US-China Relations Ep 9. 1990-2020: Ambivalence

[00:00:05]One clear lesson of history is that we must let time pass before we can fully understand the significance of events and historical points.

[00:00:16]Despite this, future historians will marvel at how the period around 1990 saw the remarkable coincidence of two major historical turning points.

[00:00:28]The lack of awareness of this remarkable coincidence may also explain why many American policy makers have reacted with bewilderment and confusion to the return of China to center stage in human history.

[00:00:44]The first historical point is one that many Westerners are aware of. It was the end of the Cold War.

[00:00:51]However, the end of the Cold War happened just as another equally significant historical event was taking place.

[00:01:00]The decision of China and India to wake up after 200 years of slumber.

[00:01:07]The US did not see this return of China also because it coincided with another major historical event, the crackdown on the Tiananmen demonstrators on June 4th, 1989.

[00:01:20]Hence, China was seen as a weak and broken country again, not as a rising power.

[00:01:26]So, after the Cold War ended, America could have easily abandoned China.

[00:01:32]Instead, the US continued engaging China over the next three decades, even though there were significant ups and downs in the relationship.

[00:01:43]The American public was genuinely horrified by the killings of demonstrators in Tiananmen.

[00:01:50]Hence, when the then President George H.

[00:01:53]W. Bush just tried to maintain good relations with Beijing.

[00:01:57]American public opinion disapproved of Bush's handling of China by a ratio of 5 to 1.

[00:02:04]In the American presidential election campaign in 1992, Bill Clinton said that he would not coddle the butchers of Beijing.

[00:02:14]Therefore, when Bill Clinton was elected in November 1992, it should have led to a downturn in US-China relations.

[00:02:21]Instead, the opposite happened.

[00:02:24]Indeed, barely a year after his election, on 20th November 1993, I personally saw Bill Clinton coddle President Jiang Zemin of China at the first APEC leaders meeting in Seattle.

[00:02:40]Bill Clinton deserves some credit for his pragmatic approach to China ties.

[00:02:46]Yet, an even more important role had been played by Deng Xiaoping, who was still the effective leader of China then.

[00:02:55]Even though he personally decided to crack down on the Tiananmen demonstrators in June 1989, Deng was shrewd enough to realize that it would have been a mistake to choose the then Premier Li Peng as the leader of China because he was known to be a hardliner.

[00:03:13]Instead, Deng chose the moderate reformer Jiang Zemin.

[00:03:19]Equally importantly, Deng was shrewd enough to make significant diplomatic concessions to get China out of isolation. So, for example, he agreed to allow Taiwan and Hong Kong to join as fellow economies in the APEC forum. This shrewd concession enabled the presidents of America and China to meet each year at the APEC leaders meetings.

[00:03:46]But despite these regular meetings, there were several crises in US-China relations in the 1990s.

[00:03:53]President Lee Teng-hui of Taiwan, who had secret aspirations to make Taiwan an independent country, successfully lobbied the US Senate to allow official visits to America by Taiwanese officials.

[00:04:07]In September 1994, the Clinton administration had assured China's government that President Lee would not be allowed into the country except for transit.

[00:04:17]Instead, President Lee was issued a visa.

[00:04:21]In response, China recalled its ambassador to Washington, D.C. and refused to accept the credentials of the American ambassador, James Sasser.

[00:04:31]In February 1996, China launched missiles across Taiwan Straits.

[00:04:36]Bill Clinton responded by sending two aircraft carrier battle groups, creating the first military confrontation between China and America since the famous Nixon-Mao reconciliation.

[00:04:49]Fortunately, relations improved in the rest of Bill Clinton's term with a successful summit in November 1997 between Clinton and Jiang leading to an announcement of a constructive strategic partnership between the two powers.

[00:05:06]Yet too, the American bombing of the Chinese embassy in Belgrade in May 1999 could have derailed US China relations.

[00:05:14]It didn't.

[00:05:15]The Chinese swallowed their humiliation.

[00:05:19]Relations could have also nose-dived after collision between a Chinese fighter jet and an American signals intelligence aircraft led to the landing of the American aircraft on Hainan on 1st April, 2001.

[00:05:33]It took weeks of negotiations to release the American crew and aircraft.

[00:05:40]But one major historical event intervened to save US China relations, the 9/11 attacks on the US in 2001, President George W. Bush and his administration turned their attention completely to invading Afghanistan in 2001 and Iraq in March 2003.

[00:06:02]The latter war was completely illegal and unnecessary.

[00:06:07]In theory, China opposed it.

[00:06:11]In practice, the Chinese were delighted.

[00:06:14]And as I document in my book, The Great Convergence, China even facilitated America's stay in Iraq.

[00:06:21]So, the angry and thoughtless American reaction to 9/11 and the careful long-term strategic approaches of the Chinese may explain why the decade of 2000 to 2010 proved to be critical in shifting the balance of power between America and China.

[00:06:41]In that decade, while America remained bogged down fighting unnecessary post-9/11 wars, which eventually cost them $5 trillion, China China quietly grew its economy.

[00:06:55]In 2000, the American economy in nominal market terms was 8.5 times larger than that of China.

[00:07:05]By 2010, it was only 2.5 times larger.

[00:07:09]By 2015, the relative difference shrank even more to 1.5 times.

[00:07:15]Hence, even though the American establishment woke up to the new reality that a novel superpower emerged after Trump was elected in November 2016, the real changes in the strategic equations between [music] US and China took place within 2000 and 2010.

[00:07:35]And here too, the global financial crisis of 2008-2009 hit America hard.

[00:07:41]At a time when America was still reeling, the US Treasury sent teams to request China not to stop buying US Treasury bills as it would have spooked the market even more.

[00:07:55]This had the unfortunate effect of making some Chinese officials arrogant.

[00:08:00]Indeed, there were clear signs that China had become more assertive after the 2008-2009 global financial crisis, becoming more assertive in places like the South China Sea.

[00:08:13]Future historians will record that in the period when Hu Jintao was in power and President Bush and President Obama were in power, relations drifted between US and China with no clear strategic directions.

[00:08:29]Two big events changed everything.

[00:08:32]The first was the election of President Xi Jinping in November 2012 as a strong and decisive leader, he brought new and clear strategic direction to China's foreign policies.

[00:08:47]The second was the election of Donald Trump who was in almost every respect the exact opposite of Xi Jinping.

[00:08:55]He was mercurial, erratic, unpredictable, and non-strategic.

[00:09:01]So, it was almost always inevitable that a geopolitical contest would break out between America and China as China became stronger and stronger in relative terms.

[00:09:14]Graham Allison has made a strong case for this in his book Destined for War.

[00:09:20]But, America could have chosen to launch this contest against China thoughtfully or thoughtlessly.

[00:09:28]Under President Trump, it chose the latter, indeed unwise option.

[00:09:34]Yet, virtually all of America supported Trump.

[00:09:38]The stage was therefore set for a major geopolitical contest between America and China by 2020.