FPI Analysis: Assessing U.S. Policy Towards China

February 15, 2012

As Xi Jinping, the First Secretary of the Chinese Communist Party, visits the United States this week, America’s overall strategy towards China remains in flux. 
 
On the one hand, the heavily choreographed visit of Xi—who concurrently serves as China’s Vice President and is expected to succeed President Hu Jintao—reflects President Obama’s desire to constructively engage Beijing.  On the other hand, Xi’s visit comes months after the announcement of the so-called “Asia Pivot,” the Obama administration’s purported effort to refocus America’s foreign and defense policies on the Asia-Pacific region.  The Asia Pivot is widely regarded as a challenge to China’s diplomatic, economic, and military rise.  Indeed, China’s assertiveness in foreign policy was recently on full display, when it joined Russia to deny the United States and its partners, and veto a U.N. Security Council Resolution that would have condemned Syrian President Bashar al-Assad for his regime’s continuing atrocities against its own people, and demanded that Assad step down.
 
Washington and Beijing differ deeply on a wide range of economic, diplomatic, security, and human rights issues.  A strategy of engagement, by itself, cannot completely bridge these differences.  Instead, there is a need for the United States to articulate, clearly and publicly, an integrated long-term strategy towards China that advances America’s core values and interests—one that not only emphasizes U.S. commitment to its allies and partners in the Asia-Pacific, but also supports Chinese dissidents, Tibetans, and Uighurs in their continuing struggle for human rights and dignity. Specifically, the Obama administration, in cooperation with Congress, should take the following actions:

  • Press China, as it further allows the Yuan’s value to appreciate, to fully respect intellectual property rights, roll back massive government subsidies on state-controlled enterprises, and refrain from other anti-competitive practices.
  • Work with partners outside of traditional multilateral institutions like the United Nations to promote U.S. values and interests while minimizing the negative aspects of China’s international influence.
  • Solidify America’s security ties with its allies and partners in the Asia-Pacific to counter-balance China’s growing conventional and nuclear military capabilities, and change current law to avoid devastating cuts to the U.S. defense budget.
  • Make human rights and democracy promotion an integral element of America’s public agenda with China, especially at the presidential level; and pursue concrete policy objectives, such as pressing Beijing to change how it defines and persecutes so-called “subversion offenses,” to respect religious freedom, and to stop vilifying the Dalai Lama, Tibetans, and Uighurs as “splittists” or “terrorists.”

Economy and Trade

RECOMMENDATION:  Press China, as it further allows the Yuan’s value to appreciate, to fully respect intellectual property rights, roll back massive government subsidies on state-controlled enterprises, and refrain from other anti-competitive practices.
 
For better or worse, the United States and China are economically bound together, a factor that can weigh heavily on decision-makers in both countries.  Over the last three decades, China has further liberalized—and thereby grown—its economy, which now ranks second only to the United States.  In 2011, the United States exported an estimated $2.103 trillion in goods and services to China, and imported roughly $2.661 trillion from China.  Beijing is also one of the biggest owners of U.S. government debt, holding roughly $1.132 trillion in U.S. Treasury Securities as of January 2012. 
 
U.S. proponents of closer political ties with China often cite this economic interdependence to mistakenly claim that Washington cannot afford any major disagreement or confrontation with Beijing.  However, interdependence cuts both ways.  For example, it is far from clear that it would ever be in China’s interests to liquidate its vast holdings of U.S. government debt—even in a time of great international crisis.  Indeed, such a move would have a severe negative impact on both America’s and China’s economies.  The point is that economic interdependence should not deter Washington from taking principled stands with Beijing on issues that affect America’s core values and its diplomatic, economic, and security interests.
 
Although Washington’s economic rhetoric towards China has focused largely on encouraging Beijing to allow its currency to fluctuate, other bilateral economic issues deserve greater attention.  In fact, China has actually allowed its currency to appreciate in response to U.S. complaints, as the Yuan has risen 31 percent in value against the dollar since June 2005.  Despite this, the Senate passed legislation on Chinese currency policies in October 2011 that would penalize Beijing through the imposition of tariffs on Chinese imports.  The Obama administration and Speaker of the House John Boehner declined to support the bill—and rightly so, given the likelihood that U.S. tariffs could lead to a trade war with China. 
 
Instead, the United States should press China on its negligent enforcement of international rules regarding intellectual property rights, which continues to undermine key sectors of the U.S. economy.  China remains one of the world’s largest sources of counterfeit goods.  As the U.S.-China Economic and Security Review Commission stated in its 2011 report to Congress, “The Chinese government itself estimates that counterfeits constitute between 15 and 20 percent of all products made in China.”  The report goes on to note that employment in the United States could increase by as much as 2.1 million jobs “if China were to adopt an intellectual property system equivalent to that of the United States.”
 
The United States should also press China on its attempts to dominate Chinese domestic markets by heavily subsidizing a large number of state-controlled enterprises.  In effect, Chinese government subsidies have restricted U.S. and other foreign companies from competing effectively within China’s economy.  As Dean Cheng and Derek Scissors of the Heritage Foundation write, “These practices reserve the majority of the economy for a relatively small number of firms, blocking American exports to the PRC and other opportunities for American firms there.  Given China’s size, the subsidies now also warp markets globally.”

