Transition 2021 Series: Confronting the China Challenge

Panelists discuss the challenges the Biden administration will confront navigating the U.S.-China relationship, including negotiating trade agreements, cybersecurity, relations with Taiwan, and Chinese repression in Hong Kong and Xinjiang.

The Transition 2021 series examines the major issues confronting the administration in the foreign policy arena.

ELLIOTT: Welcome to today's Council on Foreign Relations Transition 2021 Series meeting, "Confronting the China Challenge," with Evan Medeiros, Minxin Pei, and Susan Thornton. I'm Dinda Elliott, director of programs at China Institute and I will be presiding over today's discussion. I want to add that I'll be speaking in my private capacity, not representing China Institute today. This meeting is part of the Council on Foreign Relations Transition 2021 Series, which examines the major issues confronting the Biden-Harris administration in the foreign policy area. We have an amazing group of thinkers with us today. Evan Medeiros is a fellow in U.S.-China studies at Georgetown University and was a top Asian policy expert on the National Security Council during the Obama administration. Minxin Pei is a professor of government at Claremont McKenna College, and he's a leading American expert on Chinese politics. Susan Thornton is a senior fellow at Yale's Paul Tsai China Center and was a top State Department official during the Obama administration. So let's jump right in. We have so much to cover, so I'm going to ask you all to try to keep your answers brief. Let's start with, you know, this program is called "Confronting the China Challenge," so I'd like you first to each take a minute or two, to map out what you think is the China challenge. As you know, of course, lots of discussion and controversy—is China a strategic competitor, and if so, does that mean that China is or will become an enemy? How do you define the challenge that China's rise poses for the United States? Susan, do you want to jump in first?

THORNTON: Sure. Thanks, Dinda, and thanks to everyone for tuning in today. It's a great group of colleagues and important topic. I actually think there are several aspects to the China challenge that confront us now and that make it really difficult for us to sort through what to do about it. I mean, the first is really a challenge, it's a structural challenge. A challenge, sort of, to the U.S. position in the world, our national identity as the leading nation, sort of the architect of the international system, and we see China coming up in the rearview mirror and this is the sort of structural challenge that Graham Allison talks about in his book Destined for War. But I think there are a couple of other things going on, too. I mean, it's a system challenge, because, you know, China is so large. Its size and its weight in the international system and it has a different governing system so it needs to be fitted into the current existing global order in a way that doesn't break it. And that's really the project that we've been about with China for the last forty years. It's still not clear that it's doable or it can be done, and I think that's a challenge. And then the last challenge is really the one that the Biden administration talks about a lot, which is we need to get our own house in order and make ourselves more competitive so that we can compete with the, you know, rapidly ascendent China. And I think that is also an issue where we have to figure out what it is that the domestic challenge is all about. I mean, I personally think it's mostly a governance challenge and an economic challenge, not a military challenge. But I think this is something the U.S. is still sorting out.

ELLIOTT: Evan, you want to jump in?

MEDEIROS: Sure. And Dinda, thanks to you and our friends at CFR for inviting me. Great to be here, and I'm glad we're having this conversation so early on in the Biden administration. So I very much agree with Susan's assessment. I slice the pie a little bit differently. I think about the competition as challenging in three ways. Number one, unlike with the Soviet Union during the Cold War, China is a real peer competitor, right? The competition has an economic dimension to it, a technological dimension to it, of course, as well as a military and a diplomatic dimension. So unlike the Cold War, this is a serious broad spectrum competition that doesn't lend itself to an easy solution. Point number two, the Biden team and other strategists have talked about the right strategy is one that's a combination of confrontation, competition, and cooperation. And while I generally think that's right, I think the challenge for the Biden presidency or really any U.S. leader is how do you actually execute that, right? It's really easy to talk about, oh, we need to find a balance of policy options that leads to competitive coexistence. These are all ideas I agree with and I applaud my friends and colleagues in and out of government for proposing them, but how you move from articulation to actually implementation—how do you structure a policy that allows you to confront, compete, and cooperate simultaneously? It's really hard to do and I think we need to study that a little bit more. Third point is I think the China challenge is going to be difficult for the United States because of domestic politics, not just in America, but also in Beijing. In other words, I think this relationship will be driven as much by domestic politics as by geopolitics. And again, that's not only domestic politics in the United States, but the politicized nature of China's U.S. policy in Beijing. Over to you.

ELLIOTT: So Minxin, that's a perfect segue to you to, you know, hear your thoughts about how the United States, you know, what is the challenge?

