By Chen Dingding and Hu Junyang    Source: The Diplomat    Published: 2019-1-22

Conceived to be “one of tariff wars, unprecedented cyberattacks, and nuclear saber rattling,” 2018 was a year marked by international challenges as the U.S.-China confrontation ramped up to the edge of a full-blown crisis. Next year might well be the year in which that good fortune runs out for both sides.

There are five significant challenges that we fear may become messier within months, accompanied by some less publicized but still worrisome “hot spots” that remain and should command our attention. So where will U.S.-China relations head this year?

First, although a few experts say that the trade war is winding down and that the U.S. and China will strike and finalize a specific deal in the following months, there is still, in our view, considerable cause to think twice about the direction of this conflict in 2019. Undeniably, as progressive trade talks remain underway, the costly tariff confrontation between the two countries may end sooner or later. However, the “elephant in the room” so to speak of trade competition between China and the U.S. is their respective economic partnerships with other countries. In the Cold War context, those relationships were of great importance to what Dean Acheson had once called “situations of strength” in the competition with Moscow.

As China aims to regain economic leadership, the world’s economic center is retracing its footsteps toward the east. China persists in pushing ahead with its Belt and Road Initiative, the Regional Comprehensive Economic Partnership (RCEP), the ASEAN-China Free Trade Area, etc., attempting to group itself with other “emerging markets.” Meanwhile, realizing a decisive factor in rivalry with its competitor will be how well the U.S. tends to its alliances, Washington takes up maintaining solidarity with the world’s powers, especially in Asia-Pacific and Europe, with the first step concerning the economy. In addition to the much-critiqued U.S.-Mexico-Canada Trade Agreement (USMCA), certain scholars contend that the U.S. is expected to reconsider either a return to the Trans-Pacific Partnership (TPP) or join the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) within the foreseeable future. Since the two countries have been exerting a “gravitational pull” on the world’s economic output, their main focus is now to get everyone on board.

Second, given the two countries’ potential to spark an unexpected bilateral crisis, while the ongoing trade dispute between them is unquestionably eye-catching, heightened bilateral military tensions should not be neglected. American decision-making now is driven by Washington’s new generation of policy hands, of which responsible officials have lost patience and understanding for China, according to Douglas Paal. This deficiency of appropriate knowledge of premodern China ends up leaving the floor primarily to critics. And the position of Taiwan as well as the South China Sea in this rivalry has become more subtle than ever. For instance, in protest against China’s deployment of missiles on artificial islands it has built in the South China Sea, the U.S. military excluded China from Rim of the Pacific international maritime exercise (RIMPAC) last fall and subsequently increased the tempo of naval transits in surrounding waters near the Taiwan Strait.

The chances of an inadvertent military conflict resulting from cross-strait tensions could be aggravated or even driven to a critical point in at least two ways, pertaining to the already fragile relationship between Beijing and Taipei. First, out of concern about Washington’s policy adjustments, Beijing could respond by retaliating against Taiwan as it is the softer target. Second, Washington’s policies to back up Taiwan could make it believe that it is possible to integrate the island’s security into U.S. defense arrangements in the region. Regardless, it would lead to far-ranging and severe consequences

Third, with a higher frequency of strategic interaction between the U.S. and China, the battle over geopolitical conflict may expand to Africa. John R. Bolton, President Donald J. Trump’s national security adviser, has recently unveiled that a new strategy for Africa that is really all about countering China’s influence. Being at the head of Beijing’s economic agenda, Africa is not only regarded as the potential target of future investment, but an amplifier possessing profound geopolitical implications for U.S. global strategy. While the U.S. is re-centering itself in the Asia-Pacific, China has identified increasing hindrances in its strategic advancement in East Asia and the Pacific. Hence, China has been shifting its priority westward to Africa, which is seen as the most promising region by Beijing given the stagnation and decline of U.S. involvement, offering it opportunities and arenas to grow strategic influence. After recognizing the flaws of its previous investments, China is also modifying its approaches to bridging the many cultural gaps that inhibit closer cooperation and understanding. To fortify the core interest of the Western bloc, the U.S. would never allow this circumstance to happen.

Fourth, deteriorating relations over information technology will be another concern as China’s emerging technology sector might well be subject to new export controls. Notably, in order to freeze out China, the Department of Commerce, Bureau of Industry and Security of the U.S. published a proposal titled Review of Controls for Certain Emerging Technologies, of whose content covers artificial intelligence, biotech, computing, positioning and navigational systems, data analytics, and robotics, and sought public comment. Now the deadline (January 10, 2019) for comment has already been passed, and the criteria of potentially controlled technologies and products will soon be officially forged. The subsequent proposed rule based on this list is going to enable the U.S. government to review and evaluate relevant products and limit the proliferation of emerging technology imports and exports, mostly targeting China’s tech growth. As for Meng Wanzhou and other related Huawei events, they are merely skirmishes in a deeper and more serious tug of war, in which China will not have the edge over the U.S. within the short term.

Last, but not least, tightly intertwined with both emerging technology and military defense, cybersecurity is a new sensitivity for both sides of the Pacific. When the U.S.  Department of Defense updated its 2018 Cyber Strategy, it became a symbolic watershed for “defense forward.” In the document, China and Russia have been identified as threats to U.S. prosperity and security that should be defended against with an eye toward long-term strategic competition, along with U.S. allies. Given this context, no wonder Poland is seen joining the United States in pressing NATO allies to coordinate efforts to handle security challenges from China. So if the Trump administration fails to contain China economically, it may endeavor to solidify its alliances to tighten rules on foreign investment in a bid to block Chinese acquisitions, and the likelihood of the issue regarding cybersecurity will be looming ever more extensive in the bilateral relationship this year.

In a time of uncertainty, having done so well out of the existing global ecosystem, both the U.S. and China are responsible for a remarkable share of any change thereof, and both sides should recognize their roles as its custodians. Undoubtedly, if one fails in any field as mentioned above during interactions, its competitiveness as a whole may erode. If one, however, abuses its power—particularly by overburdening the system—everything might collapse, including their respective pushes to ‘Make America Great Again’ and the ‘China Dream’.

Chen Dingding is a visiting fellow of Chongyang Institute for Financial Studies at Renmin University of China.