Who Benefits From Confrontation With China?

'In the long term, the best guarantee of American security has always been American prosperity and engagement with the rest of the world.'   And Canada?

Mar. 11, 2023

America’s increasingly confrontational posture toward China is a significant shift in U.S. foreign policy that warrants greater scrutiny and debate.

For most of the past half-century, the United States sought to reshape China through economic and diplomatic engagement — or, in the case of the Trump administration, through economic and diplomatic disengagement. The Biden administration, by contrast, has shelved the idea that China can be changed in favor of the hope that it can be checked.

The White House has moved to limit economic ties with China, to limit China’s access to technology with military applications, to pull back from international institutions where the United States has long sought to engage China and to strengthen ties with China’s neighbors. In recent months, the United States has restricted semiconductor exports to China, and this week it moved ahead with plans to help Australia obtain nuclear submarines. The administration also is seeking to impose new restrictions on American investments in certain Chinese companies. In treating China as a growing threat to American interests, it is acting with broad support, including from leading Republicans, much of the military and foreign policy establishments, and a growing portion of the business community.

Secretary of State Antony Blinken provided the clearest articulation of the administration’s China policy in a speech last May at George Washington University. Dismissing engagement as a policy failure, Mr. Blinken said the United States had tried with little success to persuade or compel China to abide by American rules or the rules of international institutions. He described China as increasingly determined to impose its priorities on other nations. “China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to do it,” he said. “Beijing’s vision would move us away from the universal values that have sustained so much of the world’s progress over the past 75 years.”

It is true that engagement with China has yielded less than its proponents hoped and prophesied. China’s embrace of capitalism has not proved to be a first step toward the liberalization of its society or political system. Indeed, China’s brand of state-sponsored capitalism has damaged the health of liberal democracy elsewhere. The United States rightly continues to press China’s leadership on issues where serious differences remain, including its repression of Uyghur Muslims and its disregard for intellectual property rights.

China also is demonstrating a greater willingness to engage in worrying provocations, mounting military displays in the South China Sea and Taiwan Strait, and sailing a balloon over the United States. U.S. officials say China is considering military aid for Russia, a move that would deliberately escalate tensions with the United States in an arena where China has little to gain.

Yet the relationship between the United States and China, for all its problems, continues to deliver substantial economic benefits to the residents of both countries and to the rest of the world. Moreover, because the two nations are tied together by millions of normal and peaceful interactions every day, there is a substantial incentive to maintain those ties and a basis for working together on shared problems like climate change.

Americans’ interests are best served by emphasizing competition with China while minimizing confrontation. Glib invocations of the Cold War are misguided. It doesn’t take more than a glance to appreciate that this relationship is very different. Rather than try to trip the competition, America should focus on figuring out how to run faster, for example through increased investments in education and basic scientific research.

Chinese actions and rhetoric also need to be kept in perspective. By the standards of superpowers, China remains a homebody. Its foreign engagements, especially outside its immediate surroundings, remain primarily economic. China has been playing a much more active role in international affairs in recent years — a new agreement facilitated by China to re-establish relations between Iran and Saudi Arabia is the latest example — but China continues to show strikingly little interest in persuading other nations to adopt its social and political values.

There are also signs that China’s leaders are not united in supporting a more confrontational posture. It behooves the United States to reassure those who may be open to reassurance. America and China are struggling with many of the same challenges: how to ensure what President Xi Jinping has termed “common prosperity” in an age of income inequality; how to rein in the worst excesses of capitalism without losing its vital creative forces; how to care for an aging population and young people who want more out of life than work; how to slow the pace of climate change and to manage its disruptive impacts, including mass migration.

The core of America’s China strategy, building stronger relationships with our allies, is sound policy. Over time, the United States ought to seek a greater alignment between its economic interests and other national goals. The president’s budget proposal, released on Thursday, repeats some of the language from Mr. Blinken’s speech last year and proposes several billion dollars of foreign aid and investments to buttress U.S. allies in the Indo-Pacific region. “We’re trying to make sure that we can outcompete them when it comes to hearts and minds around the globe,” said Shalanda Young, the director of the Office of Management and Budget.

But the United States should not pull back from forums where it has long engaged China.

For example, the World Trade Organization operates a court of appeals that was created to adjudicate trade disputes. The court, however, has not operated in over two years, since the most recently appointed judges completed their terms. New judges cannot be installed without the support of the United States, and the Biden administration has declined to provide that support. The United States has also pulled back from committees at the W.T.O. that write the rules of trade, according to Henry Gao, a professor at Singapore Management University and an expert on the organization. When Mr. Xi proposed in November 2021 to use the W.T.O. as a forum for establishing rules about state-owned enterprises, a key American goal, the United States didn’t show much interest, Mr. Gao said in an interview.

That is a mistake. The construction of a rules-based international order, in which America played the leading role, was one of the most important achievements of the 20th century. It cannot be preserved if the United States does not continue to participate in those institutions.

The Biden administration’s continuation of Trump-era restrictions on trade with China, and its imposition of a host of new restrictions, is also a dubious strategy. Limiting competition is likely to yield some short-term benefits, but American economic growth in recent decades has been driven primarily by increased productivity in sectors that are exposed to global trade. Competition has been both painful and beneficial. The value of the major investments the federal government is making in infrastructure, research and technical education is significantly reduced by measures that limit the size of the market for American goods or that shelter American businesses from healthy foreign competition.

The confrontational turn also makes it harder for the United States and China to cooperate on addressing climate change and on other issues where national interests could plausibly align.

Much of the shift in China policy has been justified as necessary for national defense. National security considerations can provide a legitimate rationale for limiting some types of trade with China. But it can also provide a legitimizing vocabulary for protectionist measures that are not in the interest of Americans. In the long term, the best guarantee of American security has always been American prosperity and engagement with the rest of the world.

That’s true for China, too.

[Top image: Rebecca Chew/The New York Times]