U.S.-China Relations in an Election Year

8/2/2019 U.S.-China Relations in an Election Year

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U.S.-China Relations in an Election Yea

Taking the Long View in a Season of Heated Rhetoric

Jacob Stokes and Nina Hachigian March 2012

www.americanprogressaction.o


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U.S.-China Relationsin an Election YearTaking the Long View in a Season of Heated Rhetoric

Jacob Stokes and Nina Hachigian March 2012


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Contents 1 Introduction and summary

6 Trade and market access

10 Currency

12 Chinese ownership of U.S. government debt

14 Chinese direct investment in the United States

16 Human rights

19 The United States enduring role in Asia

21 Chinese military modernization

24 Supporting U.S. allies in Asia

26 Taiwan

28 Cybersecurity

30 Conclusion

31 About the authors and acknowledgements

32 Endnotes


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1 Center or American Progress Action Fund | U.S.-China Reations in an Eection Year

Introduction and summary

Conservaives and progressives oday approach he challenge o China very di-

erenly. Many conservaives, including mos o he epublican candidaes or

he presidenial nominaion, are criiquing he Obama adminisraions policies

on Chinaa acic designed o chip away a Presiden Barack Obamas high poll

numbers on naional securiy issues and disrac rom congressional obsrucion-

ism on key seps o improve our economic compeiiveness a home.

Bu hey are no oering many sensible ideas. odays conservaive approacheson Chinawhich oo oen end up shorsighed, inconsisen, emoional, and

belligerenwill ail. Sraegies ha aim or shor-erm poliical poin scor-

ingor, even worse, calculaed eors o creae a new Cold War enemywill

undermine global securiy.

In conras, he Obama adminisraions approach is seady, clear-eyed, and

ocused on resuls. Te adminisraion has pushed back on China muliple

imesaking China o ask on unair rade, orming a unied ron o ge China

o back down rom aggressive acions in he Souh China Sea, and selling arms o

aiwan over urious proess rom Beijing. Presiden Obamas Asia sraegy, which

is deepening parnerships and engagemen in he region, is designed o ensure ha

as China grows i conribues o peace and sabiliy and ollows he rules o he

inernaional sysem. A he same ime he adminisraion does no le dierences

preven he Unied Saes rom working wih Beijing on imporan join chal-

lenges such as Norh Koreas nuclear program and clean energy.1

Tis progressive approach oers he bes acic or dealing wih China because or

he oreseeable uure China will be boh a rival and a parner. Our policymak-

ers have o play he long game, ensuring our sraegies or China make sense nojus during campaign seasons bu or his year, his decade, and beyond. Fosering

successul policies oward China requires a seady hand and a concered eor o

rerain rom overheaed irades and knee-jerk responses.


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Bu reexive belligerence oward China plays well on he conservaive campaign

rail. Already he elecion has seen he wo op candidaes or he epublican nomi-

naion ghing over who could be more conronaional oward China on Day 1,

and a conservaive candidae or he U.S. Senae using racially inged adverisemens

o soke ears abou Chinese ownership o U.S. deb. In TeWall Sree Journal, Mit

omney oered a plainly zero-sum view o he U.S.-China relaionship.2

China policy via shor-erm poliical poin scoring may help campaigns bu i does

no help he Unied Saes. In ac, a air and maure relaionship wih China will

serve U.S. ineress in creaing jobs and susainable economic growh. Seady U.S.-

China relaions will promoe sabiliy in he Asia-Pacic region and securiy or

he global commons. And i will enable boh naions o help address ransnaional

problems such as climae change, pandemic disease, energy securiy, and errorism.

For heir par he American people do no wan a needlessly anagonisic rela-

ionship wih China. In a poll conduced a he end o 2011, 7 ou o 10 respon-dens said srong relaions beween he Unied Saes and China are somewha

or very imporan.3 While Americans are righly concerned wih Chinese

economic policies, when asked o choose in a 2010 poll wheher o underake

riendly cooperaion and engagemen wih China raher han acively working

o limi he growh o Chinas power, more han wo-hirds o hose surveyed

hough ha he Unied Saes should pursue engagemen.4

Sill, Americans end o see China hrough he prism o hese hard economic imes.

A recen poll showed ha 53 percen o Americans hink China is he leading

economic power in he world oday, compared wih jus 33 percen who said hey

believed he Unied Saes holds ha spo.5 Te realiy: Chinas economy runs a dis-

an second o ha o he Unied Saes. China is no abou o eclipse or overake

he Unied Saes anyime soon.6 Chinas rise does no porend American decline.

Moreover, Chinas uure is no as cerain as i migh seem. China has is own

share o problemsenormous problems. China has a shocking, disasrous lack

o clean waer. I aces a poenially devasaing real-esae bubble. I has a uure

aging crisis has been called a demographic sunami.7 And hen heres Chinas

poliical sysem, which is britle and riddled wih corrupion.

Te Chinese people are demanding soluions o hese problemsdemands

ha are leading o ens o housands o local proess ha he governmen

works hard o keep rom coalescing. Ofcials have been brually suppressing

China policy via

short-term polit

point scoring m

help campaigns

it does not help

United States.


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challenges o heir auhoriyariss, lawyers, academics, and many ohers have

been argeed. Tese acions are plainly loahsome and he adminisraion has

repeaedly called Beijing ou on hem.

Te challenge or he Unied Saes is o press China o make responsible

choices ha conribue o sabiliy, prosperiy, peace, and human righs. Tismeans he way orward or he Unied Saes is o combine srong and orward-

looking bonds wih our Asian allies old and new wih a srong relaionship wih

China. Te Unied Saes should no seek o begin anoher Cold War or con-

ain China.8 Insead, he Unied Saes should welcome Chinas rise, while a

he same ime insising ha China adhere o inernaionally acceped rules and

norms o behavior a home and abroad.

Tis repor examines he 10 mos debaed challenges in he U.S.-China relaion-

ship in he 2012 presidenial and congressional campaign season, exploring

dierences beween progressive and conservaive approaches o China. Wedeail hese 10 issues in he pages ha ollow, bu briey, here is a summaion o

he op challenges and he dieren approaches advocaed by conservaives and

aken by progressives.

Ensuring fair trade. Te Obama adminisraions policy o vigorous enorce-

men and resuls-oriened dialogue beas conservaives reusal o inves in

American compeiiveness a home; empy, anagonisic rheoric oward China;

and highly inconsisen posiions on rade cases. Te Obama adminisraion has

announced a new rade-enorcemen uni and has brough more major rade

cases agains China han any o is predecessors.

Progress on currency. Te Obama adminisraions eors, on is own and wih

oher naions, o pressure China o deal wih is undervalued currency have

resuled in progress, hough more remains o be done. Te adminisraion is

keeping he pressure on. Te conservaive answer is boh needlessly anago-

nisic and ineecive.

China owning U.S. debt. China owning jus more han 8 percen o our ederal

deb is no leverage China can use wihou unaccepably harming is own ineress.Conservaive hyserics and earmongering abou his complex issue is misplaced.

Chinese direct investment. Chinese invesmen in our counry can be a major

source o capial and jobs going orward. We should allow proven naional


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securiy processes o weed ou hreas o our naion and avoid excessive

paranoia around Chinese purchases, les we miss invesmen-led growh

opporuniies. Conservaives should ake heed.

Championing human rights. Te Obama adminisraion has consisenly called

China ou on human righs, speaking privaely and publicly wih Chineseleaders, meeing wih he Dalai Lama wice, and giving our diplomas new

orums o engage ully wih heir Chinese counerpars and he Chinese peo-

ple o improve human righs and religious reedoms in China. Conservaives

only answer is even more orceul browbeaing o Chinese leadersemoion-

ally saisying, bu no an eecive acic o make real change.

America the Pacific power. Under he Obama adminisraion new rade par-

nerships, deense arrangemens, and serious connecions wih regional orga-

nizaions all suppor deeper U.S. engagemen in Asia. Exremis conservaive

rheoric claiming he adminisraion is no invesing adequaely in deense inAsia is nonsense.

Addressing Chinas military. Chinas miliary has grown rapidly in recen years,

albei rom a very low base. While some echnologies are worrisome, he

Unied Saes reains a huge advanage over China. Te Obama adminisraion

is responding o Chinas miliary buildup bu is no exaggeraing he hrea, in

conras o conservaive eors o use he China hrea o jusiy unsusain-

able increases in miliary spending.

