About the Report

With the unprecedented, large-scale global challenges 

confronting the international community, there is a growing 

need for China and the United States to cooperate. While China 

emphasizes respect for its core interests and major concerns, 

the United States puts a premium on bilateral cooperation in 

areas of common interest. The challenge lies in understanding 

each side’s position and building a bridge between them. 

In addressing these questions, Wu Xinbo presents a distinct 

perspective on U.S.-China relations not commonly heard 

outside China. The Institute’s Center for Conflict Management 

commissioned this special report as a series on the evolving 

Sino-U.S relationship. This series will focus on avoiding crises 

and exploring opportunities for Sino-U.S. cooperation.

About the Author

Wu Xinbo, a 2006–07 Jennings Randolph senior fellow at 

the United States Institute of Peace, is currently professor 

and deputy director at the Center for American Studies and 

associate dean at the School of International Relations and 

Public Affairs, Fudan University, Shanghai. Professor Wu is the 

author of Dollar Diplomacy and Major Powers in China, 1909–

1913, the award-winning Turbulent Water: U.S. Asia-Pacific 

Security Strategy in the Post–Cold War Era, New Landscape in 

Sino-U.S. Relations in the Early 21st Century, and Managing Crisis 

and Sustaining Peace between China and the United States. He 

has published numerous articles and book chapters.

2301 Constitution Ave., NW • Washington, DC 20037 • 202.457.1700 • fax 202.429.6063

Special Report 277 June 2011

© 2011 by the United States Institute of Peace. 

All rights reserved.

Wu Xinbo

China and the 

United States 

Core Interests, Common Interests, and Partnership

Summary

•	 In an era of increased economic interdependence and shared security issues, it is vital that 

China and the United States become genuine partners, based not on shared ideology or 

traditional geopolitical interests, but on the needs of global governance. This, however, 

requires both countries to respect the other’s legitimate core interests; if they do not, the 

resulting distrust and misinterpretation of intentions make cooperation less likely.

•	 To date, China has emphasized protection of its core interests, while the United States has 

emphasized developing areas of common interest while maintaining its expansive approach 

to foreign policy. This difference in emphasis has set up both areas of friction and possibilities for greater interaction.

•	 China’s interests in Taiwan, Tibet, and Xinjiang lies at the heart of its national security concerns and their management is considered fundamental to the country’s survival and development. As China has declared, continuing U.S. involvement with these issues is viewed as 

a challenge to China’s core interests. If the United States eases its policies toward China’s 

core interests, this could, in turn, encourage China to respect U.S. core interests and foster 

cooperation as China’s material power and international influence are both growing.

•	 Developing common interests, meanwhile, can create more momentum for the two countries to manage and resolve their differences. Potential areas for successful cooperation 

include building a permanent peace mechanism on the Korean Peninsula; helping to secure 

strong, sustainable, and balanced global economic growth; and bringing about a global 

arrangement on creating an international environmental regime.

United States Institute of Peace www.usip.org

SPECIAL REPORT

Contents

Respecting Core Interests 2

Expanding Common Interests 3

Forging Partnership 9
2

After a relatively smooth first year, the second year of Sino-U.S. relations under the Obama 

administration has been more turbulent. The reasons—the U.S. arms sale to Taiwan, Obama’s 

meeting with the Dalai Lama, and U.S. military exercises on China’s periphery—are not new; 

they all reflect the continuity of U.S. policy toward China and the region. However, given 

the changing circumstances for bilateral relations, including a more symmetrical economic 

interdependence between the two countries and an urgent need for Sino-U.S. cooperation 

in dealing with a wide range of international and global issues, such inertia in U.S. foreign 

and security policy may undermine the prospects for building such cooperation, and more 

broadly, a positive and comprehensive Sino-U.S. partnership in the future.

Both Beijing and Washington have written out their respective prescriptions for managing bilateral relations. China has emphasized that each country must respect the other’s 

central policy priorities, while the United States puts a premium on bilateral cooperation 

in areas of common interest. Chinese president Hu Jintao, while attending the nuclear 

security summit held in Washington, DC, in April 2010, told President Barack Obama that 

“China and the United States should respect each other’s core interests and major concerns. 

This is key to the healthy and stable development of bilateral ties.” For his part, Obama 

stressed that “the strengthening of cooperation and the building of partnership between 

the two countries are not only in the interests of both countries, but also of the world.”1

The views of both sides have merit. Given the unprecedented global challenges confronting 

the international community, there is a growing need for China and the United States to 

cooperate, and the prospect exists for forging a Sino-U.S. partnership to address common 

concerns. However, there are real differences between the two countries, and not only over 

concrete issues; they also involve guiding principles for and approaches to bilateral ties. The 

challenge lies in understanding each side’s position and building a bridge between them. 

Why does China stress respect for its core national interests? How can the two countries 

expand common interests between them? What adjustments should each side make to forge 

a genuine partnership?

