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A Short History of the US-China Relationship

Chinese leaders have long made it their business to understand America in a manner that their American counterparts have rarely felt the need to reciprocate. This is because the Chinese Communist Party, since its founding in 1921, has believed that its ultimate survival and success depends on understanding those countries and forces in the world capable of destroying it, principal among which is the United States. By contrast, even today, among American political elites, with few notable exceptions, there is little sense of urgency to understand the domestic drivers of China’s international policy behavior. Whereas understanding China may have been seen by some Americans as important for US national interests, very few have seen this as essential, let alone existential. Moreover, because America’s geopolitical footprint is so large, the US-China relationship—which has long seemed problematic but rarely critical—has had to compete for attention for decades: first with the Soviet Union and then with rolling crises in the Middle East.

Belatedly, that may now be changing. This is driven in recent years by a destabilizing mix of ill-considered strategic panic and domestic political opportunism in a race to the bottom on who can sound the toughest on China during a given election season. The policy appetite and political space for a more rational American approach, the product of seasoned analysis of China’s and America’s changing political, economic, and strategic circumstances over time, remains limited. Indeed, in the view of the American strategic establishment, China has been transformed from a strategic partner to a strategic competitor—and, for most parts of the American elite, to a strategic adversary—all roughly in the handful of years since Xi Jinping came to power in China in 2012. By contrast, China, under the Communist Party, has long exhibited a deep strategic realism toward America where the limitations of strategic and economic collaboration with Washington have always been recognized, particularly given the underlying Marxist-Leninist nature of the Chinese party and state.

When the American republic was in its infancy in the immediate aftermath of the Revolutionary War, China was at its height as the largest, wealthiest, and most populous country on earth. The Qing dynasty (1644–1911) extended the territorial reach of the Celestial Kingdom to its greatest extent since China first became a unified kingdom in 221 BCE. Under the Qianlong Emperor (1735–1796), the Chinese economy represented 40 percent of global GDP, despite the fact that relatively little of China’s wealth was derived from external trade.

Some earlier eras, including the Han (206 BCE–CE 220), Tang (618–907 CE), and Song (960–1279 CE) dynasties, as well as the Mongol Yuan (1279–1368) and early Ming (1368–1644), witnessed considerable political and economic engagement with the rest of the world, including when the Silk Road was at its height and China’s flourishing commercial sea routes were connecting its merchants with their central Asian, Middle Eastern, and European counterparts. But even during these high periods of China’s international commerce, historians have calculated that probably no more than 25 percent of GDP came from sectors of the economy involving trade.

Given the history of periodic political and military incursions, China has long been suspicious of foreign “barbarians” of any stripe. Chinese official culture has also long taken pride in its ability to Sinify intruders within a generation of their arrival through the inherited norms, practices, and procedures of China’s formidable Confucian bureaucratic state. On multiple occasions, foreign conquerors, including the Mongol Yuan and Manchu Qing dynasties, had little choice but to first adopt Chinese practices and norms in order to rule the vast Chinese state and then find means of accommodation between their own ethnic practices and those of the Confucian state. Still, the fact that multiple ruling dynasties had themselves been the product of invasion by non-Han peoples living along China’s borders made China’s leaders all the more aware of possible threats from abroad.

Over the millennia, China also developed its own philosophical and religious traditions (Confucianism, Taoism, and Legalism) without reference to the wider world. All three predated the arrival of Buddhism from the Indian subcontinent during the Han dynasty (at approximately 150 BCE), and successive Chinese dynasties then spent a thousand years varying between attempting to assimilate it entirely and attempting to eliminate it. They finally resorted to the next best thing to Sinifying it, which was subordinating this new foreign teaching to the political imperatives of the Chinese Confucian state. Islam had traveled along the Silk Road during the Tang dynasty (around the mid-seventh century), but its primary impact was limited to minority ethnic communities along China’s western borders and some other pockets, with little penetration of the vast Han majority. Christianity, having arrived first in the seventh century with the Nestorians and then again in the seventeenth century with the Jesuits before the arrival of Protestant missionaries in the nineteenth, had fared considerably worse, leaving little appreciable imprint on the Middle Kingdom, at least until the last decades of a declining Qing empire.

China, therefore, as seen through the framework of its national historiography, had been a relatively successful self-contained, self-referential political, economic, philosophical, cultural, and religious system. Foreigners, by contrast, were viewed with a combination of suspicion and condescension: as episodic invaders; culturally inferior; and, in most practical respects, irrelevant to China’s essential national needs. It was within this wider frame that, by the mid-nineteenth century, neither the West nor the British, let alone their distant American cousins, loomed large in the collective Chinese imagination.

The Opium Wars

This isolated status quo, however, would be turned on its head in the decades following the First Opium War (1839–1842), when Britain forced China to open its ports to international trade, imposed a series of unequal treaties on the Qing (including granting foreigners in China impunity from Chinese law under the principle of extraterritoriality), and gradually forced China to accept foreign missionaries. While the Americans may have been officially squeamish about the colonial methods used by their European cousins in forcing open China’s doors, they were soon demanding the same access to the country—both for commerce and Christian evangelism. American businesspeople were no more noble than any other country’s. Boston merchants did a significant trade in opium, sourced from Ottoman suppliers, and then plied across the Pacific to China’s newly opened treaty ports.

During the course of the nineteenth century, America’s trade and investment interests in China continued to grow. However, China represented only about half the overall value of America’s economic engagement with Japan. Together, China and Japan made up an even smaller proportion of total US trade and investment than did Europe, which had captured the vast bulk of American economic interests abroad. By contrast, over the course of the next one hundred years, American Protestant missionaries became the dominant Christian presence in China. Beyond their core mission of saving human souls, American missionaries also led the way in the establishment of Western hospitals, colleges, and universities in the late Qing and (after the revolution that overthrew the Qing in 1911) early Republic of China. Tens of thousands of young Chinese professionals were trained and educated either through American philanthropic institutions in China or, increasingly, at America’s public universities. Relatively quickly, America became the single largest foreign destination other than Japan for Chinese students studying abroad.

As anticolonialists themselves (at least in their conception), the Americans brought to China a different sensibility than the Europeans did. Nonetheless, while the US government regularly protested the growing depredations of Western colonialism in China, its diplomatic emissaries continued to insist on equal treatment for its nationals to ensure that American interests would not be sacrificed at the altar of political purity. Indeed, in the aftermath of the Boxer Uprising of 1900 (a violent antiforeign and anti-Christian movement that attacked foreign legations with the tacit support of the Qing), the US sent troops to help put down the Boxers’ siege of the foreign legations in Beijing. They took part, with the armies of seven other imperial powers, in the brutal foreign occupation of Peking and in the extraction of exorbitant financial indemnities from the Qing government, equal to six times the court’s annual revenue at the time, to be paid in silver over the following forty years.

Washington, however, under pressure from American missionaries objecting to the indemnity, later remitted a large part of its share back to the Chinese government to fund scholarship programs for Chinese students going to America. Yet this did not fundamentally ameliorate Chinese perceptions of America’s semicolonial behavior in China or place the United States in a significantly more benign light than the other imperial powers of the time.

With the dawn of what would in time come to be called the American Century, the fundamental dynamics of the relationship changed as the US supplanted Britain as China’s principal interlocutor with the West. The United States had become one of four major powers with which the new republican government—itself unstable and under constant threat from local warlords—was forced to deal to secure its territorial integrity. Imperial Russia effectively annexed more than a million square kilometers of territory from the Qing dynasty through a series of unequal treaties. Imperial Japan, following the Sino-Japanese War of 1894–1895, seized de facto control over the Chinese tributary state of Korea (which it would then annex in 1910) as well as Taiwan. France effectively took control of China’s southern tributary state of Annam (Vietnam). America, however, maintained an official stance of supporting the continuing “integrity of the Chinese Empire,” in contrast to its continuing dismemberment by the colonial powers. Still, Washington proclaimed its open-door policy, under which the United States would not allow American traders, investors, or missionaries to be squeezed out by those of the other, openly imperialist powers.

