The Future of U.S.-China Relations: Competition, Coexistence, Cooperation

What is the future of U.S.-China relations? On Friday, November 18, 2022, the Harvard University Fairbank Center and the Harvard Kennedy School Rajawali Foundation Institute for Asia hosted a symposium in Cambridge that brought together leading voices on China to discuss the future of bilateral relations between Washington and Beijing. With more than 30 world-leading experts speaking on politics, economics, security, journalism, law, and diplomacy, this symposium set out what is at stake for the world’s most-important bilateral relationship. The conference was produced with generous support from the Asia Society Center on U.S.-China Relations and the 21st Century China Center at UC San Diego.

The event marked the first time since 2020 that top China scholars in the U.S. have gathered at Harvard to grapple with the policy implications of a China whose domestic and international stance has changed dramatically under the autocratic rule of Xi Jinping. There was some disagreement about what measures the U.S. should pursue—but scant optimism that relations will improve during the Xi era. Highlighting the challenges the U.S. faces in dealing with China, Harvard Business School Professor Meg Rithmire said, “China has shifted its political economic model to something that is incompatible with global capitalism as it’s been practiced in the last generation.” Xi’s top-down, “personalistic dictatorship” has “lead to…overreach,” said Susan Shirk, Director of the UC San Diego 21st Century China Center. Examples of changes in Chinese policy include “Wolf Warrior diplomacy, picking fights with your neighbors, provoking the United States; and internally as well, with ramped up repression and a more statist economy.” All of this requires the U.S. and other liberal societies to rethink seriously their terms of engagement with China.

Opening the symposium, Mark Wu, Director of the Fairbank Center, highlighted the current challenges at the heart of the U.S.-China relationship: “The planet’s two leading nations are locked in a strategic rivalry.” Given the entrenched differences in the two countries’ political, economic, and social governance models, and the leaders’ conviction that their model is superior, Wu asserted that growing conflict will be with us for some time: The reality is that in multiple domains, “one [side] seeks to change the status quo, while the other seeks to preserve it.” “Yet even amid this rivalry,” he suggested that “there is a need for cooperation,” citing climate change, global diseases, and terrorism as examples. Wu also pointed out: “The vast majority of our citizens of these two countries seek the same thing: material security, physical security, opportunity, and a better future for our children.” In opening the symposium, he articulated his hope that “today’s panels provoke even more dialogue with each other…as we find ways to manage [the] difficult times and choppy waters ahead in U.S.-China relations.”

Also opening the event, Tony Saich, Director of the Rajawali Foundation Institute for Asia and Daewoo Professor of International Affairs at Harvard University, emphasized that “without U.S.-China participation in a number of key areas, it will be difficult to achieve global public goods in the global commons, in global collaboration, and in global regulation.” Pointing to the U.S.’s recent decision to ban chip and semiconductor exports to China, as well as the national security strategy, Saich asked: “What is Washington’s end game with this and with these actions? Is it just to effect change in certain practices in China, particularly focusing on those where there’s a sense it doesn’t comply with WTO agreements, other agreements it has signed onto, or is it really to hamper China’s economic development and prevent it from being in any way a challenge to U.S. hegemony?”

Chinese Views on U.S.-China Relations

The mood at the symposium reflected the growing pessimism about U.S.-China relations. In the opening panel, two prominent Chinese experts on the U.S. confirmed that this view is shared within China as well.

Zha Daojiong, Professor of International Political Economy at Peking University, noted that the U.S. remains unrivaled in its power, but its key problem is its domestic income distribution.  Moreover, for China, because of its needs to access overseas markets and energy inputs, “interdependence is natural and structural, including that with the U.S.” Consequently, Zha emphasized, “There is hardly any basis for China to contemplate a Cold War 2.0 as a modality of relations with the U.S.”  Yet, while it may be “difficult for us to come up with a timetable or genealogy of what has gone wrong in U.S.-China relations,” he admitted that “the reality is that we have had six years of minimal contact between the U.S. and China.” Zha also remarked that cooperation between the U.S. and Soviet Union was, in some ways, stronger than that between the U.S. and China today, pointing to U.S. sanctions enacted amid a pandemic as an example.

