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A broad range of issues is plaguing Sino-US relations in 2013. Strategic prospects might now be grimmer than at any time since the normalization of bilateral relations in 1979. The cybercrime charge from the White House about China’s military intelligence unit espionage aimed at commercial secrets is a burning issue.¹ Edward Snowden’s revelations are prompting Beijing to assume “victim” status and blunt the US push to curb cybertheft. Economically, China’s Likenomics is likely to cloud Washington’s plan to expand exports to the Chinese market. Furthermore, Beijing’s skeptics toward TPP’s intentions now are showing rising interest in exploring the possibility of China’s entry, but with preference for the Regional Comprehensive Economic Partnership (RCEP) China might find it hard to extend a warm hug to TPP, which is considered a US-driven Asia-Pacific economic integration framework. US sympathy to Tibet and Xinjiang rattles political ties when Beijing is allegedly employing a heavy-handed policy to crack down on the resurgence of ethnic riots in these border areas. More importantly, China’s military modernization, coupled with its “assertive” foreign policy, significantly raises American awareness of China’s intentions, and is leading the two countries onto a narrow road, where their strategic interests seem increasingly to collide.² In particular, the China-Russia joint naval drills on July 5-12, 2013, spark renewed concern about a Beijing-Moscow anti-West axis.³

Since the “pivot to Asia” announcement in November 2011, the United States has repeatedly affirmed its commitment and presence in the East Asia, but that fails to keep China at bay from a number of flash points in the East China Sea and the South China Sea. Beijing largely remains on its own path to address territorial disputes with Japan, Vietnam, and the Philippines. At a minimum, the, US “rebalancing” strategy has not produced noticeable effect in helping to settle down such disputes. Instead, China’s ensuing fear of America’s encirclement, or containment, is triggering growing anxiety about deterioration in its surrounding environment, and is stimulating domestic consent for speeding up its naval and air-force buildup.

By proclaiming “rebalancing,” the United States is arguably “about China”, and not “against China.” However, how far this strategy will advance in regard to its three components of military, diplomatic, and economic “rebalancing” is a severe problem if China refuses to switch course from driving the Philippines away from the disputed Spratly Islands, intruding into the territorial waters of the Diaoyu/Senkaku islands, and upholding its nine-dash line claims. The White House has escalated in the patrolling standoff by declaring full support for Tokyo as long as the Diaoyu/ Senkaku Islands are under its administration—an obvious tilt substantially towards Japan in the contest. In Chinese eyes, Japan’s exclusive administration was yesterday’s news, not today’s. Abe’s “three noes”—nonexistence of a territorial dispute, no negotiations, and no shelving—has nullified the previous status of Japanese administration, and “co-administration” is the new status, in which China cannot make concessions unless Tokyo abandons its complacency to recognize “this dispute.” Against the backdrop of the Abe administration’s rampant nationalist sentiment, no one can exclude the possibility of an accidental, but bloody, crash between Chinese and Japanese surveillance boats, which quite likely would escalate into military conflict. The United States has vowed to fulfill its alliance commitments in case of such a conflict. The sovereignty dispute over the islands has turned into a dangerous trigger for detonating a three-way military confrontation.

Neither Beijing nor Washington want a “new cold war.” but strategic animosity in the history of international relations often arises from an unanticipated accumulation of misperceptions and risk-taking. For the moment, it is improbable that a new cold war will shroud China-US relations. However, carefully examining factors that might cause an escalation of the rivalry and, at the same time, suggesting steps that would avert a “detonation,” is a timely, if sobering, exercise.

Rising China: Traction from a New Security Prism

Chinese military modernization and the PLA’s new “AD/A2” military capability have greatly changed traditional strategy toward a potential threat from the PLA. There has been a mounting possibility of Sino-US conflict in the West Pacific as the number of “flash points” has increased. The Taiwan Strait is not the only potential flashpoint, with the recent addition of the Yellow Sea, the South China Sea, and the East China Sea. It is widely believed that the PLA is heavily motivated, by seeking the AD/A2 capability, to reduce American entry and undercut its access to potential “hot spots,” which China, arguably, has already mapped out. To desperately keep the US military away from these “hot spots,” Beijing seems to be attempting to bully its “small neighbors” and pushing a solution to its own advantage,⁴ arguably, on the basis of this new capability that some perceive as nearing US capability in the region.”⁵ The PLA’s AD/A2, combined with the perception of China’s expansionist ambitions, presumably constitutes the main source of regional instability.

