Sino-US relations are not a zero-sum game

Sino-US relations are not a zero-sum game: What does it look like by 2025?


Dr Richard Li-Hua, Professor of Strategic Management and Leadership
Founding Director of Sino-US Strategy and Innovation Research Center, Sias International University
August, 2015
[Sino US Strategy and Innovation Research Centre has been jointly founded by US China Business Association, USA, and Sias International University, China]


Executive Summary
In the 21st century, Sino-US relation is one of most important bilateral relations around the world. What does this relation look like by 2025 in the next 10 year time? The answer certainly arouses curiosity and great interest of academics, researchers, entrepreneurs and innovators, investors, diplomats and politicians in the world, in particular, between China and the United States. Former US Secretary of State Henry Kissinger pointed out that USA-China relations should not be construed as a zero-sum game, and that the rise of a strong and prosperous China does not mean the strategic failure of the USA. The choice of the strategic cooperation between the two sides challenges the prejudice and misunderstanding between the two. However, China and the US are not only strategic partners, but also, without doubt, competitors. The relationship between China and the US has been subject to international scrutiny and to various pressures and domestic problems. Therefore, it will be difficult to sustain the strategic relation between the two if only relying on crisis management.


Kissinger, based upon his long standing diplomatic experiences and familiarity of US and China affairs, proposed the concept of a “US–China Pacific Community”. Meanwhile, in 2012, the Chairman of Chinese National Innovation and Development Strategy Research Association, Zheng Bijian, also put forward the strategic concept of “China’s peaceful rise”. China should build “common interests” and a “community of interest” with all relevant countries and regions so that Chinese society will be full of vitality, harmony, and stability.
Singapore’s Lee Kuan Yew said that China will avoid any conduct that damages Sino–US relations. To challenge the USA, a more powerful, technologically advanced country will destroy China’s “peaceful rise”. It is obvious that the primary aim of the Xi-Obama summit has been regularly held is to seek harmonious coexistence between the “dominant major power” and the “rising major power” to foster a “new type of major power relationship” for the mutual benefit and inter-dependence and to jointly lead the peaceful development of the world.


Observers have commented that mutual strategic suspicion and mistrust between the USA and China is significant, and desperately needs to be addressed. The question of whether the two countries will step out of the box—the “adversary vicious circle” of No.1 and No. 2 - and create a new era of peaceful competition instead of tragic confrontation has become a major test for both countries, and even the rest of the world. Still, rather than seeking to build trust—a worthy but difficult and, at best, long-term goal—a more realistic objective would be to enhance the level of mutual confidence, predictability, and transparency. If successfully achieved, this will help both leaders and countries to interpret future developments more accurately, minimizing the risks of misunderstanding and facilitating their ability to communicate effectively.


Competition and game between China and the US is normal, but both should be aware of the bottom line of the game of the other side. Close to the bottom line that the other party has set will affect regional stability and world peace. In fact game between China and the US is the contest between "Chinese interests" and "American Standard ". The primary aim of this paper is to set up the context of the research into Sino-US Economics and Peace index undertaken by Sino-US Strategy and Innovation Center at Sias International University, China. Firstly this conceptual paper is to examine aspects of strategic thinking, major concerns between the two; Secondly it provides strategic analyses on the endeavors and efforts from both sides; And finally it provides the strategic perspectives on what Sino-US relation look like in the next 10 years of time.  It strives towards the realization of the strategic and constructive dialouges and building mutual trust among business executives, politicians, academics and researchers, innovators and entrepreneurs between China and US so as to minimize the misunderstanding, misinterpretation and miscalculation.

Key words: China-US Relation, Strategic Thinking, Global Governance, Thucydides’ Trap, West Meets East, Economics and Peace, a Global World Order


1. The similarities of China and USA but representation of different civilizations
China and the USA are of similar size with regard to land area, and share the same degree of confidence in their economic success and international influence. However, the two states are quite different in terms of history, culture, value, social, and political systems. American history shows an overall harmonious coexistence with other countries, while in Chinese history it is difficult to find a precedent of dealing with such a large country. The USA has respected the universal concept, which is of different from China’s ideas. China has the world’s largest population (1.3 billion people) and 9.60 million km2of land. Chinese history has shaped its unique cultural superiority and self-confidence. The USA, with a population of 300 million and 9.62 million km2of land, is rich in natural resources and has a favorable geographical environment. A special immigrant community has created an openness and diversity in American culture. Sino–US cultural differences exist in nature. The former belongs to Oriental civilization, while the latter belongs to Western civilization. Arnold Toynbee (1889–1975) pointed out that the independence of these two civilizations is most significant and in history they have almost nothing in common.1It is believed that the greater mutual confidence, despite the two different systems in both countries, will deliver the policy deliberations.


