U.S.-China Mutual Trust Committee
The U.S. in the 21st Century
Since 2017, U.S.–China relations have been going steadily downhill. In his book, The Beautiful Country and the Middle Kingdom, John Pomfret, a journalist with extensive experience in China, traces the relationship between U.S. and China from 1776 to the book’s publication in 2016 as a series of enchantment followed by disappointment. We are currently in a disappointment phase.
U.S. Policy Makers — The United States presses China about its human rights violations, and China responds by citing the U.S. failures in its treatments of African Americans and Native Americans. During the Trump presidency the number of visas granted to Chinese student applicants was cut almost in half. Currently President Biden is retaining the Trump tariffs, supporting the shipment of military arms to Taiwan, sanctioning high technology flow to China, and intentionally forming global alliances which exclude China.
For the first two years of the Biden administration, policy makers have viewed the current situation as autocracy vs. democracy, and have developed a three-pronged strategy:
- Invest in the U.S.
- Align with allies against China
- Compete with China as a zero-sum game – for the U.S. to win, China must lose
This strategy has made harmonious collaboration between U.S. and China very difficult.
The Biden administration is also moving from ambiguity to concrete clarity in some of its foreign policies. It plans to bring Ukraine into the West and to keep Taiwan independent. China and Russia view these steps as threats to them.
Some of the leaked Pentagon documents, produced between mid-February and early March 2023, “indicate that, according to some of the intelligence gathered about China, Washington deemed China to be the most serious long-term challenge to the international order.”
Currently China is one of six countries (the others are Cuba, Iran, North Korea, Russia, and Venezuela) designated by the U.S. Secretary of Commerce as a “foreign adversary” and, for national security reasons, restricted from owning farmland in this country.
2023 U.S. Foreign Policy Update by Thomas Hanson — Diplomat in Residence, University of Minnesota Duluth — “U.S. national security sees the U.S. at a 10-year inflection point. There is a dichotomy in U.S. foreign policy. The focus on threats going two years out are geopolitical risks in Ukraine, China, and the cost-of-living crisis (income inequality is one of the greatest national security threats); but the 10-year risks are all about climate and sustainability. This is the disconnect. The paradigm is one of autocracy versus democracy globally.”
In addition to the petro dollar there is now talk of a Chinese–Saudi currency, the petro yuan. China will now trade with the Gulf Cooperation Council, and Saudi Arabia uniquely, in a strong digital yuan.
There is also talk by Russia and China that the Global Minority – comprised of all the old colonial powers from Japan to Italy to France to the U.K. to the U.S. – is trying to dictate its views and its values to the Global Majority, the Global South.
The U.S. is moving away from strategic ambiguity on the issue of Taiwan because Taiwan is at a crucial point in what’s called the First Island Chain. Washington is still seeing China in terms of its strength that very much involves technology and the most advanced tech, all of which has military implications. Quantum computing is a major part of this. Taiwan Semiconductor Manufacturing Company (TSMC) produces about 95% of the highest, most refined semiconductor chips.
In the current Biden administration, views on China are divided. There are cooperationists who believe there could be a win-win situation, centrists who call for a careful approach, and restrictionists who are hawkish hardliners advocating for military escalations.
The U.S. is Seriously Challenged by China in Key Technologies — China is ahead of the U.S. in quantum computing (per Eric Schmidt, ex-CEO of Google). China has invested $100 billion in quantum computing (which can solve problems a million times faster than conventional computers) vs. $10 billion from the United States. In Artificial Intelligence, the U.S. may still be ahead (per ChatGPT).
Currently, the Pentagon is 98% dependent on chips from Asia. The U.S. passed the Chips Bill to catch up:
- The bill offers participants $52 billion in funding
- They must agree to NOT invest in tech in China
- They must close their U.S. tech activity in China
Additionally:
- Taiwan makes 90% of advanced chips
- Rahm Emmanuel is working with Japan to build chips in the U.S.
- The U.S., Japan and the Netherlands currently control the tools needed to manufacture advanced chips; they are aligning to limit export of these tools to China
Can the World Make an Electric Car Battery without China? — Despite billions in Western investment, China is so far ahead – in mining rare minerals, training engineers and building huge factories – that the rest of the world may take decades to catch up. By 2030, China is projected to make more than twice as many batteries as every other country combined, according to estimates from Benchmark Minerals, a consulting group. This article details how China controls each step of lithium-ion battery production, from getting the raw materials out of the ground to making the cars, and why these advantages are likely to last.
