【Recommendations】

U.S.-China Relations Study GroupFY2021 Report: Recommendations

March 2022

U.S.-China Relations Study Group◆ Introduction
The U.S.-China Relations Study Group conducts research on the theme “U.S.-China
Relations as Seen Around the World” and discusses “Issues in Specific Fields of U.S.China Relations (advanced military, life sciences, human rights issues, and others),” fromboth a Japanese perspective as well as from a broad range of perspectives on how othercountries view U.S.-China relations. Together, NPI experts and external experts analyze
the issues to identify the problems and examine the initiatives developed to resolve them.
This report is a brief summary of the implications and recommendations for U.S.-China
relations from the 2021 study group. Research activities will continue in the coming year.

◆ FrameworkDespite variables such as the situation in Ukraine, the U.S.-China confrontation isexpected to be a major axis of global politics for decades to come, and Japan should
clarify its principles regarding its position on this issue with a view to its nationalinterests. This should be divided into short-term, medium- to long-term, and longterm issues, and should be formulated in light of the various aspects of the U.S.-China
confrontation in each region and issue area.

We should determine the areas in the U.S.-China confrontation that particularly standout, broaden Japan’s options in those areas, and create an environment in which Japanis not disadvantaged. To this end, it is important not only to know China and its allies,
but also to analyze and understand Japan’s current situation evenly and objectively.

Japan is China’s neighbor and has close economic relations with China; the risingcapabilities of China’s coast guard over the Senkaku Islands issue; and the progressof Chinese technological innovation in the digital domain and elsewhere, as well as
China’s preparations for Taiwan unification: these issues should not be addressedwith assumptions or hopes, they should be considered and addressed based on
objective facts and realism.

◆ Key Findings•

China’s science and technology are already becoming increasingly advanced, and thecountry will probably pursue policies to further strengthen them, such as through theconstruction of digital infrastructure. The struggle for supremacy in science andtechnology between the U.S. and China is likely to continue for a considerable
period of time. In order for Japan to gain a firm position in the complex international

situation, it is necessary to revive its position as a “science and technology
powerhouse.”•In addition to the government’s extreme siphoning of the fruits of growth, China isalso promoting the concentration of power in the hands of President Xi Jinping
through formulation of laws and other measures. The “merits” of this policy areevident in the recovery from the Novel Coronavirus pandemic and the massive
investment in the promotion of science and technology, but it has also created “sins”
such as the disparity between the rich and the poor, the decline in the vitality ofthe private sector, and the creation of a government bureaucracy inclined to“inaction.” It is necessary to look at the future rise and fall of China’s economy inline with the actual situation.

•The nature of what is considered the U.S.-China confrontation differs from region toregion and case to case around the world. In some regions, the U.S.-China
confrontation is difficult to see, and in some cases, the U.S. and China are cooperatingwith each other. Rather than perceiving and discussing everything based on the U.S.China confrontation, we need to make varied and flexible observations andconsiderations for each region and issue area. For this reason, Japan should not havea simple and rigid policy, but rather firm (strong but with a certain flexibility)
principles regarding the U.S.-China confrontation so that it can flexibly deal withdiverse situations.

•Although it is said that there is an “anti-China consensus” in the United States, aunanimous strategy toward China has not been formed. The majority of
Republican supporters have adopted a hard-line stance toward China, viewing theregime as a problem in addition to China’s behavior. In contrast, Democratic
supporters are divided in their stance toward China between those on the left, whobelieve that diplomatic engagement should continue regardless of the intrinsic
political system, and those in the middle, who believe that the United States should
engage in competition with countries that cannot abide by agreements and rules.
These differences have given rise to approaches to China such as the strongly
Republican “regime collapse theory,” which holds that we should wait for China toweaken and transform its system of governance, and the strongly Democratic“competitive coexistence theory,” which holds that we should aim to moderate
China’s foreign behavior through coalition building while avoiding conflict withChina; at present, formulation of a China strategy on which the three parties can agree
is hindered.

•Although the Biden administration has put forth a “democracy versus

authoritarianism” policy, in actual diplomacy it is likely to cooperate with
nondemocratic states in areas where cooperation is possible.
While not rejecting the significance of the Summit for Democracy outright,
policy elites in Washington do not strongly support the approach of identifying
partners by political system and are more inclined to argue that cooperation infunctional areas should be promoted with nondemocratic states as well. The Biden
administration’s slogan of democracy and human rights is a good example of this, as
it allows it to meet the demands of the left wing within the Democratic Party toachieve social justice (human rights guarantees, anti-corruption, etc.) and at the samedenounce the centrist camp without incurring criticism from the Republicans in theforeign policy arena.
•Membership in the CPTPP remains a political hurdle for the Bidenadministration, which has put forth an alternative plan, the Indo-Pacific
Economic Framework, but its impact remains to be seen.
With China and Taiwan having applied to join the CPTPP, some policy elites in
Washington are of the opinion that the U.S. should also join, and some Democratic
centrists are of the opinion that trade liberalization should proceed. However, the left
wing of the Democratic Party remains negative about trade liberalization withpartners that do not meet labor and environmental standards, and Trump supporters
in the Republican Party are also negative about joining the CPTPP. Under thesecircumstances, if Biden were to propose trade liberalization through CPTPP
membership, it would mean political criticism that he is putting corporate interests
ahead of workers, running a significant risk of losing the support of the white working
class in the process, so it is unlikely that this is an option on the policy agenda. As analternative, the Indo-Pacific economic framework bundles together existing
economic engagement measures, but we have yet to see a convincing case that its
economic impact would surpass that of the CPTPP.