Supporting regional allies.Asian naions coninue o urn o America o ensure

peace and securiy. Te Unied Saes is meeing ha need by srenghening rela-

ions wih our Pacic riends and allies. elaionships wih Japan, Souh Korea,

and Ausralia are rock-solid, and he Unied Saes joined wih regional players

o push back on Chinese belligerence. Conservaives ignore his rack record in

desperae atemps o ag he Obama adminisraion as abandoning our allies.

A friend to Taiwan. Te Obama adminisraion has sold unprecedenedly large

packages o arms o aiwan, including major gher upgrades, while also upping

oureach o he island in ways ha will no desabilize cross-Srai relaions.Conservaives are le complaining ha he curren adminisraion, like he Bush

adminisraion beore i, did no sell aiwan he mos advanced je ghers.

The Obama

administration

is responding to

Chinas military

buildup but is

not exaggeratin

the threat, in

contrast to

conservative ef

to use the Chin

threat to justiy

unsustainable

increases in mili

spending.


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Tackling cybersecurity. From he sar he Obama adminisraion has ideni-

ed cybersecuriy as an issue o grave concern and mouned a comprehensive

response. Conservaives who condemn he adminisraions response do no

undersand is scope; hey also oer litle in he way o new ideas or comba-

ing he hrea.

In he pages ha ollow, we will presen in more deail hese 10 challenges along-

side he response o he Obama adminisraion and he misplaced criicisms and

hosile rheoric o many conservaives.


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Trade and market access

China mus, in Presiden Obamas words, grow up and obey he inernaional

rules o he economic game. o his end he Obama adminisraion has brough

more major rade acions agains China han any o is predecessors.9

I is imperaive ha American businesses are able o compee on a level playing

eld in China and agains Chinese companies increasingly operaing around he

globe. China mus also bear is share o he responsibiliies ha come wih is

saus as a global economic power. o he degree ha China plays by he rulesand shoulders is burdens, he Unied Saes has a real sake in is growh. China

has he poenial o be an even larger marke or U.S. producs and services, a

job-creaing invesor in he Unied Saes and a seady engine o global economic

growh. A he same ime, as Chinas economy maures, he Unied Saes will have

o inves in is own compeiiveness. Our willingness o spend on educaion, inra-

srucure, and research a home links direcly wih our uure success overseas.

Unorunaely, many conservaives on he campaign rail are no addressing hese

issues. Te candidaes end o equae Chinese rade pracices wih currency,

when, in ac, he problems wih China go beyond he value o he yuan. Former

Gov. Mit omneys (-MA) insisence ha he would label China a currency

manipulaor on Day 1, which, as we discuss in he nex secion, is an anagonisic

bu ineecive proposal, does no address inellecual-propery proecion, marke

access or U.S. companies, or echnology ranser issues. While hose issues are

cied in a cursory ashion in campaign documens, i is unclear wha omneys or

any o he oher candidaes proposals are o couner hese pracices.10

Te irades abou Chinese rade pracices are cerainly no lacking on he

campaign railhe batle is no over ideas bu over whose rheoric is morebellicose. In a debae las Ocober, or example, epublican presidenial candi-

dae and ormer Sen. ick Sanorum (-PA) ried o bes Gov. omney in his

area. Aer omney suggesed he would label China a currency manipulaor,

Sanorum responded by saying, You know, Mit, I don wan o go o a rade


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war. I wan o bea China. I wan o go o war wih China and make America

he mos atracive place in he world o do business. 11

Meanwhile, omney, Sanorum, and mos o heir conservaive congressional col-

leagues have symied and opposed invesmens in clean energy research, ranspor-

aion inrasrucure, and educaion improvemens ha expers agree are neededo posiion U.S. workers and businesses o compee wih China in he uure.

In conras, he Obama adminisraion has pushed back rmly, consisenly, and

in concree ways in a variey o areas where China compees unairlyrom

subsidizing is domesic companies o prevening marke access o no enorcing

inellecual propery proecionswihou needlessly inaming ensions. Te

adminisraion has worked o ensure a level playing eld hrough a number o

venues, mos prominenly he U.S.-China Sraegic and Economic Dialogue, he

Commerce Deparmens Join Commission on Commerce and rade, and he

World rade Organizaion, or WO.12

Te Obama adminisraion has brough more major rade acions agains China

han any o is predecessors.13 Acions aken during he Obama adminisraion o

srenghen he U.S.-China rade relaionship and push back agains unair Chinese

rade pracices include:

Presiden Obamas pledge, in his 2012 Sae o Union address, o creae a new

enorcemen uni o invesigae unair rade pracices in counries like China.14

In February he presiden signed he execuive order o creae he agency, which

will open in less han 90 days and include employees rom he Deparmens o

Agriculure, Commerce, Homeland Securiy, Jusice, Sae, and reasury, as well

as U.S. inelligence agencies.15

Iniiaing ve WO dispues agains China: on wind power componens, indusrial

raw maerials, elecronic paymen services, cerain seel producs, and poulry.16

Winning a WO ruling brough by he European Union and he Unied Saes

agains Chinas expor conrols on raw maerials used o make seel and chemi-

cals, which will also provide leverage or ending quoas on rare earh minerals.17

Imposing duies o proec American manuacurers under U.S. rade-remedy

laws o comba a disrupive surge o Chinese ire impors ino our naion.

The Obama

administration

has brought mo

major trade acti

against China

than any o its

predecessors.


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Beginning an invesigaion, a he promping o indusry, ino possible unair

rade pracices by Chinese solar panel and wind-ower makers.18

Issuing 15 counervailing duy orders and 22 anidumping orders on 22 dier-

en producs impored rom China.19

Securing he li o a Chinese ban on poulry producs rom Idaho and Kenucky,

while urging promp acion o li our remaining sae-level bans.20

Winning signican commimens rom China o improve he proecion

o inellecual propery, curail he use o indigenous innovaion, level he

playing eld or privae enerprises, and open he marke or Chinese govern-

men procuremen hrough he Sraegic and Economic Dialogue and he Join

Commission on Commerce and rade processes.21

As Presiden Obama saed during his rip o he Asia-Pacic region lasNovember, Te botom line is, is ha he Unied Saes can be expeced o

sand by i heres no he kind reciprociy in our rade relaions and our eco-

nomic relaionships ha we need.22

Te sraegy behind hese rm acions agains Chinese abuses was explained

o Congress by Depuy U.S. rade epresenaive Demerios Maranis las

Ocober. He said he Obama adminisraion believes resuls-oriened dialogue

works hand in hand wih vigorous enorcemen.23 Tis sysemic, coheren, and

consisen approach is working.

Compare his o omneys curren sance. He is alking ough on China now, while

in his 2010 book,No Apology, he criicized acions by boh he Bush and Obama

adminisraions o hold China accounable or unair rade pracices. omney wroe:

Te Bush adminisraions decision o proec he U.S. seel indusry is a case

in poinI agree wih hose who have concluded i did more harm han good.

Presiden Obamas acion o deend American ire companies om oreign

compeiion may make good poliics by repaying unions or heir suppor o his

campaign, bu i is decidedly bad or he naion and our workers.24

Likewise, while omney insiss he would impose puniive measures agains

Chinese currency manipulaion, he has hired rade advisors who have consisenly

lobbied agains bills o do exacly ha.25 In 2007 ormer Bush adminisraion


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Commerce Secreary Carlos Guierrez, now head o omneys rade Policy

Advisory Group, signed a leter o Congress arguing agains a bill o label China

a currency manipulaor, saying such a law will no accomplish our shared goal o

persuading China o implemen economic reorms and move more quickly o a

marke-deermined exchange rae.26 Tis kind o inconsisen policy and overheaed

rheoric risk exacerbaing ensions wihou achieving any resuls.

In ac, he only deailed proposal omney has oered is one ha he adminisra-

ion has already pursuedo creae a high-sandards ree-rade area. Te admin-

israion is working wih regional allies o raise he bar o rade sandards in Asia.

Te Unied Saes breahed new lie ino he rans-Pacic Parnership, which

Asian naions ounded in 2005. Tis rading regime is designed o se high san-

dards or labor, environmenal, and legal rade pracices, sandards ha China will

have o mee i i wans o join. Te possible members o his rading agreemen

( Japan, Canada, and Mexico have expressed ineres in joining he nine naions

already engaged in alks) would produce 40 percen o world gross domesic prod-ucmore han he European Union.27


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Currency

Chinas undervalued currency coninues o give i an unair advanage in global

commerce. Presiden Obamas approach is seeing resuls while prominen conser-

vaive approaches are boh needlessly anagonisic and ineecive.

omney says he will label China a currency manipulaor on Day 1 o his adminisra-

ion.28 Bu he does no say wha he will do on Day 2. Declaring China a manipulaor

is a symbolically hosile gesure, coming as i would beore he will have ever me or

spoken o any Chinese leader. And ye wha his designaion requires is enering inoalks wih Beijing, made all he more difcul by he declaraion isel.

