Foreign Policy Research Institute A Nation Must Think Before it Acts America and China Without Illusions
America and China Without Illusions

America and China Without Illusions

China has long occupied a special place in the American imagination.  In the late 19th and early 20th centuries, Americans envisioned a Christianized China that would become an Asian counterpart to the US.  That and other dreams were dashed by the triumph of Mao Zedong and the communists.  However, with the death of Mao and the emergence of Deng Xiaoping as China’s leader in the late 1970s, everything once again seemed possible.  China might not become Christian (at least in the short to medium term) but Deng put in place market reforms and opened the Chinese economy to the world.  Beijing donated two pandas to the National Zoo and Chinese students flocked to US universities.

Washington responded by supporting China’s 2001 entry into the World Trade Organization under special favorable terms.  US businesses built factories in China while Chinese language programs proliferated in American schools and colleges.  China was viewed through the rosiest of rose-tinted glasses – based on assumptions that were little more than wishful thinking.  American businessmen, scholars, and government officials convinced themselves that China was becoming a “normal” country that could be integrated into the existing international system with its laws, values, institutions – and US leadership.  Some even saw a nascent democracy.

However, there were warning signs.  In 1989, when Chinese university students flocked to Tiananmen Square to demonstrate for democracy, army units sent in by Deng massacred them.  In 1995, China established a military outpost in the South China Sea far from China and very close to the Philippines.  Few noticed that Chinese maps showed almost the entire South China Sea as being within China’s boundaries. US businesses found the operating environment within China increasingly inhospitable including the wholesale theft of key data and technologies and government subsidies to Chinese corporate competitors.  The balance of trade between China and the US heavily favored the former in part because the US market was open to China, but not the reverse.

When China’s new President, Xi Jinping, visited President Obama, he promised two things: (1) China would stop its theft of US corporate secrets and technologies and (2) China would not “militarize” the South China Sea.  In the few years since, Xi has ignored both pledges. Today China has a number of artificially constructed military bases in the South China Sea supported by extensive naval deployments.  Last December the US Justice Department unsealed an indictment accusing China’s Ministry of State Security of a longstanding, systematic program to steal key technologies from US firms working in aviation, space, pharmaceuticals, oil and gas, maritime, and other fields.  One informed government official described China’s actions this way: “They basically got the crown jewels of hundreds and hundreds of the world’s biggest companies.”  The targets often included key security and defense technologies.  It is no accident that China’s newest jet fighter looks almost exactly like America’s new F-35. 

We have also had echoes of Tiananmen within China as Xi has imposed an increasingly Maoist-style totalitarian rule.  China is now the most heavily surveilled society in history using advanced facial recognition technologies.  One million ethnic, Uighurs (Muslims) have been interned for “reeducation.”  Hong Kong’s supposed special autonomy has given way to increasingly heavy-handed rule from Beijing.

For the US, the focus is increasingly on technology.  Weeks ago Washington blacklisted Huawei, China’s most prominent and important telecommunications firm.  Huawei’s advanced technologies and pervasive infrastructure are assets available to Chinese intelligence agencies.   Huawei is the world’s number two cellphone provider and the leading competitor in the crucial race to build a new global 5G infrastructure.  The blacklist threatens to cripple Huawei in part by withholding key electronic components that it currently purchases from the US.  China has responded by suggesting a painful blow of its own – stopping the export of rare earths that are a vital ingredient in contemporary electronics.  China has a near monopoly in their supply due to predatory pricing in past years that eliminated foreign competitors.

What began a few months ago as a trade war with tit-for-tat tariffs has now moved into the security/defense arena.  In fact, this is all overdue.  China has been exploiting US naiveté and goodwill to – as the phrase goes – “eat our lunch.” China has been quite explicit about its intentions.  The regime’s “Made in China 2025” promises state backing to make China’s companies (state-owned and “private”) the world’s leaders in supercomputing, artificial intelligence, new materials, 3-D printing, facial-recognition, software, robotics, electric cars, autonomous vehicles, 5G wireless and advanced microchips.  Dominance in these key technologies will assure that: (1) China’s economy will lead the world, and (2) that the Chinese military will prevail on any battlefield.  The stakes could hardly be higher.

The administration’s hard line tracks with a rapidly coalescing US consensus – in the government and across the country – that China must be called to account.  At the same time, there are nagging doubts—that center, ironically, on whether the White House will be tough enough.  This president is fixated on trade balances – on dollars.  He tweets incessantly about tariffs but actually says relatively little about security threats from China.  Trump and Xi will meet at a Summit in late June.  It is likely that Xi will try to entice Trump with flattery and with offers of large purchases of US products – while leaving the security landscape untouched.  How will President Trump, who craves a “deal” and believes personal relations override everything else — react?  He has already suggested Huawei might be part of a trade deal.  Does that mean compromising national security for money?  Already, enforcement of the sanctions on Huawei have been deferred until after that meeting.