China and America: At a Dangerous Tipping Point

The notion of a cooperative U.S.-Chinese economic relationship, balanced by security hedging, has run aground.

Just a year ago, presidents Barack Obama and Xi Jinping met in California and, in shirtsleeves, proclaimed a “new type of major-power relationship.” A noble aspiration, perhaps. But in the interim, such stage-managed optimism has been dangerously overtaken by a cascade of troubling events.

One day, the United States indicts five PLA officers for cybercrimes; the next, the United States claims victory in WTO disputes over car tariffs and rare earth minerals. All this is happening while the United States promises enduring support for Asian allies, and it has moved openly to challenge the legitimacy of Chinese territorial claims in the South China Sea. Meanwhile, China is busy creating facts on the ground and water. Last month, a $1 billion Chinese oil rig set up operations in territorial waters claimed by Vietnam. In the East China Sea, Chinese SU-27 fighter jets have come within 100 feet of Japanese surveillance aircraft.

This was all capped at the recent Shangri-La Asian Security dialogue in Singapore (Asia’s annual defense-ministers meeting): Defense Secretary Chuck Hagel bluntly described China’s behavior as “destabilizing, unilateral actions.” The PLA deputy chief of staff, Lt. Gen. Wang Guanzhong, accused the United States of “hegemonism.”

The mood has soured, more than the usual ups and downs of big-power relationships. The question now is not whether a “new type of relationship” is in the offing, but rather, whether U.S.-Chinese relations have reached a tipping point.

From WTO cases to Beijing’s behavior along the western Pacific, the thread that links them all is the question of global rules and norms. As China integrated into a global system, rapidly becoming a major beneficiary, an expectation arose that it would also invest itself in a rules-based order. The implied bargain: With steadily more weight would come more opportunity to shape the rules—just as the United States had done in its twentieth-century rise and postwar influence.

For an entire generation, the United States and its allies and partners in Asia have embraced a hedging strategy toward China: on the one hand, full economic cooperation with booming trade and investment; on the other hand, moves to counterbalance China’s growing military capacity (which was the result of two decades of double-digit growth in military spending). Much faster than predicted, China has gained sophisticated, new military capabilities: Our defense department reckons China’s defense budget at $145 billion, second only to the United States.

Until now, the hedging strategy—a partly cooperative/partly competitive template—has made sense. It reflected and respected both China’s complexity and its three-decade integration into the international economic system. China has become a major economic partner of the United States, with $562-billion in bilateral trade in 2013.

The rules-based order enabling these changes belongs to China just as much as to the West. For many years, the liberal ‘institutionalist’ school has argued that helping China integrate into the global system would shape and constrain its behavior. This aspiration congealed into hope that Beijing would emerge a “responsible stakeholder”, now contradicted by China’s neomercantilist security agenda.

Instead, like a classic rising power, Beijing has become more assertive as the power gap has narrowed between the United States and China. President Obama had barely returned from his recent trip to Asia when Beijing unambiguously began to probe U.S. resolve by placing that oil-drilling rig and a flotilla exceeding one hundred vessels, including coast guard and PLA Navy ships, in Vietnamese territorial waters.

Along the western Pacific, and in Asian land borders elsewhere, the basic assessment of China’s long term intent is changing. In particular, the notion of a cooperative U.S.-Chinese economic relationship, balanced nicely by security hedging, has run aground—no matter how much the U.S. business community might wish otherwise.

Incrementally but inexorably, mirror-image military competition in both the Pentagon and the PLA has led to worst-case planning. The specter of conflict sows growing strategic distrust on both sides. China develops antiship missiles designed to take out U.S. aircraft carriers and, more broadly, to deny U.S. maritime access; meanwhile, the Pentagon develops its “Air-Sea Battle” concept—a military option whose argued goal is to strike mainland China preemptively, destroying Chinese offensive capabilities.

Something’s got to give. It is difficult to see how two contradictory paths—economic integration and security confrontation—can be sustained. The time is fast approaching when the United States will have to decide how and where to draw the line. We are well on the way: Washington now openly challenges the legitimacy of Beijing’s South China Sea claims as well as China’s expansive and unilateral definitions of air and maritime control aimed at curtailing U.S. and allied access.