Tis is why ormer Uah governor and presidenial candidae Jon Hunsman,

who served as he Obama adminisraions rs ambassador o China, rejeced

omneys approach as wrongheaded, saying in a debae, Wha he [omney] is

calling or would lead o a rade war.29

No only is he approach needlessly anagonisic, i is also ineecive. Te las

hing Chinas leaders will do is invie criicism rom heir own naionalis base by

bowing o a hosile, unilaeral American demandeven hough a more appropri-

aely valued currency will bene he Chinese economy over he long run.

Te Obama adminisraion akes a dieren, more pragmaic approach o he issue,

and ha helps explain why, in ac, here has been some movemen on his issue. Te

value o he yuan has appreciaed 7.5 percen agains he dollar since Beijing loosened

conrols in June 2010. On a real, inaion-adjused basisChina has a much higher

rae o inaion han he Unied Saeshe renminbi has appreciaed nearly 12

percen since June 2010, and nearly 40 percen since China began currency reorm in

2005.30

Tose raes show progress, alhough much more remains o be done.

An eecive way o pressure China o appreciae is currency o beter reec marke

undamenals is o build an inernaional coaliion ha shares he same policy goals.

Te Obama adminisraion has careully assembled such a coaliion, which resuled


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in a srong saemen a he Group o 20 developing and developed naions meeing

las Ocober in Cannes, where he group agreed o accelerae a move oward marke-

driven exchange raes and menioned China or he rs ime in ha conex. 31

Te Chinese hemselves have acknowledged he need o bring heir currency

in line wih marke prices and increase domesic consumpion. Te 12h Five-Year Plan, released in March 2011, atemps o resrucure he Chinese economy

by encouraging domesic consumpion, developing he service secor, shiing

o higher value-added manuacuring, conserving energy, and cleaning up he

environmen.32 Bu, as happens in he Unied Saes, domesic ineres groups

mainly exporers and recalciran local governmensoen ry o block reorm

even when he naional governmen is rying o carry hem ou.33 Obama admin-

israion ofcials are engaging in requen discussions wih heir Chinese couner-

pars on he imporance o hese reorms or he Unied Saes and or China.


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Chinese ownership

of U.S. government debt

Some conservaives also earmonger over Chinese ownership o U.S. deb bu

his is leverage ha China canno use wihou harming isel signicanly. Te

Obama adminisraion undersands his dynamic and has no allowed bluser

over he size o Chinese holdings o preven i rom aking many acions ha he

Chinese have srongly proesed.

ep. Michele Bachmann (-MN), a ormer candidae or he epublican presi-

denial nominaion, argued ha cuting deense spending somehow increasedAmerican deb o China and helped und Chinese miliary modernizaion. When

we cu back on naional deense a rillion dollars, ep. Bachmann said, we are, in

eec, sending money over o China in he orm o ineres.34

Her economically disored commens buil on a similar campaign ad run by

Ciizens Agains Governmen Wase during he 2010 congressional elecions

showing a uure China ha has eclipsed America hrough deb.35 Already

in he 2012 cycle, ep. Pee Hoeksra (-MI) has run a similarly misinormed

and borderline racis adverisemen ha has sparked a backlash among Asian

American and civil righs groups.36

Convenional wisdom in Washingon holds ha America mus ollow he advice o

Gao Xiqing, presiden o he China Invesmen Corporaion, which is o be nice o

he counries ha lend you money.37 Bu China buys U.S. reasury bonds because

i has o manage he ow o greenbacks ino is own economy resuling rom Chinas

rade surplus wih he Unied Saes wihou sparking massive inaion.

Invesmens in U.S. reasuries represen poliical cauion as well because he

Chinese people are well aware ha Chinas sovereign wealh belongs o hem. Pasinvesmens ha suered losses, such as is 2007 invesmen in he privae equiy

rm Te Blacksone Group, were vocierously criicized in China.38 In shor,

China needs o purchase U.S. reasuries, which means he power in he relaion-

ship lies wih he Unied Saes. Also, alhough China is a major buyer o ne new


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deb, he counry only owns abou 8 percen o oal U.S. governmen deb.39 Te

majoriy o U.S. governmen debnearly 70 percenis owned by Americans.40

Moreover, he amoun o leverage China ges rom owning ha deb is very

limied or he simple reason ha any hrea posed by China deciding o rapidly

sell o is U.S. reasuries would send he price o he dollar plummeing, herebydiminishing signicanly he value o Chinese holdings. As Dan Drezner o us

Universiy poins ou: o paraphrase John Maynard Keynes, when he Unied

Saes owes China ens o billions, ha is Americas problem. When i owes ril-

lions, ha is Chinas problem. He concludes ha he uiliy o nancial saecra

is more circumscribed han curren ears sugges.41

Te Obama adminisraion undersands his dynamic and has no allowed bluser

over he size o Chinese holdings o preven i rom aking many acions ha he

Chinese have srongly proesed. Tese include meeing he Dalai Lama wice,

selling aiwan unprecedenedly large packages o arms, conducing miliary exer-cises in he Yellow Sea, pushing or mulilaeral resoluion o dispues in he Souh

China Sea, and ling rade cases a he WO.42


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Chinese direct investment

in the United States

In 2010 alone China invesed $5 billion in he Unied Saes, a gure ha has been

doubling annually in recen years.43 As long as any naional securiy concerns are

addressed, here is no reason no o welcome job-creaing invesmen.

Mayors and governors are eager o cour Chinese invesmen in heir ciies and saes.

Chinese invesmens in our naion have creaed nearly 10,000 jobs, a solid ounda-

ion on which o build. Te rend is likely o ramp up. I China ollows he patern o

oher emerging naions, more han $1 rillion in direc Chinese invesmen will owworldwide by 2020, a signican share o which will be desined or advanced markes

such as he Unied Saes, according o a recen Asia Sociey repor.44

Bu as his repor also explains, given he parade o poliical ear-mongering seen

so ar, hose benes likely will be squandered i seps are no aken o resore clear

hinking. Te resorm surrounding he 2005 bid by China Naional Oshore Oil

Corp., or CNOOC, Chinas sae oil company, o buy Caliornia-based oil gian

Unocal Corp., remains he mos prominen example o poliical debae, alhough

i is hardly he only one.45

o be sure, some Chinese invesmens would pose risks or U.S. securiy. Case in

poin: Huawei echnologies Co., Ld., a Chinese elecommunicaions rm wih

ies o he Peoples Liberaion Army, which sough o inves in U.S. server ech-

nology company 3Lea.46 Te invesmen was blocked via a process or screening

poenial oreign invesmen in he Unied Saes or risks o naional securiy

ha runs hrough he Commitee on Foreign Invesmen in he Unied Saes, or

CFIUS, an execuive branch ineragency commitee ha boass a repuaion or

air and eecive deliberaion.

Beore Huawei was blocked rom invesing by CFIUS, he company was success-

ully coured by exas Gov. ick Perry (), a ormer epublican presidenial

candidae, or invesmen in his sae. In 1999 Huawei also worked wih omneys

ormer privae equiy rm, Bain Capial, on a bid o acquire he soware rm


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3Com (now a par o Hewlet-Packard Developmen Co., LP).47 Conservaive

rheoric and pracice are dramaically a odds in his case.

Te Obama adminisraions approach o Chinese direc invesmen in our

counry is o capialize on his poenial job-creaing invesmen while also

proecing naional securiy. Disinguishing beween hose rms ha pose a realrisk and hose ha do no, especially in he ace o coninued poliical resorms

abou Chinese invesmen, is criical. Ye here is no reason no o atrac inves-

mens rom China ha creae U.S. jobs as long as he process is air and securiy

concerns are manageable.

Te U.S.-China relaionship has poenial o bene boh counries. By encourag-

ing economic ineracions on a level playing eld wih high sandardsgood jobs,

workers righs, environmenal proecionhe Chinese and U.S. economies will

work bes or heir people and creae durable and broad middle classes.


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Human rights

Te Obama adminisraion ime and again speaks and acs on behal o American

core valuesdemocracy, rule o law, human righs, reedom o expression,

religious reedomwhen i comes o China. In counless meeings wih Chinese

counerpars, in boh public and in privae, U.S. ofcials have raised hese issues.

