Mutually Assured Interdependence and the Building of a New Type of China-us Relations

The current twists and turns in the China-us relations are not a result of overinterdependence, but rather reflect the need for a more comprehensive, closer and well-balanced mutually assured interdependence. In the construction of a new type of China-us relations, the two countries must abandon the mentalities of mutually assured destruction based on the notion of deterrence, Cold War thinking, zerosum game and competition of systems.

Ever since the establishment of diplomatic ties between China and the United States, putting an end to the long period of isolation between the two countries, the bilateral relations have progressed from early limited engagement to a comprehensive interdependence with an increasingly high degree of mutual interests. As one of the most important bilateral relationships in the world, the overall China-us relationship has remained stable, providing an important guarantee for the world’s peaceful development, prosperity and stability. However, in recent years, the benign interactions between the two countries have been disrupted, exhibiting a tendency of antagonism in some areas.

With the change of administrations in the United States, the bilateral relationship stands at a new crossroads. Regarding the future course of China-us relations, Chinese President Xi Jinping expressed in his congratulatory message to US President-elect Joe Biden the hope that “the two sides will uphold the spirit of non-conflict, non-confrontation, mutual respect and win-win cooperation, focus on cooperation, manage differences, advance the healthy and stable development of China-us ties, and join hands with other countries and the international community to promote the noble cause of world peace and development.”1 China’s position not

only serves the fundamental interests of the two peoples, but also meets the common expectations of the international community, pointing to building a new type of China-us relations. Facing the future, China and the United States must work together for a “mutually assured interdependence” against the risk of “decoupling” in order to lay a solid foundation for the healthy and stable development of China-us relations.

The Logic for Interdependence and Peaceful Coexistence

Generally speaking, economic globalization refers to a process of increasing economic interdependence of human beings. As economic globalization deepens, people across countries live in a world of contradictions. “On the one hand, as material wealth accumulates constantly, and science and technology progresses with each passing day, human civilization has developed to the highest level in history. On the other hand, the world is faced with rising uncertainties as a result of frequent regional conflicts, terrorism, refugee flows and other global challenges, as well as poverty, unemployment and increasing income gaps.”2 It demonstrates that the increasing global interdependence in the process of economic globalization does not necessarily bring about common prosperity, peace and stability for all countries. Especially in recent years, the great change in the China-us power balance has intensified concerns about the prospects of world peace. In the debate over whether the world’s two largest economies can coexist peacefully in the process of globalization, the arguments that China and the United States are headed toward confrontation have gained some popularity. Graham T. Allison compared the China-us relationship to that between Athens and Sparta, concluding that the two countries might fall into the so-called “Thucydides trap.”3 This argument should serve as a warning signal to us to take measures

in order to avoid such a scenario in China-us relations. Meanwhile, it underestimates the objective requirements of international economic connectivity and interaction for the world economic development and the reality of high global interdependence.

With the rapid development of economic globalization over the past half century, the world has been able to maintain overall peace without largescale wars among major powers. Especially since the end of the Cold War, military confrontation between the East and West camps no longer exists. Instead, the global market is rapidly growing, and global interdependence is advancing at an unprecedented pace. As this “double-edged sword” effect of global interdependence becomes prominent, people are increasingly uncertain whether a high degree of interdependence among major powers is a stabilizer of peaceful coexistence or a catalyst of conflicts. Systematic study of the relationship between interdependence and peaceful coexistence began as early as in the 1960s. Richard N. Cooper was among the first to establish a relationship between political and economic factors in international relations from the perspective of international economic interdependence, and analyzed the effects of economic interdependence on domestic and foreign policies and the response to the effects by domestic and foreign policies, laying the foundation for the systematic study of interdependence.4 As this study deepens, researchers have tended to take one of the two following views: one arguing that the interdependence may help peaceful coexistence; the other that it will increase the possibility of conflicts.

In the liberal theories of international relations, mutual dependence between two states is based on close trade relations that bring benefits to both parties, and the interruption of trade by conflict will invariably leads to the loss of any “gains from trade.” This thesis has its deepest foundation in classical political economics. In the view of classical political economists like Adam Smith and David Ricardo, the prosperity and development

of any nation originates from market expansion, which carries policy implications with regard to the promotion free trade and to participation in the international division of labor. When two countries have close trade ties, both parties will improve their welfare. Based on the historical experience and the study of interdependence in the 1980s, Richard Rosencrance pointed out that a true interdependent relationship has emerged, which has greatly increased the benefits of peace; and peaceful development through inter-state trade has become an important factor in achieving prosperity and even world leadership.5 The policy implication of Rosencrance’s research for the United States is that it must re-position itself, shifting from the old style of military competition and devoting more efforts to the world economy and to trade, so as to avoid nuclear war and ensure prosperity. Since the 21st century, the development of information technology has further surmounted restrictions on trade both in time and space, and spawned new types of trade as well as new trade rules, making the world more “flat.”6 The expansion of inter-state economic exchanges has increasingly consolidated the economic foundation for peaceful coexistence between states.

