The Rise and Fall of U.S. Engagement toward China

By Zoltan Feher

“We are the modern version of Mary Shelley’s Frankenstein, the 19th-century tale of an experimenting scientist who brought a dead body to life using that era’s technology: the electric shock.…[t]he resurrected creature became a murderous monster.”These are the words of Janos Kornai, the world-famous Hungarian economist and professor emeritus at Harvard. In Kornai’s July 2019 Financial Times article, Dr. Frankenstein stands in for Western intellectuals and the monster is none other than today’s Communist China. Kornai was one of the Western intellectuals who helped China reform and integrate into the world economy starting in the 1980s; in fact, he is considered the Western economist with the greatest influence on Chinese reforms. He argues now that China, under its current leader Xi Jinping, has turned back time, returned to totalitarianism, and become a monster. He regrets his past involvement and calls for the containment of China. Even though Kornai talks about the responsibility of Western intellectuals, it is clear he is also talking about the United States.

Over the past decades, Communist China has risen to become a global great power. The United States now considers it a peer competitor. Ironically, U.S. strategy toward China in the past half century is in great part responsible for the rise of China. The United States continued its strategy of engagement, originally designed as a partnership with China to counter the Soviet Union, after the end of the Cold War in the hope of helping China to  liberalize and integrate into the U.S.-led international order as a “responsible stakeholder.” Consecutive U.S. administrations perpetuated the strategy of engagement despite the lack of progress on liberalization and as China became more of a strategic competitor than a partner. In the past decade, as the United States has finally begun partially balancing against China, the inadvertent negative effects of the engagement strategy are coming to light and the need for balancing is becoming more clear.

In 1969, the leaders of the two countries, China’s Chairman Mao and U.S. President Nixon and his National Security Advisor Kissinger, recognized that the United States and China would need to create a balance of power against Moscow. As a result, the United States entered into a de facto alliance with China in 1972 against the Soviet Union. During this late-Cold War period (1972–1989), the alliance with China was in the U.S. national interest, especially since China’s power did not come close to that of America’s. What U.S. policymakers did not anticipate, however, was that the internal market reforms that began in China in 1978, largely aided by Western advisers, coupled with the subsequent U.S. (then global) market opening in 1980, would transform China into a global economic powerhouse in just a few decades. This transformation has been so successful that Beijing is expected to challenge Washington’s leading economic position in the world in a few decades. We can understand and sympathize with the fact that this was not foreseen in the 1970s and 1980s. But what followed is hard to explain.

In the “unipolar moment” after the end of the Cold War, China was no longer an ally of the United States. Their common enemy, the Soviet Union, had dissolved. Moreover, China had patched up its relationship with the USSR in the late 1980s, and Beijing began siding with Moscow on more and more international issues starting in the early 1990s. China’s economic miracle persisted through the 1990s and its overall power position in the international system grew dynamically. From a systemic realist theoretical perspective, America’s long-term national interests would have prescribed a shift toward a balancing strategy during this period. However, the United States continued pursuing a strategy of engagement and helping the integration of China into the global economic order. Washington regularized China’s “most-favored-nation” status and then paved China’s path in the World Trade Organization to full membership in 2001. Meanwhile, it became more and more obvious that China was not complying with the rules of the international economic order on, for example, free trade, free markets, limited state intervention, currency convertibility, or intellectual property rights, and that its power position was becoming an ever greater challenge for the United States. American leaders in this era were slow to recognize any of this. And when they did, they did not respond to it efficiently.

The Clinton administration’s strategy of “engagement and enlargement” was based on the idea that, after the end of the Cold War, cooperation among states and achieving prosperity through globalization would be at the heart of international politics. Engagement with China continued even though China was no longer a natural strategic partner and its global power position kept increasing. Following the terrorist attacks of September 11, 2001, the Bush administration became focused on a new priority, the war on terror, and the region of the broader Middle East with wars in Afghanistan and then Iraq. China, meanwhile, began modernizing its military in the 2000s and then shifted to an assertive foreign policy in the Asia-Pacific under President Hu Jintao in 2008. Nonetheless, the Bush administration carried on with engagement, because it was preoccupied with the war on terror and business interests prevailed in decision-making on China.

Thus, U.S. policymakers maintained an engagement strategy well into the 2000s, disregarding John Mearsheimer’s advice from 2001 when he warned that great-power competition would return, China would pursue a more assertive foreign policy as its power position grew, and the United States would have to contain China’s rise. Many analysts, including his former critics, are now saying that Mearsheimer has been vindicated.

Since Xi Jinping took office in 2012, China has been backsliding toward totalitarianism and pursuing a new, aggressive foreign policy. The Obama administration was the first to partially break with the strategy of engagement by pivoting (or rebalancing) from Europe and the Middle East toward the Asia-Pacific. The Trump administration, however, finally embarked on a true balancing strategy vis-à-vis China. The new strategy sets out U.S. balancing in all areas, including the military, economic, diplomatic, and technological, even though the administration’s downgrading of U.S. diplomacy is hampering the success of such a strategy. Overall, the new strategy’s focus is on the economic facet of the competition. The current administration called out Beijing for playing a rigged game in economic affairs, launched a trade war against Beijing in 2017, and initiated the gradual separation (“decoupling”) of the now highly intertwined economies—the world’s two largest—with a particular focus on the technology sector.

There has been much talk about rising U.S.-China tensions since the onslaught of the coronavirus. However, the COVID-19 pandemic did not create the fierce rivalry between the United States and China—it simply brought the tensions between the two great powers to the forefront. How the United States and China each deal with the pandemic may well influence their competition down the line. So far, the United States’ management of COVID-19 has been catastrophic. China, where the virus originated, communicates that it has been able to get the pandemic under control, but its numbers are not trusted by many external observers. However, in the heat of the worst pandemic in a century and the deepest economic downturn since the global financial crisis in 2008, Washington and Beijing have been in a war of words about the coronavirus and where the blame for it should be placed.

Behind all the fussing and fighting over COVID-19 lie the larger tensions between two great powers vying for global hegemony. Of course, U.S. and Chinese leaders’ domestic agendas of staying in power (especially with the upcoming U.S. presidential elections) also heighten the atmosphere of conflict. The coronavirus is simply a catalyst. The shortcomings of the U.S. engagement strategy, exacerbated by the lag in shifting toward balancing against China, have come to light. What we are seeing now is a manifestation of the late realization that America’s engagement strategy has ended up facilitating China’s rise and was (after the end of the Cold War) a naïve and misguided strategy that did not advance the U.S. national interest in the face of a rising challenger. It’s time for balancing, Dr. Frankenstein.

This article and research is supported by the Tisch College of Civic Life at Tufts University.