Taiwan — Spooked by the threat that China might invade Taiwan, the U.S. wants to cut its dependence on the island’s world-beating microchips. Officials in Taipei believe the Biden administration is going too far.
In quiet conversations and back-channel warnings, Taiwanese officials have urged their American counterparts to tone down their rhetoric about the dangers of relying on chips made by the Taiwan Semiconductor Manufacturing Company.
“Chip designers will still have their most important products made by TSMC or manufactured in Taiwan,” TSMC official Kung said. “This will be very unlikely to change in the next decade or two.”
The Status of the U.S. dollar — As the world’s currency, the dollar is threatened by current U.S.–Europe sanctions on Russia. Washington is ignoring this issue, driven by belief that “There is No Alternative” (TINA). China is currently holding $2.3 trillion U.S. dollars. Would the U.S. attach these holdings to its sanctions?
Argentina, Bolivia, Vietnam, Russia, and Malaysia already are using the Chinese yuan as their reserve currency. In diplomacy, China is the dominant force with 2/3 of the world’s population and is far more flexible than the U.S. in its dealings.
The Indo-Pacific Economic Framework for Prosperity (IPEF) — Launched by the U.S. with Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam, the goal of this initiative is “to advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness for our economies.” However, this framework is not giving these countries access to U.S. markets.
A new comprehensive study by an Australian think tank, the Lowy Institute, found that In the past five years China’s influence in all ten countries in Southeast Asia has soared, while that of the U.S. has ebbed. The IPEF “is a poor substitute for a real economic agenda, and it is seen as a bad joke by most governments in the region.”
U.S.–China Social and Cultural Dialogue — There was a time in the not-too-distant past when the U.S. and China pledged to cooperate on a wide range of issues. On September 28, 2017, U.S. Secretary of State Rex Tillerson met, for the first time, with Chinese Vice Premier Liu Yandong. The topic of this inaugural meeting was U.S.–China Social and Cultural Dialogue. The summary from the State Department’s website noted that “the social, cultural, and people-to-people ties between our two peoples are both deep rooted and dynamic.”
https://www.state.gov/r/pa/prs/ps/2017/09/274496.htm
The press release from the Chinese Xinhua Agency4 was extensive and specific, including all areas and all topics. Of particular interest was that under the area of Cultural Dialogue, the two countries had pledged to promote the interchange of outstanding artistic undertakings that would further their mutual understanding. One example cited was San Francisco Opera’s 2016 World Premiere production of Dream of the Red Chamber, which was initiated and promoted by the Chinese Heritage Foundation of Minnesota.
During the Obama Administration — President Obama and President Xi Jinping met eleven times to exchange views. Together they led the Paris meeting on Climate Change and gained agreement on curbing worldwide carbon emissions. Further talks since then have broken down.
Current Perceptions of China Among the U.S. Business Community — The current situation is very volatile. The U.S. private sector does not share the same concerns as U.S. national interests, and several CEOs of large companies have recently visited China.
However, there are signs that recent tensions between the U.S. and China have led to a stop in American capital, such as Sequoia Capital, flowing to Chinese venture capital and private equity funds. Some endowments, such as the University of Chicago, and foundations, such as the Robert Wood Johnson Foundation, are also halting investments in China.
Survey of Writings / Polls / Institutional Responses on U.S.–China Relations — At the same time, there is a group of China specialists who have been advocating the seeking of common ground between the U.S. and China, and promoting cooperation between the two countries. They suggest areas such as climate change, environmental protection, reduction of pollution, and cultural / educational exchanges from which to promote mutual cooperation and understanding. Their voices are gaining more attention and there appears to be a shift in policy in the Biden Administration.
