions. Notably, the Chinese authors involved in this report felt strongly that their research should focus on recommendations for the Chinese and American governments.

In developing these recommendations, this report employed a unique framework inspired by the American and Chinese diplomatic communities to identify, classify, and prioritize bilateral and international matters of concern. This intellectual exercise helped guide the authors in selecting which issues were analyzed.

Academics, professionals, and researchers from both the U.S. and China were first recruited into two independent teams to draft the report in parallel. One team consisted of authors residing in the People’s Republic of China, while the other team consisted of authors residing in the United States of America. Each team was tasked with identifying and categorizing bilateral and international issues into three broad categories: (1) issues over which the U.S. and China have mutual interest in cooperation, (2) issues over which the U.S. and China should conduct dialogue, and (3) issues over which the U.S. and China must commit to peaceful management of their disagreements. Each team identified the issues categorized independently of one another, and items in each category were left unranked.

Once categorized by both teams, the lists were exchanged, and mutually convergent issues were identified. Convergent issues constituted the foundation of this report. Each list can be found on the methodology page.

[1] We acknowledge that the Chinese conception of civil society differs somewhat from that of the US, see page 3-4 of Elizabeth Knup 2019, “The Role of American NGOs and Civil Society Actors in an Evolving US-China Relationship,” https://www.cartercenter.org/resources/pdfs/peace/china/china-program-2019/knup.pdf

[2] Ibid., 3.

China-U.S. Cooperation on Climate Change: History and Future Agenda

By Zhao Hai

Lessons of China-U.S. Cooperation on Climate Change

In the past 30 years, from the United Nations Framework Convention on Climate Change, to the Kyoto Protocol, to the Paris Agreement, the world has gone through a winding road to building a U.N.-centered global governance structure and action plan on climate change. Any progress requires consensus-building as well as strong leadership to overcome the challenges of collective action.

China’s carbon-neutral goal and emission control actions are a solid foundation for global cooperation on climate change, particularly with the United States. The two countries are the biggest greenhouse gas emitters in the world; China and the U.S. must work together to find solutions for the gap between developed and developing countries. It would have been almost impossible to reach the Paris Agreement of limiting global warming to below 2°C in December 2015 if it weren’t for the U.S.-China Joint Announcement on Climate Change in November 2014 and the bilateral Joint Presidential Statement on Climate Change in September 2015.

On top of the Paris Agreement, China also worked with the Obama administration to accomplish the Kigali Amendment of the Montreal Protocol and the ICAO Carbon Offset and Reduction Scheme for International Aviation resolution, both in October 2016. The former was an agreement by 197 countries to phase down hydrofluorocarbon refrigerants, and the latter was aimed at capping aviation emissions at 2020 levels by 2027. The significant progress of bilateral cooperation on climate change during President Barack Obama’s second term provided at least five lessons for the future.

Mutual Respect Is Essential

In Kenneth Lieberthal and David Sandalow’s report, “Overcoming Obstacles to U.S.-China Cooperation on Climate Change,” published 12 years ago, the first recommendation was to “acknowledge the legitimacy of each other’s perspectives.” The authors explained that the U.S. and China bring very different perspectives to the issue, reflecting their different histories and circumstances, and each should recognize the legitimacy of the other’s viewpoint and avoid making these differences barriers to pragmatic cooperation.[1]

Another Pew Center and Asia Society report also stated that “a meaningful U.S.-China partnership on climate change issues can be forged based on equity, taking into account the respective stages of development, capacities, and responsibilities of each country.”[2] This argument should continue to guide the bilateral cooperation on climate change, for it was precisely this spirit of mutual respect that ensured trust between the two countries, from the top leadership to the parties involved in the process.

Over the Obama years, disagreements between China and the U.S. have often frustrated efforts to reach consensus on an effective international response to the problem of climate change. Key disputes have centered on the “common but differentiated responsibilities” principle, or more specifically on the appropriate prioritization of economic development versus climate mitigation, responsibility for historic emissions versus contribution to current and forecasted emissions, and total emissions versus emission per capita.

However, both Chinese and American leaders maintained constructive attitudes despite intense debates due to their respect for the other side’s perspectives and needs. Common interests, effective communication, and determination led to necessary compromises and brought the two parties over the finish line of climate change agreements.

Working Mechanisms are Critical

The U.S.-China Climate Change Working Group (CCWG), the premier mechanism for facilitating constructive China-U.S. dialogue and cooperation on climate change, was established in April 2013. This mechanism played a critical role in promoting climate change cooperation between China and the U.S. because it directly reported to the Strategic and Economic Dialogue for cross-country policy coordination, and it included nearly a dozen concrete action initiatives covering major sectors of the economy.

The ambition of China-U.S. cooperation can be reflected in these areas: heavy-duty and other vehicles; smart grids; carbon capture, utilization, and storage; energy efficiency in buildings and industry; collecting and managing greenhouse gas emissions data; climate change and forests; industrial boiler efficiency and fuel switching; climate-smart/low-carbon cities; green ports and vessels; and zero-emission vehicles. These action-oriented initiatives were guided by joint implementation plans and led by interagency actors on both sides. The CCWG also hosted a regular Enhanced Policy Dialogue that covered the international climate negotiations and respective domestic plans for achieving climate targets. Also, China and the U.S. founded the Clean Energy Research Center in Beijing and reached the Ten-Year Framework for Cooperation on Energy and Environment.[3]

Domestic Politics Matter

China experienced a dramatic change of domestic view and political economy on climate change. The U.S. also went through domestic political swings. At the federal level, the Obama administration saw climate change as one of its core issues on the political agenda. Greenhouse gas reduction was central to Obama’s economic recovery and job-creation plan. However, the prioritization of health care reform cost the Democratic Party the control of Congress, and the administration lost legislative and budgetary leverage to promote climate change legislation.

Obama took a different approach in his second term by fully deploying the executive power to drive the climate agenda. In the summer of 2013, he updated the Presidential Climate Action Plan (CAP), since the plan was first prepared at the beginning of his first term. The CAP called for cutting carbon pollution in America, preparing the U.S. for the impacts of climate change, and leading international efforts to address climate change. Among many proposals, the CAP directed the Environmental Protection Administration to raise carbon pollution standards on U.S. power plants, accelerate clean energy permitting, and raise fuel economy standards for the transportation sector.[4]

Concurrently, the U.S. was experiencing a fracking revolution that delivered record oil and gas production throughout the Obama years, directly undermining political support for climate change policies. Donald Trump, on his first day as president, abandoned Obama’s CAP, calling it “harmful and unnecessary.” Trump also quit the Paris Agreement, leaving other countries — including China — greatly disappointed. But gradually ample supply of American oil and gas caused a nosedive in energy prices, putting the debt-laden fracking industry in retreat. In his inaugural address on Jan. 20, 2021, President Joe Biden announced he would rejoin the Paris Agreement and revoked Trump’s order by signing an executive order reinstating the Obama CAP.[5] In eight years, climate change policy has run a full circle in the U.S. due to the polarization of domestic politics.

Local and Pragmatic Cooperation Is Enduring

One of the most salient features of China-U.S. climate change cooperation is vibrant local and pragmatic exchanges and projects based on common interests among the two peoples. In the past decade, the two sides have been working together on clean coal, electric car technology, renewable energy, smart grids, carbon sequestration, and green building, efforts that have effectively improved both countries’ energy efficiency and reduced emissions. From the environment, energy, and transportation ministries and departments in the two countries to provincial, state, and municipal governments, multilayer policy exchanges, multiple pilot projects in many industrial sectors are sprouting up.

This pragmatic local cooperation has produced two important results. First, it has helped local governments acquire the knowledge, experience, data, and capability to analyze their environmental situation so they can make better plans for energy production, environmental standards, and emission targets. Second, it has enlisted social and business actors like environmental nongovernmental organizations, research institutions, enterprises, and even celebrities to join hands in specific projects. The increased coordination and mobilization in both societies have helped to consolidate public support for bilateral cooperation on climate change.

Indeed, local, business, and social cooperation on low-carbon sustainable development between China and the U.S. were so strong and mutually beneficial that it endured during the Trump administration but failed to flourish. Today, the cooperation is ready to move into a higher gear.

One Plus One Is Greater than Two

When China and the U.S. work together on climate change, the ripple effect is truly global. On top of the Paris Agreement, Kigali Amendment, and CORSIA, joint efforts by the two countries greatly reinforced the leadership of rule-making for climate change, setting the stage for global growth of renewable energy, green financing, and low-carbon technologies and industries. Green-tech transfer and joint development between China and the U.S. also reduced the cost and accelerated the wider application of alternative energy solutions in the least developed countries.

Meanwhile, China and the U.S. recognize the importance of mobilizing climate finance to support low-carbon, climate-resilient development in countries that have limited financial resources. As part of the Obama-Xi Joint Statement in 2015, China pledged 20 billion yuan to the South-South Climate Cooperation Fund within the framework of the 2030 Agenda, and the U.S. made an equivalent pledge of US$3 billion to the Green Climate Fund (GCF), which accounted for 29% of the fund’s total amount announced.[6] China continued with the commitment and followed the plan to fund 10 low-carbon demonstration projects, 100 climate change adaptation and mitigation projects, and 1,000 training places in developing nations (the “10-100-1000” plan).[7] When the U.S. quit the Paris Agreement, Trump stated that the U.S. would not honor the $2 billion that remains to be paid to the GCF. Now that Biden has rejoined the agreement, it is hoped the U.S. will recommit to the GCF and contribute more to mitigation finance and help to reduce the huge adaptation finance gap.

In addition, with the U.S. ending public financing for new conventional coal-fired power plants except in the poorest countries, China also updated low-carbon policies and regulations to restrict public investment flowing into projects with high pollution and carbon emissions both domestically and internationally. As a result, the green concept was adopted and integrated into China’s Belt and Road Initiative (BRI) and China made additional financial and material contributions to U.N. country climate change initiatives.

