Why Did the US-China Relationship Collapse, and Can It Be Repaired?

Why Did the US-China Relationship Collapse, and Can It Be Repaired?

Why Did the US-China Relationship Collapse, and Can It Be Repaired?

Ending mindset of zero-sum conflict among elites in both countries is needed to address existential dangers.


After five years of plummeting relations between the US and China, Presidents Xi Jinping and Joe Biden met at the G20 summit in Bali last week. It was their first in-person meeting since Biden took office nearly two years ago. The aim, according to US national security adviser Jake Sullivan, was to “build a floor for the relationship and ensure that there are rules of the road that bound our competition.” Early indications are hopeful: the Xi-Biden meeting reportedly went well, and both sides seem genuinely interested in reducing the acrimony that now dominates. But the “guardrails” that the Biden administration has promoted to prevent open conflict are no match for the forces pushing the two countries into confrontation. A more ambitious agenda—in which the two countries work together to reform the global system—is needed to resolve the structural drivers of conflict.

The obstacles to such cooperation are daunting. Nationalism and militarism are growing in both countries, and a perception of zero-sum conflict prevails among political elites in both. But a global reform agenda fits the stated aspirations of both sides. If undertaken, it would simultaneously build trust and reduce pressures toward confrontation. Most importantly, it is desperately needed to overcome the truly existential dangers—climate change, pandemic disease, global inequality—now facing all people regardless of their nationality.

Less than 10 years ago, when President Barack Obama held his first meeting with newly inaugurated President Xi, the possibilities for great power cooperation looked bright. Despite long-running points of friction over Taiwan, trade, and human rights, the two presidents were keenly aware of the terrible dangers that historically have accompanied a rising power’s challenge of a jealous global hegemon. They took steps to reduce tensions and build a foundation for cooperation—measures that bore fruit over the next couple years. In 2014, for example, the United States and China worked together closely to resolve the Ebola epidemic in West Africa and concluded a major bilateral agreement on limiting greenhouse gas emissions, the single most important step on the path to the Paris Agreement.

Today, these examples of great-power cooperation feel like something out of a dream. Instead, each side launches tendentious broadsides against the other, scapegoating them for domestic problems. US leaders say that China is undermining the international order’s support for democracy and human rights; Chinese leaders say the US wants to keep developing countries subordinated forever. The United States has launched a limited but extremely provocative form of economic warfare against China, seeking to destroy its most prominent multinational company, Huawei, and cut off all Chinese tech companies from essential inputs of advanced semiconductors. The two countries are engaged in an escalating tit-for-tat exchange of provocative military and diplomatic moves around Taiwan, and there is a growing sense in both capitals that a war over Taiwan may be inevitable.

What’s behind these escalating and increasingly dangerous measures is that political elites in both countries now perceive the success and prosperity of the other as a major threat. Beginning from the assumption that the US and China are locked in zero-sum or even existential struggle, they are increasingly viewing every aspect of foreign policy as a way to frustrate the others’ projects. As long as this is the lens through which policy-makers see the relationship, arguments for balanced approaches on specific issues will appear as weakness while escalatory steps of all sorts will appear as prudent measures to signal resolve and guard against aggression. Attention, resources, and creativity will be channeled toward countering the other rather than addressing shared problems.

How has it come to this? One popular explanation is divisive leaders, whether the culprit is said to be a dictatorial Xi Jinping, driven by Marxist ideology and personal ambition to threaten freedom and American power worldwide, or an erratic Donald Trump, obsessed with the US trade deficit and using anti-Chinese racism to distract from his mishandling of the Covid pandemic. However, the developments that Trump and Xi intensified were already well underway before they took power.

A second approach is to blame not individual leaders but enduring national characteristics. China’s authoritarian politics meant that sooner or later it would turn against the liberal international order, snuffing out pluralism inside China and seeking to displace the open, democratic leadership of the United States over the global system. Alternatively, America’s love of global domination meant that it would seek to stifle China as soon as China started to compete seriously with the US economically and militarily. But both of these accounts rely on cherry-picking evidence to suit their thesis rather than dealing honestly with the much more ambiguous and complex record of US-China engagement over the past four decades.

These two explanations for the collapse of US-China relations appear to be opposites, but they share one key characteristic: They blame growing enmity on the behavior of one side only. The other side is thus portrayed as being forced into purely defensive action to foil the malign aims of the antagonist. Such one-sided explanations are not only unsatisfying in accounting for recent history; they also close off any possibilities for the future aside from capitulation or confrontation.

A better explanation will not only clarify the sources of the conflict but also open new paths to resolve it. It was not that one side betrayed the other; instead, the disintegration of free market globalization—which knit together the US and China over three decades—has made the interests of the two powers incompatible.

Before 2008, it had seemed not only that US and Chinese success could coexist, but also that growth and prosperity in one contributed to growth and prosperity in the other. Despite persistent frictions, both countries seemed to be converging on the values of neoliberal globalization: social openness, cosmopolitanism, multiculturalism, an active civil society, free markets, acquisitive individualism, self-responsibility.

The globe-spanning economic crisis of 2008 and the failure to restore dynamism to the global economy in the years that followed changed everything. In both countries, extremely high levels of economic inequality and a powerless working class meant that wage-driven growth could not replace the global consumer demand that dried up. The two countries suddenly found themselves immersed in cutthroat competition over an abruptly less promising global market, particularly in the high-value sectors of advanced technology.

At the same time, in both the United States and China, the gradual disintegration of globalization also discredited liberal thinking and eroded the political legitimacy of existing elites. The ideas and interests that before had aligned leaders in both countries, allowing them to ignore or finesse points of tension, broke down. Previously marginalized groups in both countries, like trade protectionists, security hawks, and xenophobic nationalists, now found a wide audience for their arguments.

In both countries, the slowly emerging response to this treacherous new landscape has been a turn toward state organization of the economy and nationalist organization of the culture to reorient society toward a global economic competition that is increasingly seen as inseparable from global military competition. It is perceived this way because, unless the structural constraints on global growth are lifted, global competition will in fact be zero-sum and perhaps existential in nature. No matter how earnestly US and Chinese leaders may wish to avoid it, violent conflict will then be the inevitable outcome.

The Chinese readout of the Biden–Xi meeting claimed, “The world is big enough for the two countries to develop themselves and prosper together.” The problem is precisely that this claim is untrue. But rather than accepting that competition must be zero-sum in nature, the United States and China could instead focus their efforts on opening up a world that currently pushes them against each other.

The essential first step is to pause the current escalation and for each side to reassure the other on the central points of tension, especially around Taiwan. The outcome of the Xi-Biden meeting is highly positive on this count. The revival of basic channels for diplomatic dialogue is also a heartening development.

But behavior on both sides will slide easily back into the established rut of provocation, sabotage, and ultimately open conflict unless far more robust cooperative initiatives are developed. Again, the outcome of the Xi-Biden meeting is encouraging. The two sides agreed that, as the US readout put it, “the United States and China must work together to address transnational challenges—such as climate change, global macroeconomic stability including debt relief, health security, and global food security.”

If such cooperation were gradually built up to become a central part of the bilateral relationship, it would stabilize relations and restore the trust that has been lost. If it expanded to meet the true scope and urgency of the crises humanity currently faces, it would also open up the constricted global economy by spreading investment more broadly than market forces have. Creating jobs and raising wages around the world through the development of clean energy, public health infrastructure, and all the other global public goods that have been starved for so long would not only save lives and prevent future crises—it would generate enough consumer demand that the world actually would be big enough for the both the United States and China.

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