Respecting Core Interests

During President Obama’s visit to China in November 2009, the two countries, after a long 

and tough negotiation, issued a joint statement holding that “the two sides agreed that 

respecting each other’s core interests is extremely important to ensure steady progress in 

China-U.S. relations.”2 For China, such core interests include the situations in Taiwan, Tibet, 

and Xinjiang, where secessionist momentum challenges not only China’s territorial integrity, 

but also the legitimacy of the Chinese Communist Party as the ruling party of China. Given 

the U.S. security commitment to Taiwan under the Taiwan Relations Act of 1979, its longheld policy of arms sales to the island, its support of the Dalai Lama, and its relations with 

activists in Xinjiang’s secession from China, it is no surprise that Beijing has urged Washington to handle its interests with great sensitivity. It is also not the first time that China 

emphasized its core interests in an official document with the United States. In October 

1997, during President Jiang Zemin’s visit to the United States, the two sides issued a joint 

statement that “China stresses that the Taiwan question is the most important and sensitive central question in China-U.S. relations, and that the proper handling of this question 

in strict compliance with the principles set forth in the three China-U.S. joint communiqués 

hold the key to sound and stable growth of China-U.S. relations.”3 The phrase core interest 

was not used, but Beijing clearly demanded that Washington deal carefully with Taiwan. 

It is normal for a country to protect its core interests in its foreign relations. In diplomatic negotiations, these interests define the red lines that cannot be crossed without 

inflicting serious damage to bilateral ties. Clearly stating core interests sends a message to 

The views expressed in this report do not necessarily 

reflect the views of the United States Institute of Peace, 

which does not advocate specific policy positions.

To request permission to photocopy or reprint materials, 

e-mail: permissions@usip.org

About the Institute

The United States Institute of Peace is an independent, 

nonpartisan institution established and funded by Congress. 

Its goals are to help prevent and resolve violent conflicts, 

promote postconflict peacebuilding, and increase conflict 

management tools, capacity, and intellectual capital worldwide. The Institute does this by empowering others with 

knowledge, skills, and resources, as well as by its direct 

involvement in conflict zones around the globe.

Board of Directors

J. Robinson West (Chair), Chairman, PFC Energy •

George E. Moose (Vice Chairman), Adjunct Professor of 

Practice, The George Washington University • Judy Ansley,

Former Assistant to the President and Deputy Security 

Adviser under President George W. Bush • Anne H. Cahn,

Former Scholar in Residence, American University 

• Chester A. Crocker, James R. Schlesinger Professor of 

Strategic Studies, School of Foreign Service, Georgetown 

University • Kerry Kennedy, President, Robert F. Kennedy 

Center for Justice and Human Rights • Ikram U. Khan,

President, Quality Care Consultants, LLC • Stephen D. Krasner,

Graham H. Stuart Professor of International Relations, 

Stanford University • John A. Lancaster, Former Executive 

Director of the National Council on Independent Living 

• Jeremy A. Rabkin, Professor, George Mason School of Law 

• Judy Van Rest, Executive Vice President, International 

Republican Institute • Nancy Zirkin, Executive Vice 

President, Leadership Conference on Civil Rights

Members Ex Officio

Michael H. Posner, Assistant Secretary of State for 

Democracy, Human Rights, and Labor • James N. Miller, 

Principal Deputy Under Secretary of Defense for Policy •

Ann E. Rondeau, Vice Admiral, U.S. Navy; President, 

National Defense University • Richard H. Solomon, 

President, United States Institute of Peace (nonvoting) 
3

other countries that violating them, even inadvertently, could lead to an otherwise avoidable conflict. In dealing with the United States, China has emphasized its core interests 

for several reasons. Beijing has believed that some of Washington’s actions, such as the 

abovementioned arms sales to Taiwan and involvement in Tibetan and Xinjing issues, have 

challenged and even damaged China’s core interests from time to time. China’s stature in 

the world has grown, but the Sino-U.S. balance of power still favors the United States, and 

while there are many interests that China wants to promote in its U.S. relations, both Chinese elites and the public would regard diplomacy toward the United States as a failure if 

its core interests were undermined in the process. At the same time, China’s emphasis on its 

core interests reflects its growing confidence in its U.S. interactions. As China strengthens 

materially and its international influence expands, Beijing has obtained more leverage to 

bargain with Washington, and it believes that it deserves more respect and accommodation 

from the U.S. when it comes to China’s priority concerns. 

China’s efforts to stress the issue of core interests to the United States have not wavered. 

In the negotiation over the joint statement to be issued during President Hu’s visit to the 

United States in January 2011, the U.S. negotiator was instructed not to agree to put into the 

document the phrase core interests, which, as a result, did not appear in the joint statement 

released on January 19, 2011.4 However, this does not mean that the Chinese side changed 

its position on the issue. The joint statement states that “the two sides reaffirmed respect 

for each other’s sovereignty and territorial integrity,”5 which are exactly what the Chinese 

side emphasized under the name of core interests in the joint statement of 2009. The following sentence—“the Presidents further reaffirmed their commitment to the November 

2009 China-U.S. Joint Statement”—also suggests that the previous bilateral agreement on 

“respecting each other’s core interests” still exists. Furthermore, Chinese vice foreign minister 

Cui Tiankai, who oversees U.S. relations, stressed in his speech delivered right before President Hu’s U.S. trip that “respect for each other’s core interests and major concerns constitute 

the foundation of our relationship if it is to make steady and solid progress in the long run.”6

Most important, President Hu, in his remarks at the official arrival ceremony held for him 

by President Obama on January 19, 2011, reminded the U.S. side that “China and the United 

States should respect each other’s choice of development path and each other’s core interests.”7 Obviously, after the turbulences in Sino-U.S. relations in 2010, Beijing has become 

even more adamant in securing U.S. respect for China’s core concerns.

