(Project of the Kajima Institute of International Peace)

The US-China Competition and Japan

Ryo Sahashi
Professor at Kanagawa University

1. Introduction

At the US-China summit talks held in Florida in April 2017, Xi Jinping must have laughed up his sleeve. Retrospectively, Donald Tramp's victory in the presidential election in November 2016 was, for China, obviously an unexpected upshot. China considered Trump a candidate more "tractable" than Hilary Clinton who had been expected to take a hardline attitude toward China in terms of security and human rights issues. Yet, it was hard for China to foresee what Trump's unpredictable way of thinking would bring about. A shocking development ensued for China: a congratulatory phone call to Trump from President Tsai Ing-wen of Taiwan, and the Japanese Prime Minister's visit to the Trump Tower prior to Trump's inauguration --- a result of the Japanese government's efforts to secure inroads with Trump's inner circles. China's counterattacks, however, were also conspicuous and with great results. The Chinese Ambassador in Washington explored a channel with Jared Kushner; and Xi Jinping succeeded in extracting a promise from President Trump to honor its "One China" policy adopted by previous US administrations, in a telephone summit that barely preceded the Japan-US summit meeting in February 2017. Lastly, Xi Jinping came over to Florida in April and held a summit meeting with President Trump.

More than a year and a half has elapsed since then. How many experts could have predicted that the US-China relationship would deteriorate in this way? Regarding technology which was to constitute a major agendum for the US-China competition, the interim report of the Defense Innovation Unit Experimental (DIUx) released in February 2017 and media's daily reports not only on China's improvement of advanced technology but also on her unfair manner of technology acquisition. The existence of a huge trade deficit with China had been earlier noted. President Trump's inaugural speech also emphasized "America First." Since the 2014-15 period of the Obama era, such behaviors of the Xi Jinping administration as cyber attacks, and construction and militarization of artificial islands in the South China Sea exacerbated US public opinion of China. In the middle of 2017, however, negotiations between both countries were underway; and the "globalists" within the Trump administration including the Director of the US National Economic Council Gary Cohn, who fully acknowledged the relevance of the Chinese economy for the US economy, made a certain contribution to the formulation of China policies.

In 2018, the US government, Congress and society significantly hardened their attitude over US China policies, and a tremendous change to the extent of rewriting the playbook occurred. Although it was a logical consequence in international politics of the coming closer of two superpowers, yet, its rapid development was surprising.

What does the United States consider problematic about China? What move will happen in the bilateral relationship? What will be possible impact on Japan? First, this paper will focus on the two speeches delivered in the fall of 2018 by Vice President Mike Pence. Next, it will consider US policy continuity and discontinuity from the Obama administration, and finally it will discuss possible implications on Japan to help predict future developments.

2. China illustrated by two Pence speeches

(1) The Hudson Institute speech (October 4, 2018)

Vice President Pence's speech at the conservative Hudson Institute on October 4 was delivered in a context aware of the upcoming midterm elections and of his visits to Asia. The content of the speech lasting over 40 minutes is strongly-worded against China. Immediately afterward, it was considered in the Washington neighborhood as portent of "New Cold War." Actually, however, the speech includes few prescriptions for problems. While enumerating as many issues as conceivable, the speech fails to give clear priorities.

At the outset, Vice President Pence stated as follows: "Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States." This signifies that "China problems" are not confined to the US trade deficit but inclusive of an extremely broad range of issues. The speech aims at raising attention to the fact that "Chinese problems" have begun to affect not only the international order built by the United States after World War II, but also US society itself. Touching on the bilateral trade issue, The Vice President's accusations were directed to the Made in China 2025 strategy; unfair, forced technology transfer; infringement of intellectual property rights, subsidy provision, and information stealing --- all promoted by the Chinese government.

As for the security issue, the speech refers to disturbing Chinese behaviors in the South China Sea, where the destroyer USS Decatur conducting a Freedom of Navigation Operation had an unsafe encounter with a Chinese destroyer just before the speech, and in the East China Sea, and particularly to the A2/AD strategy. The novelty of this speech is its reference to: Christianity, Buddhism (Tibet), and Islam (Uighur) in relation to restricted religious freedom in China; China's accusable loan practices to extract political or economic concessions from a debtor country that have become widely known as "debt-trap diplomacy," and particularly China's interference and political maneuvers against the democratic society. Regarding the last point, the speech has enough cogency to make the audience shudder. It recounts the Chinese government's confidential decision by referring specifically to official documents, and by disclosing Chinese government's demand on corporations to set up an in-house CCP organization, as well as related specific instructions and pressure.

