Hand-Off: The China Policy George W. Bush Passed to Barack Obama
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This special episode of the U.S.-China Nexus brings together three former National Security Council (NSC) experts to examine U.S. policy toward China during the George W. Bush administration.
Paul Haenle, Faryar Shirzad, and Dennis Wilder assess the breadth of former president Bush’s orientation to the China question and the strategic perspective that guided both the United States’ engagement with Beijing and its hedging against the potential of a more ambitious China. In many respects, they find that the Bush administration's economic and security building blocks in the region echoed across subsequent administrations through to today. In this conversation, we unpack the China elements in the recently published Hand-Off: The Foreign Policy George W. Bush Passed to Barack Obama (2023), an edited volume with 30 newly declassified transition memoranda, made public for the first time in the book, alongside postscripts.
Eleanor M. Alert: Today we have a special episode of the U.S.-China Nexus speaking to three experts, Paul Haenle, Faryar Shirzad, and Dennis Wilder, who look back on the foreign policy from the George W. Bush administration to that of Barack Obama. They also contributed to a recently released book Hand-Off, which chronicles then-classified transition memoranda prepared by National Security Council experts, along with postscript reflections that bring us up to the present. To do some quick introductions:
Paul Haenle holds the Maurice R. Greenberg Director’s Chair at the Carnegie Endowment for International Peace and is a visiting senior research fellow at the East Asian Institute, National University of Singapore. Prior to joining Carnegie, he served in a variety of roles in government, including as the director for China, Taiwan, and Mongolia Affairs on the National Security Council staffs of former presidents George W. Bush and Barack Obama.
Faryar Shirzad is the chief policy officer at Coinbase. Previously, he spent 15 years at Goldman Sachs playing a leading role in managing the firm’s government relations and public policy strategy. Faryar also held several government positions before joining Goldman Sachs, including serving on the staff of the National Security Council as deputy national security advisor for international economic affairs and as the U.S. G-8 sherpa.
Dennis Wilder is a research fellow for the Initiative for U.S.-China Dialogue on Global Issues at Georgetown University, where he previously was the managing director. He has held numerous positions in government, serving as the National Security Council's director for China and senior director for east Asian affairs. He was also senior editor of the president's daily brief and his most recent service in government was as the CIA's deputy assistant director for East Asia and the Pacific.
To start, I want to welcome Dennis, Paul, and Faryar and to look back at your time in the Bush administration. And given that 9/11 and the wars in Iraq and Afghanistan dominated a lot of the Bush agenda, how much did the president actually engage on East Asia, and what are your favorite memories of his engagement? We can start with Dennis, and then we'll go to Paul, and then Faryar.
Dennis Wilder: I will tell you a story about my first meeting with President Bush, but it wasn't when he was president, it was when he was Governor Bush in Texas. He had just received the nomination of the Republican Party, and I was part of a small team of CIA analysts sent by the National Security Council to do the courtesy briefing for Bush on foreign policy. This was on the second of September 2000. We flew down to Waco, Texas, and then to the ranch. When I went into the ranch house, I was startled, because on the wall were two Cultural Revolution propaganda posters in Chinese. I thought about it for a couple minutes and then I decided, "I'm going to ask him." And so I said to him, "Governor, these posters don't fit with your image as a China hardliner. What's this all about?" And he laughed and he said, "Yeah. The New York Times has it all wrong on me on China."
He said, "I made a couple flip remarks to them about the only thing I did when I visited my father in China was try to date Chinese women. And that was all that anybody remembers about my attitude toward China." He said, "But actually, when I visited my dad and the liaison office, I was absolutely fascinated by China, and by the Chinese people." That really stuck with me, because it was so contrary to what the public perception of him was on China.
The second story I will tell, just to show you how in detail he worked on China, even though he had the 9/11, the war in Iraq, the Global War on Terrorism, weighing on his mind, he still really worked at figuring out how to work with the Chinese leadership. We went to the APEC Summit in Sydney in September 2007, and during those summits, you have bilateral meetings, and one of them was with Hu Jintao, the president of China.
