US-China relations is a topic of intense debate among IR's scholars because the more dangerous a system of one super power is a situation where the two great-powers are firmly stood in the same region [6].​ Joseph Nye [19] wrote that some US policy makers suggested the containment policy of China before it became too strong. However, he rejected this approach and argued that US can engage and cooperate with China in international liberal institutions established by US after WWII. “From that position of strength, the Americans could afford to engage China economically and socially and see whether such forces would eventually transform China.” Instead of using military containment policies to confirm that China is an enemy, the United States has continued its engagement policy while it has strengthened its alliance with Japan and South Korea in the triangular balance to ensure that if engagement failed to work, there was a firm fallback position. American experts and their Asian allies want to implement cooperative policy with China on the power of economic engagement or economic interdependence to change China from an authoritarian country to a free, liberal democracy. Yet, policy of engagement seems to be doomed. As Navarro [20] argued, “Not only does the authoritarian grip of the Chinese Communist Party seem to be tightening, but economic engagement is providing China with a supercharged economic engine to drive its military buildup”. Navarro added that in contrast to Nixionian pragmatism stands Bill Clinton^[1] preferred idealistic vision of engagement taming American power^[2]. Martin Jacques [12] also argued that the policy of engagement with China in the hope that China would become a modern western society is “guilty of underestimating what the rise of China represents”.

George W. Bush's administration began to see Beijing as a "strategic peer competitor" in the early 2000s [23]. The Obama administration has decided on 'moving towards Asia' - a rebalancing of military assets as well as diplomatic attention. This policy “will create new points of stress and rising competition with China for influence in the region” [24]. Betts considered China a nation “most likely over time to disturb equilibrium in the region - and the world, and warned that ‘given the high Chinese economic growth rates and Beijing’s rising military spending the only recently overpowered Soviet threat was actually a “comparatively modest challenge” [2]. Betts noted “It is hardly inevitable that China will be a threat to American interests, but the United States is much more likely to go to war with China than it is with any other major power” [3]. In a new national security strategy report based on Trump’s America First vision in which the US government defines China as a “revisionist country” and a “strategic competitor” seeking to erode US security and prosperity. US Indo-Pacific strategy is part of a policy to contain China that will also contribute to a bumpier Sino-US relations which entails increased cooperation between the US, Japan, Australia and India aimed at countering the ever-expanding clout that China is wielding in Asia [18].

Diplomatic Relations and Its Trends

Since 1949, Sino-US relations have evolved from tense standoffs to a complex mix of intensifying diplomacy, growing international rivalry, and increasingly intertwined economies [25]. On January 1, 1979, ambassadorial-level diplomatic relations between US and PRC was established and realized normalization of Sino-US ties [17]. The cooperation between the two countries brings benefits to their economic development and security, bringing the fall down of USSR. After the collapse of USSR, US strategic thinkers have been considering PRC as a new threat to US interest, especially in Asia-pacific. In the changeable situation of the world today, relation between the two countries are intricate and complex, anti-China forces dishes out the “China threat theory”, but PRC still insisted that as a “status quo” power, PRC will enjoy in economic cooperation with a peaceful rise and commitment to be a responsible great power in international political order. Xi Jinping convinced that “we Chinese love peace”, we will never seek aggression and expansion and will never compromise on defending its sovereignty [21]. In the interest of peace, China will remain committed to peaceful development. No matter how much stronger it may become, China will never seek hegemony or expansion [22]. However what china’s claim of being peaceful rise, but if we look at china’s history after the civil war, it may be possible to analyze Chinese behavior after the Communist Party of China ruled in 1949, and that China would adopt a revisionist strategic approach. Through the occupation of Tibet's territory^[3], China's involvement in the Korean Peninsula^[4], the Vietnam War, the war with India, the war with the former Soviet Union^[5], the territorial claims at the East China Sea and South China Sea, especially Chinese jets interception of US surveillance plane are reflected China’s proactive and assertive foreign policy as a revisionist state. When economic power drives China toward superpower position, China will have to show its full range of military and political muscles, even it wants or not [16].

Christen [4] argued that “even US capabilities in economic, military and social terms are better than PRC, but PRC still can pose major challenges to US security interest. As Denny Roy [7] argued that “a stronger China is likely to undermine peace in the region. Economic development will make China more assertive and less cooperative with its neighbors; China's domestic characteristics make it comparatively likely to use force to achieve its political goals; and an economically powerful China may provoke a military buildup by Japan, plunging Asia into a new cold war.” Whereas Huntington [9] described the US-China relations as “potentially most dangerous” rivalry because of the issues like trade, human rights, arms sales, the proliferation of weapons of mass destruction, Tibet, and Taiwan. The fundamental issue, however, is one of power reinforced by profound civilizational differences. The Chinese have made it clear that they see their era of subordination to and humiliation by other major powers coming to an end and that they expect to resume the hegemonic position that they had in East Asia until the mid-nineteenth century. The United States, on the other hand, has always opposed the domination of Western Europe or East Asia by any single power and in the last century fought and won two world wars and one Cold War to prevent that from happening. Whether conflict or accommodation will characterize US-China relations is thus central to the future of world peace.”

