On the heels of the IISS Shangri-La Dialogue, scholars, members of think tanks and former U.S. and Chinese government officials came to Beijing to discuss what many participants considered “the most important bilateral relationship” in the world: the relationship between the United States and China. As former U.S. Ambassador John Negroponte described during his opening remarks, the relationship, “if properly managed,” can result in an enormous boon for the world; but if mismanaged, can bring great harm to global stability and prosperity.

Stanford and Peking University jointly hosted a forum titled “A Changing Global and Political Order: Perspectives from China-United States Cooperation” on June 6-7 in Beijing. All attendees, who participated in their capacity as private individuals, acknowledged that a level of uncertainty and tension clouds the bilateral relationship, exemplified most clearly in the territorial disputes in the South China Sea. Having participated in the restoration of Sino-U.S. relations in 1972, Negroponte and former Chinese Ambassador Wu Jianmin remarked upon the geopolitical rationale that first motivated this rapprochement: to counter the Soviet Union. They noted that the bilateral relationship has grown increasingly robust and multi-dimensional over time. For example, Wu cited that trade between the United States and China has increased exponentially, from a mere US$1 billion in 1978 to $550 billion in 2015. Investment, economic cooperation and competition have also grown. Despite disagreements on regional security matters, both countries have worked together on global challenges such as climate change, North Korean and Iranian nuclear issues, anti-piracy efforts and the Ebola outbreak.

However, with China’s rapid rise, both militarily and economically, and as the developing world has gained increasing clout on the world’s stage, many participants suggested that the current global order, originally envisaged in 1944 with the Bretton-Woods Agreement, needed an update. Many participants, especially on the Chinese side, stated that the “balance of power was shifting” with the G7/G8 yielding economic momentum to the G20. The American participants generally did not share Chinese views of a power transition, but conceded that reforms were necessary to the global order to take into account China’s meteoric rise.  Participants did not dispute the benefits that China has derived from the current international order and most agreed that some type of evolutionary change is needed to increase inclusivity. As one participant asked regarding China’s perception of the United States (and vice versa), “Are we foes, enemies or friends?” Despite such ambiguity, U.S.-China cooperation is essential to effecting any type of change.

Questions were rife and specificity was scant with respect to what the key changes were or the mechanisms by which those reforms should be effected, however. Which countries should partake in this decision-making body? Should other entities and institutions other than nation-states be included? What are the rules of participation and criteria for membership? How large should the governing body be? What key reforms need to be undertaken?

Both Negroponte and Wu disavowed the zero-sum mentality of the Cold War, which, Wu stated, continues to impact perceptions on both sides. They both highlighted the critical importance of frequent dialogue by the Chinese and American heads of state and by their militaries. Calling summit-level meetings between the two presidents “indispensable,” Negroponte emphasized that “[both] leaders have to understand [the] viewpoints and attitudes of each country” in order to formulate the right policies. Negroponte added, “[d]iplomacy at that level is probably more important than it has ever been.”

As this summary of the forum is posted, we note with sadness the untimely death of Ambassador Wu Jianmin on June 18, 2016, in a tragic car accident in Wuhan, China.

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Photo gallery from the conference

As the inaugural meeting of the Asian Infrastructure Investment Bank sets to convene, Stanford researcher Thomas Fingar discusses findings from his new book that seeks to study China’s objectives and methods of engagement with other countries. Much of China’s behavior is determined by its own cost-benefit analysis of the perceived effect engagement would have on its security and development.

As China has pursued modernization over the past 35 years, patterns have emerged that shed light on the government’s foreign policy decision-making, according to new research by Thomas Fingar, a Stanford distinguished fellow at the Shorenstein Asia-Pacific Research Center (APARC).

Since 1979, China’s foreign policy has been underscored by two priorities – security and development. Knowing those priorities, analysts can attempt to better study and anticipate China’s relations with other countries even in the wake of unforeseen events in the global system.

“China’s increased activity around the world has elicited both anxiety and admiration in neighboring countries eager to capitalize on opportunities but worried about Beijing’s growing capabilities. Yet as is the case with all countries, what China can do is shaped by global and regional developments beyond its control,” said Fingar, the editor of The New Great Game: China and South and Central Asia in the Era of Reform.

The book, which has a total of 13 authors, is the first in a series published by Stanford University Press that examines China’s changing relationships in Asia and with other portions of the world. It is also an outcome of the research project “China and the World.” Fingar, who heads the project, draws upon his experience from five decades working on Asia and more than 25 years in U.S. government, including as chairman of the National Intelligence Council.