All in all, despite a troubled start, China-U.S. cooperation on climate change before the Trump administration was a great accomplishment and that proved the viability of genuine bilateral cooperation on pressing global challenges based on common interests and real political leadership. There was no shortage of disputes between China and the U.S. in the climate change negotiations and on the geopolitical and security issues such as the Diaoyu Islands, South China Sea, and cybersecurity. However, the distrust, tension, and friction within the bilateral strategic relationship did not deter both sides from deepening cooperation on climate change. On the contrary, they highlighted the urgent need for a fulcrum for building trust and seeking collaboration to prevent a zero-sum interaction between the two largest economies in the world.

China’s Goal of Carbon Neutrality by 2060

 In the past 40 years since China’s opening and reform, the Chinese economy has been growing at an incredible speed, lifting tens of millions of people out of poverty and making it the world’s second-largest economy. The downside of this unprecedented growth is that China is also becoming the world’s largest polluter, with carbon dioxide emissions exceeding 9.8 billion tons in 2017, or 28% of the global total. Due to the economic development stage and industrial structure of China, 90% of the carbon emissions come from electricity generation, industrial production, and transportation. However, China’s economic structure has been changing, and the government is leading the way to transform the economy.

China’s Carbon Neutral Commitment

President Xi Jinping has addressed the importance of “ecological environment” numerous times in his speeches. “Ecological environment is a critical political issue, also a major social issue related to people’s livelihood,” Xi said. He coined the popular phrase “Green is gold” to highlight the value of sustainable development.

During the United Nations General Assembly in September 2020, Xi announced that China will strive to reach peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060. This pledge not only laid down a clear target for carbon reduction but also put China in line with carbon-neutral commitments made by developed countries, sending a strong signal to the world that China will play a leading role in implementing the Paris Agreement.[8] Now, these lofty goals will be integrated into China’s 14th Five-Year Plan and the 2030 Development Vision.

Such a high bar to curb emissions would require an overhaul of China’s current energy structure. In addition to switching from fossil fuel to renewable energy sources, this target-driven energy revolution must also rely on the digital transformation of the electric systems. Research shows that it is technically, economically and financially feasible to achieve the carbon-neutral objective and its impact on China’s GDP per capita in 2050 will be minimal.[9] If China’s carbon neutrality is realized in the next 40 years, it is estimated that China will reduce carbon dioxide emissions 215 billion tons in total. Even if other countries do not increase their carbon reduction commitments, global temperature will rise an estimated 2.59℃, which is 0.25℃ below the level currently expected.[10]

Solving the Problem of Coal

One of the greatest challenges ahead for China is its dependency on coal. China’s economy in the next decade will maintain a medium-high growth rate and the energy demand will continue to increase. Decarbonization in the industrial and transportation sectors poses a great technological and cost challenge, but it also creates unprecedented opportunities for new industries and markets.

During the “Thirteenth Five-Year Plan” period, China’s power generation installed capacity increased by an average annual rate of 7.6%, of which non-fossil energy installed capacity increased by 13.1% annually. The proportion of non-fossil energy installed capacity increased from 34.8% at the end of 2015 to 44.8% at the end of 2020. The average annual growth rate of coal-fired power installed capacity was 3.7%, and its share of total installed capacity dropped from 59% at the end of 2015 to 49.1% at the end of 2020. Still, mere reduction of coal in electricity generation is not likely to bring China to carbon neutrality. China needs more solutions to transform energy consumption and carbon dioxide control, particularly through electrification of transportation, a shift toward a high-level circular economy, decarbonization of heavy industries, carbon capture and storage, state-of-the-art building insulation, and other technological innovations.

In the Paris Agreement, China pledged to adhere to the nationally determined contributions (NDC) of 60-65% reduction of carbon dioxide emissions per unit GDP from the 2005 level, and to increase non-fossil energy to 20% of total energy consumption. On Dec. 12, 2020, President Xi announced at the U.N. conference that by 2030, China will aim at NDC of 65% and non-fossil energy at 25% of the total and will triple solar and wind power capacity of their 2019 levels by 2030.[11] The application of newer technology and a larger scale of deployment are leveling the cost of energy between fossil fuels and renewables. The cost of solar and wind energy has on average decreased 82% and 39% respectively in the past decade, and 56% of newly deployed large-scale renewable energy cost is lower than traditional fossil fuel energy.[12]

New National Guidelines on Climate Change

On Jan. 11, 2021, China’s Ministry of Ecology and Environment (MEE) published the Guideline on Coordinating and Reinforcing Responses to Climate Change and Protection of Ecological Environment. Following up Xi’s carbon peak and neutral pledges, the guideline made it clear that countering climate change will be a critical part of China’s macroeconomic governance. Carbon reduction must be coordinated throughout the entire economy with unified planning, implementation, and reviewing systems. The guideline stated that China will accelerate the compilation of action plans for peak carbon emission, including specific plans for energy, industry, transportation, and construction. The steel, cement, nonferrous metals, chemicals, petrochemicals, electricity, and coal mining industries are encouraged to set targets and make action plans. Climate change legislation will be promoted, particularly the Regulations on Carbon Emission Exchange, and climate change standards will be amended to better evaluate carbon emission reduction.[13]

Also, the MEE and National Development and Reform Commission, People’s Bank of China, China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission together issued another guideline on Promoting Climate Change Investment and Financing (PCCIF) on Oct. 21, 2020. It aims at leveraging social capital to invest in areas related to climate change such as energy structural change, industrial optimization, production, and consumption modes, to meet the target of Nationally Determined Contributions and creation of a low-carbon society. One key part of the PCCIF is to encourage private and foreign capital to enter into climate investment and financing, in which carbon emission trading mechanisms will be further developed and foreign holding of green financial assets will be facilitated. Bilateral and multilateral cooperation on climate change investment and financing are also welcome.[14]

To answer China and other member countries’ call, Asia Infrastructure Investment Bank has promised to stop financing any coal-fired power plant or coal-related projects. By 2025, AIIB plans to allocate 50% of its loans to clean energy, energy conservation and efficiency, and climate change projects. Private capital will also be leveraged to participate in green projects.[15]

Biden’s Climate Change Plan and China

Since the term “Green New Deal” (GND) was first used by Thomas Friedman in January 2007 to describe the massive and comprehensive work that the U.S. government must do to avert climate calamity, the United Nations, President Obama, and Green Party candidates have all borrowed the concept to summarize their own climate policies that aim to make systemic changes. The Trump administration’s negligence and obstruction of climate policies has prompted the Democratic left, represented by U.S. Rep. Alexandria Ocasio-Cortez, to push for an epic Green New Deal to overhaul the American economy.[16] Though Joe Biden did not endorse the plan while a presidential candidate, he and his climate change team agree with the goals and principles contained in the GND.

During the campaign, Biden’s “Clean Energy Revolution” on climate change also took a bold stand, just on a less ambitious time frame and at a lower cost than the GND. It promised to take detailed climate actions in the transportation, electricity, construction, and agricultural industries, and to invest a total of US$2 trillion for job creation and environmental justice. The Biden plan commits the U.S. to reach carbon neutrality by 2050, achieve complete carbon-pollution-free electricity generation by 2035, adopt rigorous greenhouse gas and fuel economy standards for vehicles, establish an Energy Efficiency and Clean Electricity Standard for buildings and construction, create a new Advanced Research Projects Agency for Climate to support low-carbon technologies, plug abandoned oil and natural gas wells and reclaim abandoned mines, make American agriculture the first in the world to achieve net-zero emissions, create a climate and economic justice screening tool to identify disadvantaged areas, and establish an Environmental and Climate Justice Division within the Justice Department.[17]

Internationally, the Biden plan touches on the U.S.-China relationship in some detail, but the undertone of the plan is competitive, not cooperative. It specifically ties trade and climate policy, raising the concept of a carbon adjustment tax or quota on carbon-intensive goods. It even suggests conditioning future trade agreements on China’s commitment to meeting the Paris Agreement targets. On green technology and supply chain, John Kerry, the newly appointed presidential envoy for climate, argued in December 2019 that the U.S. is in a “green race” with China and it would be a geopolitical failure if China were to outrun the U.S. in innovation and green technology.[18] The plan extends and reinforces the “Buy American” policy with a view to build a more resilient supply chain domestically, including for electric vehicles. The Biden plan also takes a hardline on the Belt and Road Initiative, recommending alternative financing for low-carbon investments in BRI projects to replace Chinese sources. The plan seeks to hold China to high environmental standards for BRI’s infrastructure projects and to stop China from exporting or subsidizing coal-fired power plants to BRI countries.

The lack of a positive and cooperative plan with China on climate change in the Biden agenda shows the pervasive influence over American politics of the “tough on China” mentality. But in professional circles, the discussion of bilateral climate change cooperation is extensive, and hope resides in the fact that many China experts on the Biden team came from the Obama administration that used to be quite constructive on climate collaboration issues. Biden’s long political career and experience as well as his personal relationship with Xi may prove vital in overcoming the obstacles to climate change cooperation between the U.S. and China. Besides, local governments, NGOs, and businesses are all waiting and calling for the restoration of bilateral cooperation on climate, adding pressure to the two governments to act as soon as possible.

Recommendations for Climate Change Cooperation

On Aug. 7, 2020, when China-U.S. relations were rapidly deteriorating, Yang Jiechi, Politburo member and director of the Central Foreign Affairs Commission of the CPC, published an article on bilateral relations. Yang listed energy, law enforcement, drug control, local exchanges, and people-to-people as potential areas for bilateral cooperation, and the Korea peninsula, Afghanistan, the Middle East, cybersecurity, climate change, and public health as potential global issues for cooperation.[19] Since climate change and public health are top priorities for the Biden administration, China has identified climate change as a forefront issue for bilateral cooperation. As Chinese State Councilor and Foreign Minister Wang Yi said in a virtual meeting on Dec. 18, 2020, China will not only firmly implement its Paris Agreement commitments, but also seek to work together with the U.S. to jointly contribute to the global response to climate change.[20]

However, the Trump administration has burned the bridge on climate cooperation over the past four years. It suspended the China-U.S. Ten-Year Framework for Cooperation on Energy and the Environment (2008–2017), canceled the CCWG, and froze the China-U.S. Clean Energy Research Center. Moreover, U.S. tariffs and sanctions against China in the name of “national security” are so extensive, it becomes a web of barriers that are blocking progress on climate cooperation. Under the icy diplomatic relationship and poisonous political environment, any talk of cooperation with China in Washington, D.C., will be met with a long list of Chinese wrongdoing and the claim that the past policy of U.S.-China engagement was a fiasco. Therefore, how and when China and the U.S. can resume bilateral climate actions remains uncertain.

