Future Directions for US-China Relations: An Emerging Dual Leadership Structure

Since the 2008 global financial crisis, the US-China relationship has taken on a new structure, namely an emerging dual leadership structure, in the Asia-Pacific. This trend represents the future direction of US-China relations. China, as a rising power, has begun to play a leadership role in both the economic and financial domains, which can be seen most recently in the development of the China-led Asian Infrastructure Investment Bank (AIIB). Meanwhile, the United States, as the existing hegemon, plays a leadership role in the security and political domains. It remains to be seen whether the US and China can extend this dual leadership structure into regional as well as global institutions.

Uncertainties about Order

There are some inherent uncertainties involved in these new developments. The emerging nature of this new type of relationship means that the transitional process is still going on and the situation has not yet stabilized.  The fact that it is a dual-power structure, with both sides having their own, sometimes different, viewpoints and opinions on what should be done, also adds to this uncertainty. The dual leadership structure reflects recent trends and perceptions regarding China’s rise – namely China’s dramatic and persistent economic growth (despite its recent slowdown). This in turn may momentously affect global and regional power distribution, giving Beijing considerable new leverage relative to the one exercised by Washington.  For example, China’s increasing economic strength helped to maintain economic stability in East Asia when the 2008 financial crisis weakened the US.  At the same time, continued US leadership in the military and political domains may prove to play a balancing role vis-à-vis China’s rising influence in Asia and constitute a hindrance to Beijing’s leadership in the East Asian region.

No “Bipolar” or “G2” Structure Will Emerge

Some realists envision a future bipolar structure in which the US and China balance one another. However, the dual leadership structure is distinct from this concept because it reflects fundamental asymmetry rather than parity.  China has not moved into a position where it can challenge US leadership.  Rather, China is merely starting to become more influential in the economic dimension.  While this trend could eventually enhance Beijing’s power in the military and political dimensions, the transition from economic to political influence will occur over a long period of time and is difficult to measure. Therefore, it is unlikely that China will replace US leadership in either the security or political domains any time soon—either in global or regional affairs.

Furthermore, the dual leadership structure may appear similar to the “G2” and other shared leadership concepts.  They are, however, conceptually and empirically different.  In 2009, Zbigniew Brzezinski argued strongly for the G2 model, suggesting that “the relationship between the US and China has to be truly a comprehensive global partnership, parallel [to] relations with Europe and Japan.” In contrast, the dual leadership concept only refers to a newly emerged regional structure in East Asia and emphasizes the distinct strengths of the US and China in separate dimensions, namely, economic and military. In a global sense, it is still an asymmetrical structure – that is, the US remains the sole hegemon and China is far from replacing it.

This dual leadership has proven to be a positive development so far, with benefits for both the US and China. Examples of these benefits include US-China cooperation in dealing with such global issues as climate change, anti-terrorism, or preventing the next financial crisis, as well as the North Korean nuclear crisis. However, it remains to be seen whether the two powers can coordinate well with other powers in the region, such as Japan.

The nature of the dual leadership structure can also be viewed in different ways. One way to examine the issue is in terms of perceptions. We do see that the gap between the US and China in many dimensions is narrowing, such as in overall GDP, with many projecting that the latter will surpass the former sooner or later. In sum, as China’s global influence and soft power continues to rise, as well as its overall GDP, the perception may be that China is moving up while America is moving down.

Another angle from which to see the development is that China may become a world superpower in certain dimensions, such as economically, but it is unlikely for China to become the leading power in the military and political domains.  In fact, the dual leadership concept is double-edged.  It not only emphasizes China’s rise and its implications, but the strength and persistence of US leadership.  Despite the origins of the global financial crisis in Wall Street and the loss of American credibility in Afghanistan and Iraq, there have been no real challenges to US hard and soft power in the world. That is why we are witnessing the interesting phenomenon of China’s continuing economic momentum through three decades, while the US continues to hold the leading military and political position. The region and the world are therefore at a compelling “historical moment” that demands further empirical data and suggests the necessity of new theoretical constructs.

Containment vs. Engagement

Looking forward, there are at least two important questions which relate to the reactions of key players to this dual leadership structure. The first question is whether the US would accept a dual leadership structure in East Asia. Needless to say, there is a constant chorus of opposing voices in the US arguing about how to deal with the rise of China.  A classic example is the debate between advocates of a containment policy versus an engagement policy.  It seems to this author that the majority view among American elites and policymakers is that the United States should do its utmost to bring China into existing international political and economic systems, making China an insider rather than a challenger.  In this way, China and the US would not only avoid a most undesirable and catastrophic military confrontation (such as a dispute in the East China Sea or South China Seas), but also achieve win-win cooperation in dealing with regional and global issues, such as a nuclear North Korea, terrorism, and global environmental challenges.

Other Regional Players

The second important question relates to the reaction of existing players to a dual leadership structure, such as Japan, Russia, the two Koreas.  One must also pay attention to the question of how we should treat the existing multilateral institutional arrangements such as ASEAN plus Three, the ASEAN Regional Forum, the East Asia Summit, and most recently, the Trans-Pacific Partnership (TPP). It is true that China’s Asian neighbors have some concerns about the rise of China, particularly in the security dimension. Much of this has to do with difficult conflicts and territorial disputes in the South China Sea and the East China Sea.  But at the same time, China has made major progress in the past decade in the region, establishing close economic ties with virtually every neighboring country as well as initiating its own financial institutions such as the AIIB.  The positive manifestation of increasing Chinese influence in the economic dimensions became particularly clear in the US financial crisis of 2008, when China’s record high economic growth offset the US’s negative growth, playing thereby a stabilizing and beneficial economic role for ASEAN countries. On the other hand, it is still unclear whether or how China will be a part of the TPP process in the foreseeable future, which indicates that there are still real limitations in terms of China’s leadership role.

The Future Balance of Power

There are several uncertain factors that will affect the future balance of power in the Asia-Pacific region.  Prospects for China’s continued rapid economic growth, which has been the impetus for the regional power shift, are still uncertain, with some predicting the coming collapse of a Chinese economic bubble, and others believing in the sustainability of Chinese economic growth for the decades to come.  The US position in Asia also remains uncertain, depending upon its continued economic recovery, and a strong commitment to the policy of rebalancing towards Asia.  If these Chinese and US factors continue to strengthen, then a dual leadership system is sustainable.  However, if either the US or China suffers a future economic downturn, or if the US is unable to follow through with the rebalance, then it will further the uncertainty of a dual leadership apparatus. In any case, the uncertain nature of US-China relations will have an enormous impact on the region as well as the globe for years to come.

Quansheng Zhao is Professor of International Relations at American University School of International Service and Chair of the AU’s Asia Studies Research Council.

This commentary originally appeared in the ICAS Bulletin.