The US-China Relationship Needs a New Organising Principle

The US-China Relationship Needs a New Organising PrincipleThe Hon Kevin Rudd ACPresident of the Asia Society Policy Institute, New York. China-US Think Tanks Online Forum Peking University9 July, 2020

It’s good to be in this gathering and to follow Foreign Minister Wang Yi and Dr Kissinger.

Foreign Minister Wang Yi before spoke about the great ship of US-China relations. The great ship of US-China relations currently has a number of holes in the side. It's not quite the time to man the lifeboats. But I do see people preparing the lifeboats at present. So this conference comes at a critical time.

I'm conscious of the fact that we have many distinguished Americans joining us today. Ambassador Stapleton Roy (former US Ambassador to China in the Bush Administration); Kurt Campbell (former Assistant Secretary of State for East Asia under the Obama Administration) who have occupied distinguished offices on behalf the United States government in the past. Steve Orlins, President of the US National Committee on US-China Relations, together with other distinguished Americans, are with us as well. These individuals will have valuable perspectives from an American point of view. And as you know, I'm not an American. Nor am I Chinese. So what I will try to provide here are some separate reflections on the way forward.

We're asked in this conference to address the correct way forward for US-China relations. I always love the Chinese use of the word zhengque, translated as “correct”. I think the Chinese in the title of today’s conference is Zhong-Mei Guanxi Weilaide Zhengque Fangxiang. Well, it depends on your definition of Zhengque or “correct”. Within a Chinese Marxist-Leninist system, zhengque has a particular meaning. Whereas for those of us from the reactionary West, we have a different idea of what zhengque or “correct” happens to be.

So given I'm an Australian and our traditional culture is to defy all rules, let me suggest that we informally amend our title to not finding a “correct” future for the US-China relationship, but to find a sustainable future for the US-China relationship. A relationship which is kechixu. And by sustainable, what do I mean? I mean four things. “Sustainable” within Chinese domestic politics. China is about to have the Beidaihe meetings in August where the US-China relationship will once again be the central topic. “Sustainable” within US domestic politics, both Republican and Democrat. A third criteria is, dare I add it, is “sustainable” for those of us who are third countries trying to deal with both of you. And fourthly, to do all the above without the relationship spiralling out of control into crisis, escalation, conflict or even war.

Now, as think-tankers, finding this intersecting circle between these four considerations is very difficult and perhaps impossible. We're in search of the new “golden mean”, the new zhongyong in US-China relations. But I believe it's worth the effort. In my allocated ten minutes, I'd therefore like to make just three points. And I base these three points on two critical political assumptions. One is that Xi Jinping is likely to remain in office after the 20th Party Congress in 2022. And my second critical assumption is that Biden is likely to be the President of the United States after January 2021.My first point is we need to understand clearly why the US-China relationship is now in its most volatile condition in 30 years - and perhaps 50 years. I think we need to agree on three mega-changes that have been at work.

Number one: the changes in the underlying power structure of this relationship, that is the balance of power between the US and China, because of China's rise. Those of us on the American side here who read the Chinese strategic and political literature know that this is openly discussed in China. That the shili pingheng has changed. And therefore this, in China's mind, provides it with greater opportunity for policy leverage.

The second reason for the change is that those of us who observe China closely, as I've done for my entire professional life, have seen significant changes since the Central Party Work Conference on Foreign Affairs held in December of 2013. And since then China's international policy has become more activist and more assertive across strategic policy, economic policy and human rights policy in this new age of fenfayouwie, and no more an age of taoguangyanghui or “hide your strength, bide your time.” We understand that change and we watch it carefully.

And the third factor that's structurally at work is the Trump phenomenon and what “America First” has meant in practice. We've seen a trade war. We've seen the National Security Strategy. We’ve seen the National Defense Strategy. We've seen technology decoupling, in part. And we've seen it on human rights.

But this third structural factor associated with Trump will not change 180 degrees with Biden. It will change in tone. But my observation is that under Biden the substance is likely to be systematic, strategic competition rather than episodic strategic competition (as we have had with Trump). But with the United States under Biden still willing to work with China on certain defined global challenges like pandemics, like climate change, and possibly global financial management.

My second point is there can be no return, therefore, to previous strategic frameworks for managing a “sustainable” or kechixu US-China relationship in the future. Therefore we need to develop a new framework for doing that. I'm not talking about throwing away the three communiques (from the 1970’s, outlining the foundations of the US-China relationship). I'm talking about building something different based on the three communiques. I often read in the Chinese literature that Beijing hopes that the United States will recognise its errors and return to a “correct” understanding of the US-China relationship and resume the past forms of strategic engagement. For the reasons I've outlined, already, that will not happen.