Climate change, on the other hand, is not waiting for human disagreements to dissolve. The year 2020 tied with 2016 as the hottest year on record, making the last decade the hottest on record as well. Temperatures soared the most in the Arctic and northern Siberia, reaching more than 6°C above average and causing weather abnormalities all around the world.[21] The cost of inaction or weak response is no longer bearable to humankind, and such a global emergency demands a decisive global response, particularly a China-U.S. coordinated one.

Recommended Bilateral Actions

The Biden administration is opening a window of opportunity for the U.S. and China to resume and upgrade their climate change cooperation. On one hand, Biden didn’t waste any time moving forward with his climate agenda by signing two executive orders, one to return to the Paris Agreement and the other to rescind permits for the Keystone XL pipeline, on his first day in office. On the other hand, Biden’s goal of making the U.S. carbon-neutral by 2050 has realigned America with all major countries in the world, particularly China, which aims for carbon neutrality by 2060. The reversal of climate change policy in the U.S. coupled with the pursuit of high quality and sustainable development by China may lay the foundation for a durable cooperative relationship on climate. Considering the current situation of bilateral relations, solid progress on climate cooperation could help rebuild mutual trust and provide a model for cooperation in other areas. From the good lessons of the past cooperation, China and the U.S. could start with the following actions.

> Rebuild Diplomatic Ties and Confirm Cooperative Intentions

During the last days of the Trump administration, almost all meaningful communications between the two countries were cut off or stalled: The U.S. consulate in Chengdu and the Chinese consulate in Houston closed, diplomats’ activities severely limited, journalists expelled, officials and companies blacklisted and sanctioned. Before there is any form of cooperation, it is extremely urgent to reopen channels of communication and to rebuild the basic working relationship between China and the U.S.

In the meantime, the two sides need to arrange for high-level climate change officials to talk over the phone or through online meetings, and meet in person when possible. U.S. climate envoy John Kerry and Chinese climate envoy Xie Zhenhua should discuss and confirm each side’s intention for cooperation, the scope of that cooperation, the mechanism for negotiation and coordination, and short-term goals for confidence-building.

> Restart the US-China Climate Change Working Group (CCWG)

Presidents Xi and Biden could either renew the Obama-era CCWG and grant the group wider authority or establish a new cross-agency comprehensive platform to cover the growing range of climate change issues. Either way, it is important that senior politicians who are heading the two teams directly report to the top leadership in each country.

The CCWG was created under the Strategic and Economic Dialogue, but it is not clear what kind of high-level framework will be established during the Biden administration. The CCWG or the new platform should have an independent mechanism. It will also be a plus if both teams could have advisory bodies consisting of top scientists, business leaders, and professional civil servants from both countries to provide constructive advice. Other climate change agreements like the China-U.S. Ten-Year Framework for Cooperation on Energy and the U.S.-China Clean Energy Research Center should be reinstated and fully funded.

> Focus on Rule-Making and Global Standard-Setting

Previous U.S.-China climate change cooperation focused on detailed action plans and environmental projects. Both countries developed and updated their domestic environmental rules and climate change-related standards over the years. With climate change policies entering a new stage, it is more important now to focus on formulating international standards for green buildings, transportation emissions, electricity generation emissions, industrial pollution, and so on. At the center of the carbon-neutral revolution is the question of carbon pricing and carbon emission exchange. Without global negotiation and collaboration on rulemaking for pricing and exchange, is hard to imagine how to set up a large and efficient global market to drive down greenhouse gases.

In addition, intellectual property protection on green technology and financial rules specifically designed to encourage green investment are also indispensable for the proper function of the market to transition societies to a low-carbon footing. The key content of the Phase One trade deal between China and the U.S. is intellectual property protection. China has modified domestic laws to enhance IP protection accordingly. Both countries could preserve and improve on the terms of the Phase One agreement and make them more relevant to green technologies. China and the U.S. could also lead such efforts in other international forums and institutions, such as the G20, World Bank, development banks, Asia-Pacific Cooperation, and the World Trade Organization.

> Empower Local Governments and Non-State Actors

China-U.S. exchanges on the local level (provincial/state, municipal) were very active before the COVID-19 pandemic, and local climate change cooperation was a critical component in the overall climate actions framework. The two countries need to renew and increase not only channels of dialogue to support continued local governments’ cooperation, but also promoting think tank dialogues, people-to-people exchanges, and public-private green projects. Back in 2015 and 2016, the U.S.-China Climate Leaders Summits, which connected major states, provinces, and cities in the two countries through shared climate goals, is a good example of how local and nonstate actors can grow more active and find innovative ways to counter climate change with the support of the two countries. More conferences, exhibitions, green tech tours, and training programs should be developed to sustain close ties between the two societies, which in time will generate higher and wider popular support in both countries for their climate change cooperation.

> Promote Joint Research on Next-Gen Green Tech

Technological competition between China and the U.S. is one of the most talked-about topics in the past couple of years. In response to real or imagined threats from China, the Trump administration launched a crusade against bilateral ties in science and technology. Scientists were prosecuted, federal funding to collective works was cut, Chinese students’ visas were restricted, and Chinese mergers and acquisitions of U.S. tech companies were scrutinized. Many believe that the so-called “decoupling” in high tech is inevitable. But without the flow of knowledge and know-how, green innovation will be delayed or disrupted, and the dissemination of green tech will be slow and costly. If both countries want to accelerate the implementation of the Paris Agreement, they must exempt the majority of next-gen green tech researchers from excessive national security or military control lists. A negotiated negative list on certain types of tech should be published and the rest should switch back to normal research cooperation in both countries. There should also be a joint program to finance the deployment of new green tech to the poorest developing countries in addition to the existing programs.

Lasting cooperation between China and the U.S. will bring a wide range of changes in green tech innovation, electric grid decarbonization, green financing standardization, and green trade regulation, giving the private sector, R&D facilities, global financial institutions, and multilateral organizations more incentives to collectively invest in a great transition toward a low-carbon future. To prevent more climate catastrophe, China and the U.S. must work together closely and look beyond the short-term political fluctuations due to trade friction and geopolitical competition. In the end, we share the same fragile habitat, and nothing surpasses the utmost importance of preserving it for posterity.

For references, please click here.

How to Restore China-U.S. Dialogue

By Liu Ying

Introduction

During President Donald Trump’s term in office, China-U.S. relations deteriorated. In 2018, The Trump administration announced sweeping tariffs on Chinese imports, worth at least $50 billion. China also imposed retaliatory measures, and then the China-U.S. trade war started and escalated in the following years.[1] The two sides signed Phase One Economic and Trade Agreement (POETA) in 2020, and the trade war mitigated temporarily. The United States and China also had frequent conflicts in terms of democracy and human rights,[2] technological exchanges,[3] and personnel mobility[4] during the last few years. In July 2020, the two countries even closed each other’s consulates, and the conflict between the two countries further escalated.

Despite the growing tension between the two countries, the United States basically cut off bilateral dialogue at all levels. However, China-U.S. dialogue and cooperation is needed to fight COVID-19, tackle climate change, promote world economic recovery and address other global issues.[5] On Jan. 20, 2021, Joe Biden became president. It is imperative that he restart the dialogue between China and the United States. In addition, a normalized dialogue mechanism needs to be established, and the dialogue should be timely and frequent. The phone call between Chinese President Xi Jinping and Biden on Feb. 11, 2021, was a positive step in that direction.[6]

This report will focus on the following two topics:

> How to carry out the dialogue: China and the United States need to establish dialogue mechanisms at all levels, modeled on the historical dialogue mechanism.

> Specific content of the dialogue: The content of the dialogue must involve not only the bilateral concerns of China and the United States, but also global governance issues. Although the two countries have many differences and points of conflict, they also have common interests that should be discussed and pursued for their mutual benefit.

Dialogue Mechanisms

In the past couple of years, the official high-level dialogue between China and the United States has almost stopped, and the danger of miscalculation in China-US relations is heightened. Normally, differences can eventually be resolved through communication based on understanding the two sides’ common interests.[7]

The purpose of dialogue is to clarify facts, eliminate misunderstandings, avoid misjudgments, and curtail misinformation in order to maintain space for improvement of China-U.S. relations in the future.[8] If the dialogue is timely and effective, it may affect the Biden administration’s policy and attitude in certain areas. Only communication can dispel falsehoods, and only dialogue can prevent miscalculation. That is why it is necessary to make timely arrangements and adjustments to the dialogue content and strategies.

“China and the United States should re-establish various dialogue mechanisms, accurately understand each other’s policy intentions, and avoid misunderstanding and misjudgment,” Xi said during the Feb. 12 phone call with Biden.

Before the creation or re-establishment of any dialogue mechanism, three matters should be taken into consideration:

> When to have a dialogue: In theory, the dialogue between the two governments needs to be ongoing and uninterrupted. Nongovernmental organizations such as think tanks, trade associations, and businesses in both China and the United States can also engage in dialogue.

> Whom to talk to: The conversation should not be confined to China and the United States. In the future of global governance and international affairs, Western countries that share the same values as the United States should also be involved.

> How to have a dialogue: The main body of the dialogue should be broad, it could take a variety of forms, and the issues addressed should be comprehensive.

There are two principal approaches the nations could take:

On the one hand, China and the United States could restore previously established strategic high- level dialogue mechanisms and add others where needed.

