Initiative for U.S.-China Dialogue on Global Issues

Living with a Trust Deficit

Major international relations theories predict the persistence of trust deficit.  Classic realist anarchy theory still holds water today. No government would punish the United States for waging an unjustifiable war against Iraq. Nor is China held accountable after the Hague Tribunal’s ruling on the South China Sea dispute. There is no soil for a seed of trust in the bilateral relations, given that the hegemon will invariably contain rising powers to maintain its dominance.

Neoliberal institutions promote cooperation, but gap of trust remains due to states’ selective use of institutions. The United States criticizes China for currency manipulation and illegal export subsidies. China, on the other hand, is perplexed by the U.S. double standard and reluctance to sign international agreements.

The difference in values and ideas of the two is too big for rapid reconstruction of interests, according to constructivists. China is alert to the United States’ “export of values”, as is seen in its education minister’s repeated vow to ban textbooks “promoting Western values”, whereas the United States disapproves China’s resistance to democratic transition.

The Danger of Deficit

The reason that the trust deficit should be overcome is two-fold: presence of strategic trust generates positive externalities for both countries; absence of trust takes a toll on the world peace and global governance.

Over the years, both sides have benefited from trust-based cooperation. China has achieved remarkable export-led growth that lifts its people out of poverty, while the United States has enjoyed the consumption of cheap goods and gains market access.

Yet the danger of strategic trust deficit looms large, not only hindering greater cooperation, but undermining the world peace and compromising the capability of the global governance regime. The failure of the United States to reassure China on the Syria issue renders the absence of coordinated international effort to counter ISIS. China’s inability to defuse the volatile situation in the Korean Peninsula eventually led South Korea to embrace THAAD to contain the threat from North Korea, which has harmed China-Korea relations despite cultural affinity and economic ties.

Building Trust in an Age of Uncertainty

China and the United States, for all their differences in values and interests, are  capable of building strategic trust in the realm of politics, economics, and diplomacy.

China and the United States should build trust incrementally by first strengthening political dialogue in regional issues, in which they expect each other to play a constructive role. On the North Korea nuclear issue, for instance, China and the United States have more common interests than conflicting ones, hence they are more likely to achieve desirable outcomes by elucidating each other’s long-term goals. Recent evidence supports the effectiveness of political dialogue, as China and the United States agreed to work together toward a “course correction” and denuclearization of the dKorean Peninsula.

Both sides should promote bilateral investment to reduce distrust in economics and trade. The two countries have solid trade ties, but the investment barriers are blocking greater success. China needs to continue its market reform to attract investment, and the United States should encourage infrastructure investment that can benefit local governments. By breaking down institutional and informational barriers, the two countries can move toward a bilateral investment treaty that will be mutually beneficial.

In addressing thorny diplomatic issues, both sides should maintain strategic ambiguity publicly to shun uncertainty. The intricacy of maintaining strategic ambiguity is crucial to the sound development of bilateral relations. Yet it becomes fragile during U.S. presidential transitions. China, on the other hand, is seen as increasingly assertive in territorial disputes, which causes apprehension of neighboring countries and growing U.S. concerns. Both sides need to be cautious about their remarks on diplomatic occasions and work to mitigate distrust.

Powder keg issues have become exceptionally volatile in an age of uncertainty, and will only be more so if China and the United States fail to build strategic trust. While a trust deficit is likely to persist, both countries shall collaborate to defuse the danger of it, by strengthening political dialogue, promoting bilateral investment, and maintaining strategic ambiguity in bilateral relations.

Yuqian Zhang is a master’s degree student of the Tsinghua-Johns Hopkins SAIS Dual Degree Program.