Announcer: There has never been anything like it before, not in all of human history-- the rise of modern China.

In the space of a generation, the world's most populous nation has transformed from an isolated, impoverished backwater to the second-largest and consistently fastest-growing major economy, with social, economic, demographic, and geopolitical implications which many believe are the defining issues of the 21st century.

There has also never been anything like the relationship between the United States and China.

History is perhaps defined by rivalries between great powers.

History also includes examples of great nations, economically interdependent with one another.

But where in history is there an example of two great nations so economically intertwined and yet so clearly divided by their views of their respective places in the world as strategic competitors?

So, are the United States and China destined to cooperate or doomed to collide?

This episode of "The Whole Truth" was made possible by the Doran Family Foundation... Ametek... and by... For hundreds of years in English-speaking courtrooms around the world, people have sworn an oath to tell not only the truth, but rather the whole truth.

The oath reflects the wisdom that failing to tell all of the story can be as effective as lying if your goal is to make the facts support your point of view.

In the courtroom, the search for truth also relies on advocates advancing firm contradictory arguments and doing so with decorum.

All of these apply to the court of public opinion, what John Stuart Mill called the marketplace of ideas.

This series is a place in which the competing voices on the most important issues of our time are challenged and set in a meaningful context, so that viewers like you can decide for themselves the whole truth.

On this episode, we will look at the most important bilateral relationship in the world today, and perhaps ever-- that between the United States and China, and we ask the question-- are the United States and China destined to cooperate or doomed to collide?

Here to discuss the U.S.-China relationship are Gordon Chang, author of "The Coming Collapse of China"; Robert Knake, senior fellow at the Council on Foreign Relations, a leading expert on the important issue of cyber security.

And also joining us by Skype from Shanghai, uh, is, uh, Dr. Zhang Zhexin, whose friends call him Tiger, research fellow at the Shanghai Institute for International Studies and executive co-editor of "China Quarterly of International Strategic Studies."

Gentlemen, welcome.

I want to go first to Tiger in Shanghai.

Uh, greetings.

Uh, actually, I have two questions here, I believe.

Uh, Tiger, uh, first, uh, does the stability of the U.S.-China relationship, and this is a--a topic that we're gonna be looking at today, stability, depend largely upon stability within China itself, uh, and second, on that subject, uh, we've all heard, uh, versions of the idea that there is a kind of bargain between the Chinese government and the Chinese people to the effect that as long as economic growth is strong and living standards are rising, uh, political freedom is something that a majority of the Chinese are prepared to wait for.

In other words, the popular sovereignty of the, uh, of the Chinese, uh, government depends upon continuing strong economic growth.

Now, first of all, you accept the premise, uh, that, uh, China's stability is in question and that the relationship depends on this, and second, uh, is it possible, uh, for China to sustain anything like the economic growth that we have seen, uh, achieved over the past, uh, number of years?

Uh, I believe the-- the latest I've read is that, uh, targets have been downgraded somewhat to 6%, but 7% annual growth, which is enormous for an economy that size.

Uh, uh, what--what are your views on this?

Well, basically, I think, uh, you are asking 3 questions.

First one, is China trying to overturn the current international system and issue rules that's beneficial to itself, probably, with this power?

The second is, is China's rising an opportunity or a challenge to the world, with all the so-called population or resource disaster and the climate change and so on.

And finally, is China going to collapse, as Gordon has written in his book, predicted many years ago.

I think I can, uh, analyze the following questions in the following way.

First, is China trying to, uh, uh, change the world by its own standards?

I think China, for now, over the past 36 years since its, uh, reform and opening up, is a great benefitor of the current international system, and in general, in general it will remain so.

Uh, it benefited from the U.S.-dominated order in the Asia-Pacific that kept the whole region very stable, and also by joining the WTO 15 years ago, China has witnessed great rise in its trade with the world.

So, China's benefiting from the international system.

It doesn't need to overhaul the whole system.

