In a column two weeks ago, I described the outlines of a proposed grand-strategic bargain between China and the United States. Basically, the "term sheet" that I helped draw up proposed various bilateral compromises over the security issues -- Taiwan, North Korea, Iran and the South China Sea, among others -- that keep the relationship clouded by profound strategic mistrust. The resulting climate of confidence would encourage Beijing to invest some of the trillions of dollars it holds more directly into our economy, instead of simply using them to facilitate our skyrocketing public debt. Since the column appeared, I and my co-authors spent two weeks in Beijing meeting with top government-sponsored think tanks and retired Chinese senior diplomats to discuss and revise the proposal. I thought it would be useful to report on this dialogue.
First of all, the Chinese experts we engaged were generally stunned but excited by the comprehensive nature of the proposal. Numbed by years of the "separate tracks" that characterize U.S.-China diplomacy, most confessed that they couldn't have dreamt up something so integrated. Not that they were intimidated by it, because they weren't. It's just that, compared to the existing policymaking environment, we had gone far out on a limb in making what many of them called a "courageous" proposal that they deeply admired. This suggests that the Chinese are open to advancing the bilateral relationship in a dramatic fashion, even if most of them are conditioned to accept the minute improvements generated by the twice-a-year Strategic and Economic Dialogue (SED). But in general, they're underwhelmed by the SED, viewing it mostly as a hedge against more-frequent and more-dramatic downturns.
Second, virtually all of the experts thought it would be spectacular if China and the United States could manage such a breakthrough right now, as everybody recognized that the relationship is currently stuck in a rut, and is likely to get worse before it gets better. Yes, the normal Chinese instinct is to keep talking and hope things will improve over the long haul. But most were also significantly disappointed with President Barack Obama, whose initial promise of a new, more mature relationship seems to have gone by the wayside over the past year.