By Xia Liping

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Necessity of and Routes to a New Type of Major-Country Relations

By Xia Liping

President of the Institute of Politics and International Relations Tongji University

It is a big question of global interest whether China and the United States can break the historical curse that “there must be conflict between a rising power and an established hegemon” and establish a new type of major- country relations featuring mutual respect and mutually beneficial cooperation. From the perspective of building a new type of major country relations, the article will take the the contest and cooperation between China and America in space as an example and discuss the concepts and routes on establishing such kind of relations.

I. Necessity of building a new type of major-country relations between China and the United States

It is pointed out in the report of the 18thNational Congress of the CPC that “China will improve and develop relations with developed countries, expand cooperation areas, properly handle differences and promote the long-term, steady and sound development of a new type of major-country relations.”1It was the first time that “a new type of major-country relations” had been written into an important Party document, which is of great significance for guiding China’s international strategy and diplomatic policies.

The core features of the new type of major- country relations can be summarized as cooperation, accommodation, mutual benefit and win-win cooperation. It has the following connotations: first, equality and mutual trust. It means adhering to the purposes and principles of the UN Charter, mutual respect, treating each other as equals, increasing mutual trust and sharing security. Second, accommodation and mutual learning. It means respecting the diversity of world cultures and development paths, respecting the right of people in different countries to choose their social systems and development path, and promoting progress of human civilization through mutual learning. Third, win-win cooperation. It advocates the awareness of a community of common destiny. It calls on countries to accommodate the legitimate concerns of other countries while pursuing national interests, to promote common development while pursuing development of their own country, and to establish a more balanced global development partnership to share rights and responsibilities and increase shared interests of mankind.

China is a rising power in the international system, while the United States is the dominant power. In history prior to the end of the Second World War, such countries often plunged into military conflicts and war. It is of global significance whether China and the United States can establish a new type of major-country relations and break this historical fatalism. It is highly necessary for China and the United States to have a new type of major-country relations:

1. China-U.S. cooperation brings tremendous opportunities for the two countries and the world.

Economic opportunities. The United States and China are the two largest economies in the world. They are the second largest trading partner for each other, with increasing interdependence and common economic interests. According to statistics of the U.S. Commerce Department, in 2012 bilateral trade volume between the United States and China reached US$536.23 billion, an increase of 6.5%, in which American export to China stood at US$110.59 billion, an increase of 6.4%; American import from China stood at US$425.64 billion, an increase of 6.6%. In addition to being the second largest trading partner for each other, China is also the third largest export destination and top source of import for the United States. Besides, the two countries are each other’s top source of FDI. By the end of 2012, American investment projects in China accumulated to 62,000 and China’s total use of actual American investment reached US$70 billion. China’s accumulated direct investment in the non-financial sector of the United States amounted to US$8.6 billion. Bilateral cooperation also steadily proceeds in a wide range of areas covering industry, agriculture, science and technology, finance and project contracting as well as new energy, energy saving and environmental protection, pharmaceuticals, smart power grid, and aviation. Besides, China is also the largest creditor country for the United States. By May 2013, China’s holding of U.S. treasury bonds reached a record high of US$1.3159 trillion.

China-U.S. economic and trade ties are win-win and have delivered tangible benefits for peoples of the two countries. In the 1980s, the American economy was stuck in “stagnation”, with economic growth stagnating and hovering inflation rates. The main reason was that the world had been divided into two camps and two markets between the West and the East after the end of World War II. By then, the Western market had saturated and the “four Asian tigers” were not capable of providing inexpensive quality goods for America in large quantities. Economic globalization and the development of the emerging market, which came after the end of the Cold War, expanded the export market of the United States by scores of times. Export of large quantities of inexpensive quality goods to America by emerging countries represented by the opening-up China also helped greatly lower inflation rates in America. In 1978 China’s GDP was US$216.46 billion, which increased to US$8.36267 trillion, an increase of 38.6 times. In 1978 America’s GDP was US$2294.7 billion, which went up to US$15.653 trillion, an increase of 6.6 times. However, absolute increase of American GDP was US$ 13.358 trillion, US$6.21 trillion more than the increase of China GDP.