Da Wei, Director of the Center for International Security and Strategy at Tsinghua University, also struck a candid tone: “On the status of the current China-U.S. relations, I think, of course, it’s bad.” Da further noted that all of the experts with whom he has interacted on both sides are “very pessimistic” with “many U.S. observers believe that we are already in a new Cold War with China” but this has yet to become the mainstream view in Beijing. However, in light of the recent Biden-Xi meeting in Bali, Da offered his hope “that next year we can gradually stabilize bilateral relations by increasing exchanges between officials and people.”

For Zha, the framing of the symposium as searching for a “coexistence” between the U.S. and China was itself problematic and the wrong historical lesson to draw as the two sides try to define the bilateral relationship. Zha pointed to his subsequent op-ed elaborating on this point in the South China Morning Post. Yet as MIT Professor Yasheng Huang noted, “Whether or not ‘Cold War 2’ is the right framing, it does describe the anxiety of many in the U.S.” given that the relationship is no longer moving in a positive direction.

China’s Realities at Home

China faces an increasingly challenging domestic political environment. The next panel focused on how these challenges shape the government’s actions, which, in turn, contribute to growing tensions in its relationship with the rest of the world. The speakers agreed that Party General Secretary Xi Jinping’s autocratic and ideologically driven governance style has effectively silenced alternative voices—contributing to increased domestic repression and more assertive moves internationally.

The panel began with a discussion of the question about the nature of the Chinese Communist Party itself and its objectives. David Shambaugh, Professor and Director of the China Policy Program at George Washington University, characterized it as “schizophrenic” in its nature. Reflecting on the report delivered by General Secretary Xi Jinping at the recent 20th Communist Party Congress, Shambaugh highlighted that “on one hand you had hubris, pride, confidence, even braggadocio” while on the other hand, “there’s a profound sense of insecurity and defensiveness.” He then warned that an insecure being “frequently overreacts, overcompensates, and acts in hubristic kinds of ways.” Furthermore, the current regime under Xi, Shambaugh suggested, is “neo-totalitarian.” Of concern are attributes including the disciplined, military-like hierarchy, the return of dogmatic ideology, and the reemergence of a personality cult. Overall, Shambaugh argued, “This is a very insecure regime, fearful, even paranoid,” leading to diminishing trust of civil society and the growth of the surveillance state.

The panelists also agreed that the narrowing of political debate within China has restricted the capacity for alternative views within the Communist Party to surface and compete with Xi Jinping’s ideological priorities. Shambaugh highlighted the lack of feedback within the Party itself and bemoaned the disappearance of “pragmatism vis-à-vis the economy or foreign policy.” He also highlighted the growing emphasis within the recent Party report on security and national security threats and the de-emphasis on the economy. 

Arthur Kroeber, Founding Partner of Gavekal, argued that Xi’s prioritization on security and control is less of a break from the recent past and more of a continuity of an enduring historical tension that has always marked Communist Party rule in China. While “the primary objective has always been to maintain the monopoly of power of the Communist Party,” Kroeber noted that historically “the growth agenda has always been a close second” in order to allow the Party to “maintain a system that is domestically prosperous and internationally influential.”  After discussing China’s desire to become a regional power at the expense of the U.S., the important role to be played by technology in this quest, and the Party’s recent efforts to assert control over tech companies, Kroeber proclaimed, “I view the situation now as essentially a continuation of this long-term struggle that the Party has had for decades to maintain the control and growth agendas, which are clearly in tension, but clearly to a degree complementary.”

Kroeber further pointed to a trend in China to promote domestic industry over reliance on foreign imports: “You have a clear self-reliance agenda in China, a recognition that the U.S. is hostile and that U.S. capital and technology will no longer be available, so there is a need to promote domestic industries and technologies.” However, Kroeber suggested the near-term implications may be different for foreign firms than Western policymakers who seek greater technological de-coupling. Kroeber highlighted that China has yet to retaliate strongly against U.S. firms, even as U.S. government increases sanctions. “[T]hey want to be self-reliant, but they realize they can’t be. And so the revealed strategy is to actually try and increase the interdependence as a defensive hedge against a more hostile and unpredictable world.”

