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(2019-02-24 12:59:45)



By Wang Huiyao |

President of the Center for China and Globalization(CCG) 

It is time to take a sober look at the China-US relationship and accept that the coming years and decades will see both cooperation and competition

Sometimes, people tied together by circumstances imagine radically different futures. Over time, mismatched expectations can put a strain on a relationship. This tension is captured in the Chinese aphorism, "to share the same bed with different dreams".

Various observers have applied this metaphor to the relationship between China and the United States since ties were normalized in 1979. Yet, what started as a marriage of convenience amid the China-US-USSR strategic triangle has since blossomed into a robust relationship that has weathered tough times and brought great prosperity to both countries.

By any measure, the last four decades have seen China-US ties take remarkable strides forward. When President Richard Nixon visited Beijing for the first time in 1972, annual China-US trade was less than $100 million and bilateral investment was close to zero. By 2017, the bilateral trade in goods had reached $710.4 billion, over 232 times the value in 1979.

For China, the deepening of ties with the US has taken place alongside its reform and opening-up process, and the evolving bilateral relationship has had a significant influence on China's development over this time, with trans-Pacific trade helping millions to be lifted out of poverty. By 2017, cumulative foreign direct investment from the US had reached $82.5 billion, with 68,000 companies set up in China.

At the same time, the US economy has also drawn strength from the burgeoning relationship. Chinese-made goods have helped to keep prices low for US consumers, while US multinationals have enjoyed an unprecedented spell of global growth, fueled in part by the lower cost of labor in China and its vast market. From 2007 to 2016, US exports of goods to China grew 86 percent, compared to the 21 percent growth in its exports to the rest of the world. US exports of services to China increased more than 300 percent in the same period, while its services exports to the rest of the world increased by around 50 percent. In 2016, US services exports to China totaled more than $52 billion.

With the global value chains binding China and the US ever closer, citizens of both countries have had increasing opportunities to travel and learn more about each other, forging lasting friendships and cultural links. Today, more than 10,000 people travel between China and the US each day, double the number a decade ago. Chinese tourists have become a boon for local businesses and communities in the US, spending more than $33 billion in the US in 2016, significantly higher than the spending of tourists from any other country. Chinese students make a similarly substantial contribution to US education institutions, with more than 350,000 enrolled in the 2016-17 academic year - accounting for over one-third of all international students.

In many ways, the current US-China trade dispute stems from the failure of policymakers in industrialized countries to manage the dislocations of rapid globalization over the past few decades. The pains and gains of this process were distributed in a grossly unfair fashion. Attempts to mitigate the worst effects were usually an afterthought and largely ineffectual.

A hollowing out of manufacturing, driven by technology and globalization, has contributed to the massive US trade deficit and triggered waves of discontent among blue-collar workers in many member nations in the Organization for Economic Cooperation and Development. Rather than compensating the losers of globalization, cynical politicians pointed the finger at free trade in general and China in particular.

In 2015, US former president Barack Obama's National Security Strategy welcomed the rise of a "stable, peaceful and prosperous China". But the 2018 iteration labeled China a "strategic competitor".

Arguably, some adjustment of previous misguided beliefs was overdue. Unfortunately, China has gone from being a repository of unrealistic expectations to an anxiety trigger amid the relative decline of US power.

As China-US relations evolved over the last four decades, many in Washington believed - or at least hoped - that China's long-term trajectory would converge with the US model. Images of China as a promised "land of a billion customers" that would increasingly benefit US citizens filled the pages of best-sellers and multinationals' business strategies.

It was not the first time in history that US projections of hope and fear have been cast onto China, or vice versa. In the early 20th century, US missionaries imagined China's future as the world's largest Christian nation. Meanwhile, hopeful Chinese saw the US as a benevolent arbiter of justice that would protect them from imperialist forces. Both visions failed to materialize. As journalist John Pomfret has written, trans-Pacific relations have long gone through cycles of "rapturous enchantment begetting hope, followed by disappointment and repulsion".

Coming out of the 1970s, modernization theory supplied an intellectual framework for these projections. It posited that irresistible forces would shape China into a Western-style free-market democracy. US advocates of engagement premised their position on this belief.

Now that Western observers have come to understand that China is destined to forge its own development path, hawkish voices and opportunistic politicians in the US have pounced on the chance to recast Beijing as the new enemy.

"Decoupling" has become a buzzword in some circles. In reality, the two nations are deeply entwined and cannot afford to decouple from each other. The US should not abandon engagement because some of the premises it rested on were misguided. To do so would be to throw the baby out with the bathwater; it remains the only way for China and the US to coexist peacefully and ensure continued global growth.

Acceptance of competition in certain fields should not mean an end to bilateral exchanges. Indeed, it calls for more interaction, particularly at the people-to-people level, to improve mutual understanding and identify opportunities to maintain the balance in favor of cooperation rather than conflict. A chilling of people-to-people ties will widen the information deficit between China and the US, raising the risks of strategic miscalculation and conflict.

Applying historical models to the China-US relationship has become a cottage industry. In fact, there is no precedent to guide us in managing relations between two great powers in our deeply interconnected 21st-century world. Constructive dialogue and action must form the basis of our relationship to ensure that competition remains benign. That means listening carefully as well as speaking in a calm, clear voice.

We should also ensure that young people in China and the US have opportunities to learn more about each other. Hopefully, the next generation of Chinese and Americans will grow to see each other for who they really are: fellow humans that may sometimes have different beliefs, values and dreams, but who nonetheless have a huge stake in each others' futures.


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