Kissinger expressed that in his writing “Avoiding a US-China cold war”, conflict is not inherent in a nation’s rise. He cited an example of the US in the 20th century achieving the eminence without conflict with the then – dominant countries, such as UK. However, he further pointed out that neither the United States nor China has experiences in such a great task of dealing with the potential conflicts. In many respects, because of the different civilization, culture, history and values, etc. US and China think and act differently. America’s exceptionalism believes it natural to condition its conduct towards other societies if they accept the American value while most Chinese with a middle kingdom mentality see their country’s rise not as a challenge to America but as a natural restoring to the normal state of affairs when China was pre-eminent.


Furthermore, the way of thinking and the outlook towards the world and the world affairs are different. America has found most problems are soluble, so America has a problem-solving approach. However, China with a long history came to believe that few problems have ultimate solutions, so they are comfortable managing or “embracing contradiction” without assuming they are resolvable. Kissinger, based upon his decades of diplomatic experiences,   further elaborated that interestingly American diplomacy pursues specific outcomes with single-minded determination while Chinese negotiators are more likely to view the negotiation process as complicated combining political, economic and strategic elements and it has to outcome via an extended process. American always represents a society that has never suffered national catastrophe – except the Civil War. Chinese always cannot forget the century of humiliation of foreign armies took fortune from a prostrate China. American negotiators become restless and impatient with deadlocks while Chinese negotiators consider them the inevitable mechanism of negotiation.


2. Go Beyond Thucydides’ Trap and Build Strategic Relation
When addressing the conflicts between China and United States, the most commonly cited example, the Peloponnesian War, was a serious conflict between the rising Greek city - state of Athens and the dominant hegemonic city - state of Sparta. The war, meticulously recorded by the contemporary Greek historian Thucydides, took place 2000 years ago, from 431 BC to 404 BC. In understanding what happened between Athens and Sparta, people today use the terminology “Thucydides Trap” to describe the phenomenon of a rising power provoking so much fear in a status quo power that it ultimately leads to conflict between the two. In history to some extent, the rise and fall of great powers is itself straightforward. Any risings are significant and frightening things according to Lee Kuan Yew. Historically, the rise of great powers meant that the rising power got the world’s resources through war and the integration of the world’s resources, causing frictions and conflicts between the dominant and the rising powers.


Martin Jacques summarized the similar features of the global economic hegemonies between the USA and China while outlining the difference of the models:

The rise of China represents at least as profound a change in the nature of capitalism as did the arrival of modern America capitalism in the 19th century. What are the key distinguishing characteristics of the Chinese model compared with those… associated with United States? The Chinese market is far larger than that of the US, thereby enabling now forms of production and marketing….Chinese capitalism is shaped by the fact that China is primarily a civilized-state; one of the most fundamental expressions of this is the nature of the Chinese state—ubiquitous, omnipresent, directive, strategic and highly competent. As such, it could hardly be more different from the American model[AU: Please give the page number/s of the quoted material from Jacques (2009).].


However, the competition between China and United States and between the Spartan- Athenian conflicts are not comparable at all. We could collect data and evidences that demonstrate the dissimilarities in these two cases. In many respects, such as, bilateral economy and trade, anti-terrorism, climate change and so on, China and US are very much inter-related and connected.  At the time of writing, one can read many headlines that the two sides are getting ready for the first state visit by Chinese President Xi Jinping to the United States in September, 2015. President Xi and President Obama will discuss a wide range of issues, including climate change, Iran’s nuclear program and China’s currency policy. They have been trying to ease tension over everything from trade and human rights to exchanges of accusations of hacking and Internet theft.