The conversation then shifted to issues concerning domestic inequities, a theme mentioned earlier by Zha Dajiong. Ya-Wen Lei, Associate Professor of Sociology at Harvard University, highlighted several challenges confronting the Chinese government, including gaping income disparities across society. “The government, Xi Jinping, is trying very hard to emphasize the role of ideology. But the problem is, when you emphasize ideology that much, how do you deal with the enormous gap between the official socialist principles and the reality of high inequality?” Lei asked. “When people see inequality as a serious problem, it’s more likely that they will have lower trust of the government, especially the central government.”

Susan Shirk, Chair of the 21st Century China Center at UC San Diego and author of a new book, Overreach: How China Derailed Its Peaceful Rise, noted that China’s behavior in recent years has fueled the rise of “counter-coalitions,” an international backlash against China. “What I mean by overreach is not just ambition, but taking things too far both in foreign and domestic policy in a way that snaps back on yourself.”

She pointed to Deng Xiaoping’s legacy as a reason for how Xi Jinping was able to concentrate his power since 2013, “Deng had a very sophisticated understanding of the problems of the Mao era and he talked about over-concentration of authority and a system that led to arbitrary decision making. [Deng] set up this system of collective leadership as a check, but he did not pursue de-Maoization deeply enough or fundamentally enough. He was not willing to allow for a legislature or a legal system to have independent authority to check the actions of Party officials. And that’s one reason that the collective leadership did not survive.”

Referring to Xi’s current tenure, Shirk remarked that “Xi Jinping has put tremendous top-down pressure on subordinates…, to survive by somehow proving their loyalty,” adding that the ongoing anti-corruption campaign (“which is simultaneously a purge”) has affected up to 5 million Party officials. “This has led over compliance. The incentives lead to this overreach—Wolf Warrior diplomacy, picking fights with your neighbors, provoking the United States; and internally as well, with ramped up repression and a more statist economy. The tragedy, of course, is that Xi Jinping is not more secure as a result of this system. In fact, [he has created] a state of paranoia.” Shirk predicted that Xi’s third term “is likely to be even more extreme.”

Overall, the panelists were not optimistic that the domestic challenges would lead the regime to adjust in ways that would improve, rather than worsen, bilateral relations. Instead, Shirk predicted that Xi’s third term “is likely to be even more extreme.”

Competition & Cooperation in Security, Ideas and Rules

On the panel on U.S.-China competition in security, Graham Allison, opened by noting historical parallels between the contemporary and the U.S.’s rise in the nineteenth century. “I try to put this in a historical canvas, and I ask about the rise of the U.S. and Teddy Roosevelt, and what he thought about having foreigners in our hemisphere… In terms of a historical canvas, doesn’t it seem quite normal that if and as China becomes bigger and stronger, it will seek to be more influential in its region?” The panelists then proceeded to discuss Allison’s question of whether China is determined to displace the U.S. as the preeminent power in Asia.

Most panelists agreed that China was trying to seek to achieve this objective.  Andrew Erickson, Professor of Strategy at the Naval War College and Visiting Professor of Government at Harvard, noted that he is “very concerned,” because the neo-totalitarian regime discussed in the prior panel is “engaged in dangerous overreach” and has “few acceptances or credible commitments to durable constraints and guardrails.”  M. Taylor Fravel, Director of MIT’s Security Studies Program, noted that it is not surprising that China would aspire to achieve regional hegemony, but that the more relevant question before us is “how quickly is China trying to achieve this objective and at what cost.”

Speaking to China’s regional power, Fravel noted that China “has a complex security environment in that it has to balance its strategic priorities in all directions.” This environment, he argued, means that China is heightened to questions of regional security and its need to ensure control over its neighborhood. Joseph Nye, Professor Emeritus and Former Dean of the Harvard Kennedy School of Government, further added that simply because China has an aspiration does not mean that it will succeed, particularly when the U.S. can mobilize a much larger portion of the world and recombine talents more effectively than China at present. 

