Did the U.S. and China Get Each Other Wrong for 40 Years?

Narration: President Nixon’s visit to China started a 40-year-long interaction between the two countries, but did America get China wrong from the very beginning?

Bill Gertz: They didn’t fundamentally understand the nature of the communist system in China.

Narration: A profit-driven business sector dominated the U.S.-China policy from the Clinton era to the Obama era, What’s the result and what’s the lesson learned?

Bill Gertz:  We have not seen a moderating of China. We have not seen an evolution towards a democratic system. In fact, we’ve seen just the opposite.

Narration: Trump overhauled the China policy. Is he getting it right?

Narration: For the past 40 years, did China also get America wrong? And what impact will that have?

Title: Did the U.S. and China Get Each Other Wrong for 40 years?

Simone Gao: It is official, America is experiencing a major overhaul in China policy under President Donald Trump. And guess what? This time the Democrats are also with the president. This is almost surreal in today’s America. So, what has changed with America’s thinking on China? If I have to summarize it in one sentence, it would be: America is finally starting to see China as it is. That is, no more hopes for a gradual transformation into democracy. No more hopes for a peaceful rise of the dragon, and most importantly, no more hopes for sharing of that sweet pie of a prosperous Chinese economy in a mutually beneficial way. All these hopes are gone. But the question is, how did they come about in the first place? In the past 40 years, is America’s China policy driven by hegemonic ambitions in geopolitics? Has it been eroded by corporate greed? Is it an unfortunate result of wishful thinking? Or does the misunderstanding simply reflect cultural differences? What is the most important lesson America should learn from this 40-year-long unsuccessful China experience? We don’t have the luxury to do a detailed chronologization of U.S.-China relations in this 24-minute program, instead, we will only analyze the parts that address the aspects mentioned above. So, let’s get started.

Part 1: Containing the Soviet Union – how U.S.-China relations got started

Narration: After World War II, the world entered into another state of geopolitical tension, namely, the Cold War. A confrontation between an Eastern Bloc that includes the Soviet Union and its satellite states, and a Western Bloc that includes the United States, its NATO allies, and others. At the height of the Cold War in the late 1960s, a deterioration of a Sino-Soviet relationship complicated the situation. On the brink of nuclear attack by the Soviets to destroy China’s key political and military targets, the Nixon administration decided the existence of a strong China would best serve America’s national interest because it was the Soviet Union that was the country’s biggest adversary.

Narration: Nixon deterred the Soviet Union and accepted the olive branch from China. His visit to China in 1972 eventually led to the diplomatic relations between the two nations. During the Ford and the Nixon administration, the U.S. offered military intelligence and technologies to China. It even promised to neutralize the Soviet threat to China.

Narration: According to Michael Pillsbury, a former U.S. official and author of an international bestseller: “The Hundred-Year Marathon,” President Reagan, although deeply skeptical about the Chinese Communist Party’s nature and his predecessor’s China policy, did the most to boost China’s military. The National Security Decision Directive (NSDD), signed by President Reagan, permitted the Pentagon to sell advanced air, ground, naval, and missile technology to the Chinese to transform the People’s Liberation Army into a world-class fighting force. It even inaugurated nuclear cooperation and development between the two countries. But, unlike his predecessors, Reagan added a caveat to make the U.S. assistance dependent on China’s alienation to the Soviet Union and liberation of its authoritarian system. However, those conditions were largely ignored.

Narration: America’s continuous effort to boost China militarily and technologically falls right into the Communist Party’s grand strategy of modernization in four key areas: agriculture, industry, national defense, and technology. The strategy was first crafted by Mao Zedong. But it was Deng Xiaoping, the paramount leader after Mao, who took the strategy to a new level. Deng believed economic reform, together with development in science and technology, holds the key for China to change its fate. He received substantial assistance from President Jimmy Carter. The effort included accepting a great number of government-associated Chinese students to study in America, mainly in the field of science and engineering. Deng’s rationale is simple: China needs science and technology, and the quickest way to get it is to take it from America.

Simone Gao: Deng has a famous saying “Tao Guang Yang Hui.” It means to hide your ambitions and build up your capability. He claimed that China had no grand strategy but had just been crossing the river by feeling the stones. There is some truth to this analogy. The Chinese Communist Party might not know everything they need to do in building an economically powerful empire, but they have been crystal clear about one thing from the very beginning. That is, the Party must be the sole ruler of the country, and this cannot be changed. Did America get China wrong from the very beginning? I discuss this issue with Mr. Bill Gertz, senior editor of the Washington Free Beacon, author of “The China Threat.”

Simone Gao: Has America been wrong about China from the beginning?

