How America's relationship with China changed under Obama

Barack Obama had six diplomatic priorities in his 8-year term.

The first was to control the costs of US hegemony. The US paid a high price for the two wars fought during George W. Bush’s term. After Obama assumed the presidency, he withdrew the majority of its military forces from Iraq and Afghanistan. After the breakout of the Arab Spring in 2011, however, the US failed to show self-restraint and again involved itself in the wars in Syria and Libya. Exiting one battleground to enter another was not a wise move.

The second was to revive the US economy. During Obama’s first term, when the US was mired in a financial crisis, he did a lot of work, including convening the G20 Summit, coordinating macroeconomic policies, pledging to double export growth and revitalize manufacturing. In retrospect, all these policy measures seem to have failed to achieve their expected targets—US export growth was only 60%, falling behind its original goal of doubled growth. Only to China has the US achieved a 150% growth in exports. Also, Obama failed to bring back manufacturing jobs. When Donald Trump campaigned for the presidency, he criticized the Obama administration for only bringing back three companies with 600 jobs despite its hype of manufacturing revival. While the actual results may not be as exaggerated as Trump claimed, they are far behind pledged goals.

The third was to continue to fight against terrorism. During his term, one significant accomplishment was the assassination of Osama bin Laden, but the rise of Islamic State has cast a shadow over his earlier efforts.

The fourth was to advance global issues, including promoting a nuclear-free world and tackling climate change. The progress in global cooperation on climate change should be largely attributed to China’s support. Nuclear security has been one of the tenets espoused by Obama, for which he was also awarded the Nobel Peace Prize. Despite the progress on Iran’s nuclear program, the deadlocked nuclear issue on the Korean peninsular has weakened his performance.

The fifth was to restore the international reputation of the US, that had been injured by Bush and to strengthen its ties with allies. Obama was partially successful on this front. The resumption of diplomatic ties with Cuba earned applause for the US in Latin America, but economic sanctions against Cuba were not completely removed due to opposition by Republicans, who dominated Congress. It would be fair to say that their bilateral relationship has not been truly normalized.

The sixth and final priority was the strategy of “returning to the Asia Pacific,” shifting a focus which had been on Europe for 200 years, to Asia, or from the Atlantic to the Pacific. Obama proclaims himself "America's first Pacific president." Behind this title, China is a direct factor.

Originally called a “return to the Asia-Pacific”, the strategy was later rephrased as a “strategic pivot” and finally a “rebalancing”. Despite the rhetorical changes, its intent remains consistent —to contain the rise of China. The strategy was first introduced by then Secretary of State Hillary Clinton at the ASEAN Regional Forum held in Hanoi on July 23, 2010, which outraged China because there was no prior consultation with it. The then foreign minister of China, Yang Jiechi, demanded an adjournment, followed by a one-hour rebuke to Hillary.

Behind the US adjusting its global strategy to return to the Asia-Pacific is the rise of China: within a space of three years, China held three high-profile events—the Olympic Games in 2008, the military parade in 2009 and the World Expo in 2010. Moreover, in 2010 China surpassed Japan to become the world’s second largest economy, and overtook the US in manufacturing output and power generation. US pragmatic strategists are keenly aware that manufacturing is the foundation of industry. Strong manufacturing comes with strong military power, and with strong military power comes the ability to compete for global leadership.

In the 20th century, the US had three rivals—Germany, Japan and the Soviet Union. Even in their prime, their manufacturing output represented only two thirds of America's. China surpassing the US as the world’s largest manufacturer caused a widespread shock among US strategists. In China, this fact was not given enough due attention due to the lack of knowledge among elite and academic communities. It is in this context that US strategists and the Obama administration locked China in as its main rival and a thorn in its side, hence the shift of its global gravity to Asia, or precisely, to the surrounding regions of China.

When Obama first proposed the policy of a “return to Asia”, it was protested by some officials who originally worked in the Bush administration. They questioned whether the wording indicated that Asia was “abandoned” by their administration and criticized Obama as a bad example for bringing bipartisan politics into diplomacy. So the policy was renamed as a “pivot to Asia”, meaning pivoting its focus from Europe to Asia. But America's European allies found this pronouncement disconcerting, asking whether the US would give up Europe and the Atlantic. Their reaction caused the policy to be finally framed as the “rebalance to Asia-Pacific”. This is a smart word, implying that there used to be a balance in Asia, but it had been broken by the rise of China and therefore needed to be “rebalanced” by the US. This rhetoric did not trigger a backlash within the US and among its allies, but pointed to China as the cause of issues in Asia. This is how the rhetoric has been used by the Obama administration up until today.

