China’s sudden declaration of an Air Defence Identification Zone (ADIZ) over Japanese-administered islands in the East China Sea is yet another vindication of U.S. policy in the region. While there have been a number of criticisms of President Obama’s pivot to Asia, the policy was and remains prudent. The decision to re-orient itself back to the Pacific was largely in reaction to a perception that a lack of diplomatic focus had not been good for the region. U.S. regional allies, such as Japan, Singapore, and the Philippines, argued that a continued absence of focus by the United States in the region had become increasingly dangerous as China began to inexpertly exert its power, particularly over maritime-domain disputes. It has done this through a long-term incremental approach to de facto sovereignty over the East and South China Seas. In many ways, these claims have resurrected the logic of balance-of-power politics, and while Southeast Asian states have striven to avoid choosing between Washington and Beijing, the feeling was that China was taking advantage of the vacuum to assert a power-based hierarchical order. While Washington has also tried to avoid a zero-sum competition with China, the Bush administration and Obama administration began to carefully shift their view of China as it behaved with increased hubris in the region.

In the year following the announcement of the pivot policy, Chinese pundits accused the United States of containment, decrying a purported U.S. plan to stem China’s rise as a great power. This accusation is mistaken for a number of reasons. First, it ignores America’s prominent role in developing China’s economy. Throughout the 1990s, the United States granted China most favored nation trading status, making this permanent in 2001. In addition, the United States sponsored China’s entry into the World Trade Organization (WTO) in 2001. While there are no statistics on this topic, U.S. investments into China since the 1970s could be over the trillion dollar mark.

Robert Manning from the Atlantic Council has argued if the United States wanted to enact a policy of containment of China, it would look quite different from the complex policy package that we see today. It would, for example, involve far more balancing behaviors, including the attempted the diplomatic sidelining of China, a military build-up aimed specifically at Chinese platforms, and the creation of further alliances in and around China’s periphery. The United States is not attempting such policies, nor does it think such policies are possible. Instead, as Evan Medeiros has argued convincingly, Washington is carrying out a policy of strategic hedging, a dual-track policy in which it pursues two broad policy objectives: one of engagement, and one of simultaneous balancing. This article seeks to show how the United States came to follow such a complex policy, while also examining the strengths and weaknesses inherent in such a policy.

The rise of China and its increasing willingness to exert diplomatic and even military power—albeit restrained—over other regional states, especially regarding the South and East China Seas from 2008 on, is a characterization shared by policymakers in the United States, East Asia and Southeast Asia. While the United States did not and does not take a stance in these disputes, it has deep strategic interests in the region, and has undertaken great efforts to reassure allies and constrain Chinese adventurism. U.S. interests are vitally affected: not only do these conflicts have the possibility to affect U.S. trade; they can also affect the energy and trade routes of its primary alliance partners, South Korea, Japan, Thailand and the Philippines. Furthermore, if U.S. commitments to its allies are to remain credible, it must protect the maritime trading order built over the post-War period.

The Pivot in Context

So how did the United States come to enact a policy of hedging towards China?

It certainly evolved under the George W. Bush administration, but only after an integrationist Clintonian vision for the region had failed. If one examines the 1994 National Security Strategy under President Clinton, one can see that the White House had an inclusive vision for the region. Buoyed by the victorious resolution of the Cold War, U.S. policymakers focused on using America’s bilateral alliance network to foster a security community in the Asia Pacific. This vision was most clearly laid out in a 1993 speech by Clinton to the South Korean National Assembly, in which he called for “a new Pacific community built on shared strength, shared prosperity, and a shared commitment to democratic values.” The concept of a security community was first developed by Karl Deutche in 1957 to describe the socialization process in postwar Europe by which European states formed an informal society or community with customs and internal rules. The development of NATO alongside the EU had fostered a taboo against the use of force in resolving political disputes, something U.S. policy planners sought to recreate in the Asia Pacific.

At the time, this new policy meant gradually discarding John Foster Dulles’ ‘hub and spokes’ system of the Cold War, a system whereby Washington kept its alliance relationships in Asia separate from each other. By the early 1990s, U.S. policy makers realized that the ‘hub and spokes’ system had to evolve if it were to remain relevant to regional architecture developments in Southeast Asia. Perhaps they could play the hard power role that NATO had played to European Union efforts at political integration. Such a policy would give the United States the best of both worlds: the ability to maintain peace and stability in the Pacific, while also being able to shape a normative environment for ASEAN and a rising China to develop into. Clinton’s China policies were groundbreaking at the time; despite concerns over China’s human rights record, he continued to push for most favored nation trading status year after year as part of this effort to shape the region.