From time to time, policy elites in the United States try to sort out U.S. national interests 

by significance: vital, extremely important, important, less important or secondary, and the 

like.8 This categorization of interests mainly guides the building of consensus and distribution of resources internally rather than sending a signal externally, as not many countries 

can threaten U.S. core interests credibly. That said, from China’s perspective, the United 

States, with its superiority in power, appears to define its national interests expansively and 

to pursue them whether it is at the expense of others’ interests or not. The United States 

does not seem to appreciate it when other countries assert their own priorities; doing so, it 

appears, is tantamount to constraining U.S. ability to push its own interests. The differences 

in the Chinese and U.S. approaches to foreign policy help explain why, in Sino-U.S. relations, 

quarrels arise from time to time over alleged U.S. violations of China’s core interests: Beijing 

is always vigilant regarding expansive U.S. actions.

Expanding Common Interests

While China will continue to defend its core interests from U.S. violations, Washington is 

unlikely to fully respect China’s priorities as Beijing wishes. To alleviate some of the tension 

that this creates, it is important that the two sides continue their efforts to expand their 

As China strengthens materially 

and its international influence 

expands, Beijing has obtained 

more leverage to bargain with 

Washington, and it believes 

that it deserves more respect 

and accommodation from the 

U.S. when it comes to China’s 

priority concerns. 
4

common interests as much as they can. Fortunately, for the purposes of improved Sino-U.S. 

relations, the common priorities between China and the United States have grown rapidly 

and generated greater impetus to closer bilateral ties, creating momentum for the two 

countries to manage and gradually resolve their differences. In the coming decade, if both 

Beijing and Washington can cooperate effectively and productively in major issue areas 

and greatly expand their common interests, the prospect for a Sino-U.S. partnership will 

be much brighter. Cooperation could be most fruitful in addressing major regional or global 

issues where both China and the United States can be significant actors, both Beijing and 

Washington have common interests in resolving or managing the problems, and finally, there 

are no significant policy differences between the two countries that may prevent cooperation. Three such issues are building a permanent peace mechanism on the Korean Peninsula; 

helping to secure strong, sustainable, and balanced global economic growth; and bringing 

about a global arrangement for environmental concerns.

Building a Permanent Peace Mechanism on the Korean Peninsula

The Sino-U.S. confrontation began on the Korean Peninsula, and the Korean War gave rise to 

the Cold War in Asia; today, the tension on the peninsula, along with the separation across 

the Taiwan Strait, stands as that conflict’s last legacy. Taiwan’s future increasingly depends 

on the interactions between the two sides of the strait, but the situation on the Korean 

Peninsula is very much subject to the influence of external actors, particularly China and 

the United States.

Almost sixty years after the end of the Korean War, the peninsula remains one of the 

most heavily militarized regions in the world. The military confrontation between North 

Korea on one side and South Korea and the United States on the other makes it one of the 

most dangerous spots on earth. With North Korea’s procurement of nuclear weapons, the 

situation is even more precarious. As we have seen, the U.S. military exercises following 

the Cheonan incident in Northeast Asia caused tensions in Sino-U.S. diplomatic and security 

relations.9 A military conflict on the peninsula, the possibility of which cannot be ruled out 

completely, would inflict heavy causalities on the peninsula, destabilize the entire region, 

and have disastrous effects on major power relations. 

Creating enduring and reliable peace on the peninsula serves the interests of both 

China and the United States. For China, a stable periphery in Northeast Asia would lessen 

the security pressure arising from this direction and create a favorable environment for 

socioeconomic development in its own northeast. The end of confrontation on the Korean 

Peninsula also would reduce the risk of Sino-U.S. conflict in this part of the world. For the 

United States, peninsular peace would help promote the security of its allies in the region, 

curtail its security responsibilities in Northeast Asia, and remove the risk of fighting another 

Korean War.

To establish a permanent peace mechanism on the peninsula, first, it is important to 

adopt a broad conceptual picture of the Korean issue, major parts of which are the continuation of Cold War–era policies. Since the end of the Cold War, too much attention has 

been paid to the North Korea nuclear issue—a result of the lack of institutionalized peace 

on the peninsula, not vice versa. The same can be said of the sporadic conflicts between 

the north and the south, including the Cheonan incident. Second, a diplomatic approach 

is preferred to a military one. The price of using force is extremely high, and for North 

Korea, confronted by U.S. and South Korean military pressure for more than half a century, 

military deterrence has a limited effect. Third, engagement and inducement are preferred 

to sanctions and pressure. Many if not all of North Korea’s apparently irrational external 

actions could be attributed to its strong sense of insecurity. Sanctions and pressure can 

For China, a stable periphery in 

Northeast Asia would lessen the 

security pressure arising from this 

direction and create a favorable 

environment for socioeconomic 

development in its own northeast. 