The best-known mechanisms is the Strategic Economic Dialogue initiated by Presidents George W. Bush and Hu Jintao in 2006. A total of five meetings were held between 2006 and 2008. On April 1, 2009, Hu and President Barack Obama announced the establishment of the U.S.-China Strategic and Economic Dialogue (S&ED), replacing the SED. The Comprehensive Economic Dialogue (CED) was established by Trump and Xi in April 2017 to address and resolve many economic issues. This high-level bilateral economic forum was abandoned after Trump initiated a trade war with China.[9]

China and the United States also have dialogue through the Joint Commission on Commerce and Trade Meeting, and the Joint Commission on Science and Technology Cooperation Meeting.

Other dialogue mechanisms like the trade framework groups, macroeconomic meetings and the bilateral assessment and dispute resolution offices[10] should be maintained. To further improve the dispute settlement mechanism under POETA, China and the United States should allow disputes to be submitted to an expert group or an independent third party for adjudication.

On the other hand, China and the United States could make full use of dialogue platforms and channels established by civil society, including:

Think tanks and other nongovernmental organizations, which have high flexibility and can effectively communicate and convey intentions because of their unofficial nature and professionalism.

The China-U.S. Great Mekong Subregion (“GMS”) Cooperation Dialogue Forum established by Kunming South Asia and Southeast Asia International Logistics Research Institute and U.S. Stimson Center to discuss transportation and logistics, water resources development and international cooperation, energy and infrastructure projects, environmental protection, regional foreign policy and regional security, and other topics concerning international regional governance.

There should be more youth exchange mechanisms to inject vitality into China-U.S. relations. Young people, especially young leaders, should play more roles in China-U.S. exchanges.[11]

To sum up, by establishing a multilevel, point-to-point communication mechanism and making it the norm, the two countries can better reduce specific differences, achieve common goals, and avoid potential conflict.

Issues to Address through Dialogue

WTO Reform

The United States, Japan and the European Union have agreed on the need for World Trade Organization reform.[12] The Office of the U.S. Trade Representative has made it a major priority. China has always supported the role of the WTO in international trade and endorses necessary reforms to ensure the the WTO’s  survival.[13] However, the United States and other members have defined too many controversial issues as “China problems,” such as forced technology transfer, nonmarket economy practices, etc.

Recommendation:

> Starting from the common willingness to promote WTO reform, China may, through dialogue, suggest the United States distinguish between Chinese and non-Chinese factors and put forward corresponding solutions.[14] The discussion should prioritize non-Chinese issues through bilateral dialogue mechanisms, reconcile differences and divergences outside the WTO framework, and set aside matters with Chinese issues that are currently irreconcilable because of differences in economic models and values.

Digital Trade and E-Commerce

At the informal ministerial meeting on e-commerce on Jan. 25, 2019, 76 WTO members, including China and the United States, signed the Joint Statement on Electronic Commerce, confirming their intention to launch plurilateral negotiations on trade-related electronic commerce issues.[15] On April 24, China, the United States and eight other members, issued the first round of proposals through the WTO.[16] Seven rounds have been held since, and some consensus has been reached on improving the facilitation and transparency of e-commerce, protecting online consumers, and promoting the participation of small and medium-sized enterprises.[17] As large players in digital trade and e-commerce, China and the United States have some consensus on the protection of intellectual property rights and technological innovation, income distribution (collection of digital taxes), network security, and national security. But there are still differences on some specific issues such as the definition and scope of e-commerce[18] and the treatment of network equipment and products.[19]

Recommendation:

> In spite of some differences, both countries have incentive to make a new agreement, thus their consensus can serve as the basis for dialogue to bridge differences and to jointly promote a standardized, convenient, secure, and credible e-commerce trading and market environment.[20] China can respond positively to the expansion of digital trade and to strengthening the protection of intellectual property rights in digital trade.[21] The United States could partly respect China’s insistence on the nondiscriminatory treatment of Chinese enterprises and the development orientation.[22] Taking the protection of national security as the bottom line, the two countries may set national security exceptions while establishing a digital trade relief system with a high standard of rules.[23] 

The Coordination of Digital Tax

A report on a special investigation of trade barriers, issued in December 2019 by the Office of the U.S. Trade Representative, found that France’s taxation practices regarding digital services discriminated against American businesses[24] in violation of Articles 2 and 17 of the General Agreement on Trade in Services (GATS).[25] In the “Belt and Road Initiative” (BRI), Chinese digital enterprises also face the problem of collecting digital tax.[26] More and more countries with underdeveloped digital economies may levy digital service taxes on foreign digital enterprises, so China and the United States have broad consensus and interests in the international coordination of digital service taxes.

Recommendation:

> The two countries should actively participate in meetings and forums related to digital trade rule formulation under the United Nations, the Organization for Economic Co-operation and Development (OECD) and the WTO, oppose the abuse of digital taxes and the discriminatory imposition of unilateral digital tax measures, and safeguard the interests of consumers and digital enterprises.

Reforms that Dialogue Could Bring

WTO Reform

Special and Differential Treatment

Both the United States and China recognize that special and differential treatment (SDT) rules are no longer in line with current reality and SDT for underdeveloped members is an urgent problem that needs to be improved through negotiation. In the view of the United States, the applicable basis of SDT no longer exists.[27] The U.S. argues that China, India, and other advanced economies should follow the same rules that bind America, the European Union, and Japan.[28] Having made the definition of developing members and related SDT rules a key priority for WTO reform, the United States also proposed four criteria.[29] Furthermore, it suggested that SDT should not be applied automatically.[30] The U.S. proposal aroused strong opposition from developing members. China, India, South Africa, and other countries put forward counterproposals, suggesting that the North-South gap has not been substantially narrowed and developing members continue facing difficult development problems.[31] In China’s view, debate on the criteria for distinguishing developing members is meaningless, and WTO should continue to support the better integration of developing members into global value chains and continue to guarantee the SDT that developing members deserve.[32]

Recommendations:

> For the United States, developing member status is a political issue. If the United States wants to break through the current impasse, it needs to separate developing membership from SDT in future negotiations[33] and temporarily maintain the original “self-identification” approach. A proposal by members such as Norway suggested that reform should proceed in a direction that balances the rights and obligations of the 164 members with different levels of development.[34]

> For China, the separation of developing members from SDT would be more conducive to the current North-South conflicts easement within the WTO frame. On this basis, China can consider accepting reform proposals on adjusting the content and application of SDT, such as narrowing the scope of application of SDT, introducing a graduation mechanism.[35] After all, a clear definition of developing members is inevitable. While still insisting on developing member status and advocating SDT, China needs to respond to the concern of the United States and assume more international obligations in line with level of development.[36]

Notification and Transparency

It is of great importance to strengthen and enhance transparency and improve the operation and effectiveness of notification requirements, and all members should contribute to it. However, the United States proposed that punitive measures[37] should be imposed on members that fail to provide required notification on time,[38] and counternotification should be applied. China disagreed.

Recommendations:

> Formulate more specific rules for counternotification. What needs more attention is how to avoid the abuse of counternotification and improve the quality of notification. China and the United States should communicate to formulate more specific rules. For example, let prior communication, discussion, or attempts to resolve the matter bilaterally be the precondition of counter-notification;[39] require the member that conducts counternotification to provide sufficient and material evidence.[40]

> Abandon punishment mechanisms. It’s not feasible to formulate a new punishment mechanism due to the current overwhelming obstacles,[41] and no punishment mechanism can fundamentally solve the problems in the practice of transparency and notification. Therefore, it would be better for the United States to abandon its punishment mechanism proposal and work with China to seek more practical methods, such as procedures for bilateral or multilateral consultations and the review of declared measures after counternotification.

> Simplify procedures. Due to the complexity of current rules of notification, less stringent notification obligations and simplified procedures may improve the implementation of WTO notification obligations.[42] China and the United States should cooperate in this area.

> Establish a specific institution. The two countries could jointly propose to establish a working group on notification obligations and procedures responsible for managing transparency and notification affairs, as mentioned in the United States’ proposal.[43]

State-owned Enterprises

China and the United States both recognize the importance of a fair and free competitive environment. State-owned enterprises (SOEs) should participate in international trade on a commercial basis in conformity with the principle of nondiscrimination. The U.S. National Security Strategy Report, released in 2017, alleged SOEs obtained advantages through unfair trade. Since 2017, seven trilateral ministerial meetings driven by the United States have been held to reach a consensus on addressing other countries’ so-called market distortions, pointing directly to China and its SOEs. From the Trans-Pacific Partnership Agreement (TPP) to the U.S.-Mexico-Canada Agreement (USMCA), the United States tightens SOE rules and strengthens the discipline of SOEs at the international level. China believes that SOEs are commercial entities in essence. China cannot accept the establishment of additional rules for SOEs, nor should there be discrimination or additional restrictions based on ownership differences.[44] Subsidies on SOEs are another focus of the disputes between China and the United States.

Recommendations:

The conflict between China and the United States on the issue of SOEs cannot be reconciled, but in the context of WTO reform, it is necessary for the two to increase dialogue to prevent the whole process from being delayed by the differences on SOEs.

> The United States has the right to propose new rules for SOEs, but it needs to recognize that China is not the only WTO member with a large number of SOEs; it must take into account the interests of other relative members when making reform proposals. The United States could try to address some of its concerns through bilateral agreements with China.