Nonetheless, given its foreign and domestic circumstances, the late Qing reformers and the early Republican revolutionaries increasingly looked to America to assist China in resisting further external territorial depredations and in reforming its national political institutions. American strategy, however, continued to be divided between higher political principle and basic commercial instincts. American liberal intellectuals, such as John Dewey, provided guidance on the formation of the new legislative and executive institutions of the fledgling Chinese republic. Despite such well-intentioned private interventions, the official American response to the needs of the emerging Chinese state ranged from ambivalence and indifference to outright hostility. US policies toward China were also influenced by questions of race. The Chinese Exclusion Act, passed by the US Congress in 1882 and made permanent in 1902, was an explicitly racist piece of legislation effectively banning further Chinese immigration to the United States on the grounds that their presence was seen as a “threat to the working conditions of the white man.” Other federal and state acts that explicitly targeted Chinese immigrants followed. In reaction to both the Chinese Exclusion Act and anti-Chinese violence in the US, a large-scale movement to boycott American goods erupted across China in 1905.

When the US finally entered World War I in 1917, Washington prevailed on China’s recently established Republican government to also declare war on Germany. As a result, Beijing dispatched hundreds of thousands of Chinese laborers to the western front to dig trenches, build field hospitals, deliver ammunition, and work in French factories to relieve the Allies’ manpower shortages. Thousands of them lost their lives in the war. All this was on the understanding that the former German territories in the Chinese province of Shandong would be returned to China once the war was won.

After Germany was defeated, President Woodrow Wilson announced his Fourteen Points for the Paris Peace Conference and the postwar international order that was to follow, including the right for all peoples to self-determination. For doing so, he was heralded as China’s hero across Chinese domestic public opinion. Chinese patriots believed their country would be able to recover Qingdao and other German-occupied parts of their country where local people had lived like second-class citizens. Chen Duxiu, dean of letters at Peking University, who went on to become a founder and first secretary-general of the Chinese Communist Party in 1921, described Wilson as “the number one good man in the world.” Chinese university students were reportedly able to recite Wilson’s Fourteen Points by heart. But when the “Big Three” met at Versailles (Wilson, British prime minister David Lloyd George, and French prime minister Georges Clemenceau), they rejected all of China’s key demands—including the abolition of the unequal treaties, the ability to control its customs revenue rather than have the treaty powers collect it on China’s behalf, and the return of Germany’s possessions in Shandong. Back in China, America’s betrayal triggered a wave of disillusionment, anger, and protest. The insult was made worse by Wilson’s decision to cede the Shandong territories to the Japanese for fear that if the US alienated Japan, Tokyo might not join his prized creation, the League of Nations. (Japan had fought on the side of the Allies in the war and had preemptively occupied the German concessions.)

The decisions made in Paris immediately sparked widespread protests in China and radicalized Chinese politics. America’s status, in the eyes of China’s emerging political class, collapsed overnight from national savior to spineless hypocrite. Mao Zedong (1893–1976), who had been one of many young Chinese who had been initially inspired by Wilson’s commitments to China, now described the United States and the other Western powers as a “bunch of robbers” who “cynically championed self-determination.” Had Woodrow Wilson stood up to Japan at Versailles, the twentieth-century history of China may have been significantly different.

Enter the Chinese Communist Party

A principal political beneficiary of the Versailles Treaty was the newly formed Bolshevik government in Moscow. Lenin refused to attend the peace conference or sign the treaty. The new Soviet government also unilaterally repudiated Russia’s extraterritorial rights in China, automatically securing acclamation from all of China’s newly emerging political parties. Chinese students protesting over the Paris treaty took to the streets in what became known as the May Fourth Movement—an intellectual watershed moment for Chinese politics, including the subsequent foundation of the Chinese Communist Party. Li Dazhao, who, along with Mao and Chen, became one of the first members of the CCP, commented that World War I was won by Lenin, Trotsky, and Marx rather than Woodrow Wilson. At the party’s founding in Shanghai in July 1921, two members of the Kremlin’s Comintern, dedicated to promoting world communism, were also in attendance.

By 1922, however, Moscow’s representatives from the Comintern were providing financial and military assistance to both the ruling Nationalist Party (the Kuomintang, or KMT) and the CCP. The new republic was in danger. Warlords were carving up the country into personal military fiefdoms. Moscow insisted that the KMT include the Communists in the government in those parts of the country it controlled and helped establish a military academy for training both CCP and KMT forces so that they could jointly defeat the warlords and reunite the country.

An appeal by Sun Yat-sen, the first (provisional) president of the Republic of China, to President Warren Harding in 1921 to help save China’s infant republic at “the most critical time of her existence,” meanwhile, fell on deaf ears. Instead, Washington granted diplomatic recognition to a series of warlord commanders who controlled Beijing during the 1920s. Sun had previously supported America’s democracy as a model for China’s future political development. Now, he found himself with nowhere else to turn other than Moscow. Sun dispatched his deputy Chiang Kai-shek to lead a four-man military commission to Moscow to seek strategic support. Thus began what would become a one-hundred-year-long political competition between Moscow and Washington for influence over China’s future domestic and foreign policy direction.

Over the next thirty years, between the Treaty of Versailles and the proclamation of the People’s Republic in 1949, China’s future was largely shaped by three great powers: Japan, the United States, and the Soviet Union. Japan’s invasions of China in 1931 and 1937 rendered it effectively impossible for Chiang Kai-shek’s KMT government to modernize the Chinese economy, bring about basic social reforms, or begin any transition to liberal-democratic institutions. In the meantime, the Soviet Union continued to nurture close political and operational relationships with both the KMT and the CCP. However, after 1927, when Chiang sought to eliminate the Communists, Moscow’s support for the party during the course of the ensuing civil war eventually became complete. As for the United States, the KMT government looked to Washington as the only possible strategic counterweight against Japan on the one hand and the Soviet-backed CCP on the other.

Once again, however, the United States proved an unreliable ally. It was not until after the Japanese invasion of the Chinese far northeast, or Manchuria, in 1931 that the US finally agreed to an American “civilian mission” to help train the fledgling Chinese air force. Still, President Herbert Hoover reminded Americans that “Japan in Manchuria did not challenge the deep interests or values of the United States.” Even following the full-scale Japanese invasion of China in 1937, US aid to the Republic of China continued to be unofficial—primarily in the form of the Flying Tigers, under the command of Claire Chennault, a retired US Army Air Corps officer who was an advisor to Chiang Kai-shek. However, US assistance fell short of Chiang Kai-shek’s military and financial needs in dealing with the combined challenges of a Japanese invasion, continued predations by warlords, and a growing Communist insurgency.

In the end, fearing it risked outright war with Japan, the Roosevelt administration held back from offering official military support for Chiang despite professing sympathy for China. Indeed, until America’s entry into the war in 1941, 80 percent of all foreign aid to China came from the Soviet Union. Even after Pearl Harbor, Roosevelt pursued a policy of Europe first, regarding China as a secondary theater of operations and, therefore, warranting no serious US troop presence. Although Republican China lost more than three million troops and eleven million civilians during their fourteen-year war against Japan, thereby pinning down the bulk of the Japanese army in the Asian theater in a rolling war of attrition across the Chinese mainland, the US refused to make any significant military deployments to China itself. Instead, the US focused on its maritime campaign, including its island-hopping strategy across the western Pacific, before destroying Hiroshima and Nagasaki with nuclear weapons in 1945 and finally bringing the war with Japan to an end.

The same equivocal American approach to the KMT continued after the war, when the Truman administration never effectively resolved the question of whether, and to what extent, the US would intervene to defend Chiang against Mao’s resurgent Communists. The US extended a series of significant Treasury loans to a cash-strapped KMT government that was wrestling with postwar hyperinflation and a chronically unstable currency. But as soon as the war with Japan was over, Truman announced the ending of all military assistance to Chiang. Meanwhile, the Soviets were in the process of rearming Mao’s forces and secretly relocating them to Manchuria in preparation for the final phase of the civil war against the KMT.

American postwar diplomacy, primarily through the Marshall Mission of 1945 to 1947 (when General George Marshall was dispatched to China by President Harry Truman to act as a mediator) focused on the fool’s errand of trying to reconcile Nationalist and Communist forces in a democratic government of national unity supported by an integrated Chinese army under Chiang’s control. The naivety of US policy was underlined when full-scale civil war erupted in the summer of 1946, by which time Communist forces, armed and equipped by the Soviets, were at full strength and about to begin their sweeping march south. US military and financial aid to the Nationalists resumed but was insufficient to make a material difference to the war’s outcome. In Washington, the view of the State Department and others across the Truman administration was that the Nationalists were hopelessly corrupt and that a Communist victory would not necessarily be catastrophic to American interests. Mao had also assured the wide-eyed American journalists, to whom he granted carefully arranged interviews in the CCP’s Yan’an stronghold, that he was not a Soviet proxy, that a Communist regime would be politically democratic and economically pragmatic, and that it would welcome continued US trade and investment. This included Edgar Snow, a pliant journalist whose best-selling 1937 book, Red Star Over China, had a strong impact on raising American opinion of the revolutionaries. US policy, therefore, fell between two stools: not materially supporting Chiang sufficiently to deliver victory over the CCP while sufficiently committing itself to Chiang, at least symbolically, to earn the enduring enmity of Mao and the Communists, who concluded that their only reliable ally was the Soviet Union.

