How to decipher the US-China talks

On July 9, Chinese and U.S. delegations gathered in Beijing for the sixth annual Strategic and Economic Dialogue (SED), at which they have historically talked at rather than to each other. Symbolically and perhaps ironically, they met in the same villa complex where Richard Nixon and Mao Zedong had their historic breakthrough in 1972. Talking without communicating is reminiscent of the U.S.-Chinese cold war, during which the two sides did not even have diplomatic relations and merely sent their representatives to Warsaw to argue fruitlessly over whether Taiwan or mainland China represented the Chinese people. What caused U.S.-China relations to warm up back then was a major shift of power: The USSR had become so hostile toward China that Mao was forced to reach out to the U.S. Statesmanship mattered, too, both on Mao’s part and on Nixon’s.

Chinese President Xi Jinping, who has a Mao-like taste for poetic speech, said when opening the two days of talks, “The immense sea allows fish to leap at liberty. The vast sky lets birds fly freely. The broad Pacific Ocean has ample space to accommodate our two great nations.” Translated into prose: Move over, America.

China’s aggressive moves in the East China and South China seas, in cyberspace and against free speech at home were among the main bones of contention for Secretary of State John Kerry, who headed up the U.S. side. He was accompanied by Treasury Secretary Jack Lew, who pushed once again for China to move its currency to a market-driven exchange rate. Kerry raised human rights issues as well, especially criticizing the repression of ethnic minorities in China’s western regions of Tibet and Xinjiang, according to U.S. officials. But the point Kerry stressed was strategic. “Let me emphasize to you today,” he said, “the United States is not trying to contain China.”

Beijing is well aware that China, unlike the U.S., is a country that can be relatively easily contained. Unlike the U.S., which has long coasts along which there are no other nations for thousands of miles, China can be reached by ships only after they thread their way past countries with which China has territorial disputes, including Taiwan — which Gen. Douglas MacArthur described as an aircraft carrier permanently based off China’s coast. The U.S. has friendly neighbors, whereas China has rebellious populations in its western regions, and the Central Asian countries that border those regions, though stable and friendly now, are candidates for the sort of upheaval that recently swept the Arab world.

When Kerry spoke of not containing China, his next words were probably of more interest to Beijing: “We welcome the emergence of a peaceful, stable, prosperous China that contributes to the stability of the region and chooses to play a responsible role in world affairs.” Translated from diplomatese, this means, America’s not moving over until China ceases its aggressive territorial claims, floats the yuan and stops hacking — that is, plays by Western rules.

Certainly, on some points, the two countries agree — for example, on the need for a denuclearized Korean Peninsula and on slow progress on climate change (the U.S. and China being the two greatest emitters of greenhouse gases). Environmental pollution in China has become both an economic and a political issue: economic because pollution drives up the cost of health care (the hidden cost of cheap Chinese products) and political because street protests focusing on environmental issues are increasingly common. (If there is one thing China fears even more than containment, it is social instability, something going haywire in a machine with more than a billion moving parts.)

The U.S. State Department attempted to put a positive spin on things by listing 116 areas — ranging from high-level exchanges to shale gas and sister cities — where some progress was made. However, the overall sense was that there was little progress, though at least the two sides were still talking. 

A number of small events in the region in the days leading up to the talks — most of which barely made the news — could ultimately have more impact on U.S.-China relations than the SED itself.

In late June the U.S., along with many other countries, including China, took part in the 11th annual Khaan Quest, live-fire military exercises held in Mongolia that take their name from the country’s legendary conqueror, Genghis Khan. Mongolia is the U.S.’s last foothold in Central Asia now that its air base in Kyrgyzstan is closing for good. The United States’ decision not to contest its eviction from Kyrgyzstan — it could have offered to pay triple the rent, usually a winning move — may demonstrate that the U.S. is sincere in its stated position of not wanting to contain China. But it may also demonstrate to China that Washington has little feel for how to operate in Central Asia, a region now left for Moscow and Beijing.

However, the U.S. is keeping a hand in Mongolia, which uses the U.S. as part of its third-neighbor policy. Mongolia has only two neighbors, China and Russia, and wants good relations with both. For that reason, it is highly unlikely that the U.S. will ever get a base of its own in Mongolia. But as journalist Rick Rozoff put it in an article for the Centre for Research on Globalization, “Mongolia is the optimal location for U.S. military surveillance (ground, air and satellite) to monitor China and Russia simultaneously.” Mongolia, in other words, will be a good gauge of true U.S. intentions toward China.

On June 30, 113 Uighurs were sentenced to prison for terrorism, separatism and criminal activities. Eighty-one others were sentenced earlier in the month, with nine receiving the death penalty. Two things are clear. Uighur violence is escalating. There are more incidents, and they are bloodier (though, except for the occasional explosive device, the Uighurs still rely mostly on knives). The increasing number of attacks suggests that China’s strike-hard policy is not working. Nevertheless, this is a problem that Beijing will likely deal with as Moscow dealt with Chechnya: by using a combination of inducements and repression.

The real danger behind China’s Uighur problem lies in its linkage to greater forces in the region. On July 6 the president of Kazakhstan, Nursultan Nazarbayev, turned 74. He has no sons and is not known to have appointed a successor. His country, with more landmass than Western Europe, is at the moment prosperous and stable, but a succession crisis mixed with an Islamist insurgency could set Central Asia ablaze.

Russia, which has a strong interest in its pipelines’ sending gas and oil safely to China, would be China’s ideal partner to help extinguish such a blaze. The balance that tipped Beijing away from Moscow more than 40 years ago could finally tip back. Xi and Russia’s President Vladimir Putin could well meet to discuss a new grand bargain in the same villa where Nixon met Mao and Kerry met Xi. One can be sure that China’s claims in the Pacific, its currency, cybertheft and human rights violations would not top the agenda.

Perhaps the latest SED was inconclusive because Washington appeared to need more from the Beijing than Beijing needed from Washington. The U.S. needs a better carrot and a bigger stick. Working to beef up its presence in Mongolia, for one, would signal to Beijing that if there’s room for China in the Pacific, there’s room for the U.S. in Central Asia. That would give them something to talk about in the next round.