[NSP Report 66] The Transformation of the International Order and the US-China Relationship in an Era of Strategic Competition: Focusing on China's Strategic Stance and Policies

Senior Researcher and Head of Regional Studies Team at the Institute for National Security Strategy (INSS). Earned a Ph.D. in Chinese Politics from Fudan University, Shanghai. Previously served as a Visiting Researcher at the Institute for Advanced Studies on Asia, University of Tokyo, and a Visiting Fellow at the Institute for International Affairs, Seoul National University, and a Taiwan Fellow invited by the Ministry of Foreign Affairs of Taiwan. His primary research areas are China's foreign relations and East Asian security. He is currently serving as a Research Director for the Korean Association of International Politics and President of the Chinese Foreign Affairs and Security Studies Association. Recent publications include "The Emergence of the Xi Jinping Leadership and China's Foreign Policy: Focusing on Aspects of 'Continuity' and 'Change'," "South Korea-China Security Cooperation: Focusing on the North Korean Opening/Reform and Contingencies," and "China's Energy Security Policy and Prospects for Sino-US Relations."

I. Introduction

In the early 1970s, when normalization of relations between the United States and China took place, China was by no means a target of strategic competition for the United States. It was merely one of the selective targets the US had to engage with to counter Soviet expansion in East Asia, essentially serving as a buffer against Soviet influence (Kissinger 2012, 270-272). Within the US-led world order and East Asian architecture, China was merely a means to fulfill certain needs. However, in the 21st century, China has emerged as a nation competing with the US for global hegemony, replacing the defunct Soviet Union. While the US-Soviet relationship in the 20th century was characterized by intense strategic competition, the 21st-century US-China relationship exhibits a mix of competition and cooperation, conflict and compromise. Furthermore, the US and China are acting as the most crucial and influential actors in shaping a new world order and East Asian architecture.

The burden of strategic competition between the US and China in the 21st century appears to be felt more acutely by China, which is in the position of the challenger. This is because, traditionally, established hegemonic powers have responded to the rise of new powers through various means such as preventive wars, containment, and engagement strategies to thwart or slow down their ascent. Conversely, the rising China faces the challenge of overcoming various traditional arguments, such as the 'inevitability of conflict' and 'revisionism' posited by power transition theory or offensive realism, while simultaneously realizing its 'peaceful development' agenda. In other words, China must break through the direct and indirect containment and checks by the US, while also alleviating the 'China threat' perception among neighboring countries, in order to expand its own space for survival and interests.

Since the 21st century, when China's rise became an established fact both domestically and internationally, China has begun to emphasize "peaceful development" (和平發展) and a "harmonious world" (和諧世界). This signifies that China's rise will not pose a threat to the existing international system or neighboring countries and that the future international society pursued by China aims for a harmonious world (State Council Information Office of the People's Republic of China 2011). These assertions and strategies by China are a continuation and development of Deng Xiaoping's ideology, which emphasized 'peace' and 'development' as the most crucial issues after the end of the Cold War, advocating for "hiding one's strength and biding one's time" (韜光養晦) and "making a difference" (有所作爲).

Xi Jinping, the current top leader of China, emphasizes the "Chinese Dream" (中國夢) and the "great rejuvenation of the Chinese nation" (中華民族的復興) in the 21st century. He also promotes "a new model of major-country relations" (新型大國關係) as a keyword in foreign relations, particularly emphasizing the promotion of mutual understanding and strategic trust in US-China relations. However, the US remains skeptical of China's strategic intentions and has recently attempted a "rebalancing" policy to strengthen its engagement in the Asia-Pacific region. The hegemonic competition between the US and China, the two central pillars of global politics, the Group of Two (G2), on the stage of the Asia-Pacific could potentially shake the landscape of East Asian politics, diplomacy, and security. Therefore, what kind of foreign strategy and objectives is China establishing to navigate the transformation of the international order and the era of US-China strategic competition stemming from its rise? Furthermore, what strategic vision does China hold for building a new East Asian order, as well as for its relations with the US? This article aims to examine the content of China's foreign strategy during this historical transition towards a bipolar US-China system beyond the Cold War era, and based on this, to forecast the emerging new architecture in East Asia and explore policy implications and response directions for South Korea.