The uncomfortable truth was that Mao had long seen the United States as no better than the other imperialist powers. According to Mao’s writings as early as 1923, the Chinese people had “a superstitious faith in the United States,” and Americans were “naïve people” who failed to understand that “America was actually the most murderous of hangmen.” His reasons were the familiar ones—the US had failed to repeal the unequal treaties, had insisted on extraterritoriality for its nationals, and had been of negligible assistance in effectively confronting Japan’s territorial ambitions. But Mao also recognized a second and much more lethal threat to Marxist ideology: the potential impact of American political ideals and ideas within China itself. First- and second-generation American missionaries had attracted millions of Chinese converts (far more than the Europeans had) and established hundreds of charitable institutions across the country to help the poor. Popular admiration of the efficient and uncorrupt American-trained advisors working across multiple branches of the KMT administration in Nanking was substantial. Above all, there was the continued popular appeal of the American democratic-capitalist model to Chinese political elites, notwithstanding the equivocal nature of US official support for China’s national aspirations. This was reinforced by the still significant cohort of returning Chinese students from US academic institutions, many emboldened with new ideas on the transformation of China into a modern liberal state.

All of these, Mao concluded, were corrosive to CCP claims to comprehensive ideological legitimacy. In 1937, he wrote that American “liberalism is extremely harmful in a revolutionary collective.… It is an extremely bad tendency.” Therefore, from its early years to the present, the Chinese Communist Party has seen the United States, uniquely among the Western democracies, as hostile to its ideological interests and a continuing challenge to its efforts to secure and sustain political power.

The United States and the People’s Republic

Following the Communist victory in 1949, the next quarter century of the US-China relationship became its most acrimonious. For all its reservations about Chiang and the KMT, the US continued to support him after he fled with his army and supporters to Taiwan, determined to make the island his political and military base for “recovering the mainland.” In the United States, the domestic political debate for the next decade was dominated by the Cold War, McCarthyism, and a viciously partisan fight between Republicans and Democrats over “who lost China.” Meanwhile, Chinese domestic politics were driven by the convulsions of the Great Leap Forward, the Cultural Revolution, and Mao’s doctrine of continuous revolution, which saw millions of deaths, social fracturing, and the near collapse of the Chinese economy.

Chiang’s establishment of the Republic of China on Taiwan was a direct affront to Mao. But facing the considerable challenges of rebuilding a war-torn country and establishing an entirely new form of government there, Mao did not want to risk a general war with the United States. So when North Korean leader Kim Il-sung asked for his help in dislodging the Americans from South Korea, Mao gave conditional assent. He said he would come to North Korea’s aid if the Americans crossed the thirty-eighth parallel. When they did, he sent hundreds of thousands of Chinese troops to fight them—but not as the People’s Liberation Army. Instead, they were called “volunteers” so that the fledgling People’s Republic would not have to officially declare war on the US.

While Chinese troops were fighting American forces in Korea, China’s propaganda apparatus launched a “hate America” campaign on the home front to “cure three diseases: kongmei bing (the disease of fearing America), chongmei bing (the disease of worshiping America), and meimei bing (the disease of flattering America).” The party also used the campaign to discredit American-trained intellectuals who had stayed in China after 1949, requiring them to make public confessions of their ideological heresies while professing afresh their love for the party.

This demonization soon became mutual as American troop losses in Korea mounted, concerns over the brutal treatment of thousands of American POWs grew, and McCarthyism amplified the threat of the “yellow peril,” the “red peril,” and the domino theory of prospective Chinese domination of all East Asia. It was during this period that America developed its postwar alliance structure across the region, involving Australia and New Zealand (1951), Japan (1952), South Korea (1953), Taiwan (1954), the Philippines (1951), Thailand (1962), and South Vietnam (1956), as well as (modeled along NATO lines) the multilateral Manila Pact, or Southeast Asian Treaty Organization, of 1954. These polarizing years were also punctuated by multiple crises across the Taiwan Strait during which President Dwight Eisenhower repeatedly threatened China with nuclear annihilation. By the 1960s, the US-China relationship reached its historical low point, creating deep, scarifying, personal, and institutional memories on both sides of the Pacific with lasting resonances to this day.

Strategic enmity between the two nations continued until Richard Nixon and Henry Kissinger’s “opening” to China in 1971, aided by Zhou Enlai’s “ping-pong diplomacy” and Mao Zedong’s positive response to it. This radical change in course was the product of a rapid deterioration in Sino-Soviet relations over the previous decade, sparked by Nikita Khrushchev’s 1956 denunciation of Joseph Stalin after the Soviet leader’s death. This infuriated Mao, who considered Stalin (an early supporter of the CCP) “the greatest genius of the present age.” More importantly, Mao saw Khrushchev’s criticism of Stalin’s dictatorial abuse of power and cult of personality as a potential threat to himself—particularly if his Chinese comrades ever became tempted to follow suit. Even as US-Soviet tensions reached a peak with the Cuban Missile Crisis, Sino-Soviet relations were rapidly deteriorating to the point of lethal military conflict on their shared border. While American schoolchildren were practicing duck-and-cover drills, citizens in Beijing and elsewhere were mobilized to dig vast networks of bomb shelters as China raced to test its own A-bomb—a defense not just against the Americans but also against the Soviets. Meanwhile, the withdrawal of Soviet economic aid and technical advisors in 1960 left China’s industry and economy in increasingly desperate circumstances.

The opening to America was, therefore, in part a reaction to domestic political and economic developments within China itself, including the economic implosions of the Great Leap Forward and the Cultural Revolution (1966–1976), and in part a reaction to China’s strategic exposure to the Soviet threat. Nonetheless, the normalization of US-China relations during the course of the 1970s had nothing to do with any Communist Party reappraisal of the virtues of American liberalism or Western democracy. These remained anathema to party orthodoxy. Instead, it reflected China’s desperate financial and economic circumstances and a deeply pragmatic response to the withdrawal of Soviet economic aid and technical advisors, as well as the large-scale deployment of Soviet forces and escalating military clashes along the Sino-Soviet border.

In the United States, a parallel sense of pragmatic opportunity emerged. Following the “missile gap” debate of the 1960s and Soviet equivocation under Leonid Brezhnev on the desirability of strategic arms control negotiations with the US, Washington concluded that a political opening to Beijing would significantly advance a range of American strategic interests. Developments in Vietnam accelerated this process, as Nixon and Kissinger saw Beijing as a potential ally in permanently “freezing” the Vietnam conflict between north and south along the same lines that had been achieved in Korea. This would enable Nixon to bring about the withdrawal of American forces from a deeply unpopular war while achieving “peace with honor.” Vietnam would also become a factor in Beijing’s consideration of the advantages of full normalization with Washington in 1979, after the Soviet-backed regime in Hanoi unceremoniously removed the Beijing-backed Pol Pot regime in neighboring Cambodia in 1978, leading to a full-scale Sino-Vietnamese border war the following year.

Diplomatic Normalization

Diplomatic normalization between China and the United States was finally achieved in 1979, seven tortuous years after the negotiation of the Shanghai Communiqué of 1972. The main sticking point between the two nations was Taiwan—as, indeed, it has been ever since. The US insisted unsuccessfully that China renounce the use of force in any attempt to compel reunification with Taipei. At the same time, the US passed the Taiwan Relations Act, under which Washington would continue to provide military assistance to Taipei, an action that came close to derailing diplomatic recognition altogether. Taiwan aside, as a result of diplomatic normalization with the US, China had achieved its core strategic goals: a steady flow of military intelligence from Washington on Soviet and Vietnamese troop deployments; the sale of US and allied military hardware to the PLA; and Beijing ultimately being granted “most-favored nation status,” which allowed China the same trading relationship with America as the latter had with its friends and allies around the world. Thus began China’s decades-long march toward economic modernization—a process in which access to American technology, markets, and capital was fundamental. Playing the “China card” also strengthened Washington’s negotiating hand with Moscow, causing the Soviet Union to soon begin long-delayed strategic arms control negotiations with the US.

