Special Edition: Conference Summary
Conference co-sponsored by the Institute for China-America Studies (ICAS), the Carter Center, Emory University & the National Institute for South China Sea Studies
In the News
Chinese ambassador calls for cooperation as China-US diplomatic ties hit 40-year mark
Global Times, February 8
“Chinese Ambassador to the United States Cui Tiankai on Wednesday called for more cooperation between China and the United States as their diplomatic ties reached its 40th anniversary.”
“Addressing a reception for the anniversary of China-US diplomatic relations and the Chinese New Year at the Chinese embassy, Cui said history has proven that cooperation serves the interest of both countries.”
“Approximately 750 guests attended the reception, including US Secretary of Commerce Wilbur Ross, National Security Council Senior Director for Asian Affairs Matt Pottinger, Former US Secretary of Commerce Carlos Gutierrez, and a number of US lawmakers.”
Trump to meet Kim in Vietnam as envoys thrash out issues
Andrew Salmon
Asian Times, February 6
“US President Donald Trump has revealed that he will hold a summit with North Korean leader Kim Jong Un on February 27-28 in Vietnam. The news came just as his envoy arrived in Pyongyang on Wednesday, local time.”
“In his annual State of the Union speech to the US Congress, Trump, after alluding to the success of his diplomacy with Kim, which he alleged had prevented a war, said: “Chairman Kim and I will meet again on February 27 and 28 in Vietnam.””
“It will be the second-ever summit between the two leaders, following their groundbreaking meeting in Singapore in June last year. Although the two leaders appeared to strike up a convivial man-to-man relationship in Singapore, the stakes are high for the upcoming meeting, given the lack of progress that followed the last summit.”
Trump Optimistic on Trade Deal With China, but May Keep Tariffs Anyway
Alan Rappeport and Mark Landler
New York Times, February 1
“President Trump expressed optimism Thursday about reaching a landmark trade deal with China, but said in an interview that he would consider leaving in place some tariffs on Chinese goods even if the two sides strike an agreement.”
“As he hosted the Chinese delegation in the Oval Office earlier in the day, Mr. Trump said he would meet next month with the Chinese president, Xi Jinping. Liu He, China’s vice premier and Beijing’s trade negotiator, told the president that Mr. Xi was committed to buying five million tons of soybeans, a pledge that caught Mr. Trump’s aides by surprise.”
“Mr. Trump’s chief trade negotiator, Robert Lighthizer, struck a far more guarded note, saying the two sides had not even agreed on a draft framework for an agreement that is supposed to come together by March 2. Nor did they discuss rolling back American tariffs on Chinese goods. The main achievement, he suggested, was that the two sides were still talking.”
China builds rescue centre on artificial Spratly island in South China Sea’
Liu Zhen
South China Morning Post, January 30
“The Ministry of Transport said on Tuesday that the centre had been built on Fiery Cross Reef to serve the Spratly Islands, also known as the Nanshas. The announcement comes six months after China stationed the Nanhaijiu-115 rescue ship at Subi Reef, another artificial island in the Spratlys.”
“The rescue centre would provide stronger and more comprehensive support to rescue missions and would be part of the ministry’s “South China Sea rescue bureau” , the ministry said. “It is a measure to implement international treaties and ensure safety of navigation and transport in the South China Sea region,” it said.”
U.S., China launch high-level trade talks amid deep differences
David Lawder, Jeff Mason
Reuters, January 30
“The United States and China opened a pivotal round of high-level talks on Wednesday aimed at digging out from their months-long trade war amid deep differences over Chinese practices on intellectual property and technology transfer.”
“Cabinet-level officials, led by Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer, gathered in the Eisenhower Executive Office Building next to the White House, with about a month to reach a deal before a March 2 U.S. deadline to increase tariffs on Chinese goods.”
“A crucial component of any progress in the talks, according to top Trump administration officials, is agreement on a mechanism to verify and “enforce” China’s follow-through on any reform pledges that it makes. This could maintain the threat of U.S. tariffs on Chinese goods for the long term.”
Chinese Exiting U.S. Real Estate as Beijing Directs Money Back to Shore Up Economy
Esther Fung
The Wall Street Journal, January 29
“Chinese purchases of U.S. real estate last year dwindled to their lowest level since 2012, as Beijing kept up the pressure on Chinese investors to bring cash home during a period of worsening economic growth.”
“Insurers, conglomerates and other investors from mainland China were net sellers of $854 million of U.S. commercial real estate in the fourth quarter, according to Real Capital Analytics. That marked the third-straight quarter Chinese investors sold more U.S. property than they bought, the first time ever these investors have been sellers for that long a stretch.”