Condoleeza Rice [5] also mentioned that China wants to challenge US dominent in Asia Pacific region in its favor^[6]. Ikenberry [10] believed that East Asian region would become a bipolar system^[7] contested by the US and PRC rivalry and in response US would prefer confrontation and containment policies rather than engagement to maintain balance of power. However, China views US as a most serious threat to its security. As a revisionist state, China will challenge the preeminent US position in the region to alter the old world order with its “proactive” foreign policy [16] and with a Chinese world’s views on socialism with Chinese characteristics [15]. Conversely, US considers China as peer-competitor to seriously challenge US’s interests in the region.

Economic Aspects in US-China Relations

China in the last three decades has been being busy championing trade deal around the globe, building up some of the world biggest companies, taking over some international real-estate markets, building up networks of energy powerhouse. China is the largest trading partner for more than 130 countries and the largest cargo trader for many years as well as being the largest exporter and second largest importer in the world [11]. China has push for global economic leadership in Launching the Asian Infrastructure and Investment Bank (AIIB), One Belt One Road Initiative (OBOR) and the proposed Free Trade Area of the Asia Pacific. China has opened 104 of its 160 services sectors to foreign investors according its membership to World Trade Organization (WTO) [1], when much of the world, especially US and Europe are not certain about the impact of economic globalization. For more than a century, the United States has been the world's biggest economy, accounting for over 24.7% of the world’s gross domestic product (GDP) in 2016. Infographic from the Visual Capitalist [14] shows, US is the largest economy in the world on nominal basis where as China is largest on PPP basis. US is ahead of China by 7170 billion US Dollar in 2016. In September 2008, China surpasses Japan to become the largest holder of US debt—or treasuries - at around $600 billion [25].

The Chinese government has achieved this high growth through reliance on old drivers: credit and real estate. However, the government’s unwillingness to allow the market to play a bigger role has resulted in deteriorating investment efficiency, meaning higher levels of debt are necessary to generate growth. Household consumption—an essential element of China’s economic rebalancing—is growing but at a sluggish pace due to the slow rate of reform. China’s high and rising debt levels pose a growing threat to the country’s financial stability. China’s total debt reached $27.5 trillion, or 257 percent of GDP, at the end of 2016. The dramatic rise in China’s debt burden can be attributed to the relentless expansion of credit the government has relied on to generate growth since the global financial crisis [26, P.2].

The US trade relationship with China remains extremely unbalanced, as evidenced by a substantial goods deficit, which totaled $347 billion in 2016. The goods deficit decreased 5.5 percent year-on-year in 2016, driven by declining US imports from China, which dropped 4.3 percent to $463 billion. US goods exports remained flat, declining 0.3 percent over 2015 levels to $116 billion. China continues to dominate the United States’ global deficit in trade in goods. In 2016 the United States’ goods deficit with China was equal to 47 percent of its total deficit, down from 49 percent in 2015. In the first eight months of 2017, the goods deficit increased 6.2 percent to $239.1 billion, with U.S. exports to China reaching $80.2 billion, an increase of 15 percent year-on-year, while imports from China grew 8.3 percent year-on-year to $319.3 billion. In 2016, the US services trade surplus with China reached a record high of $37 billion, driven almost entirely by an increase in Chinese tourism to the United States [26, P.2]. US attracted more than $373 billion of global FDI flows in 2016, of which around $27.6 billion, or 7.4 percent, came from China. From 2010 to 2016, Rhodium Group estimates annual Chinese investment in the US rose from $4.6 billion to $46.2 billion. There are potential economic benefits of investment: Chinese FDI can help US firms secure the capital necessary to grow their business and hire more workers, leading to an expansion of the U.S. tax base, improving productivity, and raising overall competitiveness^[8].

According to the Global competitiveness index [8], US is the second most competitive country on earth where China ranked on 27^th place (See table 1). In Annex 1, we compare the 12 pillars of GCI between US and China by ranking and score then developed a matrix level of competition in table 2. As identified in the 12 pillars of the GCI, US is more competitive than China in all pillars besides market size and macro-economic context.