Repetition of "the Chinese Communist Party (CCP)" is also characteristic of this speech. There seems not to be a definite rule for its usage. But repeated use of "the Communist Party" will leave the impression with the audience that China's political system should be accountable for the root cause of "Chinese Problems." Incidentally, it cannot be judged just at present --- at least from this speech or other references to US China policy, whether the US government has shifted to a policy seeking a reform of China's political regime.

This speech is a strange motley of an economic nationalist's conventional complaint that China's accession to the WTO was a failure, and anti-China hardline theories in various domains such as political interference and freedom of religion. Reportedly, in the process of drafting, cross-ministerial adjustments were made. However, those hardline theories are far from being in concordance with one another. Political priority seems to have been given to taking a strong stance against China by exhibiting a comprehensive display of accusations. Furthermore, some interpretations hold that the Vice President is deliberately playing "bad cop" against China prior to an upcoming direct negotiation led by President Trump.

(2) The APEC speech (November 16, 2018)

Vice President Pence, who attended the APEC CEO Summit held on November 16 in Papua New Guinea, gave another speech. This speech mainly highlights US economic involvement (investment and aid) for the Indo-Pacific region. In this context, China is repeatedly designated as a rival. The speech particularly emphasizes the risk of Chinese debt trap capable of infringing on the loan recipient country's sovereignty, while declaring the United States will not do such a thing.

The speech states that the United States will not spare its support for the realization of civil society, the rule of law, and improvement in government accountability, etc. toward building the international order based on rules, and declares that "Authoritarianism and aggression have no place in the Indo-Pacific." In the midst of increasing concerns about the South Pacific's strategic significance, the speech also articulates that a tripartite cooperation toward Manus Island should be advanced between the United States, Australia, and Papua New Guinea. This speech is relatively short compared with the previous one on October 4, focusing on US government policies. Although the address did not attract so much attention, yet it clearly shows US views on the international order distinct from those of China.

As of December 2018, the Chinese response to the Pence address in October has seemingly subsided. According to a Washington-based journalist with whom the present author recently exchanged views, US government officials refer overtly to US-China rivalry over economy and technology, and to the exclusion of China; yet, as far as military security (except technical fields) is concerned, the US government remains vigilant against China's military moves, issuing cautious remarks that it is significant to induce China to change its behavior and to prepare crisis management. However, the deterioration in the US-China relations remains unchecked as represented by the arrest of Huawei's CFO, concurrent with the US-China summit talks at the G20 in Buenos Aires; China's suspected involvement in the Marriott data breach exposing personal information of 500 million customers, etc.

3. Policy continuity and discontinuity from the Obama administration

The first US administration to face "the emerging China" may have been the Obama administration. Debates had begun earlier inside the US government since the Bush era to discuss how to face China in the future. (Refer to the exhaustive research by lecturer Nina Silove at the Australian National University.) However, the Obama administration was to witness China's expansion in different areas, such as the South China Sea, cyber space, and international finance --- China had already acquired enough economic power to overtake Japan. The then newly inaugurated Xi Jinping administration, through the 2014 Central Conference on Work Relating to Foreign Affairs and the strengthened international NGO management law, strongly impressed US and European experts with China's different nature. The US vigilance against China began to rise in that period.

The response of the Obama administration was a rebalancing policy. The chief objective of the policy was to upgrade US capabilities to address China's rise.1 Being apprehensive whether the existing alliances were being compromised, the Obama administration feared that China would emerge as a substitute actor for the United States bound by human rights obligations. In addition to actively participating in multilateralism in the Southeast Asia region (ASEAN-based multilateral cooperation mechanism), the United States was obliged to allocate more resources to maintain and strengthen the US military presence through advancing bilateral security cooperation with different countries as well as multilateral cooperation mechanism led by the US military. TPP negotiations were also emphasized from strategic concerns. US military experts were apprehensive, from a longer perspective, about the possible impact on the US force projection of China's introduction of precision guided weapons. This is related to China's A2/AD capability and the air-sea battle concept as a countermeasure against it.

