Investigative Summary

The U.S.-China relationship continues to be defined by differences despite a number of notable compromises and agreements including the recent accord on emissions reductions. However, recently the differences between the two giants on opposite sides of the Pacific have forced allies, neighbors, and bystanders alike to, at times, reluctantly choose a side. This insistence on choosing teams is, depending on the issue, leaving either the U.S. or China isolated and perhaps feeling threatened. This could be a dangerous proposition and these dividing issues may cause the relationship to heat up as summer approaches. The following represents five key issues highlighted by the U.S. and China over the previous month as tracked by the UCR Briefing.

‘Defections’ to the AIIB

The U.S. has found itself complaining to an increasingly disinterested audience recently, that the AIIB is a poor substitute for the World Bank as a financier for developing nations’ infrastructure projects. This they argue is due to a lack of checks ensuring good governance in countries provided with loans. However, this month saw the U.S.’s closest ally, the United Kingdom, officially apply for membership to the AIIB, and one of the U.S.’s closest Asian allies, South Korea, also followed suit. There is a good chance these are not the last close American allies to ignore Washington’s warnings and join the AIIB. Rumors swirled in March that Japan and Australia, two other strong American partners in Asia, were seriously considering joining the AIIB as well (a rumor that turned out to have some meaty substance in the end). Since the U.S. continues to keep its head in the sand and is continually espousing the need to uphold “standards for governance and environmental and social safeguards,” one cannot help but speculate as to what will happen if the U.S. is one of the few developed nations forced to view the AIIB from the outer.

China, on the other hand, seems to be revelling in the AIIB’s success, issuing numerous statements welcoming all to apply for membership and denouncing American obstructionism. With statements such as, “We will stay open and inclusive and welcome the participation of interested countries in establishing and operating the AIIB,” Beijing seems to be growing in confidence as it gathers momentum. It can even be reasonably claimed that it is almost daring the U.S. to join. Clearly a line in the sand is beginning to form, the question is: will the U.S. choose to dissolve it?

A Shield around Asia?

While there are numerous hot spots around the globe that are garnering more immediate attention, the security situation in East Asia and on the Korean peninsula is reaching a new critical juncture, as the U.S. pushes its allies to import the Terminal High Altitude Aerial Defense (THAAD) system. The issue is most poignant in South Korea where its often derided ‘evil twin,’ North Korea, poses a serious threat since it is now widely accepted that its nuclear weapon development program has matured and is now developing superior missile technology capable of delivering a nuclear warhead to Seoul.

This has led to a constant back in forth between the U.S. and China, where the U.S. noted in March, the ongoing discussions concerning THAAD within South Korean government circles and assumed that its close military partner would seek to “determine its own needs.” The U.S. also highlighted its plans to expand the missile defense program both within its own territory in Alaska and along the Pacific Coast as well as continuing cooperation in this field with the Japanese, Australian, Romanian, and Polish governments. China on the other hand continues to insist its neighbors, namely South Korea, consider regional security and the security concerns of others when exploring the possibility of importing U.S. missile defense systems. In stark contrast to the AIIB, it appears that China is the one left out in the cold on this issue. As other states in East Asia hoist the American missile shield over their respective territories, will China spend more political capital to keep South Korea from importing THAAD? Or will it pull back in an attempt to win over Seoul through other means at their disposal?

Not So Peaceful Seas

The South China Sea continues to be a stumbling block and draws major attention from all nations in the region. As China begins ‘construction’ activities on islands that it believes are part of its sovereign territory, protests have been lodged from many different circles, which sent Beijing immediately into defense mode, aggressively rejecting what it calls “outside meddling from the United States and like-minded countries.” A type of meddling that it says is most definitely unwelcome. The U.S. however is not shying away from its criticisms of China on this issue, claiming that it has consistently and frequently raised with China concerns over its large-scale land reclamation, which the U.S. believes undermines peace and stability in the South China Sea, and more broadly in the Asia Pacific region.

Beijing continues to remain defiant however, sticking to its now well-rehearsed line that China is the first country to discover the Diaoyu Dao and has exercised long-term effective administration over them, therefore justifying its activities in the area. Moreover, it continues to emphasize that it holds a clear and consistent position on the South China Sea issue. China claims it is committed to resolving disputes through bilateral negotiations. The U.S. on the other hand finds itself also very concerned with the situation in Ukraine still, and the U.S. loudly laments the violation of Ukrainian sovereignty by Russia, something that China makes no mention of. However, another point of interest is the decision by Taiwan to apply for membership to the AIIB, as well as the question of whether China would allow Taiwan to join, in-turn China’s spokesperson delivers a carefully worded response to the potentially loaded question.

The Powder Keg Continues to Go Off

The deterioration of the situation in Yemen represented the latest spark to go off in a region beset with the unfortunate realities of political instability. The situations in Iraq, Iran and Syria, as well as the fight against ISIL continues to appear prominently on the radar. However, as of late, China has tended to focus its official statements on developing cooperation with its African partners, whilst the U.S. often finds itself alone in scrambling to put out political and literal fires all over the Middle East and Africa. This seemingly was not the case in March 2015, both the U.S. and China were embroiled in a wide range of issues requiring more overt positioning, with the Chinese side unusually vocal on security matters in the region. Having to defend itself of accusations that it was being friendly toward the Taliban, China vehemently denied that there was any truth in that accusation, choosing to re-emphasize itself as a friend of Afghanistan and the Middle East region as a whole. China was also very clear that it was monitoring closely events in Yemen and evaluating its potential response to disruptions there.

The U.S. found itself in a delicate position of having to balance a nuclear deal with Iran, against the loud protestations of an aggressive Benjamin Netanyahu, where the U.S. was forced to defend its commitment to Israel's security in a very public and unequivocal manner. China was clear in its support of a nuclear deal with Iran, this was also tempered with its own congratulatory message to Netanyahu's administration on their latest victory in securing a mandate for governing Israel for another term. A sign that China, for one reason or another, is being drawn out to play a more active role in the region beyond its mere development focused goals perhaps?

Anything You Can Do, I Can Do Better

Aid has become somewhat political lately and in many cases aid also comes with ignoble motives. Often, disbursement of aid is part of a wider political push for keeping up appearances. Indeed, the competition between the U.S. and China in this area is clearly pronounced, as both nations touted their generous donations to victims of crises or persecution around the globe; China boasting of its donations to the ravaged nation of Vanuatu following a large devastating cyclone, and the U.S. highlighting the State Department-led Global Equality Fund which is focused on advancing the rights of LGBT persons around the world.

Both countries also made much of their efforts to help those suffering due to the Syrian civil war with the U.S. claiming to have donated the largest sum of aid to the effort and China noting it has ‘done its best’ to help those in need in Syria or displaced by the war. While obviously the aid provided from both governments is positive and contributes to helping those in need, one cannot help but ponder what the political outcomes of such ‘philanthropic’ efforts will be...(Continued)

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