January 27, 2021 Reading Time: 6 minutes

US-China relations have an incredibly complicated history that dates back many years to when the United States first interacted with imperial China. There have been some periods of mutual benefit and trade. There have also been numerous armed conflicts such as the Boxer Rebellion in response to the United States and other colonial powers occupying parts of China. The United States supported the nationalist Kuomintang during the Chinese Civil War, which was the opposing faction to the Chinese Communist Party, which is currently in power. More recently there was the Korean War where Chinese forces intervened to assist North Korean forces in pushing back the US-South Korean coalition to the current day border. There have since been countless back and forth instances of aggression and cooperation on both sides. However, China very much sees itself as humiliated by the West and intends to return the favor by crafting its own global hegemony. 

With the Biden administration now in power and China now squarely in the bipartisan crosshairs, we have a new opportunity to appropriately address the growing threat of China. It goes without saying that the Chinese Communist Party is an existential threat to human liberty not only in China but worldwide. Whether it be locking up millions of Muslims in concentration camps in the Chinese province of Xinjiang, support for authoritarianism on the African continent, or espionage campaigns right here on US soil, China is a worthy adversary to confront. Let us not also forget that China suppressed information regarding the outbreak of Covid-19 in Wuhan, subsequently sending the entire world into lockdown. 

At the same time, China is also our top economic partner and comprises 14.7 percent of our total goods trade. Chinese innovation and industrial progress have contributed enormously to not only our well-being but the entire world’s. Chinese immigrants and Chinese-Americans have contributed tremendously to building the United States physically as well as culturally. Although these benefits do not even come close to balancing the issues, it is possible, if not necessary, to preserve them while still confronting China. The problem is not the Chinese people but the Chinese Communist Party.

It would be foolish to suggest that China’s authoritarian goals do not pose a threat to US interests and the general welfare of the world. It would also be ignorant to suggest that there is absolutely nothing to gain from working with the Chinese or that doing so is not important. Finally, it would be a recipe for failure to embrace a strategy that does not exercise restraint and nuance.

Power Projection and Diplomacy 

This topic is the most existential of all issues so it would be good to address this first. Should we even recognize China as a legitimate polity? Why don’t we just roll the tanks right now and institute a liberal democracy? On the other side of the argument, why don’t we just accept China with open arms and give them the keys to the world? Both of these approaches would prove utterly disastrous, one leading to nuclear war and the other jeopardizing the fate of human liberty. A good book to read on this topic would be Micheal Pillsbury’s The Hundred-Year Marathon. The book is on the hawkish side but it provides a detailed account of Chinese foreign policy goals. In particular, China plays the long game and employs a diverse array of economic, military, as well as institutional assets in ingenious ways to gain leverage in its international power struggle. 

China is willing to wait decades for the fruits of their labor, whether it be the One Belt One Road Initiative that seeks to create an unprecedented international trading realm with China in the middle or the slow reintegration of Hong Kong which the British returned in 1997. Over the course of 20 years, the Chinese Communist Party slowly eroded the liberties of Hong Kong so as not to promote international backlash. China desperately wants to conquer Taiwan. In order to prevent what will likely be a full-scale US military incursion, China has instead periodically moved military assets around Taiwan to test the willingness of the US to intervene. It has also conducted a long campaign of economic integration with Taiwan as well as interfered in Taiwan’s elections in order to sway support for politicians that support further integration with China. All of this is happening while the Chinese military slowly expands and modernizes to the point that it can take on the US military. 

Chinese military assets have become a growing problem in Asia. In the 1950s, the People’s Liberation Army annexed both Tibet and Xinjiang. Both regions now live under brutal repression. The Chinese were also quite strategic with their use of force, claiming that both regions are part of the historical Chinese nation dating back thousands of years. The South China Sea is a contemporary example where at least six countries lay some sort of claim to the region but the Chinese are keen on advancing their claims further. 

To do so it employs a mix of military might, economic integration, international law, and at times building physical islands that it can then lay claim to. The South China Sea is not just a sentimental piece of ocean. Over $3 trillion worth of international trade passed through the region in 2016 along with 40% of the global natural gas trade in 2017, according to the Council on Foreign Relations. The Chinese do not and will likely not honor a commitment to free trade and private property if it gains control of the region, especially if doing so will further its broader goals of protecting as well as expanding its authoritarian model. 