. . . For the United States, 

peninsular peace would help 

promote the security of its allies 

in the region, curtail its security 

responsibilities in Northeast Asia, 

and remove the risk of fighting 

another Korean War.
5

only worsen this sense, leading to more irrational behavior. Engagement and inducement, 

meanwhile, could improve North Korea’s sense of security and build trust with other major 

players, particularly South Korea and the United States, hopefully making Pyongyang 

more cooperative and less stubborn. 

Operationally, the four parties to the Korean War—China, the United States, and the two 

Koreas—should restart the Four-Party Talks (FPT) that ran from December 1997 to August 

1999.10 The new talks should focus on reducing the tension on the peninsula and replacing 

the truce agreement signed in 1953 with a formal peace mechanism that would formally 

terminate the state of war and renounce the use of force to resolve disputes on the peninsula in the future. China and the United States have important roles to play in the process, 

from providing initiatives to restart the talks to helping set the agenda and navigating the 

negotiations through turbulent waters to finally signing up to the new peace treaty.

In parallel, the Six-Party Talks (SPT) could continue to work on the denuclearization 

issue, albeit with a reduced load. In July 2007, all six parties agreed to set up five working groups to pursue various goals: denuclearization, economic and energy cooperation, 

normalization of North Korea-U.S. and North Korea-Japanese relations, and peace and 

security in Northeast Asia. While the other working groups should continue to work within 

the framework of the SPT, responsibility for the peace and security group can be shifted to 

the FPT. With both the FPT and the SPT in operation, Beijing and Washington could lead 

international efforts on the Korean issue in addressing both the nuclear problem and the 

broader issue of establishing a peace mechanism, strengthening a common Sino-U.S. interest in the process.

Securing Strong, Sustainable, and Balanced Global Economic Growth

The financial crisis originated in the United States in the fall of 2008 and revealed many 

shortcomings in the current world economy at both the microeconomic and macroeconomic 

levels, from the slack financial oversight in the United States and the dereliction of duty 

by international financial institutions to the American public’s overspending and China’s 

oversaving of foreign currency. Since the crisis, the greatest challenge has been in securing 

strong, sustainable, and balanced global economic growth—a key goal agreed upon at the 

third Group of Twenty (G-20) financial summit, held in Pittsburgh in September 2009. China 

and the United States must act cooperatively to advance this goal, and both countries can 

play important and unique roles in the process. They are the world’s two largest economies. 

In 2010, they together contributed over 40 percent to the growth of the global economy.11

Moreover, as the largest developed and developing countries, the development models of 

the United States and China, respectively, affect countries in their own categories. Finally, 

it is in both Chinese and U.S. interests to secure strong, sustainable, and balanced global 

growth, given the two economies’ high degree of interdependence as well as their deep 

integration with the world economy generally. 

Sino-U.S. economic cooperation must occur unilaterally, bilaterally, and multilaterally. 

Unilaterally, China—as it already started to do during the financial crisis—should further 

boost its domestic consumption to adjust its long-pursued export-oriented development 

model. It also should base its economic growth more on technological progress and gradually 

reduce its dependence on low-end manufacturing industries, which have consumed too many 

resources and heavily polluted the environment. For its part, perhaps obviously, the United 

States must get its public to save more and borrow less—a task that is as important as it is 

difficult. As the Obama administration has realized, it is also necessary to emphasize the real 

economy (such as the manufacturing industry, dealing with material products) and reduce 

reliance on the virtual economy (such as finance, dealing with nonmaterial products).
6

Bilaterally, both China and the United States should resist the temptation of trade 

protectionism. Since President Obama’s first year in office, trade frictions between China 

and the United States have risen remarkably,12 and with high unemployment rates as well 

as the Obama administration’s political ties to trade unions, protectionist pressure is felt 

strongly and acutely. However, a trade war with China would hurt the U.S. economy in many 

ways, from reducing the import of products of U.S. companies that have relocated their 

production bases to China to suspending China’s buying and holding of U.S. treasury bonds. 

Sino-U.S. trade has been largely complementary and generally does not threaten major 

domestic industries on both sides. These should not be sacrificed in trying to alleviate 

domestic economic problems, particularly on the U.S. side. Robust bilateral trade is crucial 

to the healthy development of Sino-U.S. economic relations and underpins bilateral political 

relations as well.

Direct investment is an important part of bilateral economic ties. U.S. investment in 

China started in 1980 and reached $59.65 billion by 2008 in accumulative terms. Despite the 

financial crisis, U.S. companies invested in 1,530 projects in China in 2009, with an actual 

utilization of about $2.56 billion.13 However, starting in 2009, U.S. companies began to 

complain loudly about the changing investment environment in China.14 Given the importance of foreign direct investment (FDI) to China’s economic development, it is essential 

that their legitimate concerns are addressed seriously. Meanwhile, fueled by the world’s 

largest foreign currency reserve and endorsed by the government’s go-abroad strategy, 

Chinese firms recently have sought opportunities for overseas investment more actively. In 

