Commentary

Washington’s Dilemma with China: Security vs Economics

A dilemma continues to surface regarding US policy toward China. During the Cold War rivalry with the Soviet Union, it was fairly easy for the United States to adopt a firm policy toward that country with respect to security issues. Moscow was a blatant strategic adversary, and the primary objective for US policy makers was to contain the expansion of Soviet power and influence. Although there were occasions for grumbling and some differences of opinion on specific issues, Washington’s principal allies in both Western Europe and East Asia welcomed US protection and generally followed US leadership.

The need to avoid antagonizing a major trading partner and creditor imposes limits on Washington’s inclination or ability to contain China’s diplomatic and military power.”

For most of the Cold War period, economic factors did not significantly complicate that strategic paradigm. America’s trade with the USSR never exceeded a negligible level, peaking in 1979, following the period of détente, at $4.5 billion. That figure plunged to $2 billion in 1987, accounting for barely 1% of total US foreign trade. Commerce between democratic Europe and the Soviet bloc was modestly greater, especially after the onset of West German Chancellor Willy Brandt’s policy of ostpolitik in the 1970s, but it never became large enough to complicate Western Europe’s economic, much less security, ties to the United States.

The current situation regarding Washington’s relations with Beijing is murkier and far more complex. A growing number of US officials and outside policy experts view China as an emerging adversary of the United States. At a minimum, they echo George W. Bush’s assertion during his 2000 campaign for the White House that China is a “strategic competitor.” Beijing’s recent, highly assertive behavior toward its neighbors regarding territorial disputes in both the South China Sea and the East China Sea has strengthened the argument that the United States needs to adopt countermeasures to curb China’s power and ambitions. Although proponents rarely use the term “containment” to describe their proposed strategy, the features are similar to the doctrine that was applied to the Soviet Union.

But unlike the relationship with the USSR, the United States has extensive, vital economic ties with China. Bilateral trade in goods reached $562.4 billion in 2013. China also has become a major creditor for the US government, now holding some $1.3 trillion in treasury debt. Furthermore, that total continues to grow rapidly, as Washington amasses annual federal budget deficits near or above $1 trillion. China has effectively become America’s banker.

The need to avoid antagonizing a major trading partner and creditor imposes limits on Washington’s inclination or ability to contain China’s diplomatic and military power. In addition, Beijing has important economic ties with the European Union and with Washington’s allies in East Asia. Again, the contrast with the situation involving the Soviet Union is striking. US officials cannot always count on the support of those allies regarding efforts directed against China. Discussions with officials in such countries as Australia and South Korea quickly reveal that they have no desire to get into a situation where they must choose between America and China.

As a result, Washington’s policy toward Beijing sometimes appears ambivalent or uncertain. Even the change of terms from “strategic pivot” to “rebalancing US forces” to describe the Obama administration’s greater military emphasis on East Asia reflected a desire not to unduly annoy China. But Chinese leaders remain suspicious of that initiative, as they do about the Trans-Pacific Partnership, the free trade agreement being negotiated among the United States and eleven other Pacific Rim countries. President Obama’s recent comment that he would be open to the idea of China joining the TPP did little to dilute Beijing’s wariness that the arrangement was just another US scheme to mobilize a bloc of nations against China’s interests.

It is clear that US leaders continue to fret about China’s mounting power, especially the apparent willingness to push an agenda in ways that seem threatening to neighboring countries, some of which are long-standing US allies. Thus, Washington feels compelled to back Japan’s position regarding the territorial feud with Beijing over the Senkaku/Diaoyu islands, even though that stance greatly irritates the Chinese government.

The tension between US security objectives in East Asia and its economic relations with China will not abate anytime soon. Policy experts and pundits who believe that the United States can replicate the success of its containment of the Soviet Union during the Cold War with respect to China in the 21st century are badly mistaken. They ignore the numerous, crucial differences in the two situations. Very few nations, even Washington’s close allies, are interested in embarking on such a course toward China. And although the United States may be uneasy about Beijing’s behavior, the bilateral economic relations are too important to jeopardize by adopting a simplistic containment strategy.

Nor is such a strategy necessary. China’s economic links with the United States, the nations of East Asia, and the European Union are important enough to Chinese leaders to restrain aggressive impulses on their part. Tensions will continue to occur on certain issues, but the incentives for restraint and cooperation are likely to prevail. It is important to remember that larger context when quarrels flare from time to time.

Ted Galen Carpenter, a senior fellow at the Cato Institute, is the author of nine books and more than 500 articles on international affairs.