The Next Phase of the "Contest for Supremacy" in Asia

Since the end of the Cold War, the United States has pursued a persistent, reasonably coherent, two-part strategy toward China. Albeit with some shifts in rhetoric and emphasis, successive administrations have sought to engage China through trade and diplomacy while at the same time taking steps to maintain a favorable balance of hard power in East Asia. To this latter end, the United States has bolstered its own military capabilities in the region, strengthened strategic cooperation with traditional treaty allies (especially Japan, South Korea, and Australia), and built what might be called "quasi-alliance" partnerships with other countries (such as Singapore and India) that share its concerns about China's growing power.

The goal of the balancing half of U.S. strategy is to deter aggression or attempts at coercion directed at the United States' Asian allies. Meanwhile, through engagement, Washington aims to "tame" Beijing, encouraging it to become what the George W. Bush administration termed a "responsible stakeholder" in the existing international system. While they do not always say so in as many words, U.S. policymakers hope that in the long run trade and dialogue will help transform China, easing it along the path from authoritarianism toward liberal democracy.

The Obama administration came into office intending to maintain the basic approach of its predecessors but believing that it could enhance and expand engagement—broadening and deepening it to include issues such as climate change, while minimizing perennial disagreements over human rights. Although they had no intention of abandoning efforts at balancing, administration officials downplayed this part of U.S. strategy. Among other gestures, they dropped the term "hedging" to describe the purpose of the United States' Asian alliances and military deployments for fear that it conveyed a sense of mistrust, and instead began speaking of the importance of mutual "reassurance."

Starting in the latter part of 2009, however, this soft-edged approach encountered a series of setbacks as China began to behave more assertively across a variety of fronts. When North Korea sank a South Korean naval vessel in March 2010, Beijing shielded its long-time ally from punishment and instead criticized Washington and Seoul for conducting joint naval exercises meant to warn Pyongyang against further aggression. After Japanese authorities arrested a drunken Chinese fishing boat captain in waters near disputed islands in the East China Sea in September of the same year, Beijing chose to escalate what should have been a minor incident into a major diplomatic confrontation, eventually going so far as to suspend exports of rare earth minerals vital to Japanese high-tech manufacturers. Further to the south, Beijing intensified its long-standing claims to virtually all the waters and resources of the South China Sea. Faced with mounting opposition, in July 2010 Foreign Minister Yang Jiechi warned other claimants, with uncharacteristic bluntness, that "China is a big country, and other countries are small countries, and that is just a fact."¹

In addition to attempting to browbeat its neighbors, China adopted a tougher verbal stance toward the United States. At various points Chinese officials threatened to impose sanctions on U.S. companies involved in possible arms sales to Taiwan and issued public statements warning that they might stop buying U.S. debt if the president met with the Dalai Lama. Although it proved to be a bluff, the latter threat went well beyond previous expressions of displeasure over this sensitive issue.

The year 2010 also saw a number of notable displays of China's growing military capabilities, including the rollout of a prototype stealth fighter during a visit to Beijing by Secretary of Defense Robert Gates and the initial deployment of new antiship ballistic missiles evidently designed to target U.S. aircraft carriers. During the summer the People's Liberation Army Navy conducted its biggest exercises ever outside the so-called first island chain.

After a brief period of hesitation, the Obama administration began to respond to China's actions by increasing emphasis on the balancing half of the U.S. strategic portfolio. In addition to sending a deterrent signal to China, the administration sought to...