Some argue that the military buildup is the long-lasting attempt by Beijing to break the American encirclement. As long as the United States steadfastly pursues its forward military deployment in the Asia-Pacific, Beijing will hardly slow its pace to restrain US access through military modernization.⁶ China’s AD/A2 capability and its sequential access-denial strategy significantly raise US strategic concerns, and the Strategic Guidance for 2020, a cornerstone defense document issued in January 2012, unequivocally states that one of the leading threats for the United States in the Asia-Pacific is the prospect of gravely limited access and entry,⁷ catastrophically undermining the credibility and dependability of its security commitment in the region. By all standards, these robust security commitments have been an anchor of the region’s peace and prosperity.

How big is the PLA’s AD/A2 capability and how imminent is the threat to American strategic objectives? So far there are no consistent and convincing answers. For example, the PLA’s DF 21 middle-range missile is regarded as an “aircraft carrier killer,” but how effective would it be? There are rather contradictory assessments. Any argument about its effect in scaring off US military entry would be a pure denial of conventional wisdom that attacking a US carrier group would summon more aircraft carriers and even force an open war between Washington and Beijing, raising the question of whether Beijing would contemplate a military showdown between two powers.

AD/A2 originally stems from the PLA’s acute anxiety about the credibility of its military deterrence capabilities against Taiwan’s independence drift. With the Taiwan issue gradually easing since 2008, the PLA’s military advances are proceeding steadily, purporting to go beyond Taiwan in order to support military counter-measures for diverse security requests such as maritime security, territorial disputes, and perhaps most importantly, grappling with American strategic supremacy in the Asia-Pacific. The PLA’s military modernization, despite two decades of double-digit increases in defense spending, has not nearly eliminated the spending gap with the United States, allowing Washington to maintain its military and strategic superiority The huge military power disparity between the United States and China is sufficient to impose “structural constraint” on China’s international behavior. With the concept of “Air-Sea Battle” on the horizon, the United States is fortifying its cutting edge in the military field.⁸ Despite unwavering dissatisfaction with American hegemony, Beijing has no intention of challenging US military and strategic preponderance in the Asia-Pacific, and, perhaps unwittingly but realistically, enjoys its self-definition as a developing power. The PLA’s AD/A2 capability, in essence, is passive and defensive. Though it might complicate US strategic calculations in the region, it remains far from a “game changer” in the regional security posture of the two. The AD/A2 capability cannot function independent of the total US-China power disparity. The fear of it decisively metastasizing China’s regional security strategy has been overstated.⁹

What has been the impact of “rebalancing” on military interactions between Beijing and Washington? A nationalist barrage in the Chinese media and “loose cannons” among PLA scholars condemn this strategic adjustment as an “American conspiracy” aimed at “containing” and “encircling” China, but Beijing’s official response seems quite reasonable. No one in the government or the PLA is rebuking the “rebalancing” in that way. Instead, the Chinese Foreign Ministry is not disinclined to use the Chinese translation of “pivoting” or “rebalancing” rather than persisting in invoking the Chinese term “returning to Asia”—an obsolete usage for Obama’s Asian policy from the early days of his presidency.¹⁰ Likewise, Beijing seems to prefer to seal its lips, dramatically in contrast to the media’s hyperbole. According to my observations, the official quiet towards America’s high profile “rebalancing” rests on a two-fold calculation. First, the Chinese leadership understands that “rebalancing” is inevitable. The effects of China’s rise on the global and Asia-Pacific regional order are expected to be the main preoccupation of the United States in particular and the West in general; so it is fruitless to complain. In fact, US balancing of China is by no means a novelty since the end of the Cold War. Second, the Hu Jintao government has been emphatic on a “stable, healthy, and cooperative” relationship with its American counterparts.¹¹ Officially blasting the United States would have poisoned the political climate, shadowed the foreign policy legacy of his government, and even worse, undermined the power base when leadership reshuffling approached. The Xi Jinping government proposes “a new type of great power relations,” seeing “cooperation and win-win” relations with Washington as central in handling thorny issues.