Presiden Obama himsel regularly champions human righs. When Chinese

Presiden Hu Jinao visied Washingon in January 2011, Presiden Obama

pressed him on human righs, saying, Hisory shows ha socieies are more har-monious, naions are more successul and he world is more jus when he righs

and responsibiliies o all naions and all people are upheld, including he univer-

sal righs o every human being.48

Te presiden reieraed ha message in a speech o he Ausralian parliamen

during his November 2011 rip, saying, he currens o hisory may ebb and

ow, bu over ime hey movedecidedly, decisivelyin a single direcion.

Hisory is on he side o he reeree socieies, ree governmens, ree econo-

mies, ree people. And he uure belongs o hose who sand rm or hose

ideals, in his region and around he world.49

Despie vocierous Chinese governmen proesaions, he presiden made wo

srong saemens abou he deenion o dissiden Chinese wrier and Nobel Prize

winner Liu Xiaobo. In one, Presiden Obama noed:

Mr. Liu reminds us ha human digniy also depends upon he advance o

democracy, open sociey, and he rule o law. Te values he espouses are univer-

sal, his sruggle is peaceul, and he should be released as soon as possible.50

Presiden Obama has also me wih he Dalai Lama wice during his erm despie

rabid responses by Chinese ofcials.51 Meeing wih he Dalai Lama s wihin

broader concerns raised abou religious reedom in China. In response o a

spae o sel-immolaions by ibean monks and nuns early his year, Obama


20/39


adminisraion Special Coordinaor or ibean Issues Maria Oero issued a

saemen calling on he Chinese governmen o address he counerproducive

policies in ibean areas ha have creaed ensions and ha hreaen he disinc

religious, culural and linguisic ideniy o he ibean people.52 Oero builds on

commens by Secreary o Sae Hillary Clinon las November when she called

on China o embrace a dieren pah.53

Te adminisraions srong rheoric on human righs is backed up by is policies.

Americas decision o join he new U.N. Human ighs Council gives he Unied

Saes a mulilaeral orum in which o scruinize Chinas record each year. Te

adminisraion also resared a specic bilaeral dialogue wih he Chinese on

human righs and religious reedoms, which Beijing obviously dislikes.54 And he

adminisraion has spen millions o dollars on soware designed o allow dis-

sidens o circumven Chinas grea rewall.55

Te Obama adminisraion also posed ambassadors o Beijing capable o dem-onsraing U.S. resolve on human righs and religious righs in ways he Chinese

people undersand and he Chinese governmen is hard-pressed o comba.

Ambassador Gary Lockes orhrigh commens on he human righs siuaion

in China draw criicism rom Communis Pary media oules.56 Undeerred,

Ambassador Locke keeps i up, noing o V hos Charlie ose in January ha

Chinas human righs siuaion is in a down period, and is geting worse.57

o be sure, Chinese leaders deserve credi or success in povery reducion,

including a recen move o increase he income hreshold or povery, which

allowed more Chinese o receive sae anipovery subsidies.58 Bu noable suc-

cess in povery reducion does no serve as an excuse or poliical repression.

Chinas brual crackdown on dissidens, lawyers, proessors, proesers, and

ariss coninues.

Conservaives will argue hese iniiaives are no enough. Tey claim ha he

adminisraion mus do somehinganyhingmore. omney argues in his or-

eign policy whie paper ha he Obama adminisraion has relegaed he uure

o reedom o second or hird place.59 ober Kauman o he Foreign Policy

Iniiaive, a prominen conservaive academic, alsely suggess ha PresidenObama made no menion o democracy or reedom in his meeings wih a

brually auhoriarian Chinese leadership ben on hegemony raher han equilib-

rium in Eas Asia.60

Americas decisi

to join the new

U.N. Human Rig

Council gives th

United States

a multilateral

orum in which

scrutinize China

record each yea


21/39


Tey and oher conservaives argue or louder, more orceul browbeaing o

Chinas leaders. Any proposed acion, hough, mus be considered in ligh o how,

specically, i will improve he lives o people in Chinahis has o be Americas

ocus. Ulimaely, while he Unied Saes can help, insising ha heir governmen

respec human righs and digniy ress largely in he hands o he Chinese people.

Increasingly, he Chinese are aking ha responsibiliy in hand. During 2011 pub-

lic ourage aeced he governmens response ollowing a high-speed rain crash

in Wenzhou in easern China, proess over a chemical plan in he norheas por

ciy o Dalian, and demonsraions agains ofcial sales o village land in Wukan in

souheas China. In Wukan, or example, proess pushed he Communis Pary o

respond o ciizens demands or new local leadership, and Wukan was permited

o hold elecions in February.61


22/39


The United States

enduring role in Asia

Presiden Obama is walking he walk in Asia, sysemaically deepening our ies

in he region hrough a major rebalancing iniiaive. Tese seps will encourage

China o make responsible choices and also allow he Unied Saes o capialize

on he grea economic opporuniies ha Asia holds.

Conservaives narraive is only abou he China hrea. In a recen speech a he

Ciadel miliary academy in Souh Carolina, omney adoped an ominous one

abou Chinas growing powera one ha seemed o quesion he necessiy oworking wih and shaping he choices o a rising China. China has made i clear

ha i inends o be a miliary and economic superpower, he said. Will her rulers

lead heir people o a new era o reedom and prosperiy or will hey go down a

darker pah, inimidaing heir neighbors, brushing aside an inerior American

Navy in he Pacic, and building a global alliance o auhoriarian saes?62

Te Obama adminisraion does no share omneys doubs abou U.S. saying

power in Asia. Te Unied Saes has been a Pacic power or more han 60 years

and will remain so because he region has been a op ocus o he Obama adminis-

raion since he presiden ook ofce. Secreary o Sae Hillary Clinons rs rip

upon aking ofce was o Asia, no o Europe, where all her recen predecessors

had gone. Asia holds high sanding because, as Clinon wroe:

Te uure o he Unied Saes is inimaely inerwined wih he uure o he

Asia-Pacic. A sraegic urn o he region s logically ino our overall global

eor o secure and susain Americas global leadership.63

Te Deparmen o Deense is equally emphaic abou he imporance o Asia.

Te Deense Sraegic Guidance released issued by he Penagon in January2012he sraegy documen ha ses prioriies or deense spending during he

nex decadewas unequivocal, noing ha as he wars in Iraq and Aghanisan

wind down, we will o necessiy rebalance oward he Asia-Pacic region.64


23/39


Te reasons or his renewed atenion are economic as well as sraegic. Bu China

poses no imminen or direc miliary hrea o he Unied Saes. China is no he

new Sovie Union, nor is a new Cold War brewing. In oher words, Chinas sraegic

inenions are sill being shaped; assuming an adversarial relaionship will ensure

one.65 Te more hosile any U.S. rheoric aimed a China, he more we srenghen

he hand o hose in boh counries who argue he wo are on a collision course.66

Trusing he relaionship ino a sraegic cones or supremacy will preven

cooperaion on he many ransnaional issues ha will require boh counries o

solve. As Henry Kissinger pus i:

A Cold War beween [he wo counries] would bring abou an inernaional

choosing o sides, spreading dispues ino inernal poliics o every region a a

ime when issues such as nuclear prolieraion, he environmen, energy and

climae require a comprehensive global soluion.67

Te Obama adminisraions de approach o he region displays a deep undersand-

ing o hese nuances. Te rollou o he Asia rebalancing in November 2011 included

new rade iniiaives, deense arrangemens, and a more serious engagemen wih

regional organizaions, he deails o which are discussed elsewhere in his paper.

Naional securiy expers have applauded he seps. Waler ussell Mead, a re-

quen adminisraion criic, heralded he rip, calling i as decisive a diplomaic

vicory as anyone is likely o see. He wen on o explain ha, In he eld o

oreign policy, his was a coming o age o he Obama adminisraion and i was

conceived and execued abou as awlessly as hese hings ever can be.68 Similarly,

longime China wacher andAlanic Monhly wrier James Fallows assesses he

Obama sraegy his way:

Much like Nixons approach o China, I hink i will evenually be sudied or is

skillul combinaion o hard and so power, incenives and hreas, urgency and

paience, plus deliberae and eecive misdirecion... he sraegy was Sun zu-

like in is paien pursui o an objecive: reesablishing American hard and so

power while presening a smiling We welcome your rise! ace o he Chinese.69


24/39


Chinese military modernization

Te Obama adminisraion is responding o a growing Chinese miliary bu i

does no exaggerae he possible hrea posed by China.