It has been six years since the US put forward the “rebalance to Asia-Pacific” strategy, which is supported by four pillars. The first is to deploy 60% of its navy and air force to the Asia-Pacific region, a plan announced by a senior US official. This is reminiscent of the US, during the Cold War, deploying 60% of its navy and air force in the North Atlantic while keeping 20% for home territory and the remaining 20% for strategic mobility; the second is to create the Trans-Pacific Partnership (TPP), a trade framework that excludes China; the third is the use of what Hillary Clinton calls “smart power” in diplomacy, which is actually to take advantage of China’s conflicts and disputes with its surrounding countries to drive wedges among them; the fourth pillar is to continue its contact with China.

This explains why Sino-US relations during Obama’s eight years followed a different trajectory. Before Obama, when a new US president took office, bilateral ties between the US and China would first experience some bumps before returning to normal. During Obama’s term, however, Sino-US relations had a good start but with a bumpy ride before being stabilized.

Obama visited China in November 2009, the first year of his presidency, which was a rarity. As a rule of thumb, a US president would not visit China unless he had won the second term. The reason behind Obama’s different approach to China is because the US cannot accommodate the rise of China, hence the “return to Asia” policy. From May 2015 to this past July, the two countries were once at loggerheads over the South China Sea issue and their relationship didn't ease until after this past July. Now, there are only two months left for Obama’s presidency. During the US presidential transition, the two countries are expected to maintain stability in their bilateral ties.

Looking back, the “rebalance to Asia-Pacific” strategy cannot be called a success. It not only failed to contain the rise of China, but also deepened China’s strategic mistrust of the US, which is against its interests. Among the four pillars underpinning this strategy, the third and fourth pillars are also conflicting to each other. Deploying 60% of its navy and air force against China can only put China on full alert and motivate it to accelerate its military modernization. The exclusion of China from the TPP has also encouraged China to advance its Regional Comprehensive Economic Partnership (RECP), Free Trade Area of the Asia-Pacific (FTAAP) as well as its “One Belt, One Road” initiative, and prompted China to lead the creation of the BRICS Development Bank and the Asian Infrastructure Investment Bank.

With Donald Trump having won the US presidential election, we can safely say that the TPP is already clinically dead. Although the “smart power” diplomacy has created some headaches for China, it has not significantly worsened China’s surrounding environment. Moreover, the Philippines’ reversal in its foreign policy towards the US and Thailand and Malaysia choosing to take sides with China have proven that such “wedge-driving” manoeuvres can only produce short-term effects. It is now understood by China’s neighbours that they would finally suffer if they joined the US in pitting themselves against China; on the contrary, they would benefit if they maintained equal distances from both China and the US. When you look at the “return to Asia” policy now, it has become “a project that will never be finished” for the US trans-Pacific policy.

Obama’s two terms saw improved equality in the balance of power between the US and China. China smoothly completed its leadership transition at the 18th CPC National Congress. By purchasing power parity (PPP), China overtook the US as the largest economy in 2014, which, in terms of historical significance, can compare to the US surpassing Britain in real GDP in 1872. By mid-2016, China’s real GDP was already 12% higher than that of the US. At the end of 2015, China’s total manufacturing output represented 150% of the US, or was equivalent to the combined total of the US and Japan—an unprecedented record in Chinese history. At the current growth pace, China’s factory output would be as much as the sum of the US, Japan and Europe in 10 years.

China has also been advancing by leaps and bounds on the technological front. For the past five consecutive years, China was ranked first in terms of patent filings. In all the hot areas of defence, there are a dozen Chinese players competing head to head against a limited number of two or three companies from other countries. According to the Nature Index, an index drawn by British scientific journal Nature from 68 natural science journals, China’s total contribution to high-quality science has risen to become the second largest in the world, surpassed only by the US.

The US, by contrast, has seen no substantial reform since the 2008 financial crisis, which projects a feeling that the US has been “muddling along”. The crisis robbed five million US families of their homes and left seven million families dependent on legal acts for the continued use of their homes even if they could not pay their mortgages. The Federal Reserve instituted several rounds of quantitative easing, but did little to reform Wall Street. The US also failed to deliver its gun control, immigration reform and middle class support plans. Obama’s healthcare plan was advanced with a lot of fanfare, but the middle class was disgruntled because it turned out to increase the financial burden on many of them. Despite its moderate economic recovery and improved job figures, its real economy remains weak, fraught with a further divided society. The several rounds of quantitative easing didn't help a lot beyond buoying the stock markets on Wall Street.

Despite the limited role of policy, the relationships between big powers like the US and China are mainly driven by their comprehensive national power. Coincidentally, China’s national strength increased over the past eight years. In this context, the US needs a new policy to deal with China, and the Obama administration did devise one — the unsuccessful “rebalance to the Asia-Pacific” policy.

On the contrary, China has not only narrowed its gap with the US, but also demonstrated more strategic initiative, as exemplified by the concept of “a new type of major power relations”, which was proposed by President Xi Jinping during his meeting with Obama at the Annenberg Retreat in California in June 2013. The defining elements of this type of relations are “no conflict or confrontation, mutual respect and win-win cooperation”. The US is able to completely accept “no conflict or confrontation,” but not “mutual respect”. The US can also partially accept “win-win cooperation”. For example, the two countries are, more or less, willing to cooperate on issues such as anti-terrorism, nuclear security and climate change. In other words, Obama has neither rejected nor accepted the construction of this new type of bilateral relations. Whether the US can accept this concept or not, the failed rebalance strategy of the US has allowed China to gain the strategic initiative with a slight upper hand.