However, political realists have criticized and questioned the theory of economic interdependence as a safeguard for peace. They maintain that national survival and security is the foremost objective of state policy as compared with national prosperity, which is based on trade. Therefore, political considerations prevail over economic ones, and survival and security over economic prosperity. This is also one of the fundamental reasons why states have been willing to sacrifice the economic benefits of trade, by imposing sanctions and suspending trading activities. As far as economic benefits are concerned, trading states may also experience frictions and tensions over the relative nature of the benefits and their distribution. Meanwhile, since interdependence is often asymmetrical, the less dependent player

often sees interdependence as a source of its power over its more dependent counterpart.7 Neo-realist political scientist Kenneth N. Waltz argued that close interdependence means close interaction, thus increasing chances of accidental conflicts. If interdependent relations are not well managed, conflicts and occasional violence between states will occur; and if the interdependence develops too quickly and gets out of control, it could lead to war.8 Empirical studies even show that there seems to be a curved type of relationship between interdependence and conflict. Low- and medium-level interdependence reduces the chances of antagonistic disputes, while extensive economic interdependence rather increases the possibility of disputes between states, even leading to military conflict. A large degree of interdependence in particular, whether symmetric or asymmetric, could increase conflicts.9 Other studies have pointed out that in view of possible “weaponization” in the relationship, global interdependence will lead to more serious inter-state rivalry, or to a more strident division of power in some fields, making it difficult or even impossible for late-comer competitors to catch up. Therefore, in that view, the conflicts between states with vested interests and those that are just emerging in the global economic system are irreconcilable and unavoidable.10

Divided on the question of interdependence, neither argument denies the impact that localized issues may have on high-level politics, as both follow a common logic. First, trade helps to enhance well-being. Interdependence brings economic benefits to both parties, otherwise states would not be motivated to strengthen economic ties with one another, but it does not necessarily benefit a nation’s priority security and military objectives. Second, a greater degree of interdependence increases the cost of conflict. Some states may provoke disputes and conflicts regardless of the cost, but for a state with

a rational view, the losses from “decoupling” as a result of conflicts cannot be excluded from their cost-and-benefit calculations. Third, interdependence is an instrument for leveraging national policies and international relations. Although the interdependence in low-politics areas such as economics may have opposite effects on the relationship between states in high-politics areas such as military and security, the increasingly close relationship between low-politics and high-politics issues tends to provide greater dynamics to the interdependence, allowing more space for countries to avoid conflicts or at least serving to reduce their intensity. Therefore, many of the problems which have disrupted China-us peaceful coexistence cannot be attributed to their intensified interdependence, but rather lie in the degree and structure of their interdependence in the various fields.

Real Challenges of China-us Interdependence

In June 2013, Chinese President Xi Jinping and then US President Barack Obama met each other and reached a consensus on building a new type of major-country relationship between China and the United States. The two sides believed that in the face of the rapid economic globalization and increased connectivity between nations, China and the United States could avoid the traditional path of confrontation between major countries and embark on a new path. The two sides agreed to work together to build a new type of major-country relationship with mutual respect and in the spirit of win-win cooperation to benefit the people of the two countries and the people of the world at large.11 However, since Donald Trump came to power, China-us relations have been facing the most severe challenges since the establishment of diplomatic relations. According to the scores of China’s foreign relations published by the Institute of International Relations of Tsinghua University, China-us relations in October 2020 scored -8.2, the lowest point since the establishment of diplomatic relations of the two

countries, and since the beginning of the Korean War truce negotiations in July 1951. In contrast to the deterioration of China-us relations during the Korean War, the recent sharp decline in bilateral relations occurred despite the high degree of interdependence achieved. China-us interdependence failed to assure positive interactions between the two states, but rather turned into an excuse for the Trump administration to pressure China and to cause dramatic fluctuations in the bilateral relations, arousing doubts about the positive nature of that interdependence.

