Stephen K. Bannon, the former White House adviser, calls the United States’ relationship with China’s Communist Party an economic and information “war,” while Eric Schmidt, a Google founder, says American interests are entangled with China, our biggest competitor in the race for global technological dominance.
The next phase of the relationship between the two countries could set the tone for the rest of this century.
That was the consensus of nine China policy experts in a discussion moderated by Thomas Friedman, a New York Times columnist, at the DealBook conference in New York.
Tensions have been rising between the United States and China for more than a year. President Trump has been pressuring the Chinese by imposing tariffs on $360 billion of Chinese goods. China, in turn, slapped tariffs on American imports to its country.
Uncertainty lingers while both sides hammer out the first phase of a trade deal. On Friday, President Trump said he hadn’t decided whether to lift some of the tariffs. That contradicts the Chinese government, which said Thursday that the Trump administration agreed to roll back at least a portion of the levies if a deal was reached.
The trade battle is only one part of the evolving relationship. China faces accusations of unfair trade practices, including stealing American technology. It has cracked down on pro-Democracy protesters in Hong Kong. And the United States and other Western nations have challenged China’s mass detention of more than one million Muslim Uighurs in the Xinjiang region.
A decades-old policy of peaceful engagement with China directly has given way to an era of confrontation and conflict.
“We’re at the end of one moment and the beginning of another,” said Orville Schell, the director of the Center on U.S.-China Relations at the Asia Society.
China is about halfway through a 10-year plan to gain dominance in high-technology manufacturing, including artificial intelligence, 5G communications and aerospace.
Mr. Friedman, a Pulitzer Prize winner who writes about foreign affairs for The Times, asked the panelists to describe what they see as the main challenge in the relationship between the United States and China and how to solve it.
Mr. Bannon said the United States should cut the Chinese Communist Party off from Western financing. “We’re in an information and economic war now, a technology war.”
He added: “I think we cannot appease this power. I think we cannot accommodate this power.”
Samm Sacks, a fellow in cybersecurity and China’s digital economy at New America, a centrist think tank, said it was not so much a war as a struggle over new technologies. The Chinese government has been using face-recognition and other artificial intelligence to surveil its own people and is exporting those technologies elsewhere.
In the meantime, the United States has been grappling with privacy, data protection and security while remaining mostly hands-off in other aspects of the internet. “The Communist Party is moving aggressively and assertively to use technology in deeply troubling ways,” Ms. Sacks said. “We need to offer a compelling alternative to that.”
Mr. Schmidt, who chairs the Department of Defense’s Defense Innovation Board and Congress’s National Security Commission on Artificial Intelligence, insisted that the answer was to establish American-made technology as the global standard.
“We’re much, much better off trying to have again Western technology win,” he said. “And I would argue that my position is an America-first strategy.”
Encouraging high-skills immigration and spending on technology education and research should be key priorities, Mr. Schmidt and some other panelists said.
“We don’t invest in what we need to invest in,” said Sheryl WuDunn, who won the Pulitzer Prize covering China’s Tiananmen Square crackdown 30 years ago for The Times. “We could do more on our domestic front to compete.”
Engagement, a policy dating back to the 1970s, was aimed at opening China to the rest of the world. United States-China relations also counterbalanced the Cold War with the Soviet Union.
“Bit by bit, every interaction would bend the metal,” Mr. Schell of the Asia Society said. “It was the idea of convergence.”
But, as Mr. Friedman and others acknowledged, the relationship with China became something very different from America’s interaction with the Soviet Union, which collapsed in 1991 after years of American political and economic pressure. “We only bought caviar, vodka and nesting dolls from them,” Mr. Friedman said.
China, on the other hand, emerged as the second-largest economy and America’s biggest trading partner. It produces and consumes much of the world’s goods and materials. It also happens to own $1.1 trillion in United States government debt. Over time, this interdependence provided a framework for getting along.
Human rights issues and growing intolerance of China’s business policies — protecting its own industry while shutting out the rest of the world and forcing technology companies doing business there to hand over critical information — sparked the turn away from engagement.
“I feel a lot of us have been hopeful that in engagement, China will change,” said Jianying Zha, a journalist and author. “It did not happen.”