But while this transition from a quarter century of strategic enmity to an embryonic strategic rapprochement between China and the United States was remarkable, the underlying expectations in each capital were radically different from the outset. The CCP saw its new relationship with Washington as a temporary arrangement until such time as the Soviet Union was no longer a threat to Chinese security and until China itself could build its national economic and, in time, military strength. On the other hand, over the years that followed, Washington nurtured much deeper aspirations that China’s opening to the United States would presage the development of a massive new market for American exports and investment and that China’s evolution into a market economy would eventually create the foundations for a more open, even liberal, society. In many respects, the seeds of the current crisis in US-China relations originated in these different expectations. To put it another way, from the outset, Beijing saw the relationship as a transactional one, as a means of enhancing China’s national security and prosperity. Whereas Washington came to see it, at least in part, as transformational, carrying with it the deeper objective of changing the fundamental nature of Communist China itself.

Deng Xiaoping, Economic Reform, and the Road to Tiananmen

Mao may have begun the process of normalization, but by the time it happened in 1979, the CCP (and thus the PRC) was under the collective leadership of Deng Xiaoping. The age of “reform and opening the door to the outside world” was now well and truly underway. Deng had, in fact, been Mao’s faithful lieutenant in the vicious purge of suspected capitalists and party critics in the 1958 antirightist campaign. So much so that Mao warned him to cool his ardor: “If we kill too many, we will forfeit public sympathy, and a shortage of labor power will arise.” Yet after the Great Leap Forward caused three years of famine, Deng was part of a group of leaders who reintroduced small-scale markets and gave farmers the right to grow their own food—a crime for which he was eventually accused of being a capitalist roader during the Cultural Revolution. After his emergence as China’s paramount leader after Mao’s death, Deng brought back an even wider range of market-based reforms, transforming the Chinese economy in ways that left many in the West starry-eyed. Despite this, Deng never committed to any form of political liberalism. He had no qualms about suppressing the Democracy Wall movement of 1979–1980, sending its leaders off to lengthy prison sentences, presaging how he would act with overwhelming force in the violent suppression of hundreds of thousands of protesters in Tiananmen Square a decade later in June 1989.

Deng saw China’s modernization not as any kind of political, let alone ideological, transformation but as a pragmatic economic move in the tradition of the various national self-strengthening movements from China’s imperial past. While opposed to the political and economic chaos brought about by Mao’s mass movements during the Great Leap Forward and the Cultural Revolution, Deng had no interest in any form of fundamental democratic reform. While Deng may not have seen the United States as a source of political reform, he did see it as a source of foreign trade, investment, technology, training, and modern financial and economic management. While not an orthodox Marxist, Deng remained a fully committed Leninist. Unsurprisingly, he was determined not to cede the party’s political power for the sake of American economic engagement or common strategic endeavor against the Soviet Union. Even as he began his reform and opening campaign in 1979, he vowed from the outset adherence to the Four Cardinal Principles and that China would forever “uphold the dictatorship of the proletariat” and “the leadership of the Communist Party.” In Deng’s words, while it was important for China to “open the windows wide to breathe the fresh air,” the party’s responsibility was to continue to “swat away the flies and insects that came with it.” For the party, that meant remaining ever vigilant against the importation of Western liberal-democratic ideas, ideals, and institutions.

The fact that most US administrations after Nixon did not see the relationship in the same brutally pragmatic terms as the CCP was not entirely naive. Indeed, it was broadly consistent with long-standing development theory that irrespective of what the party might want or say, market reforms would increase living standards and create, in time, a burgeoning middle class that would eventually demand a political voice of their own. According to this theory, over time, the resulting democratization of China would also cause Beijing to acquiesce, accept, and gradually become full participants in the overall fabric of the liberal international order led by the United States. At the outer reaches of this reasoning rested the view that if China eventually surpassed the United States in aggregate economic power, as the US had surpassed the UK a century before, this transition would again be peaceful because the shared values underpinning the global order would remain broadly constant.

The bilateral trade and investment relationship grew rapidly as Beijing imported advanced computer systems, aircraft, and automobiles from the US. China’s economic transformation to become the world’s factory was fueled by its access to a vast American consumer market and new sources of foreign direct investment. Military collaboration between Washington and Beijing reached its height during the 1980s, as American and Chinese forces worked together to arm the mujahideen in Afghanistan against the Soviet occupation. A joint listening station was also established near the Soviet border to help China monitor Soviet troop deployments. Indeed, the flow of American military hardware and intelligence steadily grew to assume the operational characteristics of a substantive strategic alliance.

However, in the decade following diplomatic normalization, the deep underlying tensions already at work across the wider fabric of the US-China relationship came to the surface. The political relationship during this period remained fraught as the Communist Party wrestled with the effects that the opening to America was having on Chinese students, intellectuals, and policy elites. Exposed to a wide range of heterodox ideas, many challenged various aspects of Marxist-Leninist orthodoxy and one-party rule, including in art, literature, and film. In 1983, Deng authorized a “campaign against spiritual pollution.” Four years later, after the purge of leading reformist General Secretary Hu Yaobang, Deng launched another campaign against “bourgeois liberalization,” culminating in the removal of Hu’s replacement, Zhao Ziyang, just before Deng sent in the military to repress the Tiananmen protesters in 1989—a bloody crackdown that stunned the world and left Chinese citizens dead in the hundreds, if not thousands. I met both Hu and Zhao on a number of occasions during my time in the Australian Embassy in Beijing. Hu, despite having risen through the ranks of the Communist Youth League, had become a pioneering liberal reformer during the golden decade of Chinese reformist experimentation in the 1980s. Hu enjoyed the patronage and, importantly, the protection of Deng for nearly a decade against the powerful group of conservatives remaining in the party center. Like Deng, Hu was barely five feet tall. His native dialect was an almost impenetrable Hunanese, and he was a colorful, internationally active political live wire. We entertained him at the Australian Embassy before he embarked on one of his first visits abroad—to Australia. The embassy was overrun with official food tasters (an important legacy of both a Leninist and Confucian state) to ensure we were not about to poison the party’s senior leadership over lunch.

Zhao, in the many meetings I observed with him, was just as personable as Hu but was a more conventional politician from central casting of Chinese mandarins and more seasoned in dealing with foreign barbarians such as ourselves. Both, however, eventually fell, having pushed the reformist envelope too far even for Deng’s tastes, at a time when Deng still had to be mindful of the body of political opinion within the central leadership that was ever prepared to critique him from the left. Indeed, Tiananmen marked the end of China’s first phase of reform, when, at least for a season, all things seemed possible under heaven.

Until Tiananmen, successive US administrations by and large tended to avert their gazes from Deng’s politics and the enduring Leninist nature of the CCP. But even after 1989, American sanctions, to the extent they were applied, were only temporary. The larger consideration for the US was the continued strategic and economic relationship with Beijing, its continued utility against the Soviet Union, and an eternal American corporate optimism for the prospects of a burgeoning Chinese market.

Resolution of the Sino-Soviet Border Dispute

By the 1980s, however, one of the foundational pillars of the US-China relationship faltered. The ascent of Gorbachev in 1985; a final agreement on the Sino-Soviet border in 1989 after three hundred years of dispute, conflict, and war; and then the collapse of the Soviet Union in 1991 fundamentally changed China’s strategic landscape. While politically and ideologically, the CCP was horrified at the domestic implosion of Soviet Communism without the Americans dropping a single bomb on Moscow, the Soviet collapse effectively eliminated Moscow as a long-term threat to Chinese national security. Importantly for this account, one of the principal strategic rationales for the normalization and development of US-China relations in the early 1970s disappeared, leaving little beyond mutual economic self-interest to take its place.

In fact, Beijing’s rapprochement with Moscow began several years earlier, as the CCP leadership grew to fear excessive dependence on Washington, especially as it sought to modernize its military. US sanctions on China’s export of nuclear and missile technologies to Iran, Pakistan, and North Korea incurred the wrath of a cash-strapped PLA interested in expanding its export income. Furthermore, as tensions eased between Beijing and Moscow after 1991, the Russians proved willing, once again, to become suppliers of advanced weaponry to their Chinese neighbors, thereby providing fresh orders for Russian armaments factories that were desperate for work.