At the same time, China continues to boost its presence and increase its say in US-dominated frameworks. For example, China has managed to include the RMB into the SDR basket, continued to appoint senior officials at the World Bank and the International Monetary Fund, increased its UN membership dues and mapped out its own global strategy after the 18th CPC National Congress, as evidenced by the “One Belt, One Road” initiative and the Asian Infrastructure Investment Bank. That’s to say, China has broadened its vision beyond Sino-US relations to a global scale. This has helped it gain more strategic initiative. By contrast, the US has regressed significantly in terms of strategic thinking when compared with the Cold War period. When it comes to the disintegration of the Soviet Union, there is a false belief among US elites that the dissolution was a result of the US triumph over the Soviet Union rather than the result of its internal problems. This has encouraged the US to be arrogant and belligerent and make lots of enemies. The “rebalance to the Asia-Pacific” policy designed to contain China is also devoid of creativity as a continuation of its old-fashioned geopolitical mentality.

The fact that Donald Trump won the presidential election is also a reflection of public discontent with the Obama administration. Faced with a rising China, the US needs to break away from “Americentrism”. The US still has a great sense of superiority, viewing the world from a US-focused perspective without appreciating the most important fact in this world—China has already become the strongest industrialized nation in human history. It also neglects another historical fact - the US had always benefited from its cooperation with China in the Asia-Pacific throughout the 20th century. Sino-US cooperation led to the triumph over militarist Japan during World War II and the skew of Asia-Pacific geopolitics in favour of the US during its Cold War against the Soviet Union. However, when it gathered some small nations against China, the consequences were the Korean War and the Vietnam War. China is a natural big power, which can never be beaten even if the US has the support of some small nations.

The US remains focused on itself and its allies, unable to treat China as an equal. If it reverses its approach and considers China as an equal partner, both its Asia-Pacific and global strategies will gain a new life. If the two countries can become friendly partners, the cause of war in the Asia-Pacific region will be rooted out. The significance of Sino-US cooperation is much greater than a US-dominated alliance and the US will strategically reap much higher benefits from such cooperation. However, it remains to be observed whether US decision makers will develop such horizons in the future. When it comes to internal affairs, the US is now advised to learn from China by instituting comprehensive opening and reform measures.

There is a prevailing consensus among US elites that despite many issues, the US system remains the best in the world. What the US needs to do is fine-tune its policies rather than reform its system. This is a wrong belief. First, the US economy is too reliant on finance, printing too many dollars, which is a reserve currency, instead of boosting its real economy and manufacturing to strengthen its competitiveness. This is not a sustainable model. Second, politically, the US must reconstruct its mainstream society. One physical precondition for a well functioning multi-party democracy is a strong mainstream society. Different parties are mere representatives of different segments of the mainstream society, which is the foundation of cooperation. However, this physical precondition is dangerously disappearing in the US and some other European countries. Instead of focusing its attention on these two fundamental issues, the US is obsessed with rivalry against China. In fact, there is no way to beat China; even if it does, the US will still turn out to be a loser.

Trump’s presidential campaign was full of blockades installed by both Democratic and Republican elites as well as by pro-establishment groups. The entire election was a dirty process. Three divides in US society may explain Trump’s victory—the class divide, the Right-Left divide and the racial divide. Trump smartly built loyal bases among lower middle classes, rightists and the white majority. It is their frustration and anger with the Democratic Party and the Obama administration that helped Trump surmount obstacles created by pro-establishment groups to win the election.

However, behind Trump’s triumph there are also three major risks that need to be addressed—anti-elitism, white racism and rightist anti-globalization; otherwise US society will become further divided, with a shrinking mainstream society. Trump has three identities—businessman, candidate and president-elect. Now he needs to transition from his previous two roles into the third one; or it would be detrimental to his presidency. Now we have seen him making some adjustments, like appealing to his supporters not to be racist and claiming to inherit part of Obama’s healthcare reforms.

Recently, he also made some innovative moves, like opening 4,000 political appointment positions in his administration to the general public. Conventionally, these positions would be allocated to Republicans. His departure looks like a warning to the pro-establishment camp within his party. After he assumes the presidency, whether this will cause a grudge among Republican senators and representatives and therefore executive-legislative discord remains an unknown.

After Trump takes power, there will definitely be an impact on pro-establishment groups in the US political system. Moreover, the policy directions indicated in his speeches will, too, cause some impact on current US-dominated alliances, in which the US will no longer assume so much responsibility and its allies will have to share more of it. US efforts to advance globalization, such as TPP and NAFTA, will also meet some setbacks.