II. The Basic Structure and Nature of US-China Relations in the 21st Century

The structure and nature of US-China relations in the 21st century can be described in various ways. However, the most fitting term to describe contemporary US-China relations is likely 'cooperation amid struggle.' For over 40 years since the normalization of relations in 1972, the US-China relationship has not deviated from this pattern of 'cooperation amid struggle.' While many experts describe the US-China relationship as one where 'conflict and cooperation coexist,' strictly speaking, it is more accurate to view it as 'conflictual cooperation,' where cooperation is pursued based on selective needs within a fundamental structure of conflict. Moreover, as China's national power rapidly increases today, the competitive structure in US-China relations is intensifying globally, including in East Asia, inevitably leading to more frequent manifestations of conflict between the two countries across specific issues and domains. Nevertheless, the reason both the US and China emphasize and actually pursue cooperation is their unwillingness to allow amplified confrontation and friction from conflict to undermine mutual interests and destabilize the world order.

Secondly, the structure and nature of contemporary US-China relations can be described as 'cooperation amid strategic mistrust.' This is because, despite the broad range of cooperation between the US and China, it fundamentally occurs within a context of underlying strategic mistrust, driven by practical necessities. Fundamentally, the US is concerned about China's medium-to-long-term strategic intentions and the potential challenge to its national interests, while China suspects that the US is attempting to contain or hinder its rise and undermine its political system (Lieberthal and Wang 2012). For instance, the US claims its rebalancing policy toward the Asia-Pacific region contributes to regional stability, expands its constructive role, and protects its national interests. However, China views this as part of a strategy to check and contain it, believing it will only lead to regional instability (Yang Jiemian, 2013, 18; Kim Chan-young and Dai Wei-lai, 2012, 19-23; Wang Yi-wei, 2012, 66-72). Such a US-China relationship can only be perceived as a 'fragile relationship,' as argued by Harry Harding, or a situation of 'same bed, different dreams,' as described by David Lampton (Harding 1992; Lampton 2002).

In the 20th century, US-China relations were characterized by the US adopting an offensive and pressuring stance towards China, based on its unilateral power advantage. However, unlike the 20th century, the narrowing gap in comprehensive national power between the two countries, evident in the 21st century, acts as a factor that significantly complicates their relationship. China's economy became the world's second largest after the US in 2010, and its defense spending has also been the second highest globally since 2009. Furthermore, as of the end of 2012, China held the world's largest foreign exchange reserves at $3.3 trillion, with over $1 trillion invested in US Treasury bonds, making it the largest holder of US debt. China effectively holds a key lever that can influence US economic power. As its national strength grows, China demands respect and equal treatment from the US, advocating for the 'democratization of the international order' and 'new major-country relations'.

[Table 1] Comparison of National Power Indicators between China and the US (2012)

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Source: World Bank, United States Census Bureau, CIA’s the World Factbook, IMF.

Of course, China's rise presents both a threat and an opportunity for the United States. The US seeks to reduce the burden and cost it has historically borne alone in resolving international issues by cooperating with China, a rising great power, and sharing joint responsibility for various international challenges. The US expectation for China to act as a 'responsible stakeholder' reflects this intention. Indeed, from the US perspective, there is a growing number of areas where cooperation with China, now a 'G2' in the era of globalization, is essential. The US finds it difficult to resolve major global issues such as the aftermath of the global financial crisis, the North Korean nuclear issue, and climate change and environmental problems without China's cooperation. This is why President Obama stated in his opening remarks at the first U.S.-China Strategic Economic Dialogue (S&ED) on July 27, 2009, that 'the US-China relationship is more important than any other bilateral relationship in shaping the 21st century.' At the time, then-Secretary of State Hillary Clinton and then-Treasury Secretary Timothy Geithner asserted that 'there are few global issues that the United States or China can solve alone, but there is nothing that cannot be solved if the United States and China work together' (Clinton and Geithner 2009).

However, the increase in China's comprehensive national power and the corresponding expansion of its responsibilities and roles are also perceived as increasing China's influence and amplifying its voice on major international issues, leading to perceptions that China is challenging the US-led international order. This is because as China's comprehensive national power grows, the power competition between the US and China inevitably intensifies, and the scope of issues leading to friction and confrontation between them also expands. Although not openly stated, both the US and China possess strategic objectives that threaten the fundamental interests of the other. The US, while adopting a peaceful and gradual approach, ultimately believes that China should evolve towards embracing Western-style liberal democracy. Conversely, the Chinese leadership has no intention of fundamentally altering its Communist Party-led system and views the US's demands for systemic change as the most serious external threat China faces. Therefore, China seeks to contain US military power and diplomatic influence in the Western Pacific and ultimately aims to become the dominant power in East Asia, replacing the US.

