The US-China relationship: on a downward spiral?

Officials from the US and China put on brave faces at the recently concluded US-China Strategic and Economic Dialogue. Tensions in the maritime and cyber realms, however, are threatening to send the relationship into a downward spiral.

Getting To The Point

Speaking to the press at the recently concluded S-China Strategic and Economic Dialogue (S&ED), US Secretary of State, John Kerry, tried to dispel an increasingly widely held belief among analysts that Washington’s relationship with Beijing is in a tailspin over tensions in the South China Sea and cyberspace.

‘I don’t think you heard […] any scintilla, not one tiny little piece, of an indication of this downward spiral,’ Kerry said. ‘I think what you saw was an ascending relationship with great clarity about the things on which we’re going to cooperate – even if there is disagreement about how to approach one, or two, or three issues.’

Mr Kerry is partly right. An impressive 127 agreements were reached between China and the United States over the two-day period. A third (44) of these related to climate change – a bright spot in the bilateral relationship. They also included agreements on counter-terrorism cooperation, global development, Iraq and Afghanistan, and their shared concerns over the nuclear programmes of Iran and North Korea.

Unfortunately, the ‘one or two’ issues that Mr Kerry glossed over also happen to be those with the greatest potential for serious friction.

Maritime and cyber security are problems around which officials from both sides trod softly during the discussions. Mr Kerry promised that government-sponsored theft of commercial secrets would be tackled ‘in a frank discussion’ behind closed doors, and opted for a general rebuke of China’s island reclamation in the South China Sea – which reportedly now spans 2000 acres of freshly pumped sand and coral. Meanwhile, one of Mr Kerry’s counterparts leading the economic track on the Chinese side, Vice Premier Wang Yang, drew attention towards the prospects for deeper economic cooperation, which he described as ‘ballast’ for the broader bilateral relationship.  

Protecting The ‘Flows’

Can US-China differences in the maritime and cyber realms be managed? Promising developments elsewhere in the bilateral relationship serve as a reminder that some US-China problems can be contained, and even resolved, in the long term. US Treasury Secretary Jacob Lew’s announcement at the S&ED that China had finally agreed to limit its deliberate devaluation of the Yuan – an issue that in 2011 mobilised a bipartisan majority of US Senators to threaten a trade war with China – is partly a success of sustained diplomacy by both sides.

Yet the problems both countries face at sea and online are more complex. The South China Sea is sometimes simplified in press coverage as a set of ‘territorial disputes’. Meanwhile, the US government’s public embarrassment at the hands of Edward Snowdon leads some commentators to draw equivalence between the espionage activities of Washington and Beijing.

The reality is more complicated.

As Washington has repeatedly stressed, it remains impartial on the question of sovereignty over individual island features in the South China Sea. And as former CIA chief, Michael Hayden, recently acknowledged through gritted teeth, the alleged theft of millions of U.S. government employees’ vetting data by Chinese intelligence was ‘honourable espionage work’ and a ‘legitimate intelligence target.’ It is the targeting of commercial data and US industry that is the real source of rancour.

At stake between the US and China in the maritime and cyber realms is what some US analysts refer to as the ‘flow’: of commercial and naval traffic at sea first of all, but also the flow of resources and energy, the flow of finance, the flow of information, the flow of people, and the flow of government communications. The flow of all these things underpins the prosperity and security of the liberal international system that has existed since 1945.

To a significant body of US strategic thinkers, China’s attempts to exert jurisdiction over international waters in the South China Sea threatens the freedom of navigation as it exists in international customary law and as it is defined by the UN Convention of the Law of the Sea (UNCLOS).

Beijing’s alleged theft of foreign intellectual property threatens the lifeblood of free trade and commerce, not just American corporate competitiveness. Hence Vice President Joe Biden’s recent rebuke to Beijing: ‘Nations that use cyber technology as an economic weapon, or profits from the theft of intellectual property are sacrificing tomorrow’s gains for short term gains today.’

Difficulties Ahead?

The gravity of US concern about China’s interference with the ‘flows’ at sea and in cyberspace is matched evenly by Beijing’s own concerns. These include a widely held belief that the US Navy has no legal right to operate its navy so close to China in waters over which Beijing, in any case, maintains historic claim. Connected to this point is the question of America’s forward-based forces. Many in China’s government see US forces as hindering the People Liberation Army Navy’s (PLAN) access to the Pacific; threatening the security of China’s supply lines in a contingency; and curbing China’s ability to achieve strategic encirclement and eventual reunification with Taiwan.

In cyberspace China sees a source of political subversion and a danger to regime stability. Through the targeted acquisition of foreign technology, it is also an opportunity to expedite its inevitable rise as a military and economic superpower.  

The time between now and President Obama’s meeting with Xi Jinping offers a window for negotiation on the maritime and cyber policies of both countries. Yet this window will soon close, and that both sides did not broach maritime or cyber security issues seriously during the E&SD shows that differences are entrenched.

Failure to progress on either issue may embolden those in Beijing who see no solution through further negotiations. Possible future actions by Beijing might include the declaration of an ADIZ over the South China Sea, upping the stakes further. Or Beijing could offer more forceful challenges of the US Navy’s regional presence, as a Chinese fighter jet did when buzzing a US P8-A Poseidon maritime patrol aircraft over a disputed reef in the South China Sea in August last year.

Either action would increase the risk of military conflict. Yet given what is at stake, it seems that neither side is preparing to make concessions anytime soon.


Edward Schwarck

Research Fellow, Asia Studies

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