PEI: Well, there were three aspects to this challenge. One is, obviously, the power dimension. That is, Chinese power has grown significantly and unexpectedly over the last twenty years. And that has shifted our perception of China and also shifted the Chinese perception of the U.S. So how do we deal with Chinese power? And second is related to that is the way China has been using its power, applying its newly found or newly gained capabilities. And that's a policy issue. So if Chinese power is used judiciously or moderately that will not make China as big a challenge as it is today. And third, is really the Chinese system, the ideological dimension. I would not say that the ideological dimension is dominant. The most important aspect is really Chinese power, but at the same time, how China is governed, how the Chinese Communist Party, the ruling party, treats its own people and the values the party espouses—these are very problematic aspects to this relationship. And the difficulty is, how can you separate one from the other because all these three aspects are closely connected?

ELLIOTT: Minxin, I want to follow up with you, if I may? It seems to me that to understand how to deal with the China challenge, so-called, we need to understand what is China's motivation and what are China's goals? So tell us what do you see driving China's foreign policy these days? What are Xi Jinping's goals? Does he want to expand China's influence in the world to export China's ideology or model? And does China pose the kind of existential threat to the U.S. that former Secretary of State Pompeo referred to?

PEI: Yes, let me deal with the last one first. I don't think China currently poses an existential threat to the U.S.. It could in the future because if you look at the Chinese military threat it's still not anywhere near where the Soviet Union's threat was. And the Chinese economy may be large, may be becoming the most technologically sophisticated, but still the U.S. is way ahead. In terms of alliances, China is way, way behind. In terms of ideological appeal, the Chinese ideology still is not as appealing as American liberal democracy, of course, assuming that we can get our own house in order. So what is driving Chinese foreign policy? I see three things driving Chinese policy. One is perceived American decline. This has been a very important theme in driving Chinese foreign policy thinking. The second is perceived opportunities. There's zero areas where Chinese leaders believe they could act without serious pushback or without serious consequences and I single out two. The South China Sea island building is one of the gray zone areas where they saw an opportunity where they could do what they wanted without encountering a serious pushback. Obviously, they've miscalculated. The other area is Belt and Road, which is not exactly about infrastructure, it's really about neglect by the West of developing countries. And the third factor driving is really Xi Jinping himself. This is a man who has a lot of appetite for risk, and he's single handedly really has made a set of decisions I don't think his predecessor would have made.

ELLIOTT: Evan, I have essentially the same question for you but about the United States. So, you know, we need to look at what should the United States' goals be—short term, medium term and long term in dealing with a rising China. What do you think the goal should be? It seems like we've been drifting without a long-term plan for a while. I think you're muted, Evan.

MEDEIROS: So I don't think the U.S. has been drifting, per se. I think the U.S. hasn't found the sweet spot yet. So while the Trump team sort of woke up the world to the acute nature of the China challenge that we've all talked about, they then adopted a series of policies that I see as not very competitive and very, very confrontational, right? And so the question is sort of what's the sweet spot? And I think that the ideal policy is one that continues to constrain China and shape China and affect the degree to which some of its ideological inclinations and its views about, especially, external governance, in particular global governance, you know, really are contained. And so it depends on which dimension of the competition you're talking about, whether it's the military, the technological, the economic, or the ideological, which arrows in the U.S. policy quiver you want to use to apply. But I think in general terms, the U.S. approach needs to think about strategies that rely more on shaping the environment around China as opposed to strategies that are about directly negotiating with the Chinese. I think we're, you know, for all the very good points that Minxin made about Xi's ambition, his risk tolerance, their views of U.S. decline, I think we're in a phase of the relationship right now—hard to say how long it'll last, maybe it'll be three years, maybe it'll be five—where the Chinese feel as if their relative advantage is accelerating. And so our ability to actually elicit meaningful changes in behavior from China or our ability to constrain the Chinese through direct bilateral mechanisms, I think, is limited. And so where I think U.S. strategy needs to spend more time is in, sort of, shaping the external environment. And that means in Asia, in Europe, forging coalitions of the willing, depending on the issue that you're talking about. And that means, you know, bringing the Europeans in to work on some security issues in very limited discreet ways, perhaps Taiwan and the South China Sea in Asia. You know, working more closely with our Asian friends and colleagues on technology supply chain issues to reduce the degree of American and Asian vulnerability to cut-offs from China. I mean, look no further than recent statements by Xi Jinping were basically his strategy is we want to increase reliance on the rest of the global economy on China but reduce China's reliance on the rest of everybody else. In other words, maximize our leverage with the rest of the world, right? So I think the U.S. needs to recognize that this strategy of shaping and constraining by working around China is going to be more effective over the long term.

ELLIOTT: Great. So Susan, this idea of working with allies, you know, as you were saying the Biden administration's new mantra seems to be that the U.S. will focus on working with allies in a joint approach to deal with China with the assumption that pushing together will elevate U.S. leverage somehow. So talk about that from your experience as a career diplomat. What do you think about that? Is it realistic? Will the others follow?