Bill Gertz: Yes, I do. I think that the strategic opening to China under the Nixon administration appeared to be what I would call a strategic gambit. In other words, this was the China card against the Soviet Union, and it had its place at the time. It was considered a great foreign policy success. Richard Nixon had been a very strong anti-communist, and he took criticism from his conservative supporters for opening up to China. The problem with that policy was, that once the Soviet Union collapsed in 1991, there was never a reevaluation of the China policy. And that’s–it was kind of on autopilot–and that’s where I think that American policy went off the rails. They basically made a huge strategic mistake by thinking that–by engaging–unfettered engagement with a nuclear-armed communist superpower dictatorship, that this was somehow going to lead to a real strategic partnership. They didn’t fundamentally understand the nature of the communist system in China.

Narration: Coming up, a profit-driven business sector had dominated the U.S.-China policy for almost 20 years. What’s the result and what are the lessons learned?

Part 2: An Era of Mercantilism

Narration: The 1989 Tiananmen massacre of the pro-democratic students and citizens by the Chinese Communist regime put a pause on the U.S.-China honeymoon. After the crackdown, the Communist Party closed a big percentage of publications, arrested tens of thousands of movement participants and sympathizers, waged an anti-western influence campaign and temporarily stalled the economic reform. Deng Xiaoping, who keenly spotted the danger as an imminent economic recession posed to the Communist Party’s rule, insisted that China would continue its economic reform and opening up policy, a line the Americans were eager to hear.

Narration: Right after the student movement, President George H. W. Bush authorized the promised delivery of military supplies to China. He said: “I am convinced that the forces of democracy are going to overcome these unfortunate events in Tiananmen Square.”

Narration: Bill Clinton campaigned on being tough on China. However, his tough stance did not last long after he took office. According to Michael Pillsbury, China mobilized a pro-China coalition within the administration to facilitate contact between them and Chinese allies in the business community and to promote China’s interests in Washington. Chinese officials dangled commercial deals before influential American businessmen. Major donors to the Clinton campaign lobbied the president directly, asking him not to jeopardize the prospective sales of Boeing aircraft to the Chinese or to stand in the way of launching American commercial satellites on Chinese rockets, which would save the U.S. government hundreds of millions of dollars.

Narration: New support was mobilized in Congress, based on constituents’ economic interests. By the end of 1993, these allies persuaded the president to relax his anti-China stance.

Narration: The rest of it is history. The Clinton administration helped China enter the World Trade Organization and granted the most favored nation status to China. Following that, foreign investment poured into the country and boosted its GDP. China became the world factory and the second largest economy. Meanwhile, however, it has not become a freer society that embraces democratic values. The Communist regime largely used foreign technological help to develop its great firewall and other apparatus to control and persecute the Chinese people.

Simone Gao: What went wrong in this period, and what is the lesson to be learned? Here is the next part of my discussion with Mr. Gertz.

Simone Gao: From the 1990s to Obama era, America’s China policy had been heavily influenced by American international corporations. Now, finally, we start to see the long-term impact of this policy. A model in which a profit-driven business sector dominates public policy has brought great damage to the country. What do you think is wrong with this model and will it happen again?

Bill Gertz: My views, I’ve been sounding the alarm on what I call the China threat for many years, going back to the 1980s and with my 2000 book: The China Threat. And I’ve argued since the beginning that the fundamental approach to China has been mistaken. And that approach has been partly that, if the United States trades with China, that this trade and business interaction will have a moderating influence and ultimately result in the evolution of China from a communist state to a democratic state. And that assumption has been the underpinnings of American policy for more than 30 years, going back to the 80s. And it’s proven to be fundamentally false. We have not seen a moderating of China. We have not seen an evolution towards a democratic system. In fact, we’ve seen just the opposite. This is the–what they often say about second marriages–that it’s the triumph of hope over experience. You can’t build a national security policy based on hope, and that was what they did in hoping that trading with China would bring about a more peaceful and a more democratic, more open China.

Simone Gao: I wonder if the fault is all on wishful thinking. How about the greed of these big American corporations? Cisco, Microsoft, they all made big money in China by doing so.

Bill Gertz: I wonder, nobody’s ever looked at their books to see how much money they’ve made in China. Every business is heavily restricted in China. The Chinese require massive transfers of American technology, they put incredible restrictions on American companies over there. Again, it’s–from the business community standpoint–it was based on the hope, this hope that somehow they could gain access to this emerging market of 1.4 billion people in China. And the hope was that, again, that let’s try to get them into the business sphere and hope that this idea of American capitalism will catch on. Well, it hasn’t caughten on, in a sense that, especially under Chinese leader Xi Jinping, we’ve seen a retrenchment towards a much more ideological and much more hardline communist position.

Simone Gao: I know something about Cisco. Its president reached out to the Chinese leaders in the late 1990s. Cisco laid the design foundation for China’s Great Firewall, helped China with the Golden Shield project, and sold equipment to China. I understand the businesses are supposed to make money and you can’t put too much moral burden on them. But when a profit-driven business sector is driving the public policy, would we run into the risk of neglecting or even compromising the long term interest and values of the country?

