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Managed Competition: Finding Answers in U.S.-China Diplomatic History

Dennis Wilder

We are in a new era in U.S.-China relations as precarious as any since the Tiananmen crackdown of 1989. Channels of meaningful communication have broken down, mutual trust is at an all-time low, the Chinese Communist Party has become a bipartisan issue of focus in U.S. politics, and senior Chinese officials, including President Xi Jinping, now explicitly assert that the United States is leading a Western effort to “contain and suppress” China. Simply put, the Chinese leaders strongly suspect that the U.S. end game is to destroy Chinese communism. U.S. leaders strongly suspect the Chinese end game is to replace the United States as the world’s leading military and economic power.

So, the question we face is whether there are ways to mute the levels of strategic suspicion while still engaging in intense competition. Is there a way to create an equilibrium so that strategic competition does not become an end unto itself and crowds out efforts to tackle worldwide challenges like climate change, pandemics, and food insecurity in the Global South?

There is no question that this is a large, seemingly impossible, task in the current environment. However, during my four decades of government service I have experienced similar crises before in U.S.-China relations, and I have seen how the use of tried-and-true diplomatic tools has successfully bridged the divide. One of the most successful avenues, for example, has been the intense engagement of the U.S. national security advisor with Chinese counterparts. This has proven incredibly productive because it has cut through the bureaucracies on both sides and taken the discussion to a strategic level authorized by the top leaders—but it does take a greater commitment of time on both sides than periodic virtual meetings.

 As U.S.-China tensions mounted in 1995 and 1996 over the visit of Taiwan President Lee Teng-hui to the United States and subsequent Taiwan elections, U.S. National Security Advisor Tony Lake was convinced by his National Security Council staff that the only way to diffuse the crisis was by face-to-face engagement with his counterpart, Vice Foreign Minister Liu Huaqiu. On President Bill Clinton’s orders, Lake invited Liu to Washington in March 1996, and they held intense negotiations at the estate of Averill and Pamela Harriman in the Virginia countryside, even as Beijing was firing missiles and conducting exercises around Taiwan as an act of intimidation. This first round of talks did not end the crisis, and President Clinton subsequently announced the deployment of two carrier battlegroups near Taiwan to deter Chinese aggression. However, Tony Lake was sent by President Clinton to Beijing in July 1996 and, while no new U.S.-China communiques were issued, his candid discussions were credited with resetting the bilateral strategic framework, in particular the U.S.-China understanding over Taiwan.

Similarly, after the bloody Tiananmen crackdown that led to immediate U.S. sanctions on China, President George H.W. Bush decided to send National Security Advisor Brent Scowcroft to Beijing to stabilize ties. Scowcroft went secretly only three weeks after the massacre and met directly with Deng Xiaoping. In his memoirs, Scowcroft recalled that he told Deng, “There had been many ups and downs in the relationship but, overall, it has been a steadily deepening one. Not only because it responded to the basic interests of both sides, but because we respect the diversity between our two societies.” Scowcroft’s trip was considered a success, and Scowcroft later noted, “The purpose of my trip, however, was not negotiations… but an effort to keep open the lines of communication with a people inclined to isolate themselves and whose long experience with foreigners had engendered xenophobia.” Bush did not doubt that Beijing had killed hundreds of its own citizens, but he did not wish to see U.S. actions destroy 20 years of progress bringing China into the international community.

Successful engagement with Beijing does not always require the involvement of White House players, but it does require a commitment to intense face-to-face engagement and dialogue, and there have been many points in the more recent past when it has worked. The most consequential of these that the Biden-Harris administration might look to for ideas was the model created by then-Treasury Secretary Hank Paulson in 2006 of the Strategic Economic Dialogue. At a time of great turmoil in the relationship over such issues as Chinese currency manipulation, Paulson created an in-depth channel of discussion first with Chinese trade czar Wu Yi and later with Vice Premier Wang Qishan that met in person twice a year. I was serving in the White House at the time, and I saw firsthand how when Lehman Brothers failed in September 2008, the relationship developed over time between Paulson and Wang helped contain the financial crisis. China agreed not to sell its large holdings in U.S. securities, giving Paulson time to find the means to contain the crisis.

Macroeconomic and financial issues today are just as pressing, and Treasury Secretary Janet Yellen has signaled a strong interest in working with the Chinese on support for emerging markets and developing countries in their clean energy transitions. In addition to Yellen, other leading officials could be added to this dialogue, such as Commerce Secretary Gina Raimondo and U.S. special envoy for climate John Kerry. One issue to revive might be the completion of a Bilateral Investment Treaty—a process that was more than 90% complete when Trump halted the negotiations in 2017.

Some will push back against these ideas, saying that in the Xi Jinping era mutual animosities run so high that it is impossible to conceive of producing a positive outcome through such interactions. Nonetheless, I believe that the stakes are high enough that we have little choice but to find a way to resurrect a broad framework and a modus vivendi that allows for coexistence as well as intense competition. Presidential phone calls and periodic engagement between the U.S. secretary of state and the Chinese foreign minister are necessary pieces in constructive engagement, as is the use of the military hotline to communicate at the level of the U.S. secretary of defense. However, the current dangers of an inexorable march toward a crisis over Taiwan or even North Korea—which could lead us to the brink of a nuclear conflict—demand that we consider proven ideas from the old playbook of highly personal, intense face-to-face dialogue.