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China and the US: Between Cooperation and Cold War

When Barack Obama and Xi Jinping meet, both men will be aware of the catastrophic consequences of great-power confrontation.

Written by Praveen Swami | New Delhi |
September 25, 2015 8:13:30 am
xi jinping, jinping Us visit, obama, obama jinping meeting, jinping in US, china Us relations, chinese president, obama jinping, china news, india news, US news President Barack Obama and Chinese President Xi Jinping, right, walk from the West Wing of the White House in Washington, Thursday, Sept. 24, 2015, for a private dinner at the Blair House, across the street from the White House (AP photo)

For the last two years, the world’s two pre-eminent powers have been inching ever-closer to a new Cold War. China’s aggressive behaviour in the South China Sea has panicked nations across its eastern seaboard while its cyber-strikes have enraged the United States. For its part, China sees the United States’ strategic pivot to Asia as an effort to contain its legitimate geopolitical aspirations.

Today, when President Barack Obama and President Xi Jinping meet, both men will be aware of the catastrophic consequences of great-power confrontation. It’s far from clear, though, how much progress they’ll be able to make towards avoiding that worst-case outcome.

From Beijing’s point of view, the big prize is a Bilateral Investment Treaty — an agreement that would provide uniform rules for foreign investments in both countries. A BIT would be a major vote of confidence in China’s troubled economy. It would also ease the entry of Chinese firms into United States markets. United States businesses, in turn, would be allowed to invest in many of the 100-plus sectors of the Chinese economy they are currently excluded from.

The signs of an imminent agreement, though, aren’t good. Michael Froman, the United States’ trade czar, said on Tuesday that China’s proposed list of sectors exempted from the BIT was still too long.


Even less agreement is likely on the most volatile geopolitical issue, the South China Sea. In recent months, China has been energetically engaged in building military outposts on disputed islands. The United States has been demanding that it stop militarising reefs. President Xi, however, has staked his nationalist credentials on the issue, and is profoundly unlikely to back down.

Having said that, there’s still plenty of room for cooperation. The two sides are reportedly negotiating a cyber-warfare agreement that would bar attacks on vital infrastructure, like power facilities or satellites, during peacetime. The agreement wouldn’t end cyber-espionage — something both China and the United States engage in — but would reduce the prospects a cycle of strikes and counter-strikes.

Both countries, moreover, see possibilities for cooperation in regions like South Asia — where the United States has backed Chinese efforts to facilitate Afghanistan-Pakistan dialogue, and counsel Pakistan’s army to avoid potentially-destabilising actions against India.

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