Bill Gertz: Yes, very much so. I think their–first of all–many of the American technology companies are beginning to understand that doing business with China is a high-risk enterprise. And what is the risk? The risk is that China will steal their most important proprietary secrets, their industrial and economic secrets. And that’s really, I think, becoming a little bit more clear to a lot of companies that have done business in China. Under the Trump administration, we’re seeing a major pushback against that. Through a number of actions, the U.S. trade representative office did a report on this. They’ve been very aggressive in pushing back. And part of the reason for that is that many of the American business leaders have approached the U.S. government in saying, look, we’re being stolen blind by China. We need to do something to protect our technology because it is really the engine for America’s industry and economy right now.

Narration: Coming up, the overhaul of U.S.-China policy under President Trump, and what lessons were learned about China from the past 40 years?

Part 3: Trump’s Overhaul of China Policy

Narration: During the Obama administration, a pivot to Asia policy was formed. The then-Secretary of State Hillary Clinton published an article on Foreign Policy–“America’s Pacific Century.” Half a year later, Secretary of Defense Leon Panetta presented an Asia-Pacific rebalance outline that indicated the U.S. Navy would deploy 10 percent of its ships and submarines to the Pacific Ocean. By 2020, 60 percent of the American Navy will be deployed around the Pacific Ocean. One year later, his successor Chuck Hagel announced that 60 percent of the American Air Force will also be deployed in the Asian Pacific region. Ashton Carter, the next secretary of defense in line, assured that America would continue to increase its military power projection in the region. In February 2016, the United States and 11 other countries signed Trans-Pacific Partnership Agreement, which many observers believed would reduce the signatories’ dependence on Chinese trade and bring them closer to the United States.

Narration: But people still did not sense a fundamental change of China policy in the Obama era. This changed quickly after President Donald Trump took office.

Narration: On August 13, 2018, Trump signed the National Defense Authorization Act (NDAA) for 2019. The 716-billion-dollar defense policy funds weaponry upgrade across military branches, increases the active duty forces, and addresses a number of countries that pose a strategic challenge to America, among which, China, took a front seat.

Narration: The NDAA states: the Secretary of Defense won’t allow China to take part in naval exercises in the South China Sea area until China halts all land reclamation activities, removes all weapons, and has consistently acted towards stabilizing the region for four consecutive years.

Narration: The NDAA also expanded the scope of its annual China military and security development reports to encompass espionage and technology transfers through investment, industry, cyber theft, and academics. It added China’s efforts to influence media, culture, business, academic, and policy communities, as well as its nonmilitary tools overseas to support its security and military objectives.

Narration: The bill also expands its China strategy to include a whole-of-government strategy addressing China’s efforts to undermine democratic institutions and processes.

Narration: These more detailed China additions reflect the consensus that both political parties and other sectors of the American society have quickly reached in recent years. That is: China is a major rival instead of a partner. For president Trump, however, it is in line with his openly confrontational approach to China which had drawn criticism at the time.

Narration: Since his election, President Trump has broken diplomatic precedence regarding China on several occasions. He accepted a congratulatory phone call from Taiwanese President Tsai Ing-wen, where he also congratulated her on her election victory. It was the first known call between a Taiwanese leader and a U.S. leader since the U.S. severed diplomatic relations in 1979.  In contrast, President Trump never congratulated Chinese President Xi Jinping on his election, despite saying he has good relations with President Xi.

Narration: President Trump also questioned Beijing’s “One China” policy, which is one of China’s bottom lines.

President Trump: “I fully understand the ‘One China’ policy, but I don’t know why we have to be bound by a ‘One China’ policy unless we make a deal with China having to do with other things, including trade… I don’t want China dictating to me.”

Narration: In another pushback against China, President Trump signed the Taiwan Travel Act. It resumes the high-level visits between Taiwanese and the U.S. officials. These visits stopped as a result of the Sino-U.S. joint communiques signed in 1979. One thing to note is that the Taiwan Travel Act was first proposed in 2016, but it was not passed by Congress. Two years later, Congress passed it unanimously.

Narration: Policy differences between the Trump administration and previous administrations don’t stop at the diplomatic level. Under Trump, the U.S. Navy has increased its patrols in the disputed South China Sea where China’s man-made military islands are located. There were four patrols conducted during the entire Obama administration; under President Trump, patrols have increased to two or three per month.

Narration: And finally, President Trump started the trade war with China. By confronting China’s unfair trade practices and intellectual property theft, the Trump administration, in effect, is disrupting China’s Communist Party dominant economic model.

Simone Gao: China policies under President Trump is going through major changes. Is the president on the right track? Here is Mr. Gertz again.