Jessica Chen Weiss, Professor of Government at Cornell University, however, cautioned against a sense of inevitability that might grow from drawing parallels between contemporary politics and the past: “There are important structural drivers and historical analogies in the U.S.-China relationship, but we shouldn’t rely on these parallels to explain contemporary outcomes,” she said. “In doing so, we remove both our and China’s agency to choose alternate options.” 

The panelists then turned to discuss thoughts presented in Chen Weiss’s recent Foreign Affairs piece criticizing “zero-sum competition” between the U.S. and China. Allison recounted Chen Weiss’s argument that that the current Biden Administration policy toward China not only risks “catastrophic conflict” but also “threatens to undermine the sustainability of American leadership in the world and the vitality of American society and democracy at home.”

Chen Weiss kicked off the discussion by emphasizing that the goal of her Foreign Affairs essay was to create space to ensure “that beneath these words of an inclusive, free, and open world that we seek to create and lead, that we make sure that the actions that we take are in support of that vision.” 

Competition & Cooperation in Trade, Investment, and Technology

Opening the first afternoon panel, Mark Wu, Director of the Fairbank Center and Henry L. Stimson Professor at Harvard Law School, posed a question to panelists of what is “the level of partial decoupling or selective decoupling” desired and in service of what end goal.  Expanding on his question, he posited that the U.S. and China had incompatible long-term goals for technology, trade and investment; therefore, cooperation would prove difficult and the two sides were bound to clash on several dimensions related to technology, cyberspace and U.S. dollar primacy.

The panelists agreed with this characterization. Dan Rosen, Co-Founder and Partner, Rhodium Group, suggested that the halt in market reforms in China has led to a reassessment in the U.S. of further economic engagement. “The core elite Chinese commitment to make headway toward market economy approaches, how to organize a society for prosperity, how to put the balance on economic welfare, that has hit a ceiling beyond which additional economic modernization requires some political liberalization, which is not yet accepted at all,” Rosen said. “American concern is about systemic incompatibility. The basis for economic permissiveness from the U.S. has changed, because it was contingent on where Beijing was trying to get to, through painful and difficult economic reforms that it did commit to and do over decades—until pretty recently when it started to have second thoughts.”

The panel then turned to discuss the recent shift in U.S. technology policy toward China which has led to the fencing off a greater portion of cutting-edge technology in certain sectors from Chinese firms.  Wu asked panelists whether they thought this policy shift was an overreaction or not. 

In response, Meg Rithmire, Professor of Business of Administration at Harvard Business School, answered yes and no. She asserted that given national security concerns, there is good reason to increase technology controls, as “China has shifted its political economic model to something that is incompatible with global capitalism as it’s been practiced in the last generation.” Furthermore, she added, “It’s impossible to basically say that a Chinese firm will not one day become an asset of the Chinese state vis-à-vis the United States or elsewhere.” While these are very legitimate concerns, she added that there is nevertheless the danger that this could lead to a policy outcome that over-controls or over-excludes, citing the Department of Justice’s China Initiative and Department of State’s Clean Network Initiative as examples.

Elizabeth Economy, Senior Fellow at Stanford’s Hoover Institution and Senior Advisor to the U.S. Secretary of Commerce, responded that there is a “ramping up of [Chinese] national security laws and intelligence laws . . . around data sovereignty [and] cyber sovereignty.”  This has led to a more radical shift in U.S. policy, which Economy suggested is well-justified for several reasons, including: “an economic and security rationale” and a “new appreciation of the challenge that China poses.” In addition, she added: “There’s a new thinking about threats and challenges since Covid-19 that have reshaped how we consider threats and challenges to do with supply chains in the U.S.-China relationship.”

Rosen further added that given the changing nature of technology as well as uncertainties over how “technologies will be used by the state in the context of markets, by the Chinese, in the future,” it is likely that U.S. technology restrictions will continue to evolve dynamically in the future.  Economy and Rithmire both agreed, leading Rosen to exclaim that the three panelists “are in consensus that the techno-specific policies taken by the Biden Administration lately are pretty well fit to a reasonable understanding of the situation.”