Таблица 1

Глобальный индекс конкурентоспособности – GCI 2017-2018

Table 1

The Global Competitiveness Index - GCI 2017-2018 [8]

Таблица 2

Матричный уровень конкуренции между США и КНР, GCI 2017-2018

Table 2

Matrix Level of Competition between US and PRC, GCI 2017-2018

Security Aspects in US-China Relations

In terms of military spending per capita, China is still behind the United States. In terms of total military expenditures, China spends the second most worldwide with a total of approximately 216 billion US Dollar per year, where the US – 609 billion US Dollar. In the US consists of 1.43 million active military personnel, where in China – 2.33 million. In term of military expenditure in the percentage to the GDP, China spends about 2.1% of its annual GDP on military, and the United States spends 3.8%. The US has 133 military bases outside of its territory, and China has one base in Djibouti, Africa which is at the southern entrance to the red sea on the route to Suez Canal. More specifically, US has bases in multiple jurisdictions that surround China: South Korea, Kyrgyzstan, Japan, Singapore, Guam, Afghanistan, and Diego Garcia, a set of small islands in Indian Ocean. The US has 7315 nuclear warheads and 121 military satellites, where China has only 250 nuclear warheads and 24 military satellites [13]. According to the Global Fire Power Index 2017, US ranks the first place in military power ranking, where PRC stands in the third place (See table 3).

Таблица 3

Глобальный индекс военной мощи – GFP 2017

Table 3

The Global Fire Power Index - GFP 2017^[9]

China was the third-largest arms exporter worldwide in aggregate terms during the 2012–2016 periods with $8.8 billion in exports, following the United States with $47.2 billion and Russia with $33.2 billion. Comparing five-year periods, China’s exports of major arms rose 74 percent from $4.5 billion between 2007–2011 and 2012–2016 while US and Russian exports rose 21 and 4.7 percent, respectively, meaning China’s share of global arms sales rose from 3.8 to 6.2 percent. During the past five years China has sold arms to 44 countries, with Pakistan (35 percent), Bangladesh (18 percent), and Burma (10 percent) as top recipients. China’s customer base has also expanded across Africa, Asia, and South America, with its exports to countries in Africa rising 122 percent over the previous five-year period, and exports to former Soviet countries (Kazakhstan and Turkmenistan) for the first time in 2016. All recipients of China’s arms exports to date have been low- and middle-income countries [26, p. 177].

Despite efforts by the Trump and Xi administrations to set a positive tone for the bilateral relationship in early 2017, US-China relations suffered from tensions over longstanding disagreements such as the South China Sea, Taiwan, and especially North Korea^[10]. President Trump and President Xi held their first face-to-face meeting at a summit in April 2017 and established a new framework for bilateral security relations. The two sides agreed to initiate a new “US-China Comprehensive Dialogue.” This features four “pillars” of dialogue on diplomatic and security, economic, law enforcement and cybersecurity, and social and cultural issues. This framework replaces the US-China Strategic and Economic Dialogue begun under the Obama Administration. According to US officials, the two sides additionally “had candid discussions on regional and maritime security” and “reaffirmed their commitment to a denuclearized Korean peninsula,” without discussing specific arrangements. Although the US side affirmed it is prepared to take action on the Korean Peninsula without China, the Chinese side argued military actions should be stopped in exchange for North Korea halting its nuclear program. President Trump reportedly emphasized US support for international norms in the East and South China seas and opposition to militarization of disputed areas, and President Xi emphasized his desire for US participation in China’s OBOR initiative and for US cooperation in returning Chinese fugitives to China [26, p. 179].

Since the summit, China’s Foreign Ministry spokesperson has referred to “the consensus achieved” there, later criticizing a US arms sale to Taiwan and US sanctions on North Korea that target a Chinese bank as going against this “consensus,” but US officials have not referred to this supposed “consensus.” The United States and China held the first “pillar” dialogue, the US-China Diplomatic and Security Dialogue, in Washington, DC, in June 2017. Statements from the US side following the meeting noted discussion on areas of agreement such as the need to achieve a denuclearized North Korea, as well as frank exchanges on China’s responsibility to exert greater pressure on North Korea, China’s actions in the South China Sea, and China’s human rights record. Statements by China also cited a “constructive and fruitful” dialogue, but stressed the need for US respect of China’s political systems, development path, sovereignty, and territorial integrity; its opposition to U.S. missile defense deployments in South Korea; and its desire for strengthened exchanges and cooperation in counterterrorism [26, P. 179].

Strategically, the Trump administration’s NSS [18] identifies the security of the US homeland, particularly against terrorist threats and weapons of mass destruction, as a priority; recognize that promoting economic prosperity^[11] is core to sustained US global leadership; highlight the value of preserving an open and liberal international order that has often times benefited the US; and underscore the importance of preserving core American principles and values. Professor Jin Canrong, a Chinese government adviser, warned US-China Relations are headed towards trouble, as the latest National Security Strategy Report in which the US government defines China as a “revisionist country” and a “strategic competitor”, as well as several “very provocative suggestions” on Taiwan made in the US Congress [28]. US-China relations should be embedded in a larger set of stable US political, security, and economic ties. It will require a greater commitment to the region, of strategic thinking, time, resources, and energy. Pyongyang’s nuclear weapons program could tilt US-China relations towards either increased collaboration or further confrontation.

Информация о конфликте интересов: авторы не имеют конфликта интересов для декларации.

Conflicts of Interest: the authors have no conflict of interest to declare.