In conras, a number o vocal conservaives have lached ono China as he nex

hrea, oering doomsday scenarios as a way o arguing or ever-expanding,

unsusainable U.S. deense spending. omney calls or spending 4 percen o GDP

o he base deense budge in order o hedge agains China and oher hreas.70

Keeping ha promise will add more han $200 billion in addiional ederal spend-ing in 2016 and will no buy America more securiy. 71 Similarly, Dan Blumenhal

o he American Enerprise Insiue warned Congress las July ha America is

heading oward sraegic insolvency unless we make an expensive eor o

comba Chinas miliary modernizaion.72

Chinas miliary modernizaion, especially since is deails remain secre, is a

cause or concern. Bu i is imporan o keep hese developmens in perspec-

ive. Despie seady advances, he Peoples Liberaion Army remains ar behind

he U.S. miliary in nearly every way. Tese include no only echnological

sophisicaion, bu also modern operaional conceps, join operaions, and

nework-cenric warare.73 As Vice Adm. David J. Jack Dorset, he Navys op

inelligence ofcer, noed las January:

Tey [he Chinese] are a he on end o developing heir miliary capabiliy.

We need o look o he uure and no underesimae heir capabiliies o develop

ha operaional prociency, bu we shouldn overplay how compeen hey are

oday. I don view hem as en ee all.74

Conservaives who call or increasing he deense budge in he ace o grow-ing Chinese miliary spending would do well o remember ha America spends

nearly six imes he amoun spen by China on is miliary when war coss are

considered.75 As or base deense budges, he Deparmen o Deense esimaes

ha in 2010, U.S. miliary spending increased o $533.8 billion while Chinese


25/39


miliary spending increased o only $160 billion, a gap o $373.8 billionnearly

$60 billion greaer han he gap in 2006.76

Over he pas year, Chinas miliary unveiled wo new weapons sysems ha

caused alarm among some miliary wachers and creaed a narraive o Chinas

miliary on he march. Looking a he deails, hough, and comparing hose sys-ems o similar American and allied plaorms, he new developmens come more

as symbolic advances han rue echnical challenges o U.S. supremacy.

Las April China launched is rs aircra carrier, a reurbished Ukrainian vessel

ha analyss agreed is a relaive piece o junk more or raining han warare.77

U.S. Navy Admiral ober Willard, head o Pacic Command, said he is no con-

cerned by he projec, alhough he did noe ha he change in percepion by he

region will be signican due o he symbolic value.78 By comparison, America

has 11 aircra carrier batle groups.

Specically on he quesion o U.S. naval presence in Asia, Adm. Jonahan

Greener, chie o naval operaions, recenly noed he Unied Saes has roughly

50 ships in he wesern Pacic on any given day, which he says is enough o carry

ou American sraegy in he region.79 Adm. Greeners commens rejec he idea

espoused by omney o increasing ship building o levels no seen since he Cold

War, a massive, unsusainable cos.80

Te oher sysem ha has heighened concern, he Chengdu J20 gher je, a

h-generaion sealh airplane, garnered much hype when phoos o a es igh

leaked ono he sies o Chinese miliary bloggers during a visi by ormer Deense

Secreary ober Gaes. Ta sysem, oo, is based on relaively old designs and relies

on ussian je-engine echnology. Gaes amped down heaed rheoric abou he

J20 shorly aer his visi by puting he echnology in conex. Te Unied Saes,

he explained, will have on he order o 500 h-generaion ghers by 2016more

han 300 F-35s and almos 200 F-22swhile China will have a handul o J20s.81

Beyond he J20, Chinas air orce is shrinking. Why? Because China is ollow-

ing he rend in modern miliaries o reiring large numbers o less-sophisicaed

aircra in avor o smaller numbers o more modern planes.82

Broadly, Chinese miliary sraegy ocuses on relaively asymmeric responses o

expensive U.S. weapons sysems. As Lawrence Korb, Senior Fellow a he Cener

or American Progress and ormer assisan secreary o deense in he eagan

adminisraion, noes:

Broadly, Chinese

military strategy

ocuses on

relatively

asymmetric

responses to

expensive U.S.

weapons system


26/39


A he operaional level, PLA modernizaion is no inended o creae a miliary

equal o ha o he Unied Saes ourigh. Insead, he PLA aims o develop

a robus ani-access and area denial, or A2/AD, capabiliy vis--vis echno-

logically superior opponens. Te purpose o A2/AD operaions is o deny he

Unied Saes or oher echnologically superior miliaries unetered access o

he Wesern Pacic where Chinese core naional ineress are a sake, includingaiwan and erriorial claims in he Souh China Sea.83

Chinese miliary modernizaion requires a response, and he Obama adminisra-

ion is acing. On a acical level he Penagon under Presiden Obamas leadership

is currenly developing wha is known as he AirSea Batle Concep o respond

o ani-access, area-denial echnologies, some o which China has been develop-

ing, by beter inegraing naval and air asses.84 Te Penagon se up an ofce las

November o coordinae he developmen o AirSea Batle, and he January 2012

Deense Sraegic Guidance explicily idenied hose plans as a prioriy.85

On a sraegic level he adminisraion is deepening is engagemen in Asia,

and wih allies, o consrain Chinas abiliy o disrup peace and sabiliy. Ta

said, changes o U.S. deense capabiliies should be implemened wih an eye

oward no inaming Chinese ears o conainmen, which are unounded and

srenghen ulranaionaliss in Beijing. And hey mus be paired wih a compre-

hensive diplomaic sraegy aimed a increasing rus beween he wo counries.

ecen eors o increase miliary-o-miliary relaions beween he wo coun-

ries, however rocky and uneven, represen a srong rs sep.86 Conservaives

miliary-rs approach, which assumes he wo naions are desined or conic,

is more likely o creae ha realiy.


27/39


Supporting U.S. allies in Asia

Presiden Obama is sysemaically srenghening ies wih allies and parners in

Asia, despie conservaive rheoric abou undermining our allies.87 omney

wroe in TeWall Sree Journal ha weakness has only encouraged Chinese

asseriveness and made our allies quesion our saying power in Eas Asia.88 In

ac, he opposie is rue.

A cenral pillar in he Obama adminisraions Asia policy is srenghening ies

wih riends and allies in he region. Te adminisraion coninues o push orwarda coheren, sraegic policysysemaically srenghening bilaeral and muli-

laeral ies in Asiaand in doing so creaes an environmen ha will encourage

China o make choices ha conribue o peace and sabiliy. Such a policy diers

rom he conservaive dream o building an ani-China coaliion in Asia, an unre-

alisic Cold War hrowback ha our allies hemselves do no desire.

eacing o wha hey saw as Chinese belligerence during 2009 and 2010, Asian

naions urned o America o help ensure peace and sabiliy, and he adminisra-

ion responded. In July 2010, a a meeing o he Associaion o Souheas Asian

Naions in Hanoi, Secreary Clinon joined wih her Souheas Asian counerpars

o push back agains Chinas more aggressive sance on he Souh China Sea.

ogeher, hey sood rm in pressing or a mulilaeral process raher han Chinas

preerence o setling erriorial dispues on a bilaeral basis, where smaller coun-

ries would be more vulnerable o Chinese coercion. Secreary Clinon explained

ha he Unied Saes remains neural on claims o he dispued waers bu due o

is ineress in he region wans o see he dispues solved in a peaceul manner in

accordance wih inernaional law.89

When Presiden Obama became he rs presiden o atend he Eas Asia Summiin November 2011, a similar dynamic unolded, wih China proesing he discus-

sion o he Souh China Sea, bu Asian counries, backed up by he Unied Saes,

insising he dispues be discussed and resolved mulilaerally.90 And in 2009

Presiden Obama was he rs U.S. presiden o hold a meeing wih all 10 leaders

o he Associaion o Souheas Asian Naions.