Economy further noted how economic cooperation becomes even more difficult when China sets preconditions and is inflexible: “The U.S. is willing to cooperate bilaterally on a range of issues, but China needs to show that it is also willing. China has a lot of red lines, and when it shuts down cooperation in one area because of issues in another, that makes cooperation very difficult.”

Rithmire also highlighted a set of other challenges to China’s future development—as it sorts out its economic relationship with the rest of the world: “Can China’s state mandate technological intervention to get out of the middle-income trap? Can China develop financially without the rule of law? China needs to work out its fiscal and financial systems, and that means cooperating with global financial markets.”

Opening a panel exploring how other Asian countries are grappling with the rise of China and U.S.-China tensions, Fatema Z. Sumar, Executive Director of the Center for International Development, noted that Asian countries are “caught in many ways between the U.S. and China infrastructure politics.” She asked how Asian countries can balance concerns about Chinese loans becoming “debt traps” with the more positive aspects of Chinese investment, and what the U.S. can offer to Asia versus the negative impacts of trade sanctions on China.

Ian Chong, a professor at National University of Singapore, noted the challenge for Southeast Asian countries: “The default position has been, ‘we don’t want to choose sides.’ But in terms of having more positive options [that would help us] buffer ourselves, we haven’t really come up with a solution.” Asian countries, including Singapore, he said, “are a bit stuck. There’s a lot of fear of punishment from the PRC, and there’s a lot less confidence in U.S. commitment and engagement with the region than before.”

U.S. Representative Ed Case, who co-chairs the Pacific Islands Caucus, suggested that countries in Asia have concerns about China’s intentions. “Everybody wishes everybody would get along, that we weren’t in this larger geopolitical challenge for whether the international rules-based order will continue or whether there will be an attempt to supplant it or to create an alternative international rules-based order, which would force its own set of choices,” Case said. “And so it is a very uncertain time.”

Bopha Phorn, a Cambodian journalist who is currently a Nieman Fellow at Harvard, described Cambodia’s warming relations with China as a double-edged sword. On one hand, China’s investment in infrastructure—roads, infrastructure, bridges, power—“has been very important for Cambodia to operate the garment industry, the most important sector of the Cambodian economy.” On the other hand, Phorn pointed out the increase in corruption that has coincided with Chinese investment.

Toward Coexistence 2.0: What Should the U.S. Do?

Speaking on the final panel of the day, experts expressed differing views on how the U.S. should address China’s rise. Melanie Hart, China Policy Coordinator for the Office of Undersecretary of State for Economic Growth, Energy and Environment, noted that the downturn in U.S.-China relations is “hard” for experts who have spent their lives working on China. “But one thing I want to highlight is, it takes two to tango, and we have to deal with the China we’ve got,” Hart said. “We have to deal with the Xi Jinping, the PRC government we have at this point in time.”

In these circumstances, Hart emphasized the need for “resolute action to defend U.S. national interests, to defend U.S. national security, and uphold American values.” However, she added that the U.S. is also “keeping that door open to collaboration with the PRC and actively seeking it.” Hart pointed to efforts by the U.S. to collaborate with China on climate and food security issues but added that Beijing has yet to respond with specific policy measures. “There haven’t been big moments of pomp and circumstance to celebrate…collaboration, because we haven’t gotten much back yet,” Hart said, adding that “intense competition requires intense diplomacy.”

“We have to really ask ourselves, why did [the age of U.S. engagement with China] end? …There’s a tragedy here which has a great deal to do with Xi Jinping’s nature, and his deep suspiciousness, which is a current that has flowed throughout Chinese contemporary history,” said Orville Schell, Director of the Asia Society’s Center on U.S.-China Relations. “There’s always been this deep abiding mistrust that what America was trying to do to China was to overthrow the Chinese Communist Party one way or another. And engagement was just another way to do that.” Xi Jinping, he added, “has sucked from the wellspring of Chairman Mao, who saw enemies everywhere, whose whole notion of the philosophical construct of the world was contradictions… That, alas, is the way Xi Jinping views the United States. In a climate like that, every approach [by the U.S.] just seems like another attempt to…overthrow the Chinese Communist Party.”

