In November 2021, US President Joe Biden and Chinese President Xi Jinping held their first face-to-face meeting on managing great power competition and preventing a “New Cold War”. The talks, however, did not lead to a diplomatic breakthrough. There was no agreement on substantive political issues such as arms control, the coronavirus pandemic, climate change and trade disputes. While the summit may ultimately ease tensions in the medium term, the two countries were less inclined to agree on a framework that would encourage a more conciliatory approach. Part of the difficulty appears to be a political climate increasingly hostile to diplomacy and a growing propensity to define competition in terms of security.
The occasional non-confrontational rhetoric aside, the threat perceptions of policymakers in Washington and Beijing normalize an existential contest for the 21st century. Instead of bolstering existing economic partnerships in the Asia-Pacific region, the U.S. foreign policy establishment is more willing than ever to rally allies and rely on security partnerships — like AUKUS — to bolster the rules-based international order which it has traditionally led.
As China has grown into an economic powerhouse in its own right, the United States has always resorted to “securitization” as the policy of choice. The militarization of Washington’s posture in the Pacific predates Biden and his immediate predecessor. The Obama administration’s “pivot” to Asia and its goal of reallocating US defense priorities to the region are largely ignored. On the one hand, “pivot” meant increased US military spending and additional US Navy resources in the region; on the other hand, China began to increase its own military spending as well as its island-building efforts to secure its claims and trade routes in the South China Sea.
Therefore, regional military build-up can heighten tensions in several turbulent theaters. For example, the prevailing security dilemma between the two powers may further aggravate military tensions on Taiwan, triggering a conflict with disastrous consequences for regional stability and the global economy.
Overstating security as a framework for competition with Beijing has ramifications: Washington risks not only wasting political capital that could respond to economic rivalry, but also miscalculating how secure economic decision-making is. As a recent white paper from the Institute for Peace and Diplomacy observes, “recognizing the reality of multipolarity and moving away from viewing rivalry through a militaristic prism would allow the United States to capitalize on the system based on rules that they carefully orchestrated to reconstruct”.
Meanwhile, the United States neglected multilateral economic arrangements in the region. Beijing recently applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Washington has abandoned. Japan, the biggest economy in the deal, has reservations about securing its relationship with China given its geographic proximity and trade ties to Beijing. Tokyo, however, is open to a more coordinated economic strategy to counter China’s growing influence in the region and hopes the Biden administration will join the CPTPP, a policy prescription that could foster healthier economic competition.
The Biden administration has so far refused to return to the CPTPP which it partly designed to contain Beijing’s economic clout. Meanwhile, China and much of Asia-Pacific have signed the Regional Comprehensive Economic Partnership (RCEP) – a fifteen-member free trade agreement that will strengthen regional interdependence at the expense of non-members. Once RCEP is implemented, deeper economic integration will bring Asia-Pacific closer to China’s orbit and allow Asia-Pacific’s largest economy to wield greater influence over the rules and arrangements of the interior pact.
In other words, the emphasis on security has produced a US strategy that is increasingly incompatible with the economic basis for Sino-US competition. It is vital for China’s competitors to forge a stronger, multi-pronged economic program that would counterbalance the regional deals in which they ceded political influence to Beijing. Going forward, US support for such initiatives could be key to their impact and sustainability.
A more considered grand strategy that takes geoeconomic realities seriously can coexist with policies that address legitimate security concerns, including China’s ascendancy in strategic industries. For example, New Zealand has carefully tightened its telecommunications regulations to address security concerns around 5G networks. Meanwhile, Wellington successfully updated its free trade agreement with Beijing this year. Other US partners might strike a similar balance between security imperatives and economic imperatives, but it is in the latter that US-China competition is most acute.
Using ideology and negative public opinion to lower the risk threshold and secure US-China relations are recipes for escalation and a dangerous zero-sum framing of competition. The prevalence of fear-based politics only ensures that the two countries present themselves as existential threats, raising the prospect of armed conflict while warding off the real economic drivers of competition that guide how the rest of Asia engages and competes with China. Instead, the United States must use economic competition to counterbalance China, promoting global economic growth while avoiding the dangerous security implications of competition.
Pouyan Kimiayjan is a research associate at the Institute for Peace and Diplomacy. He writes editorials and policy briefs, moderates panels, and provides foreign policy analysis to various media, including The Hill Times, The Responsible Statecraft, and National Interest. Pouyan’s research focuses on Canadian foreign policy in Asia-Pacific, West Asia and Europe.
Johnsen Romero is a Policy Research Assistant at the Institute for Peace and Diplomacy and a Yenching Fellow at Peking University. He previously served as a policy analyst for the Canadian Department of Foreign Affairs.