Question: With the growing risk of conflict between China and the United States, what are the key issues hindering effective dialogue and mutual understanding?

Douglas A. Jaffe

In an era of social-media diplomacy dominated by inflammatory rhetoric, an impediment to effective dialogue lies in identifying and prioritizing the important issues. For example, there is an unconscionable inability or unwillingness to highlight and defend the expansive business, trade and investment ties between the US and China. The benefits in terms of jobs, income and economic growth touch all aspects of both economies. Many US multinationals face stagnant growth in existing markets and need the growth offered in China. People forget that US companies employ millions of Americans and pension fund investments in these companies are critical for ensuring future liabilities are covered. Chinese companies cannot survive solely on a domestic market and the PRC needs help to improve skills in asset management, legal/accounting, semiconductor manufacturing, health care, etc., to become a modern economy that can provide for its aging population.

Effective dialogue means focusing on the big picture and not getting distracted by less critical issues. It also means ensuring the right people are talking to each other with interlocutors that have the stature to push back against vested interests. Re-establishing military-to-military dialogue would help in this regard. Unfortunately, much of the current noise is driven by small groups with outsized voices. These include exile communities who champion a narrative that fits neatly with the aims of neo-Cold Warriors who outdo each other with dire warnings and bellicose rhetoric. This is echoed by Chinese “wolf warriors” whose rhetoric plays well domestically and feeds growing nationalism. To move past these dangerous distractions, which are sadly taking on racial overtones, China and the US must be willing to horse trade and that means putting all chips on the table, however sacred. Both sides argue the other is untrustworthy as a negotiating partner. America suffers from the short-term nature of a Presidential system that must face down an intransigent Congress, while the CCP remains opaque to outsiders and even details like President Xi’s tenure are unknown. Nevertheless, both countries routinely accept allies and trading partners with different political systems and values. Horse trading is possible, but it must start with practical measures to build trust and momentum. Tone matters though, and until both sides are willing to shelve provocative grandstanding, it will become more difficult to take those first steps.

Peter Kuo

What originally started as disputes over trade policy between the US and China has rapidly spiraled to encompass technology, human rights and increasingly, national security. The speed with which the bilateral relationship has deteriorated has taken many with significant commercial interests at stake by surprise, as the relative stability of economic ties between the US and China since China’s entry into the WTO in 2001 has on the face of it been a mutually beneficial relationship for both countries. How have things unraveled so quickly? The challenge for both countries and by extension the rest of the world is that the primary driver of the relationship has shifted from one of mutual economic gain to one where domestic political considerations are biasing both governments to demonize the other side. As nationalistic tendencies in both countries increase, the prospect for a turn in this dynamic seems unlikely in the near future.

In China Xi Jinping has consolidated power and his ambitions of advancing the “China Dream” has meant that China is undergoing a fundamental shift in both domestic and foreign policy. Efforts to shore up nationalism has meant that criticisms of China are met by extremely fierce responses by the government, most clearly manifested in the emergence of China’s so-called “Wolf Warrior” diplomacy and a more muscular approach to territorial issues such as Taiwan and the South China Seas. In the meantime, US domestic politics has meant that taking a “hard line” towards China has become the bipartisan consensus in Washington, with little room for divergence. This shift towards an “anti-China” policy has taken place with breathtaking speed, uniting an unlikely coalition of those who have traditionally advocated for free trade with those with longstanding criticisms of China’s human rights policies. With nationalist politics driving the dialogue between the US and China, the world is increasingly being caught in a negative feedback loop which will require meaningful changes in both policy and tone to escape from. There are certain areas of potential common ground, foremost among them climate change. And of course, both countries remain incredibly interconnected from an economic perspective, talk about decoupling notwithstanding. Nevertheless, the current outlook remains bleak, particularly with both Beijing and Washington making clear that playing to near-term domestic passions in both countries remains the priority.

Peter Kuo is the CEO of PTK Acquisition Corporation and a partner and co-founder of Canyon Bridge Capital Partners

David Hoffman

Generalized presumptions, and the confirmation biases they create, are key impediments to effective dialogue and mutual understanding between the US and China. There is room for improvement here. On the China side, the prevailing presumption is that the US seeks to contain China’s progress, even agitate for regime change. In China, everything policy-wise is now contextualized within this precept, including the future of Taiwan. This is hugely dangerous. On the US side, one dangerous presumption is that China, in the broadest sense, will endeavour to steal any IP ‘it’ possibly can and exploit institutional loopholes wherever possible to advance its state power. This presumption, if taken too far, would bear many harmful impacts, especially on the positive flows of people and ideas necessary for human flourishing. China could quell this presumption if it stopped exploiting the openness of western systems, and leveraging the closedness of its own, to accrue unfair industrial advantages. It is within the power of the Chinese leadership to do this, even do it quickly. And it is in China’s own best interests to do so. China’s economic vitality would improve if its global engagement were more ‘normal’.

Presumptions like these undermine trust which in turn prevents effective dialogue. Government leaders on both sides should dispassionately review their presumptions about one another and reset, or at least nuance, where appropriate to hopefully create runway for accommodation or space to amicably ‘agree to disagree’. It is OK if the issue list for the latter is much longer. It’s an acceptable outcome if today’s global business environment bifurcates into two spheres, or that China becomes a very divergent economy from “the West”; it already is. At present, a bifurcated economic environment is where we are trending. An incompatibility of systems is driving this trend at a structural level, and the key incompatibilities at play cannot be quickly resolved. We must get by in the meantime. Leaders on both sides need to make every effort to ensure that bifurcation happens peacefully, that key linkages remain where they can, and that we cooperate effectively on shared global threats, climate change most importantly. We can do all this if we’re smart and open minded.

David Hoffman is Senior Vice President for The Conference Board Asia and Managing Director of The Conference Board China Center for Economics and Business in Beijing – www.tcb.org

Alastair Campbell

Do we confuse the symptoms with the underlying cause of the conflict? Is it really about autocracy versus democracy, communism versus capitalism, private versus state ownership?  Surely the core issue is cultural or civilisational, and failure to appreciate this will impede progress to a more realistic and pragmatic engagement. It is one thing to criticise the governance of another State as unpalatable, quite another to deny that State’s legitimacy. Mutual recognition and respect between States are the fundamental premises for meaningful diplomatic intercourse. The alternative is to continue the descent from the trading of insults to armed conflict.

The power and influence of nations depend on their handling of domestic affairs as well as recognizing the legitimacy of other States. As became only too apparent during the Trump presidency, America has neglected domestic affairs for far too long, whilst China has steadily encouraged prosperity and rebuilt infrastructure for the benefit of all its people. An ethnocentric America has finally woken up to a resurgent China and chosen to confront and characterize it as a defiant upstart, which rejects American values, and therefore presents a threat to American authority over the world order. This reflects another fundamental issue: the asymmetry of knowledge and understanding of each other’s socio-cultural background. As Kissinger once said: “America is the first society in history to have been explicitly created in the name of liberty”. This led to America’s assumption of cultural superiority accompanied by proselytizing zeal. But this concept of liberty has no meaningful counterpart in China’s long history of dynastic rule, and in the light of America’s multiple foreign interventions, is viewed with deep suspicion and distrust. China struggles to deal with a system whose policies remain framed in an historic international order subordinated to American policy interests and can change with each successive administration. The result: America has consistently failed to develop any meaningful long-term strategy towards China. A more enlightened approach of principled realism in its dealings with China will be possible only if America tones down the rhetoric and heeds the words of a former president: “People the world over have always been more impressed by the power of our example than by the example of our power”, so let it first put its own house in order.