One could argue that this liberal approach did not fully appreciate the spoiling power of Cold War remnants. North Korea and China had not really fully adjusted to the post-Cold War mindset of the Clinton administration and still had serious issues with the status quo. First, the North Korean nuclear crisis in 1994 revealed that country’s feeling of vulnerability and desire to survive. The Third Taiwan Strait Crisis, during 1995-6, demonstrated the level of China’s unhappiness with the continued existence of Taiwan as a separate state. The combination of crises dispelled U.S. efforts to marry its alliance system to a security community, and instead reinforced the traditional defensive roles of the alliances. For example, the United States leveraged Japan’s sense of vulnerability after the 1993 North Korean missile test, to gain a broader regional support role for the U.S.-Japan Alliance in the 1996 U.S.-Japan Joint Declaration.

U.S. aspirations to develop a security community by marrying its alliance system with ASEAN was devastated by the Asian financial crisis, which was believed by many in the region to have been the result of U.S. policies. The evolution within Washington of a vision of China as a potential partner to one of China as a potential threat emerged from a number of events following the near-disaster of the 1995-96 Taiwan Crisis. The damning 1998-9 Cox Report documenting cases of Chinese espionage in the United States was followed by the 1999 U.S. bombing of the Chinese embassy in Belgrade. This period saw a hardening of expectations vis-à-vis China, and the beginning of the U.S. hedging strategy, which was articulated in the 2006 National Security Strategy. This NSS had a sizable section on China, stating that “the United States will welcome the emergence of a China that is peaceful and prosperous and that cooperates with us to address common challenges and mutual interests”, if China keeps its commitment to “walk the transformative path of peaceful development,” but encouraged China to let go of its “old ways”. The United States, the 2006 NSS continues, “seeks to encourage China to make the right strategic choices for its people, while we hedge against other possibilities.”

So what are the benefits and dangers inherent in a hedging policy?

The main benefit is that the United States continues to trade and interact with a potential peer competitor, while also seeking to shape that state’s policy choices. It can continue to promote the economic benefits of the relationship, while simultaneously attempting to ‘socialize’ China into the norms and customs it upholds in the region. Former Secretary of State Hillary Clinton’s deliberate choice to avoid taking sides over the South China Sea issue in 2010 is an example of this. Rather than forming an anti-China bloc over the issue, U.S. policy, she insisted, was that all disputes be solved peacefully, according to the rules-based system favored by the United States. China has yet to resort to force over its disputes with Vietnam, Philippines, or Japan. In many ways, hedging reveals a certain optimism on the part of those who utilize it. The potential opponent is not yet a lost cause, and elites of one state can seek to shape the policy choices of another state.

Hedging, then, is a mixture of realism and hopeful constructivism. Furthermore, one can avoid the self-fulfilling drift towards conflict—known as the security dilemma—that occurs when states carry out harder forms of balancing behavior against each other.

Some—such as Aaron Friedberg—would argue that the United States is already caught in a security dilemma with China and that this can be seen in U.S. policy since the Bush presidency. After all, in the period following 2005, U.S. policy makers have undertaken serious efforts to enhance the scope and depth of the bilateral alliance partnerships. There are now trilateral relationships linking the U.S.-Japan alliance to Australia, South Korea, and India. Furthermore, the 2005 U.S.-India Civil Nuclear Agreement is often couched in terms of
U.S.
balancing strategy towards China. While the policy documents of these trilaterals do not specifically refer to China—indeed, they are often focused on non-traditional security—their existence is meant to have a restraining effect on Chinese action in the region. ="#p5">="#p5">

Another form of balancing behavior carried out by the United States and China towards each other has been military signaling and doctrine. The decision in January 2007 by China to shoot down one of its own weather satellites constituted a warning to the United States that its systems were vulnerable in any future Taiwan contingency. The United States’ response the following year sought to equalize that vulnerability. The development of other such systems by China including a supposed anti-ship ballistic missile, super cruise missiles like the CJ-20, and other such systems are specifically targeted at U.S. naval platforms. Collectively, these developments have been dubbed anti-access/area-denial (A2/AD) and have led to the counter-development of the AirSea Battle operational concept. One result of this quiet signaling war has been for the U.S. military to undergo a serious rethinking of its military assets in-region, as shown by the basing of U.S. Marines in Australia, the basing of U.S. naval elements in Singapore, and the consideration of facilities in Vietnam and the Philippines. Despite all this, it would be wrong to say that the DOD only represents the balancing side of U.S. policy towards China. The Pentagon’s own efforts at engagement with China are less well-known, but are nonetheless remarkable for their depth and ongoing nature.

