Strategic Challenges for the U.S.-China Relationship

The next decade is likely to be the decisive period determining the future course of U.S.-China relations. Unless China and the United States can find ways to block the current drift toward strategic rivalry, tensions will rise. This will make it more difficult to preserve the climate of peace and prosperity that has fostered China's rise and made East Asia such a dramatic success story. Moreover, if China's economy continues to surge ahead while the United States remains mired in the struggle to bring its burgeoning budget deficit under control, China could emerge from this coming decade with the largest GDP in the world. This will have both psychological and strategic significance and could roil the waters of the bilateral relationship.

Recent U.S. attention to East Asia, and particularly to Southeast Asia, is part of a coherent policy approach that seeks not to contain China but to restore confidence in a region where the United States, despite its budget difficulties, is truly committed to maintaining a robust presence. Not surprisingly, this flurry of U.S. activity is causing many Chinese to see the United States as challenging China in its own backyard. In reality, the situation is more complex.

China's more assertive behavior following the 2008 financial crisis increased the desire of Beijing's neighbors for the United States to remain engaged to play a balancing role. However, these same countries also worry that the United States may go too far in provoking China by trumpeting U.S. determination to pivot back into East Asia and reassert a leadership role. In addition, the United States' closest friends and allies in the region share the concern that Washington may become distracted by domestic difficulties and lack the staying power to remain fully engaged in East Asia.

Such considerations underscore the fact that the credibility of U.S. policy in East Asia rests to a significant degree on Asian perceptions of how effectively Washington is managing relations with Beijing. East Asians want the United States sufficiently engaged to deter China from using its growing military capabilities in inappropriate ways. At the same time, they do not want the United States to rely excessively on the military component of its regional presence or to behave in ways that make China a more dangerous neighbor and increase pressures on them to choose between China and the United States.

These considerations underline the importance for the United States of using measured rhetoric in defining its regional policy. In contrast to the Cold War era, regional countries are seeking a sustainable U.S. political, economic, and military presence in East Asia, not a robust affirmation of U.S. leadership, which could have the polarizing effect of highlighting regional rivalry between China and the United States. Washington should also show respect for the concept of ASEAN (Association of Southeast Asian Nations) centrality and not give the appearance of challenging the leading role that ASEAN countries have played in creating a new regional architecture over the last decade and a half.

Equally important, to avoid the impression of being overly focused on military balancing, the United States must devote attention and resources to strengthening U.S. economic engagement in East Asia. Given the impressive growth rates of most regional economies, the United States will damage the longer-term health of its own economy if it is not a vigorous competitor in these emerging markets. The current U.S. push behind the Trans-Pacific Partnership (TPP) is a welcome development, but the high standards for membership limit the partnership's utility as the main vehicle for U.S. trade strategy in the region. China's share of Southeast Asian trade has been growing at an annual rate of over 20%, and the country has overtaken the United States both as a market for ASEAN exports and as a source of FDI flows to the region. The United States needs to employ a broader range of trade and investment arrows in its quiver rather than rely on the TPP alone to shore up its lessening share of trade and...