It is now a consensus in both the U.S. and China that the U.S. has changed its China policy. However, there is no consensus about why the U.S. has taken this turn. The dominant discourse in the U.S. has revolved around three claims. The first claim concerned China’s ambition to drive the U.S. out of the West Pacific. The U.S. government saw China’s construction on the reefs in the South China Sea as a step toward that goal. The second claim accused China of not abiding by its commitments pledged for its accession to the World Trade Organization (WTO). The third claim assessed that China had conducted cyber thefts of American trade secrets and intellectual property. Chinese views were very different. The dominant view was that the U.S. changed its China policy because China was catching up with the U.S. and the U.S. feared that China would challenge American supremacy. Neither side was candid enough to speak out the entire story. On the U.S. side, much of its anger toward China arose from its regret about taking China into its own system. On the China side, people tended to ignore the changes within China that could have affected American decisions.
The shift in American China policy took about a decade to finish. The causes behind it must be multi-dimensional and complex. In this article, I offer the perspective of a Chinese watcher of the U.S. about its causes. This view does not necessarily represent all viewpoints in China, but rather the view of a Chinese scholar who is seriously observing events happening in the U.S.
“China did not become more like us”
Starting from the early twentieth century, the U.S. began to develop a rather romantic view about China. It took the lead to use the Boxer indemnity for China’s educational purposes. The general attitude in the U.S. toward China was one of empathy, and American policy was a kind of knighthood to bring China into the modern world. The CCP’s victory in the Chinese Civil War in 1949, therefore, dealt a major blow to American euphoria and prompted fierce debate in the U.S. about who “lost China.” Over the next twenty-odd years, the U.S. did not stop its contact with China despite ideological animosity between the two countries. The threat of a common enemy, the Soviet Union, brought the two countries together again in the 1970s and 1980s. Those twenty years of rapprochement warmed-up American attitudes toward China—once again, China became a country that Americans could influence and convert.
From the 1990s to the 2000s, that attitude became more rational, but also more clear. The three administrations in this period—George H. W. Bush, Clinton, and George W. Bush—all based their China policy on the belief that “China will become more like us if we engage China.” That is, their engagement policy was based on the ultimate goal of inducing China to adopt American economic and political systems. This view, however, began to falter after the Global Financial Crisis (GFC). The crisis severely damaged the American economy, but the Chinese economy fared quite well due to the government’s quick and strong response.
China’s subsequent catch-up with the U.S. can only be described as “staggering”. In 2008, China’s GDP was only 31.2% of U.S. GDP. Ten years later, that number more than doubled. In 2008, there were 35 Chinese companies on the Fortune Global 500 list of the world’s largest companies by revenue, far below the American number. In 2020, China had 124 companies on the list, overtaking the U.S. This rapid catch-up gave Chinese leaders more confidence in their ability to manage the economy. In the meantime, confidence in the Chinese system also increased. “The China Model” became a popular topic in academic discussions and media debates inside China. Internationally, the debate was framed by the contrast between the Beijing Consensus and the Washington Consensus, with the former meaning an authoritarian government plus state capitalism, and the latter meaning a liberal government plus free capitalism (Yao 2011, 26–31). This depiction of China quickly became received wisdom in American political circles and academia. China’s domestic and foreign policy under the new leadership only reinforced this view.
Along with an unprecedented anti-corruption campaign, China’s new leadership also began to change the CCP’s governance model. This new model downplays the importance of economic growth and instead places the purity, cleanness, and loyalty of the party as the highest priority. To a large extent, this was a correction of the chaotic order in the period under the previous leadership of Hu Jintao (Xi et al. 2018). However, America’s China watchers took it as a sign that the CCP was taking China in a different direction. Internationally, China’s BRI also presented a very different China to American policy makers. For the first time in Sino-American relations, China set the agenda and the U.S. had to respond. To many American elites, China was using its economic prowess to export its authoritarian model to the rest of the world. China’s influence was not confined to the developing world; it also extended to Europe when China played an important role in some European countries’ recovery from the GFC.
By the time the Trump administration was sworn in, a consensus emerged in American policy circles that U.S. policy toward China had failed to make China “more like us” (Campbell and Ratner 2018). While some cool heads believed that America’s China policy was never designed to change China, most American policy makers took that as a fact and saw China’s rise as a major ideological challenge to the American idea of liberal democracy. These events ultimately led to Pompeo’s New Cold War speech. Although not many Americans would echo Pompeo’s call to treat China as an ideological enemy, more of them believed that the U.S. should reduce its economic ties with China because those ties would directly or indirectly support China’s political system of which Americans do not approve.
“China has become arrogant”
Starting in 2010 when the Obama administration started its “Pivot to Asia,” some Americans began to feel that “China is too arrogant.” By that time, China had ignored the West’s warnings and began putting permanent structures on several reefs in the South China Sea over which the country claims sovereignty. The West also believed that China spoiled the Copenhagen Climate Conference. However, China’s “arrogance” only increased afterwards. Not only did it accelerate construction on the reefs in the South China Sea, it also began to show that it was determined to follow its own road to prosperity and sound state governance and was ready to present a more assertive image on the international stage.
