A ’Bumpy’ U.S.-Chinese Relationship

The U.S.-China Strategic and Economic Dialogue (WashPost) is taking place amid tensions over the case of human rights activist Chen Guangcheng, one of many sensitive bilateral issues. CFR China expert Adam Segal says that despite growing U.S.-China economic ties, the relationship is "entering into a more bumpy period," with stress points including China’s territorial claims in the South China Sea, U.S.-Chinese differences over how to deal with Iran and North Korea, and questions about cybersecurity. While the United States and China have cultivated growing economic ties, says Segal, the relationship between the two countries is in search of "guiding principles" that have been absent since China joined the World Trade Organization in 2001.

In advance of the start of the U.S.-Chinese high-level strategic and economic talks in Beijing, the two sides worked out an agreement to resolve the problem of Chen Guangcheng, the Chinese dissident who had sought refuge in the U.S. Embassy. The Chinese apparently have agreed to let him stay free, studying at a university, united with his family. Do you have some thoughts on how this turned out? [*Editor’s Note: News reports on May 3 indicate that Chen and his family have changed their minds and want to get asylum in the United States, complicating U.S.-Chinese relations.]

A fairly remarkable and surprising outcome. Clearly both sides are happy not to have the issue drag on, but of course a big question will be if Chinese authorities keep their side of the deal. The other question is how does Beijing save face in what clearly looks like U.S. interference in internal affairs. Probably the focus becomes the mistakes of the local government and how the central leadership is now righting the situation.

What are some of the major issues likely to come up in the strategic and economic dialogue?

Iran, North Korea, renminbi [currency] evaluation, Chinese policies, indigenous innovation, some of the dumping cases. Those are the major ones. There may be some new topics, including cybersecurity.

Historically, there is concern by the Chinese every time the United States says it is considering a new arms sale to Taiwan, which the United States has announced recently. Also in recent months there has been a concern over issues regarding Chinese territorial claims in the South China Sea and the U.S. stated policy of basing more of its troops and forces in Asia. How do you see the Chinese agenda right now?

The Chinese will clearly restate their opposition to any arms sales to Taiwan, but that right now is fairly speculative. What we have is a letter from the administration saying it would reconsider the sale of the more advanced F16 C/Ds to Taiwan, but no real assurances yet. Clearly, the Chinese will also push back on the United States and criticize the United States for politicizing the South China Sea controversies, and suggest again that China can handle the situation bilaterally with its neighbors in the region and [that] the United States is really making the situation worse.

Is the United States making the situation worse?

At this point, no. It is responding to requests for support from many of the countries that have claims on the South China Sea. The United States is trying to give them some confidence to engage China more directly, but we have to be fairly prudent about how confident we want to make those smaller countries because we don’t want them to provoke China. The United States has been fairly clear that we have for the most part remained agnostic about sovereignty claims. We just want them to be resolved without using force and relying on rule of law.

There have been some reports recently suggesting that China has been more cooperative on Iran and North Korea. Do you see it that way?

Yes, China has been reducing oil purchases from Iran and has been putting more pressure on Iranian oil companies. The issue is, of course, why they’re doing it. Right now it certainly serves their purposes. It allows them to receive cheaper prices from Iran. So we’ll get to know as we get closer to the summer, when the economic sanctions really cut into Iran, how far China is going to go.

With North Korea, what we’re basically seeing is more of the same. The Chinese continue to be extremely reluctant to put real pressure on the North Korean regime. But they are certainly not happy with the new leader, Kim Jong-un, and they are going to have an issue if the North Koreans decide to test a nuclear device again. But in the end, the final decision about putting real pressure on the North Koreans is not likely to come, and we’re going to face the same frustrations as we always do with Beijing.

Has the U.S.-China relationship improved during the Obama administration? Is it about the same as it was before?

It’s a relationship still in search of its guiding principles. In the final days of the Cold War, after the United States opened relations with Beijing, we could balance ourselves against the Soviets, giving the relationship some shape. Then we had the tragedy of Tiananmen [1989], which threw the relationship into disarray, but then we had China’s joining the WTO in 2001, and so the focus was heavy on economic issues.

Since then, once China entered [the WTO] we’ve really had no guiding principles. We’ve tried the "responsible stakeholder" [approach] under the Bush administration; the Obama administration started off with encouraging China to be a global partner, and that didn’t work as well as the Obama administration had hoped for, and then they pushed back against China. Now we see the new pivot toward Asia. But there is no guiding principle.

So what we can expect is that the relationship is very cyclical--it has its good points and its rough periods, because the two sides are constantly bumping up against each other. We’re entering a more bumpy period. But overall, given the widespread economic interdependence between the two sides and the increasing people-to-people contact, I suspect the damage will not be dramatic to the relationship, but we will continue to bump along.

China’s leadership will change at the end of the year, with a new president, Xi Jinping. What is Washington’s view of him?

His visit in February was clearly an effort to try and get to know him better; we don’t really have a great deal of insight of what he’s bound to do or what vision he has for China. We know he’s a princeling; his father was a revolutionary leader. He was probably chosen for the position because he was seen as a consensus candidate who was unlikely to make radical or dramatic changes. During his visit, the personal relationship between him and Vice President Biden, and the meeting with President Obama, were slightly warmer than it had been with current President Hu Jintao, but I don’t think we’re really going to know how relations will turn out until he is in the job.

Of course, the big question, with the removal of [Chongqing party chief] Bo Xilai, is whether the succession is going to go as smoothly as we had all expected. Is Xi going to be able to strengthen his position, or will he be weakened in the upcoming factional struggles that seem bound to happen over the next couple of months?

And the question of Mr. Bo: This is obviously a shattering experience for the leadership, isn’t it?

It is. Certainly from the outside, before all of this, the succession was going fairly smoothly. The story that the party had been telling that it was essentially a meritocracy, that it was moving toward the rule of law and transparency--all of this has been completely ruptured by the Bo case. The Chinese press is saying, "Oh you know, the removal of Bo Xilai happened completely by law and shows that the party is following those provisions." It’s hard to say that with a straight face. So, yes, it certainly exposes the party to charges of high-level corruption, which is a major concern for legitimacy and stability.

Your specialty in recent years has been cybersecurity. Do we have big problems with the Chinese hacking into American companies? What are the issues?

There are two or three major ones. The first one, as you mentioned, is the theft of U.S. intellectual property, primarily focused on U.S. private companies. This is happening on an extremely large scale. We don’t really have a good metric for it, but we do have this new report from the Office of Counterintelligence saying that the Chinese along with the Russians are the major actors in this space. How do we protect U.S. intellectual property; how do we get the Chinese to stop being involved in industrial espionage?

Then there’s the larger focus, which is on cyber conflict, or what you would call cyber war, and what would happen if these tools are used in actual military conflict. Would they be deployed, for example, if there was some type of military encounter between China and the United States over the South China Sea or Taiwan? There’s no real agreed-upon rules on how you respond if China attacks the United States through a cyberattack. How would the United States respond? Would it respond with a cyberattack? With missiles?

All these things are uncertain, and there is a great deal of worry about misperceptions and uncertainty, especially since it is very hard to decide where an attack comes from.

Are the Chinese getting hacked from the United States?

They are. One has to assume that the United States intelligence agencies are very active hacking into Chinese networks. On the criminal side, they are also frequently attacked. The Chinese often say they are the world’s biggest victim, and mention that many of the IP addresses from the attacks come from the United States, Japan, and South Korea. In the long term, this should give us a kind of common base from which to work from--that both sides realize that this is a problem, and seem vulnerable to the attack--and you can kind of hope that we could address the problems together.