And after--when people talk about China, we--we tend to ignore that China has only started its opening up 36 years ago.

Compared with the 3,000 years of Chinese kingdom history, China is still, um, a very tiring and, uh, uh, tough way of learning, getting used to, and accepting the international norms, like the recent, uh, Chinese acceptance of the code of conduct in the South China Sea.

They're talking about it.

And finally, is China's, uh, reform to a so-called international regime, uh, going to be drastic?

I don't think so, because as we have seen in the past, China's engagement with INF or U.N. or other international organi-- organizations, they're all very incremental.

China is changing the international rules incrementally in a way that's in accordance with the international process.

So, China is not trying to overturn the international system.

And you're right, David, by saying that China seems to be posing greater challenges to the world with its--especially if people talk about the pollution today in Beijing.

Uh, I would call it growing pains, because any developing country with rapid economic growth will have those pains, but China, having noticed that, uh, have taken very active measures in the past two years, especially to counter pollution and also corruption and all these related things.

Uh, gentlemen, Tiger said quite a bit, uh, from, uh, from Shanghai.

Very interesting.

One is that China's satisfied uh, with the current international, uh, system.

This is--when we're talking about the United States, China, I believe we are talking about an international system, uh, that has developed over the past several decades, uh, and fundamental to that is that major players in that system do not make war on it.

Uh, does that sound correct?

Uh, uh, h-how do things look, uh, from here?

Well, I think certainly China has benefited from the international system, as Tiger talked about, but it is trying to change it, and we see that on its periphery, in the East China Sea and the South China Sea, where China in very recent years has grabbed territory from other nations.

This is aggression.

And also, we have seen unprecedented cyber attacks on other countries, including the United States, and indeed the proliferation of very dangerous weapons, um, to North Korea, to Iran, and we're talking about nuclear weapons and others.

This is really important for us, because this is a challenge to the international system, and in many ways, this is an existential challenge to the system.

It is a liberal international order, and of course, Beijing with an authoritarian government very much does not want that to exist.

It wants to make the world safe for its brand of governance.

But the situations that you're referring to here are confined to the vicinity of China.

This is the--the near abroad, so to speak, uh, China right?

In other words, uh, uh, we're not seeing a great deal of Chinese activism in places like the Middle East or, uh, uh, other areas of traditional Western concern, or are we?

No, but as Rob knows better than--than I do, certainly, cyber challenges are global, and--and indeed, those go well beyond China's periphery.

Eisenhower: Yes, in fact, that brings me, as I said at the outset, we have with us an expert on cyber security.

Rob, a few months ago, the well-known TV journalist Ted Koppel wrote a book in which he said, among other things, that the Chinese have already embedded a virtual time bomb in the American power grid, and if they so choose, they could turn the lights out for tens of millions of Americans in a matter of months, uh, 4 months.

Uh, this could end up being as serious attack on the United States as a nuclear attack in its disruptive effects.

First, do you believe that Mr. Koppel is correct?

Uh, second, is this kind of nightmare scenario something that, uh, keeps, uh, people such as yourself, that is, thinkers on national security, up at night, uh, and, uh, do you think that like the logic of the nuclear era, do you think that this kind of thing will produce a condition of mutual deterrence?

I know you're close to it.

I think we're in a situation in which the technical threat may be real, but there are factors that are keeping China or any other country from using cyber weapons to create that kind of destabilizing activity.

You can imagine what kind of impact that attack would have on the Chinese economy, which is very dependent on its relationship with the United States to sustain trade, to be able to deliver the kind of growth that Tiger is talking about.

So, from that perspective, I think most policymakers really aren't worried about the threat of a cyber attack per se.

What they're worried about is China's current cyber activity that's focused much more in the espionage phase and specifically on stealing intellectual property from U.S. companies.

That's been the current concern and that's what this administration has been focused on--changing China's behavior.