Bush had not told me about this before, so I was as taken aback as the Chinese leader was. He turned to the Chinese leader and said, "I'm going to tell you something you don't like." And the Chinese leader kind of braced and looked very uncomfortable, and Bush said, "I'm going to give the Dalai Lama the Congressional gold medal in a few weeks. Capitol Hill has asked me to do this, Nancy Pelosi in particular, and I feel very strongly that I should do this for this man." Hu Jintao started to rise in this seat, and ready for rebuttal. And the president stopped him, put up his hand, and he said, "Wait a minute. Let me tell you something else. I am today committing to you that I will attend the 2008 Summer Olympics in Beijing."
Now, we had said nothing to that point about whether or not the president would go to those Olympics, but Hu Jintao relaxed at that point. Amazingly, we got no blow back from the Chinese over the gold medal to the Dalai Lama. And I think this shows both the president's commitment to his freedom agenda, the human rights agenda that he had, but also his understanding about how to work with a Chinese leader, the transactional nature that was necessary to keep relations on track, while still sticking to our values.
Eleanor M. Albert: How about your memories, Paul?
Paul Haenle: Those are terrific stories. I remember going to the ranch down in Crawford, and seeing the same two Cultural Revolution propaganda posters, Dennis. But it was probably six years after you went. We have to keep in mind that his dad, former president George Herbert Walker Bush, was the director of the liaison office in Beijing in 1974 and '75, which was prior to having official relations with the PRC [People’s Republic of China]. That didn't happen until '79. He was in effect, our unofficial ambassador, and he took that position in Beijing to get a feel for China, and to meet Chinese leaders. He did meet Mao Zedong, and he met Deng Xiaoping, and a number of leaders that in the future would take on the top positions.
But I remember hearing the story that in the summer between semesters at Harvard Business School, President George W. Bush went to Beijing, and spent a big part of the summer there. And like his dad, who was known as “the bicycle-riding envoy,” in Beijing, George W. Bush, the son, also rode his bike around Beijing that summer through hutongs. And I think he developed a special appreciation for the country. And I think that on the ground, being able to see it, and feel it, and meet Chinese people, I can't think of any other presidents besides Herbert Walker Bush and George W. Bush that have come in to be the office of president and have had that experience in China.
Like his father, George W. Bush felt that personal bonds are really important. And I think much of the success that he had during his time as president came because that relationship that he had both with Jiang Zemin, but later with Hu Jintao. Also his decision to go to the 2008 Olympics in Beijing, despite quite a bit of international concern and criticism, created some goodwill with the Chinese, and that was helpful. But those personal, face-to-face interactions were an important part of what he tried to do in the U.S.-China relationship. And we see that importance still today in the meeting that took place in Bali [Indonesia] between President Biden and President Xi.
And the last thing I'll say is, Eleanor, you asked about the fact that there are trade-offs around having wars in Iraq and Afghanistan, and that this would have had an impact on the president's ability to carry out a number of other foreign policy priorities, including China. I think for President Bush, that wasn't always the case.
The transition memo starts out by talking about President Bush's decision to visit Shanghai for the APEC leaders meeting just days after 9/11. That shows President Bush's ability during that time to be able to tend to other important foreign policy priorities. It certainly left a deep impression on Chinese leaders because they understood the pressure that he was under to respond to 9/11, and the challenges posed by Al-Qaeda. Throughout the administration, you can see despite what was happening in the Middle East, President Bush and the administration was deeply engaged in Asia and with Chinese leaders.
Eleanor M. Albert: Great. Faryar, any memories of engagement on East Asia and China during this time?
Faryar Shirzad: My role was to lead international economics at the NSC, and I was also the sherpa for the G-8, at the time, as well as the APEC summits and a number of other international economic summits. So I had the chance to spend a lot of time with the president in his engagements in a broad range of regions, and with a lot of different countries. And it's interesting, and I think I've understood this only in hindsight, the degree to which I don't think there was another bilateral relationship in which the president had as good a feel for the full dimensions of than the one he did in the U.S.-China relations. The reason I say that is that I came into the administration from a fair amount of time on the Senate Finance Committee staff.
It was in May of 2000, the Congress, Democrats, Republicans, both houses and the Clinton administration passed the China Normal Trade Relations Bill, which was a prerequisite for China's accession to the WTO. That was probably the strongest political statement the U.S. political system had rendered on the trajectory of U.S.-China policy. So taking an area of legislation, essentially turning it as an affirmation of commitment to China's integration to the global rules-based trading system, into the international economic order. President Bush came into office at a period in which there was a very strong sense of the potential of what the relationship could have. The positive potential economically, commercially, trade-wise. Then stemming from that, people perceived a lot of other benefits.