2009, Chinese direct investment in the United States reached $620 million,15 a figure that 

is relatively small compared with U.S. direct investment in China, but increasing rapidly, as 

one recent research pointed out, “FDI from China to the United States is now more than 

doubling annually.”16

Yet Chinese investors do not regard the investment environment in the United States 

as encouraging. After the passage of the Foreign Investment and National Security Act 

of 2007, the U.S. Department of the Treasury promulgated its rules of implementation in 

November 2008, involving regulations pertaining to mergers, acquisitions, and takeovers by 

foreign persons. It has subjected to review transactions involving infrastructure, energy, and 

crucial technologies affecting U.S. national security, and has also set strict rules on foreign 

investment. In the eyes of Chinese companies, the new regulations create many obstacles 

to foreign investors.17 More generally, from the failed bidding of the China National Offshore 

Oil Company (CNOOC) for U.S. oil company Unocal in 200518 to the recent controversy over 

Chinese steel company Anshan Iron and Steel Group’s investment plan in a U.S. steel plant,19

Chinese investors are increasingly concerned about the political and security influences on 

the U.S. opposition to Chinese investment. Given the real and potential benefits of Chinese 

FDI in the United States, such as creating more job opportunities and reducing bilateral 

trade imbalances, Chinese investors should not be deterred by investment protectionism in 

the United States, institutionally or culturally. 

U.S. export control to China is another area for improvement. Since the 1950s, China has 

been a main target of U.S. export control. However, since the improvements in Sino-U.S. 

ties starting in the 1970s, U.S. export control policy toward China has been adjusted many 

times. The issue became more salient in recent years due partly to the George W. Bush 

administration’s stepped-up export control measures against China and partly to the growing 

trade imbalance between the two countries. China deems strengthened U.S. export control 

as unfair, since it is probably the only major U.S. trading partner to be brought under such 

strict restrictions. Beijing complains that 

it usually takes three months to half a year and sometimes even eighteen months to 

obtain a license for exports to China, much more lengthy than in other countries, such 

Given the real and potential 

benefits of Chinese FDI in 

the United States, such as 

creating more job opportunities 

and reducing bilateral trade 

imbalances, Chinese investors 

should not be deterred by 

investment protectionism in the 

United States, institutionally 

or culturally. 
7

as Germany and Japan, where two or three weeks to a month is enough. Besides, in the 

process of obtaining an export license, reviews will be carried out by the U.S. concerned 

authorities whenever necessary, and additional clauses on end-user are attached in 

commercial contracts.20

Whenever Washington has accused Beijing of having a hand in its mounting trade deficit 

with China, Beijing invariably refutes it by saying that U.S. export control policy contributed 

to it. The American Chamber of Commerce in China endorses this argument, estimating in a 

survey that U.S. companies lost billions of dollars annually in sales to foreign rivals in China 

due to Washington’s export controls.21 The Obama administration indicated that it would 

review U.S. control policy with a view toward relaxing some export control measures against 

China as appropriate, but this has been slow in coming. Loosening export controls certainly 

would enhance U.S. export to China and help reduce trade imbalance. It would also send 

an important political signal that Washington is serious in seeking to develop a partnership 

with China. 

Multilaterally, in the postcrisis period, China and the United States should work to build 

a fair, equitable, inclusive, and well-managed new international financial order and maintain 

an open and free world trade system. Reforming the international financial system includes 

increasing the representation and voice of developing countries, improving the existing 

decision-making process and mechanism, and reforming the international financial supervisory and regulatory regime. Continued progress depends largely on effective cooperation 

between Beijing and Washington. At the Pittsburgh G-20 summit, leaders pledged to move 

toward ending the Doha Development Round, which would greatly promote the process of 

global trade liberalization. China and the United States should make joint efforts to realize this goal, even though it is quite a challenge to the Obama administration, given the 

serious unemployment situation in the United States. Finally, with the G-20 becoming the 

premier forum for international economic cooperation during crises, China and the United 

States should continue to work closely to build it as an institution and ensure its central 

role in promoting international economic cooperation and global economic governance. 

Effective cooperation between China and the United States in promoting global governance 

will broaden common interests, enhance mutual trust, and even reduce the effect of their 

bickering over core interests on their overall relationship.

Creating a New Environmental Regime

Developments in manufacturing since the Industrial Revolution over two centuries ago promoted economic growth and improved people’s standards of living, but also seriously harmed 

the environment across the world. Climate change, partly attributed to carbon dioxide emissions, has raised the urgency of creating a new international environmental regime, involving greater use of clean energy, environmental protections, and amelioration of the damage 

already done. Such a regime would alter modes of production and lifestyles worldwide.

As the largest energy consumers and greenhouse gas emitters, China and the United 

States are undoubtedly the two crucial players in creating a new environmental regime. 

According to one estimate, in 2007, the United States accounted for about 20 percent of 

the world’s total energy-related carbon dioxide emissions while China accounted for 21 percent.22 At least at the international level, both sides seem to understand the seriousness of 

the issue as well as the need for individual and joint efforts. In a joint statement, the two 

countries agreed that “a vigorous response is necessary and that international cooperation 

is indispensible in responding to this challenge.”23 Both Beijing and Washington have begun 

work to increase the use of clean energy as well as develop new energy sources. Though 

China is arguably the world’s largest greenhouse gas emitter, it also ranks first in installed 

hydroelectric power capacity, nuclear power capacity under construction, the coverage of 
8

solar water panels, and photovoltaic power capacity.24 Meanwhile, since Obama entered 

office, the United States has become more active in developing its green economy. The 

two countries have also agreed to cooperate in a wide range of areas related to energy and 

the environment,25 establishing the China-U.S. Energy Research Center and launching the 

China-U.S. Electric Vehicles Initiative.