The areas that would come into play, such as taking out the power grid, such as destabilizing the stock market, scenarios that might be technically possible are ones that are hard to imagine absent some kind of overarching conflict that we hope to never see with a country like China.

I would think that right away, what's different, uh, between now and two decades ago, what's different is that China is an enormous country, an enormous power.

It is a great power now.

And in fact, the dimensions of this great power are something I'd like to come to.

One thing that I have read recently, ah, is that by certain measures, the Chinese economy is now the same size as the American economy, perhaps larger.

Uh, what I've also read in recent sources, ah, is that, uh, American defense spending continues to be much larger than, uh, Chinese defense spending.

In fact, a military parity is, uh, some decades off.

This is what I've read.

So, I see symmetries and asymmetries.

Are these two nations equal?

Ah, would they have a kind of similar, uh, set of expectations for the international system that would be a harbinger for stability, uh, or are we in fact, uh, moving into a, uh, a competitive, bipolar international system characterized by distrust, uh, and, uh, rivalry?

Well, I think the hope, when you look at cyber security, is that we can exploit two things that you brought up.

One is China's desire to be a world leader.

World leaders are, I think, by definition, not kleptocracies.

They're not countries that engage in the kind of behavior that China's engaged in, and so, if China wants to be a world leader, it's gotta stop engaging in the theft of intellectual property.

Criminals are, by definition, again, not world leaders.

The second thing is to recognize that I think China has a host of challenges that are far greater than the challenges to the leadership of the United States.

They have a population of 1.3 billion people, many of whom still live in abject poverty.

They've got horrible pollution.

They have risks from global warming that are far more severe than the United States.

They have the worry about the breakup of their country or outright revolution.

These are things that the president of the United States, at least on a handful of them, does not have to worry about.

And so, we were able to put cyber security at the top of the agenda, and I think it may be possible for us to make China say, "Hey, "we want to take this off the table because we have all these other things to worry about."

Eisenhower: Gordon?

Chang: Mm.

When you look at China and the Soviet Union, there are certain parallels in the sense that, you know, the Soviet Union looked big from our perspective, um, and if you go back to the 1970s, of course, there was the whole notion of detente, because we believed that we had to coexist with the Soviets.

But the Soviet system was actually much weaker than it appeared from the outside, and I think the same is true with China, because of all the things that you talked about, including collapsing demography right now, I-I think that this really poses important challenges to Chinese leadership.

But when we look at the most important challenge, it's probably the economy, which is not growing at the 6.9% that they claim.

It's really growing perhaps about 1% or 2% when we look at even official data, which is completely inconsistent with what Chinese leaders are saying about their own economy.

And the most important thing-- money is coming out of China at unprecedented amounts.

$460.6 billion, according to Bloomberg in the third quarter.

Now, no country, no matter-- one as big as China can absorb, you know, that type of capital outflow.

That's a real indication that the Chinese people don't have confidence in their country anymore, and clearly from a whole broad range of perspectives, these challenges are hitting the Chinese leadership at the same time.

The U.S., for all of our problems, and we've got great problems, we are a resilient nation, largely because of the nature of our political system, and because of the strength of our economy.

Tiger, I have a, uh, question as well.

Uh, if America is a great power, and there is a sort of an American world, and if China is a great power and there's a sort of Chinese world, who is part of that China--Chinese world?

Do we see--one of the things that's been striking has been the special relationship between the Chinese and the Russian government, for instance.

Uh, between the Chinese president and Vladimir Putin, for instance.

Uh, is this-- are we seeing, in some sense, a--a formation of a kind of bloc, uh, in, uh, centered in East Asia?

Is--is this developing, uh, uh, or--or is that imaginary?

Uh, Iran would be another case in point.

I know China's had a special relationship with Iran over the years.

Uh, North Korea.

Is there a kind of bloc forming?

Do you feel that you're facing a bloc?

For now--for now, I don't see that bloc forming, even when China and Russia are strengthening their strategic relationship.