“The turnabout last year reflects an effort by the Chinese government to stabilize its currency, reduce corporate debt, and help arrest the country’s economic slowdown by clamping down on certain overseas investments. Some Chinese developers, now facing tighter credit conditions at home, have tried to raise money instead by selling some of their U.S. properties.”
US naval chief: American and Chinese navies in talks to cut risk of South China Sea miscalculation
Zhenhua Lu
South China Morning Post, January 29
“Addressing the Washington-based Brookings Institution on Monday, Admiral John Richardson said the dialogue was to open communication to avoid a potentially disastrous blunder. The discussions were a positive sign that China and the US were moving forward with a plan to reduce tensions in the disputed waters.”
“Richardson, who visited China for a second time as the US chief of naval operations in mid-January, said a reliable communication mechanism needed to be in place. “If something should happen, we can call each other up and de-escalate that before it gets too hot,” he said.”
U.S. Authorities Unveil Sweeping Set of Charges Against China’s Huawei
Kate O’Keeffe, Aruna Viswanatha and Dustin Volz
The Wall Street Journal, January 29
“The Trump administration unveiled a sweeping set of criminal charges against China’s Huawei Technologies Co. in its latest salvo against the telecom giant, with authorities unsealing a pair of indictments just days before U.S.-China trade talks are set to resume.”
“The charges are the latest to accuse the Chinese government or Chinese companies of stealing intellectual property from U.S. firms through a combination of cyberattacks, traditional espionage and other means. U.S. officials have warned that China’s corporate raiding of secrets, which some government estimates value into the hundreds of billions of dollars in damages annually, represents a pre-eminent national- and economic-security threat.”
“China’s Foreign Ministry urged the U.S. “to stop the unreasonable suppression” of Huawei and renewed its appeal for Washington to end its extradition case against Ms. Meng. In a statement, ministry spokesman Geng Shuang accused the U.S. of marshaling the power of the state to discredit particular Chinese companies and to try to throttle their business. Instead, he said, the U.S. should treat Chinese companies “objectively and fairly.””
Young Americans seen as ‘future of China-US relations’ as scholars reflect on soft power’
Catherine Wong
South China Morning Post, January 29
“That was the consensus at a seminar in Beijing last week to mark the 40th anniversary of the establishment of relations between China and the United States, where a key discussion was why American culture shown in products such as Hollywood films had been so well received elsewhere. They said the success of these cultural exports had helped the US to spread its values around the world, while China’s efforts to use its soft power abroad were often met with scepticism and even resistance.”
“Wang Lili, deputy dean of the National Academy of Development and Strategy at Renmin University of China, said one way to improve cultural ties was for China to focus on younger Americans. Her view is backed by survey findings from the Pew Research Centre in August, showing 49 percent of Americans aged between 18 and 29 had a favourable outlook on China, compared with 37 per cent of those aged 30 to 49, and 35 per cent who were 50 or older.”
Major Mobile Carrier Halts Huawei Purchases Amid Security Concerns
Stu Woo
The Wall Street Journal, January 25
“Vodafone Group said Friday that it would pause the purchase of Huawei gear for use in the core of new 5G networks it’s rolling out across Europe because of uncertainty over whether some governments in the region will ban the Chinese company, posing a threat to the Chinese company’s growth and delivering another blow to its reputation amid growing government scrutiny around the globe.”
“Amid a U.S. government-led push last year to further limit Huawei’s small business in the U.S. and its much larger business among allies, governments including Australia, Britain, Canada, Germany and Japan have all said they were looking closely at their telecom equipment supply chain. Australia and New Zealand have restricted Huawei’s involvement in new 5G projects with those countries’ carriers.”
US Navy sails warships through Taiwan Strait
Ryan Browne
CNN, January 24
“The US Navy sailed two ships through the Taiwan Strait on Thursday, according to the US Pacific Fleet, which oversees operations in the area. The guided missile destroyer USS McCampbell and the USNS Walter S. Diehl “conducted a routine Taiwan Strait Transit” that was “in accordance with international law,” US Pacific Fleet spokesman Lt. Cmdr. Tim Gorman told CNN.”
“The US Navy also sailed two ships through the Strait in October and November, operations that were shadowed by multiple Chinese warships. The US had conducted a similar operation in July. Prior to that, the transits occurred only about once a year.”
Canada’s China envoy John McCallum says Huawei executive has good chance of avoiding U.S. extradition
Robert Fife, Steven Chase
The Global and Mail, January 23
“Canada’s envoy to China John McCallum says top Huawei executive Meng Wanzhou has a good chance of winning a Canadian court case to avoid extradition to the United States on allegations of banking fraud relating to U.S. sanctions against Iran.”