THORNTON: Yes, I mean, for me, I think there is a real crucial set of actions that we need to focus in on. First is that the U.S. needs to, kind of as you said, we haven't been drifting but we need to focus in on this problem that we have of transitioning to a more multipolar system in the global order. And we also at the same time need to get China to learn how to control its, you know, newfound increasing powers. And so the way that the Biden administration, I think, is proposing to look at these two problems, I mean, first, has been mentioned by Minxin, the idea that we need to get our own house in order and sort of build up our own leverage, but at the same time that our own leverage isn't going to be enough anymore to sort of shape the environment around China and we need to get our allies and partners and others in the international system who see this problem in the same way that we do and are worried about as Evan said, you know, China increasing their reliance on only China and preventing them from diversifying as they'd like. We'd need to get all of those partners together to try to help us build leverage to, you know, get China to control, learn how to control, learn how to constrain its own powers in the international system and what kind of accountability are we going to jointly wield in order to do that, because I think it's clear to most of us that the Chinese aren't going to do this just on their own accord. They're going to have to be seeing a kind of a coalition arrayed against them.

Now, the one, I think, problem that we have right now in trying to push this forward with allies is that, you know, they have been pursuing a kind of more nuanced policy, shall we say, toward China than the Trump administration pursued for the last four years. And they worry that the U.S. has really, you know, built up this kind of toxicity in the U.S.-China relationship that will end up dragging them into a much more confrontational stance with China than they feel is prudent. And that gets back to the question that Evan raised, which is, you know, it's very hard to say, I mean, it's easy to say that we want to cooperate and we want to compete and we want to also contest or confront in certain areas, but it's really hard to fashion a strategy where that is actually going to work because the other guy, i.e., China, as Defense Secretary Mattis was always fond of saying, also gets a vote. And right now, you know, they're looking at what the U.S. is doing. They have accumulated a set of concerns and grievances mainly having to do with whether or not the U.S. is bent on kind of limiting their progress, containing their development, and overturning their system and their regime. So they are, you know, we have now to make up that ground plus also convince others that we have a nuanced strategy that's going to work. And that's really difficult to do. I think it can take time to get the allies on board for what we want to do.

MEDEIROS: Dinda, can I come in here? Susan's point is a really, really important one and very, very well said, Susan. Two things come to mind. Number one, luckily, the Chinese often never miss an opportunity to miss an opportunity, right? And so, to some extent, the U.S. benefits from a limited degree of Chinese "overstretch and overreach," to use Susan Shirk's term. In other words, the way in which they pursued relatively coercive policies, of course, with India, with some South China Sea claimants, most obviously with Australia in recent months, South Korea a few years ago. So the Chinese have ceded the ground for a high degree of trepidation. But Susan's right, despite that trepidation about China, nobody wants to be drawn into a "contain China coalition." So second point is, I think, that, you know, as that trepidation exists within the region, but it's tempered by this desire not to get drawn into an anti-China coalition, the key strategy point for me is that the administration needs to focus on three ideas—sequencing, momentum, and risk management. Sequency meaning they really need to pay careful attention to issues like domestic investment, working with allies, multilateralism, their democracy agenda. In other words, you know, and I think that they're doing this, right? I've been surprised by the degree to which they've gotten a quick start and have actually telegraphed pretty clearly what their priorities are. And while they understand it's important to talk with China, Tony Blinken talked with Yang Jiechi, they're not in a particular rush to recreate some grand architecture of strategic dialogue that may or may not generate benefits. So the sequencing piece is important. Can they sustain it? It's going to be a real challenge because there will be pressures to move in different directions. Number two—momentum. They need to get some points on the board, right? And as Susan rightly pointed out, right, we can talk forever about alliance coordination, we need a couple quick wins early on to show that allies can work together. And while the whole issue of the coup in Myanmar is not a China issue, per se, if the administration is able to demonstrate a respectable degree of Asian allies’ and partners’ common views in addressing the Myanmar, I see that as a really interesting early indicator of broadening out those kind of coalitions of the willing. And the third point is risk management. And that has to do with America's China policy as distinct from U.S.-China relations. In other words, the U.S. needs to begin creating an architecture at home and perhaps with the newly empowered, you know, Indo-Pacific coordinator in this big NSC office—which is like three times the size of the office that I ran when I was there—that they really focus on internal debates about identifying costs and risks associated with China policy and just simply deciding what costs are we willing to pay and what costs are we not willing to pay and being forthright and honest about that. Because China policy at its heart, you know, and Susan will know this because she's been through these, you know, brutal internal debates, fundamentally is about trade-offs. Every hard China policy decision involves a trade-off. And I think you just need to confront these trade-offs head on and create a consensus around what costs we want to pay and what costs we don't want to pay, right? And we'll have to see if the administration is able to build that architecture and internalize that concept of risk management and thinking about their China policy. Over to you.

ELLIOTT: Minxin, did you have anything you wanted to add to that or should we move on to the next?