There are also individuals and institutions advocating for a restraint approach towards China, one that seeks common ground and mutual respect. The following is a brief listing of their views:
Jessica Chen Weiss — A pioneer advocate for seeking common ground between the U.S. and China and promoting cooperation between the two countries:
The China Trap: US Foreign Policy and the perilous logic of zero-sum competition
A World Safe for Autocracy? The domestic politics of China’s foreign policy
https://chinacenter.umn.edu/past-events/world-safe-autocracy-domestic-politics-chinas-foreign-policy
America and China Don’t Need to Knock Each Other Out to Win: China and the United States should invest more resources in a vision of success not defined by undermining the other
John Thornton — Navigating the Future of U.S.–China Relations: On Friday April 28, 2023, John Thornton, Director of the Global Leadership Program at Tsinghua University in Beijing, and former President of Goldman Sachs, led a conversation about Navigating the Future of U.S.–China Relations in the Amir and Zaib Husain Auditorium on the campus of the University of Texas Austin. In his presentation, Thornton made the following key points:
“China is the largest trading partner with 170 countries who are not supporting the U.S.-led sanctions against Russia.
Missed opportunity – John Kerry, in conversation with Xi Jinping, received an invitation from Xi for the U.S. to join China in its One Belt, One Road Initiative. On the advice of officials in Washington, Kerry did not deliver the invitation.
The Chinese way of doing things is to find the person most knowledgeable on the topic of interest, drain his / her brain, and then customize the information for China.
If the Chinese say they are going to do something, chances are they are going to do it. The One Belt, One Road Initiative is an expression of that. The goal of common prosperity is the Chinese version of fixing income inequality.
The 2000-year-old national examination system in China still exists. Of the 10 million students who take the yearly examination, the top 3000 will be admitted to the prestigious Qinghua University. The Chinese Communist Party, aka the Central Government, consists of the best and brightest minds in China, a meritocracy just as it has always been.
All the students at Qinghua know 100% of what is going on outside of China, despite all the fire walls. While among the American elite knowledge of China is very thin, the converse is not true among the Chinese. We need many more Americans in China.
There is a fundamental disconnect in U.S. policy on China: if you want to build a relationship with or make a judgement on China, you must meet with the Chinese. The most important aspect in U.S.–China relations is building relationships based on trust. For sure, you need to gain their trust.”
Duncan McCampbell — A Metropolitan State University Professor of International Business and Law, and a Global Minnesota and Great Decisions speaker, delivered this speech: War or Collapse? Why Today’s China Discussion Needs a Reboot.
Jeffrey Sachs — Director of the Center for Sustainable Development at Columbia University and President of the United Nations Sustainable Development Solutions Network – Democracy Now! An Interview with Jeffrey Sachs on China’s Push for a Multipolar World.
“What China is after, if we view it from China’s perspective, is what was also said: true multilateralism. And what that means is that they don’t want a U.S.-led world, they want a multipolar world. The basis of that is that the United States is 4.1% of the world population, while China is 17.5% of the world population. China’s economy is comparable to the U.S. economy, and indeed China is the lead trade partner for much of the world. So, China is saying, “We’re there, too, alongside you. We want a multipolar world. We don’t want a U.S.-led world.”
Sachs suggested that there is a core of hardliners in the U.S. (among politicians and media) who are committed to continued world domination by the U.S. and are willing to go to war to defend it.
Cyrus Janssen (https://www.youtube.com/watch?v=Q81nDrcYTi8) — How the US Sold Australia a China War – In spite of China’s incredible track record of not starting wars, one in 10 Australians (more than those in Taiwan) now believe that China will invade the Mainland of Australia within three years. This is due to the fear mongering of China Hawks as reported in the news media.
Daniel Larison — Columnist from Eunomia: What Will 2024 Hold for US–China Relations? And A Far-Fetched Goal for China Policy — Larison reports that Stephen Walt argues that the Biden administration will try to avoid any big foreign policy blowups in the run-up to next year’s election. In the comprehensive 2005 article “Taming American Power”, Walt argued that the U.S. should “make its dominant position acceptable to others – by using military force sparingly, by fostering greater cooperation with key allies, and, most important of all, by rebuilding its crumbling international image.” He proposed that the U.S. “resume its traditional role as an offshore balancer, to intervene only when absolutely necessary, and to keep its military presence as small as possible.”
“The U.S. should always try to distinguish between peoples and their governments, but we know from past experience that policies defined by confrontation and rivalry do not preserve that distinction.”
https://daniellarison.substack.com/p/a-far-fetched-goal-for-china-policy
The American Way of Dodging Accountability — “We fail to see both how we needlessly securitize everything China does, and how we erase our own responsibility for anything that happens in the world that we don’t like. The problem is not that America’s to blame for everything – it’s that U.S. officials believe America shouldn’t have to be accountable for anything.”