Not surprisingly then, both the Chinese and American sides have emphasized that the meeting’s real goal was to further building a personal relationship between the two leaders in the hope that it would create momentum for addressing issues and problems in US–China strategic relations in the 21st century. But rarely does statecraft work this way, especially when the disputes between the two countries are not ones of misunderstanding but are, instead, rooted in fundamental differences in history, political systems, and the norms that should guide the international system.


3. Endeavors of The Leaders and The Current Efforts – Avoiding A US-China Cold War
Henry Kissinger warned in 2014 that both US and China should make joint efforts in avoiding a Cold War, not repeating what happened between US and Soviet Union in the 2nd half of the 20th century. A Cold War between US and China will force countries to chose sides, spreading disputes into internal politics of every regions. This does not help at all because the nature of the globalization and the reach of modern technology and innovation have enabled many issues becoming global, such as unclear proliferation, the environmental issues, global warming, energy and climate change which require a comprehensive global solution.


In fact, leaders from both China and US have make efforts in avoiding a Cold War. Since the birth of the People’s Republic of China in 1949, successive generations both from China and the United States have sought to make significant endeavors in building the strategic relation. The Chinese leaders have maintained a series of foreign policies, the basics of which are the Five Principles of Peaceful Coexistence proclaimed in 1954 – namely mutual respect for sovereignty and territorial integrity, non-aggression, non-interference of internal affairs, peaceful coexistence, equality and mutual benefit.


One of the important legacies of Richard Nixon was that the foreign policy he pursued allowed him to visit Beijing and meet with Mao Zedong and Zhou Enlai in 1972, setting in motion normalization of relation with China. It marked the first time a US President has visited the PRC and the visit ended 25 years of separation between the two sides. The US government regularly issues statements on “The National Security Strategy of the US and “US Security Security Strategy for the East Asia-Pacific Region. It is obvious that these statements profess support for global spread of political freedoms and democracy, including in China, however, none of them treat China as hostile power and to the contrary, treat China as “an essential partner in building a good world order. In August, 1991, when George H.W. Bush was the President, the statement stressed the importance of “building the links with China in the developing situation of the collapse of the Cold War order”. In late 1993, Bill Clinton stressed the significance of securing China’s cooperation on various issues, “The United States has a big stake in bringing China into the global community … more cooperations on problems like North Korea” when meeting with President Jiang Zemin.


In was in 1974 when China returned the United Nation and started to embrace the international order and norms based on the UN Charter. Deng Xiaoping highlighted the importance for developing countries to gain political independence while addressing the UN General Assembly in April 1974. Deng Xiaoping gave the new meaning to Five Principles of Peaceful Coexistence that in determining relationship between two countries, “each party should pursue his country’s strategic interest … and at the same time respect the interest of the other” when meeting President Richard Nixon in October, 1989.


The new leaders from China and US also have been making tremendous efforts in building strategic relations. The two-day Summit between President Xi and President Obama in Sunnyland estate in California in 2013 and 2014 seem effective and efficient approach for the two leaders not only to address the global issues but also to build personal relation.


It has been noticed that neither China nor the USA question the importance of Sino–American relations for their own economic, political, and security interests. However, what is still in question is whether the “new type of major power relationship” to which both leaders are nominally committed can be infused with meaningful substance. After China’s succeeding Japan as the second largest economy in 2010, Sino–US strategic relations are at a “new historical starting point” and the meetings will be an “opportunity to outline a blueprint for building a new great powers relationship” that is not based on confrontation between an established power and a rising power.


4. West Meets East – An Inclusive “Global Order” for The 21st Century
China and US has similarity in terms of their size. However, they are very different in terms of their history, political system and values. The discussion around West Meets East—the integration of Western Management with Eastern philosophies—has gained considerable traction, and for good reason because of the globalization, political and economic changes, and shifting of powers. The world, including the USA, Europe, Russia, India, and China, has undergone significant transformations over the last 35 years. The world has changed. Unprecedented events—the start of China’s economic reform and opening up to the outside world in 1978; the collapse of the former Soviet Union with the end of the Cold War in 1989; and the burst of financial bubble on Wall Street in 2008—have led people to rethink and reconsider how to secure a political and economic environment for delivering sustainability. The integration, inclusiveness, and collaboration has never been more relevant than in the post-recession context. The “West Meets East” paradigm possesses great significance in many aspects.  The key considerations around this topic not only benefit the US but also China. However, the impact of the integration goes beyond the diplomatic relation between the two.