The Obama administration, especially in its second term, heightened the alertness to the rise of China, and gradually lost hope to make China, through the involvement policy, a contributor in the international community and to pave the way to her democratization. A part of the policy community overtly argued measures to impede the emergence of China. (A report authored by Robert Blackwill and Ashley Tellis at the Council on Foreign Relations is a typical example.) This awareness of the existence of a problem has been carried over to the Trump administration. The stagnant bilateral relationship contributed to the United States viewing China as a challenger and a competitor. Alertness is widely shared against China's deviation from international rules that had so far safeguarded the US interests. For example, one China expert testified in Congress in September 2015 as follows: "Chinese leaders are also moving forward with initiatives that undermine U.S. interests via tactics that evade current international governance mechanisms and U.S. attempts to counteract and deter these actions."2 China's problematic behaviors pointed out by the expert include cyberspace intrusions, unfair trade practices, infrastructure construction in the South China Sea, and restrictive national security regulations.

However, until this period China had not been credited with having the structural power3 capable of really threatening the US superiority --- not even in discussions on economy and finance. Debates led by China experts emphasized the need to change the behavior of China and to, above all, prioritize Asia in US foreign policy. David Shambaugh argues to the effect that China boasts an active presence in several regions and domains in the world; nonetheless, she is not yet actually influencing the trajectory of international affairs in various domains, or shaping global trends.4 Thomas Christensen also states that what China is doing in relation to multilateral cooperation is nothing other than cheating and free-riding.5

As seen from the above, the Trump administration is the first US administration facing an emerging possibility of US-China equilibrium and the realistic fear of being overtaken by the rising China. Policy measures taken by the Obama administration seem to have assumed some political flexibility. China experts, except US military planners, would agree to similar assessments.

4. Clues to future prospects

How will future US China policy and the US-China relationship unfold? The bilateral relations are accompanied by an extremely strong uncertainty due to the "deal" strategy of President Trump. Meanwhile, China is proposing many placating measures such as some modifications to Made in China 2025 and larger imports from the United States.

Public opinion trends are of vital importance for the US foreign policy. Looking at US China policy from that viewpoint, it is noteworthy that hawkish views on China have recently become dominant in Washington. Such views are shared on a bipartisan basis and will remain dominant for the time being, given the emerging US-China equilibrium and the peculiar Chinese outlook on the international world order.

Two points in this connection may be worth mentioning. First, figuratively speaking, various hawkish views on China are juxtaposed in a mosaic fashion, irrespective of the fact that they are contradictory to each other in terms of major emphases and goals --- assertiveness alone is common to them all.

Second, there is still something in US policy circles that can be called "the temptation of appeasement." This is represented by, among others, measures to avoid "the Thucydides's trap" suggested in Graham Allison's "Destined for War: Can America and China Escape Thucydides's Trap?" (grand US-China deals in the South China Sea and the Korean Peninsula), or by the "strategic reassurance" theory of Jim Steinberg and Michael O'Hanlon. Historically speaking, the Acheson line drawn by Secretary of State Dean Acheson is remembered as an example of US consideration for China. Trump administration Secretary of State Rex Tillerson, however, expressed a suspicion about the everlasting sustainability of the One China policy in his testimony at House Foreign Affairs Committee on "One China Policy" in next 50 Years.

The person that Steve Bannon saw immediately after having been ousted from the Trump administration in 2017 was Henry Kissinger. Both men were of the same opinion that the United States and China are destined for war. According to Kissinger, the United States and China must strive for the "partial cooperation of countries that by normal standards might be considered enemies."6 This episode reminds us of an immoral nature of US detente policy. On the other hand, we must remember that the US intellectual community appreciates "accommodation" as a rational solution and "tolerance" to different values.

5. Implications for Japan

The fluid international situation that Japan faces today is unprecedented. It is fortunate for Japan that the current US government is more serious than the Obama administration in addressing China's challenge to the international order, by utilizing its own rich policy resources.

On the other hand, however, the Trump administration has yet to build a stable, trustworthy policy formulation process. There are big cracks in the transatlantic relationship, and the Trump administration's engagement in the principles and rules of the international order remains insufficient. It is feared that the Trump administration can make a deal with an authoritarian state quite easily and to bring large-scale strategic responses to another standstill. Meanwhile, the Trump administration would be likely to make excessively hard responses to China, and to adopt exclusive policies, thereby causing serious restrictions on economic and social relations with other countries including Japan.

Japan faces both a China risk and an America risk, and is asked to respond from a strategic perspective. One solution would be to call for and help to realize the possibility of changing Chinese foreign policy and economic policy. Yet, its feasibility is doubtful, while the United States could obstinately disrupt relations with China. Japan's strategic dilemma would then be too profound.

(The SSDP's secretariat takes full responsibility for the translation for this paper.)

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