However, as the Copenhagen Conference indicated, China’s and the United States’ shared 

interests in combating climate change and transitioning to an economy that uses fewer 

fossil fuels does not mean that they can reach an agreement on a specific international 

arrangement, or that reducing their own greenhouse gas emissions is easy, politically or 

culturally. The crux of the issue is the respective responsibilities that each will shoulder, 

especially as China and the United States are starting from different points in taking mitigating actions. China’s carbon dioxide emissions so far have been largely a function of its 

economic growth—that is, the major source of emissions is industrial—and as a developing 

country undergoing industrialization and urbanization, China is trying to ensure that its 

mitigation responsibility does not undermine its economic and social development. In considering the United States, however, Beijing perceives that U.S. citizens’ lifestyles—living in 

big houses and driving luxurious, fuel-inefficient cars—have contributed greatly to overall 

U.S. emissions,26 and believes that adjustments in this regard do not pose a major threat 

to its economic growth. This perception explains part of China’s reluctance at the moment 

to set its peak time of emission or emission reduction targets: If the United States will 

not significantly reduce emissions, even when it is not economically painful to do so, why 

should China? The Chinese complaint may not be entirely accurate, as activities related 

to industry and electric power generation still produce significant shares of U.S. carbon 

dioxide emissions.27 But the United States, as the largest developed economy, should be 

more sympathetic with the pressure that China bears in developing its economy and raising 

the living standards of its people. U.S. political elites should make more serious efforts to 

reduce the country’s own greenhouse gas emissions as well as provide assistance to others 

to do likewise.

Moreover, despite its size and immense share in global economic activity, China is still 

in many ways a developing country. Its environmental record may be found wanting when 

compared with the European Union, but not when compared with other large developing 

countries, such as India or Brazil. China is the most vigorous major developing country in 

reducing greenhouse gas emissions and deserves recognition and reward from developed 

countries for this, including financial assistance, technology and capacity-building support, 

and market access. This could help stimulate other developing countries to follow China’s 

example in emission reduction. That said, China should be more conscious of its status as 

the largest greenhouse gas emitter and its role as a major player on the international stage. 

While making serious domestic efforts in cutting its carbon emission, Beijing should also 

work harder to promote international accord on environmental issues. At the Cancun climate 

change conference held in December 2010, China made strides to make its commitments 

more measurable, reportable, and verifiable, setting a good example for developing countries. It should stay in close consultations with them and lead them in transitioning to a 

low-carbon economy, while simultaneously acting as a bridge between the developing and 

developed worlds, helping forge a deal between them.

Meanwhile, even as the Obama administration has adopted a more active attitude than 

the previous administration toward combating climate change, in taking mitigating action, 

Washington appears to be progressive internationally while conservative internally; in promoting international cooperation, Washington is politically enthusiastic but economically 

and technologically reluctant. Among developed countries, the European Union, not the 

United States, leads efforts to seek an international accord on addressing climate change. 

China is the most vigorous 

major developing country 

in reducing greenhouse 

gas emissions and deserves 

recognition and reward. 
9

This obviously contradicts the United States’ self-assumed leadership position in the world. 

The Obama administration should make more serious efforts both internally (e.g., pushing 

Congress to pass the American Clean Energy and Security Act) and externally (e.g., providing 

financial and technological assistance to developing countries in their emission-reduction 

efforts) to foster an international regime that encourages all countries to lower their greenhouse gas emissions and implement other policies that benefit the environment. A more 

progressive U.S. policy in managing climate change could drive China to make even more 

rigorous efforts unilaterally and multilaterally.

Active Sino-U.S. cooperation and leadership in the making of a new international environmental regime could depart from the traditional political and economic themes of international affairs, suggesting new avenues for further partnership while creating universal 

and enduring benefits for the international community. During the latter part of the Cold 

War, China and the United States cooperated in checking Soviet expansion for the sake of 

regional and global peace and stability. Today, creating a healthier living environment for 

humankind is arguably the most important challenge of the century; there is no alternative 

to making a difference. Successful Sino-U.S. leadership in this regard could contribute to 

forging a greater partnership between the two countries generally. If respect for each other’s 

core interests is one leg of the partnership, development of common interests is the other. 

They work to support each other and move bilateral relations forward.

Forging Partnership

If developments in the first decade of the twenty-first century tell us anything about the 

future of Sino-U.S. relations, one thing should be clear: As China has become a major global 

player, and as the international community faces a series of political, economic, and environmental challenges, China and the United States have to become genuine partners, not 

based on shared ideology or traditional geopolitical interests, but on the needs of global 

governance. China and the United States need not establish a formal group, as in the proposed G-2,28 but they do need to provide strong and effective global leadership through 

substantial and enduring cooperation. If Beijing and Washington cannot develop a mature 

partnership in the next decade, it will be a major setback not only for both countries, but 

also for the international community. 