Eastern and Western strategic thinking exist as two distinct and separate sources of information and communication, seldom communicating with each other. Western strategists build upon the strengths of previous Western strategists; Eastern strategists similarly reinforce each other. Neither builds on the strength of the other. It seems like a pair of “chopsticks” but always in a parallel situation. However, in the twenty-first century, in particular, while dealing with US–China strategic relations, we should enable the chopsticks have a “cross” maneuvered with great wisdom and strategy between West and East. The West meets East paradigm will provide strategic insight and philosophical thinking on the integration of Western management with Eastern philosophy in international relation-building in international affairs, international business, global higher education, international technology transfer, science and technology exchange between West and East in the twenty-first century.


A New Model of China-US relation
As established previously, leaders, politicians and diplomats between China and US have been making efforts to address the concerns between the two countries. In November, 1990, George Bush Senior of the United States used the term “new world order” to describe a new framework of the American global strategy and emphasized the irreplaceable leadership of the United States after the end of the Cold War. The “new world order”, accordingly Fu Ying, the Former Chinese Ambassador to the UK, has three major elements. The first element is the Western value system as its high stand point; The second element is the American military alliances system as the security base; and the third element is the American – formulated international economic and financial structure as the foundation for the world economy. It has been acknowledged that the current order system has in many respects facilitated the progress of the world. Economic globalization and the technological innovation have grown full-fledged. However, this order system has been facing great challenges. The burst of the financial bubbles in 2008 in Wall Street has demonstrated the failure of the Western economic and financial governance.  In the political sphere the promotion of the Western values in other parts of world, such as, the middle-east, failed more often than succeeding. What is more concerned is that there is no good solutions to many new issues of the day as many non-traditional and cross-border security threats are quickly dominating the world agenda. The world feels that the US leadership falls short of expectation due to domestic and international constrains.


The twenty-first century is an era of rethinking and an era that calls for great wisdom and great strategy, inclusiveness, the seeking of common ground, and the embracing of contradiction in order to have an open mind and be forward thinking. The ancient Chinese philosophy of embracing contradiction has underpinned China’s legacy in the last 35 years. In the meantime, the gist of ancient Chinese philosophy—embracing contradiction—powers the innovation of Chinese management. “Embracing contradiction” paradigm stimulates innovation at two levels: the strategic level for top-level design and the operational level for the economic base. Embracing contradiction not only stimulates the innovation of management concept, but also the innovation of technology and business management. In particular, when China exceeded Japan in 2010 as the second largest economy, China is playing a more active role in the global affairs in these days. However, China prefers “International Order” from  “World Order”. In June, 2014, Chinese Foreign Minister wang Yi expressed at the World Peace Forum held in Beijing that China was directly involved in designing and building the international order and the system with the United Nation as the centerpiece. And China will always be a participant, a facilitator and a contributor in the international order. In fact, China has grown into n active member of the United Nation agency and the international institutions. China has chosen to integrate itself into the international order as well international community and indeed has greatly benefited from being part of it.


Both China and US officials and pundits agreed that China and US came from different history and tradition, there is a concern on power fight really belonged to the 20th century. China does not subscribe to the logic of the power politics. Chinese often feel perplexed when the US talks about how China challenges the existing order and the US leadership. With a cautious optimist realist, we do not think that China and US are at loggerheads about how the order should evolve. Clearly China and US share much in common in their views for the world and the global issues. For example, both sides have strong intention for the pursuit for world peace and prosperity and the hope for strengthening and improving the UN system. Also the United States insists that it has no intention to contain or blockade China. In reality, China and US are at the center of the change. The world can get nowhere in the important process of establishing the international order if the two countries continue to try to exclude each other in political, security or economic fields. They need to be aware of the risks and avoid irritating or pointing fingers at each other.


Following his Cold War warning, Henry Kissinger ended in his book on World Order with a question mark? He argued that a reconstruction of the international system is the ultimate challenge to statesmanship in the 21st century. He also stressed that in the modern world there is a need for “a global world order” and the leaders of the major countries need to rise about the urgency of day-to-day events and think about big issues bearing on the future world order.