Unnerved by the US “rebalancing” push, Beijing pragmatically assumes that there is no credible proof that Washington has fundamentally altered its policy or is projecting a historic turnaround to fully confront China. Therefore, the “balancing” moves do not ring an alarmist bell to force China to overhaul its “peaceful rise” assurances. Growing assertiveness in Chinese responses to territorial disputes in the South China Sea and the East China Sea has little to do with Beijing’s calculus toward “rebalancing,” and, instead, has more to do with domestic political imperatives. Fearing a domestic backlash from its “weakness” in handing territorial disputes, the leadership seeks a mandate to take up a number of “hardliner choices” to placate the domestic audience. The Scarborough Shoal frictions with Manila is a case at hand. Many Chinese thought that the Philippine resort to a warship to check Chinese fishing boats in April 2012 gave Beijing legal authorization to respond with naval force. However, because of the pointlessness of escalating the shoal spat into a military confrontation, Beijing invented the “Scarborough Shoal pattern”—using surveillance ships to block Philippine boats from accessing it. Beijing wanted to duplicate the “Scarborough shoal pattern” on the 2nd Tom Shoal in June 2013, but at the last minute, it acquiesced to the Philippines’ occupation of the shoal. This demonstrates that the Xi Jinping administration really does not want to extend the fire line, though such provocations would win applause domestically, even as they precipitated a diplomatic standoff between Beijing and Manila.

Ironically, America’s “rebalancing” moves stiffened Chinese resolve to enhance diplomatic and political contacts with US counterparts rather than recalibrating policy rivaling the United States. The tougher posture of the United States towards China dramatically binds both more tightly to diplomatic pragmatism rather than military antagonism. 2012 witnessed a couple of potentially explosive events which might have jeopardized the relationship—Wang Lijun’s sneaking into the US Consulate at Chengdu in March, and Chen Guancheng’s asylum-seeking at the US diplomatic compound in Beijing in April. These two “hot potatoes” might have caused a downward spiral in relations if mismanaged, but, fortunately, both sides sought to reach a solution through “quiet diplomacy.” As for the escalating tension from territorial disputes, China and the United States maintain routine contacts to channel information to prevent miscalculation. Thus, the “rebalancing” moves do not inevitably stir up new tensions. Instead, Beijing and Washington dramatically hold on to a higher level of strategic prudence: the Obama administration repeatedly tones down “targeting China” nuances, and harps on the necessity of cooperation; meanwhile, China is trying to dodge America’s flexing of its strategic muscles, and to avoid tit-for-tat confrontations.

The Complexity of Territorial Disputes in East Asia: New Breeding Grounds for War?

Steady systematic, rescheduled balancing of power cannot entirely reign in China’s behavior. Beijing’s intention to not challenge the United States does not automatically suggest that it would comport with outside expectations of its behavior, and, moreover, it hardly translates into full-flung political enthusiasm to behave itself. If both sides are less cautious, the military tensions might creep up rather than edge down. It is understood that given China’s reduced flexibility in handling territorial disputes, US concern about Chinese use of military force to coerce a solution in China’s favor has significantly deepened.¹² In support of the credibility and dependability of the US security commitment to the region, the Pentagon has obviously felt more compelled to prepare for military intervention, if necessary, and thus, the probability of a China-US military collision has accordingly soared.

What motivates China and the United States to resort to force in the territorial disputes? Will the disputes inevitably entail military collision between the two? One reason to be concerned about war is China’s tendency to declare sovereignty issues a “core interest,” warranting Beijing to do whatever it takes.¹³ The extended explanation of China’s alleged “core interests” in 2010 aroused considerable controversy, and it has proven to be a flawed approach for reiterating its prolonged and contentious territorial claims. But we have to discern between the Chinese political desire to harden its stance and its real preference to tackle the territorial disputes. Labeling Chinese claims “core interests” is, by and large, a way for Beijing to duck diplomatic resilience rather than an assertion of the military salience of finding a solution. Furthermore, no one could exclude the possibility that Beijing would use force even if it had not declared territorial issues “core interests.” At least so far, there is no sign that China has decided on the application of military force to seek any solution in the South China Sea. On the contrary, it is rarely indicated that the use of force against Vietnam or the Philippines would be a smart and operable idea to address their competing claims over the Spratly Islands and the Paracel Islands. Xi Jingping urges the PLA to prepare for war, and particularly for winning war,¹⁴ but his words have been widely explained in a domestic context as alluding to military prudence: don’t aim to use military force unless a winning fight can be assured.