The development of trade ties between China and the United States has brought tangible benefits to the world as well. In 1978 global GDP was less than US$10 trillion, which went up to US$71.7 trillion in 2012. The United States is the most powerful economy in the world with great capability in scientific and technological innovation. China has gradually become an engine for world economic growth since reform and opening up. China and the United States are complementary in the economic area. The growth of trade ties between the two countries has boosted global trade and productivity.

Security opportunities. Both China and the United States are permanent members of the UN Security Council and share important responsibilities for peace, security, stability and development of the world. Both countries face many security challenges and have many common or parallel interests on many security issues. Common security challenges and security issues of shared interests between the two countries fall into three levels:

First, global level. Both countries face the challenges of global issues such as global warming, terrorism, the proliferation of weapons of mass destruction, environmental pollution, drug trafficking, cross-border crimes, pirating, poverty and HIV/AIDS. Neither of them can solve these problems alone. Only through cooperation can they deal with these challenges.

Second, regional level. China and the United States have common interests in regional issues like the North Korean nuclear issue and the Iranian nuclear issue, and in safeguarding regional security and stability. Although they have differences on how these issues should be solved, only through full coordination and close consultation can they manage these problems and push parties concerned to go along a path that can lead to final solutions.

Third, bilateral level. China and the United States have some bilateral security issues. Some bilateral issues are reflections of global or regional issues. For instance, cyber security is both a bilateral issue and a global issue. Solving these issues not only conforms to the interests of China and the United States but also that of the international community.

China and the United States have the responsibility to participate in global governance on multiple levels to work with the international community to explore solutions to common problems facing mankind. As long as the two countries enhance communication, coordination and cooperation, they will make contributions to solving problems at all of the above-mentioned levels, thus creating and making good of opportunities for security and development of the world.

2. China-U.S. confrontation will bring great harm to the two countries and the world at large.

Confrontation between the two countries will cause major changes in the strategic pattern of the Asia- Pacific region and the world. Many countries will face a strategic dilemma: how to deal with the relationship with economically close to China and security ally with the United States. This will have serious negative impact on peace and development in the Asia-Pacific region.

Both China and the United States are nuclear countries. Although China’s nuclear arsenal is much smaller than that of the United States, it has a certain level of nuclear retaliation capabilities. If China and the United States had military conflict over the issue of Taiwan, it would have the possibility of escalating to a nuclear war. There can be no winner in a nuclear war, which could wreak havoc on not only China and the United States but also the whole world. China is firm in safeguarding its maritime and land sovereignty. If certain U.S. allies wish to rely on American power to adopt assertive and provocative policies in maritime territorial disputes with China, it could also cause military conflicts. If the United States chooses to intervene, it might also lead to military conflicts with China.

China-U.S. confrontation could also have disastrous impact on bilateral economic and trade relations. China is the largest creditor country for the United States. Hostility in bilateral relations could cause China to sell out U.S. treasury bonds, thus causing huge losses for finance and economy of the two countries.

3. Only by establishing a new type of major-country relations can China and the U.S. conform to the trends of world history.

The world today has gone through tremendous changes compared with the world before the Second World War and in the era of the Cold War. Rapid development of economic globalization has made countries so interdependent that they will thrive or die together. At the same time, common challenges facing mankind have been on the rise. Problems like global warming, environmental pollution, population explosion or the scarcity of water resources can threaten survival of mankind.

Under these circumstances, countries have to rely on each other like passengers on the same boat to properly handle serious challenges. As the largest developing country and the largest developed country in the word, China and the United States have to conform to historical trends, play their roles as responsible powers, abandon the Cold War mentality and establish a new type of major-country relations featuring mutual respect, mutual benefit and win-win cooperation.