Cooperation between China and the United States must begin, however, with each party’s 

greater respect for the other’s legitimate core interests. As President Hu Jintao emphasized, 

“China and the United States differ in national conditions, and it is only natural that the 

two sides may disagree on some issues. What is important is to respect and accommodate 

each other’s core interests and major concerns, appropriately handle the sensitive issues 

and strengthen the foundation of mutual trust.”29 U.S. dealings in areas of China’s core 

interests affect China’s judgment of U.S. strategic intention. Further, although the United 

States has a greater ability to affect China’s core interests than vice versa, China’s economic 

capability and international influence are increasing rapidly, and are more and more capable 

of affecting U.S. core interests. The United States is thus doing itself a favor in respecting 

China’s core interests, as this can encourage China to reciprocate while its material power 

and international influence grow. Finally, as the world’s two largest economies and as permanent members of the UN Security Council, both countries should not allow their bilateral 

differences to obstruct cooperation in multilateral contexts or preclude the opportunity 

to provide public goods, such as promoting regional and global security, securing a robust 

international economic system, and creating a better international environmental regime.

Perhaps most important, however, is to keep an open mind to new thinking in fostering cooperation and creating areas of common interest. The global political and economic 

If respect for each other’s 

core interests is one leg of the 

partnership, development of 

common interests is the other. 
10

landscape is changing rapidly: The Sino-U.S. relationship is evolving constantly as China 

becomes stronger and more confident and the two countries become more deeply interdependent. For Beijing and Washington, the challenge of better managing bilateral relations 

lies in how quickly and effectively they can adjust their respective thinking and policies as 

conditions change. After the Cold War, when the United States prioritized the nonproliferation of weapons of mass destruction in its national security agenda and pushed China 

on this issue, Beijing, originally not so forthcoming and accommodating to U.S. concerns, 

came to realize the importance of the issue to U.S. core interests as well as international 

peace at large. Beijing then adjusted its policy and practice, removing a major obstacle to 

bilateral relations. Today, a major challenge for the United States lies in overcoming its old 

thinking and policy inertia to improve relations with a rising and rapidly changing China. For 

example, its long-held policy of arms sale to Taiwan should be reexamined: The rationale for 

maintaining a balance of power across the Taiwan Strait is outdated, and China tolerates it 

less and less. Easing the U.S. position on this issue could open the door to cooperation on 

many others, from trade to the environment, and greatly enhance the prospect of Sino-U.S. 

partnership in the twenty-first century.

Notes

1. Ministry of Foreign Affairs of the People’s Republic of China, “Hu Jintao Meets with His U.S. Counterpart Obama,” 

press release, April 13, 2010, http://www.fmprc.gov.cn/eng/wjdt/wshd/t679481.htm.

2. Ministry of Foreign Affairs of the People’s Republic of China, “China-U.S. Joint Statement,” November 17, 2009, 

Beijing, http://www.fmprc.gov.cn/eng/wjb/zzjg/bmdyzs/xwlb/t629497.htm.

3. Embassy of the People’s Republic of China in the United States of America, “China-U.S. Joint Statement,” 

October 29, 1997, http://www.china-embassy.org/eng/zmgx/zywj/t36259.htm.

4. Author’s interview with U.S. diplomat from its embassy in China, March 1, 2011, Shanghai.

5. Ministry of Foreign Affairs of the People’s Republic of China, “China-U.S. Joint Statement,” January 19, 2011, 

Washington, DC, http://www.fmprc.gov.cn/eng/wjdt/2649/t788173.htm.

6. Address by Vice Foreign Minister Cui Tiankai at the Second Lanting Forum, “On the Theme of China-U.S. Relations 

in the New Era”, January 14, 2011, http://www.fmprc.gov.cn/eng/wjdt/zyjh/t786020.htm.

7. “Remarks by President Obama and President Hu of the People’s Republic of China at Official Arrival Ceremony,” 

Office of the Press Secretary, The White House, January 19, 2011, http://www.whitehouse.gov/thepress-office/2011/01/19/remarks-president-obama-and-president-hu-peoples-republic-china-official.

8. Robert Ellsworth, Andrew Goodpaster, and Rita Hauser, co-chairs, America’s National Interests: A Report from The 

Commission on America’s National Interests, 2000 (Washington, DC: Report for Commission on America’s National 

Interests, 2000), 5–8. 

9. Yang Yi, “Navigating Stormy Water: The Sino-American Security Dilemma at Sea,” China Security 6, no. 3 (2010): 

105–111.

10. C.S. Eliot Kang, “The Four-Party Peace Talks: Lost without a Map,” Comparative Strategy 17, no. 4 (1998): 

327–44.

11. Calculated in terms of gross domestic product under purchasing power parity, based on data from the Conference 

Board, “Global Economic Outlook 2011,” http://www.conference-board.org/data/globaloutlook.cfm.