The Diaoyu/Senkaku Islands issue might be quite different from the South China Sea. Most Chinese can accept a political solution over the Spratly disputes, but are less likely to call for the same solution in the East China Sea if Japanese politicians continue to sweep relations with China into the mentality of revisionism.¹⁵ We should be wary of underestimating the potential of a military conflict between China and Japan over the Diaoyu/Senkaku Islands. It is a broadly shared perception in China that Ishihara Shintaro’s proposal to purchase the islands and the Noda administration’s “nationalization” were designed to play the “China card” in Japanese domestic politics, purporting to hurt China, given the backdrop of the US “rebalancing” and Tokyo’s political and economic paralysis.¹⁶ Along with lingering and daunting “history problems” between Beijing and Tokyo, this speck in the East China Sea might spark a military conflict. It appears that Beijing does not want to risk overwhelming 40 years of Sino-Japan relations to struggle for that geographically trivial spot, but things will get out of control if Tokyo dispatches its naval force to intercept or forcefully drive away Chinese surveillance ships around that island. In that case, the US military deterrence might help to de-escalate the confrontation, but dispatching two aircraft carriers to the West Pacific Rim would hardly make the opposing sides calm down.¹⁷

Neither the South China Sea nor the East China Sea would involve an amphibious landing even if military conflict mistakenly erupted. Even if a territorial dispute would tragically lead to a military conflict, it is assumed to be limited, brief, and manageable. Concern about consequential China-US military combat is deemed to be pointless. New American Security fellow Oriana S. Mastro concludes that China’s reactions in the South China Sea are “exemplary interagency coordination, civil-military control, and harmonization of its political, economic and military objectives.”¹⁸ Faced with its domestic audience, Chinese leaders do not want to lose popularity by backing off, but that does not suggest military escalation, even if its “assertive” military posture over the territorial disputes is definitely regarded as “targeting” the United States.

The US factor has proven to successfully modify China’s policy choices in many of the territorial disputes. As Jonathan Pollack notes, “although China is focused heavily on enhancing its political-strategic position across the entire Asia-Pacific region, the management of its relations with the US remains a singular policy preoccupation.”¹⁹ Yet, China’s moderation does not result from US influence alone. There is also a ceiling effect Beijing finds no way to break, and also China’s massive regional economic integration and rising dependency on the regional market and natural resources. After the sea confrontations with the Philippines in 2012 and Vietnam in 2011, Beijing has been highly aware of the significance of how it addresses its claims in the disputed area. It risks squandering the accumulation of 20 years of “good neighbor” relations and incurring serious erosion of China’s political and economic interests with ASEAN. The PLA’s nascent AD/A2 capability does not signify real motivation for carrying out military coercion in the Asia-Pacific. Conceivably, the Spratly Islands are out of the J-10’s patrolling radius. Even mid-air refueling will not safeguard success in a theater of war over these islands. Reality ultimately frames Chinese choice in these territorial disputes. Beijing’s surprising agreement to launch negotiation with ASEAN countries over a code of conduct in the South China Sea is recent evidence.

Don’t Stoke Chinese Nationalist Emotions

Despite muting its censure of Washington in comparison to how things used to be, Beijing may still vent its frustration across many areas. Strategic tension with Washington does not serve its interests at all, but considering China’s domestic transformation, it will not change its official narrative, portraying China as a “victim” in the face of American hegemonism. Without thorough domestic transformation, the tension between China’s diplomatic pragmatism and ideological utility to beef up one-party rule will not disappear. In fact, domestic constraints lead to diplomatic problems, while complicating efforts to reach effective settlement of them.