Meanwhile, the strategic relationship between Washington and Beijing was reaching a breaking point. First, a crisis erupted in 1996, when China launched missiles into waters around Taiwan in an effort to discourage the democratic election of independence-minded candidates in the island’s first direct democratic presidential election. This prompted the Clinton administration to dispatch two carrier battle groups to the Taiwan Strait as a demonstration of American political and military support for Taipei. Then, in 1999, amid the Balkan War, five US guided missiles struck the Chinese Embassy in Belgrade, killing three Chinese journalists. Washington claimed it was an accident, but neither the outraged Chinese leadership nor the public ever accepted the explanation and to this day continue to strongly believe that the attack was deliberate. By the end of the 1990s, the US-China strategic relationship was beginning to nosedive.

At the same time, Moscow’s post–Cold War relationship with the US was unravelling, as the Russian economy lurched from crisis to crisis during its “cold turkey” experiment with American capitalism. As various of its former republics applied for NATO membership, Russia’s strategic interests were also being shredded through the dismemberment of what it had for decades seen as its imperial territory. These concerns were validated from Moscow’s perspective with NATO’s military intervention in the Balkans in the 1990s, as the Russians had long considered the region within their sphere of geopolitical influence.

The gradual strategic realignment that followed had a profound impact over time on the future trajectory of the US-China relationship. The CCP concluded, under Jiang Zemin, Hu Jintao, and then most decisively under Xi Jinping, that China now had more in common with Russia than the United States, even if US investment and trade, along with the education of China’s future elite in American universities, remained critical to China’s economic prospects.

From Tiananmen to WTO Membership

Despite growing concerns by the American public, the administrations of both George H. W. Bush and Bill Clinton ultimately pushed human rights concerns to the side after Tiananmen to promote America’s growing trade and investment relationship with China. Both administrations overtly justified this course of action by insisting, despite the evidence of Tiananmen, that Chinese economic reform, development, and prosperity would lead to political reform. America’s business community, which viewed its growing presence in the massive Chinese market as an unparalleled opportunity, advocated in favor of this view and helped provide the necessary political and economic ballast to restabilize a rocky post-Tiananmen relationship.

Three years after Tiananmen, Deng Xiaoping feared that the political hard-liners he had gathered around him to deal with the “bourgeois liberal” threat to party power in 1989 were also moving to throttle any further market-based reforms in the economy. They demanded to know whether the party’s watchword was socialism or capitalism. In response, Deng, at the ripe old age of eighty-seven, embarked on what Chinese historians now refer to as his Southern Inspection Tour (a term once used to describe travels by the emperor to China’s south). Visiting the special economic zones that were the crucibles of reform, as well as cities such as Shanghai, he declared that as long as the party was looking after the people’s well-being, it was still surnamed socialist. But Deng said that no Chinese leader should remain in power unless they supported faster economic reform, opening, and development, at which point a number of conservatives were effectively removed from the ranks of the central leadership. Following his lead, General Secretary Jiang Zemin and his premier Zhu Rongji embarked on an ambitious new program to expand what they called a socialist market economy. Chinese entrepreneurs were told to build their own companies and go out beyond the country’s borders. And in a supreme act of political pragmatism, they even invited those who had made it rich through entrepreneurship and the business of capitalism, both at home and abroad, to join the Communist Party itself.

Over the years, I met both Jiang and Zhu in China and in Australia. Jiang first visited our fair country while I was still a foreign ministry official (by this time I was back in Australia) and Jiang was first party secretary in Shanghai (1987–1989). He later took over from Zhao Ziyang after the latter was purged following Tiananmen. Jiang was larger than life and loved to demonstrate his understanding of the wider world and his knowledge of English. I remember him being taken to the Sydney Opera House at his request, where he asked if he could sing from the stage, albeit before an empty house. The entourage, both Australian and Chinese, dutifully applauded. Most importantly, the leader had fun in a way that we could never imagine either of his successors as party general-secretary, Hu Jintao or Xi Jinping, doing.

Zhu Rongji, like Zhao Ziyang in the past, was cut from a more conservative cloth—and as a founding dean of the school of economics and management at China’s prestigious Tsinghua University, he was decidedly professorial in tone. I first met him in May 1989, when he was mayor of Shanghai. He was in the midst of a political crisis managing the prodemocratic student uprisings in his city and was determined to avoid the blood that would soon be shed in Beijing. Zhu was pale and drawn but unflappable. He still insisted on honoring his commitments to meet with our delegation, not least because we were there for the official launch of the Pudong Development District, which was then little more than a swamp on the other side of the Huangpu River across from the Bund. He took me to the window of the Peace Hotel, and as we looked across the river to the wasteland opposite, he told me this would soon rival the Manhattan skyline. I thought he was smoking something, but he proved to be right. He reminded me of this three years later when he visited my hometown of Brisbane, Australia (where, by that point, I was the state premier’s chief of staff), and Zhu had risen to become vice premier of China. What animated him was what made economies tick, and Shanghai had already begun to boom.

These were still heady days in China’s economic reform project, even if Tiananmen had spelled the end of meaningful political reform for a generation. Discerning these signals, the Clinton administration began a long negotiation with China, which culminated in their eventual admission to the World Trade Organization (WTO) in 2001, greatly opening up global markets to Chinese exports and fueling a further explosion in Chinese manufacturing. At the same time, as Chinese state-owned enterprises and private firms listed on domestic and foreign exchanges, American and European financial institutions started opening global capital markets to China, providing Chinese firms with the capital needed to expand quickly. These twin developments turbocharged China’s economic growth, reduced poverty, and raised living standards for average Chinese families (Chinese GDP per capita, which was around $600 in 1995, nearly tripled to $1,750 in 2005). In doing so, they helped rebuild the party’s economic credibility and popular legitimacy after the dark events of 1989 and the earlier ravages of the Cultural Revolution.

The net result of China’s entry into the WTO and unprecedented access to global markets, coupled with its currency’s deeply advantageous fixed exchange rate, was that over the next decade and a half, China became the world’s leading manufacturing power, as factories relocated to the country from many advanced economies, including the US. This led to China also becoming the world’s largest trading country and the world’s second-largest destination for global foreign direct investment. It set the scene for the decline of American industry and the rise of populist resentment against globalization in general—and China in particular.

Throughout this process of deep economic transformation, China exhibited little interest in any form of fundamental political liberalization beyond some half-hearted experiments in localized “village democracy.” From Beijing’s perspective, it turned out that you could raise up a middle class and a market economy without sparking too much demand for Western-style democracy. But to make doubly sure there would be no repetitions of 1989, Jiang Zemin launched a patriotic education campaign in the early 1990s to reassert political orthodoxy and warn the next generation of Western-educated Chinese professionals of the ideological dangers posed by Western values. The campaign reminded them to never forget China’s “national humiliation” by Japan and the West, and in particular the US, during a century of colonial occupation. Picking up where the 1980s campaigns against “spiritual pollution” and “bourgeois liberalization” left off, Jiang’s program also specifically warned the party that unless it was careful in the domestic presentation of contemporary Chinese history, China could also fall victim to “the peaceful evolution plot of international hostile powers.” In fact, the more that American political leaders emphasized the linkage between economic development and political reform in China, the more Chinese political leaders cited this as proof and pushed back in precisely the reverse direction.

In 1994, the Clinton administration explicitly decoupled human rights progress in China from an annual congressional vote on its most-favored-nation treatment of China in US trade policy (meaning it would receive the lowest tariffs the US had to offer). Several years later, Clinton also abandoned annual efforts to push through a resolution critical of China’s human rights performance at the UN Human Rights Commission in Geneva. In exchange, China agreed to sign the International Covenant on Civil and Political Rights, which guarantees citizens freedom of speech, religion, assembly, electoral rights, and due process, among other provisions. However, Beijing later refused to ratify its commitment, and the US failed to take any action as a result. The CCP’s indifference to the principles of the international covenant was further underlined by the arrest in 2009 of “Charter 08” democracy activists (including future Nobel Peace Prize laureate Liu Xiaobo) who had modeled their effort on the Czech dissidents who launched the Prague Spring of 1968.

George W. Bush, 9/11, and Iraq

In its earliest years, the George W. Bush administration promised a fundamental rethink of the future of the US-China relationship. The new president identified Beijing as a significant emerging threat to American and allied interests in Asia. But Bush’s stated resolve to harden America’s China strategy was soon derailed by two events within the first nine months of his administration.

