With economic interests at stake, the US and China can learn to be the best of frenemies

Is China a friend or an enemy? This question drove debates between America’s panda huggers and China bashers in early June. Today, the debate rages on despite signs of a trade-war truce.

At the Sixth China Inbound-Outbound Forum organised by the Beijing-headquartered Centre for China and Globalisation, I heard jinghe (coopetition, or collaboration between business competitors) punctuating many conversations with former Chinese government officers.

One year ago at the same forum, which I also attended, discussions centred on the trade war and the repercussions of possible “confrontations on all fronts” (quanmian duikang). As the new reality settled in, the Chinese are coming to terms with the “red face, white face” approach of the Trump administration, a Chinese opera reference best translated as the “good cop, bad cop” dynamic.

The “engagement debate”, as it is known in Washington circles, is whether the United States should continue its engagement policy with respect to China. A Washington Post column on July 3 by the luminaries M. Taylor Fravel, J. Stapleton Roy, Michael D. Swaine, Susan A. Thornton and Ezra Vogel, and signed by 100 others, declares that “China is not an enemy”.

The gist of their argument: the fear of Beijing replacing Washington as the global leader is overblown, and decoupling China from the global economy will damage America’s international role and the economic interests of all nations.

In response, writer John Pomfret argued that the US does not need to return to a gentler China policy because no evidence supports the expectation that China will play a constructive role in world affairs. Roy wrote back on July 12 that “[i]t is not a tired chestnut that if you adopt a hostile attitude towards a person or a country, you increase the likelihood of a hostile response”.

Another open letter, in circulation to gather signatures, argues that 40 years of engagement policy has contributed to the incremental erosion of US national security and advises US President Donald Trump to stay the course and confront China’s “totalitarian expansionism”.

In late summer, Trump, who frequently called Chinese President Xi Jinping a “good friend” while lashing out at China’s trade practices, wondered aloud whether Federal Reserve chairman Jay Powell or Xi was a bigger enemy. By the time Joe Khan of The New York Times huddled with Vogel and Orville Schell at an oversubscribed panel discussion hosted by the China Institute of America in mid-September, the question has become whether China is the enemy.

In his open letter, Roy also wrote: “Positive gestures can help sustain cooperative relationships but cannot substitute for interest-based approaches in dealing with rivals.”

The debate is not confined to economic professors or foreign-policy circles. In a Pew Institute study released in August, 24 per cent of Americans cite China as the greatest future threat, a 5 and 12 percentage point increase from 2014 and 2007, respectively.

A survey released on October 9 by the Chicago Council of Global Affairs shows that 42 per cent of Americans say the development of China as a world power is a critical threat to the US, up from 39 per cent a year ago. Still, 68 per cent of Americans say the US should pursue a policy of friendly cooperation and engagement with China rather than working to limit the growth of China’s power (31 per cent).

But a more poignant question should be: Can China be America’s best frenemy? And vice versa.

The US and China have decided to break their trade negotiations into phases like sausages, more than 20 months into the trade war. The trade confrontation has also spilled over into technology, finance, military, national security and ideology.

Both countries also have laws that underpin the incompatibility between Chinese communist-socialist ideology and US democratic beliefs. The US Immigration and Nationality Act prohibits naturalisation for anyone involved, within the last 10 years, with the Communist Party or any other totalitarian party of the US or any foreign state, or who advocates communism or totalitarian dictatorship even without formal group membership. In article 24 of China’s constitution: “The state advocates the civic virtues of love of the motherland, of the people, of labour, of science, and of socialism [and] combats capitalist, feudal, and other decadent ideas.”

US-China ‘clash of civilisations’ is a plain old power struggle

In reality, both China and the US have always been odd bedfellows. The Chinese idiomatic expression “same bed, different dreams”, which sums up joint Sino-US business ventures, is applicable to the relationship between the two countries. Despite diverging ideologies, both sides cannot resist the financial lure of commercial engagements. Cultural and education exchanges ensued.

More often than not, the US is unbashful about its bullying tactics while China is dexterous at passive aggression, so much so that it is possibly not always conscious of it.

Former British foreign secretary, the late Lord Palmerston, declared an abiding principle in the 19th century: “Nations have no permanent friends or allies, they only have permanent interests.” But Sino-US relations are more than a matter of nomenclature. This is not a mere high-school rivalry ridden with jealousy or resentment.

While Trump sent “smiling emojis” to China during the trade-war truces, his team continued to blacklist Chinese companies accused of aiding government surveillance apparatus in Xinjiang. At the same time, the fire and fury in both countries over a Houston Rockets manager’s tweet about Hong Kong raises a question as to whether commercial interests have disoriented US companies’ moral compass in dealing with communist China.

But the US, being a capitalist country, will continue to see commercial interests and deep pockets as the driver of engagement with China. And China has a long history of exploiting capitalist impulses, doling out the seduction of its market in exchange for ideological concessions.

How much would China, and the world, grow if the trade war ends?

I expect that uncertainty will lead to some degree of decoupling, both in technologies and supply chains. But both countries should also realise that US-China relations should not be a relationship of convenience. Even a business relationship can only be effective with mutually respected ethos and rules.

As the US-China relationship badly needs a reset, the parties must find practical solutions to unwind the hostility. The US and China must compete based on sportsmanship, not on short cuts to undermine the opponent.

As Friedrich Nietzsche’s Thus Spake Zarathustra counsels: “One ought still to honour the enemy in one’s friend … In one’s friend one shall have one’s best enemy.”

Chiu-Ti Jansen, with advanced degrees from Yale and Columbia, is the founder of multimedia platform China Happenings and a former corporate partner of international law firm Sidley Austin