The Chinese government is now more resilient in terms of its public appeal. Politically, there are increasing numbers of cases where the government is adjusting its stance. The way it is behaving right now, you would almost think it had converted to democracy. Half a dozen times in the middle of 2012, officials backed down in the face of angry citizen protests—cancelling unpopular industrial projects, freeing wrongly imprisoned citizens or arresting one of its own officials for his reprehensible behavior. On foreign relations, the state-run media in China have been in full battle cry and authorities have not banned online discussions about the island disputes. CCTV, an officially-run TV station, put the riots over the Diaoyu/Senkaku Islands under the spotlight, although anti-Japanese protests are being kept under tight control. The bumpy relations with neighbors and the United States have added greatly to the pluralism of views of the world in general and the United States in particular, generating an increasingly fragmented domestic base for Chinese foreign policy—with some nationalists and others realists. Reining in the nationalist sentiments among the Chinese public is an increasingly difficult task.

Chinese domestic views of the world in general and the United States can be divided into five contending camps that present distinctive dispositions. At the left end of the spectrum there is the Populist Chinese camp, which argues that today’s world remains dominated by the Western imperialists, and China has no option but to return to the Maoist path, mobilizing the Third World and leading the rebellion of anti-Western forces. This camp strangely believes that the intolerable suffering of China’s bottom class—the poor rural population, groups of rural immigrants in China’s cities, and growing inequity and even massive corruption of officials—stems mainly from abandonment of Maoism by Deng Xiaoping and his successors. It also, incomprehensively, attributes China’s tension with the United States and Japan to the demise of Maoist thinking. They even miss the fighting years of the Korean War and Vietnam War, while condemning the Chinese government for being “spineless”” in the face of US military “encirclement,” evidence of the horrible results of giving up “Maoist China.” The Populist Chinese genuinely draw correlations between China’s domestic capitalist experiment and the external choice not to fight but compromise with the West.

Not far removed is the camp of the Nationalist Chinese. A key difference is that they do not miss the days of Maoist rule, but they also regard the West as an entrenched barrier standing in the way of China’s rise, arguing that the US-anchored regional and world order does not support China’s rise, but will continuously marginalize China, regardless of China’s economic performance and good behavior. Furthermore, the Nationalist Chinese are mired in historical grievance and humiliation, making them emotional on foreign policy. They persist in believing that the United States has been conducting a policy of containing China since the demise of the Soviet Union, and that Japan will revive its traditional militarism sooner or later. This nationalist lens generates a very negative and less confident perception of the world—a world dominated by hostility and few humane traits. At its heart, this nationalism replaces respect for human integrity and dignity with xenophobic distrust and national resentment. The Nationalist Chinese believe that it is America’s strategic intention to never accept China’s ascent and to maintain American superiority with China a mere appendage.

Close to the middle of the spectrum, but remaining on the left side, are the Realist Chinese. This camp believes that China’s rise is China’s re-emergence—the resumption of China’s historic status in the world. This cannot be achieved by focusing on cooperation, they argue, since world politics is a “dirty job.” Relations between China and the United States are purely a game of power struggle. Thus, the Realist Chinese seek to remove the delusion that cooperation between Beijing and Washington can endure, and require China to fully commit itself to a competition for power. They posit that the formula of “no two tigers over one hill” applies, and that China should safeguard its current position whatever that takes. China needs to be more powerful physically, because the story of China-US relations will not change while Beijing is in no position to compete. This provides an automatic justification for China to exercise its foreign relations in the direction of modernizing its military and allying with other countries so long as they can add to Chinese strategic weight to counter-balance the United States. The Realist Chinese view is essentially a copy of the Western Realist school of thought and assumes that pre-1945 international history will inevitably be re-staged in the 21st century. Their philosophy is strongly based on a pessimistic approach to global politics, focusing simply on relative power gains.

On the right side of the spectrum one finds the Internationalist camp and the Liberalist Chinese camp. The Internationalist Chinese see the world as not unchangeable and suggest that the realist focus on power relations in world politics can be invalidated. They draw attention to the changed format of power relations and the positive effects of the world community, trying to cast out “historic grievances” and encourage China’s full integration into global society. In that sense, they believe that China’s approach to international relations should emphasize that the well-being of China’s people is more significant and dependable as a basis for policy than building the might of the state. This camp argues that China should prioritize its domestic agenda to boost its transformation towards a shining democracy rather than eagerly flexing its muscles or rushing to compete for world-ranking.

