Where Do U.S.-China Relations Stand?

BY Larisa Epatko  February 18, 2010 at 11:56 AM EST

Over the past few weeks there have been a number of headline grabbing dust-ups in U.S.-China relations: the cyber-attacks on Google; China’s reaction to U.S. arms sales to Taiwan; President Barack Obama’s meeting with the Dalai Lama; disagreements over Iran’s nuclear program; and the debates over the value of China’s currency and climate change.

Author and lawyer Gordon Chang and Susan Shirk, director of the University of California’s Institute on Global Conflict and Cooperation and a professor of China and Pacific relations, help put these differences in the broader context of U.S.-China relations.

Do the recent disagreements between China and the United States represent bumps in the road or more of a breakdown of U.S.-China relations?

GORDON CHANG: These disagreements represent deeper tensions in the U.S.-China relationship. One of most important things to take note of is there are changes going on in the senior levels of the Chinese Communist Party, in terms of the way they see themselves and the way they see the world. China has really turned a corner at the top reaches of Beijing. Why have there been such changes in China? A lot of people point to an increase in nationalism and a new belief in the terminal decline of the United States. And inside the senior levels of the Communist Party there are differing points of view in regard to accommodating the United States. The real problem for us is that it coincides with a number of other trends [that don't benefit the United States].

SUSAN SHIRK: I think there really isn’t a substantial change in the relationship. The Taiwan arms sales and the Dalai Lama meeting are things previous administrations have done, and these actions represent no significant shift on the U.S. side of things. But has there been a specific reaction on the Chinese side, a sign of something, I’m not sure of yet. I recently took a trip to China, and I came back thinking it’s too soon to say that there has been a strategic shift in China’s approach to the world and to the United States, but there’s something going on on the Chinese side.

Of the issues listed above, which ones are the most serious?

GORDON CHANG: It’s hard to rank problems because we don’t know what’s going to happen. The Chinese and U.S. positions [and differences] on climate change are essentially irreconcilable. I don’t see the Chinese changing their positions. What the Chinese want on Taiwan is a nonstarter for us. The Dalai Lama visit should not be an issue, as Obama recently reiterated the American position that Tibet is part of China. The Chinese position and reaction do not make much sense — it’s not a substantive issue.

Google, I think, is absolutely critical. Cyber-warfare against the United States is unacceptable, and they are essentially attacking the United States. These are not guys in their pajamas — you need a significant amount of bandwidth to launch this kind of attack, and it’s likely sponsored by People’s Liberation Army. You can’t have people going around the Great Firewall without the government knowing what’s going on.

SUSAN SHIRK: I think the economic issues are really pretty serious. There’s something going on internally in China, which is that the state sector in heavy industry has revived its power and the private sector is being squeezed out. Foreign businesses used to get the red carpet — this is no longer the case. A kind of economic nationalism has emerged that is popular in China. But it also reflects the very strong interests of state corporations that Chinese government has tried to turn into national champions. If our business community becomes frustrated with China, that will have a big influence on Congress and the administration and our own policies toward Beijing. What I am hearing in the American chamber of commerce and the EU chamber of commerce in Beijing is that we should not take these issues lying down. Those business interests are becoming more vocal.

Has President Obama’s approach to China borne any fruit over the past year? Are there examples where the U.S. and China are cooperating?

GORDON CHANG: I don’t think too many people would say his approach has been successful. The United States and China cooperate on some things, like [managing] North Korea, but they’re not cooperating on Iran, the cyber-attacks have been vicious, and the Chinese military has been challenging the U.S. Navy’s ships in international waters. I don’t think you’d find too many people who think Obama’s policy has borne fruit. On what issue is China really cooperating? I think [the Chinese] care less about what the world thinks of them than before. The Chinese are not willing to do very much to disarm North Korea. Its policy on North Korea is to support it, pretty much down the line.

I think we’re basically trying to adopt a conciliatory stance toward Beijing. President Obama was being generous in November, and it’s just produced a much tougher attitude on the part of the Chinese.

SUSAN SHIRK: I think the Obama administration’s policy has been unobjectionable … the way to handle the current situation is to keep a steady hand, not overreact, not make a lot of public pronouncements, keep trying to find ways to work together, but also to maintain U.S. economic and military strength.. The last thing you want to do is confirm the misperceptions in China, through, that the United States is no longer a major force. We need to find a basis to keep working with them while maintaining a strong position.

Many observers have talked about an increasingly bold China, eager to assert itself. Do you see that characterization as valid?

GORDON CHANG: Yes, that is right, but there’s more to it. Part of it is we’ve been creating perverse incentives — we’ve given the Chinese no incentives to change. The Chinese are more assertive and have viewed our conciliatory policy as a sign of weakness.

China was willing to undermine an agreement on climate change. The Chinese are feeling their oats, and they think the United States is in terminal decline, but it’s more fundamental than that. The Chinese leadership cannot cap growth because they cannot maintain their political system if they do it. The Chinese political system rests on the continual delivery of prosperity.

SUSAN SHIRK: We should expect loud public statements from Beijing to satisfy the public demand for more assertiveness, but let’s watch what they actually do. In China sometimes tough words are used as a substitute for tough action.