Key Issues and Recommendations on U.S.-China Relations
FY2022 U.S.-China Relations Study Group Report

March 2023

U.S.-China Relations Study GroupPreface
Taking up the theme “U.S.-China Relations Viewed from Around the World,” the U.S.China Study Relations Group has invited experts from Southeast Asia, Russia, India,Eastern Europe, Central Asia, Africa, South America, Taiwan, and the United States toexamine and discuss how U.S.-China relations are viewed from each country and region,
the world views these countries and regions hold, and how they seek to engage with theU.S., China, and other countries in a situation involving both “conflict” and “competition”
between the two countries. During the past three years, the Novel Coronavirus pandemic
and Russia’s invasion of Ukraine have triggered major changes in the internationalsituation, threatening the very foundations of the international order. In FY2022, the finalyear of the project, the study group also examined how the United States, China, and othercountries view the war in Ukraine and its impact on the international order, taking into
account the domestic situations in the United States and China, including the mid-term
elections and presidential election in the United States and the 20th Party Congress inChina. The study group also considered the course that Japan should take.
Section 1. Tone of U.S. and China’s foreign policy and Japan
With the view of maintaining the existing order, the U.S. views China as a representativeof despotic states, a challenger to the existing order, and one that has the power tochallenge it. The U.S. is also increasing pressure on China, together with its allies andpartners, by enacting a series of domestic laws in Congress in anticipation of a long-term“competition” with China in various aspects, including military security, economicsecurity, and values such as democracy and human rights. However, the U.S. has also
stated that conflict may be avoided and cooperation may take place, and trade between
the U.S. and China in 2022 increased slightly to a record high.
China considers the existing order led by the U.S. and other advanced nations to be“outdated.” While insisting on the importance of the United Nations, China criticizes theU.S.-centered security system and the values of advanced nations and says that by 2049
China will surpass the U.S. and achieve order formation by itself (“realization of a new
type of international relations”). However, China also positions its relationship with theU.S. as “competition,” and while avoiding “conflict,” it says that it will “cooperate” withthe U.S. where “cooperation” is necessary. On the other hand, China does not accept theconfrontational structure of developed countries versus despotic states such as China andRussia, and China is willing to be a representative of non-developed countries, i.e.,
emerging and developing countries.
China-Russia relations have never been an alliance, and China does not accept the1“China-Russia relations strong as monolith” theory of the United States and othercountries. China has criticized economic sanctions and strengthened its economic ties
with Russia following Russia’s invasion of Ukraine, but China has not sought to support
Russia militarily. Nor does China support sovereignty violations criticized by otherdeveloping countries. However, since Russia is extremely important to China’s long-term“competition” with the U.S., China wants to avoid excessive reductions in Russia’s force
and disruption.
The Global South is currently an important issue for the United States and China.
This is because the competition for order requires a global perspective that is not limited
to the developed countries and China and Russia. On the other hand, however, theopposing structure of the U.S.-China “confrontation” is not necessarily fixed throughout
the world, and the way the conflict appears varies from region to region and from case tocase. There are also voices, especially in developing and emerging countries, that do notwant conflicts in terms of values, the economy, etc. Both the U.S. and China try to gain
support from these countries, but rather than choosing one to the exclusion of the other,many countries seek to benefit from developed countries, China, Russia, and others inline with their national interests, or they envision their external relations based on theirown policy principles or domestic power conflicts. Forcing a “choice between the two”
from the outside is unwelcome.
Section 2. U.S. and China domestic situations
It goes without saying that foreign policy in the U.S. and China is in some respects
determined by domestic factors. This is the reason the study group discussed the U.S.
midterm elections and the Chinese economy.
In the U.S., the midterm elections brought the Republican majority in the House ofRepresentatives and the Democratic majority in the Senate. In the House ofRepresentatives, the Republicans have gained the chairmanship of various committees,
which has in some respects expanded their influence. For the time being, however, theJoe Biden administration is expected to continue its “diplomacy for the middle class” andwill continue to apply pressure on China over economic security and values. At the sametime, however, the administration says that the U.S. does not face a “collision” with China
and does not consider a Taiwan contingency “imminent.”
In China, the 20th Party Congress in October 2022 is extremely important, and thisis probably why the country was conservative in its policy choices, with no room forchanges in existing policies or new policy failures. For this reason, the Zero-COVID
policy, economic recovery policy, and other policies were basically postponed for
discussion after the Party Congress, but because many of those in charge of the economy
2are involved with the State Council of the People’s Republic of China, it is thought thatno drastic policies will be taken until the National People’s Congress of the People’s
Republic of China in March 2023. The Xi Jinping regime is currently focusing on
alleviating social discontent and achieving economic recovery, while, in terms of foreign
policy, it is trying to reduce friction on the diplomatic front by correcting the course of“wolf warrior diplomacy.”
Public opinion in each of the U.S. and China is also important, but in China inparticular, concern about a “Taiwan contingency” is growing and calls for peace are
becoming stronger. For China, a “Taiwan contingency” is perceived as being initiated by
the U.S., but if Chinese public opinion is calling for “peace,” this will also be a factor for
China to consider.
Section 3. International relations and security issues in East Asia
In FY2022, the international situation and security environment in East Asia changed
dramatically with Russia’s invasion of Ukraine. In particular, the deterioration of relations
between Japan and Russia has led to increased Russian military activity around Japan,and Chinese and Russian naval vessels and air force aircraft have frequently engaged injoint military exercises. North Korea has also been actively conducting long-, medium-,and short-range missile tests and has increased the number of nuclear warheads in its
arsenal, and its military capability continues to grow.
China has completed its own Global Positioning System (GPS) with the satellite
BeiDou and is building its own network of Internet cables as Xi Jinping’s policy of“modernizing” the People’s Liberation Army (PLA) continues to gain the capability tocarry out the “Intelligentized Warfare.” In addition, China is enhancing its cyberattack
capability and other capabilities while promoting military-civil fusion. It is also said that
China is planning to increase the number of nuclear warheads to match those of the U.S.
and Russia and is even abandoning the No First Use policy. These policy changes
foreshadow changes in China’s global strategy, specifically its military policy toward EastAsia. In particular, a new security environment is being created through a change in thenuclear balance, an increase in conventional forces such as missiles, an improvement incyberattack capability in “normal times,” unmanned aerial vehicles (UAVs), maritime
drones, and so on.
The U.S. is strengthening its relations with allies such as Japan and South Korea andis increasing its involvement in Taiwan in particular. In 2022, a “Taiwan contingency”
has been a focus of discussion and many simulations were conducted. Taiwan is not onlya strategic location in terms of military security, but also a presence that embodies thevalues of freedom, democracy, and human rights, and, in terms of cutting-edge industries,3