> China should agree to negotiate the rules of SOEs under the WTO framework to make full use of its discourse power to avoid the unfavorable situation of passive acceptance. It also should consider adopting different negotiating positions in each specific area. China can commit to some obligations in line with its SOE reform goals step by step, such as “competitive neutrality.”[45] Meanwhile, China should advocate ownership neutrality and oppose tailoring a set of rules to restrict the development of SOEs.[46] A fairer allocation of subsidies rather than an allocation designed to favor SOEs is needed. China could distinguish SOEs whose main business involves essential national economy and people’s livelihood from those in the fully competitive industries and fields that should not be granted subsidies, while continuing its traditional measures and providing preferential policies to them.[47]

Subsidies

The rules of subsidy need to be clarified and improved, and all members need to gradually reduce subsidies. The United States attempted to expand the range of prohibited subsidies and actionable subsidies, while China argued that non-actionable subsidies should be reinstated and its coverage should be expanded. On overcapacity, the United States argued that China’s subsidies led to overcapacity and even distorted the market, which should be directly included in the scope of “Serious Prejudice” mentioned in Article 6.3 of the Agreement on Subsidies and Countervailing Measures (ASCM). However, in China’s view, the reasons for overcapacity were diverse, and it was wrong and one-sided to blame the overcapacity problem solely on subsidies.[48]

Recommendations:

> Each country should review its own subsidies and gradually eliminate those that are not in compliance with WTO rules. China needs to formulate more systematic subsidy regulations. In particular, China should improve the statistics and notifications of subsidies granted by sub-central entities since the insufficient notification of such subsidies has been strongly criticized by the United States. The United States has both incomplete and excessive notification.[49] Some subsidies in the United States still belong to actionable subsidies and may even fall into the scope of prohibited subsidies. Besides, the huge agricultural subsidies in the United States cause market distortions. The United States needs to adjust the scale and structure of its subsidies.[50]

> Focus on promoting subsidy reforms under WTO. China and the United States should focus on cooperating to promote subsidy reforms under the WTO, including establishing more detailed and specific subsidy rules, preventing abuse of trade remedy measures, and maintaining normal trade order.

National Security

National security exceptions are a necessary “safety valve” reserved in the WTO Agreements, and members’ right to resort to the exception should be respected. However, the United States has frequently sanctioned Chinese companies on the grounds of national security recently, seemingly in violation of WTO obligations. China called on the United States to act in good faith and exercise restraint in resorting to national security exceptions.[51] Besides, while China believed that the panel and appellate body had jurisdiction over such issues,[52] the United States opposed such jurisdiction.[53] China claimed the United States used national security provisions to undermine WTO rules.[54]

Recommendation:

> China should continue supporting the jurisdiction of of the Dispute Settlement Body (DSB) on national security exceptions and the principle of acting in good faith, and attempt to promote its views to be more widely recognized among members. The United States should apply national security exceptions prudently, especially when the measures it takes are not consistent with WTO Agreements. At any time, unilateralism and protectionism run counter to global cooperation. Dialogue is the best way to settle disputes. Even if it fails, the two countries should resolve their disputes through existing dispute resolution mechanisms such as the DSB rather than imposing unilateral sanctions.[55]

Market Economy

The United States demanded that the WTO formulate new rules with “like-minded” members to prevent economic distortions caused by China’s state capitalism, and continues to invoke Article 15 of the Protocol on the Accession of the People’s Republic of China (the Protocol) after its expiration.[56] The United States, Japan, and the European Union not only do not recognize China’s market economy status, but also coordinated their positions and set seven new marketing standards.[57] China stated that “common sense issues like market orientation do not need to be discussed at the General Council”[58] and opposed any denial of the diversity of development models and any discrimination against different development models in WTO reform. “We should take concrete actions to address the above wrongful practices which undermine the fair competition and market-oriented conditions,” China declared, and welcomed consultation and dialogue instead of chanting the empty slogan of “market-oriented conditions.”[59]

The WTO has never required members to be a market economy system, and never even defined what a market economy is.

Recommendations:

> China could bring the relevant provisions of the Protocol in relation to market economy[60] to the WTO General Council or ministerial meeting for clarification. Additionally, China could unite some members concerned about the very strict standards set by the United States. China should also carefully study the legislation and measures of the United States on the “non-market economy” and make a positive response, and strive to obtain more official recognition of its market status by other members.[61]

> The United States should abandon its seven criteria under the WTO framework, since there is no concept of a “non-market economy country” in the WTO rules or direct link between “non-market country” identification and the performance of obligations under WTO. The differences in economic models and values between the two countries have always been huge and difficult to bridge effectively in a short term. The two countries should not continue to argue on this issue, and more attention should be paid to urgent issues with more mutual interests, such as the reform of the Appellate Body.

Reform of the Appellate Body

China and the United States both are willing to reform the Appellate Body; specifically, they both want to resolve the problem of overdue reports. They and other members may, through successful dialogue on this issue, exchange their views and concerns on other problems, especially those criticized by the United States, such as domestic law, de facto precedent, judicial ultra vires in trade relief, etc.

Consequences of overdue reports

The United States advocated a change in adoption means from negative consensus to consensus once an Appellate Body report is overdue. However, its proposal would lead to more delay and complexity in the adoption of the report, and even a change in the DSB mechanism. China and most other members stressed that the report should be adopted by the DSB under Article 17.14 of the DSU.

Recommendations:

> It is suggested that the United States abandon the proposal on the change of adoption means and work with other members to find ways of ensuring an on-time report. In fact, the Multi-Party Interim Appeal Arrangement (MPIA) has introduced two innovative provisions: One is to allow the disputing parties to agree to an extension of the 90-day period, based on the recommendation of the arbitral tribunal;[62] the other is to allow the arbitral tribunal to take appropriate measures to streamline the proceedings, including page limits for submission of documents and decisions, effective control of the time of arbitration proceedings, and limitations on the number and duration of hearings, etc.[63]

Domestic law

According to the United States, the Appellate Body had no right to review the meaning of the domestic law of WTO members,[64] which is a matter of fact and does not fall within the jurisdiction of the Appellate Body.[65] Members such as China, European Union, Canada ,and India agreed.[66]

Recommendation:

> China and the United States should together suggest clarification of the legal issues and the legal interpretation in Article 17.6 of DSU,[67] and make clear the jurisdiction of the Appellate Body under Article 11 of the DSU should include objective review by the Panel, but not of the domestic law itself.[68]

De facto precedent

The United States challenged the Appellate Body’s request to follow a precedent, arguing its report should not be parallel with WTO rules. China believed that a de facto precedent could guarantee uniformity in the application and interpretation of WTO rules, satisfy the objectives of reliability and predictability of the multilateral trading system, and protect the reasonable expectations of its members. The essence of the U.S. objection is to seek justification for the Panel’s departure from the Appellate Body’s decision at the legal level.[69]

Recommendations:

> Except for the United States, almost all other members agreed with the de facto precedent approach.[70] It is suggested that China and the United States can learn from the experience of the precedent application by the International Court of Justice.[71] Attention should be paid not only to the rules themselves but also to the differences of the case and the explanation in individual cases.

Judicial ultra vires in trade relief

The United States strongly criticized the so-called “ultra vires” interpretation in trade relief cases by the Appellate Body and explicitly proposed to amend the DSU to strengthen the control of WTO members.[72] However, the U.S. proposal did not receive a positive response from other WTO members. China hasn’t expressed any view on this issue.

Recommendations:

> China and the United States should propose a special review mechanism upon those challenged ultra vires reports.[73] It is also suggested to delete the obligation of the Appellate Body in Article 3.2 of DSU to “clarify” the provisions of the Agreements under WTO, or to change Article 3.2 so that the Appellate Body can “clarify” the application of the relevant provisions only to resolve the current dispute.[74]

China-U.S. Agreements on Trade and Investment

While the views by China and the United States do not fully represent the position of all WTO members, they have significant impacts on promoting consensus on reform. Numerous issues, such as SOEs, subsidies, market economy, technology transfer, and national security, are related to both China-U.S. bilateral relations and WTO reform. Consultations on these issues are not confined to the WTO negotiating table; bilateral dialogue mechanisms can also provide a venue for negotiations on matters related to global governance.

Continue to Implement the Phase One Economic and Trade Agreement

China and the United States have a consensus on continuing to implement POETA. [75]However, the United States believes that China is still a long way from the purchase commitment. The obstacles for China to fulfill the commitment are the outbreak of the COVID-19 epidemic and the improper measurement standards[76]. The United States will keep tariffs imposed on Chinese goods by the former Trump administration in place but will decide how to proceed after a thorough review.[77]

Recommendation:

> Based on dialogue, China shall continue to implement POETA, and it is hoped that the United States may further and sincerely consider the issues of tariff reduction.

Consider the Phase Two Economic and Trade Agreement

Biden’s attitude toward signing a new agreement is uncertain since he has prioritized domestic economic recovery in the first weeks of his presidency.[78] China has not yet made a clear statement on the Phase Two Economic and Trade Agreement (PTETA) negotiation, but Chinese Foreign Minister Wang Yi made it clear that China and the United States should strengthen dialogue and economic and trade cooperation.[79] However, the prospect of PTETA is dark. The formation of an independent Asia Pacific Industrial Chain under the Regional Comprehensive Economic Partnership Agreement (RCEP) reached this year may reduce China’s willingness to compromise to a certain extent.[80] Biden has said that POETA “cannot solve the core issues in dispute, including industrial subsidies, support for state-owned enterprises, cyber theft and trade and technology plunder.”[81] It can be deduced that these issues are what Biden hopes to negotiate, but also the issues where the two countries are deeply divided.

Recommendation:

> It can be expected that the economic and trade dialogue between China and the United States will gradually resume in 2021. PTETA negotiations may also have an opportunity to begin. China and the United States should prepare for possible negotiations by listing in advance what issues they want to discuss and hold all-level dialogues before the formal negotiation.

Motivate the Signing of China-US BIT

The complementarity of the Chinese and U.S. economies is the driving force for China-US Bilateral Investment Treaty (BIT). With the signing of the China-US BIT, both sides can use each other’s strengths to achieve long-term and sustainable development. But China and the United States have divergences on the negative lists, transparency, the availability of information, and national security review. Also, the United States has accused China of oppressing foreign enterprises and forcing them to transfer technology in exchange for market access and has been trying to expand the prohibition of performance requirements under the Agreement on Trade-Related Investment Measures (TRIMs). China’s Foreign Investment Law stipulates the implementation of the “list of negative admissions,” establishes “transparency” as the basic principle, and proposes equal treatment of foreign-funded enterprises and voluntary technology transfer. Compared with the negative list in 2019, the negative list in 2020 reduces the number of restrictive measures from 40 to 33, with a reduction of 17.5%; in 2020, the negative list of free trade zone reduces the number of restrictive measures from 37 to 30, with a decrease of 18.9%.[82] In the past, China rarely mentioned performance requirements, and it has made great concessions[83] on the issue of performance requirement; thus it is almost impossible for China to adopt even stricter prohibition of higher performance requirements.[84] The United States advocated that there should be clear clauses on labor and environment and the standards should be continuously improved. In recent years, China has realized that it is unsustainable to develop by harming the environment and therefore has put more emphasis on improving labor and environment.