Upon his inauguration in 2013, President Xi Jinping put forward his vision of the China Dream. The central piece of the China Dream is national rejuvenation—to build a strong China today that matches its ancient achievements as one of the most glorious civilizations in human history. This is a dream that several generations of Chinese leaders have shared, starting from Sun Yat-Sen to Deng Xiaoping. But for Americans, the China Dream was a competitor of the American Dream. It was a sign that China would challenge American supremacy. Michael Pillsbury’s best selling book, The Hundred Year Marathon, provides the best account of such American anxiety (Pillsbury 2016). Pillsbury’s central thesis is that China had a grand strategy to deceive the U.S. from the very start when it decided to normalize bilateral relations in the early 1970s. The ultimate goal of this strategy was to replace the U.S. as the global superpower. China hid that goal when it dealt with the U.S. and tried to gain everything from its relations with the U.S. On the American side, most American policy makers at various times, including Pillsbury himself, did not realize—or were not willing to accept—that China had a hidden strategy. The evidence Pillsbury provided was anecdotal at best. Yet the book was published at the right time and helped frame the shift in U.S. policy toward China. China was no longer an American follower ready to be changed, but rather a long-term strategic competitor of the U.S.
Within China, economic success transformed into political and cultural confidence. This was best reflected in the “Four Confidences” that Xi proposed to guide the party—confidence in China’s unique road, confidence in Chinese theories, confidence in China’s political system, and confidence in Chinese culture. Since the end of the nineteenth century, China has looked up to more advanced countries to search for ways to modernize. The CCP itself first copied the Soviet system and then, when reform and opening started at the end of the 1970s, began to learn from advanced capitalist countries. This was part of the reason why the American administrations in the 1990s and 2000s believed that China would become more like the U.S. Now the “Four Confidences” tell the world and the Chinese people that China is no longer a pupil of other countries. On the surface, this is a sharp break in the CCP’s view about the world and China. But at a more fundamental level, the “Four Confidences” reflects the CCP’s turn back to Chinese traditions started by Deng Xiaoping at the end of the 1970s. China’s economic success is often attributed to reform and opening. A deeper question, however, is what drove reform and opening. One has to turn to the CCP to find an answer. Under Deng’s leadership, the CCP gave up orthodox Marxist doctrines and turned to Chinese traditions for political and organizational resources. At a philosophical level, the pragmatism became the party’s guideline for action; at the organizational level, the political meritocracy was adopted to select government officials. Both are part of the Confucian tradition and played critical roles in China’s 40 years of reform and opening (Yao and Qin 2021). The “Four Confidences” are built on such confidence in the Chinese tradition.
In the U.S., however, many have interpreted Chinese confidence as a sign of China’s arrogance. It has reinforced the view that China is determined to take a different road than the American one. For most Americans, the American way of life—liberal democracy and free markets—is the only decent way of living for everyone. It is almost Americans’ instinct to disdain China’s political system. Since bringing China into the American world order helped China’s growth, which in turn boosted China’s confidence, many Americans reached the conclusion that the U.S. should decouple with China as much as possible.
“China is challenging American technological supremacy”
In 2004, Paul Samuelson, one of the most prominent economists of the twentieth century, published his last academic paper (Samuelson 2004, 135–146). It was about the impact of China’s technological upgrading on the American economy. Citing David Ricardo’s framework of comparative advantage, Samuelson told his readers that China’s technological upgrading will hurt Americans if it leads to Chinese companies replacing American companies to produce goods in which the U.S. enjoys comparative advantage. In a globalized world, this is almost sure to happen. For most of the last 30 years, China’s labor productivity increased faster than wage rates in its manufacturing sector; whereas, the opposite happened in the U.S. It was thus natural for China to gain comparative advantage relative to the U.S., and for China to produce more of the products that the U.S. used to produce. However, not many economists took Samuelson’s warnings seriously in 2004 because at the time, most people in both China and the U.S. believed the future was remote in which Chinese technology would pose any serious challenge to America’s technological supremacy.
The rise of China’s internet giants and global technological leaders in the last decade set off an alarm for Americans. Suddenly, Americans found that Chinese companies could compete head-on with American companies. In some areas, notably, telecommunications, artificial intelligence (AI), and drones, Chinese companies even took the leading positions. China’s technological upgrading now poses two major challenges to the US.
The first major challenge is to the American manufacturing industry. American policy makers have long ago reached the consensus that the U.S. should bring manufacturing jobs back to the country. The first Obama administration, for example, put forward the slogan: “Bringing manufacturing back to America.” The Trump administration simply took this issue over from the Obama administration. However, realizing this slogan is easier said than done, because America is losing comparative advantage to China in the manufacturing sector. This is a complex, but probably rather unavoidable result. On the American side, two factors mitigate against the return of manufacturing jobs. One is that people have grown accustomed to higher-wage jobs and the lifestyles that come with them, reducing the competitiveness of American manufacturing. The other factor hides in America’s super-efficient and ever-growing financial sector. Built on numerous forms of derivatives, the size of American financial assets has reached an astronomic number. This trend forces the financial sector to chase high-return industries, thereby explaining the coexistence of cutting-edge innovation and the hollowing out of manufacturing in the U.S. China is almost on the flip side of the U.S. Chinese people are still working hard to earn meager salaries and China’s financial sector is still being tightly regulated. American hawks, however, chose to ignore the economic fundamentals in both countries, and instead blamed China for the loss of U.S. manufacturing jobs.
The second challenge lies in America’s geopolitical competition with China. The fundamental forces supporting a country’s geopolitical position are its military might. In today’s world, technology almost solely determines military strength. China’s military upgrading in the last twenty years can only be described by “astonishing.” China’s fast technological upgrading has underpinned this development, particularly its advancements in the telecommunication sector. This was why American sanctions targeted China’s leading telecommunications companies, notably Huawei and ZTE.
China has not reached the stage of posing an all-around challenge to American technological supremacy. But China has large catch-up potential because of its high savings, large number of university graduates, and fast accumulation of research capacity. The Trump administration’s technological sanctions have had only limited impact on China’s economy. Growing by 2.3% in 2020, China’s economy was the only major economy that maintained positive growth during the pandemic. If anything, American technological bans only triggered Beijing to speed up the autonomous development of advanced technologies.