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US - China


President Bush’s second term opened with an active agenda of bilateral U.S.-China interactions.  Secretary of State Condoleezza Rice traveled to Beijing on a six-nation tour of South and East Asia during which she sought to enlist China’s help in exerting pressure on North Korea to give up its nuclear weapons. China’s National People’s Congress passed an anti-secession law that the Chinese government viewed as reasonable and necessary, but U.S. officials characterized as “unhelpful” and likely to increase cross-Strait tensions.  Urging China to enhance its protection of intellectual property rights (IPR) was the central task of outgoing U.S. Secretary of Commerce Donald Evans’ visit to Beijing. Deputy Under Secretary of Defense Richard Lawless conducted the first ever “special policy dialogue” between the two militaries. Senior U.S. officials voiced concern about China’s military buildup and its proliferation activities, and strongly opposed the lifting of the EU’s 15-year old arms embargo on China.

America’s grievances with China mounted this quarter, signaling a likely end to the post-Sept. 11 honeymoon in China-U.S. relations and the beginning of a rocky phase.  On a range of trade and economic issues, the Bush administration adopted a harsher stance, increasing pressure on Beijing to appreciate its currency to fend off criticism from Congress and domestic groups that blame China for stealing U.S. jobs and unfairly creating a massive trade surplus with the United States.  Trade officials began taking action to curtail the flood of Chinese textiles and punish China for widespread violations of intellectual property rights. A takeover bid for Unocal Corporation by the PRC’s state-owned China National Offshore Oil Company (CNOOC) raised cries in some quarters that Beijing’s offer was part of a long-term national plan to gain strategic advantage over the U.S.

Washington leaned harder on Beijing to apply economic and diplomatic pressure on North Korea to rejoin the Six-Party Talks aimed at eliminating its nuclear weapons programs.  U.S. officials openly declared that they hold China largely responsible for reining in the nuclear ambitions of its formerly “close as lips and teeth” ally, North Korea.

China’s military buildup also came under sharper criticism. Defense Secretary Donald Rumsfeld bluntly warned Beijing that its military spending and procurement programs are unjustified by any threat it faces. And China’s human rights abuses and suppression of political dissent and religious freedom figured prominently in U.S. official statements and reports issued this quarter.

Mindful of the benefits to the U.S. of cooperation with China where the two countries’ interests overlap and the dangers of engaging in full-blown strategic competition with China, President Bush and his Cabinet members attempted to keep the bilateral relationship on an even keel, while urging Chinese leaders to modify their policies to make them more compatible with U.S. national interests.


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The quarter opened with a 20-hour stopover in Beijing by Secretary of State Condoleezza Rice.  In early August, her deputy Robert Zoellick visited China to launch a senior-level dialogue on strategic issues. The devastation wrought by Hurricane Katrina resulted in the postponement of Chinese President Hu Jintao’s long-planned visit to the United States. Instead, Presidents Hu and Bush met on the sidelines of the UN General Assembly (UNGA) meeting. China played an instrumental and assertive role in forging consensus on a joint statement at the fourth round of the Six-Party Talks. U.S.-China military exchanges picked up this quarter with an exchange of visits by Gen. Liu Zhenwu, the commander of China’s Guangzhou military region, and Adm. Fallon, the commander of U.S. military forces in the Pacific. The economic and trade picture was mixed. Some progress was made on strengthening the protection of intellectual property rights in China. Three rounds of textile negotiations failed to produce an agreement. In July, China abandoned the decade-old peg of the yuan against the dollar, and revalued its currency 2.1 percent.

President George W. Bush’s November visit to Beijing produced no concrete deliverables, but provided an important opportunity for U.S. and Chinese leaders to engage in a strategic conversation about the bilateral relationship and the changing world in which it is embedded. After almost six years as secretary of defense, Donald Rumsfeld traveled to China, where he sparred with Chinese military researchers from the Central Party School and the Academy of Military Sciences and became the first foreigner to visit the Second Artillery Corps. In Washington, D.C., the second round of the Senior Dialogue was held, broadening and deepening strategic discussions between senior Chinese and U.S. officials and holding out hope that a new framework for the relationship could help manage U.S. and Chinese differences.

