The future of US / China relations

Underlying the international system is the concept of normal diplomatic relations. What this means is that two states agree to exchange embassies, trade with each other and maintain sporting, cultural and educational contacts. During a period of tension some or all of these ties may be broken. Thus during the Cold War the US and the Soviet Union were in a standoff and only maintained some ties but well short of normal diplomatic relations. With the replacement of the Soviet Union by Russia normal diplomatic relations have been restored but these are strained by unilateral acts on the part of Russia such as the occupation of the Crimea. In the usual course of events this would have to be approved by the United Nations to be consistent with normal diplomatic relations.

In the case of China since diplomatic relations were restored in the 1970’s there has been a gradual broadening of ties in all of the channels that are consistent with normal diplomatic relations even though both countries maintain differences over North Korea, Taiwan and other issues. However, under the Trump Administration the US has started to take unilateral measures which are not consistent with normal diplomatic relations;

1. Education – the Trump Administration wants to actively discourage Chinese students from pursuing their degrees in the US. This contradicts all post War opinion regarding the value of student exchanges in encouraging normal ties. As these progress in their careers they are more likely to see the point of view of their former student friends than if they never studied abroad and this can help to avoid conflict.
2. Language – the Trump Administration has demanded the closure of the Confucius Institutes in the US. China’s is not the only Government that spends money to promote its language – so do also the Governments of Spain, France and Germany with the Cervantes Institute, Alliance Francaise & Goethe Institute, for example. The US economy is going to need Americans fluent in Chinese in order for its companies to prosper in the Chinese market. That China is happy to subsidise this ought to be seen as a plus. The idea that these Institutes are instruments of indoctrination is preposterous.
3. Governance – China bans Google and Facebook in the home market so the US has a right to ban Chinese companies from its market. Westerners often see the world in terms of democracies and dictatorships but in China the population looks at its own history and sees periods of unstable Governments and stable Governments. The current Chinese Government fits in a succession of dynasties and its legitimacy is linked to its ability to deliver economic benefits; therefore, it is going to be quite some time before it allows the same levels of freedom of expression as in the West. 
4. Economic – the US ban on Huawei and its attempts to force this on its allies around the world is without precedent. It can be proven mathematically that the encryption can’t be broken so there can be no question of China eavesdropping on conversations. On the other hand, Huawei would have access to data – such as placing two mobiles in the same room – and, in theory, some of this could be sensitive. Nevertheless, a Chinese company that bought a supermarket group, for example, would also have access to data and, let’s not forget, that US operating systems such as Windows, Mac OS, Chrome OS and Android are ubiquitous in China so what the US is intimating in banning Huawei doesn’t really stand up to scrutiny.
5. Industrial – the ban on US semi-conductor sales to China will cause short-term disruption but, in the medium term, will turn out to be a shot in the foot. The main US advantage in this sector is in software but this is forcing Chinese companies to work harder to catch up and, like in sport, a rival who works harder often comes out ahead. When China has closed the gap in a few years’ time the US will have lost its market share in the world’s largest market and this will, in due course, cause it to lose its competitive advantage as well.
6. Legal -- It can also be argued that under Trump the US has moved away from a rules based approach to settling disputes such as the unilateral measures against TikTok and unilateral sanctions outside of the dispute resolution mechanisms of the World Trade Organisation.

This column has argued that China’s economy is already the world’s largest by some distance. The way the international system works, under normal diplomatic relations, economic weight should translate to diplomatic influence such that, for example, most of the countries participating in China’s Belt & Road initiative should be more amenable to China’s diplomatic entreaties than those of the US. The US cannot prevent this without offering economic alternatives.

The US and China have serious differences over North Korea and Taiwan. However, if one accepts my argument that China’s economy is already much larger then it stands to reason that the US should be prepared to stand aside and let China settle them on its terms to avoid a larger war. The idea that the US should be negotiating with North Korea is holding the hymn sheet upside down. China will allow North Korea to fold into South Korea if US forces leave the peninsula and a United Korea comes under it’s wing diplomatically. The US guarantee to Taiwan arose during the Korean War and when the latter is settled it should be prepared to drop it. There are no circumstances under which China will drop its claim to Taiwan so the US ought to ask how far it really wants to go.

In other parts of the world the US still acts as hegemon but as its economic influence wanes the only means it will have of maintaining its diplomatic weight is via its military presence and arms sales.  If it doesn’t acknowledge the increased Chinese economic presence in these regions it could end up prompting China to compete with it in those spheres as well; i.e. military presence and arms sales, with the potential for a wider war.