I spent a lot of time where China came up with the president and his bilateral engagements with other countries. With Japan, Korea, India, Southeast Asia, but Europe as well, and other parts of the world where the full dimensions of the U.S.-China strategic responsibility I think the president had, in terms of managing that relationship, played itself out.
It always struck me because, particularly coming in as the economics guy, there was a tendency I think I probably had to overcalibrate on the economic issues, which at the moment there were problems but there was a huge focus on the opportunities. But to see how for every meeting where there was an opportunity to raise a commercial thing, [President Bush] would balance it with an issue regarding Tibet, an issue regarding religious freedom, political freedom, Taiwan, the criticality of maintaining U.S.-Japan and [U.S.-] Korea alliances to maintain the U.S. presence in the region. The strengthening of APEC in a way that our presence in the region remained firm.
It struck me how persistent the discipline and the breadth of his orientation was to the China question. And he was not caught up in the euphoria of the economic issues in the way that a lot of other people were. I think with the test of time, it demonstrates that there was a much more of a strategic, historically durable, perspective that he had.
Eleanor M. Albert: Great. I think that helps us transition well to talking about China policy. I want to start with Dennis and have you unpack a little bit of what the general U.S. security assessment was of China at the beginning of the administration, and what were the key pillars of U.S. China policy that were put in place and why were these pillars valued in the way that they were?
Dennis Wilder: I think we have to put ourselves 20 years back, to a very different time and a very different place. China, the changes in the last 20 years, particularly in the security arena, are just night and day. So what was our assessment? I did those assessments in 2000 because I was chief of China analysis at the CIA at the time.
China was a rising economic power, and people were very enamored of that. It was amazing the changes they were making to the economy. But the military was another story. The military was called the fourth of the four modernizations. The leadership really hadn't focused yet on creating a very dynamic, powerful armed forces with power projection capabilities.
What we saw on the ground was a huge land army of 3.9 million, designed to defend these very long borders they had with Russia, with India, Vietnam. They had unsettled borders, and that was the focus of the military. It’s bizarre to talk about, but they had only 18 ICBMs capable of reaching the United States. That was the full extent of the danger to the United States, whereas we had thousands of missiles capable of striking China. They had one ballistic missile submarine capable of firing missiles. But frankly, we never thought that submarine ever had a missile on board. It never went out to sea. No aircraft carriers and what we called it was a brown water navy, whereas a blue water navy means you can project power a long distance from your coast. All they could do was project power very close to the Chinese coastline.
Our biggest concern was the beginnings of the buildup we now have opposite Taiwan, and that was using short range ballistic missiles. What they were focused on at that point was lifting the people of China out of poverty. Half of the Chinese people were still below the poverty line, and so the security situation for China and the United States was one of potential problem, but not one of any immediate dangers like we have today related to the South China Sea, Taiwan, East China Sea, and its relationship with the Russian military today.
In terms of what we did to implement our key pillars of strategy toward China… First of all, we were very focused on our partners in East Asia, our allies, reinforcing the role of the U.S. as the dominant Pacific power. We could see that China would be a growing problem. North Korea was already a growing problem, and so we worked hard to build those relationships.
Secondly, we wanted to shape Chinese behavior in a way that it would become a responsible player in East Asia and the world. Bob Zoellick used the term in a 2005 speech of wanting China to become a “responsible stakeholder” in the international system, and we were very keen on that.
And thirdly, though, we wanted to hedge against the emergence of a more aggressive China. Steve Hadley, and the president, and Condi Rice and others were quite prophetic in thinking about that question, because as we know, China has to some very real sense taken a different course in recent years. So, we weren't naive. We weren't so enamored with the China of reform and opening up. We knew that there was still an undercurrent in the Chinese system of the communist party, uncomfortable with what was going on, and that there could easily be a backlash within that system.
Eleanor M. Albert: I just want to follow quickly because when we had a brief conversation about this, you had talked about these C's that encapsulated the Bush administration's approach to China. And what were those?
Dennis Wilder: Constructive, candid, cooperative are the three I remember. I would focus on, "Candid," because that was kind of a code word that Bush used for saying, "I'm not going to let you off the hook. Yeah. We'll be cooperative and we will be constructive with China. We will try and find all those places where we can work together." But, "candid" meant "I don't trust the Communist Party of China. I don't like a lot of the internal policies, the repression."