Foreign Policy

 RECOMMENDATION:  Work with partners outside of traditional multilateral institutions like the United Nations to promote U.S. values and interests while minimizing the negative aspects of China’s international influence.
 
China’s diplomatic, economic, and military rise is challenging the global order.  Indeed, Beijing’s foreign policy has become increasingly at odds with that of Washington. 
 
In the U.N. Security Council, China is using its veto power to shield rogue regimes from international scrutiny.  In early February 2012, China joined Russia in the Security Council to block international efforts led by the United States, Europe, and the Arab League to halt the Assad regime’s continuing bloodshed in Syria.  In addition, China continues to oppose international efforts to impose and implement harsh economic sanctions on Iran for its ongoing efforts to develop nuclear weapons in violation of international obligations.
 
In Southeast Asia, China’s rejection of international law in pursuit of territorial and maritime claims in the South China Sea poses a direct threat to U.S. allies and interests.  In response, nations across the region—including the Philippines, Singapore, and Vietnam—not only have begun to bolster their own military capabilities, but also are looking to the United States for reassurance.
 
China also continues to turn a blind eye to North Korea’s ongoing violations of international law and atrocious human rights abuses.  By protecting Pyongyang, Beijing ensures the existence of a satellite regime and economic partner at the expense of regional security.  As the U.S.-China Economic and Security Review Commission stated in its 2011 report to Congress: “Continued Chinese support for North Korea and Iran demonstrates China’s willingness to place its national interest ahead of regional stability by providing economic and diplomatic support to countries that undermine international security.”
 
Washington should not allow veto-wielding members of the U.N. Security Council to hold America’s strategic and moral responsibilities hostage.  If and when China uses traditional multilateral institutions like the United Nations to obstruct, the United States should not hesitate either to use alternatives means to create international consensus to take action—such as through the use of ad hoc coalitions of like-minded nations, or through established regional political or military groupings to which China does not belong—or to act alone.

Military Competition

 RECOMMENDATION:  Solidify America’s security ties with its allies and partners in the Asia-Pacific to counter-balance China’s growing conventional and nuclear military capabilities, and change current law to avoid devastating cuts to the U.S. defense budget.
 
The United States and China are engaged in a long-term strategic competition.  As China grows its conventional and nuclear military capabilities, so too will its ability to project its power and influence more effectively not only regionally, but eventually more globally.  China’s military rise therefore poses serious risks to the security and interests of the United States, and its allies and partners in Asia-Pacific region.
 
China’s increasingly assertive foreign policy is backed by the growing capabilities of the People’s Liberation Army (PLA).  Although Beijing’s official defense doctrine states that “China pursues a national defense policy which is defensive in nature”, the PLA has developed a comprehensive defense strategy aiming to project Chinese power and influence across the South China Sea, the Taiwan Straits, and elsewhere in the Asia-Pacific; to secure the delivery of raw materials and energy to the mainland; and to deter and defeat the militaries of the United States and other regional rivals.
 
China’s defense spending has grown dramatically over the past decade.  A 2011 Pentagon report states that China’s publicly-available military budget grew at an average of 12.1 percent from 2000 to 2010.  The Economist estimates that China’s annual defense spending will surpass America’s by 2025.  It is important to note that comparisons of U.S. and Chinese defense spending must also account for a key difference:  whereas America’s security interests span the globe, China’s security interests and military investments are, for the time being, more regionally focused.
 
Whatever the actual numbers, the intent of Beijing’s conventional and nuclear military modernization efforts is clear.  China’s advanced naval capabilities far outpace those of its competitors in the Asia-Pacific region, and are designed to challenge those of the United States.  China is prioritizing the development of advanced ballistic and cruise missiles that are aimed to deny U.S. aircrafts and ships access to nearby waters. 
 
Defense analysts have also noted the growing threat from Beijing’s advances in underwater military capabilities.  A recent report by the Center for New American Security states: “China has over 60 submarines and will have around 75 in the next few years, slightly more than the United States (and only about 55 percent of U.S. submarines will be stationed in the Pacific).”  China’s evolving submarine force aims to ensure Beijing’s pre-eminence among western Pacific naval powers, and limit the U.S. Navy’s ability to operate in the region.  At a Congressional staff briefing, Dan Blumenthal of the American Enterprise Institute said that “China’s economic success and growing military might are emboldening it to press its maritime territorial claims and carve out a maritime sphere of influence in the Western Pacific that would restrict U.S. military access to the region.” 
 
The PLA’s growing confidence was clearly displayed during then-Secretary of Defense Robert Gates’ visit to Beijing in January 2010, when China’s Air Force tested its fifth-generation J-20 fighter for the first time.  Asia expert Michael Auslin writes: “More assured of its capabilities, the Chinese military has at the same time become more confident, expanded its domestic influence and undertaken to deploy its assets in an attempt to mark off nation interests and assert both a regional and global security role.”
 
