Why Sino-American relations are likely to become stormier
Weaker business ties, the South China Sea and bad timing
By J.P.
AS THE world’s two largest economies, and possessors of the two largest armies, China and America make the weather in Asia and much of the world. Partly for that reason the two sides have a routine exchange, called the Strategic and Economic Dialogue (S&ED), so their cabinet-level leaders and top bureaucrats know what each other is thinking—and can minimise dangerous surprises. The most recent S&ED, which took place in Beijing on June 6th and 7th, suggests that the need to avoid surprises has rarely been more necessary.
It is not merely that the two sides have much to disagree about. At their meeting, they differed about China’s claims in the South China Sea; about what to do next in North Korea (though they promised to impose sanctions agreed in March) and about the pace of Chinese economic reform (the Americans want China to go faster). Some disputes are inevitable.
The worry is that they might become confrontations. There are three reasons for thinking this is a possibility. One is the timing. An international panel is likely to rule soon on a case involving conflicting claims in the South China Sea brought by the Philippines, an American ally. Though the ruling is likely to be fairly technical, such as whether some features count as rocks (which have territorial waters) or low-tide elevations (which do not), China has become increasingly assertive about its maritime claims, and could react harshly if (as is thought likely) the court backs the Philippines. Next, America fears that Chinese assertiveness in the South China Sea reveals more than a difference over a particular matter of interest: it may be part of a wholesale rejection of the rules-based global order that America sponsors. America’s defence secretary, Ash Carter, said on May 27th that “China sometimes plays by its own rules”, resulting in “a Great Wall of self-isolation”. Third, the strong economic and business interests that used to underpin the bilateral relationship and helped smooth over political differences seem weaker now. At the S&ED, America’s treasury secretary, Jacob Lew, gave a blunt warning that “foreign businesses [are] questioning whether they are welcome in China.”
If relations do get worse, it is hard to imagine them improving again any time soon. There are few bright spots to offset the gloom, as there were in the past couple of years, for instance when America and China found common cause in limiting carbon emissions. Moreover, both Donald Trump and Hillary Clinton, America’s presumptive presidential candidates, are notably more hawkish about China than Barack Obama has been. The next few months seem likely to be a period when both sides shout past one another.