This is just the tip of the iceberg on what China is doing to undermine key US foreign policy goals that threaten everything from trade routes, to our longstanding allies, to the idea of liberal democracy worldwide. 

What Principles Should Guide Our Response? 

China plays smart and we should too. A military war would be a disaster and both sides know that. A trade war with tariffs and blacklists has not only proved to be ineffective but has cost American citizens billions. It also goes without saying that the trade war likely slowed the progress of innovation and competition on both sides, which the entire world loses from. A topic for another day. 

A competent and effective strategy would be to understand China’s tactics and play the game. In fact, it is better to be proactive rather than reactive. Respond with diplomacy, economic integration, and global cooperation. Such a response will avoid bloodshed while still pushing back. It will also allow us to reap the fruits of trade and cooperation. The current trade war with China has been a disaster for everyone involved. Not only that but the United States has more to lose in this situation, since its average nominal per capita income is over six times higher. It also has a system that values individual freedom. Expanding trade with China will not only have tremendous economic benefits but will also create further interdependency that will allow the US to have more leverage. The US economy is also far more dynamic and flexible than the Chinese economy, which is weighed down by excessive regulation as well as increasing political control, which could be a sign of anxiety regarding the stability of the Chinese Communist Party. Promoting trade and economic interaction not just with China but with the rest of the world will work in the United States’ favor more than it will for the Chinese. 

Finally, the United States should not fight this battle alone. China has an ever-increasing list of skeptics, whether it be our long-time allies such as South Korea, Japan, Taiwan, and Australia or more recent acquaintances such as India and Vietnam. Forwarding collaboration and integration with the ever-growing list of angry countries will ensure that the effort of promoting some semblance of a rules-based international order is not a lone crusade. The combined military and economic assets of all these countries would be a far more formidable and legitimate force than just the US military. This also makes it less about promoting the sole interests of the United States and more about coexistence in the Pacific region led by those immediately involved, not some superpower across the ocean. However, this is not an argument to assemble an Asian version of NATO to further antagonize the Chinese. Everyone has an interest in working with China where they can and pushing back where they can’t. It is possible to use this to everyone’s advantage. 

Key Takeaways

The primary objective when it comes to foreign policy should be to lower the temperature set by the Trump administration while still letting China know that there are boundaries and the world is watching. Soft power projection and economic cooperation are essentially the name of the game at this moment. However, a trade war on paper and now in practice has proven to be a disaster. Understanding the role that economic integration plays in the Chinese strategy is crucial and the US should not be an idle bystander. In fact, it is likely if not apparent that the US has more to lose in embracing economic isolationism and more to gain in pursuing closer economic ties with countries across the world. In particular, those would include China’s immediate neighbors as well as China itself. More and more countries are growing tired of China’s antics. Failing to engage both economically and strategically with these potential allies as well as with China would be a crucial piece left on the table. Diplomacy, economic engagement, and the reserved use of military force are the core principles that define disciplined interstate relations. Throwing them out in favor of romanticized visions of conflict and glory would be playing checkers while China is playing chess.

Ethan Yang

Ethan Yang

Ethan Yang is an Adjunct Research Fellow at AIER as well as the host of the AIER Authors Corner Podcast.

He holds a BA in Political Science with a concentration in International Relations with minors in legal studies and formal organizations from Trinity College in Hartford Connecticut. He is currently pursuing a JD from the Antonin Scalia Law School at George Mason University.

Ethan also serves as the director of the Mark Twain Center for the Study of Human Freedom at Trinity College and is also involved with Students for Liberty. He has also held research positions at the Cato Institute, the Connecticut State Senate, Cause of Action Institute and other organizations.

Ethan is currently based in Washington D.C and is a recipient of the 13th Annual International Vernon Smith Prize from the European Center of Austrian Economics Foundation. His work has been featured and cited in a variety of outlets from online media to radio broadcast.

Get notified of new articles from Ethan Yang and AIER.
AIER - American Institute for Economic Research

250 Division Street | PO Box 1000
Great Barrington, MA 01230-1000

Contact AIER
Telephone: 1-888-528-1216 | Fax: 1-413-528-0103

Press and other media outlets contact
888-528-1216
[email protected]

Editorial Policy

This work is licensed under a 
Creative Commons Attribution 4.0 International License,
except where copyright is otherwise reserved.

© 2021 American Institute for Economic Research
Privacy Policy

AIER is a 501(c)(3) Nonprofit
registered in the US under EIN: 04-2121305