II. Major routes to a new type of major- country relations between China and the U.S.

1. It should be built on the foundation of a new type of strategic stability.

The framework of strategic stability among big powers is the foundation for global strategic stability, which comprises three elements: (1) Major powers have established a stable relationship based on the basic balance of power and interests as well as concessions; (2) Due to their respective interests or common interests, they all wish to maintain this kind of relations for a relatively long period of time. There is no adequate stimulus to cause them to change it by force; (3) The strategic stability is institutionalized into a framework that can be accepted by all parties, which includes binding codes of conduct, international agreements or treaties.2

To build a new type of major-country relations between China and America, they have to, first and foremost, realize and maintain strategic stability, for strategic stability is the solid foundation for the new type of relations without which the two countries will not have mutual respect or mutual benefit. The relations of strategic stability between China and the United States should be of a new kind, different from the strategic stability between the United States and the Soviet Union during the Cold War. Its main features include:

Stability of sound interations. Strategic stability between China and the United States is dynamic instead of static. As rising and established powers in the international system, China and the United States are seeing the balance of power in constant changes. The two countries must strive for dynamic stability, which is built on the foundation of sound interactions. During the Cold War, strategic stability between the United States and the Soviet Union was based on vicious interactions, namely, “mutuall assured destruction” as a result of nuclear arms race. China-U.S. relations should not repeat this old path of arms race in a “security dillema”. Both China and the United States are nuclear countries. War is in the interests of neither side. Besides, although military power is still important in international politics, its role in China-U.S. relations has been reduced. China and the United States have to realize sound interactions in the area of security, i.e., not regarding each other as enemies. Instead, trying their best to prevent relations from getting confrontational and make continuous efforts to send goodwill signals and give goodwill response in the area of security.

Comprehensive security. Strategic stability between China and the United States is comprehensive instead of being isolated. During the Cold War, strategic stability between the United States and the Soviet Union was realized through “balance of terror” ensured by strategic nuclear weapons. However, in China-U.S. relations, nuclear weapon is only a peripheral factor. In building strategic stability between China and the United States, nuclear weapon is an important factor but not all. Another important factor is the economy. In recent years, economic and trade relations between the two countries have seen great development, which has brought huge economic benefits for the two countries. Economic interdependence has become a ballast stone for stable China-US relations. Although there are many challenges and problems in bilateral economic and trade ties, no country can do without the other. Both are trying to solve differences and problems through negotiations. China does not want to see the American economy mired in crisis and the United States does not want to see the Chinese economy stagnating. If the two countries cut their economic ties completely, both would suffer immeasurable losses, despite the fact that the losses on the American side might be less than China’s. China is the largest creditor country of the United States. Chinese purchase of U.S. treasury bonds accounted for about 8.1% of total American GDP in 2012. If China sold out American bonds, it could deal a heavy blow to the U.S. financial sector. America may also use Chinese treasury bonds as strategic collateral. Other factors affecting strategic stability between China and the United States include: missile defense system, cyber weapons, weapons in space, fast-speed conventional assault weapons.

Asymmetric stability. Strategic stability between China and the United States is asymmetric, because their powers are not on the same par. In terms of nuclear weapons, America has the largest nuclear arsenal in the world and has not given up the policy of first strike. China’s nuclear arsenal is small, but it also has a certain degree of nuclear retaliation capabilities. The strategic stability in nuclear weapons is asymmetric, but it can be maintained as long as the United States does not try to take the initiative to use nuclear weapons, to strengthen the missile defense system or to deploy fast-speed conventional assault weapons to break the asymmetric equilibrium.

In the economic sector, in 2012, China’s GDP was about half of American GDP, so economic interdependence of the two countries is not symmetric either. This kind of asymmetric interdependence can be highly sensitive. The American economy is highly open. The Chinese economy is extremely open. The total volume of trade and services accounts for around 75% of China’s GDP.3Given this, as one of the largest trading partners for each other, a minor change in the economic situation or policy of one party can lead to fast and costly changes in the other. This asymmetric interdependence is fragile and durable at the same time. Because of differences in ideology and political system, it is extremely difficult to establish strong relations between China and the United States. However, China-U.S. relations have moved forward despite ups and downs. It shows that bilateral relations also have something durable. This asymmetric interdependence is also dual in nature, reflected in the fact that the two countries have both cooperation and competition, both dialogue and confrontation, both unity and disagreement, yet they have never completely broken off. The reason is that the two countries have both extensive and major common interests but also different strategic needs and security and economic interests. Judging from the big trend, strategic stability between China and the United States will gradually get more symmetric.