Uh, they are doing this as a counter-reaction to the U.S. rebalancing in Asia-Pacific and also the, uh, uh, aggressive stance as we've seen by the Russians in Europe.

But you're right, Gordon, and, uh, gentlemen.

You all mentioned that the U.S. is a global power with global responsibilities.

It has to look over around the world, while China is still even, not even a complete regional power.

So, it would take China decades, probably, to become a global power with a global influence and global attention as the United States did.

Um, I think, David, you are asking a question about the future system, if they are going to be a tribute system revisited, for example.

I don't think there is going to be this kind of system anymore, because, first, uh, China is leading by example, heavily influenced by the Confucian, uh, tradition.

By Confucian tradition, the most important lesson is to rule--rule by benevolence.

Rule by, uh, uh, good governance.

So, uh, China-- even when China is, is the leading world--uh, leading power in the world, uh, in terms of its hard and soft power, it will not do as Western powers did, uh, before.

Second is, there is not going to be a superpower anymore like the United States.

The U.S. superpower shift is a result of the two world wars, and once its industrial production was half of the world.

China, or any other country, cannot even reach that level.

So, there will not be a new superpower and the world will be even flatter in terms of international relations.

So, there won't be any [indistinct] in the future.

Uh, and also, I think the future trend will be regionalization, or regional, uh, development.

Uh, and this is not bloc-forming by, for example, uh, the so-called 10-plus-3 or 10-plus-one, ASEAN plus China, and, uh, uh, what is being formed is called RCEP, Regional Comprehensive Economic Partnership.

Uh, the whole East Asia is not going to form a bloc against anybody, but the internal integration within themselves.

So, with all these regionalization, uh, economic, especially, going on, I don't see any possibility of military blocs formed in the future, unless, unless all these major countries-- China, Russia-- they feel a common threat from the United States.

This is, without question in my mind, the most important bilateral relationship in the world, and, uh, a unique one, and what keeps coming back to me is that we are, uh, we are at a point in this relationship, uh, which allows us to, uh, uh, think in terms of shaping it.

We have a unique relationship in many ways.

Economic interdependence, uh, military asymmetry, uh, a--uh, a developing or an emerging nation, uh, 4 times the size of the United States in population, with, uh, two nations sharing one thing in common--that is, a great sense of themselves as, uh, as the center of a world, the middle kingdom, China, the United States, uh, as a kind of city upon a hill.

Uh, just in conclusion, is this relationship headed towards a collision, uh, in your view, or is it headed towards some sort of a, a intermediate state, I would say a competitive coexistence, which characterized much of the Cold War, uh, or is this, uh, uh, a contingency that's gonna pass in the night?

Something that will be resolved at the level of, ah, conventions on, ah, cyberspace, conventions on, uh, intellectual property, things like that?

What do you think the dimensions of this potential, of, of, uh, I would say conflict?

Uh, what do you think that...

So, I think you can look at how the Obama administration has handled cyber security as possibly a road map for handling other issues that come up in the Chinese relationship.

Keep the overall goal maintaining the economic relationship, maintain the trade, and use potential threats to that to bring China in alignment with our views and our views on how China should act on the world stage.

So, if you look at the issue of economic espionage and trying to end that behavior, the focus has been on threatening to use sanctions to essentially take away the economic value that Chinese companies might get from engaging in that kind of behavior.

And then secondarily to also use, uh, China's desire to be a world power as--as something that can be threatened by embarrassing them, by showing how a world power acts in the United States and then showing how China's been acting and demonstrating that there's a difference.

The United States must grant and respect China's ambition to become a world power, right?

I think the United States cannot have a desire, does not have a desire to keep China from becoming a world power.

That's gonna be up to China, but that's gonna be up to China whether they can grow into a country that can produce the kind of innovations that the United States can produce, that can produce the kind of dialogue within its community that the United States can produce.