28/39


Te adminisraion has also deepened Americas radiional alliances. Te U.S.-

Japan alliance, he cornersone o U.S. involvemen in Asia, remains srong. In he

wake o a dispue wih China, he Unied Saes reassured Japan ha he dispued

Diaoyu/Senkaku Islands in he Eas China Sea beween China and Japan all

wihin he scope o he Japan-U.S. Securiy reay, and ha he Unied Saes

would mee is commimen o deend Japan.91

Japan and he Unied Saes areworking closely ogeher on a variey o securiy challenges, including he reloca-

ion o Marines on Okinawa. In he wake o he sunami and Fukushima nuclear

disasers, America sen 20 ships o aid in he relie eor, dubbed Operaion

omodachi (Friend), including he USS onald eagan.92

Presiden Obamas announcemen his pas November o he creaion o a roaional

miliary presence in he ciy o Darwin, Ausralia, slaed o hos some 2,500 Marines,

represens jus one par o he bigges leap orward in 30 years or U.S. deense ies

wih Ausralia.93

Te Souh Korean relaionship has never been sronger. In he ace o provoca-

ions rom now-deceased Norh Korean dicaor Kim Jong-il, he USS George

Washingon was deployed ino he Yellow Sea and he Sea o Japan. A Seouls

reques he Obama adminisraion also agreed o push back he dae or Souh

Korea assuming warime command o is roops by hree years, rom 2012 o

2015.94 Presiden Obama hosed he rs sae visi o he Unied Saes by a Souh

Korean presiden in a decade and las Ocober successully worked wih he

Senae o pass he U.S.-Korea ree rade agreemen. Ta agreemen will add an

esimaed $10 billion o $12 billion o U.S. GDP annually.95


29/39


Taiwan

Te Obama adminisraion has been a solid riend o aiwan. Neverheless,

conservaives coninue o alsely accuse he Obama adminisraion o abandoning

he island. Las Sepember, Sen. John Cornyn (-X) called he adminisraions

decision no o sell new F-16s o aiwan capiulaion o Communis China

and a sad day in American oreign policy. Bu as Jerey Bader o he Brookings

Insiuion noes:

Te noion ha is being bandied abou ha his a capiulaion o China, givenhe unprecedened magniude o sales [o U.S. weapons o aiwan] in he rs

wo and a hal years o he adminisraion, and ha F-16s were never auho-

rized by he Bush adminisraion, suggess ha hese atacks are parisan raher

han securiy-based.96

Since he lae 1970s, when he Unied Saes esablished diplomaic relaions wih

China, epublican and Democraic adminisraions alike have insised ha cross-

Srai dierences be resolved peaceully and according o he wishes o he people

on boh sides o he Srai. Te Unied Saes opposes unilaeral atemps by eiher

side o change he saus quo. I welcomes eors on boh sides o engage in a

dialogue ha reduces ensions and increases conacs across he Srai.

Te Obama adminisraion has been a solid riend o aiwan in suppor o his

policy, including selling unprecedenedly large packages o arms sales. In he las

wo years, he adminisraion sold aiwan more han $12 billion worh o miliary

equipmen. As a senior Sae Deparmen ofcial noed on background o Congress,

his is comparable or greaer han a any oher period in he hisory o U.S.-aiwan

unofcial relaions since he enacmen o he aiwan elaions Ac in 1979.97

Kur Campbell, assisan secreary o sae or Eas Asian and Pacic aairs,

provided urher deail o Congress when he esied las Ocober. Te Unied

Saes has bolsered aiwans capaciy wih a supply o careully seleced deense

aricles and services, consisen wih he aiwan elaions Ac and based on a


30/39


pruden assessmen o aiwans deensive needs, he said. aiwan mus be con-

den ha i has he capaciy o resis inimidaion and coercion as i coninues

o engage wih he mainland.98

Te Obama adminisraion has also commited o suppor aiwan in ways i

calculaes will no desabilize he siuaion across he Srai, including upping helevel o visis by Cabine and sub-Cabine ofcials o aipei. o ha end Depuy

Energy Secreary Dan Poneman visied he island las December and announced

U.S. suppor or aiwan o join he Inernaional Aomic Energy Agency. Depuy

Secreary Poneman was he highes-ranking governmen ofcial o visi he island

in a more han a decade.99


31/39


Cybersecurity

From he sar, he Obama adminisraion has idenied cybersecuriy as an issue

o grave concern and mouned a comprehensive response. Conservaives who

condemn he adminisraions response do no undersand is scope, nor do hey

oer much in he way o new ideas or combaing he hrea.

People based in Chinasome apparenly linked o he Chinese governmen

and ohers operaing on heir ownare working o seal American rade and

miliary secres on a massive scale.100 Ohers are rouing heir cyberatackshrough China. As he Ofce o he Naional Counerinelligence Execuive

concluded in a repor las year, Foreign economic collecion and indusrial

espionage agains he Unied Saes represen signican and growing hreas o

he naions prosperiy and securiy.101

Upon aking ofce he Obama adminisraion iniiaed a comprehensive 60-day,

clean slae review o assess U.S. policies and srucures or cybersecuriy.102 Ta

review saed, Cybersecuriy risks pose some o he mos serious economic and

naional securiy challenges o he 21s cenury. Te Naional Securiy Sraegy,

released in May 2010, noed, Cybersecuriy hreas represen one o he mos seri-

ous naional securiy, public saey, and economic challenges we ace as a naion.103

Te Obama adminisraion has pu unprecedened eor and resources ino build-

ing he inrasrucure o proec agains cyberhreas. In June 2009 hen-Secreary

o Deense ober Gaes direced U.S. Sraegic Command o esablish he U.S.

Cyber Command. USCYBECOM, as he ofce is known, opened in May

2010 and was running a ull operaional capaciy by Ocober o ha year. Te

Deparmen o Deense also released is rs cybersecuriy sraegy in July 2011.104

Cybersecuriy is being addressed across agencies, no jus in he Deense

Deparmen. As Secreary o Sae Hillary Clinon pu i in a speech in January 2010:


32/39


We have aken seps as a governmen, and as a Deparmen, o nd diplomaic

soluions o srenghen global cybersecuriy. Over a hal-dozen dieren Bureaus

have joined ogeher o work on his issue, and wo years ago we creaed an

ofce o coordinae oreign policy in cyberspace. We have worked o address his

challenge a he UN and oher mulilaeral orums and pu cybersecuriy on he

worlds agenda.105

o be sure, he process o nding soluions o he problems o cybersecuriy

boh miliary and indusrialhas only jus begun. Te Chinese governmen is

believed o have been behind a number o recen major cyber breakins, including

muliple hacks o Google Inc., EMC Corp.s SA uniwhich makes he numeri-

cal okens used by millions o corporae employees o access heir nework

Lockheed Marin Corp., and he Penagons Join Srike Figher program.106

Such breaches have negaive implicaions or he broader U.S.-China relaionship.

As Kenneh Lieberhal and Peer Singer o he Brookings Insiuion poin ou,disrus o each ohers acions in he cyber realm is growing beween he Unied

Saes and China, and such disrus easily spills over ino broader assessmens o

he oher counrys long erm inenions.107

o make progress on resolving hese hreas, global norms or rules o he road

or cyberbehavior, boh sae sancioned and oherwise, need o be esablished.

Going orward, while global agreemens abou accepable web behavior are

preerable, he Unied Saes could rs creae a web o bilaeral agreemens ha,

aken ogeher, can orm he backbone o global norms.108 In addiion, U.S.-China

dialogue on he issue has he poenial or progress and should ocus on conveying

red lines and exploring common problems, such as atack atribuion.109

Domesically, legislaion pending in Congress would aciliae inormaion sharing

beween he public and privae secors, alhough privacy concerns should be ully

addressed.110 Finally, Chinese capaciy should no be assumed. As Adam Segal o

he Council on Foreign elaions noes, despie ouside percepions o he coher-

ence and efcacy o Chinese cybersraegy, Chinese analyss are eeling increas-

ingly vulnerable in cyberspace. Segal explains ha Chinas analyss believe, Te

work ahead [or China] is boh deensive and oensive, echnical and sraegic.111

To make progre

on resolving the

threats, global

norms or rules

o the road or

cyberbehavior,

both state

sanctioned and

otherwise, need

be established.


33/39


Conclusion

No relaionship will be more imporan in he 21s cenury han ha o he Unied

Saes and China. U.S. ineress will be bes served by insising China play by

he rulesin global securiy, in global economic growh, in advancing universal

human and democraic valueswhile reassuring he Chinese ha he Unied

Saes encourages heir emergence as a responsible world power. Tis will require

seely nerves and rm adherence o a principled, pragmaic approach geared

oward long-erm oucomes.

Conservaive approaches, which oo oen end up shorsighed, inconsisen, emo-

ional, and belligeren, will ail. Sraegies ha aim or shor-erm poliical poin

scoringor, even worse, calculaed eors o creae a new Cold War enemywill

undermine global securiy. An unsable and adversarial U.S.-China relaionship

would be he wors-case oucome or he Unied Saes, China, and he world.

o rise o he China challenge, he Unied Saes mus inves in our own economy

and our own sociey o ensure we remain he mos dynamic economy and power-

ul naion on earh, and srive o reclaim our place as he mos prosperous sociey

where anyone willing o work hard and play by he rules can cra a good living.

While pressing China o ollow he rules is criical and mus coninue, soluions

o Americas compeiiveness challenges lie mainly wihin. When we srenghen

our own undamenals, he Unied Saes will have a brigh uure wih a srong

middle class, regardless o Chinas rajecory.


