We’ll Increasingly Regret the End of the Deng Era

Denny Roy
Senior Fellow, East-West Center

The most consequential strategic issue in the Asia-Pacific region is not the North Korea nuclear crisis. Rather, it is the structural change created by China’s emergence as a great power. The North Korea problem is serious and currently intense (i.e., it might lead to military conflict), but the regime in Pyongyang will probably be gone or at least substantially changed one way or another within a decade.  The power transition between China and the United States, however, will likely continue to generate tensions for most of the rest of this century.

US-China relations have clearly deteriorated in the last couple of years. There are at least two competing explanations of why this has occurred.

The first is that the United States has become less accommodating to the rise of China as China has moved closer to great-power level, a view espoused by some Chinese analysts. The second explanation is that a critical mass of Americans has concluded that the Xi government has disproved their previous assumptions about how the United States should engage China, and a tougher policy is needed. I will argue here that the second explanation is more convincing.

The “rise” of China is based on a fundamental principle of international relations: differential growth rates. The economies of states grow and decline at different rates. Since economic strength is the single most important source of national power, this means the ranking of particular states within the hierarchy of relative power is constantly in flux.

China has always had a large territory and population, but it is rising to great power status because it has enjoyed an extraordinarily high economic growth rate for three decades—around 6 percent, compared to about 2.5 percent for the United States during the same period. That arguably makes Deng Xiaoping the greatest hero of modern Chinese history, because it was Deng who pushed through the reforms that generated this unprecedented period of high growth. The industrial capacity and wealth China has built up allowed Beijing to convert economic strength to strategic weight by acquiring high technology and modernizing China’s military forces.

History has seen several previous cases like the current situation in Asia, when a new great power emerges into a region already long dominated by a pre-existing “mature” great power. Previous cases demonstrate that this situation creates an unusually high risk of war. The dominant position conveys the privilege of setting the rules of international affairs, and of course the dominant state will implement rules that suit its own national interests. When a new challenger arises, it is anxious to gain influence over the system commensurate with its increased capabilities, while the mature power wants to maintain its pre-eminent status. Thus both have a motivation for seeking military conflict: the mature power considers embarking on a preventive war, and the challenger sees war as a way of re-arranging the international hierarchy.

The problem is one of demand vs. accommodation. The rising power demands more privileges: the mature power should make way for the rising power to achieve more of its national foreign policy goals. To have a chance of mollifying the challenger, the mature power must make adjustments to allow the challenger more influence over regional affairs.  If the challenger is satisfied with the degree of accommodation made by the mature power, and the mature power does not view the demands made by the challenger as excessive and threatening, the transition can be peaceful.  This raises the question of how satisfied Beijing and Washington are with each other’s behavior.

Chinese foreign policy from the 1990s to 2012 stayed within the advice given by Deng Xiaoping: “冷静观察, 站稳脚跟, 沉着应付, 韬光养晦, 善于守拙, 绝不当头.”  In practice, that meant striving to maintain a constructive relationship with the United States and avoid confrontations whenever possible. This policy faced an acid test in 1998, when US aircraft engaged in the war in Yugoslavia bombed the Chinese Embassy in Belgrade, killing three Chinese. The US government said the attack was the result of mistaken identification of the target, apologized, and paid $4.5 million in compensation. Chinese government and society, however, considered the attack intentional. A meeting of high-level Chinese leaders reportedly considered shifting to a more adversarial relationship with the United States in response to what the Chinese considered an act of war.  Nevertheless, President Jiang Zemin overruled the hawks and decided to persist with a basically cooperative China-US relationship even amidst inflamed Chinese public opinion.

