Washington Debates the Objectives of a Tougher Line Toward Beijing

The United States’ stance toward China had been tending toward greater wariness during President Barack Obama’s second term, but the change of direction became more prominent late in the first year of Donald Trump’s administration with the release in December 2017 of a new National Security Strategy that shifted the thrust of America’s China policy from engagement to competition.

What are the characteristics of Washington’s competitive approach toward China? The Trump administration has been moving on various fronts to counter the Chinese, but are these moves based on a consensus and a coherent strategy toward China? If Washington and Beijing are able to reach a settlement in their current negotiations about trade and other economic issues, how will this affect the competitive thrust of America’s stance? These are the main questions I will address in this article. 

A “Whole of Government” Pushback

The United States’ current competition-based approach toward China has a number of characteristics. One is the emergence of what Robert Sutter has called a "whole-of-government" pushback with all the relevant agencies of the executive branch acting to apply pressure on China and to rein in existing cooperative arrangements.

The Office of the US Trade Representative conducted an investigation of China under Section 301 of the Trade Act of 1974, based on which it identified China as a country involved in unfair acts, policies, and practices related to technology transfer, intellectual property, and innovation. This finding served as the basis for raising tariffs on some categories of imports from China. Meanwhile, the Committee on Foreign Investment in the United States, an interagency panel headed by the Department of the Treasury, has strengthened the policing of investments from China, acting on the basis of its expanded powers under the newly enacted Foreign Investment Risk Review Modernization Act. And the Department of Commerce has tightened controls on the export of “emerging and foundational” technologies under the Export Control Reform Act of 2018.

In addition, the Department of Justice has launched a “China Initiative” aimed at uncovering Chinese industrial espionage and blocking the transfer of pilfered technology. Also, the Department of Defense has labeled China a “revisionist power” with respect to its nuclear stance and missile defense strategy. It has established the US Space Command and is considering the creation of a Space Force; it is energetically pursuing possible military applications of advanced technologies; and it is working with the State Department to promote the United States’ Indo-Pacific strategy.

A second feature of the current US approach toward China is the forward-leaning involvement of the legislative branch alongside the executive branch. Congress has been hardening its posture toward China with legislative measures undertaken on a bipartisan basis. For example, as part of the National Defense Authorization Act for fiscal 2019 Congress approved the ECRA and FIRRMA legislation mentioned above, and increased the defense budget; also, in October 2018 it enacted the Better Utilization of Investment Leading to Development (“BUILD”) Act creating the US International Development Finance Corporation to strengthen the architecture for US investment in infrastructure in the Indo-Pacific and elsewhere.

In December Congress passed the Asia Reassurance Initiative Act to back up the United States’ engagement with the Indo-Pacific. During 2018 it also addressed the issues of Taiwan and Tibet, both subject to political pressure from Beijing, by enacting the Taiwan Travel Act (March) and the Reciprocal Access to Tibet Act (September). 

A third feature of the current line is the wide range of the issues addressed by Washington, as seen, for example, in the speech that Vice President Mike Pence delivered at the Hudson Institute last October. In addition to commenting about security and economic issues, Pence voiced a number of criticisms of China’s behavior in the area of political affairs, such as its “control and oppression” of human rights and “malign influence and interference in American politics and policy.”  This is in stark contrast to the time of the Obama administration, when the US government focused on a rather limited set of issues like China's activities in the South China and East China Seas and use of cyber tools to steal US industrial secrets, and insisted on a cooperative approach toward China.

Differing Agendas 

The US government has thus shifted from the conventional engagement-based approach to China that it had been taking for about a quarter century. Washington now sees China as a rival in great-power and strategic competition. (For an account of the changes in structural factors behind this shift, see my article “US-China: A New Consensus for Strategic Competition in Washington” in the Diplomat, January 30, 2019.) As described above, a competitive posture toward China is now the basic line of both the Trump administration and Congress.

Within the administration there are, broadly speaking, three camps: economic hardliners like US Trade Representative Robert Lighthizer, those who seek stabilization of US-China relations through adjustment, such as Treasury Secretary Steven Mnuchin and National Economic Council Director Larry Kudlow, and national security hawks at the Department of Defense. As each camp pursues its own agenda, President Trump appears to be making the decisions about specific matters.

It seems that President Trump is aiming to reach a settlement in the economic negotiations with China with an eye on timing so as to maximize the political gains for himself. To this end he is seeking to extract concessions from Beijing by applying strong pressure in the form of tariff hikes.

At the present juncture the US government appears to be following the competitive line toward China in unison. But China and Asia policy hands in Washington suggest that there is less than total unanimity within the government, with a debate going on below the surface over which of two “ideal types” to pursue.