34/39


About the authors

Jacob Stokes is a policy analys a he Naional Securiy Nework and edior o

he inernaional aairs blog DemocracyArsenal.org. He has writen or CNN.

com, Te Guardian, Te Balimore Sun, and Bloomberg Businessweek, among oh-

ers. Beore joining NSN, Sokes worked or he Cener or American Progressand Democracy. He holds degrees in journalism and poliical science rom he

Missouri School o Journalism.

Nina Hachigian is a Senior Fellow a he Cener or American Progress Acion

Fund. Based in Los Angeles, she is he co-auhor oTe Nex American Cenury:

How he U.S. Can Trive as Oher Powers Rise (Simon & Schuser, 2008). Prior

o joining CAP, Hachigian was a senior poliical scienis a RND Corporaion

and served as he direcor o he RND Cener or Asia Pacic Policy or our

years. Beore RND, she had an inernaional aairs ellowship rom he Council

on Foreign elaions during which she researched he Inerne in China. From1998 o 1999 Hachigian was on he sa o he Naional Securiy Council in he

Whie House. Hachigian received her B.S. rom Yale Universiy and her J.D. rom

Sanord Law School.

Acknowledgements

Te auhors would like o hank udy deLeon, Heaher Hurlbur, he China eam

a CAP, and Ed Paisley or heir commens and suggesions.


35/39


Endnotes

1 The White House, Press Brieng on the Upcoming Visit o ChineseVice President Xi Jinping to the United States, Press reease, Febru-ary 10, 2012, avaiabe at http://www.whitehouse.gov/the-press-oce/2012/02/10/press-brieng-upcoming-visit-chinese-vice-president-xi-jinping-united-s.

2 Mitt Romney, How I Respond to Chinas Rising Power, The WallStreet Journal, February 16, 2012, avaiabe at http://onine.wsj.com/

artice/SB10001424052970204880404577225340763595570.htm.

3 Cheng Guangjin and Chen Weihua, Surveys revea positive pubicattitudes, China Daily, February 10, 2012, avaiabe at http://usa.chinadaiy.com.cn/china/2012-02/10/content_14573771.htm.

4 The Chicago Counci on Goba Aairs, Constrained Internationa-ism: Adapting to New Reaities (2010).

5 Jerey Jones, Americans Sti View China as Words leadingEconomic Power, Gaup Economy, February 1 0, 2012, avaiabe athttp://www.gaup.com/po/152600/Americans-View-China-Word-leading-Economic-Power.aspx.

6 In act, a growing number o economists have orecasted a signi-cant sowing o the Chinese economy over the next decade. AsMichae Pettis o the Carnegie Endowment writes, To rebaance itseconomy towards consumption China must eiminate the utureburden on the househod sector by sharpy reducing investment

and credit growth. This wi come with a cost, however. GDP growthrates wi drop, perhaps to beow 3 per cent beore the end o thedecade. See: Michae Pettis, Dont panic, Chinas economy is not onthe rocs yet, Financial Times, November 7, 2001, avaiabe at http://www.t.com/cms/s/0/0b20ade-0937-11e1-a20c-00144eabdc0.htm#ixzz1Pgg8Plj.

7 Frederi Baour, Chinas Demographic Tsunami,Bloomberg Busi-nessweek, January 5, 2012, avaiabe at http://www.businesswee.com/magazine/chinas-demographic-tsunami-01052012.htm. Formore inormation on Chinas interna chaenges, see: EizabethEconomy, Chinas Growing Water Crisis, World Politics Review,August 9, 2011, avaiabe at http://www.wordpoiticsreview.com/artices/9684/chinas-growing-water-crisis; Nichoas Eberstadt, TheDemographic Future, Foreign Afairs, November/December 2010,avaiabe at http://www.oreignaairs.com/print/66771; Minxin Pei,Chinas Greedy Communists, The Diplomat, August 16, 2010, avai-abe at http://the-dipomat.com/2010/08/16/china%E2%80%99s-greedy-communists/.

8 Joseph Nye, Shoud China be Contained?, Project Syndicate, Juy4, 2011, avaiabe at http://www.project-syndicate.org/commentary/nye96/Engish.

9 Bruce Stoes, Fresh Start, The German Marsha Fund o the UnitedStates, February 16, 2012, avaiabe at http://www.gmus.org/archives/resh-start.

10 Romney has aid out some suggestions or deaing with these issues,but it is uncear how this woud dier rom the Obama administra-tions eorts. For Romneys pan, see: Mitt Romney, China mustrespect the ree-trade system, The Washington Post, October 13,2011, avaiabe at http://www.washingtonpost.com/opinions/romney-china-must-respect-the-ree-trade-system/2011/10/13/gIQAiVil_story_1.htm; Beieve in America: Mitt Romneys Pan orJobs and Economic Growth, Romney or President, September 6,2011, avaiabe at http://www.washingtonpost.com/r/2010-2019/WashingtonPost/2011/09/06/Nationa-Poitics/Graphics/BeieveInA

merica%E2%80%93MittRomney%E2%80%93PanForJobsAndEconomicGrowth.pd.

11 David Edwards, Santorum: I want to go to war with China, Raw-Story.com, October 11, 2011, avaiabe at http://www.rawstory.com/rs/2011/10/11/santorum-i-want-to-go-to-war-with-china/.

12 Oce o the U.S. Trade Representative, United States Fies WTO CaseAgainst China to Protect American Jobs, Press reease, September20, 2011, avaiabe at http://www.ustr.gov/about-us/press-oce/press-reeases/2011/september/united-states-es-wto-case-against-china-prote; Oce o the U.S. Trade Representative, FactSheet: 21st U.S.-China Joint Commission on Commerce and Trade,Press reease, December 15, 2010, avaiabe at http://www.ustr.gov/about-us/press-oce/act-sheets/2010/21st-us-china-joint-commis-

sion-commerce-and-trade; The White House, Fact Sheet: U.S.-ChinaEconomic Issues, Press reease, January 19, 20 11, avaiabe at http://www.whitehouse.gov/the-press-oce/2011/01/19/act-sheet-us-china-economic-issues; U.S. Department o the Treasury, The 2011U.S.-China Strategic and Economic Diaogue U.S. Fact Sheet Eco-nomic Trac, Press reease, May 10, 2011, avaiabe at http://www.treasury.gov/press-center/press-reeases/Pages/TG1172.aspx.

13 Stoes, Fresh Start.

14 The White House, Remars by the President in State o the UnionAddress, Press reease, January 24, 2012, avaiabe at http://www.whitehouse.gov/the-press-oce/2012/01/24/remars-president-state-union-address.

15 Eric Martin, Obama Creates Trade Enorcement Unit Aimed atChinas Vioations, Bloomberg Businessweek, February 29, 2012, avai-abe at http://www.businesswee.com/news/2012-02-29/obama-creates-trade-enorcement-unit-aimed-at-china-s-vioations.htm.

16 Wayne M. Morrison, China-U.S. Trade Issues (Washington: Congres-siona Research Service, 2011), avaiabe at http://www.as.org/sgp/crs/row/Rl33536.pd; Oce o the United States Trade Representa-tive, United States Fies WTO Case Against China to Protect Ameri-can Jobs.

17 Tom Barey, China loses Trade Appea Over Its Curbs on Exports,The Wall Street Journal, January 31, 2012, avaiabe at http://onine.wsj.com/artice/SB10001424052970204652904577193131423685816.htm.

18 Wiiam McQuien, Wind Tower Maers in U.S. Hurt by China Imports,Pane Finds, Bloomberg Businessweek, February 13, 2012, avaiabeat http://www.businesswee.com/news/2012-02-13/wind-tower-maers-in-u-s-hurt-by-china-imports-pane-nds.htm.

19 Ambassador Demetrios J. Marantis, Testimony beore the HouseCommittee on Ways and Means, Hearing on the U.S.-China Econom-

ic Reationship, October 25, 2011, avaiabe at http://waysandmeans.house.gov/UpoadedFies/DemetriosTestimonyTrade1030.pd.

20 Oce o the U.S. Trade Representative, Fact Sheet: 21st U.S.-ChinaJoint Commission on Commerce and Trade.

21 Department o the Treasury, The 2011 U.S.-China Strategic andEconomic Diaogue U.S. Fact Sheet Economic Trac.

22 Peter Nichoas, Obama rm with China, The Los Angeles Times,November 13, 2011, avaiabe at http://artices.atimes.com/2011/nov/13/word/a-g-obama-apec-20111113.