Paul earlier alluded to the trip to Shanghai after 9/11, and the president was eager to do that because he was trying to get as many countries to sign on to the Global War on Terror as possible, and China could be a big player in that regard. So he wanted to see Jiang Zemin, and he wanted to emphasize that.
But during that meeting, I remember him saying to Jiang, and this was their first meeting with Bush as president, he said, “I will never meet with you, Mr. President, and not bring up human rights. I will never meet with you and not bring up religious freedom in China. These are my core values, and they’re not going to change.”
The other thing I'll just mention, every time he went to Beijing, we had to find a church for him to attend service. You can imagine how thrilled the Chinese Foreign Ministry was with the idea of an American president going to church. We always did it, the Chinese security services always went bonkers over it, but President Bush, and Laura Bush too, really wanted to make that statement every time they went.
Eleanor M. Albert: Those are incredible insights. I want to turn to the trade and economic side, so we'll bring Faryar back in. You talked a bit about the signaling from Congress, as well as the fact that China then joins the WTO. I'm curious how you would characterize the Bush administration's approach to trade and economics vis-à-vis China, either in line with the security approach, or in comparison to.
Faryar Shirzad: It was complimentary to the broader dimensions of the relationship. In a way, I thought you asked the question well, in the sense that you asked about trade and economics. I think in a way that the table was set on the trade agenda. We had the bilateral agreement that was the WTO accession agreement that China had to agree to as a part of joining the WTO. But there was a series of bilateral agreements that China entered into with the U.S. and other WTO members as conditions of accession. These included provisions like special safeguard mechanisms, and additional measures beyond traditional WTO commitments. So in an interesting way, the trade dimension was heavily set and was a catalyst for dramatic and important reforms inside of China, which at that point we all wondered whether [they] would have broader social and political liberalization implications.
The issue really on the table as an administration was policing compliance, ensuring the WTO met its commitments, and then using whatever levers that might have been available, whether they were anti-dumping, or enforcement provisions, or variety of types. So in a way that was a more straightforward issue. It was one in which the tenor of concern about the size of the bilateral deficit was increasing.
The less covered and much more interesting work was the economic pillar. The reason I distinguish that is that there was a lot of work a lot of us did, including with the [U.S.] Treasury, and the president took huge interest in this, that was built on recognizing that the WTO agreement was actually quite a limited agreement at the end of the day. It didn't reach deep and important fundamental parts of how the Chinese ordered their economy. It didn't reach every dimension of their subsidy practices, their currency management, and their broader economic model.
But there was an increasing cadence of work that we were doing and an agenda item that came up more and more in the discussions about trying to transition China towards a more domestic consumption-based economic model: moving from an export-led model to a domestic consumption-based model.
That was an important framework that the president used and those of us who worked for him at Treasury and in the White House and elsewhere, also used heavily in our bilateral dialogue with them, because it became a proxy by which to talk about their currency management practices, liberalizing their financial services sector, and allowing a range of changes that made them less oriented in producing underpriced export goods and trying to feed the domestic pressure that they had to create jobs, and find opportunities for the two million people that entered the workforce every month, and made them a much more mature economic model. And the financial services regulations were critical because they allowed there to be more effective allocation of capital in the economy and in the way that would shift investment away from export-led industries use to domestic consumption-based industries.
I say all of that because there's a lot of focus for people who don't dig deep enough in terms of what the U.S.-China economic and trade relationship was over the course of the Bush administration, particularly in those mid-years—pre-financial crisis—but they were heavily organized around this pushing the Chinese to adopt a more mature economic model that was more commensurate to the size and the global significance of their economy.
I’ll add one more thing, just as an anecdote. The level of dialogue between the U.S. and China was not particularly as strong as it could have been. There were leader meetings, but the Chinese typically did not allow the vice premiers to engage directly with members of our cabinet. And the military-to-military dialogue was limited as well, and that was a big agenda item. So there was a big effort to use the president, and his engagement, with the Chinese president, to try to bring that out more through these various bilateral dialogues, the JCCT (Joint Commission on Commerce and Trade), and the Strategic and Economic Dialogue, where we were trying to bring out the decision-makers on the Chinese side for discussion, because those decision-makers ultimately allowed us to get to the issues that we thought would address the trade frictions, the problems with the currency practices, and ultimately make their own economic management work better for them, which by extension would work better for us as well.
