Is China Feeling Contained?

In late January, the 1990 Institute hosted a fireside chat with two previous ambassadors to China: Jon Huntsmen and Gary Locke to discuss U.S./China relations. Moderator John Chen, CEO of Blackberry, asked why the U.S. was re-pivoting towards Asia. Ambassador Gary Locke mentioned that it was time. He said half the world's GDP is from Asia, and it was time to sit up and take notice. Ambassador Jon Huntsmen argued that the U.S. had been in Asia since the late 1800s and never totally diverted its attention from Asia. (See Fireside Chat, part one.)

John Chen: You pointed out that this pivoting was originally viewed as some kind of containment policy. So this whole issue in the South China Sea and the AIIB, is that anything like a reaction to this containment?

(The issue in the South China sea refers to a territorial dispute over an area in the South China sea which has two sets of rocks--I mean, islands: the Paracels and the Spratlys. The value of the area is not these "islands," but the minerals that may or may not lay beneath, as well as their strategic position. Along with China, Vietnam, the Philippines, Malaysia, and Brunei all lay claim to the area. Recently China has been moving in--building onto the "islands," sending people there, even in 2015 building an airstrip.

The AIIB--Asian International Infrastructure Bank-- plans to fund the building of infrastructure in the Asia-Pacific region and was created by the Chinese Government in 2015. It has 57 members, including the Philippines--who set aside the above island disputes for the moment-- and many U.S. Allies who joined despite Washington's opposition--Australia, Britain, Germany, Italy, and South Korea.)

To repeat the question: 

John Chen: So this whole issue in the South China Sea and the AIIB, is that anything like a reaction to (China's sense of) containment?

Gary Locke: I don’t think China’s assertive position in the South China Sea—building up the shoals in the region—is in any way a reaction to the American Pivot. Nor do I think the formation of the Asian Infrastructure Investment Bank is a reaction to that. I think it’s really a matter of China feeling its confidence. Trying to reassert itself. Trying to overcome the humiliation that it has felt for the past hundred years. You’ve seen it already in the past years—the Beijing Olympics, putting a man into space, landing a spacecraft on the moon, and of course the economic transformation. So I don’t see these as a reaction to the pivot. And again the U.S. and China are really cooperating on a lot of military things. China has participated now –at the invitation of the U.S.—in joint military exercises in the Pacific. They’re working together to try to stop piracy off the coast of Africa. And they engaged in a lot of joint humanitarian exercises and relief exercises too.

John Chen: Governor Huntsman, when AIIB first came out and China extended the invitation to the U.S., we outright rejected it. Did we fumble the ball?
Jon Huntsmen: Absolutely, we fumbled the ball. It was a huge strategic mistake. We should be engaging in creating and shaping ideas and working to promote ideas in an area in which, during 2010 and 2020, we’re looking at 8 trillion dollars being spent on infrastructure projects. That’s a lot of procurement that could come out of the U.S. and creates jobs. So, why we weren’t fighting for a seat at the table was a bit beyond me.

But I think it represents a broader behind-the-scene’s puzzle . So there’s been a bit of a power vacuum due to a couple of things 1. America’s pre-occupation with the Middle East. And yeah, when you’re president and you’re running the National Security Council, and everything is focused on one region, it really does create a void in other parts of the world. It’s a combination of our calamities in the Middle East, the economic collapse in 2007, and the rise of Xi Jin Ping.

He hit the ground with a different vision of China’s role in the world. I think he has a very distinct sense of what that looks like. It isn’t the old. It isn’t the status quo. I think he saw the Asian Development Bank of which the United States and China have a voting share—the U.S. is quite substantial, maybe 40% and China has maybe 3-4-5%. The World Bank is old. The IMF is part of the post-World II configuration. And he wanted something new. So –wham—you put a hundred billion bucks into this new thing and you get 57-60 new members who rally around it, and you’re off to the races. I think the next step will be what is done with the AIIB, which is probably the most ambitious undertaking of Xi Jin Ping’s first term. 

Gary Locke: I also agree that the United States made a very big mistake in number one, not joining, and number two, insisting our Allies not join. I thought that whatever misgivings we had about the rules, etc, etc, it would be better if we tried to change it from the inside rather than standing outside. Safe water, transportation, everything else is in this.

(...to be continued. Next: the role of Chinese-Americans in U.S./China Relations)