In April 2001, a Chinese fighter jet flying at 22,500 feet closed within ten feet of a USAF EP3 reconnaissance aircraft, resulting in a midair collision. The Chinese jet crashed, killing its pilot, while the Americans made an emergency landing at a Chinese airbase on Hainan Island, near the South China Sea. Both aircraft had been in international airspace, but Beijing exploited the spy flight incident to maximum effect, defining itself as the victim of American aggression. In exchange for releasing the plane’s crew, Jiang extracted from Washington the so-called letter of the two apologies, stating that the United States was “very sorry” for the death of the Chinese pilot and “very sorry” for the American aircraft having entered Chinese airspace to land without verbal clearance. Meanwhile, the Chinese extracted a treasure trove of technological and intelligence data from the damaged aircraft.

The second, and far more significant, development was the September 11, 2001, terrorist attacks on New York and Washington, which led to the longest large-scale military operation in American history. The American and allied invasion and occupation of Afghanistan was supported by a UN Security Council resolution that was backed by both China and Russia. But when President Bush broadened his “War on Terror” to include the disastrous invasion of Iraq in 2003, Beijing was not among his supporters. What’s more, the political, military, and financial costs of these wars were a strategic and foreign policy boon to China. They damaged American global prestige, sapped American strategic self-confidence, and divided American public opinion and its allies. Most importantly, they kept Bush preoccupied for the duration of his administration with the Middle East, even as China flexed its regional and global strategic muscles in a manner that had not been possible before.

Much later, as the leader of the opposition in the House of Representatives and then prime minister, I spoke to Bush about his handling of China during his presidency. Bush told me the China relationship had been difficult during his time in office but that China had been helpful in building a united front against Al Qaeda’s global operations. When we had first met in Sydney during an Asia Pacific Economic Cooperation (APEC) summit, and when his best buddy, then conservative Prime Minister John Howard, was my bitter opponent in the 2007 Australian national elections, Bush had not exactly been entirely warm and friendly toward me. Howard had backed him in the Iraq War, whereas I had opposed the war from the get-go. I handed Bush a few tomes on Chinese politics and foreign policy as my “welcome to Australia” gift, which at least opened a conversation with him on China’s rise—and whether it would be benign.

When I visited Washington the following year as prime minster (on an around-the-world trip that later took me to Beijing), we spent most of our time on China, after I congratulated him on his handling of a potentially dangerous period in the relationship. The Taiwanese president at the time, Chen Shui-bian, had repeatedly flirted publicly with the idea of an independent Republic of Taiwan—an act that would likely have triggered war with Beijing. Bush adjusted US policy in a manner that sent a clear message to Chen that if he continued to play with fire, the Eighty-Second Airborne would not necessarily come running to the rescue. Chen got the message. Bush, backed by his national security advisor, Steve Hadley, had handled a difficult set of Taiwan problems well.

It was the first of many, many conversations over the years on China with US presidents, vice presidents, secretaries of state and defense, and US trade representatives throughout the Bush, Obama, and Biden White Houses. The exception was the alternative universe of Trump—although as president of the Asia Society Policy Institute in New York, I was able to strike up a good, respectful, and professional relationship with Trump’s USTR, Bob Lighthizer, who was usually a voice of quiet reason in the midst of the chaos.

The Global Financial Crisis

The worldwide financial crisis of 2008–2009 and the global recession that followed had an even more profound effect on Chinese strategic thinking. For decades, China’s leadership had been deeply respectful of American military, economic, and technological power. But thirty years later, as the scale of the economic carnage wrought by the structural weaknesses of America’s financial system in the 2008 crisis became apparent, a less reverent perspective emerged in Beijing. Not only was there the fact that the crisis was born and incubated in the US, but also, for the first time, the world needed economic solutions that were beyond America’s ability to provide alone. Instead, as a member of the G20, China was sharing the world stage as an engine of global economic recovery. When I attended the first leader-level meeting of the G20 in 2008 as Australian prime minister alongside other leaders, including Chinese president Hu Jintao, it was clear how significantly the center of global economic gravity was shifting. China had finally arrived at the top table of global affairs, recognizing the strength and size of its economy and the success of the reform program that had produced it.

However, Chinese financial and economic technocrats, who had been trained in the United States and diligently sought to apply the principles of the American model back home, were challenged by their more conservative colleagues within China over how the Americans could have allowed such a crisis to occur. As then–Vice Premier Wang Qishan famously observed to then–US Treasury Secretary Hank Paulson, “You were my teacher, but… look at your system, Hank. We aren’t sure we should be learning from you anymore.”

China had already been prepped for this reappraisal a decade earlier by the Asian Financial Crisis of 1997, in which a series of currency and credit crises devastated economies across Asia. Chinese thinking was affected by the impact of laissez-faire, free-market, antistate approaches adopted by the International Monetary Fund (IMF) under the so-called Washington Consensus on the developing countries of East and Southeast Asia (including, in Indonesia’s case, triggering the toppling of the Suharto regime). In 1998, Beijing proposed what became known as the Chiang Mai Initiative (CMIM), a network of bilateral currency support agreements between the ten member states of the Association of Southeast Asian Nations (ASEAN), together with China, Japan, and South Korea. This would help them avoid the harsh budgetary austerity measures demanded by the American-driven IMF as a prerequisite for help in stabilizing their currencies and their capital accounts. At about this time, China also became more proactive in regional foreign policy initiatives when it successfully established the “ASEAN+3” (with Japan and South Korea) as a grouping that excluded the United States.

None of this meant that China was immediately abandoning the preexisting American-led order, anchored in the UN and the Bretton Woods institutions, such as the World Bank. Far from it. In fact, China played a more active role in these long-standing institutions that had been created as part of the post–World War II settlement. China, for example, already had a privileged position on the UN Security Council as one of its five permanent members armed with the power of a veto and was in no rush to surrender it. But the Chinese also looked outside this framework where opportunities arose and quietly built the elements of a more Sino-centric order within its immediate region.

The question of China’s future role within the global rules-based order was brought to a head in a 2005 speech by US deputy secretary of state Robert Zoellick, which framed the question of whether China intended to become what he described as a “responsible stakeholder” in the existing international order or simply remain a free rider on an international system sustained by the United States and its principal allies. The speech infuriated hard-liners in Beijing, but it gained attention around the world for what seemed to be its conceptual clarity on the choice facing China.

The CCP’s operational response to Zoellick’s challenge was selective. In effect, the position they took was that China would become a more active stakeholder in the existing order where it so chose, but it would also start building the elements of a new, more China-friendly order when opportunities to do so presented themselves. This latter ambition would be reflected not only in the continuation of the Chiang Mai Initiative but also in a range of new multilateral institutions and initiatives set up by Beijing in the decades that followed. This included new regional development banks and, most spectacularly, the Belt and Road Initiative launched in 2013.

The great inflection point in this long, evolving process of China’s growing international self-confidence was the Beijing Olympics of 2008. Its spectacular opening ceremony was interpreted around the world and within China itself as the People’s Republic’s global coming-out party. The estimated $43 billion sum the Chinese government put into hosting the games was only part of the enormous Chinese investment in projecting a positive image. Decades of effort had been made in preparing its athletes to shine on the global stage, and China’s one hundred medals (forty-eight of them gold) were the country’s highest total since it began competing in the Olympics—seemingly another signal of China’s growing self-confidence in its ascent. I attended the opening ceremony with George W. Bush and a gaggle of global leaders. As a Sinologist, I found it fascinating: the visual collage of Chinese traditional civilization and culture, with not a single reference to Mao, the Communist Party, or the People’s Republic. The intended impression for the world was civilizational continuity, with the current Communist leadership simply forming yet another dynasty of the eighty-three dynasties that had preceded it. The opening ceremony mysteriously forgot to mention that Mao, as a Leninist iconoclast, did his best on several occasions to destroy the symbols and substance of China’s physical culture across multiple campaigns in a manner that no previous emperor had attempted since Qin Shi Huang in the third century BCE. The ceremony was nonetheless a stunning public relations success for the party and the country. I said as much to Premier Wen Jiabao over lunch the following day, when I was seated next to him at the Great Hall at a gathering of all visiting heads of state and government. China had formally, and with great fanfare, entered the world stage. And it was all planned as such.