it is a key point in the supply chains, such as those for Taiwan Semiconductor
Manufacturing Company Limited (TSMC) semiconductor components. However, there
is considerable suspicion within Taiwan about the involvement of the U.S. in the event ofa Taiwan contingency. In Taiwan, an armed invasion by China is not considered an urgent
issue; rather it is thought that there is a peacetime infiltration operation and stronger
military pressure. It is not known to what extent the U.S. has taken Taiwan’s internal
factors into account in formulating its Taiwan policy.
Section 4. Japan’s course of action: Recommendations from the study group
In light of the current confrontation between the U.S. and China, what course of action
should Japan take?
First, in order to cope with the changing global security environment and various
tensions in East Asia, Japan should work to further strengthen the Japan-U.S. alliance andcooperation with Australia and South Korea based on frameworks such as the Quad, aswell as various ways of cooperation with NATO, Western European countries, and otherpartners where possible.
Second, as stated in the three security documents, in light of the new security
environment, Japan must improve its equipment and response capability on the security
front and enhance its deterrence capability.
Third, in the area of economic security, Japan should promote cooperation with theU.S. and other developed countries while keeping in mind how to take into account thewishes of the Japanese domestic business community. Japan should also note that
although the U.S. is increasing its trade volume with China, the U.S. is not aiming forcomplete economic and trade coupling with China.
Fourth, on the issue of developing and emerging countries, the so-called “GlobalSouth,” Japan should follow the basics such as the rule of law, but it will be necessary toconsider not only the perspectives of developed countries, but also the diverse
perspectives and values in the world, as well as the internal politics, history, and sense oforder of each country and region. In this respect, Japan, as the only non-Western state in
the G7, may have a role to play.
Fifth, although Japan is faced with China, North Korea, and Russia, it must not forgetthat it is still required to coexist with these countries. In particular, Japan has close
economic relations with China, and there is an extremely large amount of traffic in people
and goods. For this reason, Japan’s urgent task is not only to improve deterrence as
described above, but also to take measures to avoid conflict and maintain peace througha variety of means, including diplomacy and private-sector exchanges.

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