Simone Gao: What do you think of the National Defense Authorization Act 2019, that President Trump signed into law recently?

Bill Gertz: I think the latest National Defense Authorization Act is a very important step forward in codifying the new approach to China by the Trump administration, which has been outlined in, first, the White House national security strategy. I think that was in December of 2017 and then followed by the new national defense strategy, which came out in January of this year. And those two, for the first time in decades, identified China as a strategic competitor, which is a diplomatic way of saying that it’s no longer accepted that China is going to become a pro-freedom, a pro-capitalist nation. And so I think that the NDAA for the first time has kind of codified that new strategy in a number of areas. Now, there are some minuses to it. For example, Senator Marco Rubio, who is one of the most outspoken on the issue of China, voted against the measure because it did not contain restrictions on Chinese telecommunications companies that he was advocating. And that was as a result of a Trump administration deal with China which removed U.S. sanctions on Chinese telecommunications companies.

Bill Gertz: But on the positive side, we see that this has really called for strengthening U.S. relations with Taiwan, which I think is a real important strategic move by the Trump administration. Cooperation.

Simone Gao: So are we seeing a major overhaul of China policies under president Donald Trump?

Bill Gertz: Yes, very much so. And like I said, the national security strategy and the national defense strategy have been a Teutonic shift in policy. Now, it’s going to take, I would say, a number of years, probably two or three years before that top-down policy really has an impact on the various government agencies, whether it’s the commerce department or the Pentagon or the Justice Department. But we’re already seeing major shifts from the private sector.

Simone Gao: So, what’s the thing about Trump that makes him different from previous presidents in dealing with China?

Bill Gertz: It’s very interesting. I’ve studied the president, the current president’s policies, and I noticed that as far back as 2012, Trump first wrote a book when he was thinking about running for president in that time, and in that book in 2012, he talked about breaking with the American business community on China, specifically, really focus–not ignoring, no longer ignoring China’s human rights abuses and, of course, from a business perspective, China’s unfair trade practices. So that has really been, I think, for the president, the prime impetus for his new policies.

Simone Gao: Mr. Pillsbury’s book paints a rather pessimistic picture of America’s ability to influence China. It talks about how America has got China wrong for four decades. But I would like to ask another question. Has China misunderstood America for four decades as well? They stole a great deal of American technologies and economic strategies, but do they understand where the true strength of America come from? If they neither understand what had made America great in the first place nor do they appreciate it, will they really learn the secret of becoming a long-lasting superpower in the world? What’s your thinking on these questions?

Bill Gertz: Well, first off, I think that from the Beijing perspective, the collapse of the Soviet Union in 1991 was a wake-up call in that the Chinese leadership understood that they had to make changes in the system, otherwise they were destined, like the Soviet Union, to collapse under a communist system. Now, they had already begun the reform and opening up process in the 80s before that, but I think that that was–they were basically set on a course designed to make communism great again. And that’s kind of their–from my perspective–that’s kind of what they were after. And they, so they modified the communist economic system, but they have not modified the communist ideological system: strong central control over everything, internal security, repression. These are the key features of the communist system that they are unable to give up. And their fear is that if they loosen on that and move towards a more democratic state, that they will end up like the Soviet Union. But yet on the economic side, the watchword was, yeah, it’s great to be rich, let’s all get rich. But as it turned out, with rampant corruption, as it is in China today, that there’s great disparities in wealth. You have coastal cities and elites benefitting from the system, where the rest of the country is languishing in poverty and squalor. So this is an internal contradiction that China has not been able to deal with. And they’re also dealing with a lack of values in that system, in that they’ve moved away in many public forms from endorsing hardline communism. But they also recognize that there’s no internal values system. This was considered a problem for capitalism, but when you look at the capitalists in the early part of the 20th century, they had basically religious or Christian value systems, which oriented their–they looked for the greater good, how could they benefit the whole of society. Where this is a kind of a value system, that I see, that it’s lacking in China. And I think the Chinese leadership understands this. They’ve studied one-party dictatorships or one-party political systems in Singapore, somewhat in Japan, looking for that values system that can hold what they have together, and they haven’t found it. So I see great contradictions within the current Chinese systems between what you have as a hardline, ideological communist system on the one hand and a quasi-capitalist, semi-socialist system, economic system on the other hand.

Simone Gao: According to French political philosopher Alexis de Tocqueville, there are three central features in the American democratic experience: township, civil associations, and religion. He also believed that free societies rest on public morality. Individuals can draw moral guidance from reason or religion, but societies can only do so with religion. If that is true, in China, to a large extent, both are absent. We don’t know if the American model is the best model for governing, but it has kept this country prosperous for 242 years. The Chinese people were once enlightened to great wisdom. But the country today has been plagued by Communism so much so that even though the ideology has died, its effects linger. Until that is changed, China will probably not have the opportunity to become a long-lasting world superpower.

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