Framework to analyze China’s foreign policy

One dimension of the research project examines how China’s policies and priorities are shaped by China’s perceptions about how much a country threatens or addresses China’s security concerns; a second dimension examines China’s perceptions about how much a country can contribute to China’s pursuit of sustained economic growth and modernization.

To explore these relationships, Fingar developed a framework for analysis using a matrix that displays, on one axis, China’s perceptions about the threat to China’s security posed by a country or region, and on the other axis, China’s perceptions about a country or region’s capacity to contribute to China’s development.

By comparing the position of a given country or region from one period to another, the matrix both predicts the character of China’s policies and reveals a pattern over time. The figure below illustrates China’s views in 1979 and 2016.

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In 1979, India and countries in Central Asia figured high on the threat axis because of their relationship with the Soviet Union and low on capacity to provide the resources China needed to jumpstart its economy, Fingar said.

At that time, China sought to address both its priority security concerns and developmental goals by improving ties with Europe, Japan and the United States. South and Central Asia were afforded lower priority, he said.

In the 1990s, however, China’s perceptions shifted as a result of the demise of the Soviet Union and a decade of economic success in China, Fingar explained. Shown in the matrix, China’s policies toward Central Asia changed as the region transitioned to a more favorable security position by 2000 and as China required additional resources (energy, technology, training, etc.) to fuel its growing economy.

Fingar said China’s increased engagement with South Asia was buttressed by a need for markets and investment opportunities, and furthered along by a reduction in the threat environment as India altered its relationship with Russia and Pakistan became a less valuable security partner.

Calculating who China will engage with and how has become much clearer, yet in some ways it has also become more complicated, according to Fingar.

“The countries that can do the most for China today often pose the greatest perceived long-term threat, namely the United States and its allies,” he said. “Conversely, China’s proclaimed closest friends—North Korea and Pakistan—can do little to assist China’s development and pose increasing danger to its security.”

Current policy applications

Over the past three years, Chinese President Xi Jinping has embarked on numerous projects with neighbors and other countries around the world, such as the “new Silk Road,” a trans-continental trade route that will link countries together, and the Asian Infrastructure Investment Bank (AIIB), a multilateral development bank that plans to lend money to poorer parts of Asia for building infrastructure.

The objectives of both initiatives are consistent with the China’s prioritization of security and development, Fingar said. The AIIB and Silk Road initiative indicate that China assumes there are gains from economic integration, and this is largely due to the fact that China has already benefited from past projects.

In 2001, the Chinese government launched concerted efforts to improve its relationships with Central Asian countries because of China’s concern that the United States was seeking to “contain” China, he said. Outcomes have included newfound markets for China’s manufactured goods and increased stability in separatist areas near or on its borders.

“By taking such a big stake in building infrastructure, China has changed the dynamic of the region,” he said. “Anybody can use a road, railroad or bridge. China has helped stitch together the economies of different countries in ways they have never been before.”

For China, the AIIB and the Silk Road initiative are also a form of “soft power,” said Fingar. The approach by the Chinese government evokes memories of U.S. “dollar diplomacy” early in the last century and Japanese “yen diplomacy” when financial assistance was extended to developing countries.

But Fingar doubts that “buying friends by building infrastructure” will be a major contributor to China’s quest for security and development. Going forward, the Chinese government must face the growing paradox between its foreign infrastructure projects and its principle of respect for sovereignty and territorial integrity, he said.

“When working in other countries, China cannot afford to dismiss internal stability, governance, rule of law,” he said. “Those facets are the baseline for building infrastructure.”

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The Diplomat - Q&A on Chinese diplomacy in the 21st century

A “radical uncertainty” now lies at the heart of the U.S.-China relationship, making it essential that the two countries find ways to rebuild the confidence they once shared or face a future with potentially catastrophic events, said Maxwell School Dean James Steinberg during a speech at Stanford’s Shorenstein Asia-Pacific Research Center (APARC) on Wednesday.

“There is an urgent need for both sides to step back beyond the day to day back and forth to try to steer a different course,” he said. “We need to deal concretely – and in very pragmatic ways – with taking steps to give each other confidence that our paths are not necessarily in conflict.”

Steinberg’s call to action came as senior leaders of China and the United States set to meet for a dialogue on economics and strategy in Beijing. His speech was part of the Oksenberg Lecture series, an annual dialogue on U.S. policy toward China and Asia, named in honor of the late Stanford professor and Freeman Spogli Institute senior fellow Michel Oksenberg.