Economic issues garnered most of the attention this quarter with U.S. officials and members of Congress pressing China to address the trade imbalance, revalue China’s currency, and curtail Intellectual Property Rights (IPR) violations in advance of Hu Jintao’s April visit to the United States. Summit preparations were conducted in high-level visits. Deputy Secretary of State Robert Zoellick met Chinese leaders in Beijing and hugged a panda in Chengdu. Chinese Vice Foreign Minister Yang Jiechi visited Washington, D.C. and urged the Bush administration to rein in Taiwan President Chen Shui-bian. Two major U.S. government reports were issued – the National Security Strategy and the Quadrennial Defense Review – both of which provoked Chinese condemnation. Beijing convened the fourth session of the 10th National People’s Congress, which focused on domestic priorities, including rural reform, education, public health, social security, and the legal system.

Despite the bungled welcoming ceremony on the South Lawn and the absence of concrete deliverables, the Hu-Bush summit was a modest success, given the complex nature of China-U.S. ties and the thorny issues that plague the relationship.  Progress was made on market access and intellectual property rights at the Joint Commission on Commerce and Trade meeting that preceded the summit.  In the wake of the summit, Beijing and Washington stepped up cooperation on both the Iranian and DPRK nuclear issues.  Military exchanges were active this quarter, with a visit to China by Commander of U.S. Forces in the Pacific, Adm. William J. Fallon, the convening of the annual Defense Consultative Talks, ship visits by the U.S. Coast Guard Cutter Rush and the USS Blue Ridge, and a 10-member PLA delegation visited Guam to observe the Valiant Shield-06 military exercises.  In its semi-annual report to Congress, the Department of the Treasury noted that it was “extremely dissatisfied with the slow and disappointing pace of reform for the Chinese exchange rate regime,” but refrained from citing China as intentionally manipulating its currency regime.

Much attention focused on economic issues this quarter with visits to China by U.S. Trade Representative Susan Schwab and U.S. Treasury Secretary Henry Paulson, which launched a new U.S.-China Strategic Economic Dialogue. Bilateral military ties also took a step forward with a visit to the U.S. by Vice Chairman of the Central Military Commission Guo Boxiong and the first ever U.S.-China joint naval exercise. Bush administration officials took China to task for continued proliferation of weapons of mass destruction (WMD) materials and technology due to lax enforcement of its export control laws.  North Korea, Iran, and Sudan dominated the security agenda.  The second round of the China-U.S. Global Issues Forum was held in Beijing.  Bilateral space cooperation was initiated with a “get acquainted” visit to China by a delegation led by NASA Administrator Michael Griffin.

A gaggle of Cabinet secretaries, led by U.S. Treasury Secretary Paulson, traveled to Beijing in mid-December to launch the Strategic Economic Dialogue. No breakthroughs were achieved, but both sides had low expectations for near-term results and seemed pleased with the outcome. On the North Korea nuclear front it was all bad news, with Pyongyang testing a nuclear device in early October and no tangible progress achieved at the resumption of the fifth round of Six-Party Talks after a 13-month hiatus. A positive byproduct was that intensive consultations between Washington and Beijing boosted bilateral ties. The U.S. mid-term elections that resulted in the seizure of control over both the House and Senate by the Democratic Party generated some concern in China about increased pressure on trade and human rights. On balance, however, Beijing remained confident that China-U.S. relations would remain on a positive track. Military-to-military ties continued to develop with a three-day U.S. ship visit to Zhanjiang, China, joint military exercises between the U.S. Navy and Marines and their Chinese counterparts, and a visit to China by U.S. Pacific Fleet Commander Adm. Gary Roughead.