Fortunately, despite fundamental differences in governing ideologies and political systems, and despite the structural geopolitical confrontation, both the US and China are making efforts to avoid direct conflict. China prioritizes economic growth, thereby seeking to avoid direct confrontation with the US, as such a conflict would clearly have a negative impact on achieving its national goals of building a 'moderately prosperous society in all respects' and the 'great rejuvenation of the Chinese nation.' Consequently, since the early days of reform and opening up, China has emphasized the principle of 'enhancing understanding, expanding consensus, developing cooperation, and jointly creating the future' (增進了解, 擴大共識, 發展合作, 共創未來) in its relations with the US (Tao Jian 1998, 10). Today, under Xi Jinping, China advocates for a 'new model of major-country relations' in its dealings with the US. According to Foreign Minister Wang Yi, this concept aims to 'escape the historical pattern where the international order was reshaped through direct conflict, like war, between newly rising and established great powers, and instead, have the two major powers achieve peaceful global development through fair competition on the basis of cooperation' (Wang Yi 2013, 4).

Meanwhile, the US also emphasizes a future vision of mutual win-win through cooperation rather than conflict with China. For example, in a speech at the United States Institute of Peace on March 7, 2012, commemorating the 40th anniversary of President Nixon's visit to China, former Secretary of State Hillary Clinton described the relationship as a 'major-country relationship' that achieves the ideal balance between competition and cooperation, stating that 'China is not the Soviet Union, and the US and China should not return to the Cold War.' Clinton further emphasized, 'Historically, when a rising power challenges an established power, war has been inevitable, but we must and can write a new history where this does not lead to hostility or war' (Clinton March/7/2012). Although historical instances of conflict surrounding power transitions between established and rising powers are frequent, the strong public commitment by both the US and China to avoid mutual conflict offers hope that the transformation of the international order in the 21st century may unfold in a new way.

Nevertheless, we cannot deny that in reality, US-China relations are structurally and dynamically far more fragile and complex than US-South Korea or US-Japan relations. This is because China views securing dominance in the Asian region, particularly East Asia, as crucial for its future vision, and the US appears unwilling to cede its leadership in the Asia-Pacific region to China. The Obama administration's 'pivot to Asia' or rebalancing policy embodies this US intention. Conversely, China, based on its 'Anti-Access/Area-Denial' (A2/AD) strategy, seeks to maximally block or deny US intervention in Asia (Kim Sung-gul 2012, 42-67).

Furthermore, the conflict and cooperation between the US and China are issues that have profound ripple effects not only within their bilateral relationship but also regionally and globally. This implies that both the US and China are facing continuously increasing difficulty and importance in formulating strategies toward each other. Moreover, due to the complex interplay of various political, economic, and socio-cultural issues stemming from differences in social structures and characteristics, US-China relations are becoming increasingly difficult to navigate with simplistic strategies. In other words, dealing with each other is becoming progressively more challenging. For example, while the US strategy toward the Soviet Union during the Cold War focused primarily on security issues, the strategy toward China today must simultaneously consider a much wider range of issues, including military and security, economic matters, human rights, and democratization.

In conclusion, the current bilateral relationship between the US and China is characterized by a structure of conflict and competition, within which cooperation is pursued based on practical necessity, resulting in a mixture of conflict and cooperation. The US and China operate with strategic considerations stemming from 'same bed, different dreams' regarding the international order, and competition for dominance, particularly in the Asia-Pacific region centered on East Asia, is unavoidable. The crucial question is whether the US-China relationship in the 21st century can shift more towards cooperation than competition. To achieve this, as Henry Kissinger has pointed out, it is necessary for both the US and China to engage in mutual dialogue on common issues of conflict and cooperation, pursue shared interests, and share a global vision. Furthermore, a comprehensive framework for crisis management that transcends the bilateral level is needed to resolve regional conflicts or tensions (Kissinger 2011, 526-530). Only then can the US-China relationship move beyond a structure of conflict and confrontation and forge a new structure of co-evolution.... (to be continued)