Oksenberg was a role model who “consistently urged the United States to engage with Asia in a more considerate manner,” China Program Director Jean Oi said in her welcome remarks. A reknowned China scholar, he served on the National Security Council under President Jimmy Carter and was a driving force behind normalization of relations between China and the United States in the late 1970s.

A panel of experts from Shorenstein APARC including Michael Armacost, Thomas Fingar and Kathleen Stephens, all distinguished fellows at Shorenstein APARC, offered comments following the keynote speech. Steinberg worked with each of them in Washington at various points in his career that ranged from the State Department, where he served as deputy secretary of state in the Obama administration, to the Brookings Institution, where he served as vice president.

Consensus approach to engagement

Oksenberg advocated a vision of engaging China based on pursing the goal of a creating a stable, secure and effectively governed China, Steinberg recounted. That vision became known as the consensus approach wherein the two countries agreed to work together by building trust and letting their priorities be known to each other.

That consensus held steady, weathering stressful events such as the missile crisis in the Taiwan Straits in 1996 and the Tiananmen Square protests in 1989, Steinberg told the audience.

The mutual understanding that shaped the U.S.-China relationship remained relatively unscathed until the early twenty-first century. China pursued growth “without directly challenging the United States, our allies, or the post-World War II international order,” he said, but as 2010 came to a close, agreement began to wane as an “emerging security dilemma” took its place.

Part of the divergence in the U.S.-China relationship was caused by the 2008 global financial crisis, Steinberg argued. The crisis encouraged some in China to believe that the financial crisis foreshadowed an era of decline for the United States. Meanwhile, China began to increasingly assert sovereignty claims in the East and South China Seas, despite objections from many of its neighbors and from the United States.

Toward strategic reassurance

While uncertainty is an inherent part of major power relations, China and the United States now each hold concerns about the other that are broader and more extreme compared to three decades ago, when the consensus approach was first shaped.

Armacost, a former U.S. ambassador to Japan, later noted that some ambiguity is to be expected. “In dealing with foreign policy issues of any consequence, there is an irreducible element of conjecture,” he said. “One doesn’t know the intensions of other countries – especially big complex societies like China.”

However, the level of uncertainty held by the United States and China is problematic because they are so deeply embedded in each other’s success, Steinberg said. The path to reducing uncertainty could be first addressed through “humble acknowledgement” of the unknown. Recognizing that neither side has an exact understanding of the other, he said, creates space for both sides to broach concerns and foster “strategic reassurance.”

But strategic reassurance by itself is not enough, the former senior State Department official said, and must be coupled with hedging. Steinberg described the United States’ pursuit of multiple strands of engagement with China as “hope for the best, prepare for the worst,” but also cautioned that too much emphasis on hedging could undermine progress.

Rebuilding confidence in the U.S.-China relationship will not be immediate or simple and requires sustained engagement and cooperation with other countries. Stephens, a former U.S. ambassador to South Korea, underscored the necessity of dialogue. She said the United States and its allies in the region must “talk more frankly and more often with each other, as well as managing that with China.”

The academy and policy community

Steinberg said an important role exists for academics and policy analysts in rebuilding lost confidence between the United States and China. Scholarship can give policymakers the tools to untangle some of the uncertainties and “help us not get the answers, but at least get the questions right,” he said.

Fingar, a former director of the National Intelligence Council, agreed with Steinberg and urged those communities to “do a better job of analyzing, explaining and perhaps buttressing confidence that the engagement with hedging strategy is actually still working.”

Steinberg lauded the example set by Oksenberg in his ability to bridge the academic and government sectors and of encouraging students to consider those career paths. “Our challenge…is to train the next generation of scholars – just as Michel Oksenberg trained his – to be able to talk and operate in both worlds,” he said.

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Video and transcript from the 2016 Oksenberg Lecture

China and the United States have lately been characterized as geostrategic rivals and on a path toward inevitable conflict. But, according to Fu Ying, chairperson of China’s Foreign Affairs Committee of the National People’s Congress and former ambassador to the Philippines, Australia and the United Kingdom, this picture is incomplete and misrepresents a reality that is much more nuanced.

Fu discussed the current state of U.S.-China relations in a keynote speech at Stanford on Tuesday. Speaking to a full house in Encina Hall, she described different perspectives and shared challenges of China and the United States, and urged a new consensus between the world’s two largest economies.

“In the past thirty years, we’ve had friendly moments, but we were never very close. We had problems, but the relationship was strong enough to avoid derailing.