During this Deng-era of Chinese foreign policy (which continued after Deng’s death in 1997), a strengthening China promoted Beijing’s views on foreign affairs.  China criticized the US alliance network in Asia as an artifact of the Cold War that did not contribute to peace, called for “democratization” of international relations (i.e., less US influence), complained about Japan’s incremental march toward re-armament, made minor moves to improve China’s position in the South China Sea, maintained threats against Taiwan, and began a military buildup and modernization. At the same time, however, Chinese actions indicated serious effort to avoid alarming China’s Asian neighbors about the consequences of a stronger China.  Beijing invested huge effort into promulgating the idea that China would “never seek hegemony,” and strenuously countered the notion that a strong China might try to dominate or bully smaller Asia-Pacific states. Beijing tried to appear a good international citizen, endorsing multilateral agreements when necessary to avoid drawing negative attention as a regressive outlier.

The Deng era apparently ended with Xi Jinping becoming China’s paramount leader.  During the Deng era, Beijing’s foreign policy seemed heavily influenced by the fear that bold Chinese action might alarm neighboring states into anti-China security cooperation. Under Xi, that concern seems greatly downgraded. Instead of avoiding the appearance of bullying, Xi’s foreign policy seems to value achieving Chinese preferences by intimidating foreign opponents into submission.

Previous Chinese governments were somewhat ambiguous about the United States playing a strong strategic role in the region. Officially and in principle the United States was an outsider and in some ways an obstacle to peace, but privately Chinese often expressed their appreciation that the United States helped deter North Korea and keep Japan on a leash. Xi has said more clearly and often that the United States should cease being a strategic player in Asia. Scholars and analysts who meet privately with their Chinese counterparts have noticed a different tone in the Xi years: China is the regional boss now, and America should stop getting involved.

The key event illustrating the end of the Deng era is China’s decision to build military bases in the middle of the South China Sea on artificial islands, a massive engineering operation that took advantage of a capability in which China enjoyed a world-leading comparative advantage. Beijing is correct in arguing that other South China Sea claimant governments, as well, have added land and built new facilities to bolster their claims. The differences are that China’s land reclamation is much larger than that done by all the other claimants combined; that China is also in the midst of greatly increasing its lead in the number of military and paramilitary forces deployed to the South China Sea; and that China uniquely claims ownership over nearly the entire South China Sea through the “nine-dashed line” and Beijing’s refusal to say that it means anything other than what it appears to mean.

In contrast to the cautious “creeping invasion” that rival claimants accused China of during the Deng era, Xi’s decision to build the bases in the South China Sea is a stunning rejection of the principle of settling international disputes cooperatively. Rather, Xi’s decision indicates that China has already determined the eventual outcome of the dispute that Beijing will impose that outcome by force if necessary, and that China was willing to absorb whatever international criticism resulted from its actions.

The end of the Deng era had a crucial effect on US thinking.  From the 1980s until recently, several key assumptions drove US policy toward China. First, Americans assumed that inviting China to be a participant and even a leader in the US-sponsored regional order (the system of norms, rules and institutions that regulate international relations) would gradually convince the Chinese that upholding this order is in China’s own interests because China can gain more by playing within the rules of this order than by fighting against it. This thinking underlay the famous 2005 formulation by US Deputy Secretary of State Robert Zoellick of the hope that China would become a “responsible stakeholder,” meaning a supporter of the system.

Several recent US presidents and their high-ranking officials have repeated the phrase that the United States welcomes a “strong and responsible” China. The phrase signaled that the US government would not oppose China gaining more security and prosperity as long as China did so by remaining within the basic constraints of the regional order—most importantly, refraining from aggression or bullying in the pursuit of goals not shared by at least a majority of the international community.  (To be clear, there is a difference between the United States bullying North Korea over its illegal missile program and China bullying a Southeast Asian country over fishing rights in the South China Sea). Hence the common description of the US military posture in the region as “hedging,” meaning it would not bother lawful (as interpreted by Washington) Chinese economic, diplomatic or military activity, but was an insurance policy to be activated if China engaged in bullying or aggression, especially against a US friend or ally.