The Toxic Effect of U.S.–China Rivalry — Hardliners attack anyone in or out of government who doesn’t jump on their bandwagon, and they denounce the most routine, unremarkable diplomatic contacts as capitulation to the enemy. Under these circumstances, most politicians and policy makers fall in line or stay quiet, and zealots and ideologues get to set the terms of the debate.
Chas Freeman — Former U.S. Ambassador and China expert in an interview with EIR’s Mike Billington: “I think unfortunately, the natural American response to any international development at present is to view it through military eyes. Therefore, there is a suspicion that the Belt and Road has a geopolitical military purpose. I don’t think it does. I think it is a geo-economic outreach, which takes advantage of the fact that China now has the best infrastructure construction technology and equipment on the planet. That it has surpluses of materials for construction, like concrete, aluminum, steel and so forth. And it has experience in solving very difficult engineering problems, and it is applying this to create a potential economic community that will span the entire Eurasian landmass from Lisbon to Vladivostok, and North from Arkhangelsk to Colombo, as well as parts of East Africa.
This will be an open economic architecture based on connectivity, whether it’s roads, railroads, fiber optic cable, ports, airports, industrial estates or whatever. And I think the Chinese bet is that in such an open environment, China’s size and dynamism would give it a natural leadership role. But this is very different from imagining the sort of military positioning that we characteristically try to impose on such developments.
I think the proper response by the United States to the Belt and Road Initiative would be to take advantage of it. Somebody builds a road, let’s drive an American car down it. Someone connects Tokyo and London with fiber optic cable, let’s use that to improve the speed of trading on the stock market. If someone builds an airport, there’s no reason that only Chinese aircraft can use that, and so forth and so on. I’m very impressed actually, by the extent to which the Belt and Road Initiative is not just physical connectivity, but a series of agreements on the management of the transit of goods, openness to services, improvement of customs and immigration procedures, and bonded transit between China and Europe and a third country or region. I think this is a great opportunity, if it’s approached in that way, for American business, for the American economy.”
Thomas Fazi — A journalist, writer and Anglo-Italian translator, Fazi writes in The Capitalists Are Revolting Over China: “Already many European companies are pushing back against U.S. proposed measures against China, claiming that they place an excessive regulatory and bureaucratic burden on industry at a time of massive economic challenges. Unsurprisingly, German companies are leading the chargeChina is the country’s largest trading partner, with total trade last year of nearly €300 billion. Europe’s economic powerhouse has already taken a heavy hit from its decoupling from Russian gas and other commodities; with its economy in recession and an inflation rate of 7.2%, Germany cannot afford to lose China as well. The same can be said for the European Union as a whole.
In America, a similar revolt is brewing over the administration’s decoupling with China. Despite the fraying of Sino-American relations at the political level, several American CEOs have continued to visit China. While the bosses of J.P. Morgan, Starbucks, GM, and Apple have all flown in since March 2023, it was Elon Musk’s visit that predictably caused the biggest shockwaves.”
https://www.realclearworld.com/2023/06/06/the_capitalists_are_revolting_over_china_903844.html
Christine Legarde — President of the European Central Bank since 2019, has warned that “Geopolitical rifts caused by rivalry between the U.S. and China could push up inflation by 5 percent and threaten the leading positions of the dollar and euro … As developing countries trade more with China, which has become the world’s biggest exporter, they are inclined to increase their holdings of renminbi as reserves … a long period of ‘relative stability’ may now be giving way to one of lasting instability resulting in lower growth, higher costs, and more uncertain trade partnerships.”
https://www.ft.com/content/c8a06555-d18d-4416-b729-177e392b9a23?utm_source=substack&utm_medium=email
European Council on Foreign Relations — In an extensive poll conducted in eleven European countries, the Council found citizens less eager than Washington for competition and rivalry with China. The poll indicates that “majorities in all eleven countries are unwilling to support the U.S. against China if there were to be a military escalation between these two powers and would wish to remain neutral.”
“41 percent of Europeans would support economic sanctions against China if Beijing were to provide significant military aid to Russia in its invasion of Ukraine, while 33 percent would oppose that step.”