Recommendation:

> EU-China Comprehensive Agreement on Investment (EU-China CAI) negotiation was completed on Dec. 30, 2020, while China-US BIT negotiation started in 2008 but it is still unfinished. China and the United States should try to eliminate the divergences on investment. On the above-mentioned issues, China has made great concessions, but there are still great divergences, especially about SOEs. The United States advocated “ensuring State-owned enterprises compete with private enterprises on a commercial basis”[85] and hoped that all obligations under the future China-US BIT could be effectively applied to state-owned enterprises. SOE is the feature of China’s characteristic development model. China highly respects the important role of the market in allocating resources, but also allows state-owned enterprises to play an important role in economic development. Centralizing national advantageous resources and tackling strategic innovation projects with the help of SOEs precisely reflect the efficiency and vitality of market economy with Chinese characteristics.[86

Technology control

Limit the scope of technology control

China and the United States have different views on the control of technology. The U.S. believes the extraterritorial jurisdiction effect of its domestic law is authorized by the principle of person and is for national security. China believes the United States excessively expanded the principle of person by excessively defining national security and implementing long-arm jurisdiction over China. Restricting the application of technology control and reducing the restrictions on product export are beneficial for domestic enterprises to obtain a larger foreign market. Expanding the market is of great significance for enterprises to overcome the blow of the epidemic, to create more employment opportunities, to attract foreign investment, and to improve innovation ability. It is also beneficial to restore the normal operation of the supply chain, whose upstream and downstream enterprises are interdependent and inseparable. What’s more, developing the technological advantages of the United States and the production capacity of China is conducive to dealing with issues concerning global governance.[87] Dialogue is needed to find a balance point.

Recommendation:

> Both sides should delimit the scope of national security and improve the transparency of the national security review process, including the review basis and detailed procedures. Both sides must try to reach a consensus to adopt the practice of the trilateral investment agreement among Japan, the Republic of Korea and China, which reiterates the obligations in TRIMs and limits performance requirements to certain specific investments. Both parties should apply restrictive technology regulation prudently. The United States should not broaden the concept of national security and expand the application of domestic laws excessively. China should adhere to the principles of prudence, appropriateness, nondiscrimination, and transparency, and strive to strike a balance between safeguarding national security and achieving win-win global cooperation.

Capital Market

While more and more Chinese enterprises list in the United States to raise funds, the American capital market also needs to list Chinese companies. Recently, American regulators have frequently accused Chinese enterprises of falsification of financial reports and insufficient disclosure of audit reports and have proposed effecting a transparency and disclosure act. On Dec. 18, 2020, Congress passed the Holding Foreign Companies Accountable Act and President Trump signed it into law. A bill called the Ensuring Quality Information and Transparency for Foreign Listed Companies on our Exchanges Equitable Act (Equity Act), a sister act of the Foreign Holding Company Liability Act, is pending approval in Congress. Both acts directly affect the Chinese companies that have been listed or intend to list in the United States. If they fail to meet the requirements of the Holding Foreign Companies Accountable Act, Chinese companies will be excluded from trading or will not be allowed either to apply for listing or to issue new shares. The China Securities Regulatory Commission sincerely pursues dialogue with the Public Company Accounting Oversight Board about the transparency criteria, joint on-site inspection in listing Chinese corporation and treatment for misconduct.

Recommendations:

> China should actively negotiate with U.S. regulatory authorities to meet the requirements of the Holding Foreign Companies Accountable Act and the Equity Act through joint inspection, and to urge the U.S. authorities to respond to the joint inspection plan proposed by Chinese authorities. At the same time, China should seek to delay the implementation of the Holding Foreign Companies Accountable Act and passage of the Equity Act. Both the U.S. Securities and Exchange Commission and the U.S. stock exchanges have pointed out that the two acts against Chinese companies listing in the United States may lead to a great loss of Chinese companies, weaken the confidence of global investors in the United States capital market, and impair the international status of the United States as a global financial center. They believe that the market-driven approach, including stricter supervision of the U.S. branches of accounting firms, is a more viable option. Under the severe impact of the COVID-19 epidemic, the United States government may not want to drive away an existent $2.2 trillion investment and potential high-quality Chinese enterprises. Many American investment funds have also expressed their concern about the U.S. securities market without Chinese enterprises. Based on dialogue, China and the United States may achieve the outcome that the prohibition under Holding Foreign Companies Accountable Act will not be implemented and the passage of the Equity Act will be delayed.

For references, please click here.

Two Cases for Risk Management: Restoring Restraint and Trust Over the Taiwan and South China Sea Issues

by Jin Kai

Part I: The Taiwan Issue

Under President Donald Trump’s administration, U.S. policy toward Taiwan became increasingly radical and has resulted in a more belligerent standoff between Beijing and Washington over the island. By holding Taiwan as an increasingly important partner in its global and regional strategies,[1] Washington has undertaken a more hawkish approach to demonstrate its political resolve in viewing China as a strategic competitor over a wide range of political, economic, and ideological issues across the Asia-Pacific region and beyond.

The Democratic Progressive Party administration in Taiwan led by Tsai Ing-wen, who came to power in the election of 2016, has followed Washington’s lead by taking a more antagonistic approach with Beijing, dragging cross-strait relations into a more confrontational and precarious situation.

Considering that the fundamental principles of China’s Taiwan policy, which ultimately seek Taiwanese unification with the mainland, have remained largely unchanged, it is important for Beijing and Washington to jointly identify the changes in policies of the Trump administration and their subsequent impacts. A high-level dialogue mechanism should be established based on the original bilateral consensus reached in the three China-U.S. Joint Communiqués (1972, 1978, and 1982) to prevent the Taiwan issue from becoming a flashpoint or catalyst for any further deterioration of China-U.S. relations in the years to come.

Restoring Restraint and Trust: A Common Objective for Risk Management

Why does the Taiwan issue matter? For China, it is about the ultimate unification of the Chinese nation. Beijing has always claimed the Taiwan issue is a matter of national sovereignty and a domestic issue that can only be resolved among the peoples on either side of the Taiwan Strait. For the United States, the logic of why Taiwan matters is very different. A policy recommendation report on the U.S.-Taiwan relationship conducted by the Center for Strategic & International Studies (CSIS) in October 2020 explains that Taiwan matters to the United States in three aspects:

> The future of Taiwan is important to American values;

> The future of Taiwan is pivotal to peace and stability in the Indo-Pacific;

> The future of Taiwan is important to S. economic competitiveness and prosperity.[2]

The question then becomes: Is the ultimate unification of Taiwan that Beijing has long sought destined to clash with the American values of peace and stability in the Indo-Pacific accompanied by U.S. economic competitiveness and prosperity?

The diplomatic consensus and principles about Taiwan’s status articulated in the three Joint Communiqués have made it clear that peaceful resolution and unification serve the best interests of all parties. It is the “variations” in the U.S. position on Taiwan, articulated in several congressional and executive policies, that are offering different voices and sending mixed and confusing messages, which is unusual. Richard Bush, nonresident senior fellow in the Center for East Asia Policy Studies at the Brookings Institution, believes the U.S.-Taiwan tie is “a unique relationship” that seems “perfectly normal” in “economic, functional and people-to-people areas” but “not so normal” in “diplomatic and security arenas.”[3]

By contrast, Beijing’s policies toward Taiwan have remained holistic and consistent. Beijing’s relatively more hardline approach toward Taiwan in recent years has been a reaction to the more visible pro-independence movement on the island.

Therefore, Beijing and Washington must restore comprehensive restraint and, at a minimum, establish mutual trust on the Taiwan issue. Peaceful unification with Taiwan is still the best option for Beijing. Given tensions at this current moment, Washington particularly needs to reassess its previous policy of arms sales and diplomatic approaches to Taiwan. Restoring restraint based on the spirits and principles of the three Joint Communiqués is a timely mandate for both Beijing and Washington.

Recent Updates and the Consequent Impacts

The status of Taiwan has remained a crucial issue in China-U.S. relations for the past four decades. A series of official documents, including the three China-U.S. Joint Communiqués[4] have all specified that “Taiwan is part of China” and the government of the United States “acknowledges the Chinese position” of “One China.” However, dark clouds are gathering across the Taiwan Strait and between China and the United States, particularly as U.S. policy toward Taiwan has undergone significant changes in the past few years, undoubtedly due in part to the island’s internal political shift.

Key Updates

One of Washington’s significant actions was the passage of the Taiwan Travel Act in late February 2018 after the Trump administration had already signaled a “whole-of-government” pushback on China with an unprecedented trade war. The act, which was signed into law by Trump in March 2018, has made it more open and convenient for high-ranking officials from Taiwan and the U.S. to make official visits to either side. After the act became a U.S. domestic law, Tsai Ing-wen made a “transit visit” to the U.S. in July 2019, and two high-ranking U.S. officials, the U.S. Health Secretary Alex Azar and the U.S. Under Secretary of State Keith Krach, paid high-profile visits to Taiwan in August and September 2020. In return for such “goodwill,”, the Tsai Ing-wen administration decided to lift U.S. beef and pork import restrictions as an “important start for economic cooperation” between Taiwan and the United States.[5]

Other recent legislative efforts in the U.S. Congress (either signed into law or pending passage) to support Taiwan include the Taiwan Allies International Protection and Enhancement Initiative (TAIPEI) Act of 2019, Taiwan Invasion Prevention Act, Taiwan Fellowship Act, Taiwan Assurance Act of 2019, Taiwan Envoy Act, and Taiwan Relations Reinforcement Act of 2020. In addition, the White House recently made public the details of the “Six Assurances” confidentially made to Taiwan by former U.S. President Ronald Reagan in the 1980s.[6] U.S. legislators have referred to these released cables in their recent efforts to introduce a number of Taiwan-related laws and resolutions, including those mentioned above.