In response, the United States should continue to solidify security ties with its allies and partners in the Asia-Pacific.   President Obama has taken positive steps over the past year, most notably with his November 2011 announcement to station 2,500 Marines in Australia.  The Pentagon is in ongoing discussions with the Philippines and Singapore.   The United States should continue its efforts to further integrate itself into the regional security architecture, and foster greater security cooperation among the major regional powers. 
 
In addition, the Obama administration should work with Congress to completely reverse the trillion-dollar cut to long-term defense spending that is mandated by current law.  U.S. strategy in the Asia-Pacific relies on a qualitative and quantitative military edge, especially in its naval and air assets.  Unfortunately, many key next-generation systems and platforms have been delayed or cut by the President’s several rounds of defense cuts.  These reductions undermine and under-resource American military capabilities, and limit the efficacy of U.S. security efforts in the Asia-Pacific.

Democracy and Human Rights

 RECOMMENDATION:  Make human rights and democracy promotion an integral element of America’s public agenda with China, especially at the presidential level; and pursue concrete policy objectives, such as pressing Beijing to change how it defines and persecutes so-called “subversion offenses,” to respect religious freedom, and to stop vilifying the Dalai Lama, Tibetans, and Uighurs as “splittists” or “terrorists.”
 
There is a strong argument that the White House should have canceled Xi’s visit in response to China’s significant escalation of human rights abuses, and its veto of a U.N. Security Council Resolution to condemn the Assad regime’s human rights atrocities.
 
Xi’s visit should not pass without a frank assessment of the situation, a strong statement of support for human rights in China, and the identification of objectives for U.S. policy.  These objectives should include:  the release of Liu Xiaobo, the 2010 Nobel Peace Prize winner, and other political prisoners; changes in the definition and application of Chinese laws against subversion so as to allow for freedom of expression; respect for religious freedom; and an end to vilification of the Dalai Lama, Tibetans, and Uighurs as “splittists” and “terrorists”; and the integration of human rights and democracy into the U.S. policy agenda towards China, and specifically into the U.S.-China Strategic and Economic Dialogue.
 
Over the past year, China has escalated repression beyond the heightened level that was imposed in preparation for the 2008 Summer Olympics in Beijing.  Fearful of the influence of protest movements in North Africa and the Middle East, and the collapse of the Egyptian and Tunisian dictatorships, China has lowered the threshold for unacceptable dissent.  For example:

  • A series of long jail sentences have been handed down to writers for “incitement to state subversion” merely for expression of ideas—and in one case, for writing a poem.
  • Continued repression in Tibet, and Chinese intransigence in the dialogue between Beijing and representatives of the Dalai Lama, has led to self-immolation by 20 Tibetans in the past year.
  • Chinese security forces fired on Tibetans demonstrating peacefully in late January 2012, killing several people.
  • There has been a massive increase in security forces in Tibet, as well as in East Turkistan, where a violent attack on Uighurs attempting to flee in December 2011 left several dead, including children. 

China rejects criticisms on human rights as interference in its domestic affairs, yet strongly pressures other countries to deny refuge to Tibetans and Uighurs.  Beijing not only seeks to cut off Nepal, the main escape route for Tibetan refugees, but also is training Nepal’s security forces. China has also coerced Central Asian countries and Cambodia to repatriate Uighur refugees, in violation of international law.  Moreover, as the Chinese veto of a U.N. Security Council resolution criticizing Syria’s killing of civilians illustrates, China undermines respect for democratic values in international institutions and provides political and other backing for authoritarian regimes.  
 
The Obama administration has issued public statements acknowledging the “deterioration” in conditions for human rights in China, but done little to make the issue a priority or to exact consequences for the escalating abuses. The U.S.-China Human Rights Dialogue has been largely ineffective.  In addition, human rights and democracy issues have not been integrated into the U.S.-China Strategic and Economic Dialogue, established by the Obama administration in 2009. 
 
Fortunately, President Obama has resumed the tradition of meeting the Dalai Lama in the White House, begun by President George H. W. Bush, after initially breaking with that tradition before his first trip to China.  So far, however, the Obama administration has not articulated a significant role for democracy and human rights in the “Asian Pivot.” Nor has it found other, even symbolic ways, to signal solidarity with human rights, religious, and labor activists, and writers and journalists.  Instead, it has shied away from welcoming exiled Chinese, Tibetan, and Uighur dissidents to the White House and State Department, as the Bush administration did.

Conclusion

 The United States and China are locked in what Aaron Friedberg has termed a “contest for supremacy” in the Asia-Pacific region.  Washington and Beijing differ deeply—and perhaps irreconcilably—on many economic, diplomatic, security, and human rights issues.  But military conflict between the two countries is not preordained.  No doubt, Washington must prudently prepare for the rise of a China that is decidedly undemocratic and potentially combative.  At the same time, the United States, in cooperation with its allies and partners in the region, should coordinate efforts to encourage China to moderate its international behavior in all of these areas.

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