“French and German respondents have fairly negative views of China, with only 31 percent of the French and 33 percent of Germans seeing China as a “partner,” while 50 percent of Germans and 41 percent of the French see China as a rival or an adversary.”
George Yeo — A Singaporean former politician and brigadier-general who served as Minister for Foreign Affairs between 2004 and 2011, in conversation with Alex Stubb: What we get wrong about China stated that China is not a threat to U.S. dominance, but the U.S. is on the wrong track. “It is most important to understand the nature of the Chinese and their history; a few snapshots will not be enough. The Chinese cherish their long heritage, and their large homogeneous country (92% Han). Deep in their culture are notions of harmony. They are comfortable about themselves and their common civilization.”
Edoardo Campanella — In his article Understanding the US–China Rivalry, Campanella reviews five books on the perilous state of Sino-American relations and concludes that “they suggest that while America may have overdone its previous policy of engagement, it would be a dangerous mistake to go too far in the other direction.”
Institutional Responses — Amid questions such as the Washington Post’s Is Washington’s China Policy Shifting? Concrete steps are being taken by some institutions, including foreignpolicy.com. FP reporters Robbie Gramer, Jack Detsch and Christina Lu offer a “wide-ranging discussion about how Washington is thinking about Beijing now.”
Brookings Institution and the Center for Strategic and International Studies —
Launched in June 2023, Advancing Collaboration in an Era of Strategic Competition is a project undertaking “a multiyear initiative to advance U.S.–China coordination in an era of strategic competition. Through historical case studies, practitioner and expert workshops, public events, proof of concept exercises, strategy reports, and translations of Chinese perspectives, the project will diagnose barriers now impinging on collaborative efforts and develop a playbook of best practices to improve the frequency and effectiveness of such efforts across a range of functional areas.”
Andy Kim, D-NJ, U.S. House of Representatives — “The world is entering a new global era. We are in the early phase of a paradigm shift, and there is a tremendous amount of fluidity and destabilization, also a tremendous number of opportunities. We need to decide what do we want U.S.–China relations to be like down the road. It is our most complicated bilateral relationship because China intersects with the U.S. at every important issue.
There is a possibility of collaboration and cooperation. What are the benefits to our national interests? We need to understand the challenges facing both countries. It takes constant vigilance to build multinational coalition. Other countries are wondering, is the U.S. still a reliable partner? We need to respond to a changing dynamic, the changing U.S. dollar, and move away from a reactionary policy or a one-size-fits-all approach.
There needs to be a baseline level of engagement, and we should not underestimate the need for diplomacy. We need to have a comprehensive approach on how to deal with China.”
Quincy Institute for Responsible Statecraft — Michael Swaine and Andrew Bacevich of the Quincy Institute argue in their recent paper “A Restraint Approach to US–China Relations: Reversing the Slide Toward Crisis and Conflict” that a variant of the restraint approach – centered on a more credible balance between military deterrence and diplomatic reassurance, the reprioritizing of U.S. national security threats, and more cooperative and inclusive economic and technological initiatives – offers a better chance of stabilizing the U.S.–China relationship and protecting U.S. interests.”
Swain further states that the world is already in a multipolar order: the U.S.’s unipolar status has already ended. A strong defense for the purposes of military deterrence, for both the U.S. and China, does not have to mean global dominance.
On the issue of Taiwan, Kirsten Gunness noted that as China listens to rhetoric coming from the U.S. and Congress, it feels that it must react. Therefore, toning down rhetoric on both sides would be desirable. Over the short term, Swain felt that the U.S. can continue its strategic ambiguity policy and help Taiwan to defend itself. Over the long term, however, if there were an escalation of a nuclear threat from China and the U.S. continued its zero-sum game, then it would make little sense for the U.S. to be involved in Taiwan’s defense.
In conclusion, Swain suggested that the U.S. needs to change its mindset and drop the zero-sum approach. We need a clear vision that neither the U.S. nor China wants to dominate the world in the future. We need the ability to make a middle ground where both sides are willing to give. This will provide a space for suggestions. We need to alter the framing and admit that there are limitations on both sides.
From this brief survey of thoughtful individuals and institutions, there appears to be a consensus that a restraint approach to seek common ground and collaboration with China is far preferred to a zero-sum game. From John Thornton: “The most important aspect in U.S.–China relations is building relationships based on trust.”