Perhaps one of the most truculent moves made by the Trump administration on the Taiwan issue is the significant increase in U.S. arms sales to Taiwan. By late October 2020, the Trump administration approved nine packages of arms sales to Taiwan in less than four years, with total sales exceeding $17.4 billion. By contrast, President Barack Obama approved three arms sales packages to Taiwan in his two terms (eight years), with a total sum of about U.S.$14 billion.[7]

Another potentially “uneasy” change stems up from the “revised” attitude and approaches toward Taiwan by the Democratic Party, which was revealed in its party platformduring 2020.[8] This strategic guidance dropped “One China” in its language on the Taiwan issue, making the Democrats’ position on Taiwan more like that of the Republicans, and certainly leaving enough room for everyone to imagine in the years to come.

Nevertheless, it is interesting to note that there was no direct contact between President-elect Joe Biden and Tsai Ing-wen after the Biden team claimed victory in the 2020 presidential election. Trump, however, received a direct call from Tsai Ing-wen in 2016, making him the first U.S. president-elect to speak directly to the leader of Taiwan since 1979. A possible unspoken message by the Biden team is that “Biden’s goal will not be to threaten Chinese interests for its own sake but to maintain the status quo across the Strait.”[9]

Major Impacts

Unfortunately, substantive changes in the U.S.-Taiwan relationship undertaken by Washington during the Trump presidency have significantly complicated the Taiwan issue. The possible impacts of these changes could devastate the “delicate balance” across the Taiwan Strait that Beijing and Washington have subtly acquiesced to over the past four decades. In a number of aspects, the ultimate consequences could be destructive to any efforts to “reaffirm” or “re-establish” even a minimum level of mutual trust and understanding. Should restraint on the Taiwan issue not be restored, these lasting impacts might not go away at both the strategic and policy levels.

First, there will be an impact on the consensus and mutual understanding between China and the United States over the Taiwan issue. In both qualitative and quantitative terms, the increased arms sales approved by the Trump administration have far exceeded the levels of the previous administration, and represent the de facto abandonment of the road map of reduction in arms sales to Taiwan mutually agreed to in the Joint Communiqué of 1982. It certainly raises deep concerns when Beijing assesses Washington’s genuine willingness to uphold the cornerstone principles settled in the three Joint Communiqués. Nobody expects political acquiescence and diplomatic appeasement on the Taiwan issue from Beijing, no matter how the bilateral, regional, and global winds are changing.

Second, should Washington continue to directly or indirectly encourage Taiwanese independence, Tsai Ing-wen’s administration may undertake more hazardous moves to advance its incremental and substantial pursuit of Taiwan’s ultimate independence. Does this genuinely serve the best interests of the United States?[10] Should Washington return to the original consensus between China and the United States that seeks to preserve peace across the Taiwan Strait? Or, should it continue to take more aggressive moves to make Taiwan a “weapon” in its overall pushback on China and even abet the growth of pro-independence movements in Taiwan in the name of the so-called “moral responsibility,” and possibly put itself in a total conflict with China? It certainly raises many questions for Washington when it seems to be re-defining its ultimate interests in Taiwan against the overall U.S.-China relationship. Simply put, Washington’s messaging toward Taiwan, no matter how it is articulated, might be significantly reinterpreted by Taiwan leaders for various political ends.

Third, the de facto “strategic ambiguity” of U.S. policy on Taiwan’s status has been eroded by recent policy changes made by the Trump administration. The policy of “ambiguity” is derived primarily from original policy designs by the United States which not only acknowledge the three China-U.S. Joint Communiqués, but also The Taiwan Relations Act, the “Six Assurances,” and a number of related acts, resolutions, and U.S. domestic laws. However, the plethora of policy choices taken by Washington that often contradict the three Joint Communiqués do not necessarily provide Washington the best policy choices, especially when the DPP administration in Taiwan has been increasingly pro-independence.

Recommendations

Although Beijing remains resolved to seek ultimate unification with Taiwan, there have been significant “improvements” in U.S.-Taiwan relations since the Obama administration, and particularly in the last two years of the Trump administration. The worst scenario would arise from an uncontrolled, escalatory spiral of power interactions when miscalculation continues to overtake even the minimum-level mutual trust.

Ideally, both sides should join hands to maintain a workable communication mechanism to talk through a wide range of critical issues concerning Taiwan — for example, through existing bilateral dialogue channels. There are many issues, disputes, and obstacles between China and the United States over the Taiwan issue, but restoring restraint should be the first and foremost step.

1. Send and mutually confirm clear messages.

To maintain the stability of the situation across the Taiwan Strait, both sides urgently need to send and mutually confirm clear messages to each other. Both sides also need to stop introducing new policies and measures that may further complicate the already tense situation and cause instability across the Taiwan Strait. President Biden, and especially his diplomatic team, may find Beijing more willing to talk over a wide range of issues should the right message be clearly conveyed.

2. Reassess and eventually cease U.S. arms sales to Taiwan.

Washington should reassess its arms sales policy toward Taiwan, particularly the sales approved in the last four years. The significant increase in U.S. arms sales to Taiwan yields little to Taiwan’s “self-defense” capability, yet it facilitates unrealistic and unnecessary political adventurism on the island.

3. Be wary of any intention or move to substantively change U.S.-Taiwan relationship.

Both sides cautiously deal with the desire of Taiwanese authorities (and some Americans) to substantively enhance the U.S.-Taiwan relationship. To make a strong case that Taiwan’s status is undetermined and make substantial changes to U.S.-Taiwan relations would only further undermine the already not very solid foundation of the U.S.-China consensus on the Taiwan issue.

4. Restructure U.S.-Taiwan security cooperation under a U.S.-China security consensus.

Beijing understands Washington’s security concerns in the region. However, Washington must carefully reassess Taiwan’s role in the U.S. Indo-Pacific strategy while Beijing should provide more options for China-U.S. security cooperation in the Asia-Pacific region. In fact, Beijing and Washington are fully capable of conducting practical cooperation in regional security issues, such as anti-piracy, maritime law enforcement and rescue, and resource protection.

5. Examine Taiwan’s claims for participation in the international community within the framework of the “One-China Principle”.

Both parties may conduct candid discussions on Taiwan’s involvement in the international community, such as Taiwan’s participation in international cooperative efforts to fight the COVID-19 pandemic, under the condition of abiding by the fundamental spirit of “One-China Principle” and the three China-U.S. Joint Communiqués.

6. Create a good atmosphere for the promotion of cross-strait economic, trade, and people-to-people exchanges.

In the area of technology development and economic cooperation between mainland China and Taiwan, Washington should not impose any (or further) restrictions on companies or individuals involved in such businesses. Normal economic and trade exchanges across the strait should not be affected by recent changes in China-U.S. economic and trade relations.

Conclusion

The Taiwan issue should not be such a liability (if not an obstacle) to China-U.S. relations as it is at the moment. “Strategic ambiguity” by Washington in the past years may have played a certain role of “inhibitor,” for example, in time of crises. However, such “ambiguity” was also constantly re-elaborated and magnified by Taipei in its quest for more international autonomy, substantial upgrades to Taipei-Washington political and diplomatic ties, and incremental independence.

Moreover, recent policy changes and moves by the Trump administration have exacerbated tensions between the U.S. and China. Although enduring obstacles over the Taiwan issue between China and the United States may not be easily overcome in the foreseeable future, restoring restraint is nevertheless a critical starting point. It requires not only political and practical wisdom, but also dedicated and skillful diplomacy from both sides.

Part II: The South China Sea Issue

Amid intensifying political, economic, and ideological competition between China and the United States, continued enforcement of respective claims concerning overlapping or disputed territories in the South China Sea by multiple parties has significantly complicated U.S.-China bilateral relations. In the past few years, the United States has kept an increasingly high-profile presence in the South China Sea by sending a large number of planes and vessels, which have, contrary to what Washington may have expected, generated limited outcomes.

China has adopted a more restrained but comprehensive approach to solidify its sovereign position by applying military, civilian, and law-enforcement countermeasures targeted at different parties in the South China Sea, giving Beijing more maneuverability in its disagreements, for example, with Washington. It is interesting to note that under such circumstances, the Trump administration decided to deploy U.S. Coast Guard cutters in the West Pacific as new leverage to both signal U.S. presence and to diversify its policy measures in the disputed waters. Washington is also seeking more attention and substantive involvement from its traditional allies to encourage solid, multilateral, political, and diplomatic pressure on China.

Claimants among Southeast Asian countries, in addition to hardening their respective positions on South China Sea disputes, are closely watching the rising tension between Beijing and Washington. The two giants are caught in a strategic duel in which neither will easily give in, particularly in the current atmosphere.

Hence, the South China Sea issue, at the strategic level, crystallizes the conflicts between China and the United States, especially when Washington has viewed island construction and the expanded military presence of the Chinese in the South China Sea as an unbearable wedge to its absolute predominance in the West Pacific region. Consequently, disputes between China and other claimants are relatively resolvable, and at a certain level, the key to calming the South China Sea conundrum is still in the hands of Beijing and Washington.

Restoring Restraint and Trust: A Common Objective for Management

Although the United States is not a direct claimant in the South China Sea disputes, it has various strategic and policy resources and capabilities to impose substantial influence in the region. At the strategic and geopolitical level, the South China Sea issue is a matter between China and the United States. At the practical level, it is an issue between China and the other direct claimants in Southeast Asia. Hence, the South China Sea resembles a “two-tier structure.”

However, as Susan Thornton, senior fellow at Yale Law School and nonresident senior fellow at the Brookings Institution, put it, the current U.S. approach in the South China Sea is “provocative, escalatory, and unlikely to be effective, given the changing military balance in the region.”[11] Also, the absence of a clear and solid common objective between China and the United States could make it possible for spiraling escalation to draw both parties into an unfortunate conflict.

