China and the United States in 2038: Charting a Path Forward

News | October 11, 2018

Building on the foundation of the “China and the U.S. in the Next Decade” discussion, the EastWest Institute hosted the second roundtable in the series with 30 high-level U.S. and Chinese corporate and government professionals at its headquarters in New York on August 28.

Admiral William A. Owens, former vice chairman of the U.S. Joint Chiefs of Staff and co-founder and executive chairman of the Red Bison Advisory Group, joined EWI chief operating officer, Dr. William J. Parker III, and Dr. Lora Saalman, vice president of EWI’s Asia-Pacific program, to chair an exploration of the opportunities and challenges in the increasingly complex U.S.-China relationship over the next two decades. The following are a few of the key non-attribution takeaways of this session:

Strategic and Security Relationship

  • A U.S. expert shared that the United States lacks an effective grand strategy, while China possesses two formidable strategies with its Belt and Road Initiative and Made in China 2025. This same participant noted that the United States in particular considers the Belt and Road Initiative to be a threat to its global hegemony.
  • U.S. participants questioned whether the U.S. should consider China to be a threat.
    • A U.S. participant emphasized that it would be naive to consider China to not be a threat, as its capabilities continue to grow and its intentions may change rapidly.
    • A U.S. participant recommended that to better understand each other’s intentions, decision-makers should spend more time with not only leaders, but also with the general population in the other country.
    • A U.S. participant asserted that it is a fallacy to believe China wants to “take over the U.S.” given that it already has ample land and an enormous population.
    • A U.S. participant noted that it is important to acknowledge that China is acting in accordance with its own national interests and that any country would behave the same if faced with similar development challenges.

Economic and Trade Relationship

  • A U.S. participant stated that, primarily due to wider mistrust of Chinese intentions, the United States has been holding back on its receipt of inbound Chinese investment, thereby depriving itself of potential benefits.
  • U.S. and Chinese participants shared a general perception that China is ascending in economic power, pointing to Huawei and other Chinese companies as among the most profitable and productive in the world. Simultaneously, the United States is dropping in rank in several categories relative to China, such as in bandwidth nationwide.
  • A Chinese expert stated that fair competition between the U.S. and China can be mutually beneficial and that both Chinese and Americans on a cultural level welcome competition on a level, fair playing field. The key is to ensure both are making progress and avoiding conflict.
    • A U.S. participant agreed that while there are still winners and losers in a fair competitive framework, it remains a better formulation than war or dysfunctional competition.
  • A Chinese expert noted that it is not a focus or priority for China to quarrel with the United States. Instead, China is committed to stabilizing six areas of the economy, namely (1) the job market, (2) the financial system and debt, (3) domestic investment, (4) foreign direct investment, (5) trade and (6) confidence in China’s economy.

Mistrust and Closing the Perception Gap

  • A Chinese expert noted that conflict between the United States and China is not due to specific short-term calculations, but instead due to long-term and ingrained strategic mistrust between the two countries.
  • Multiple Chinese and U.S. participants noted that cultural differences might lend themselves to mistrust.
    • A U.S. participant argued that China tends to react with silence towards insults or false accusations. While in the United States, silence in reaction to criticism normally equates to acceptance, it is the norm in China to not engage with such criticism.
  • Questioning what ought to be considered a “normal” U.S.-China relationship, given its volatile history, a U.S. participant called on the United States and China to challenge common perceptions that contribute to mistrust in the U.S.-China relationship.
    • A Chinese expert stated that the United States and China view and judge China’s intentions and capabilities differently. As a result, it is important for both sides to close the gap in perceptions.
  • U.S. and Chinese participants noted that education and people-to-people exchanges would be an area in which both the U.S. and China could effectively cooperate and bridge gaps of misunderstanding.
    • A U.S. expert noted joint education initiatives are an effective means of promoting understanding between U.S. and Chinese populations. Another U.S. participant advocated for cross-collaboration between think tanks and other civil society organizations.
  • A U.S. participant noted that the United States and China should both promote technological connectivity, especially in telecommunications technology. This participant stated that the United States should expand its investments into burgeoning 5G networks and artificial intelligence pathways.
    • A U.S. participant shared the belief that the United States should allow Huawei to compete in the U.S. market and that U.S. mistrust is unfounded.

Recommendations for a better U.S.-China Relationship in 2038

A U.S. expert laid out eight specific areas in which the United States and China could cooperate to address common challenges and maximize opportunities for better relations.

  1. The United States and China should co-sponsor a national security organization in Northeast Asia, analogous to the Organization for Security and Co-operation in Europe (OSCE), to include Japan, South Korea, Russia, China and the United States to facilitate cooperation on regional security issues.
  2. A free trade zone should be instituted between the United States and China.
  3. The United States and China should institute a policy of "no first use" of cyberattacks.
  4. The United States and China should declare and pursue their commitment to collaborating for world peace.
  5. There should be general review of the multilateral organizations of the Post-World War II world order, including the United Nations and the Bretton Woods agreement, among others.
  6. The United States and China should work towards agreement that the U.S. nuclear umbrella for Japan and South Korea benefits Northeast Asian regional security.
  7. There should be an expansion of U.S.-China people-to-people exchanges, especially in the realms of military, business and education.
  8. The United States and China should cooperate on creating a more transparent world, helping both countries to better anticipate terrorist threats and humanitarian disasters.
  9. The United States and China should cooperate on the Belt and Road Initiative and counterterrorism efforts.