PEI: Yes, I think, in terms of alliance building, one of the biggest challenges for the Biden administration is really trade. I see a quick way but it's very difficult to pull off is to go to rejoin TPP or CPTPP because China has just signed RCEP. China has just done an investment deal with Europe. You really cannot counter China with nothing on the trade front because China's strategy, as Evan has just said, is to deepen the economic engagement with the rest of world except for the U.S. And how can the U.S. frustrate this strategy by China really requires political investment in free trade. And that should be a bipartisan effort, but right now I don't see it happening.

ELLIOTT: I want to follow that up with a question on views of China in America. Because I will say I am very, very troubled by what we see, which is, you know, negative views of China have increased nearly twenty percentage points during Trump's presidency. More than half of young Americans in a recent Pew poll express negative views towards China and 81 percent of people over fifty have negative views. So I want to ask you all is there a danger in your mind of this, kind of, anti-China sentiment in the U.S.? What is at stake here and is there a risk of, you know, sort of the American people seeing China as an enemy?

THORNTON: I can jump in. Go ahead, Minxin.

PEI: Go ahead, Susan.

THORNTON: I mean I do think that this is a risk and it's not just on the U.S. side with regard to views of China. There's also a similar dynamic happening inside China with respect to views of the United States. And this gets to what Evan was mentioning about the domestic politics behind the bilateral relationship. I mean, you have to have support domestically for international relations, especially U.S.-China relations, I think, because there are these trade-offs. I mean, we do have broad spectrum interactions. It hits, you know, almost every interest group in the United States and in China. And so if people are very negatively disposed, it's going to make it very difficult to have the kind of constructive relationship that, frankly, we need. I think this will abate a little bit on both sides with the advent of the new administration, with the advent of, kind of, sort of a restart of communications, and once the pandemic is over we can travel, and so I think it will revert to somewhat of a mean, but it will stay elevated until the two governments can demonstrate, you know, and send out a message that, you know, we have this in some kind of a framework that will be stable and that we can work under.

ELLIOTT: Minxin, you had some thoughts.

PEI: Yes, I agree that there was a similar dynamic in China. The Chinese image of the U.S. has deteriorated as well. I think a significant explanation is the pandemic because in the U.S., China is seen as responsible for the pandemic. This image has suffered not just in China, but throughout the world. And in China the actions taken by the Trump administration in the past year have certainly soured the mood in China toward the U.S. The real danger is in people-to-people exchanges. For the last forty years, diplomatic relations have improved. But the amount of people-to-people exchange between China and the U.S. has really been remarkable, and I'm personally worried with this kind of animosity at the people level, education, tourism, cultural exchanges will be affected and that can really make it hard for the relationship to recover in the long run.

ELLIOTT: Yes. So in a minute we're going to turn to questions from members, but I really wanted to talk—my last question is about cooperation. And this leads, you know, it segues directly into that. I mean, you know, look, these are the two most important countries in the world, the largest economies, the largest emitters of greenhouse gases, etcetera. You know, the new administration seems to believe that we need to find ways to collaborate and cooperate with China, perhaps on climate, on global health issues, etcetera. But there's little support for those policies, you know, here in the United States, of course, and, you know, but you can argue the greatest global challenges really can't be solved unless the two countries work together. So talk about how realistic, you know, to get beyond the rhetoric a little bit, how realistic cooperation is and what are some concrete steps that can be taken to start building trust and collaboration? Evan, you want to jump in first on that one?

MEDEIROS: Sure. So this is an issue I've thought a lot about because we spent time in the Obama administration trying to figure out how to elicit meaningful cooperation from China. And unfortunately I draw the pessimistic conclusion that the challenge is less on the U.S. side. It's less that there is a domestic political consensus and it's, frankly, much more on the Chinese side. In other words, they continue to treat cooperation as something that is either given or extracted as part of a broader negotiation over leverage in the relationship. And, you know, ultimately, it takes an enormous amount of time and energy to extract a little bit of cooperation from China. And then they laud it over you as if they've just given you Niagara Falls, in which you actually have an eyedropper full of water in your little Dixie cup. So, you know, it's going to be a real challenge, and I don't think Chinese views have changed. Now, look, I do think that America has learned quite a bit from the challenging experience in recent years. And I think what Americans have learned—and I certainly know that Kurt Campbell has internalized this—that when China cooperates, even though they sell it to us as something they're doing for sake of the U.S.-China relationship, the only time the Chinese ever cooperate in a meaningful way is when it's in their own interest. And then they'll threaten to withdraw that cooperation when we do something with Taiwan that they don't like, but they never really follow through on that threat. So the reality is, is can we identify areas where U.S. and Chinese interests converge and where China is willing to do something that is actually practical, tangible, and meaningful? And, you know, yes, there is a part of the Venn diagram where that works, I just think we need to have very, very modest expectation and understand if the relationship deteriorates, the Chinese could withdraw that as part of a broader bilateral negotiating process.