Crisis stability. China and the United States are trying to build a new type of major-country relations, but they lack strategic mutual trust. There is the possibility that the two countries might be caught in a crisis or military conflict on the issue of Taiwan. Furthermore, the U.S. strategy of the pivot to Asia has sent wrong signals to its Asian allies. Some of them believe that if they have military conflicts with China due to territorial or maritime disputes, the United States will be involved militarily. This causes the countries in question to adopt increasingly assertive positions in territorial and maritime disputes with China, thus increasing the risk of crisis between China and America. Therefore, China and the United States have to ensure the existence of channels for communication in the event of crisis so as to prevent crisis from escalating into a military conflict and even translate crisis into opportunities to promote development of bilateral relations.

Strategic constraint. Strategic constraint includes mutual deterrence, however, does not encourage enhancing deterrence. It places premium on dialogue and agreement to avoid misjudgmet, allay fears, antagnism, mistrust and other negative elements. To exercise strategic constraint, China and the United States should, first of all never take the initiative to use nuclear weapons; second, never take the initiative to attack each other’s assets in space; and third, never take the initiative to launch cyberattacks on the other. On this basis, the two countries should restart exchanges and cooperation in space and gradually set up a framework for strategic stability and cooperation in space to be an important part of the new type of relations between the two countries.

2. The two countries should abandon the Cold War mentality and build a sound atmosphere and habit of mutual respect, equality and mutual accommodation, as well as mutual trust.

To build a new type of relations, China and the United States must abandon the Cold War mentality believing in a zero-sum game and using force. They must regard bilateral relations from a strategic height and long-term perspective, believe that “the Pacific is big enough to accommodate both China and the United States”, accept a new security concept featuring mutual trust, mutual benefit, equality and coordination, and seek comprehensive security, common security and cooperative security.

It is very important to have a positive atmosphere filled with positive energy, which will promote long-term and steady development of bilateral relations and contribute to the building of a new type of major country relations. But this is not enough. The two sides will have to build the habit of mutual respect, treating each other as equals, mutual accommodation and mutual trust. Mutual respect means they should respect each other’s territorial integrity, sovereignty, and core national interests. Treating each other as equals and mutual accommodation means that the two countries should accommodate each other on the basis of equality. Mutual trust means that the two sides should try to reduce the deficit of mutual trust and increasingly accumulate strategic mutual trust.

3. The two countries should build full-fledged mechanisms and platforms for consultation and cooperation.

By the 5th China-U.S. Strategic and Economic Dialogue in July 2013, the two governments had set up over 90 mechanisms for dialogue and consultation, covering a wide range of areas including strategic security, anti-terrorism, military, cyber space, human rights, law, non-proliferation, regional affairs, climate, ecology, energy, oceanic affairs, health, environment, agriculture, and science and technology. The dialogues and consultations have been conducted at various levels, such as leadership level, vice-ministerial level, and expert level, etc. In addition to track 1 dialogues, there are also other forms like track 1.5 dialogues and track 2 dialogues. All these have come into being thanks to joint efforts, which have played an important role in increasing mutual trust and cooperation between the two countries and in laying a sound foundation for the institutional framework of a new type of relations between the two countries. However, compared with the wide-ranging areas of our in-depth exchanges, and with the major obligations and important roles of the two countries in the Asia-Pacific region and in the world, these mechanisms are far from enough. China and the United States must strengthen existing mechanisms, and create new mechanisms for consultation and cooperation. The two countries should work through these mechanisms to reduce misunderstanding and misjudgment to a minimum level, increase the width, depth and efficiency of bilateral cooperation and gradually build full-fledged and effective institutional framework for the new type of relations between China and the United States.

Notes:

1.“Firmly March on the Path of Socialism with Chinese Characteristics and Strive to Complete the Building of a Moderately Prosperous Society in all Respects”, report by Hu Jintao on behalf of the 17thCPC Central Committee to the 18thNational Congress of the CPC, November 8th, 2012. http://wenku.baidu.com/view/058be745a8956bec0975e37f.html

2.Xia Liping: “On Building Framework of Strategic Stability between Major Countries in the New Century”,, Issue 2 of 2003.

3.China and World Economy: From T Shirt to National Bonds,, July 29, 2010, p8.