The second round of the Strategic Economic Dialogue produced a few agreements, but failed, as expected, to make headway on the contentious issue of the value of China’s currency. U.S. lawmakers on both sides of the aisle called for Beijing to take immediate steps to reduce its $232 billion trade surplus with the United States. Presidents George Bush and Hu Jintao met on the sidelines of the Group of Eight (G-8) summit in Heiligendamm, Germany. While both countries opposed Germany’s push for binding caps on greenhouse gas emissions, they continued to disagree on the degree of responsibility that emerging economies (that are among the top emitters of greenhouse gasses) should bear for reducing emissions. The failure of many Chinese products to meet safety standards became a new source of friction in the bilateral relationship. The fourth round of the Senior Dialogue provided an opportunity for high-level officials to review a broad range of bilateral, regional, and global issues.

Continued recalls of Chinese-made products prompted actions by both the U.S. and China to shore up consumer confidence and enhance bilateral cooperation on food and product safety. Presidents George Bush and Hu Jintao discussed a broad range of economic and security issues on the sidelines of the APEC leaders meeting in Sydney.  Treasury Secretary Henry Paulson traveled to China at the end of July to prepare for the third round of the Strategic Economic Dialogue (SED) scheduled for December amid attempts by Congress to pass legislation that would punish China if it does not revalue its currency.  U.S. Chief of Naval Operations and Chairman of the Joint Chiefs of Staff- designate Adm. Mike Mullen made a six-day visit to China during which he was given unprecedented access to China’s navy.

China’s refusal to allow the USS Kitty Hawk to make a scheduled visit in Hong Kong for Thanksgiving refocused attention on bilateral differences over Taiwan and Tibet.  It also raised questions about civilian-military coordination in China and highlighted the mistrust between U.S. and Chinese militaries.  A series of agreements were reached to promote better relations between the U.S. and Chinese militaries during a visit to China by Defense Secretary Robert Gates and a subsequent round of the Defense Consultative Talks.  Economic and trade issues were at the top of the bilateral agenda as the Joint Commission on Commerce and Trade and Strategic Economic Dialogue convened and produced some successes, although not on the niggling issue of China’s currency valuation.

Developments on China’s domestic front were prominent this quarter with extreme winter weather coinciding with the Spring Festival, the annual convocation of the “two meetings” in Beijing, and protests in Tibet that spread to neighboring provinces with Tibetan populations.  Key events in Sino-U.S. bilateral ties included the fifth Senior Dialogue in Guiyang, a brief visit by Secretary of State Condoleezza Rice to kick-start the Six-Party Talks, and a visit by FBI Director Robert Mueller to discuss security for the upcoming August Olympic Games.  In the military sphere, the Commander of U.S. Pacific Command Adm. Timothy Keating traveled to China and the Defense Policy Coordination Talks produced several agreements.  Stable and complicated were watchwords for the Sino-U.S. relationship.

Major developments in Sino-U.S. relations took place on the economic, military, and political fronts this quarter.  The fourth U.S.-China Strategic Economic Dialogue was held in Annapolis, Maryland, June 17-18, yielding a 10-year energy and environment cooperation framework.  A telephone link was installed between the U.S. Department of Defense and China’s Ministry of Defense and talks were launched on nuclear policy and strategy.  The U.S. and China held a round of their bilateral dialogue on human rights after a hiatus of six years and vice-foreign minister level talks on security issues were held for the first time in four years.  The U.S. provided assistance to China to ensure the security of the 2008 Olympic Games in Beijing. A massive 7.9 magnitude earthquake rocked China’s southwestern Sichuan Province and the U.S., along with the rest of the international community, provided aid.  Secretary of State Rice visited the quake-hit area and held talks in Beijing focused on North Korea.