Eleanor M. Albert: Great. Paul, I want to offer you a chance to chime in.
Paul Haenle: Let me just say a couple things if I could. One, I think President Bush and the administration, the operating assumption was clearly that China offered both opportunities but also challenges. It was also understood that China's growing military and economic power also had the potential in the event that China evolved in certain ways to destabilize the region, and harm the interests of the United States and its allies. In fact, we have to keep in mind during the presidential campaign in 2000, it was presidential candidate George W. Bush that said China was more of a strategic competitor than a strategic partner.
For this reason, the administration pursued a strategy of engagement to try to shape China's rise. But that was clearly backed up by a very robust effort of balancing and hedging. The purpose of the engagement was to encourage China's participation in the rules-based international order to help it integrate into both the regional and the international political and economic architecture,
and encourage it to play a responsible, constructive role rather than to overturn the architecture that had been in place for decades. And many—not just the U.S., but many in China, and the international community at the time—had good reasons to expect that Beijing could continue along a path of economic reform and political liberalization. There were voices in China calling for that, including Deng Xiaoping, Zhu Rongji, and other leaders.
Now, I want to take on this narrative that perhaps the Bush administration was naive. I just want to take that on head on, this idea that the Bush administration was somehow naive in trying to engage with China, to try to build a constructive relationship, to try to cooperate with China, or to try to bring it into the international architecture. It was in our interest for the Bush administration to do that.
First of all, I think the Bush administration folks were clear-eyed, including the president, that the effort could very well fail. I think he understood, at the end of the day, the People's Republic of China is a Marxist-Leninist system, and the risk was always there. To prepare for that risk, the administration took the steps that Dennis described about strengthening our alliance relationships, and our presence in the region. Many now in the U.S., I think, believe that that risk has borne itself out, especially under the current Chinese leadership, and that the China we're seeing today is very different than the China that the Bush administration faced when it came into office.
But I think there's another good reason why it was worth trying. And you don't hear this argument as much, but if we had not tried in the Bush administration to bring China into the international system, if the Bush administration had moved immediately to thwart China's rise, or to try to build a more hostile approach to China, then the Bush administration would be criticized today for being the reason that China has become more aggressive abroad and more repressive at home. The Bush administration would take 100 percent of the blame for China becoming our adversary and an enemy in the international system. It would be similar to the arguments that you hear today about U.S. policy toward Russia, in that it was the U.S. and NATO expansion that drove Putin to invade Georgia and Ukraine through our efforts at NATO enlargement and missile defense.
So I think that engagement with China was, first of all, not really premised on the inevitability that China would converge with the political and economic systems of the West. Was there a hope that that would happen? Sure. But no one ever thought it was inevitable. I think the Bush administration took steps to hedge against the possibility that Chinese leaders would choose that different path. And as a result, upgraded security ties, economic ties, political ties with key partners and allies in the region, and many of the efforts to promote economic and security engagement with China and with countries in the region, that the Bush administration started, I would argue remain key elements of U.S. policy in the Indo-Pacific today.
Eleanor M. Albert: I want to talk a little bit about the transition, I want to start with Dennis, and see if you could lay out for us what went well? What were things that the Bush administration recognized as things that still needed to be done, and then take us from Obama through to Trump, and where are we today?
Dennis Wilder: First of all, I would encourage any listeners to go to the actual memo itself and look to evaluate how we did in terms of trying to carry out the agenda. But let me very briefly telegraph some of the things that worked and where we had our success.
First of all, on building the relationship with partners, I would just remind people that we were able to get an agreement with Japan for the first permanent home basing of a nuclear-powered carrier in Japan, which we still do. A very, very controversial decision for the Japanese people, but President Bush, with his relationship with the Japanese leaders, was able to get that done. We also created a very different relationship with Singapore and created a new agreement on forces in Singapore that gave the U.S. Navy much greater access to that very strategic port.
In trying to turn China into a responsible stakeholder, I think there are areas that I think this worked very well. One area was the six-party talks on North Korea. We actually had good success in getting the Chinese to use their leverage with the North Koreans to convince the North Koreans to come to the negotiating table, and we got some forward progress.
Unfortunately, the illness of the North Korean leader seemed to put a halt to that process in the Obama administration, but it wasn't because the Chinese backed out, or we backed out, or that the Chinese took a different direction. But because of the North Korean situation, it didn't pan out. We were hoping the six-party talks would turn into something very permanent and bring us to a place where the North Korean problem was far more manageable.