As a result, the suggested common objective starts with relinquishing the endless and pointless activity of “testing bottom lines,” because both Beijing and Washington are quite clear about what the other side wants in the South China Sea. Suppose either side does not favor an immediate military clash or even a total war, and in that case, immediate restoration of restraint is undoubtedly the top priority for both parties. Trust, even at the minimum level, can only be achieved between adequately self-restraining parties.

Recent Updates and the Consequent Impacts

Tensions in the South China Sea have surged despite the COVID-19 pandemic from 2019 to 2021. Amid disputes across almost all fronts under rapidly deteriorating bilateral relations, both China and the United States built up their presence in the South China Sea to demonstrate their uncompromising resolve — but in different ways. These new changes could bring about some potential and profound consequences.

Key Updates

China sent many survey vessels and fishing ships, conducted several naval exercises, and deployed maritime patrol aircraft in the South China Sea. In April 2020, the Chinese government approved the creation of two new administrative districts in Sansha city, which signifies another move to prove its effective control and governance in the region, despite long-lasting disputes.[12] These are, of course, part of China’s consistent approach to demonstrate and safeguard its firm stance on sovereignty over disputed areas in the South China Sea. The moves and acts adopted by Beijing, especially from a historical view, have been largely reactive if examined in a larger picture that includes other claimants.[13]

The United States, which takes no position on the sovereignty issue but cares deeply about its predominance, status, and allied responsibilities, has intensified its military patrols, passages, overflights, and drills in recent years to assert its presence. According to Ian Storey, senior fellow and co-editor of Contemporary Southeast Asia at the Yusof Ishak Institute, in the first seven months of 2020, the U.S. Navy conducted seven freedom of navigation operations (FONOPs) in the South China Sea, compared to eight in 2019, five in 2018, and four in 2017.[14] Meanwhile, the Trump administration has also decided to send U.S. Coast Guard ships to the West Pacific to conduct regular patrols after a number of short but high-profile passages across China’s neighboring waters by several U.S. Coast Guard cutters.[15]

Meanwhile, a number of recent official documents, strategies, and legislative bills have proved the “strategic weight” of the South China Sea issue in Washington’s overall global and regional strategies. In May 2020, the Trump administration released its guiding document for its China policy, “United States Strategic Approach to the People’s Republic of China,” which clearly states that “the United States military will continue to exercise the right to navigate and operate wherever international law allows, including in the South China Sea.”[16] Other strategic reports, report series, and proposed legislation by the White House and Congress that give descriptions of the U.S. stance on the South China Sea issue include “National Security Strategy,” “National Defense Strategy,” “National Intelligence Strategy,” “China Military Power Report,” National Defense Authorization Act, South China Sea and East China Sea Sanctions Act of 2019 (introduced), South China Sea Freedom of Navigation Act (introduced), and so on.

At the administrative level, high-ranking U.S. government officials have escalated their criticisms of Beijing’s position on the South China Sea dispute. In a statement released on July 13, 2020, then U.S. Secretary of State Mike Pompeo criticized China for its “unprecedented threat” and claimed that China “has no legal grounds to unilaterally impose its will on the region.” As usual, Pompeo referred to the United Nations Convention on the Law of the Sea in his statement to criticize China’s claims, even though the United States has not ratified the convention.

Meanwhile, introducing more multilateral interventions in the South China Sea from America’s traditional allies was an important policy aim of the Trump administration. In August 2020, then U.S. Secretary of Defense Mark Esper called on countries to work with the United States to more effectively counter China in the Indo-Pacific, saying that “the region has become an epicenter of power competition with Beijing.”[17] As Asia Time explained in September 2020, “Major European powers are weighing how to step up their presence in China’s adjacent waters, including the contested South China Sea.”[18]

The above changes at both the strategic and policy levels, unfortunately, have aggravated the long-running confrontation over the South China Sea, especially between China and the United States.

Major Impacts

As a nonclaimant party, the United States has been driven by a deep motivation to intervene in the South China Sea issue. Washington, honestly, may not care much about the sovereignty issues, but it fears China’s ever-expanding influence in the West Pacific that may significantly challenge U.S. predominance in the region. It is still about concerns brought by a rapidly rising challenger to the incumbent power that seeks preemptive measures to preserve the status quo.

However, this brings the U.S. stance on the South China Sea issue into a strange circle: Washington tends to constantly test Beijing’s bottom line rather than maintaining the stability of the South China Sea from a truly neutral standpoint. One of the consequences of such a biased approach is the absurd effect of “the smalls bullying the big,” which suggests that China’s claims are wholly and naturally unlawful, whereas other small claimants’ propositions are automatically justified, and the United States has a responsibility to help the small ones. Naturally, with direct and indirect U.S. support, other claimants may be emboldened to take firm stances in the regional geopolitics involving China.

First, although the intensified FONOPs by U.S. planes and ships may not necessarily lead to direct military clashes, they do significantly lower the bar for unexpected encounters, confrontations, and even low-intensity conflicts. The bottom line is that China will not be deterred by U.S. FONOPs, and the People’s Liberation Army has adopted a more active (or maybe in the future a more confrontational) approach to responding to intensified U.S. military activities in the South China Sea. As mutual trust between China and the United States has dropped to a historical low, it is almost impossible to truly avoid potential conflicts merely by relying on the existing crisis prevention and management mechanisms that may not even be fully functional at present.

Second, the United States is trying to encourage and probably expecting more countries far from the South China Sea region to get involved in the disputes, indicating that the possibility of protraction is still very high. The problem is that no matter how the issue plays out, it cannot change China’s fundamental position. On the contrary, it may significantly complicate the South China Sea issue by blending in other non-claimant countries’ more or less irrelevant claims and interests.[19] Other protracted (if not failed) examples include multilateral efforts and mechanisms to deal with nuclear issues or crises in Iran and North Korea.

Third, repeatedly testing Beijing’s bottom line by conducting more frequent military activities is not conducive to reaching a final settlement of the South China Sea issue based on negotiation and consultation between China and the Southeast Asian claimants. Examples include the full and effective implementation of the Declaration on the Conduct of Parties in the South China Sea and steady advancement of the negotiation of the Code of Conduct in the South China Sea. The point is that if the strategic issues are not resolved, there will be no way to resolve the tactical and practical policy issues. Therefore, in the South China Sea, the U.S. containment policy on China has done “more harm than good.”[20]

Recommendations

In a situation where interests cannot be fully aligned, for the time being, finding the greatest common denominator of interests is a wise choice for both sides. Overall peace and stability are vital for free and open sea lanes, preservation and protection of resources and environment, cooperation over maritime security and rescue, and joint development projects. None of these can be fully realized should the tension between two great powers keep rising.

Given the enduring tension and lack of substantive mutual trust, stability based on respective self-restraint should be the greatest common denominator, and it must be realized through a series of verifiable mitigation processes.

1. Seek a rational and pragmatic restraint.

Acknowledging the lack of solid mutual trust between the two sides, both Beijing and Washington must maintain overall self-restraint in the South China Sea, not only by reducing the intensity and frequency of operations in the area but also by significantly easing up on propaganda and media offensives against each other.

2. Relax muscles rather than keep them unduly tense.

Washington should reduce its significantly intensified operations in the South China Sea, including close-up reconnaissance, overflight, and freedom of navigation operations. Reciprocally, Beijing may respond by exercising restraint in the mass island-constructions in the South China Sea.

3. Keep communication channels open, effective, and, most importantly, responsive.

Both sides should keep military-to-military communication channels open, effective, and responsive despite possible impacts of the pandemic and other political or ideological obstructions. In the event of an unexpected crisis, designated personnel from both sides should know who will pick up the calls at the other end of the line, along with a handful of other supplementary options.

4. Prevent further internationalization of the South China Sea issue.

Washington should reassess the potential impacts that the Indo-Pacific Strategy and other multilateral mechanisms like the Quadrilateral Security Dialogue may bring to the South China Sea issue. Moreover, further internationalization would only complicate the existing two-tier structure of the South China Sea issue, introducing more variables and significantly reducing chances of building mutual trust.

5. Welcome Beijing’s leadership in preserving the environment and joint development.

In the spirit of multilateral cooperation, Beijing should take the lead in proposing a long-term regional survey of maritime resources and the South China Sea environment.The survey results could be used as a common reference for environmental preservation and joint maritime resource development by all relevant parties, including the United States. This would help Beijing and Washington find more “binding rules,” which would help maintain peace and stability despite their competition.[21]

6. Washington should reaffirm a truly neutral stance in the South China Sea.

Pragmatism would serve the best interests of the United States on the South China Sea issue. Blindly supporting claimants just because those countries are smaller in size and weaker in power will only make China’s attitude and position stronger or even more confrontational. Under the premise that the situation is relatively de-escalated, China and the United States may even discuss the possibility of jointly issuing a statement on the South China Sea issue based on a new consensus.

Conclusion

The South China Sea issue’s complexity goes far beyond disputes over maritime sovereignty, natural resources, and waterway passages. It is about great power competition at the strategic level. The United States finds it increasingly challenging to keep the Chinese navy in China’s adjacent waters, especially when China has been exerting a “reactive assertiveness” by utilizing its comparative advantages such as massive civilian resources and geographical proximity. The truly constructive course is first to restore stability. It primarily requires the self-restraint of both China and the United States, the two main players in the South China Sea disputes.

However, the resolution of the South China Sea issue is not merely about ending great power competition. It is also about the maritime environment, natural resources, sea-lane security, disaster relief, and more. None of these can be realized without all involved parties’ self-restraint. Beijing and Washington should take the initiative. The rationale is simple and explicit, though challenging: If both China and the United States have enough time and energy at the current moment for a duel, a possible or even better course is to step away from pointless and dangerous confrontation and attend to the survey, maintenance, and joint development of natural resources and maritime environment in the South China Sea.

For references, please click here.

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