23 Marantis, Hearing on the U.S.-China Economic Reationship.

24 Mitt Romney, No Apology: The Case or American Greatness(New Yor:St. Martins Press, 2010).

25 Jacob Stoes, Wheres Romney? Trade, Especiay With China, De-

mocracyArsena.org Bog, October 13, 2011, avaiabe at http://www.democracyarsena.org/2011/10/wheres-romney-trade-especiay-with-china.htm.

26 Martin Crutsinger, Ocias oppose bis pressuring China,Associ-ated Press, Juy 31, 2007, avaiabe at http://www.usatoday.com/news/topstories/2007-07-31-2076220808_x.htm.
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27 A sma reason to be cheeru, The Economist, November 19, 2011,avaiabe at http://www.economist.com/node/21538758.

28 Romney, How I Respond to Chinas Rising Power.

29 David Jacson, Huntsman attaced by Romney over China, USAToday, January 9, 2012, avaiabe at http://content.usatoday.com/communities/onpoitics/post/2012/01/huntsman-attaced-by-romney-over-china/1#.T0Ed8XJWpy;GOP NH ABC/Yahoo Newsdebate: Transcript, Chicago Sun-Times, The Scoop rom WashingtonBog, January 8, 2012, avaiabe at http://bogs.suntimes.com/sweet/2012/01/gop_nh_abcyahoo_news_debate_tr.htm.

30 Oce o Internationa Aairs, Report to Congress on InternationalEconomic and Exchange Rate Policies (Department o the Treasury,2011).

31 Danie Fynn and Noah Barin, G20 names China in ca orgreater FX fexibiity, Reuters, November 4, 2011, avaiabe athttp://www.reuters.com/artice/2011/11/04/us-g20-pan-idUS-

TRE7A31kQ20111104.

32 Joseph Casey and katherine koesi, Bacgrounder: Chinas 12thFive-Year Pan (Washington: U.S.-China Economic and SecurityReview Commission, 2011).

33 Wen Jin Yuan, Chinas Export lobbying Groups and the Poiticso the Renminbi (Washington: Center or Strategic and I nterna-tiona Studies, 2012), avaiabe at http://csis.org/es/pubication/r12n0102.pd

34 Greta van Susteren, Bachmann: The Greater Our Debt, the lessMoney or Our Miitary and More Power or China, Transcript romOn the R ecord w/Greta van Susteren, November 22, 2011, avaiabeat http://www.oxnews.com/on-air/on-the-record/2011/11/23/bachmann-greater-our-debt-ess-money-our-miitary-and-more-power-china#ixzz1NykZiyN.

35 James Faows, The Phenomena Chinese Proessor Ad, The Atlantic,October 21, 2010, avaiabe at http://www.theatantic.com/poitics/archive/2010/10/the-phenomena-chinese-proessor-ad/64982/.

36 Rache Weiner, Pete Hoestras China ad provoes accusations oracism, The Washington Post, February 6, 2012, avaiabe at http://www.washingtonpost.com/bogs/the-x/post/pete-hoestras-china-ad-provoes-accusations-o-racism/2012/02/06/gIQAPD-6buQ_bog.htm.

37 James Faows, Be Nice to the Countries That lend You Money,TheAtlantic, December 2008, avaiabe at http://www.theatantic.com/

magazine/archive/2008/12/-8220-be-nice-to-the-countries-that-end-you-money-8221/7148/.

38 keith Bradsher, China aces bacash at home over Bacstoneinvestment, The New York Times, August 2, 2007, avaiabe at http://www.nytimes.com/2007/08/02/opinion/02iht-bacash.4.6962261.htm.

39 Todd lindeman, Our mountain o debt, The Washington Post, Juy18, 2011, avaiabe at http://www.washingtonpost.com/business/our-mountain-o-debt/2011/07/18/gIQAh4FMI_graphic.htm.

40 Tom Mucha, Who owns America? Hint: Its not China, CNN.com GPSBog, Juy 21, 2011, avaiabe at http://gobapubicsquare.bogs.cnn.com/2011/07/21/who-owns-america-hint-its-not-china/.

41 Danie Drezner, Bad Debts: Assessing Chinas Financia Infuence inGreat Power Poitics, International Security34 (2) (2009): 745.

42 Nina Hachigian, Managing Insecurities Across the Pacic (Washing-ton: Center or American Progress, 2012).

43 James Fanigan, A Wave o Chinese Money Gives a lit to Com-panies Strugging in Tough Times, The New York Times, Juy 6,2011, avaiabe at http://www.nytimes.com/2011/07/07/business/smabusiness/07sbiz.htm.

44 Danie Rosen and Thio Hanemann, An American Open Door?Maximizing the Benets o Chinese Foreign Direct Investment(Washington: Asia Society and the Woodrow Wison InternationaCenter or Schoars, 2011).

45 James Feinerman, Seven Questions: China and Unoca, ForeignPolicy, Juy 1, 2005, avaiabe at http://www.oreignpoicy.com/artices/2005/06/30/seven_questions_china_and_unoca.

46 Huawei bacs away rom 3lea acquisition, Reuters, February 19,2011, avaiabe at http://www.reuters.com/artice/2011/02/19/us-huawei-3ea-idUSTRE71I38920110219.

47 Caro leonnig and karen Tumuty, Perry wecomed Chinese rmdespite security concern, The Washington Post, August 14, 2011,avaiabe at http://www.washingtonpost.com/poitics/perry-wecomed-chinese-rm-despite-security-concern/2011/08/10/gIQAAu80EJ_story.htm.

48 Caren Bohan, Obama pubicy raises human rights with ChinasHu, Reuters, January 19, 2011, avaiabe at http://www.reuters.com/artice/2011/01/19/us-usa-china-rights-idUSTRE70C12520110119.

49 Barac Obama, Remars By President Obama to the Austraian Par-iament, November 17, 2011, avaiabe at http://www.whitehouse.gov/photos-and-video/video/2011/11/17/president-obama-speas-austraian-pariament#transcript.

50 lucy Madison, Nobe Peace Prize Winner liu Xiaobo Shoud BeFreed, Obama Says, CBS News, December 10, 2010, avaiabe athttp://www.cbsnews.com/8301-503544_162-20025294-503544.

htm.

51 Jacie Cames, Daai lama and Obama Meet to Ta About Tibet,The New York Times, Juy 16, 2011, avaiabe at http://www.nytimes.com/2011/07/17/us/poitics/17prexy.htm.

52 U.S. Department o State, Statement by Specia Coordinator orTibetan Issues Maria Otero, Press reease, January 24, 2012, avaiabeat http://www.state.gov/r/pa/prs/ps/2012/01/182424.htm.

53 Shaun Tandon, Cinton presses China on Tibet, bind awyer,AgenceFrance-Press, November 10, 2011, avaiabe at http://www.googe.com/hostednews/ap/artice/AleqM5ioJbGeybreI5bhuMjyIsqdFnQA?docId=CNG.49ace90e35aac4b84d9903bee83a13.81.

54 David Goust, Obama Administration Prepares or China HumanRights Diaogue, Voice o America, May 10, 2010, avaiabe at http://www.voanews.com/engish/news/asia/Obama-Administration-Prepares-or-China-Human-Rights-Diaogue-93337359.htm.

55 US State Department hopes to brea through great rewa oChina, Agence France-Press, May 10, 2011, avaiabe at http://www.rawstory.com/rs/2011/05/10/us-state-department-hopes-to-brea-through-great-rewa-o-china/.

56 Brian Spegee, Beijing Taes On U.S. Envoy Over Rights,The WallStreet Journal, January 18, 2012, avaiabe at http://onine.wsj.com/artice/SB10001424052970204555904577166581242249996.htm.

57 Charie Rose, Gary loce on China, January 17, 2012, avaiabe athttp://www.youtube.com/watch?v=IOojT1sDHU.

58 Josh Chin, China to Raise Poverty Threshod, The Wall Street Journal,November 30, 2011, avaiabe at http://onine.wsj.com/artice/SB10001424052970204449804577068152307608914.htm.

59 Romney or President, An American Century A Strategy to SecureAmericas Enduring Interests and Ideas (2011), avaiabe at http://

www.mittromney.com/sites/deaut/es/shared/AnAmericanCentu-ry-WhitePaper_0.pd

60 Robert kauman, The Peris o President Obamas Nationa SecurityPoicy, Foreign Poicy Initiative, February 16, 2010, avaiabe athttp://www.oreignpoicyi.org/node/15511.
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61 Andrew Jacobs, Residents Vote in Chinese Viage at Center o

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