The Beijing Olympic Games were conducted without a hitch to the great relief of the Chinese leadership and the 1.3 billion Chinese people who had long anticipated the momentous event.  Abroad, the reviews were mixed.  Most agreed that the opening ceremony was spectacular and that China had successfully ensured the safety of the athletic competitions, but many argued that these goals had been achieved at a significant cost that highlighted the undemocratic nature of China’s regime. President Bush’s attendance further consolidated an already close and cooperative U.S.-Chinese relationship, even though Bush seized on several opportunities to criticize China’s human rights practices.  The U.S.-China Joint Commission on Commerce and Trade (JCCT) marked its 25th anniversary with agreements on food security, loans for medical equipment purchase, promotion of digital TV, and cooperation in agriculture and on trade statistics.  The U.S. presidential campaign heated up, but China received little attention.

The U.S. and China held the 5th Strategic Economic Dialogue and the 6th Senior Dialogue this quarter.  The global financial crisis was a focal point of discussion in both dialogues, as well as in the meeting between Presidents Bush and Hu Jintao on the sidelines of APEC in Lima, Peru. Beijing responded to the announced U.S. sale of $6.5 billion in arms to Taiwan by suspending bilateral military exchanges between the U.S. and China and talks on nonproliferation.  China’s internal debate about the international structure of power and the status of the U.S. was revived as the two prepared to celebrate the 30th anniversary of the establishment of diplomatic ties.

US - China

January — March 2010

The Honeymoon Ends

After a relatively smooth period in US-China relations through the first year of the Obama administration, the “honeymoon” ended in the first quarter of 2010.  The new year brought new frictions and returned to the spotlight many problem areas.  The quarter began with an unexpected announcement from an unlikely player in China-US relations: Google, the internet giant, reported extensive hacking of its networks traced back to China and then redirected Google.cn users to its Hong Kong site to evade Chinese censorship.  Tensions were further stoked by the administration’s notification to Congress of a major weapons sale to Taiwan and President Obama’s meeting with the Dalai Lama. Throughout the quarter, economic frictions intensified, particularly over the valuation of China’s currency.  Despite these numerous difficulties, the quarter closed with the pendulum swinging back toward the center.  At the end of March, President Obama and Deputy Secretary of State James Steinberg both reaffirmed the US commitment to a positive relationship with China; Beijing announced that President Hu would attend a major international nuclear security summit in the US in April 2010; and Obama and Hu, in a friendly phone call, renewed their determination to sustain healthy and stable ties.

Presidents Barack Obama and Hu Jintao met twice this quarter, first on the sidelines of the Nuclear Security Summit in Washington in April and again on the margins of the G20 Summit in Toronto in June.  Nevertheless, tensions lingered over US arms sale to Taiwan and the military relationship remained suspended. The Chinese rejected a request from Secretary of Defense Robert Gates to visit China.  The second round of the Strategic and Economic Dialogue was held in Beijing in late May, yielding agreements on energy, trade environment, and healthcare.  Many hours were spent during the quarter in discussions between the two countries on an appropriate response to the sinking of the South Korean warship, but the gap was not narrowed.  In June, China finally announced the long-awaited decision to allow its currency to be more flexible, though it remains unclear how fast and to what extent it will permit the yuan to appreciate.

Diplomatic confrontations over the Yellow Sea and the South China Sea were the source of new bilateral tensions this quarter.  Beijing vigorously objected to the dispatch of the aircraft carrier USS George Washington to waters near where the South Korean corvette Cheonan sunk after being attacked in March, even before Washington had made a decision to deploy it.  Worried about Chinese diplomatic posturing and destabilizing activities in the South China Sea, Secretary of State Clinton delivered a clear statement of US interests at the ASEAN Regional Forum meeting in Hanoi that irritated Beijing.  With the US mid-term elections approaching, US frustration mounted over China’s unwillingness to allow its currency to appreciate against the dollar at a faster pace. The House of Representatives passed legislation that would allow the US to impose import duties on countries that have undervalued currencies. After more than five months of delay, the Pentagon submitted to Congress its annual report assessing Chinese military capabilities.  Finally, two US presidential envoys traveled to Beijing to smooth over relations and President Obama met Premier Wen Jiabao on the margins on the UN General Assembly.

