A country’s rising economic strength tends to be reflected in her geopolitical clout. In the late 1880’s the United States overtook Great Britain as the world’s largest economy; a decade later, having defeated Spain, America took over the remnants of her empire. During the same period Germany’s massive economic growth enabled her to establish colonies in Africa and to build an oceangoing navy. Even the tiny Netherlands, having grown rich in the 1600’s, proceeded to establish a commercially oriented empire in the East Indies, the Cape, and the Caribbean.
China’s economy is now equal in size to that of the United States, and Beijing is seeking geopolitical adjustments to reflect that reality. Its grand strategy is focused on securing supply chains, however, and not on acquiring legal title to faraway lands or showing the flag for reasons of prestige. The program of building islands in the disputed areas of the South China Sea and militarizing them looks expansionist. But it may also be a strategically defensive move to secure the vital node of China’s maritime supply chains in uncertain times, a reflection of the Confucian striving for stability rather than an audacious bid to establish regional hegemony.
The Trump administration seems to have decided to treat it as a threat. During his nomination hearing on January 11, secretary of state nominee Rex Tillerson said that the United States would not allow China access to islands she had built in the South China Sea. His statement had alarming implications, leading some analysts to assume that Tillerson may have misspoken. Ten days later, however, White House spokesman Sean Spicer reiterated this position. If those islands were in fact in international waters and not part of China proper, he said, “then yeah, we’re going to make sure that we defend international territories from being taken over by one country.” Of course Spicer knew that the International Tribunal on the Law of the Sea had already ruled against China, which refused to accept its jurisdiction or to take part in the proceedings.
The Chinese reacted cautiously to Tillerson’s remarks, saying that countries outside the region should stay out of the dispute, which had “cooled down” anyway. After Spicer’s statement made denial-of-access look like established policy, however, the Chinese adopted a different tone. China’s sovereignty over the Nansha (Spratly) islands was nonnegotiable, Beijing’s foreign ministry announced; any disputes would be solved through China’s bilateral negotiations with the parties in the region.
It is fortunate that neither Spicer nor Tillerson had specified what means would be used to “defend international territories.” Any attempt by the U.S. Navy to blockade the existing islands would be an act of war against a major nuclear power. Other claimants—Vietnam, the Philippines, Malaysia, Taiwan, and Brunei—would be loath for the United States to take that path. It is also possible Tillerson and Spicer were referring to Scarborough Shoal, a chain of reefs near the Philippines that China seized five years ago, rather than the already fortified Spratlys. If so, this should be made clear. The stakes are becoming high, and the White House will undermine its credibility if it draws red lines that it cannot enforce.
In his Inaugural Address President Trump said that he would seek friendship and goodwill with the nations of the world, “with the understanding that it is the right of all nations to put their own interests first.” This realist view of international relations requires balancing the ends and means of his China policy in a way that reflects a sober assessment of interests involved. The host of trade and currency issues we have with China are neither ideological nor existential. They can and should be negotiated accordingly. It is in the American interest that China make a gradual transition to a market-determined exchange rate, to increase domestic consumption, to expand her service sector vis-à-vis manufacturing, and to open up her market to U.S. imports. There is some benefit, in opening trade negotiations, to use the threat of punitive tariffs. There is little utility in revoking the One China policy of over four decades’ standing, however, and there is no utility in treating an adjustment of balance in the South China Sea as a threat to vital U.S. interests.
The essence of Trump’s coming dialogue with Beijing should be based on the art of the deal: We insist on rectifying our trade imbalance. If you play along, we are prepared to accept a limited extension of your zone of influence in the Western Pacific. If you try to turn it into a latter-day Greater East Asia Co-Prosperity Sphere, we will lead a counterbalancing coalition—from Japan and South Korea in the northeast to Vietnam and Malaysia in the southwest—to keep you in check. It is an even bet that the Chinese will understand and opt for a positive-sum game.