THORNTON: I guess, Dinda, I have a little bit less pessimistic view on this mostly because I think that the Trump administration's national security strategy focused in on this, you know, major-power competition as the prevailing dynamic in international affairs and there certainly is that and you see, as we try to sort of make this structural transition, there's more of it. But at the end of the day, what I see when I look out is much more threat and challenge coming from things that are not contained by national borders or that won't be contained by national borders, like, you know, massive rapid technological changes that, you know, will need to be somehow managed and controlled by responsible governments in the international system, pandemics, you know, environmental disasters, etcetera, etcetera, terrorism, migrations, you name it. And so, I think, I mean, if I'm wrong, then maybe this won't be as easy, but I agree with Evan that the dynamic in U.S.-China cooperation is kind of parallel undertakings in order to move the entire issue forward. And it's not so much cooperation as it is coordination. But that, in and of itself, has proved to be very important in the past on major issues. And, I think, if we can, you know, start with looking toward COP26 in Glasgow on climate change at the end of this year—we should have been able to do this, of course, on the pandemic itself, but the political dynamic did not permit—I think, you know, we will find some of these areas to collaborate on. The one area that we haven't touched on yet that's really a difficult mud wrestle is what to do about technology and the, you know, nexus between economic advancement and zero-risk security postures. And I think that is really going to be a tough nut to crack, not just with the U.S. and China, but with countries around the world who all are now facing this in their—it's become so complicated, we have a hard time sorting, you know, what is this, you know, small-yard high-fence policy that can protect crucial technologies when everything becomes dual-use and civilian and military. So I think, you know, there are a lot of challenges out there, but I want to remain optimistic about the overlap of converging interests in the long term. And Evan and I had a debate about this so we know that we don't necessarily agree. [Laughs]

MEDEIROS: This is a great debate to have and I love being the counterpoint with Susan on this because, God knows, that, you know, nobody has ground truth. Let me put it this way very simply, Dinda, is that the Chinese continue to define their national interests in very, very narrow terms, right? What serves Chinese goals as opposed to defining their interest in broader terms that has to do with things like regional prosperity and security in Asia or anything related to global governance. And until they broaden their conception of national interests, I think the ability to have any meaningful cooperation from China is going to be limited. And I think if you look at the track record of cooperation on North Korea, or on climate change, the pandemic, it's pretty limited, pretty episodic. And as Susan said, it's a lot more about parallel actions where the Chinese say, "Hey, don't speak too loudly that we're really working together," than it is, you know, practical, tangible cooperation between two great powers.

ELLIOTT: It's so interesting, it seems to me in a sense that it's, you know, as the Chinese would say, it's a guòchéng, it's like a process. And China is so newly a great power again, right? So it may be that there's going to be a process and time during, which China, you know, adapts to its new role in the international sphere. I want to thank you all for setting the stage so brilliantly, you know, and, kind of, providing a framework for this conversation. So now I think we're ready to take questions from the members.

STAFF: [Gives queuing instructions] We'll take the first question from Susan Shirk.

Q: Hi, great, great discussion. You know, I really liked what Evan said about the need to operationalize this combination of strategies and he talked about sequencing. As I look at the early days of the Biden administration, the sequencing of avoiding any language or communication aimed at reassuring China that actually there might be a chance to improve relations seems to be pretty absent. And in particular, Tony Blinken's statement about, which he tweeted out, of holding China accountable for its abuses of the international system is threatening language of the sort that we really haven't made in the past, this language about accountable. What does that mean? It sounds to me like, well, let me just mention that in a dialogue with Chinese foreign policy experts a couple of days ago, one of them reviewed all the things that Biden team had said, and then said, "Will this persuade China that there's a chance to improve relations?" So I wonder what Susan, Evan, and Minxin think about that? Are we going a little too far in that direction? Do we need some signal that, in fact, we want to identify priority disputes and try to work them out?

PEI: Okay. Well, let me jump in first. I've looked at the Chinese press coverage of Yang Jiechi's phone call with Blinken. And it was not very critical. It tried to put a positive spin on the conversation. The Chinese perception today is the most sophisticated people would be aware that there's a lot of domestic pressure on the Biden administration to maintain a tough stance on China. So probably they are looking not at what the Biden people are saying, but what they are doing. So they will be watching the first concrete policy act very, very carefully.

