international analysis and commentary

The birth of the G2: US and China as best friends?


The G2 exists. The second round of the annual China-US Strategic and Economic Dialogue was held on May 24-25 in Beijing. This dialogue proves that Beijing and Washington are committed to strengthening their bilateral ties. The institutionalization of relations between the sole current superpower and the only country with the political, economic and military capabilities to become one in the near future should be seen as a welcomed development. It enhances mutual trust, ensuring that Cold War-style superpower antagonism is not reproduced. More importantly, Sino-American institutionalized talks ensure that global issues are discussed openly and honestly. Thus, coordination between China and the US is easier to achieve and quicker to implement. The existence and institutionalization of the G2 is therefore beneficial for both countries, desperate to avoid the rivalry that defined relations between the Soviet Union and the US during the Cold War.

The maturity of the Strategic and Economic Dialogue is reflected by its results. The second round recently closed in Beijing produced specific outcomes beyond vague declarations of friendship and mutual understanding. China and the US agreed to cooperate on energy security and the exploration of Chinese gas resources. Beijing decided to eventually revalue the yuan as well, a key American demand. President Hu Jintao even made specific reference to this issue in his opening remarks to the dialogue. Economic differences were calmly discussed and specific agreements were consensually hammered out, a sign of the level of understanding shared by both countries.

With regards to security, the bilateral relationship was strengthened by the talks in Beijing as well. American and Chinese envoys discussed issues such as North Korea, Iran, nuclear proliferation and UN peacekeeping openly and without the interference of third parties. The outcome of discussions on the area of security might have not been as specific as on economic issues, but that was to be expected. The relevance of the dialogue on security issues stems from the fact that China and the US have a clear idea of each other’s position on sources of possible friction such as Taiwan or the presence of the American navy in the South China Sea.

Some would argue that improving relations between the US and China could be related to Barack Obama’s administration preference for multilateralism over the George W. Bush administration’s “or with us or against us” mentality. Yet, the good relationship between the US and China transcends party lines in Washington. One of the few foreign policy successes of the Bush administration was improvement of relations with China. In 2005 the first round of the Senior Dialogue between both countries took place. Together with the Strategic Economic Dialogue initiated one year later, this was the first step towards the institutionalization of the G2. It also shows that Republicans and not only Democrats understand the desirability of having regular talks with China.

Why is the relationship between two possibly antagonistic powers running without insurmountable problems? With regards to the US, political and economic elites understand that China does not pose a direct threat to the American model. During the Cold War, the Soviet Union offered a clear alternative based on a state-led economy and an authoritarian political system. Differently, China has embraced liberal economics. Certainly, the government is central to the Chinese economy. But the Chinese model is a hybrid between a market economy and state guidance, very similar to that followed by Japan, South Korea or Singapore in their paths towards development. More importantly for Washington, Chinese authorities are not actively pursuing expansion of their model to other countries, as Soviet leaders did. Similarly, China might not be a democracy, even though direct elections at the local level do exist and in many cases are highly competitive, but it is not looking to forcibly extend one-party rule to third countries, as the Soviet Union and Maoist China sought to do.

Equally relevant, 9/11 fundamentally changed security perceptions in the US. The interrelated threats of terrorism, failed states and proliferation of nuclear technology and weapons of mass destruction became the main focus of American security strategy. These are issues that affect the stability of all states, including China. Not surprisingly, Beijing has been keen to cooperate with Washington to counter these threats. There might have been differences in the strategy to follow, such as when the Bush administration invaded Iraq. But for the most part cooperation has been the norm, whether in rebuilding efforts in Afghanistan or in talks to curb North Korea’s nuclear threat. 

China has proven to be a pragmatic, rather than ideologically driven, actor. Despite the gloomy comments of some neocon analysts, Beijing has neither the desire nor the capabilities to challenge the US. Economic development is the most important goal for Chinese leaders, and will remain so for at least the next twenty or thirty years. Hence, China needs a stable international system in which low barriers to trade and to the flow of capitals allows its export-led economy to continue posting impressive growth. Other short-term and mid-term objectives come second to keeping the current liberal economic system stable. Even immediate reunification with Taiwan has ceased to be a priority as de facto economic integration advances rapidly. Therefore, there is no appetite in China for confrontation with the US as long as economic growth continues unabated.  
The Strategic and Economic Dialogue is the perfect platform to ensure that Sino-American relations continue on the right track. They serve the US and China to ensure that each party can discuss their core interests openly. The dialogue allows Sino-American relations to be characterized by increasing trust and certainty, rather than the enmity and ambiguity which led to tensions and proxy wars during the Cold War. It also provides leadership, as witnessed with the agreement reached in the Copenhagen Climate Conference of 2009 or nuclear talks with Iran. Despite criticisms of the role of China during the Copenhagen conference, the agreement reached satisfied developing countries and stands a much better chance of being fully implemented than the Kyoto protocol. With regards to Iran, Secretary of State Hillary Clinton praised the role of China following the recent talks in Beijing. Therefore, the institutionalization of the G2 is a welcomed development on the road towards better superpower relations and international stability.