In the final quarter of 2010, China-US relations were marked by the now familiar pattern of friction and cooperation.  Tensions spiked over North Korea, but common ground was eventually reached and a crisis was averted.  President Obama’s 10-day Asia tour, Secretary of State Clinton’s two-week Asia trip, and US-ROK military exercises in the Yellow Sea further intensified Chinese concerns that the administration’s “return to Asia” strategy is aimed at least at counterbalancing China, if not containing China’s rise. In preparation for President Hu Jintao’s state visit to the US in January 2011, Secretary Clinton stopped on Hainan Island for consultations with Chinese State Councilor Dai Bingguo and Deputy Secretary of State Steinberg visited Beijing.  Progress toward resumption of the military-to-military relationship was made with the convening of a plenary session under the US-China Military Maritime Consultative Agreement (MMCA) and the 11th meeting of the Defense Consultative Talks.  Differences over human rights were accentuated by the awarding of the 2010 Nobel Peace Prize to Chinese dissident Liu Xiaobo.

High-level contacts between the US and Chinese militaries resumed in January with a visit by Defense Secretary Robert Gates to China.  Immediately following his trip, President Hu Jintao traveled to the US for a state visit.  The occasion combined informal discussion with all the protocol trappings of a state visit by a leader from an important country.  Both countries exerted great efforts to ensure the visit’s success, which put the bilateral relationship on more solid footing after a year that was characterized by increased tensions and discord.  At the invitation of Secretary of State Hillary Clinton, State Councilor Liu Yandong made a week-long visit to the US in mid-April, during which she co-chaired with Clinton the second round of the Consultation on People-to-People Exchange.  China held its annual “two meetings” – the National People’s Congress and the Chinese People’s Political Consultative Congress – and endorsed the 12th Five-Year Plan for National Economic and Social Development.

In pursuit of agreements reached between Presidents Hu and Obama in January, the US and China worked to strengthen their relationship, while managing friction on a number of issues. Renewed tensions in the South China Sea put maritime security at the top of the agenda in many bilateral and multilateral interactions, including the inaugural US-China Consultations on Asia-Pacific Affairs, at the ASEAN Regional Forum meeting in Bali, and in a bilateral meeting between Secretary Clinton and State Councilor Dai Bingguo in Shenzhen.  In early May, the third annual Strategic and Economic Dialogue (S&ED) convened in Washington, DC.  Despite protests from Beijing, President Obama met the Dalai Lama.  In May and July, PLA Chief of the General Staff Gen. Chen Bingde and Chairman of the Joint Chiefs of Staff Adm. Mike Mullen exchanged visits.  In August, Joe Biden made his first visit to China as vice president.

A spate of measures taken by the Obama administration to bolster US presence and influence in the Asia-Pacific was met with a variety of responses from China.  Official reaction was largely muted and restrained; media responses were often strident and accused the US of seeking to contain and encircle China.  President Obama met President Hu Jintao on the margins of the APEC meeting in Honolulu and Premier Wen Jiabao on the sidelines of the East Asia Summit.  Tension in bilateral economic relations increased as the US stepped up criticism of China’s currency and trade practices, and tit-for-tat trade measures took place with greater frequency.  Amid growing bilateral friction and discontent, the 22nd Joint Commission on Commerce and Trade (JCCT) convened in Chengdu, China.  An announcement by the US of a major arms sale to Taiwan in September prompted China to postpone a series of planned exchanges, but the Defense Consultative Talks nevertheless proceeded as planned in December.

Xi Jinping’s visit to the US went smoothly and laid the foundation for a strong bilateral relationship after the 18th Party Congress this fall. Speeches to mark the 40th anniversary of Nixon’s visit to China highlighted progress while recognizing deep mutual strategic mistrust. The third Asia-Pacific Consultation was held to manage suspicions and enhance cooperation. President Obama met Hu Jintao on the sidelines of the Seoul Nuclear Security Summit.  Friction increased with the filing of a complaint with the WTO that charged China with manipulating prices of rare earth elements. Beijing angered Washington by vetoing a UNSC resolution that called for Syria’s president to step down. But, the Council later passed a resolution that authorized observers to monitor the ceasefire. China rebuffed US entreaties to reduce oil imports from Iran and the US imposed sanctions on a Chinese company for selling refined oil to Iran.