China’s pride and growing nationalism challenge American interests, said Elizabeth Economy, the director of Asia Studies at the Council on Foreign Relations. China is exporting its values, including control over the internet and citizen surveillance. “It is precisely at the intersection of that repression at home and ambition abroad that is particularly troubling,” she said.
Mr. Friedman agreed: “China is so much more open than it was 30 years ago and so much more closed” than it was 10 years ago.
Human rights issues are growing, said Sophie Richardson, the China director at Human Rights Watch. “I think that the world has for many reasons been slow to respond, and I think that’s a function of ignorance, of greed, of normalization,” she said.
Ms. Economy and Ms. Richardson took issue with Huawei’s sponsorship of the DealBook conference, and of the Times’s past publication of paid ads for the state-controlled China Daily. Ms. Richardson said she would have liked to have known about the Huawei sponsorship in advance.
“It’s extraordinary that The New York Times, yes, runs the paid advertising from The China Daily, but would also have a conference supported by Huawei when The New York Times itself is banned in China,” Ms. Economy added.
Huawei, a Chinese telecommunications firm, was banned from doing business with government agencies in the United States over security concerns.
Mr. Friedman said he had nothing to do with the sponsorship.
Reached later, a Times spokeswoman said: “The Times reports aggressively on the Chinese government, most recently on its mass detention of the Uighurs. As a result our journalists have faced serious retaliation and China blocks access to Times journalism in mainland China. New York Times events are programmed solely by Times editorial staff. Sponsors are not involved in programming any session, and have no impact on the conference’s content.”
The China Daily ads were paid inserts that also ran in other publications, she added.
Mr. Schell said it seemed that China’s president, Xi Jinping, himself put a “stake through the heart of engagement,” against conventional wisdom. “He had America neutralized eating out of the palm of his hand,” he said. “This could have been Xi’s biggest misstep.”
Mr. Friedman asked whether the rise of Mr. Xi was inevitable.
Ms. Richardson pointed to his efforts to clean up corruption and his elevation of China on the global stage as reasons his countrymen supported him. “I think even for people that are not happy with the direction which he’s moving the country domestically, there still is a source of national pride.”
James McGregor, a journalist and chairman of APCO Worldwide, a consulting firm, said Mr. Xi was brought in to save the party but said he was not sure if he was expected to take things “to these extremes.”
Mr. Schell from Asia Society said that China had gradually moved away from calling it the China Model toward using the term the China Advantage.
This means that China is breaking away, or decoupling, from Western institutions, Mr. Bannon said, and aligning itself with other nations in Eurasia. “They are going to have their own standards,” he said.
That is creating a technological insecurity in the West, especially if China succeeds in leading the world in the development of 5G, the next iteration of communications network technology that touches everything from mobile phones to driverless cars. “We need to think more systemically,” Ms. Zha said.
Mr. Schmidt said continued cooperation would be more productive. “I’m an advocate, a strong advocate that we find ways to work constructively, while we disagree on some of these issues, in order to achieve objectives.”
The United States should redefine the terms of its relationship with China, according to the panelists. Some suggested that moving back to multilateral trade agreements such as the Trans-Pacific Partnership, which President Trump exited, would send a new message.
“It appears we’re operating from a position of weakness and defensiveness, and the narrative is an ugly one,” Ms. Economy said. “Instead what we should be doing is promoting U.S. values in a positive way.”
“When we focus on areas where China cheats we have all of our allies with us,” she said.
Mr. Friedman said had the United States stayed with other countries in the trade pacts, they collectively could have put up a united front. “It was really a strategic error.”
Mr. Schell proposed sending a delegation of American business leaders to China as part of a new policy of selective engagement. The problem with that, as other panelists noted, is that American companies aren’t necessarily willing to antagonize Beijing, considering the profits to be made in China.
“They don’t seem to think that’s pumping the blood, American money, to fuel the next round of competition with the U.S.,” Ms. Zha said. People should “rev up their shame factor” on companies looking to maximize profit there.
The Trump administration put 28 entities, including the makers of surveillance and artificial intelligence technology, on a blacklist, citing concerns about human rights violations related to China’s campaign to inter Muslim minorities in Xinjiang.
Mr. Friedman noted the “stunning” silence in the Arab Muslim world about the Xinjiang situation.
“There’s a very quiet debate in China in the party on who lost America,” Mr. McGregor said. “The extreme direction China has gone has really pushed America away.”