Take one most recent example. China's decision to enact the national security law on Hong Kong is seen in Beijing as a matter of national sovereignty – in 1997, sovereignty transferred from Britain back to China and that's the end of the argument. But the essential nature of the American democracy does not permit Washington to see it that way. And hence the reaction from other Asian and Western democracies, which is likely to intensify over the coming months. This is just one example of the much broader point of the changing deep structure of the US-China relationship.

As I said before, the US-China relationship must remain anchored in the three communiques, including the most fundamental issue within them, which is Taiwan. But a new organising principle, and a new strategic architecture for a sustainable relationship, is now needed.This brings me to my final point: some thoughts on what that alternative organising principle might be for the future.

Of course, the first option is that because we are now in an age of strategic competition, by definition there should be no framework - not even any rules of the road. I disagree with that. Because without any rules of the road, without any guide rails, without any guardrails, this would be highly destabilising. And therefore not sustainable.

The second option is to accept the reality of strategic competition but to mutually agree that strategic competition should be managed within defined parameters - and through a defined mechanism of the highest-level continuing strategic dialogue, communication and contact.

We might not yet be in Cold War 2.0 but, as I've written recently in Foreign Affairs magazine, I think we're probably in Cold War 1.5. And if we're not careful, we could end up in 2.0. But there are still lessons that we can learn from the US-Soviet relationship and the period of detente.

One of these lessons is in the importance of internal, high-level communication between the two sides that there should be an absolutely clear understanding of the red lines which exist, in particular on Taiwan. By red lines, I do not mean public statements from each other's foreign ministries as an exercise in public diplomacy. I mean a core understanding about absolutely core interests, both in the military sphere but also in terms of future large-scale financial market actions as well. Within this framework, we also need a bilateral mechanism in place to ensure that these red lines are managed. And that's quite different to what we have at present where we seem to be engaged in a free voyage of discovery, trying to work out where these red lines might lie. That's quite dangerous. So to conclude: mutually agreed red lines, both in the military and the economic sphere.

But of course, that's not the totality of the US-China relationship. But they do represent a foundation for the future strategic framework for the relationship. As for the rest of the architecture of the “managed strategic competition” that I speak of, my thoughts have not changed a lot since I wrote a paper on this at Harvard University, at the Kennedy School, about five years ago. I called it ‘constructive realism’ or jianshexing de xianshizhuyi. There I spoke about: number one, red lines where no common interests exist, but where core interests need to be understood; two, identifying difficult areas where cooperation is possible, for example, like you (both the Chinese and American sides) have recently done on the trade war; and three, those areas where bilateral and multilateral cooperation should be normal, even under current circumstances, like on pandemics, like on climate change, and like making the institutions of global governance operate in an efficient and effective way through the multilateral system, including the WHO.

And, of course, if this framework was to be mutually accepted, it would require changes on both sides - in both Washington and Beijing. But it will also require a new level of intellectual honesty with each other at the highest level of the relationship of the type we’ve seen in the records of Mao's conversations with Zhou Enlai and with Kissinger and Nixon and those who were party to those critical conversations half a century ago. The framework I've just outlined is not dissimilar in some respects to what Foreign Minister Wang Yi spoke about just before.

My final thought is this: I'm very conscious it's easy for an outsider to say these things because I'm an Australian. But I care passionately about both your countries and I really don't want you to have a fight which ends up in a war. It's not good for you. It's not good for us. It's not good for anybody.

I'm also conscious that in the United States, there are huge domestic challenges leading up to the US presidential elections – Black Lives Matter, COVID-19 – and I'm deeply mindful of Lincoln's injunction that a house divided among itself cannot stand.

But I'm also mindful of China's domestic challenges. I'm mindful of what I read in the People's Daily today about a new zhengdang, a new party rectification campaign. I'm also mindful of traditional Chinese strategic wisdoms, for example, in the days of Liu Bang, Xiang Yu and shimian maifu or the dangers of “having challenges on ten different fronts at the same time” .

So much wisdom is required on both parties. But I do agree with Jiang Zemin and his continued reminder to us all that the US-China relationship remains zhongzhong zhi zhong or “the most important of the most important”. And if we don't get that right, then we won’t be able to get anything else right.

This is an edited transcript of Mr Rudd's remarks to the Peking University China-US Think Tanks Online Forum.