In the second trimester of 2012, the US began to flesh out its rebalancing to Asia strategy, prompting Chinese concerns. The fourth round of the Strategic and Economic Dialogue (S&ED) was held in Beijing in May amid a kerfuffle over Chinese dissident lawyer Chen Guangcheng.  Presidents Barack Obama and Hu Jintao held their 12th and likely final bilateral meeting in June on the margins of the G20 Summit in Los Cabos, Mexico.  Bilateral friction intensified over developments in the South China Sea.  US-China military interactions stepped up with a visit to the US by Chinese Defense Minister Liang Guanglie and a visit to China by Commander of the US Pacific Command Samuel Locklear.  The US-China Human Rights Dialogue was held in Washington in July.

The rare convergence of a US presidential election cycle and China’s once-in-a-decade leadership transition caused both countries to focus their energies and attention domestically in the last four months of 2012. The US held its presidential election on Nov. 6 and China held its 18th Party Congress Nov. 8-14.  The reelection of President Obama was a relief for Beijing.  Although China has plenty of complaints about his policies, it preferred to deal with him for another four year term, both because of the uncertainty that the election of Mitt Romney would have brought to US foreign policy and because the Chinese generally favor the status quo when it comes to US leadership.   Washington was simply glad to get the Chinese leadership transition underway since it appeared that Chinese leaders and the bureaucracy were distracted and many decisions had been put on hold pending announcement of the new leadership lineup.

With Xi Jinping’s assumption to the presidency at the National People’s Congress, China’s leadership transition finally ended and high-level US-China contacts and exchanges picked up steam.  Senior US officials traveled to China in succession to discuss urgent matters such as North Korea’s third nuclear test as well as less pressing questions such as how to define the “new type of major power relationship” between the US and China. Secretary of the Treasury Lew, Secretary of State Kerry, Chairman of the Joint Chiefs of Staff Dempsey, and Deputy Secretary of State Burns visited Beijing.  North Korea’s third nuclear test provided an opportunity for the US and China to cooperate more closely.  Cybersecurity rose to the top of the bilateral agenda as growing evidence revealed the extent of Chinese state-sponsored hacking into US government agencies and companies.

With their domestic challenges in mind and a shared need for a stable bilateral relationship, Presidents Barack Obama and Xi Jinping met for a day and a half “no necktie” official working meeting to discuss the panoply of bilateral, regional, and global issues that affect US and Chinese interests. The fifth annual Strategic and Economic Dialogue (S&ED) was held in Washington on July 10-11, along with the Strategic Security Dialogue (SSD) and the first Cyber Working Group.  Cyber security, especially cyber theft, was a prominent and contentious issue, aggravated by the revelations of former NSA contractor Edward Snowden.  Maritime disputes in the East and South China Seas were also a source of tension.  The bilateral military relationship was a bright spot, with the visit to the US of Chinese Defense Minister Chang Wanquan.

Bilateral interactions in the final months of 2013 were characteristically active. Secretary of State John Kerry attended the APEC Economic Leaders Meeting and the East Asia Summit in President Obama’s place, and met President Xi Jinping and Premier Li Keqiang. There were several military exchanges, including the first-ever live drill involving members of the US and Chinese armed forces. A week after the Chinese military announced the establishment of its East China Sea Air Defense Identification Zone (ADIZ), Vice President Biden visited China along with Japan and South Korea. On the economic front, the 24th Joint Commission on Commerce and Trade (JCCT) was held in Beijing. US and Chinese navy ships got within 100 yards of each other in yet another close call.