The current situation is not the result of being unduly interdependent, but rather is a result of the inadequate governance and management of that interdependence. Therefore, there is a need to better understand China-us interdependence in the context of economic globalization. To understand economic globalization, one should consider it in three dimensions: in terms of its materials, its institutions and its ideas. In the dimension of materials, as the division of labor deepens and the market expands, goods and services, capital, labor, technology and other factors of production flow across national borders at far greater velocities and scales than previously envisioned; and in the dimension of institutions, the rules that have previously been utilized on a limited scale have been increasingly regarded as universal and adapted more broadly, at a time when the world operates in a way that is highly sensitive to and dependent upon what are essentially nonneutral international rules; and in the dimension of ideas, with the help of communication, and the revolution in information technology in particular, the values and ideologies of different peoples, ethnic groups and nations both converge and diverge in their encounters.12 Thus, the real challenges of China-us interdependence unfold in all the three dimensions.

At a physical level, a negative impact has been felt in bilateral economic and trade exchanges. Since 2017, the US government has launched a series of investigations under Sections 232 and 301 against Chinese products exported to the United States, continuously escalating economic and trade

tensions and seriously disrupting economic and trading activities. Donald Trump and some other American politicians claimed that the United States was disadvantaged in the bilateral economic and trade exchanges, and that China had infringed on the interests of US companies and workers. Indeed, a good number of studies have shown that China-us trade in general has had a positive impact on the employment and a rising income in the United States, both in the past and at present;13 and has benefited the manufacturing sector, industrial workers and even ordinary consumers in the United States.14 However, the benefits are unevenly distributed between different sectors, industries, and fields as well as among different social groups. It happens that negative impact is felt more strongly by less competitive sectors, industries, and groups. A similar negative effect is also found in China as China-us economic and trade relations develop. However, the real problem does not lie in the economic and trade exchanges themselves, but in the capability and efficiency of domestic governance in the United States. Similarly, recognizing the loss on the US side caused by the China-us trade frictions as being uneven, the Trump administration frequently adjusted the scope, intensity and pace of trade frictions with China.

At an institutional level, synergizing different rules reveals the divergence of interests. Economic globalization is largely characterized by increased universal applicability of international rules, which more than ever has become a major or decisive factor in economic globalization. A multilateral trading system and regional trade arrangements have been the two wheels driving economic globalization. China and the United States being the two largest economies in the world, synergizing and integrating their economic

and trading rules would conform to the development trend of the times and serve the interests of all nations. However, the United States, which established the system of international rules, has long benefited from the nonneutral rules. Despite the rise of emerging countries and new participants in the international rules-based system, the US has been trying its best to monopolize the international rules, and to maintain its rights and privileges in the existing system of international rules which are increasingly incompatible with its power, responsibilities and obligations. Consequently, China’s legitimate appeal to enhance its voice in the international system is regarded as a challenge to US interests, while some American politicians accused China of having violated the multilateral trading rules of the World Trade Organization (WTO). As a matter of fact, US approval of China’s accession to the WTO and its granting of Permanent Normal Trade Relations (PNTR) status to China are not the root causes of unemployment and other related problems in the United States, but rather have brought real benefits to most Americans.15 Meanwhile, China has been performing impressively and equally well as other WTO members such as the United States and European Union countries in complying with WTO rules and observing trade dispute arbitration.16

At the conceptual level, the “China threat” perception undermines mutual trust. After Trump took office, the United States underwent major adjustments of its strategy towards China built on the false perception of “China threat.” The US National Security Strategy published in December 2017 stated that “China and Russia challenge American power, influence, and interests, attempting to erode American security and prosperity.”17 The summary of the US National Defense Strategy, released by the Defense

18 US Department of Defense, “Summary of the 2018 National Defense Strategy: Sharpening the American Military’s Competitive Edge,” January 2018, https://dod.defense.gov/portals/1/documents/ pubs/2018-national-defense-strategy-summary.pdf.

19 The White House, “United States Strategic Approach to the People’s Republic of China,” May 20, 2020, https://www.whitehouse.gov/articles/united-states-strategic-approach-to-the-peoples-republic-ofchina.

20 “Making Unremitting Efforts for a New Model of Major-country Relationship Between China and the United States: Remarks by H.E. Xi Jinping at the Joint Opening Ceremony of the Eighth China-u.s. Strategic and Economic Dialogue and the Seventh China-u.s. High-level Consultation on People-topeople Exchange,” Ministry of Foreign Affairs of China, June 6, 2016, https://www.fmprc.gov.cn/mfa_eng/ wjdt_665385/zyjh_665391/t1370191.shtml.

21 John Newhouse, War and Peace in the Nuclear Age, New York: Alfred A. Knopf, 1989.

22 John Lewis Gaddis, The Long Peace: Inquiries into the History of the Cold War, New York: Oxford University Press, 1989.