Those are the factors that the U.S. and China are gonna compete on globally, and thus far, we haven't really seen China's ability to develop companies like Apple, develop ideas like democracy in the same way.

Gordon, what do you think?

Mm.

Yeah, I've very concerned, and the reason is as we've tried to pave the way for China's entry into the international system, and we certainly haven't stood in their way, you know, we've wanted this to happen.

Um, the problem is that the United States has not been willing to impose costs on behavior which has been extremely provocative and belligerent and aggressive.

And because of that, the Chinese have seen, oh, well, let's just push further.

And we've had a very good illustration of this in something that we talked about earlier, and that was Scarborough Shoal, where the Chinese just seized that from the Philippines and the United States did nothing.

And so, then, basically, Beijing ramped up pressure on Second Thomas Shoal, which is also thought to be Philippine territory, and the Senkakus, which are under the administration of Japan.

The problem is that by not imposing these costs, Beijing has seen the benefit of destabilizing the international system, and this dynamic has occurred so many times where the great democracies of the world have not stopped authoritarian powers at early stages, and almost all the time, this has ended in tragedy for the world.

This is a scenario that unfolded in the thirties, and it's also a scenario that unfolded in the forties, which did not necessarily lead to direct conflict between the superpowers, uh, when you had, uh, Soviets, uh, operating in Eastern Europe in the--in the wake of World War II, uh, but yes, Tiger, how does it look from Shanghai?

Well, there was a time when, uh, people used to agree that China-U.S. relations can't be too good or can't be too bad.

But that time is gone, because our relationship has come to a strategic competition era.

I agree.

Uh, without going better, it will definitely go worse.

And also, every country, every great nation, will have their own great dreams.

They won't--they all want to be leaders.

It all depends on whether this leadership is welcome and beneficial to the world or not.

I think in the future, China will go on with this peaceful development approach, and it will not seek to dominate the world, as many people have surmised.

Uh, most importantly is power rise.

It will still take China more than a decade or two decades to even compete with the United States on the global arena.

And--but because the U.S. focus is global, as we just mentioned, while China's focus is on the Asia-Pacific, mainly, so, China probably will develop a kind of primacy in the region little by little.

But with that, it doesn't necessarily create a strategic rivalry between both of us, because the whole world is going to be, as we mentioned, mutually and commonly interdependent on each other, and the whole world is seeing more, much more of necessity for cooperation than confrontation.

So, I think both leadership, uh, both strategic circles, actually, on both sides have agreed that the major task for both countries is to manage risks and, uh, develop mutual trust.

That's very interesting.

That--what you look for when you're assessing the--the stability or the constructiveness of a relationship are norms.

Uh, that, uh, strategic norms, uh, political norms.

Uh, I believe that the United States has always felt that its international influence, as you pointed out, is something that rises spontaneously.

It's, uh, it's a response to an example we set.

We do not seek to dominate.

And Tiger is saying that China does not seek to dominate.

That's a start, perhaps.

What China has accomplished is breathtaking, and in many ways a vindication of American ideas and values.

Never have so many come so far so fast.

But China remains an undemocratic regime, and its new and growing power is a new, until quite recently unexpected, and as of yet undefined degree of challenge to the world order largely created and enforced by the power of the United States ever since World War II.

As we have discussed, the United States-China relationship has no historical parallel, in the simultaneity of an enormous degree of economic interdependence with an inescapable geopolitical and military rivalry potentially on a global scale.

After all, these aren't just any two powerful nations.

These are the two whose national identities are largely defined by the idea of national greatness, of exceptionalism.

So, are we doomed to collide, or can we fashion a destiny of cooperation?

What seems to me to be the whole truth of this matter is that the future of humanity in the 21st century may well be more impacted by how we answer this question than any other.

I'm David Eisenhower.

Thank you for watching.

Announcer: This episode of "The Whole Truth" was made possible by the Doran Family Foundation... Ametek... and by... and by contributions to your PBS station by viewers like you.

Thank you.