“Now we are at a higher level. If we work together now, we are capable of making big differences in the world. But if we fight, we will bring disasters – not only to the two countries, but to the world,” Fu said.

Fu’s visit was co-hosted by the China Program at the Shorenstein Asia-Pacific Research Center and the Center on Democracy, Development, and the Rule of Law, two centers in the Freeman Spogli Institute (FSI). Following her remarks, Thomas Fingar, a Shorenstein APARC Distinguished Fellow and former chairman of the National Intelligence Council, offered comments and took questions from the audience.

Fu opened her speech by saying she welcomed alternative views and “a debate.”

Misunderstandings, she said, afflict the U.S.-China relationship. Confusion shared between the two countries can largely be attributed to a “perception gap,” which, she said, is aggrandized through media reporting.

Concern on the American side over China, she said, is tied to its own doubts over its “constructive engagement” strategy. An approach held during the past eight U.S. administrations, the strategy was based on an assumption that supporting market-based reforms in China would lead to political change, she said. However, this has not occurred, and some in the U.S. are now urging the construction of another “grand strategy.”

The United States, she said, also has “rising anxiety about what kind of a global role China is going to play,” and about the future direction of the Chinese economy after its growth slid to hover around seven percent in the last two years compared to its once double digit growth in the past decade.

China interprets the United States’ apprehension as misguided, Fu said. “We see it as a reflection of the United States’ fear of losing its own primary position in the world.”

On the other hand, China, she said, is “relatively more positive” about its overall engagement with the United States. The purpose of Chinese foreign policy, Fu said, is to improve the international environment and to raise the standard of living of its people without exporting its values or seeking world power. “We believe China has achieved this purpose,” she added.

The United States and others must also remember that the past can loom large in the minds of the Chinese people, Fu said.

In attempting to understand China, “one should not lose sight of the historical dimension,” she said. China at various times in the nineteenth to early twentieth century was under occupation by foreign powers, she said, and this is a reason why sovereignty is a closely held value in the Chinese ethos.

The overall “perception gap” between China and the United States has moved from misunderstanding to fear, and that, she said, is causing negative spillover effects for both countries.

Two manifestations of this fear, she cited, are the United States’ “reluctance to acknowledge China’s efforts to help improve the existing order,” such as the development of the Asian Infrastructure Investment Bank and ‘One Belt, One Road’ initiative, and the U.S.’ “growing interference” in South China Sea issues.

“Will it lead to a reckless urge to ‘throw down the gauntlet’?” Fu asked.

She acknowledged that collision is a concern. China is focused on addressing its challenges with the United States, including avoiding potential incidents and finding ways “to adapt to and participate in adjustment in international order,” Fu said.

Yet, she cautioned that the two countries be realistic in their aims and know that China is not seeking to emulate the United States. China and the United States, unlike Japan and South Korea, do not have a formal strategic or security alliance, and they need not have one, Fu said.

“China is not an ally, and it should not be an enemy either,” she said.

“Can we accept and respect each other, and build new consensus?” she asked. She then stated, “I want to end my speech with a question mark as a salute to Stanford University which is renowned for its capability of addressing difficult questions.”

Fingar gave a brief response to Fu’s address.

Calling it largely “fictional,” he challenged the notion that there is high “American anxiety” about China. Instead, he noted, “Americans do not think very much about China,” as reflected in the multitude of polls taken recently during the primary campaigns. Thus, “there isn’t a lot of public drive to do things differently with China.”

Among U.S. academics, however, there is “puzzlement,” Fingar suggested. Puzzlement, he explained, borne less from any kind of loss of confidence in U.S. policy of constructive engagement but rather from China’s seeming departure from a trajectory that it had set for itself over the last 40 years. At the moment China’s reforms appear “bogged down;" its leaders, slow to take the critical steps necessary for economic growth; and its engagement with the outside world, increasingly unpredictable. “The puzzlement about China,” therefore, and “concern about policy has at least as much to do with concern that China may be stumbling as it does about a rising China,” he added. Debunking the zero-sum notion of international relations, Fingar emphasized instead that the United States has “done very well as a nation” in part because of its active engagement with and because of China’s success. “We welcome the rise of China, the rise of others,” he stated.

Fingar concluded with his opinion that the debacle in the South China Sea does not pose a serious threat to the relationship. Instead, “the world needs more examples of joint U.S.-Chinese cooperation and leadership” as was the case with recent breakthroughs in climate change between the United States and China. Otherwise, he added, other countries will not commit their resources for fear of a veto or objection from either the United States or China.

Later that day, Fu met with faculty members of FSI and Hoover.

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