On hedging, we moved forward with the nuclear carrier to Japan. We also, and this was very important, moved our forward base troops in South Korea and Japan out of urban areas where they had become a problem frankly, into bases that were far more sustainable. And those bases are still where they are today. On Taiwan, I think people forget: President Bush approved $30 billion in arm sales to Taiwan, far and away the largest arm sales of any U.S. administration. So we were, again, being very careful to make sure that even if we were working with the Chinese, we also recognized that China could become a real danger to the status quo on the Taiwan Strait.
In terms of looking forward to today, I would just highlight a few things It is obvious that because of the changing China, the words cooperation and competition have been switched in order. So, we were competing with the Chinese in those days, but now it is a real competition, and cooperation is only taking place where we can, as opposed to being at the center of it.
On North Korea, for example, we have a lost opportunity. I would like to see the Biden administration try and engage the Chinese more on this issue. I think people have given up too soon on the Chinese on this issue. I still think it's within the Chinese interest to stabilize that situation.
The Biden administration really has done a superb job at following up on the whole issue of building alliances and partnerships to balance Chinese power. The AUKUS [Australia, United Kingdom, and United States] agreement, the rebuilding of the Quad [Australia, India, Japan and the United States], bringing India more into the picture. I give them very high marks, and I like to think we are the grandfather of that process.
The other big change today that we didn't talk about in the memo but is certainly front and center is the ideological struggle that is occurring between the United States and China. China today serves as a model for authoritarian regimes looking to achieve high economic growth, while maintaining their grip on power. China is also exporting the tools of the surveillance state in a way that is going to make many people around the world, their lives, less free. That is an area of big change, and one where the Biden administration is going to have to continually struggle with the Chinese.
One thing I would say though is, in all this talk of competition with China, the one thing I hope doesn't become a reality is an anti-Asian bias in the United States. I remember that President Bush after 9/11 was very careful to separate the Middle Eastern terrorist problem, and the War on Terrorism from Islam, and he would visit mosques in the United States and try and reinforce the point that our Muslim Americans were Americans, and he was not blaming them for what was going on. And I hope our politicians today can take a similar approach.
Eleanor M. Albert: On the economic front, Faryar, I wanted to see if there were things that the [Bush] administration got right or got wrong about the relationship with China. Of course, China has still been a massive global economic factor. Things have changed a bit since then in terms of economic security. They've certainly become front and center in talking about the U.S.-China relationship today. How did the trade and economic relationship with China evolve from the Bush administration to the Obama and Trump years? And are there lessons that could be applied today?
Faryar Shirzad: It's a very good question. I would say the reason why China right now is seen as such a threat is because there's rising economic strength and our dependence on them both to fund our deficit by buying bonds, buying treasuries, and because of critical components of our supply chain run through China. [These] are all domestic decisions that we’ve made over the course of the last several decades. In a funny way, the China challenge, economically, is heavily a domestic policy challenge that we didn't fully come to terms with until perhaps the Trump years, ironically, and carried on largely by the Biden administration.
I'll give you a couple of examples. One of the things that we did in the Bush administration was to negotiate the CAFTA agreement, the Central American Free Trade Agreement. This was with four or five Central American countries and the United States.
Part of the theory of the CAFTA agreement was that there were imports that were coming in from China that were priced out of being produced in the U.S. market that could have been made in our region so that it would buttress economies of countries that were in our region, critical for our regional security. But also, countries that would source significant inputs from us. So cotton, high-end fibers, components for manufactured goods…. That was a really important agreement that was as much of a part of the China strategy as it was a part of our Central America strategy.
It was a very hard agreement to get through Congress. We briefed it not only on trade and commercial terms, but we briefed the geopolitical implications of it extensively. A number of us spent a lot of time on the Hill talking in public and in classified briefings to provide important geopolitical context.
And I remember in the Bush administration there were a couple of cases under CFIUS, which is the Committee on Foreign Investment United States, which is a legislation that gives the president the authority to block foreign investments. Now, these were confidential, and they remained confidential, although there was widespread news coverage of a few of these. But you’ll see the use of CIFIUS to block foreign investments in strategic sectors. If you read the news reports, it was something that happened during the Bush administration more than it happened before. It happened even more towards the end of the Obama administration, than it did from the beginning. But there were also statutory changes that then led the Trump people to tighten up further in terms of protecting strategic sectors and strategic technologies. And then you also had reauthorization of the export control laws, additional restrictions around outbound investment, where U.S. technology was going.