Second, Americans assumed that economic development within China would cause the Chinese government to implement both economic and political liberalization. This reflects a tenet of the US national ideology that all good things go together: liberty, wealth and peace contribute to each other. In the 1990s, a common rule of thumb among American analysts was that when per capita gross domestic product reached $5,000, a developing authoritarian country would reach a tipping point because its society would be wealthy enough to demand empowerment through liberty and the rule of law.  Americans reflexively believe liberty contributes to economic growth by unleashing the entrepreneurial potential of private citizens and incentivizing them to be maximally productive, with positive micro-benefits that also increase the wealth and living standards of society as a whole.  Americans also widely believe the “democratic peace theory,” which holds that democratic countries rarely if ever go to war against each other.  Thus, by trading with and investing in China, Americans believed that in addition to making their profits, they would also be helping the Chinese get wealthier, addicting the Chinese to capitalism, creating pressure on the Chinese political system to liberalize, and eventually removing the possibility of war between China and the USA or any of America’s democratic allies.

Finally, Americans assumed they could dissuade China from building formidable military forces. This was a driving force of the US military’s engagement and diplomacy with the People’s Liberation Army. Visits to each other’s military facilities were generally unequal, with the Americans giving their PLA visitors much greater access than US personnel got at military bases in China. But these visits persisted because the US side believed showing off its superior equipment and systems would convince the Chinese not to attempt to compete with the United States.

These assumptions now appear disproven. China currently has a per capita GDP of nearly $10,000, much higher in large parts of the country such as Guangdong and Zhejiang provinces and cities such as Beijing and Shanghai.  Despite China being wealthier than ever before, the gradual liberalizing trend reversed under Xi. The Chinese Communist Party government is now strengthening the state relative to society; Xi has recentralized paramount power and even put in place a personality cult that some reminds some observers of North Korea; and liberties are receding.

Rather than growing in respect for and support of international rules, norms and institutions, China is now widely accused of wrecking them from the inside through feigned compliance. Many economists believe Chinese behavior has so undermined the World Trade Organization that it is no longer useful. China routinely disregards international agreements it has signed if they constrain China from pursuing its narrow self-interests. It is almost surprising to recall that China is a signatory to the United Nations Convention on the Law of the Sea, which establishes rules that Beijing has completely ignored in pursuit of its South China Sea claims.

The Chinese government engages in outlaw behavior, such pervasive human rights abuses and the immense campaign of economic cyber theft from multiple foreign countries, and simply denies any wrongdoing.

And the Chinese government has declined to take the hint from the US military, massively investing in an effort to build up its own first-rate armed forces. Some of the capabilities the PLA is seeking are clearly intended for possible scenarios involving fighting against the United States.

Many Americans concluded in recent years that the previous assumptions about shaping Chinese behavior in positive ways (from the US point of view) were wrong.  That shift in thinking got implemented in US policy with the election of Donald Trump to the US presidency.  Early key statements of the Trump Administration’s policy toward China make the change clear.  Whereas the Obama Administration sought to avoid antagonizing China on regional disputes in hopes of gaining Chinese cooperation on global issues and characterized the bilateral relationship as mostly a partnership, Trump’s 2017 National Security Strategy says China is “attempting to erode American security and prosperity.” His National Defense Strategy of 2018 says China “seeks Indo-Pacific regional hegemony in the near-term and displacement of the United States.”

In sum, the Chinese government under Xi has concluded that China cannot achieve some of its fundamental demands by working within a regional order dominated by the United States. Accordingly, China is now to some degree working outside of and against that order, while more actively trying to force US strategic influence out of the region. Rising challenger China is fundamentally unsatisfied with the degree of accommodation offered by the mature dominant power USA. For its part, the United States sees Chinese demands as increasingly unreasonable and fundamentally dangerous to the regional order and vital US interests.

Worsening US-China relations in the last few years are less the result of a major change in US policy—which remains amenable to welcoming a “strong and responsible” China—than of Xi’s abandonment of the Deng-era guidance in favor of a bolder and more confrontational foreign policy, which in turn convinced Americans that the previous engagement policy had failed.

Either China or the United States might abandon its commitment to this test of strength because of foreseen or unforeseen internal events. But if they both remain on their respective paths, we can expect decades of high geopolitical tension.



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