The Internationalist Chinese are also aware of the ugly dimension of power politics, but they are “optimistic realists”—traditional “structural constraints” do not necessarily unhinge China-US relations. Instead the fate of such a dyadic pair—one dominant power and one rising power—depends on their action-reaction cycle. A process of power transaction may determine policy outcomes on both sides. According to this formulation, US-China ties need not be characterized by the intractable animosities that relations between two powers of this size are often assumed to involve. If both sides could have the rationality and courage to face up to their problems while living up to their legitimate demands, Beijing and Washington could credibly find a way to build on their compatibility and collaboration. The Internationalist Chinese believe that China-US ties are more process driven, and are much less a self-referential exercise.

The liberalist Chinese tend to attribute the rockiness of China-US relations to the lack of democracy in China, arguing that these ties can hardly improve effectively without Beijing encouraging democratization. This camp contends that China’s democratic redirection will automatically help alleviate the intrinsic stresses in China-US relations, and set a new, solid foundation for cooperation. In that sense, the liberalist Chinese see democratization as a panacea to heal the strains rooted in the power relations between large countries such as these. This camp underestimates the complexity of power ties, and assumes that China’s democratization will ensure that shared political values mean shared national interests.

China’s foreign policy and the possibility of a new cold war will depend heavily on the balance among these five camps. The Nationalist and Realist Chinese account for the slight majority of the Chinese population and mass media, but the internationalist camp anchors the elite mainstream—a combination of policy circles and the academic community. China’s leadership is similarly split, and current leaders can easily identify the camp that fits them individually. This pluralism in Chinese worldviews is not a creature of one-party rule: it is the spontaneous product of China’s long overdue transformation. Obsessed with growing domestic unrest and its reduced credibility, the government has been struggling to consolidate its power base by resorting to Chinese nationalism, but when nationalist sentiments flare up, Beijing is highly afraid of a backfire, concerned that it will undercut the government’s maneuverability in trying to deal with thorny issues, such as ties with the United States, disputed territorial claims, and military development in a way that supports China’s economic advancement. Mastering rampant nationalism is like walking a tightrope: On the one hand, nationalism could beef up China’s domestic unity, but on the other hand, it blinds people to the real world. The consequence is dramatic for the time being: the majority of Chinese complain that their government is “weak” internationally, when the international media allege that China has been growing “more assertive.” Fortunately, it seems that Beijing remains robust in steering the course of its foreign policy, avoiding confrontation with the United States is its policy priority in the days to come.

Conclusion

The China-US relationship has been structurally predictable, but domestically volatile. Given US military supremacy and regional preponderance, Beijing has little feasible choice to challenge them in the foreseeable future. However, it will not stop a search for its own security in the shadow of American primacy. The Chinese media are normally infested with anti-American comments, and the PLA in particular sounds bellicose over issues like Taiwan, the South China Sea, and the East China Sea. But this does not necessarily mean that the Chinese leadership prefers to see ups and downs in its ties with the United States. Rather, Beijing’s preferred template, consistent since the end of the Cold War, remains intact. It is to maintain a productive, cooperative, and stable relationship with the United States, even if it may be described as “important but complicated” or being in the “same bed but dreaming differently.” The Xi-Obama summit at Sunnylands highlighted the urgency of discussing challenging issues in a manner that is more personal, honest, and productive.

The Xi Jinping government, I contend, will turn out to be more pragmatic and decisive than his predecessors in managing Beijing-Washington frictions. It stems partly from the leadership’s reasoned estimate of the damaging consequences of the alternative policy of “standing up,” and partly from awareness that an escalation of tension, even if restricted to the diplomatic arena, might lead to a wider breach in the bilateral relationship. Domestic issues will likely drive Xi’s agenda, but he will be more personably engaged in China’s foreign policy than earlier leaders. Xi is quite clear that his main challenges mostly come from internal rather than external problems. Stabilization of China-US relations will certainly help in tackling accumulated domestic problems, ranging from inequities and corruption to environmental degradation and social unrest. But designating becoming a maritime power (haiyang qiangguo) as its strategic goal will lead Beijing to expand its maritime presence incrementally. The territorial disputes unnecessarily highlight this process and also tarnish the image of China’s rise. Beijing should be highly aware of such risks, but skillful diplomacy, rather than militarization in the Asia-Pacific by the American side is desirable in shaping China’s choice. Thus, the genie of a “new cold war” would be safely kept in the bottle.