My point being that there's a lot of things that are now accepted in terms of the criticality of protecting the supply chain, incubating and protecting American technology as a part of a national security strategy. Although those things were emerging during the time we were in office, and the president took some very difficult decisions in that direction. But the evolution of that understanding that we accept as a given in 2023 can be traced back fairly linearly from even the early days of the Bush administration, and then through the successive administrations that follow. I think that's an important thing to keep in mind in the sense that from an economic perspective, much of the China challenge was a domestic policy challenge on our part that it took us quite a while to as a country to fully step up to.
Eleanor M. Albert: That makes a lot of sense. Now, I want to turn to you, Paul, because you stayed on as China director into the beginning of the Obama administration. Through the transition period, was their continuity vis-à-vis China policy? And then, take us to today, what changed, not just within China, but also with respect to U.S. policy towards China in the subsequent administrations?
Paul Haenle: Great question. There was quite a bit of policy continuity between the Bush administration and the Obama administration. When the Obama foreign policy team, the Asian team in particular, approached us at the end of the Bush administration, they said, “Don’t tell anybody, but we actually think the Bush administration was quite successful in its approach to China and we want to build on the foundation of success that was achieved.” So, in asking me to stay on in that way, it was much more acceptable.
I think the Obama administration in many ways put policies in place that, at least in my view, expanded on the Bush administration's economic and security building blocks in the region. They put an even greater focus on Southeast Asia. We saw with the pivot to Asia as U.S. commitments in the Middle East lessened. The strategy to strengthen regional partnership and shore up key alliances I think built on efforts that the Bush administration had initiated. The main economic component, the Trans-Pacific Partnership, that also built on Bush administration efforts to develop rules and standards on trade. We had the redeployment of military assets to the Asia-Pacific. They were efforts that were initially championed by the Bush administration.
And they also found ways to cooperate with China. The biggest example of that is on climate change agreement between the U.S. and China, which culminated in the Paris Climate Accords. So those efforts built on the efforts by the Bush administration.
But at the same time, it was clear that while this was happening, Beijing was beginning to pursue simultaneously policies that were seen to be increasingly undermining U S. interests and those of our allies.
At the end of the Bush administration, policymakers began to reevaluate the efficacy of a U.S. policy toward China that was predicated on engagement. And I think that became especially apparent toward the end of the Obama administration, following China's failure to adhere to cybersecurity agreements, commitments not to militarize islands in the South China Sea, and the administration's inability to make progress on a range of economic and trade issues.
But clearly, since the Obama and Bush administrations left office, the challenges presented by China's rise have begun to outweigh the opportunities. And I think the Trump administration was correct in identifying some of the challenges that have emerged with China, especially on trade, and technology, and the security domain.
We have seen Western economic and political challenges coinciding with a period of rising Chinese ambition and nationalism. We have seen Xi Jinping centralizing the Chinese Communist Party control in a way not seen since, frankly, the time of Mao Zedong, inserting the role of the CCP in virtually every element of Chinese society. On the domestic front, China's grip on public discourse has tightened. They've ramped up assertive actions in the region. Foreign policy known previously as “biding your time and hiding your capabilities” has gone away.
I think the Trump administration did a good job of putting a spotlight on the challenges. But my own view is the prescriptions for dealing with many of those challenges were often shortsighted and ad hoc, and unfortunately marked a significant step away from the strategies that the Bush administration and Obama administration put in place. Backing away, for example, from a U.S. leadership role in international institutions. Backing out of the TPP, leaving the World Health Organization, things like that. Pressure on our allies like Japan and Korea and NATO, and the greater push for burden-sharing.
I think these actions marked a step away from traditional commitments that the U.S. made to strengthen the U.S. role in Asia and around the world, and to shape the environment in which China rose.
The Biden administration has gone back to many of the approaches that were adopted by the Bush and Obama administrations to deal with a much more aggressive China. It's made constructive efforts to revitalize U.S. alliances, a commitment to international institutions, AUKUS, the Indo-Pacific Economic Framework, advancing the Quad, which started in the Bush administration. And I think just to conclude, these actions speak to the continued importance of U.S. alliances and partnerships in Asia and around the world, which in the context of dealing with China are force multipliers.