Such efforts, well documented in policy journals, include U.S. support for military-to-military engagement, clear and transparent communications, and efforts to develop trust-building mechanisms to deal with maritime disputes. One of these, the Maritime Military Consultation Agreement, was signed as early as 1998, though it has floundered in obscurity. On the other hand, the DoD has taken many steps to develop closer relations with the Chinese military, a consistent policy from the first term of the Obama presidency. This has included feting senior Chinese military delegations in Washington, such as the 2011 visit by General Chen Bingde, and the invitation to the PLA Navy to take part in RIMPAC 2014, the large U.S. naval exercises held in the Pacific. The DoD engagement strategy complements and coexists with a plethora of engagement policies carried out by the Department of State and the Department of the Treasury. These are generally well-known and include large-scale trading initiatives, the U.S.-China Strategic and Economic Dialogue, and growing dialogue over North Korea and Iran.

So what are the disadvantages to Washington’s hedging strategy with China?

Well, the most obvious disadvantage is misperception. The strategy is so little understood in China itself that a great deal of U.S. diplomacy is spent reassuring China that it is not attempting to contain it. This is no idle misperception: should Chinese officials decide that U.S. policy is intended to keep them down, they may throw off restraint in future dealings. Another serious weakness is incoherence, an argument made by Edward Luttwak in a recent book on China. He argues that the United States seems to have three China policies: one of engagement by the Department of the Treasury, one of confrontation by the Department of State, and one of containment by the Department of Defense. To some extent, his argument does not take on board the nuances in policy that a single department may have, as evidenced above. The real question about hedging is, does it do what it is supposed to do? Does it seek to shape and restrain the behavior of a rising power and thereby prevent conflict? If one looks at the behavior of Great Britain before the Second World War, one could argue that it too was carrying out a hedging strategy towards the rise of Germany. It had, for example, signed alliances with Poland, the Low Countries, and France. It had also started on a route of cautious rearmament—developing weapons systems like radar, the Spitfire, and a capable bombing force. Despite this nuanced policy, history has judged the cautious policies of Neville Chamberlain by his greatest failure, at Munich.

Clearly Washington is in a difficult position of trying to welcoming a large peer competitor into the existing international order—a difficulty exacerbated by different different histories and political cultures. Those who argue for pure engagement are perhaps naïve to the opportunism prevalent in the foreign policies of rising powers. Those who argue for pure containment are perhaps unaware of the self-fulfilling nature of such policy bundles.

As Vice President Biden wraps up his visit to Northeast Asia this week, his struggle to keep a lid on growing tensions between China and Japan echoes the larger struggle facing U.S. policy in the region more generally: how to accommodate China without giving in to it. Unfortunately, there is no easy answer to this conundrum, and current tensions could potentially spill out into open conflict through misperception or miscommunication. The U.S. decision to fly bombers through the ADIZ just after it was announced shows Washington’s commitment to the regional status quo. On the other hand, Biden’s visit showed Beijing that the door was still open for business. It is this combination and the communication of this combination that is the real foreign policy tightrope. Communication must be equally effective to China as it is to U.S. allies in Tokyo and Seoul. The consequences of misjudgment are grave: the pre-war German attempt to incrementally reorder the European system after the First World War is testimony to the stakes involved. While China’s ambitions are comparatively modest relative to those of 1930s Germany, the stakes are high for those with Chinese-coveted territory. This is complicated and inflamed by deep historical fault lines and the growth of Chinese nationalism input into foreign policy decision-making. Some are now predicting a new Chinese ADIZ in the South China Sea within the next six months. Should Beijing continue reaping sovereignty over the regional seas, the United States will have to react more forcefully. What could it do? Well, call a conference of course. Just don’t call it Munich.

John Hemmings is a non-resident SPF Fellow at the Center for Strategic and International Studies’ Pacific Forum.