Obama, the “G2,” and a New Type of Great Power Relationship

It was this increasingly self-confident China that greeted the Obama administration when it came into office in 2008. Unlike Ronald Reagan, George H. W. Bush, Bill Clinton, and George W. Bush, Obama chose not to engage in bellicose rhetoric against Beijing during his election campaign. This was, in part, a reflection of his cautious intellectual temperament, but it was also because his foreign policy team had seen what happened with previously successful presidential candidates: after attacking their predecessors for being weak on China, an inevitable chill in the bilateral relationship followed, after which the winner would discover that he, too, would have to eat humble pie and justify to the American public a reopening of a line of communication with Beijing. Obama’s more moderate language during his 2008 campaign also reflected a realization that the presidential election would be fought almost exclusively on economic grounds given the global financial crisis, and China’s economy would be an important source of global growth that was essential for the global economic recovery. To the extent the foreign policy debate mattered at all, it was largely constrained to the American quagmire in the Middle East. As a result, Obama, by and large, left China alone in the 2008 campaign.

Once president, Obama tried to work with Beijing in areas that mattered to his administration: namely, North Korean and Iranian nuclear proliferation, G20 collaboration on the stabilization of international financial markets, restoring growth to the global economy, and multilateral action on climate change. Obama’s senior China advisor, Jeffrey Bader, sought to define the administration’s strategy during this period as resting on three broad principles: China should not be defined as an inevitable American adversary (although Bader conceded that could turn out to be the case) but as a potential partner in resolving critical global challenges. China’s rise should be respected on the condition that it conformed with the rules, norms, and institutions of the existing international order on security, the economy, and climate. And China’s rise should not threaten the security or sovereignty of US friends and allies or the stability of the wider Asia- Pacific region.

Despite expected friction over Taiwan and human rights in Tibet, by and large the relationship developed smoothly during the first few years of the Obama administration, including reasonable progress on the president’s core policy priorities. Obama persuaded Hu Jintao to join multilateral action against Iran. He had much less success with the Chinese on North Korea, however. China did little to rein in Pyongyang, despite a series of highly provocative acts by the North, including a 2009 public declaration of a uranium-enrichment program, the sinking of a South Korean naval frigate, and lethal artillery bombardment of a South Korean island. China also collaborated closely with the US and its allies in implementing the full range of fiscal, monetary, and regulatory measures necessary to stabilize financial markets and the global economy following the global financial crisis, although China continued to resist American pressure on the management of its still artificially low exchange rate.

There was a reciprocal dimension to the relationship during this period as well—namely, an American preparedness to accept the political legitimacy of China’s Communist Party state. This was no small matter. It was deeply important to Chinese leaders, given long-standing American and international reservations about the ultimate legitimacy of a revolutionary party that maintained power through armed force. Validation was also important domestically, where the CCP leadership faced a growing civil society movement that increasingly raised questions about how long a modernizing country should be governed by a single party with a stranglehold on all political power. International recognition of China’s national achievements and, as a result, the inherent legitimacy of its political system is an enduring core interest of the Chinese party-state.

Meanwhile, in an effort to give effect to the new breadth of the strategic relationship, the Obama administration recommended, and his Chinese counterpart Hu Jintao accepted, a proposal to enhance the existing bilateral machinery of the relationship established under the G. W. Bush administration through the Strategic Economic Dialogue (SED). This was to become a twice-annual meeting to discuss economic issues and was soon expanded to become the Strategic and Economic Dialogue, led by the US secretaries of state and treasury and their Chinese counterparts. The inclusion of a formal political and security agenda that, for the first time, incorporated senior representation from each side’s military was an important breakthrough. Though still more talk than action, the idea of a comprehensive partnership embracing all elements of the relationship, including the most contentious, was taking shape.

These changes gave rise to a public discussion among policy analysts in the United States on the desirability of developing what came to be described as a “G2” relationship between the world’s two largest economies. The idea had first been conceived back in 2004–2005. Indeed, US Treasury secretary Paulson had said in 2006 that he saw the SED as “sort of like the G2.” Three years later, former national security advisor Zbigniew Brzezinski, who advised Obama during the 2008 campaign, went further. In a January 2009 speech marking the thirtieth anniversary of the establishment of diplomatic relations between China and the United States, Brzezinski called for the “G2” to become the conceptual framework for US-China relations and the cornerstone of US foreign policy more generally. He described this as “a mission worthy of the two countries with the most extraordinary potential for shaping our collective future.” Robert Zoellick, the president of the World Bank, chimed in, suggesting that “without a strong G2, the G20 will disappoint.” In retrospect, these calls for a fundamentally new and constructive strategic framework for the relationship were remarkable.

Beijing responded negatively to the idea. Its foreign policy elite was concerned the whole concept was incompatible with Beijing’s decades-long advocacy of multipolarity as the preferred form of global governance. Moreover, China’s leaders felt the costs would be too high in terms of diminished foreign policy flexibility, along with domestic political and ideological complications in explaining how China was unable to run the world except as America’s junior partner. Flattering as they may have found the American entreaties, in the CCP’s view, it was far better to continue to grow China’s economy, modernize its military, and remain selective in its international engagements in order to steadily improve China’s comprehensive national power (a core analytical term in internal Chinese strategic deliberations) as measured against that of the United States. Besides, by this time, many Chinese policy analysts accepted the argument that America was in a process of national economic and military decline. Therefore, what China required, above all, was continued strategic patience. This view, in turn, conformed with many deep learnings from classical Chinese thinking about how national power was best secured (i.e., unobtrusively) and when and under what circumstances it should be actively deployed (i.e., only when powerful enough that victory was assured).

However, in the last year of Hu Jintao’s leadership in 2012, Beijing proposed its vision of a “G2”-flavored world order, which it called a “new type of great power relations.” Deliberately imprecise, the idea was to delay what was seen by Chinese strategists as the inevitability of renewed great power rivalry and conflict with the United States until China was fully equipped to deal with it and, if necessary, prevail. This framework explicitly ruled out the possibility of future Chinese or American military conflict, a proposal that, if taken seriously, would have fundamentally strengthened China’s strategic hand for decades to come, while Washington would endure as the dominant military power. China argued that “a new type of great power relations” was technically applicable to all “great power” relationships, carefully avoiding naming which countries were in or out of contention for that title in order to avoid offending any of them (in particular the Russians). However, the message was clear: in this vision, China and the US would coexist as explicit equals.

Chinese diplomats went into overdrive, seeking to secure American acceptance of this new framework, although Washington’s level of enthusiasm for the idea of a US-China “condominium,” as Henry Kissinger put it, ranged from lukewarm to ambivalent to outright hostile. China’s intransigence at the Copenhagen Climate Summit in December 2009 had left a deeply negative impression on Obama as to how far China was prepared to go in cooperating with America to address the challenges of global governance. His administration was also mindful of the likely reactions at home, including by his Republican party critics, not to mention the European and Asian allies of the US, who feared the prospect of being left behind by an exclusive Washington-Beijing grand accommodation.

Nonetheless, it remains an open question as to whether in these middle years of the Obama administration, covering the latter years of Hu Jintao and the early period of Xi Jinping, it might have been possible to find at least some new level of strategic convergence between these two fundamentally different Chinese and American worldviews. Instead, it seemed as though the two sides ended up talking past each other. But however small or large those possibilities may have been for a time, the political window for reaching any such agreement closed as soon as new tensions unfolded in and around the South China Sea.

Obama’s Pivot Points

In 2010, security analysts detected manifestations of a more assertive, and at times more confrontational, approach on the part of the Chinese in their response to the movement of US naval surveillance ships and aircraft in the South China Sea. China argued that it would no longer tolerate foreign naval vessels operating in international waters lying within its two-hundred-nautical-mile exclusive economic zone (an area granted by international law to waters surrounding sovereign territory, in which a country has rights to resources but no right to impede the passage of ships or aircraft) without express permission. This contravened the UN Convention on the Law of the Sea (UNCLOS), to which the PRC was an original signatory and which it ratified in 1996 (and which the US has not).