As Hal Brands and Zack Cooper explain in a recent article, the strategies favored by policy experts both inside and outside the administration can be classified into four types: accommodation, collective balancing, comprehensive pressure, and regime change. Both accommodation and regime change entail high risks and lack feasibility, and their advocates are in a small minority. In practical terms the debate is between collective balancing and comprehensive pressure.

The strategy of collective balancing, which assumes that China is risk averse, aims to keep countries in the region aligned with the United States so as to ward off the establishment of Chinese hegemony and eventually cause China’s behavior to mellow. Here the “mellowing” of China’s behavior may be taken as roughly meaning the achievement of China’s compliance with the rules that the United States considers important.

The strategy of comprehensive pressure, by contrast, takes China to be relatively risk tolerant and, based on this assumption, aims to maintain America’s leading position by sapping the momentum of China’s rise before it can change the international order at the regional or global level. Another distinction is that collective balancing is mainly a multilateral approach, while comprehensive pressure is mainly bilateral. Note that both approaches are ideal-type strategies, and experts hold differing opinions regarding their inherent propositions.

The contrasting positions regarding the objectives of America’s China strategy have not yet emerged clearly on the surface. The policy of engagement with China that Washington followed for many years did not produce the desired results, and this failure has led to the adoption of a new policy line focusing on competition. But the policy debate has been concerned with the ways and means of strategy, and there has not been an in-depth discussion of strategic ends or objectives.

It is often said that the purpose of US competition with China is to keep it from establishing hegemonic power. However, regarding the actual ends of the strategy, some take this to mean getting China to observe the existing international rules that ensure an open access order, while others take it to mean sapping China’s upward momentum so as to make it abandon its ambitions for global primacy. In other words, there are two rival camps that differ in their basic thinking about America’s “China problem”: one that sees the issue as China’s behavior and another that sees it as China’s power.

The Impact of a Potential Deal  

Washington and Beijing are now engaged in negotiations over trade and a broad range of other economic issues, and some predict that they will reach an agreement before long. Though the details remain unknown, talks are reportedly underway on such matters as increased imports by China, relaxation of conditions on foreign participation in joint ventures, protection of intellectual property and a halt to forced transfers of technology, and the scope and method of elimination of mutual tariff hikes. 

If the two countries reach an agreement in which China accepts a considerable portion of America’s demands, paving the way to the phased reduction of the additional tariffs that Washington has used as its main tool to apply pressure on Beijing, the reactions of the two camps described above are likely to differ.

The advent of such an agreement would probably generate an optimistic mood of relief that the two countries have avoided a full-scale confrontation. The possibility of Chinese implementation of the accord might well lead some—including President Trump, advocates of accommodation and of collective balancing, and a portion of the general public—to adopt a wait-and-see attitude based on hopes that China will modify its behavior.

However, given China’s record of failing to observe various earlier promises, optimistic reactions will likely be accompanied by expressions of caution and skepticism. The United States will of course need to monitor China’s compliance vigilantly, and given the possibility that Washington might decide to reimpose tariffs, some are sure to maintain a guarded outlook, judging that the chances of a new confrontation between the two powers cannot be excluded.

This latter outlook will likely be prevalent among the advocates of comprehensive pressure in both the executive branch and Congress, and regardless of the contents of a bilateral agreement, we can expect to see the continuation of moves to tighten control on inbound Chinese investments and exports relating to critical technology, to counter cyber espionage and attacks, and to persuade other countries to exclude China’s Huawei from their 5G networks.

The camp that wants to curb China’s rise, while not rejecting the agreement outright, may well view it as inadequate. Suspecting that the Chinese will cheat, they may be looking for evidence of violations and working to apply renewed pressure on China.

At the core of the competitive approach toward China is the issue of protecting America’s technology and intellectual property, a concern that involves both industrial and national-security considerations. President Trump, meanwhile, places great weight on reduction of the trade deficit with China, which is a highly political matter. If China makes concrete moves to address these issues and is able to produce visible results in resolving them, the competitive approach, while not going out of existence, may become less prominent, taking the form of a strong current running deep underground. If, on the other hand, China’s moves fall short, we can expect to hear open calls for stronger pressure.

If the contents of the bilateral agreement are inadequate with regard to issues like technology transfer, opposition to it will emerge immediately, and there is no telling how far the sort of scenario described above may be realized. In any case, since the process may be affected by a large number of domestic and external variables, it will continue to be difficult to predict the future course of US-China relations.

(Originally written in Japanese on April 2, 2019 and published on April 9. Banner photo: President Trump looks on as China’s Vice Premier Liu He (left) engages with US Trade Representative Robert Lighthizer in the White House on February 22, 2019. © AFP/Aflo.)