Read the full conference summary and watch the panels on our website

On January 19, the Institute for China-America Studies (ICAS) co-hosted a public event in Atlanta with the Carter Center, Emory University and the National Institute for South China Sea Studies to discuss the outlook for U.S.-China relations and how the U.S. midterm election results may have impacted it. Given that the foundations of U.S.-China cooperation were shaken to its core in 2018, the framework of this conference sought to reflect on the milestones achieved since the normalization of U.S.-China relations, and thereby honor the far-sighted vision and accomplishments of President Jimmy Carter and Deng Xiaoping. That said, old and new challenges will continue to shape one of the world’s most important bilateral relationships in 2019, and these challenges must be addressed constructively. The team at ICAS had the opportunity to speak on several of these delicate issues in Atlanta, furthering the dialogue necessary to creating a pathway forward towards healthy cooperation and competition between the two nations.

Panel I: U.S.-China Political and Security Issues

It was the panel’s view that U.S.-China relations are currently poised at a critical juncture. Not since the normalization of relations 40 years ago has the bilateral relationship been tested so severely. Within the U.S., there is broad and bipartisan support for a markedly firmer policy towards China. The ‘China threat’ theory is real, has bipartisan appeal, and needs to be fully internalized by Beijing. U.S-China relations, at least as seen through Washington’s lens, can no longer be characterized as win-win cooperation. The blame for the deteriorating state of the bilateral relationship should not be laid only at the doorstep of the Trump Administration. It is true that the Administration has been erratic in its China policy and is guilty of poor management of the relationship. But there is ample blame to go around and both sides need to bear their share of guilt. Looking ahead, the need of the hour in U.S.-China relations is for honest and direct talk with one another. Appeal to the shared interests among the two countries is insufficient. Bilateral economic ties, and the U.S. business community in particular, has been the ballast that has steadied the ship of U.S-China relations over the past four decades. Without Beijing addressing the growing basis of their discontent and disenchantment, U.S.-China relations will be a lot more unsteady for the next few decades, going forward.

Panel II: U.S.-China Trade, Investment, and Economy Issues

It was the panel’s view that the U.S.-China trade, investment and economic relationship, akin to the broader political relationship, is facing challenging times and is at an important inflection point. The Trump Administration’s decision to impose tariffs on Chinese exports was not a wise one. The tariffs serve as a tax on American consumers and it has only had modestly-negative employment and growth effect on the Chinese economy. The tariffs have not made any significant dent on the U.S.’ overall trade deficit either. That said, there are fundamental issues pertaining to Chinese policies and practices which are of concern to American business. Examples include relative lack of market access, allegedly-coerced technology transfer, pressures to license valuable intellectual property (IP) on non-market terms, the anti-competitive and oligopolistic practices of Chinese state-owned enterprises (SOEs) in the marketplace, non-market considerations-based industrial subsidies doled out to SOEs and other state-linked companies, vague and arbitrary administrative and regulatory practices, and alleged state-linked commercial espionage. Looking ahead, there is a ray of optimism nonetheless. At bottom, both countries share self-regarding economic interests that are aligned.

Panel IV: U.S.-China Maritime Issues

It was the panel’s view that a stable but unsatisfactory equilibrium obtains in the geopolitics of the South China Sea. It is a stable equilibrium because this body of water is not about to degenerate into a shooting war anytime soon. There will be no kinetic action in the South China Sea and the fear that miscalculation by any one side in this multi-cornered contest will lead to the outbreak of hostilities is somewhat over-blown. Nevertheless, the South China Sea arbitration case was a key tipping point in the geopolitics of the South China Sea. It was also an unfortunate episode. Of course, it has gravely damaged China’s standing on this subject within the global community of nations. Besides, some of China’s maritime claims in the South China Sea, particularly its Nine-Dash Line, are hard to justify and deserve to be criticized. The Law of the Sea-related practices in the Arctic area, under the aegis of the Arctic Council, could provide some refreshing implications and ideas for managing the quarrels in the South China Sea. The United States and China should aim to realize such cooperative activities in the Arctic, which could play a useful role, too,in stabilizing the troubled state of their current ties.