Chinese President Xi Jinping called for “a new model of major – country relations benefiting the 21st century” when he visited the US in February 2012. Fast forward to June 2013, President Xi set out in details that China’s proposal to build a new model of major-country relation with the US, featuring no conflicts, or confrontation, mutual respect and win-win cooperation.


It has been observed that Chinese and US leaders are engaging and pursuing extensive and constructive dialogues with unprecedented depth and width since 2010. The strategic and friendly well-arranged dialogue and activities, including “eight hours in face-to-face dialogue” in Sunnyland Summit in June, 2013 and “spending ten hours together over two half-days” in Zhongnanhai Compound in November, 2014, have indeed helped in building this vital relationship, which is positive, amicable, cooperative, constructive and predictable. Both sides characterized the conversation as constructive, candid, sincere, in-depth and productive. President Obama expressed that the visit gave him “the most comprehensive, in-depth understanding of the history of the Chinese Communist Party and its idea of governance and a better understanding of why Chinese people cherish national unity and stability”. He sounded a positive note at a joint press conference with Xi and said,  “the truth is that we have made important progress today for the benefit of both of our nations and for the benefit of the world. The truth is that even more progress is possible as we continue to develop this important relationship. I am confident that we will be able to do so.”


Closing Remarks
This conceptual paper advocates that it is important for both China and US to have effective and efficient communication and better understanding among their people. Both countries need to engage in more extensive dialogues at all levels, which is the vision of Sino-US Strategy and Innovation Research Center.


Based upon the premises of this conceptual paper, examination of the global issues and the continuous efforts of the leaders and pundits from both from China and US, we are optimistic to believe that the China-US relation is not zero-sun game and that the rise of a strong and prosperous China does not mean the strategic failure of the USA. China has championed a more inclusive approach for maintaining peace and stability in the Asia-Pacific region. Chinese President Xi Jinping expressed that the Pacific Ocean is big enough for the two nations. China and US should strive to avoid conflicts and confrontation, show mutual respect and pursue win-win cooperation.


Let’s start engage in more extensive dialogues, use wisdom, innovative and strategic thinking at all levels and the mistakes led to conflicts in the 20th century will not be repeated.


Reference in Chinese

魏一鸣等著,2006,中国能源报告 (2006):战略与政策研究,科学出版社
魏一鸣等著, 2005,中国可持续发展:管理理论与实践,科学出版社
赵中建著,2007, 创新引领世界:美国出现和竞争力战略,华东师范大学出版社

Reference in English
Jacques, M. (2009) When China Rules the World (London: Penguin Books)
Li-Hua, R. (2014) Competitiveness of Chinese Firms: West Meets East, (Palgrave MacMillan)
Li-Hua, R. (2004) Technology and Knowledge Transfer in China, The Chinese Economy Series (Farnham: Ashgate Publishing).
Narayanan, V.K.(2001) Managing Technology and Innovation for Competitive Advantage (Upper Saddle River, NJ: Prentce-Hall).
Naisbitt, J. and Naisbitt, D. (2009) China’s Megatrends – The 8 Pillars of a New Society (Harper Business, an imprint of harper Collins Publishers, New York, NY 10022
Nolan, P.(2001) China and the Global Business Revolution (Basingstoke: Palgrave).
Porter, M.(1988) 'Strategic Management of Technology and Innovation’, in Porter, M. (ed.) The Technological Dimension of Competitive Strategy, pp. 211–32 (Homewood, IL: Richard D. Irwin).
Porter, M.(1998) The Competitive Advantage of Nations (New York: Free Press).
Porter, M.(2005) Building the Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness Index, The Global Competitiveness Report 2005–2006, World Economic Forum Policies Underpinning Rising Prosperity (Basingstoke: World Economic Forum, Palgrave Macmillan).
Porter, M., Sachs, J.D. and Warner, A.M. (2000) Globalization and Competitiveness: Some Broad Lessons of the Past Decade, The Global Competitiveness Report 2000, (New York: World Economic Forum, Oxford University Press).


More notes are to be incorporated in a later stage

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