The complexity of the US-China relationship was in sharp relief in the first four months of 2014.  Differences over maritime disputes along China’s eastern periphery were at the top of the agenda.  Russia’s seizure of Crimea introduced a new point of contention. Despite much diplomatic activity, little progress was made on a way forward in seeking denuclearization of North Korea.  US Defense Secretary Chuck Hagel made a fruitful visit to China that included very sharp exchanges with his Chinese counterparts and a tour of China’s aircraft carrier.  Michele Obama along with her children and mother toured China promoting education and people-to-people exchanges.  The full range of issues in the bilateral relationship was discussed by Presidents Obama and Xi Jinping when they met on the margins of the Nuclear Security Summit in The Hague.

The US and China held the sixth Strategic and Economic Dialogue in Beijing in July.  None of the myriad of problems in the relationship were solved, but the annual meetings provided an opportunity to take stock of bilateral relations and hold high-level discussions.  Tensions in the South China Sea caused by China’s deployment of an oil rig off the Paracel Islands dominated many bilateral and multilateral meetings.  There were several military exchanges, with a visit to the US by Chief of the General Staff of the PLA Fang Fenghui and a visit to China by Chief of Naval Operations Adm. Jonathan Greenert.  The PLA Navy participated in the US-led RIMPAC military exercises for the first time. In an incident reminiscent of the 2001 collision between a Chinese fighter jet and a US surveillance plane, a Chinese fighter flew dangerously close to a US Navy P-8 Poseidon aircraft.

The highlight of the final months of 2014 was the summit between Presidents Obama and Xi Jinping, which produced agreements on visa extensions, military confidence-building measures, climate change, and information technology. Alongside progress, tensions persisted over China’s activities in the South China Sea and its continued promotion of regional security architecture fashioned by Asian nations, with the US role unclear at best. The 25th Joint Commission on Commerce and Trade (JCCT) convened in Chicago in mid-December. The “Umbrella Movement” in Hong Kong introduced a new source of friction in the bilateral relationship as Beijing suspected Washington’s instigation behind the scenes.

2015 opened with high-level exchanges in preparation for the Strategic and Economic Dialogue, scheduled for early summer, and Xi Jinping’s state visit in September. Visits to China were made by Deputy Secretary of State Tony Blinken, Treasury Secretary Jacob Lew, Commerce Secretary Penny Pritzker, and Homeland Security Secretary Jeh Johnson. Chinese State Councilor Yang Jiechi met National Security Adviser Susan Rice in New York. Military exchanges included dialogues, ship visits, joint drills, and video calls. The South China Sea remained a source of friction as evidence mounted that China is building military outposts on reefs in the Spratly Islands. In response to the issuance of the revised US-Japan Defense Guidelines, China voiced concerns and called the alliance outdated. Despite US objections, a total of 57 countries signed up to be founding members of the Chinese-led Asian Infrastructure Investment Bank. China held its annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Congress, announcing an economic growth target of around 7 percent and an increase in its defense budget of 10.1 percent in 2015.

Preparations for Chinese President Xi Jinping’s state visit to the US in September were the primary focus of the US-China relationship from May to August. The seventh Strategic and Economic Dialogue (S&ED) was held in June in an effort to tee up agreements for the summit. Friction increased on a range of issues, including China’s artificial island building in the South China Sea, Chinese cyber hacking against US companies and the US government, and repressive laws and actions undertaken by the Chinese government, some of which are likely to have negative repercussions for future US-China people-to-people exchanges. National Security Adviser Susan Rice traveled to China at the end of August to finalize deliverables for the summit amid reports of a possible Obama administration decision to impose sanctions on China for cyber-enabled theft of US intellectual property before Xi’s arrival.

Despite growing friction between the US and China on a number of issues, Xi Jinping’s state visit to the US in September was mostly positive and produced important outcomes on climate change, cyber security, and avoiding accidents between military aircraft. Tensions persisted in the South China Sea with China unwilling to stop its construction and militarization of terraformed reefs. The USS Lassen, a US Navy guided-missile destroyer, exercised international rights of freedom of navigation by sailing within 12nm of Chinese-occupied Subi Reef. The Obama administration notified Congress of its intent to sell a $1.83 billion arms package to Taiwan prompting Chinese objections, but no suspension of bilateral military exchanges. Presidents Obama and Xi met again on the margins of the Paris climate change conference in late November. They also conferred by phone, helping to conclude an historic, ambitious, global, agreement to reduce emissions at COP21.