China has long laid claim to the entire South China Sea based on the so-called nine-dash line (a map that showed the whole of the sea marked as an addition to Chinese territory by enclosing it in nine hand-drawn dashes, first issued by the Nationalists back in 1947). This includes all of the land features, some currently controlled by other claimants, such as the Philippines and Vietnam, that lie within the sea—a vital waterway through which approximately one-third of global shipping passes. It appeared to the US that Beijing was effectively trying to turn the open seas into a de facto Chinese lake. ASEAN also reported increasing Chinese forcefulness when encountering fishing and naval vessels from various ASEAN member states seeking to utilize the disputed waters. China’s state councilor for foreign affairs privately warned the Americans that China now saw the South China Sea as part of its “core interests.”

These developments occurred at a time when the tone of China’s official and semiofficial commentary on the United States also changed. Articles appeared with increasing frequency in the Chinese media highlighting America’s decline as a global superpower, pointing to the destruction of its economy as a result of the self-inflicted wounds of the global financial crisis and the political, economic, and foreign policy cost of its now decade-long military engagements in the wider Middle East. A theory of American declinism took hold in large parts of China’s internal foreign policy debate, and nationalist commentators predicted the end of the American century, some arguing that China’s time had arrived. In June 2010, the Chinese foreign minister exploded at an ASEAN regional forum meeting following a speech by US secretary of state Hillary Clinton. He angrily warned the ASEAN states against forming an anti-Chinese cabal organized by an outside power and pointedly reminded them that “China is a big country, and other countries are small countries, and that is just a fact.”

The next year, the Obama administration developed what became known as his “pivot to Asia.” It had three main tenets. First, the US would deploy a majority of its naval, air force, and marine assets to the Pacific theater, moving some forces from Europe and the Middle East. This was intended as a direct response to the rapid modernization of the PLA’s capabilities and to its new military doctrine of air-sea denial targeting US forces in and around China’s “near seas.” Second, the Obama administration would seek to strengthen its military alliances and strategic partnerships with Japan, Korea, Australia, Singapore, Vietnam, and India. Third, the military dimensions of this strategy would be reinforced by a major new pan-regional free trade initiative that, in time, came to be called the Trans-Pacific Partnership (TPP), which aimed to link twelve Asian-Pacific economies but pointedly excluded China. Since more than one-third of total global trade was with the TPP economies, Chinese leaders realized this strategy was designed to squeeze it out of these markets and impede its participation in the future development of global supply chains. It was, they concluded, an elemental threat to its national economic interests and future prosperity and power, which relied on the rapidly emerging markets of the Indo-Pacific region.

The Pivot and the TPP, and China’s public hostility to them, once again transformed the US-China relationship. The US continued to engage the Chinese leadership on common questions of global governance (from economic management to climate change), but at a regional level, it drew a line in the sand. US secretary of state Hillary Clinton spent more time in Asia than any of her predecessors, carrying the message that America had no intention of leaving the region to China.

Beijing’s retaliation was not limited to the US. Following Tokyo’s decision to “nationalize” the disputed uninhabited islands in the East China Sea known as the Senkaku to the Japanese and the Diaoyu Dao to the Chinese, it placed its relationship with Japan in a deep freeze for the next seven years. Australia’s choice to increase the size and frequency of US marine deployments in Darwin also invited a sustained political and diplomatic offensive from Beijing. Meanwhile, Singapore’s decision to allow American helicopter carriers a home port resulted in a deep deterioration in the city-state’s relationship with Beijing, until Prime Minister Lee Hsien-Loong negotiated a rapprochement with the Chinese leadership in 2018.

By 2012, China could no longer operate largely unhindered as a result of a distracted America saddled with a declining economy. Instead, analysts in Beijing identified a worrying hardening of political attitudes and strategic postures toward China, both in the US and across the region. It was into this context that a confident, self-assured, and instinctively assertive Xi Jinping rose to take over leadership of China. He also changed the course of China’s strategic relationship with the United States forever.

The purpose of this chapter is to make plain that the current state of the US-China relationship is the product of a long, complex, and contested history. This history has created the conditions that now prevail between Beijing and Washington, including the narrowing of the balance of power between them. More importantly, it has shaped the deep perceptions, frustrated expectations, and underlying animosities of each country’s political elite toward the other.

At its core, the CCP has seen the US as representing a worldview hostile to its own. Since the 1920s, the CCP has railed against the fundamental ideological divide between the two worldviews: liberal capitalism and the international order (including the human rights order) that America constructed to serve it versus Marxism-Leninism, across all its Chinese iterations since the party’s founding in 1921, and the concept of a revolutionary socialist party that had no qualms about obtaining and sustaining political power through the barrel of a gun—either against counterrevolutionaries at home or imperialists (a.k.a. America) abroad. Thus it is not just a question of political and ideological preference on the CCP’s part. Its hostility to the American ideal—from John Dewey’s influence on the early Chinese Republic, through Tiananmen, to the crackdown on Protestant Christianity under Xi Jinping—has been grounded in the view that the American concept of freedom represents a continuing existential threat to the political legitimacy of the party within China itself. This is particularly the case now that Chinese incomes have risen so much as a result of the CCP successfully adapting the Western capitalist model over the last forty years, breathing life into an otherwise moribund Chinese economy. The CCP sees “bourgeois liberalism” as more of a threat today than at any time in its history, with the single exception of the tumultuous events of 1989. That is why ideology remains at the core of the US-China divide.

If ideology has been one major factor in defining this divide, race has been the other. With race comes the wider question of ethno-nationalism and Chinese revulsion (extending beyond the ranks of the CCP) at acts and attitudes of Western political and cultural condescension toward China over the centuries. To a large extent, this exists across much of the postwar colonial world, but in China’s case, there is a view that they are now in a position to do something about it. So when Xi Jinping talks about the historical inevitability of “the rise of the East and the decline of the West,” he is not just advancing the tired arguments of Marxist historical materialism and the self-destructionism inherent in a liberal-capitalist model. He is much more fundamentally making a point about Chinese culture, race, and nationalism, which is infinitely more unifying for the 1.3 billion Chinese people who are not members of the CCP. The Chinese people, whatever their politics, feel a collective pride about the return of China to a central place in the global order—one commensurate with its civilizational longevity, cultural depth, and sheer size.

It’s for these reasons that I have described Xi’s worldview as “Marxist-Nationalist,” because while his appeal to the party remains ideological (not least because ideology is the backbone of Leninist discipline), his appeal to the people is assiduously nationalist. That is why Xi Jinping Thought is not, as Xi would have us believe, a new theoretical revision of the deepest precepts of Marxism-Leninism. Rather, it is a skillfully constructed primer that brings together an emotionally appealing, focus group–tested set of precepts, axioms, and anecdotes. It is an amalgam of simplified ideology and reified nationalism, which, when combined, represent an appeal to the mind and heart, respectively, with the latter aiming to bring forward the collective consciousness of an ancient people to the politics of the present. In that sense, it is potentially much more potent a nationally mobilizing force than Mao Zedong Thought was half a century ago.

Ideology and nationalism have long been powerful forces in national and global politics. But so too are economics and the basic living standards of the people. This has also been an enduring theme in the history of the US-China relationship. This will be explored in greater depth in chapters 4 and 6. But for our purposes here, it is important to understand the creative interplay among ideology, nationalism, and economic prosperity as contending, or perhaps mutually reinforcing, sources of domestic political legitimacy for the CCP. Historically, the party despised the West’s economic exploitation of China and the rest of the developing world. But as a ruling party, it discovered that state socialism, as defined by Mao and the ideologists who consistently preferred class struggle over economic development, had left China impoverished and insolvent by the end of the Cultural Revolution. Deng had to turn to a capitalist model at home and liberal-capitalist order abroad to secure his country’s economic salvation. This faith dimmed greatly following the global financial crisis in 2008 and then China’s domestic financial crisis in 2015, after which collective faith in the Western development model eroded considerably. But it is an open question whether Xi Jinping’s return to a revised form of state capitalism will continue to bring home the bacon or if what others have described as “the return of the state” and the emergence of a new “CCP Inc.” under Xi’s “New Development Concept,” in fact, undermines economic growth and impairs rising living standards moving forward. At this stage, we don’t yet know because the change in China’s development model has been relatively recent. But across the three pillars of political legitimacy that have permeated the debates about the CCP’s role in Chinese national politics over the last century (Marxism-Leninism, nationalism, and economic prosperity), the latter has been the most difficult of all to get right and the easiest to get wrong.

It remains to be examined, as we will in the next chapter, how these three enduring themes in the complex history of the US-China relationship continue to permeate the deeply held views, usually unstated, that each country’s political elite have about the other and how these perceptions continue to shape each side’s policy and behavior toward the other today.