“Speaking at a news conference for Chinese-language media in Markham on Tuesday, Mr. McCallum took the extraordinary step of offering legal advice to Huawei’s chief financial officer, who Canada arrested last month at the request of U.S. law enforcement authorities.”
““I think she has quite good arguments on her side,” he said. “One, political involvement by comments from Donald Trump in her case. Two, there’s an extraterritorial aspect to her case, and three, there’s the issue of Iran sanctions which are involved in her case, and Canada does not sign on to these Iran sanctions. So I think she has some strong arguments that she can make before a judge.””
China’s Vice President Uses Davos Speech to Offer Rebuttal of Trump
Shawn Donnan
Bloomberg, January 23
“In a carefully scripted keynote address Wednesday to the business leaders gathered for the World Economic Forum in Davos, Switzerland, China’s vice president Wang Qishan mounted a vigorous defense of globalization and offered a thinly veiled rebuke of President Donald Trump’s economic policies, warning the international order was under assault from “unilateralism, protectionism and populism.””
“Wang defended globalization as an ”inevitable trend of history’’ and said that rather than reject it, the world needed to work together to address the challenges. Wang also defended China’s record of innovation against the charges leveled by the U.S. that the rise of Chinese companies and the economy as a whole have come on the back of a state-directed campaign of intellectual property theft.”
Articles and Analysis
The China gap
Daniel W. Drezner
The Washington Post, January 31
“There has been a disconnect between Trump’s populism and the foreign policy community, however one issue has united Democrats, Republicans, and seemingly the entire foreign policy community: China. The Trump administration’s approach to China has merit behind it, and the administration has taken a hawkish stance as seen through Vice President Mike Pence and US Trade Representative Robert E. Lighthizer’s speeches. Prominent Senate Democrat Elizabeth Warren also shares a strikingly similar stance to President Trump when it comes to trade with China and its threat to the American-created world order.”
“Foreign policy experts from multiple schools of thought are also upset with China for different reasons, such as their disregard for following global rules and norms and the threat they pose. Interestingly, public polling from Pew Research and the Chicago Council on Global Affairs finds that the majority of Americans have a minimal fear of China. While many politicians and individuals in the foreign policy community share a common interest in China, they are unable to unite behind a foreign policy which the American people will support.”
The Art of the Balance: Japan, China and the United States
Catherine Putz
The Diplomat, January 30
“There’s a delicate balance to relations between Japan and China. Economic realities are weighed against security concerns; a desire for maintaining the status quo balanced against long-term worries that China is a future threat and the United States a potentially unreliable ally.”
““China is — and will be — an indispensable economic partner for Japan,” Sheila Smith, a senior fellow for Japan studies at the Council on Foreign Relations, said in an email to The Diplomat. “Economic interdependence has not gone away; if anything, it has become more important to Tokyo to maintain it.” [Yet] For Japan, the U.S. alliance is critical — more so given China’s rise — and that fact persists no matter who sits in the White House.”
““Face to face, we are smiling; but under the table… we are kicking each other,” Keitaro Ohno, at the time the parliamentary vice minister of defense for Japan’s ruling Liberal Democratic Party, told a group of U.S. journalists in December, summarizing the reality of Japan’s balancing of economic interdependence and security concerns with regard to China.”
A Sino-Russian Entente Again Threatens America
Graham T. Allison and Dimitri K. Simes
The Wall Street Journal, January 29
“Former national security adviser Zbigniew Brzezinski warned in 1997 that the greatest long-term threat to U.S. interests would be a “grand coalition” of China and Russia, “united not by ideology but by complementary grievances.” This coalition “would be reminiscent in scale and scope of the challenge once posed by the Sino-Soviet bloc, though this time China would likely be the leader and Russia the follower.””
“If the defining challenge to U.S. national interests in the 21st century is a rising China, preventing the emergence of a Sino-Russian entente should be a key U.S. priority. Persuading Russia to sit on the U.S. side of the balance of power seesaw will require American policy makers to revise substantially their strategic objectives in dealing with Moscow. As difficult as this is to imagine in the craze of American politics today, the starting point for the conversation must be clear-eyed recognition of cause and effect. When the U.S. seeks to punish Mr. Putin for his unacceptable behavior—no matter its intentions—it has the predictable consequence of pushing Russia into an unnatural alliance with China.”
Don’t hand China the economic crown just yet
Desmond Lachman
The Hill, January 29
“The US has feared that other countries, such as Russia and Japan, would overtake the American economy in the past and these fears were proved unjustified. History is starting to repeat itself as America fears economic competition from China, however China’s recent economic growth is mostly attributed to a credit bubble. Credit bubbles usually lead to a large misallocation of resources, and a major example of this is the more than 50 million housing units that remain unoccupied. While it is unlikely to face an economic crisis similar to that of the US in 2008, China will not constitute a long-term threat to the US.”