The South China Sea remained the most contentious issue in the US-China relationship in the early months of 2016. North Korea’s fourth nuclear test and missile launches posed both a challenge and an opportunity. After two months of intense consultations, the US and China struck a deal that led to unprecedentedly tough sanctions on Pyongyang. Xi Jinping attended the Nuclear Security Summit in Washington DC at the end of March and met President Obama. Their joint statements called for cooperation on nuclear security and climate change. Relations between the militaries hit a snag as Secretary of Defense Ashton Carter postponed a planned visit to China and Beijing rejected a request for a US aircraft carrier battle group to visit Hong Kong. Talks continued on a bilateral investment treaty, but China failed to submit a new “negative list,” leaving prospects uncertain for concluding a BIT by the end of Obama’s term.

Senior US and Chinese officials publicly emphasized positive developments in the bilateral relationship at the eighth US-China Strategic and Economic Dialogue, while privately raising concerns. The second US-China Cybercrime and Related Issues High-Level Joint Dialogue convened a week later. The South China Sea persisted as a major area of tension as an UNCLOS Tribunal ruled in favor of the Philippines in its case against China. National Security Adviser Susan Rice traveled to Beijing in late July to prepare for the US participation in the G20 Summit in Hangzhou and what is likely to be the last meeting between Xi Jinping and President Obama. Bilateral military ties maintained an active pace with a visit by the US chief of naval operations to China in July, a port visit by a US guided-missile destroyer to Qingdao in August, and Chinese participation in the Rim of the Pacific (RIMPAC) military exercises in Hawaii.

China Prepares for Rocky Relations in 2017

Summits between Barack Obama and Xi Jinping in September and November helped to keep tensions in check in the last four months of 2016. Despite persisting differences over how much pressure to impose on North Korea after Pyongyang conducted its fifth nuclear test, the US and China agreed on a new UN Security Council sanctions resolution. The US Navy conducted another freedom of navigation operation (FONOP) near the Paracel Islands in the South China Sea. A Chinese Navy vessel snatched a US drone, claiming it was threatening the safety of the Chinese ship and its crew, and returned it to the US five days later. Incremental progress was made on trade disputes at the 27th annual US-China Joint Commission on Commerce and Trade (JCCT) in Washington, DC. Meanwhile, the election of Donald Trump as the next US president threatened to inject significant uncertainty into US-China relations as Trump received a phone call from Taiwan’s President Tsai Ing-wen and suggested that he might use Taiwan as a bargaining chip to extract concessions from China on other issues.

Trump and Xi Break the Ice at Mar-a-Lago

The US-China relationship got off to an active, albeit fitful start after Donald Trump assumed the presidency on Jan. 20. Once Trump agreed to honor the US “one China” policy, Chinese officials engaged positively with their US counterparts, and planning began for the inaugural Trump-Xi meeting.  China’s top diplomat, Yang Jiechi, visited Washington at the end of February, and Secretary of State Rex Tillerson traveled to Beijing in mid-March. The highlight of this period was the Trump-Xi summit, which took place at Mar-a-Lago on April 6-7. One of the major summit deliverables was the creation of a new high-level mechanism, the US-China Comprehensive Dialogue, which will be overseen by Trump and Xi. North Korea emerged as the pressing issue for the Trump administration as well as in the bilateral US-China relationship. Trump apparently made clear to Xi that if China is unwilling to cooperate, the US would seek to solve the North Korea threat unilaterally, including by pursuing penalties against Chinese banks and companies doing business with North Korea. After the summit, Trump called Xi twice to discuss North Korea and to urge him to put greater pressure on Pyongyang.

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