As Global Power Shifts, U.S. Must Win Beijing’s Cooperation

CUS China trade conflict

David M. Lampton via Caixin | From 1945 to 2016, the United States used its economic, military and ideological power to build institutions, alliances and regimes that contributed to global economic growth and the avoidance of great-power war.

In doing so, it fostered the rise of a new constellation of powers, China notable among them, with which it must now deal. If the U.S. wants to see its interests met, Washington must win Beijing’s cooperation rather than try to compel it.

On entering office, President Donald Trump put several contentious issues with China on the back burner in the hope of achieving his primary goal: North Korea’s denuclearization. When that failed, the front burner of U.S.–China relations became crowded with previously repressed issues.

So what might the U.S. usefully do? There are three issues on which Washington should focus: fostering an economic balance of power in Asia that promotes regional stability, achieving more reciprocity in U.S.–China relations and addressing the North Korean nuclear and missile problem.

A central part of China President Xi Jinping’s geo-economic vision is the expansion of regional links and the promotion of urbanization and growth on China’s periphery to make China the central node in this growing region. For Beijing, this means north–south connectivity — namely supply chains that originate in China and extend to the Indian Ocean, South China Sea, Andaman Sea, Bay of Bengal and beyond.

Unless Washington wants Asia to become a unipolar sphere of Chinese influence, it should become more involved in the construction of regional infrastructure to foster linkages that are not just north–south but also east–west from India to Vietnam through Myanmar, Thailand and Cambodia and on to Japan and the wider Pacific.

Turning to reciprocity, when China joined the WTO in 2001 its overseas trade and financial involvements grew enormously. So, too, did its global trade surplus and bilateral trade surplus with the United States. Beijing soon had the technology, capital and capacity to seize the opportunities of openness abroad without providing reciprocal domestic access to the U.S. and others.

From 2008 onwards, the pace of domestic economic, financial and foreign trade liberalization slowed. China’s world trade partners came to realise that as China leapt outward to seize opportunities, it did not reciprocally open itself in areas where foreigners enjoyed comparative advantages. Consequently, the issues of “reciprocity” and “fairness” have moved to front and center in U.S.–China relations. U.S. companies are now asking themselves why Chinese entrepreneurs should be able to freely acquire U.S. service and technology firms when these areas in China are closed to foreigners.

While U.S. feelings of resentment mount, finding ways to enhance reciprocity with Beijing that do not injure U.S. workers or other bystanders is hard. Limiting Chinese investment into U.S. employment-generating firms diminishes U.S. job opportunities. On the other hand, ignoring the problem invites extremist proposals at home as well as contempt in Beijing.

Finally, the issue of North Korea. Trump thought his predecessors had been right in pressing Beijing to put more pressure on North Korea and in their assessment that Beijing had sufficient means to do so. Where they had gone wrong, Trump believed, was in not making it worth Beijing’s while to apply the necessary pressure.

So President Trump suggested that Washington would give Beijing concessions in other areas—trade and Taiwan among them—in exchange for pressure on North Korea. Of all the reasons that this approach has not worked out (including the viability of some of Trump’s promised concessions) the most dominant is that Pyongyang resists following any external advice that it fears would be lethal to the regime.

Consequently, the Trump administration is left with the same stark choices as its predecessors, except that Trump has staked even more on the issue and North Korea is further down its deliverable nuclear weapons path.

It is time for Washington (in close consultation with its South Korean and Japanese allies) to acknowledge that North Korea has a modest nuclear deterrent, and that as a result the United States should shift its aim from denuclearization to deterring the use and further proliferation of these capabilities.

The U.S.–China relationship is fraught with problems and will be for the foreseeable future. The U.S. is no longer positioned to compel cooperation from China. Any policy changes from Beijing must be negotiated, and within this negotiation Washington must seek a balance of power and interests.

David M. Lampton is professor and director of China Studies in the School of Advanced International Studies, Johns Hopkins University

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.