US Bets on China: Three Strategies, Three Setbacks
Former US President Richard Nixon’s engagement with China marked a pivotal moment in American foreign policy. This decision initiated a series of strategic bets on China, each yielding unexpected consequences. Nixon’s aim was to create a partnership that could balance the Soviet Union’s influence. Instead, it resulted in China evolving into an independent global power.
Three Major US Bets on China
The US has made three significant strategic bets on China over the past few decades, each characterized by ambitious aims and unintended setbacks.
Nixon’s Opening to China
- Year: Early 1970s
- Goal: Counter Soviet Union influence
- Result: China grew into a formidable power beyond US control
Nixon’s policy, often referred to as the “Opening to China,” was driven by the need for a strategic alliance against the Soviet threat. However, it inadvertently laid the groundwork for the rise of a powerful rival.
Clinton’s WTO Initiative
- Year: 2001
- Goal: Encourage liberal reforms in China
- Result: Accelerated growth of a rigidly authoritarian regime
In 2001, President Bill Clinton advocated for China’s entry into the World Trade Organization (WTO) to usher in economic reforms. Contrary to expectations, this initiative fortified China’s authoritarianism while enhancing its economic competitiveness.
Trump’s Sanctions and Tariffs
- Years: 2017–2021
- Goal: Curb China’s technological advancements
- Result: Boosted China’s tech self-sufficiency
President Donald Trump entered office with a plan to impose tariffs and sanctions designed to restrict China’s development. Ironically, these measures only accelerated China’s technological progress, pushing the nation toward self-reliance in various sectors.
Recent Developments: A Temporary Truce
In a recent summit, Trump and Chinese leader Xi Jinping reached a deal aimed at reducing trade tensions. Key points from the summit include:
- China agreed to pause controls on rare earth metal exports.
- Commitment to purchase large quantities of US soybeans.
- Trump agreed to reduce tariffs linked to fentanyl.
This truce, however, reflects a return to pre-existing trade dynamics rather than addressing core issues in US-China relations. Trump’s previous punitive measures led to heightened Chinese investments in technology, particularly in companies like Huawei.
Continuing Strategic Tensions
Despite this temporary agreement, the underlying tensions remain. Just before the summit, Trump ordered a resumption of US nuclear weapons testing. This duality emphasizes the complexity of the relationship between the two nations.
The Future of US Policy on China
As Washington anticipates future engagements with China, it appears to have adopted an industrial policy reminiscent of state capitalism. Recent actions include:
- The US government acquiring a 10% stake in Intel.
- A “golden share” investment in United States Steel Corp.
- Potentially lifting Nvidia chip export restrictions to China for revenue sharing.
Experts caution that such industrial policies risk misallocation of resources and may produce inferior quality goods. The historical context suggests that current strategies may not lead to positive outcomes.
Reflecting on Nixon, Clinton, and Trump’s strategies reveals an ongoing challenge for the United States in navigating its relationship with China. Each bet has played a role in shaping a complex, competitive landscape that continues to evolve. As Washington forges ahead, it must tread carefully to avoid repeating historical mistakes.