THORNTON: Yes, I mean, I think what I would say is that the Chinese probably know that the Biden administration has to get a lot of appointees through the confirmation process. They know, as Minxin said, there's a lot of pressure on and they know also they want to talk to their allies and consult with the allies first and get input on, you know, what it is that they're going to put forward as this balancing strategy among the three, sort of, prongs that Evan outlined. So I think they are willing to be patient. I think probably the private conversation, the phone call was a little bit less sharp than the tweets and the readout from the State Department. I agree, Susan, that a lot of the public rhetoric that's been published from the U.S. side has been pretty sharp and one-sided. But it is interesting that so far the Chinese response is, and Wang Yi also, in his New Year's remarks, kept pretty steady. It seems that the Chinese to me are waiting to see what's going to emerge with respect to the policy. I noticed that Joe Biden also in his interview yesterday, you know, talked about how, you know, he knows Xi Jinping better than anybody and he's working on this competitiveness agenda and that he'll have no problem talking to him, etcetera. So I think there's enough for the Chinese to read between the lines at this point that they know that they have to be patient and wait to see, sort of, what emerges. On the other hand, you know, I think that we're going to need a little bit more than just cooperation on climate change to get the relationship moved ahead. And I think we need some serious strategic conversations. And that'll no doubt be coming, but I think it's—we're in a holding pattern right now.

MEDEIROS: Two quick points for me. First, it's day fourteen of the Biden administration. So like, let's keep everything in perspective, right? This takes time. As a former policymaker, I can tell you as much as you like to do everything simultaneous, in other words, create that great balance at the same time, oftentimes, it's sequential the way it happens, right? And so, you know, to Susan's very good question, we may be having the same conversation in three or four months, right? And it turns out, they've sort of recalibrated things or found a little bit of balance. So I would say it just takes a little bit of time. You know, let's see where we are in a couple months.

ELLIOTT: So we have a ton of questions in the queue. So I'm going to ask you guys to limit, at most, to two of you to answer a question and preferably just one, but let's keep going. Next question.

STAFF: We'll take the next question from Graham Allison.

Q: Thank you for the spectacular conversation, very thoughtful of each of you. My question is, if we're thinking four years ahead, so four years from now, what factors will have the greatest impact on the China challenge? And let me just say, from my view, structure will account for 80 percent of the picture. And that in that, even though we like to do foreign policies, since we're foreign policy types, that will mostly be determined by what happens inside the U.S. in terms of the revitalization of democracy, and in the economy, and the society. So I wonder if you were picking one or two or three factors that four years from now will have made the biggest difference, what would you choose?

MEDEIROS: So Dinda, I'll bite and I'll be quick. Number one, domestic investment in the United States. I agree with Graham. Number two, the extent to which the U.S. is really able to build, let's call them coalitions of the willing, as opposed to just allies. Coalitions of the willing to deal with China in the multiplicity of issues on the agenda. And number three is Xi Jinping, right? Does he dial it up? Does he dial it back? Over to you.

ELLIOTT: Good answer. Let's go on to the next question.

STAFF: We'll take the next question from Bobby Inman.

Q: Bobby Inman, University of Texas at Austin. With the Biden administration indicating they want to bring allies and partners into the dialogue on China, let me raise for you three issues that will impact on those allies, particularly Japan, South Korea, ASEAN. First, North Korea now with nuclear weapons. Second, the future of Taiwan. Third, the militarization of the South China Sea.

THORNTON: Well, I'll bite on that. I mean, I think what we are seeing now in the early days of the Biden administration is a commitment to review the policy on North Korea, and you saw Joe Biden reach out to President Moon to talk about this. I think that indicates, you know, that they're going to be listening to certainly the views of allies, but also looking at how to deal with North Korea. I imagine in the U.S.-China relationship that North Korea will come back onto the agenda. It's been off for the last, you know, three years roughly. So it's probably coming back. Taiwan, I think that the Biden team is going to make a big effort to try to get the status quo back into a box and not have this issue on the front burner while they're trying to do what Graham Allison and Evan both agreed is the most important thing, which is to revitalize our own domestic economy, governance, etcetera. And on the South China Sea, I think, of course, we'll be continuing to try to mount effective, sort of, deterrence and to push for rules adherence in the South China Sea, probably continuing various shows of military support, but also trying to broaden this out to allies in Southeast Asia and elsewhere to try to get some help from Europe and elsewhere to try to make sure to keep the sea lanes of communication open in the South China Sea and protect the status quo there.

MEDEIROS: Dinda, can I come in very briefly? Bobby, if you look at all three issue sets that you mentioned, all three of them are reasons for the U.S. to strengthen cooperation between America and its allies, strengthen cooperation between allies and partners—Japan and Australia, Australia and Vietnam, etcetera—and number three for the U.S. to continue to build up and modernize its defense posture in East Asia. So in all three of those issues, they're going to drive greater American presence, hopefully, and capabilities in East Asia, which will help the U.S. to balance Chinese power. Now doing that in a way that precludes conflict, that's the policy challenge. But I see all of those issues as ones that the U.S. can use to its advantage.

ELLIOTT: Okay, next question.

STAFF: We'll take the next question from Shaarik Zafar.