Bill Alford, Professor of Law at Harvard Law School, posed the question: “From the viewpoint of promoting U.S. power and security, where should we situate ourselves, and what might principled engagement constitute? Is not exporting certain kinds of semiconductor technology to China promoting our power and security, or conversely, does it incentivize the Chinese to develop the same more quickly?”

In response, Robert Ross, Professor of Political Science at Boston College and a Fairbank Center Associate, noted that China’s behavior in the South China Seas is not surprising in the context of U.S. military dominance in the region since WWII. The U.S. “essentially created an American lake in the South China Sea, where U.S. naval vessels could go up to the Chinese territorial waters, sometimes into them with impunity,” Ross said. “No rising power would accept that, and we would expect China to push back, and this is what China is doing.”

Ross criticized the U.S. response to China’s rise. “We are determined to not allow China to be Number One. Period.” Through recent U.S. official statements and policies, he said, “We have made it clear: We must dominate the world order and not allow China to influence the world order.” To that end, Ross argued that the U.S. has launched a trade war, a tech war, and an ideology war, while changing its Taiwan policy. “The cost to America is very high,” he said, both geopolitically and domestically. 

Ross’s advice? “The first step forward would be to accept bipolarity.  And then you compete. And you are able to compete surgically… You do what Europe is doing, what Japan is doing… say not all technology, say this particular company, that particular company… But for the most part you can maintain cooperation in technology and trade.”

In response to Ross’s comments, Hart stressed that “our aim is not to contain China’s rise. We welcome China to develop economically, to have flourishing exchanges with the U.S. in ways that are on a level playing field, and that don’t undermine U.S. national interests or universal values.” She defended U.S. measures to ban the sale of certain semiconductors to China, stressing that the barred items represent less than 1% of U.S. semiconductor sales to China and “focus specifically on high-end chips, high-end manufacturing equipment, and super computing capabilities used for weapons of mass destruction, China’s military modernization, and mass surveillance in Xinjiang.”

On the question of how to prevent war over Taiwan, Jude Blanchette, Freeman Chair of Chinese Studies at the Center for Strategic and International Studies, stressed that both the U.S. and China have responsibility: “China should take much more significant steps to assure that it is not intending to use force to bring about a solution (on Taiwan,)” he said, “and the U.S. should be clear and consistent on its one-China policy.” A visit by House Speaker Kevin McCarthy to Taiwan, he noted, would be counterproductive, unnecessarily provocative toward Beijing.

At the same time, Blanchette emphasized the importance of thinking through the consequences of U.S. policy toward China: “The challenge is to remember the humanity in all this, to go from an abstract notion of ‘The Party’ or China and remember that we are talking about issues of human dignity. When we say things like ‘we want China’s economy to slow,’ what we’re really saying is that we want all the negative effects that come with slower growth. Even if we have to make tough decisions in policy making, we’re fundamentally talking about human beings and their dignity.”

What Does History Tell Us?

Closing the symposium, Winston Lord, former U.S. Ambassador to the People’s Republic of China, noted that “when [the U.S.] opened up to China, we felt that over the long run…that China in the distant future would reassert itself. But nobody could have envisioned their astonishing growth and how fast they’ve reached the point of becoming one of the world’s two great powers.” He also recounted how individual leaders can make an enormous difference in shaping the trajectory of the bilateral relationship.

In thinking about the future direction for U.S.-China relations, the ambassador struck a more positive note than others had at the symposium: “Frankly we should try communication, we should try negotiation,” he said. “I feel that the key to our success and better relations with China is getting our own act together here at home… saving our democracy, reinvesting in our future to be competitive, then aligning with other countries for greater leverage against China, and on top of that competing peacefully, is not only the best course for America and our policy around the world, but I think it will gain China’s respect and attention.”

Overall, Ambassador Lord felt that the current approach of dividing issues into three categories – possible cooperation, competitive realms, and insoluble problems – is “the correct one” and “the one most apt to succeed.”  However, he closed his remarks to the conference with a grim reminder that “as long as Xi is in power, I’m pessimistic.”

Watch the panels from the symposium