“Despite China not being as great of a threat as it is perceived, the US should still pursue applying pressure on the country to enforce intellectual property rights and forced technology transfers.”
After Pelosi, Trump now faces down Xi. Who’ll blink?
David A. Andelman
CNN, January 28
“And as deeply as Pelosi understood Trump, especially his fatal flaws of ego and hubris, Xi may be in an even better position to outmaneuver the American president. The Chinese leader is in the enviable position of having watched and absorbed how thoroughly Trump crumpled over the past month in the face of an adversary he vastly underestimated.”
“For some time, Trump has been telegraphing his punches, claiming that China’s economy is suffering far more than America’s and therefore its leadership is prepared to cave at any moment in the face of strength and determination. But Trump has clearly been ignoring some early hints of just how badly an escalation of the trade war could play in the United States — the stock markets whipsawing investors with every whisper of deal-or-no-deal, and farmers losing a stable and lucrative market. Layer onto these challenges the looming threat of another government shutdown in three weeks, and Trump may find his back very much against a wall, forced to cave yet again.”
“At the same time, Xi has been deftly covering his own back, laying the basis for a difficult year ahead for China that he appears quite confident he’ll master. Just last week, he summoned regional and ministerial-level officials to a four-day “seminar” on “preventing and defusing major risks to ensure sustained and healthy economic development and social stability,” according to the state news agency Xinhua.”
US-China trade war: A stable deal with a strategic adversary is an elusive quest
Dr. Michael Ivanovitch
CNBC, January 27
“America’s flexible and growing $20.7 trillion economy would take in stride the loss of $130 billion of its goods exports to China, with supply chain disruptions filled in by substitutes. For China, a loss of $550 billion goods exports to the U.S. would be a big deal. Such extreme outcomes in an escalating trade confrontation are in no one’s interest. Washington and Beijing are on an old and permanent collision course.”
“The logic and the urgency of the matter would call for an immediate, sustained and large increase of U.S. sales to China, and a similar decline of Chinese exports to America. To support that process, China should broaden market access to American firms and respond to American complaints about allegedly market-distorting trade practices, such as export subsidies, illegal acquisitions of intellectual property, forced technology transfers and more.”
China’s Plan to Break off US Allies
Tao Peng
The Diplomat, January 16
“Meng’s arrest has angered China and Beijing is taking action to retaliate. However, China has adopted two different responses, approaching the issue gently with the United States – which requested Meng’s arrest – while launching strict action against Canada. In doing so, Beijing hopes to deter Canada from following the United States against China, in order to prevent Washington from forming a global and regional offensive against Beijing.”
“The Chinese official media Global Times published a particularly stern editorial entitled “Let the country that is invading China’s interests pay the price” on December 16, 2018. The article said that “for countries which do not care about China’s interests and have extraordinary behavior, China should resolutely fight back, let it pay the price, and even suffer huge losses.””
“China is deeply confident in attacking U.S. friendly forces while adopting a “soft” strategy toward the United States itself. First, China knows that almost all American allies maintain active economic and trade ties with China. China is also the largest trading partner for many of them. For example, Australia and New Zealand both count China as their largest trading partners, and Canada’s second largest trading partner is China. So China has ample measures to “deal with” these U.S. allies.”
Past Events
U.S.-China Relations after the U.S. Midterm Election and Maritime Security
Event hosted by the Institute for China-America Studies, January 19, 2019
Happiness in China: Family, Fate, and the Good Death
Event hosted by the Initiative for US-China Dialogue and the Walsh School of Foreign Service Asian Studies Program, January 23, 2019
Environmental Policy and Enforcement Trends in China and the Impact of Business
Event hosted by the US-China Business Council, January 24, 2019
A conversation with the Chief of Naval Operations
Event hosted by Brookings, January 28, 2019
Geopolitical Implications of a New Era on the Korean Peninsula
Event hosted by the Wilson Center, January 30, 2019
China’s Rise and the International Order
Event hosted by the National Bureau of Asian Research, February 7, 2019
Upcoming Events
Edgerton Series: A Conversation with Ambassador John Negroponte
Event hosted by the Pacific Council, February 13, 2019
The State Strikes Back: The End of Economic Reform in China
Event hosted by Johns Hopkins SAIS, February 20, 2019
Special Edition: Conference Summary
“U.S.-China Relations after the U.S. Midterm Election” Conference - Atlanta, GA
Conference co-sponsored by the Institute for China-America Studies (ICAS), the Carter Center, Emory University & the National Institute for South China Sea Studies
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.