Q: Hi, this is Shaarik Zafar, formerly of the Obama administration and currently at Facebook. Forgive me, this is maybe a niche question, but what do you think about engaging members of the Chinese diaspora? In my travels to Southeast Asia I found large Chinese populations. We have our own Chinese-American community—in Canada as well. Is there any value in engaging them? And I was also struck, I was really happy that you raised the point about anti-Chinese sentiment. One thing I'm really worried about is hate speech and bigotry against Asian Americans.

PEI: Yes, I guess I'm part of that diaspora. I think it depends on what do you want to achieve. I think at the moment, the most worrisome legacy left behind by the Trump administration is his insinuated policy, in which it sees the Chinese community as some kind of fifth column. This infamous China initiative targeting all Chinese, a large number of Chinese scholars, researchers. This needs to be thoroughly reviewed because when you look at a record, it's very thin in terms of this group that willfully acts as an arm of the Chinese intelligence agencies conducting espionage. So, I think, we need to reassure the Chinese diaspora communities as they are, indeed, part of the American people, American nation that we should not treat them with the kind of suspicion that recalls the worst times of the McCarthy era.

THORNTON: And let me just jump in quickly, Dinda, on another aspect of this. I mean, what we need to do is make clear to the Chinese government that ethnic Chinese citizens of other countries are not, sort of, first, citizens of China, and second, citizens of those countries. In terms of legal treatment, you know, we have American citizens of Chinese descent that have been held by China in these corruption scandals and not allowed to leave, etcetera. But this is just against everything that the international system has set out and tried to order over all these years. And those kinds of things need to be addressed and I hope they will be, and I'm sure they will be, by the Biden administration. But all countries have this concern because everyone has a Chinese community, and we can work with our allies on things like this with the Chinese government, I think, and try to push that forward.

ELLIOTT: It's a great point. Let's move on to the next question.

STAFF: We'll take the next question from James Gilmore.

Q: Great, thank you very much. This is a great discussion, and I've agreed with much of what everybody has said on the panel, although I think I identify a little more with Evan's, sort of, point of view about this. I guess what I want to try out here is the question of essential national interests. It seems to me that the United States has a fundamental national interest in not allowing one power to dominate either Europe or the Pacific. I think that's been the historical reality of what we've tried to do, which then affects how we address China. So my question is, I was struck by the first point to say, well, it may not be a military confrontation. Well, we really don't get to choose that. Military is just an instrument of policy. So doesn't it really go to the question of what the Chinese ultimate goal is. If their ultimate goal is to dominate the Pacific, then we're going to have continuing conflict between the United States and China that's going to cause our policy to react in any particular way. What do you all think about that?

THORNTON: I'll just go really quick. I think our policy has to be to prevent Chinese hegemony and I think the way that, I mean, what I see as the Chinese avenue toward achieving that hegemony, at least in the recent record, is their economic dominance. I think we need to try to focus on that.

ELLIOTT: Okay, shall we move on to the next question?

STAFF: We'll take the next question from Ivo Daalder.

Q: Hi all, I really enjoyed this conversations, it's terrific. A question on the structural issue and the rise of China's as a great power. We now have a great-power competition of the kind we've seen many times before. Within those competitions, at least for the last fifty-plus years, we've had a cooperative attitude when it came to arms control. And it's the one area that completely misses in this relationship. It's not part of the conversation. The Trump administration talked about the importance of bringing China in but really didn't have a strategy for doing so. Do you see a role for arms control, perhaps starting on the conventional side, more confidence-building measures that you might have to avoid what arms control is all about—a war that neither side wants?

MEDEIROS: So I'll jump in here as a former arms control nonproliferation guy. Ivo, thanks for the question. So the simple answer is, theoretically, yes, practically, no. So those dimensions of the U.S.-China security competition that could lend themselves to, let's call them mutual limitations in buildup, South China Sea on the one hand, Taiwan on the other, there's no Chinese appetite at all for any kind of restraint in large part because they don't see the alternative as more costly, right? And the South China Sea seems as if it's a perfect opportunity for that kind of agreement on strategic restraint. It would lock in place China's relative superiority, but yet the Chinese aren't interested. With Taiwan, similarly, it's going to be hard to do because you'd be asking Taiwan to accept something that's not in their interests and same thing for the United States. So very, very hard to see. And then if you're talking about nuclear arms control, the Chinese had been very, very clear that they're not interested in engaging in nuclear arms control, because the disparity between our forces and their forces, you know, are so substantial. So, I think, we're far from either a START-like agreement or even a CFE-type of agreement. That doesn't mean that mutual restraint is totally off the table. But it's hard to see now given the way the Chinese believe their rise is accelerating relative to the United States. Dinda?

ELLIOTT: Let's go on to the next question.

STAFF: We'll take the next question from Andy Zelleke.

Q: Thank you very much. Andy Zelleke, Harvard Business School. And this is a question for any of our panelists. I'm very curious, what's the single most interesting or creative policy prescription that you've either had or heard or any aspect of the China challenge, whether holistically or in any of the dimensions, of the challenge? Thank you.

