About the author: Stephen Roach is a senior fellow at the Paul Tsai China Center of the Yale Law School.
It has been a rough stretch for the few of us who have been dubbed congenital China bulls. It’s not just the mounting protests over an absurdly impractical “zero-Covid” policy. Nor is it the long overdue implosion of an overly leveraged property sector. It is mainly traceable to the bellicosity of Xi Jinping, China’s most dominant leader since Mao Zedong.
For Xi, it is all about power and control. He certainly has plenty of both, especially after his lifetime leadership grab at the recent 20th Party Congress, augmented by the advanced technologies of a surveillance state and the stunning modernization of China’s military and domestic security capabilities.
But the US is hardly an innocent bystander in the rise of a hostile China. Forget about Russia, China has been vilified as America’s greatest threat. In its recently released National Security Strategy, the Biden administration singles out China as “the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.”
America’s targeting of China, catalyzed by Donald Trump and amplified by Joe Biden, plays directly into Xi’s persecution complex that he justifies as a legacy of China’s century of humiliation. From Xi’s perspective, US-led China bashing is aimed at nothing short of a containment of China’s rise.
There is a common thread in all this—namely, that both nations feel threatened by the other. In my new book, Accidental Conflict: America, China, and the Clash of False Narratives, I argue that these shared fears hardly arise in a vacuum. They reflect the inclination to blame others for self-made vulnerabilities.
My premise is that this blame is based on a profusion of false narratives that exaggerate the threat that each nation poses to the other. For example, since America does not save, it runs massive trade deficits with many nations (106 of them in 2021) but chooses to blame China for a problem of America’s making. Similarly, China has failed to achieve a consumer-led rebalancing of its unbalanced economy but blames that on US containment.
Blame in both cases is politically expedient. Democrats and Republicans are actually united in holding China accountable for much of what ails America. Xi rationalizes his ever-tightening grip on power as necessary to overcome the existential threat of US-led China containment. The result is that the world’s two most powerful nations are on a collision course that could have been avoided had it not been for the false narratives that both embrace about each other.
With the past five years witnessing a trade war morph into a tech war, and now a new cold war, the risks of a dangerous clash are rising. Look no further than the ominous military exercises in the Taiwan Strait in August. The perils of accidental conflict need to be taken very seriously.
There is an off-ramp from this ominous trajectory. In my book, I posit three pillars to Sino-American conflict resolution.
First, start to restore trust. There is low-hanging fruit ripe for picking—reopening shuttered consulates in both nations, loosening of visa restrictions, restarting educational exchanges, and relaxing restrictions on non-governmental organizations. There are tougher issues of great mutual importance: Small steps have been taken on climate recently, but the Covid-origins debate stymies progress on health, and resolution of cyber issues has gone nowhere.
Second, the zero-sum bilateral trade mindset must be abandoned. We live in a multilateral world, linked by multi-country supply chains. Saving disparities—America’s shortfall and China’s surplus—guarantee a profusion of trade imbalances. The recent “Phase I” trade agreement was an abysmal failure. Predictably, all it did, in conjunction with Trump’s tariffs, was to divert the Chinese part of America’s trade deficit to others—Mexico, Vietnam, Taiwan, Singapore. Korea, and India—while the overall US trade deficit hit a new record.
What is needed, instead, are positive-sum, market-opening initiatives, such as a bilateral investment treaty, or BIT, that expand growth opportunities for both nations. Such a deal was almost contested in 2016 and now needs to be put back on the negotiating table. A BIT has the added benefit of allowing for contentious structural side issues to be negotiated, such as forced technology transfer, innovation policy, subsidies to state-sponsored industrial policies, and cyberprotocols.
Third, a new architecture of engagement is needed. The Nov. 14 Bali summit between Biden and Xi accomplished little, as have years of other grander meetings dubbed Strategic & Economic Dialogues. I favor the establishment of a new US-China Secretariat as a permanent organization located in a neutral venue and staffed by equal complements of Chinese and American professionals who focus full-time on developing collaborative approaches to all aspects of the relationship, from economics and technology to human rights and climate.
The US-China relationship is in the danger zone. China’s zero-Covid protests won’t shift Xi’s focus away from the threats of US containment. And Washington is determined to up the ante on its anti-China agenda. It wouldn’t take much of a spark to ignite the high-octane fuel of false narratives. Accidental conflict must be avoided before it is too late.
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