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The Trump administration should focus less on its trade deficit with China and more on developing the technology of the future, according a group of prominent China-watchers. Photo: AFP

Think smarter and carry a bigger stick in Asia, China-watchers urge US President Donald Trump’s administration

  • Group of analysts and former US officials call on America to turn its attention to developing the technology of the future and building international alliances to address China’s rise
  • The United States should also stage military exercises in Beijing’s backyard, the researchers say

The United States must change course and compete smarter with China rather than sever ties between the world’s two biggest economies, a group of prominent American China-watchers and former US officials has warned.

The warning was contained in a report released on Tuesday by a task force led by Orville Schell of the Asia Society’s Centre on US-China Relations and former US deputy assistant secretary of state Susan Shirk, who is now with the University of California San Diego’s 21st Century China Centre.

While the 17 members of the group supported a tougher approach against Beijing, they said the present US strategy was “defective” in various aspects including the economy and security.

They also warned that “purely defensive actions” or even decoupling the two economies would threaten American interests in the long run.

“The Chinese government's recent policies and actions are increasingly at odds with the interests and values of the United States,” Shirk said in a panel discussion in New York on Wednesday. “This is not just [because of] China's growing strength, but it's the matter of the specific choices China's decision makers have made over the past decade.

“Chinese mercantilism [and its] zero-sum policies have advantaged Chinese firms at the expense of International competitors in order to build their national strength, especially their very lavishly funded state-led effort to build China into a high-tech superpower,” she said.

The former official in the administration of President Bill Clinton argued that it was time for a “course correction” to “alter the mix of cooperation and pressure to more strongly emphasize pressure” on China.

Former US deputy assistant secretary of state Susan Shirk said China’s policies and actions are increasingly at odds with the interests and values of the US. Photo: AFP

“That means publicly calling out China's unfair ideological and certain policies and pushing harder against them,” Shirk said. “The Trump administration did that part right.”

The report said “purely defensive actions” against China had their place, including “trade and investment curbs, antidumping and countervailing duty enforcement actions, export controls and potential restrictions on Chinese nationals coming to the US for study or work”.

However, these moves “impose significant costs on US industries, workers, and consumers, and they will prove insufficient to alter China’s trajectory unless accompanied by ... other kinds of domestic improvements”, according to the report.

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To pressure China to comply with global norms, the task force suggested bolstering American strengths, building an international coalition with allies like Japan and Europe and overhauling international institutions to address China’s global rise.

“[The US should] work with like-minded countries in a multilateral effort to change World Trade Organisation rules that have proven inadequate to address China’s problematic practices and the issues created by new technologies and technology-enabled services,” the report said.

The inadequate moves included efforts to prohibit China’s data localisation requirements, source code disclosure requirements and other restraints on cross-border digital commerce, it said.

On the technological front, the panelists sounded a note of caution on America’s attempt to decouple its tech cooperation with China.

“There are security implications in some of the competition, in particularly 5G telecommunications and artificial intelligence,” said Thomas J. Christensen, director of the China and the World Programme at Columbia University and a member of the task force.

“That type of competition shouldn't spread to all sectors of technology or non-technological sectors.

“Decoupling is unrealistic,” Christensen said at the panel in New York. “We have to do more than just complain. We need to develop our own.”

Echoing that point was Arthur Kroeber of Gavekal Dragonomics, another task force member.

“We should indeed, where national security is implicated, work to protect the US interests, but we should not use national security as an excuse to really put in jeopardy the highly productive commercial and technological relationships,” Kroeber said.

The group also suggested that instead of focusing on trade deficits, the administration of US President Donald Trump should concentrate “its greatest energies on those aspects of trade that will be increasingly important to Americans in the future, including digital trade and services, intellectual property, and data protection”.

Dan Rosen of Rhodium Group, who also is on the task force, stressed that amid the backdrop of the ongoing US-China trade negotiations it was important to recognise that, “in any outcome, there needs to be a downpayment [from China] because so much goodwill has been lost in recent years. That downpayment is key to unlock a sense of fairness in this moment.”

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On the security front, the task force argued that Washington’s measures so far “have not been sufficient to maintain the gap between US and Chinese capabilities that would be necessary to assure the security of the American position in Asia and the security of US allies in perpetuity”.

The US should go beyond its present strategy of conducting freedom of navigation operations, to have exercises in the South China Sea and East China Sea that “would serve to remind China, as well as US allies, that the US military has unique joint war-fighting capabilities, and that the US leadership has the necessary will to use them to overcome aggression”.

“Allies should be encouraged to develop cruise and ballistic missile capabilities to defend US airbases located in host nations,” the report said.

The US should hold exercises in the South China Sea and East China Sea that ‘remind China, as well as US allies, that the US military has unique joint war-fighting capabilities’, the task force said. Photo: US Navy

“To encourage such enhanced cooperation, the United States needs to convince the political leadership of key allies and partners in Asia that the US strategy is viable and that the United States is politically committed to it.”

The report, “Course Correction: Toward an Effective and Sustainable China Policy”, also included recommendations to counter China’s rise in global governance, its increasingly aggressive policy on Taiwan as well as its human rights violations.

Other contributors to the report included Kurt Campbell, an architect of the Obama administration’s “pivot to Asia” policy; Winston Lord, US ambassador to China from 1985 to 1989; and David Shambaugh, a China researcher at George Washington University.

This article appeared in the South China Morning Post print edition as: US experts seek change in ‘defective’ China policy