12. According to the Chinese Ministry of Commerce, in 2009, the United States initiated ten countervailing or 

antidumping investigations against China, more than twice that of 2008, with $4.54 billion worth of products 

involved. See Bureau of Fair Trade for Imports and Exports, Ministry of Commerce of the People’s Republic of China, 

“Foreign Market Access Report 2010,” 51, http://gpj.mofcom.gov.cn/accessory/201004/1271302077034.pdf.

13. Bureau of Fair Trade, “Foreign Market Access,” 2.

14. See, e.g., American Chamber of Commerce in China, 2010 White Paper on the State of American Business in China 

(Beijing: AmCham-China, 2010), 28, 30, http://web.resource.amchamchina.org/news/WP2010LR.pdf.

15. See, e.g., Bureau of Fair Trade, “Foreign Market Access,” 2.

16. Daniel H. Rosen and Thilo Hanemann, “An American Open Door? Maximizing the Benefits of Chinese Foreign 

Direct Investment,” Special Report by Center on U.S.-China Relations, Asia Society and Kissinger Institute 

on China and the United States, Woodrow Wilson International Center for Scholars, May 2011, http://media.

asiasociety.org/ChinaFDI/AnAmericanOpenDoor_FINAL.pdf, 13.

17. See, e.g., Bureau of Fair Trade, “Foreign Market Access,” 85–86.

18. See Edward M. Graham and David M. Marchick, U.S. National Security and Foreign Direct Investment (Washington, 

DC: Peterson Institute for International Economics, 2006).

19. Doug Palmer, “U.S. Lawmakers Cheer as China Steel Firm Backs Out,” Reuters, Washington, DC, August 19, 2010, 

http://cn.reuters.com/article/companyNews/idCNN1926784020100819.

20. Bureau of Fair Trade, “Foreign Market Access,” 72. 

21. “AmCham China Says US Export Controls Hurt Sales,” Reuters, Beijing, May 14, 2009. 
11

22. U.S. Energy Information Administration, Emissions of Greenhouse Gases in the United States 2009 (Washington, 

DC: U.S. Energy Information Administration, 2011), http://www.eia.gov/environment/emissions/ghg_report/

pdf/0573(2009).pdf, 8.

23. Ministry of Foreign Affairs, “China-U.S. Joint Statement.”

24. Premier Wen Jiabao, “Build Consensus and Strengthen Cooperation to Advance the Historical Process of 

Combating Climate Change,” address at the Copenhagen climate change summit, December 18, 2009, http://

www.fmprc.gov.cn/eng/wjdt/zyjh/t647091.htm.

25. See the Memorandum of Understanding to Enhance Cooperation on Climate Change, Energy, and Environment 

between the Government of the United States of America and the Government of the People’s Republic of China, 

http://www.state.gov/documents/organization/126802.pdf.

26. For instance, in 2009, transportation activities (excluding international bunker fuels) accounted for 33 percent 

of emissions from fossil fuel combustion in the United States, and nearly 65 percent of those emissions resulted 

from gasoline consumption for personal vehicles. Industrial activity accounted for 26 percent of carbon dioxide 

emissions from fossil fuel combustion. Moreover, from 1990 to 2009, transportation emissions rose by 16 percent, 

while emissions from industry have steadily declined. See executive summary in U.S. Environmental Protection 

Agency, “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2009,” Washington, DC, April 15, 2011, 

http://www.epa.gov/climatechange/emissions/downloads11/US-GHG-Inventory-2011-Complete_Report.pdf, 

8. For China, calculated from the data provided by the National Bureau of Statistics of China, in 2010, industrial 

activity accounted for 70.7 percent of carbon dioxide emissions while transportation and telecommunication 

activities accounted for only 7.27 percent. See National Bureau of Statistics of China, China Energy Statistical 

Yearbook 2010 (Beijing: China Statistics Press, 2011). 

27. U.S. Environmental Protection Agency, “Inventory of U.S. Greenhouse Gas Emissions.”

28. See C. Fred Bergsten, The United States and the World Economy (Washington, DC: Peterson Institute for 

International Economics, 2005); “A Partnership of Equals: How Washington Should Respond to China’s Economic 

Challenges,” Foreign Affairs 87, no. 4 (July/August 2008): 57–69.

29. President Hu Jintao, “Endeavor to Build a Positive, Cooperative, and Comprehensive China-U.S. Relationship for 

the 21st Century,” address at the opening session of the second round of the China-U.S. Strategic and Economic 

Dialogue, Beijing, May 24, 2010, http://www.fmprc.gov.cn/eng/wjdt/zyjh/t696706.htm.
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An online edition of this and related 

reports can be found on our Web site 

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Of Related Interest

•	 The Need to Pursue Mutual Interests in U.S.-PRC Relations by Thomas J. Christensen (Special 

Report, April 2011)

•	 Chinese Negotiating Behavior: Pursuing Interests Through ‘Old Friends’ by Richard H. 

Solomon (1999)

•	 Managing Crisis and Sustaining Peace between China and the United States by Wu Xinbo 

(Peaceworks, April 2008)

•	 U.S.-China Cooperation on the Problem of Failing States and Transnational Threats by 

Banning Garrett and Jonathan Adams (Special Report, September 2004)

•	 The China Challenge in the Twenty-First Century: Implications for U.S. Foreign Policy by Chen 

Jian (Peaceworks, June 1998)