THORNTON: Well, I recently heard one which has to do with Huawei partnering with Nokia to put, basically, telecommunication's backbone into the developing world so that we can keep a unitary internet structure. That was I thought creative.

ELLIOTT: It sounds like a good one. [Laughs]

MEDEIROS: So Andy, I'll answer it a different way. I actually don't believe that success in China policy requires some super-creative type of initiative that if only you brought, you know, the most fertile minds together, you could come up with. I actually think the nature of the China challenge is pretty clear. The solution set is pretty clear as we've discussed here and, you know, other experts have talked about. The challenge is really implementation, right? I don't think that it's a problem that just hasn't been sufficiently, you know, theorized. I think it's just going to be building and maintaining the kind of political consensus at home and building it internationally to execute in the way we need to.

THORNTON: Remember all of the exogenous interruptions that come into it as you're trying to carry out your policy. I mean, it does get very complicated when you deal with the real world.

PEI: But the most creative strategy I've heard is really getting our own house in order, because that solves 80 percent of the problems.

ELLIOTT: Okay, let's go on to the next question.

STAFF: We'll take the next question from Rong Shi. Mr. Shi, please accept the "unmute now" button.

Q: Yes, can you hear me? Okay. My question to all panelists is reportedly the U.S. is planning a summit meeting with Australia, Japan, and India to strengthen ties with China's growing influence in the Pacific region, the so-called "Quad" group. Do you think it could be, as some reported, to become a mini NATO? What do you expect the summit and the Quad can achieve?

ELLIOTT: Anyone want to grab that one?

MEDEIROS: So I don't think it'll become a mini NATO in the sense of having a collective security commitment among the four. But I do think it will be most effective in terms of articulating a shared view of interests and values for Asia, what all the countries are going to be prepared to do collectively in the face of those threats, and sort of start to build out this idea that there are competing interests and values in Asia that the Chinese need to be mindful of. My guess is, I don't know, but my guess is that Quad meeting, if it happens, is going to spend a lot of time talking about Chinese economic coercion, not indirectly, given what Australia has faced, this sort of unending onslaught simply because they, you know, raised the idea of an international investigation of the origins of COVID. So, you know, I have modest expectations for the Quad. But I think it's upside potential is pretty significant.

THORNTON: And I'll just add one more point, which is we spent a lot of time in the Obama administration trying to get Europe to pay more attention to Asia and get more involved there and feel more broad spectrum responsibility for what happened in Asia, contributing to, sort of, the international and U.S.-led effort to bring China into the system. And now we've really got to get, I think, India, to sort of lift its head up and look out and see that what goes on in Asia and the Asia Pacific is really important to it and it needs to contribute a bit more. They're quite reluctant, but I think that's part of the mission of the Quad and probably will continue under this administration.

ELLIOTT: We have two more minutes. Do we have time for one more question?

STAFF: Sure, we'll take the next question from Lyric Hughes Hale.

Q: Yes. Hello, this was terrific. Thank you. I think that Evan's point that the change in U.S.-China relations is being driven on the Chinese side cannot be overestimated or I think it's really the critical thing to take away from this panel today. And Minxin, to your point about people-to-people, I don't know if you're a member of Clubhouse, but the last week I've spent listening in to all of these Chinese groups on Clubhouse, people from the mainland and from Taiwan, talking together, which has been amazing. I understand, however, that Clubhouse was just blocked a few hours ago. And then to Susan, you know, your point about these pivots to alliances. I don't think that's going to work because Angela Merkel put, you know, that to bed with the actions with the EU-China summit, I think. However, do you think that an episodic kind of cooperation, for example, on the Beijing Olympics is something that could happen and could be a pressure point that would be very critical? How do you all see that? Thank you.

PEI: Yes. I think that if you expect your allies to be full-fledged partners in an anti-China coalition, that's a difficult challenge. But if your allies will be more cooperative on some issues and others, so on human rights, I'm sure they're going to be more cooperative. In terms of limiting military technology to China, it will be very a hard problem. But if you demand that they decouple completely from the Chinese economy, it'll be very, very difficult. So on the Beijing Olympics, that is indeed a promising avenue. Of course, it depends on what you really want to achieve and what kind of pressure you want to apply.

ELLIOTT: I think time's up, but I just want to thank you all so much. These are big, big questions. And, you know, as Graham Allison spelled out very clearly, this is a historic moment. It's about the U.S. position in the world, as Susan was saying, and China's position in the world and I really want to thank you for helping us frame so clearly, you know, ways in which we can view the current challenges. So thank you all for joining today's virtual meeting. And thank you so much, Evan, Minxin, and Susan, for your brilliant insights. Please note that the video and transcript of today's meeting will be posted on CFR's website. Thank you all for joining. I hope we'll see you all again very soon.

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