•U.S.-China competition in cyberspace is developing on multiple levels, including
information technology, telecommunications infrastructure, and content (cognitivedomain). In terms of information infrastructure, China is expanding its cross-border
optical cable network through the “Digital Silk Road,” forming a regional
advantage that extends into the Eurasian continent, which may change the flowof information on a global scale.

◆ Policy Recommendations
China Policy① Establish a strategic vision toward China based on Japan’s comprehensive national
interests and communicate it domestically and internationally.
Based on the assumption of constant tension not only around the Senkaku Islands
but also around Japan in general, a finely balanced diplomacy is required to maintainstable private-sector exchanges and economic cooperation while working with theU.S. and other allies. At present, however, different actors in Japan have different
perceptions of China. While addressing short-term issues, it is necessary to formulatea China strategy based on Japan’s national interest from a comprehensive medium- tolong-term perspective, reflect this in the newly formulated National Security Strategy
and other policy, and formulate a certain level of social consensus.
② Formulate a new Japan-China cooperation framework starting from the 50th
anniversary of the normalization of diplomatic relations.
To promote development in Asia, Japan and China, as regional powers, canconsider various forms of cooperation, including economic, environmental, andhuman resource development. In light of common challenges such as an aging
society and environmental issues, as well as the framework for third-country market
cooperation agreed to in 2018, Japan and China should continue to cooperate on an
equal footing while maintaining contact with Chinese society.
③ The fact that both China and Taiwan have applied to join the CPTPP is an opportunity
for Japan. It will provide a valuable diplomatic forum for dialogue on China’s
economic system and other domestic issues, and will also help to maintain a balancein Japan-China relations, which are expected to continue to face challenges in thefuture. It should not be too easy for China to join, and although negotiations will takea long time, Japan should be open to discussions with China while keeping
Taiwan’s membership in mind.
Regarding the new U.S. administration① The Biden administration’s policy toward China should be viewed as a synthesis of
the policy and political imperatives of the left and center factions of theDemocratic Party. The Biden administration’s middle-of-the-road competitionbased course may be influenced by the domestic political situation to make leftleaning modifications (such as reducing military tension, bringing the human rights
agenda to the fore, and cooperating on climate change). The Biden administration
should be prepared for this and constantly question the policy goals it hopes toachieve with China over the next three to seven years.
② Regarding countries in the Indo-Pacific region, which appear marginalized by theBiden administration’s democracy and human rights rhetoric, the Japanese
government should strengthen its diplomatic efforts to prevent the development
of divisions and hierarchies by reinforcing efforts to incorporate these countries
into various functional sectoral cooperation systems.
③ Rather than holding a democracy summit, the Biden administration should beencouraged to hold a forum that addresses the agenda addressed at thedemocracy summit on an individual basis, such as counter-disinformation and anticorruption, and switch to a format that allows participation by other countries
regardless of political system.
④ While urging the Biden administration to join the CPTPP, Japan should (1)strengthen consultations with the U.S. on specific policy initiatives to deepen thelinkage between the US economy and the Indo-Pacific regional economy, and (2)strengthen its efforts to expand the Indo-Pacific economic framework beyond theunilateral efforts of the U.S. alone. Multilateral initiatives should be launched together
with like-minded countries in the region, and regional economic diplomacy should
also be developed to substantiate U.S. economic engagement.
Security① Strengthen deterrence around the Senkaku Islands and in the East China SeaIn order to avoid military friction, it is essential to cooperate with the U.S. and otherallies, improve Japan’s deterrence capabilities, and promote security dialogue with
China in parallel. In addition to defending new domains such as cyber, space, andelectromagnetic waves, Japan must also prepare for influence operations.
② China’s digital infrastructure construction and policies for the Digital Silk Road
China is increasing its influence over emerging and authoritarian states through exportof telecommunications infrastructure. Along with strengthening its ties withdemocracies, Japan should seek to strengthen relations with regional powers andgeopolitically important countries and regions, including those inside Eurasiancontinent, and build cooperative relationships in shaping global international norms
and establishing international standards. With these countries, it is necessary for Japan
to coordinate approaches that do not raise alarm, such as expert meetings on
cybersecurity and capacity-building support for government officials.
③ China’s preparations for intelligentized warfare
The Chinese People’s Liberation Army (PLA) is accelerating its preparations for theintelligentized warfare, which involves the military use of artificial intelligence (AI)and drones. The number of Chinese unmanned patrol aircraft flying in the East China

Sea is increasing, and new developments such as the normalization, autonomy, heavyequipment, and swarming of unmanned aircraft flights are possible in the future. InJapan, it is necessary to deepen the policy discussion on how to deal with China’s
war on intelligentized warfare and link it to concrete measures, as well as to focus
on domestic economic and technological promotion to increase competitiveness instrategic emerging technological fields.

This is an English translation of the original Japanese-language NPI Commentary posted on theNPI Japanese website on March 31, 2022.