On a late August weekend in 2017, a week after he was forced out as President Trump’s chief strategist, Stephen K. Bannon made a trip to the Connecticut country house of Henry A. Kissinger to talk about China.
It was more of a pilgrimage, actually: the prophet of disruption seeking out the high priest of geopolitics to make the case that Mr. Kissinger’s view of America’s relationship with China was hopelessly out of date. The two men talked for hours in the sunroom, and while they enjoyed each other’s company, they did not, in the end, see eye to eye.
“He agreed 100 percent with my analysis,” Mr. Bannon recalled, “but he disagreed with my conclusions because they were too blunt force.”
Mr. Kissinger confirmed this account, saying he told his visitor that the United States and China must strive for the “partial cooperation of countries that by normal standards might be considered enemies.”
“He has a different view,” Mr. Kissinger added dryly.
In the four decades since the United States re-established diplomatic ties with China, Mr. Kissinger and Mr. Bannon can be seen as bookends.
With his secret trip to Beijing in 1971, Mr. Kissinger kicked off an era of engagement marked by the stubborn belief that bringing China out of its isolation through trade and investment would make America safer — and perhaps make China more like America. That era now seems to be ending, giving way to a more hostile one, with a trade war encouraged by Mr. Bannon and the ascendancy of his view that the United States must confront China while it still can.
From the White House to the boardroom, from academia to the news media, American attitudes toward China have soured to an extent unseen since Mr. Kissinger’s historic trip. China’s rapid rise, and the acute sense of grievance and insecurity it has stirred in the United States, has led some to conclude, as the title of a recent book about the relationship suggested, that these two giants are “destined for war.”
The United States and China, of course, have had their ups and downs ever since the 1780s, when New England brigs first sailed to China with beaver skins and silver coins, ushering in more than a century of exchanges that sent Christian missionaries to the Middle Kingdom and Chinese railroad workers to the Wild West.
The two nations fought as allies in World War II, then faced off as foes in the Cold War, before Richard M. Nixon rekindled relations with Beijing to isolate the Soviets. The hopes generated by Deng Xiaoping’s economic opening in the 1980s were dashed by the Tiananmen Square massacre. The trade deals of the 1990s were strained when wayward American bombs destroyed the Chinese Embassy in Belgrade.
For at least a decade, Americans have blamed China for shuttered factories and jobless workers. Public views of China swung from positive to negative in 2012, according to Pew Global Research, and have remained underwater since. About 38 percent of Americans now view China favorably — down from 44 percent in 2017 — but that number is not markedly worse than it has been for the last half-decade.
Yet the current chill in the relationship seems different, less a temporary rupture than a searching reappraisal of what a status-quo superpower should do about an ambitious, formidable challenger.
The Trump administration has adopted a more confrontational stance but struggled to set clear goals and articulate a strategy for achieving them. To date, its efforts have been scattershot: trade tariffs that have rattled Beijing but also Wall Street, a foreign aid program dwarfed by China’s enormous loans for infrastructure overseas, a warning against Chinese meddling in American elections without much evidence of such activity.
The White House is channeling antagonism that extends far beyond Washington. Business executives accuse China of stealing technology from their firms. College professors suspect that some of its exchange students are spies. Military officers see its warships advancing across the Pacific.
Many Americans who embraced trade and cooperation with China had hoped that bringing it into the global economic order would, over time, pull its politics and society into a kind of convergence with the West. Yet China is heading in the opposite direction under the strongman rule of Xi Jinping, toward less political freedom and more state control of the economy — a surveillance state at home that nourishes imperial ambitions abroad. Far from modeling itself on the United States, China is presenting itself as a defiant alternative.
“In our good-hearted way, we wanted to believe that with a few more cultural exchanges, a few more visiting ballet troupes, China would come around,” said Orville H. Schell, the director of the Center on U.S.-China Relations at the Asia Society. “But Xi Jinping shut the door on that. He said, ‘Not only are we not going there, but we have our own model now.’ ”
Kevin Rudd, a former prime minister of Australia and longtime observer of China, said the political and economic changes in China under Mr. Xi, and in the United States under Mr. Trump, had shattered the consensus in both nations about how to manage the relationship. That, Mr. Rudd said, portended an uncertain — and almost certainly more dangerous — future.
“You can almost hear the ripping sound somewhere up the middle of the Pacific,” Mr. Rudd said in an interview, “and I’m not sure how that’s put back together.”
‘Tacit Allies’
Realpolitik motivated Mr. Kissinger’s outreach to China: He and Nixon saw it as a counterweight to the Soviet Union. But they were not immune to what an American diplomat, U. Alexis Johnson, called “rapturous enchantment.” After a return trip to Beijing in 1973 to open a liaison office, a euphoric Mr. Kissinger wrote to Nixon, “We have now become tacit allies.”
In the United States, China suddenly became cool. “Americans donned Mao jackets and Mao hats, stir-fried in woks, and wielded chopsticks,” the journalist John Pomfret wrote in his 2016 book, “The Beautiful Country and the Middle Kingdom.” Shortly after Nixon’s landmark trip, the Chinese cut a $392 million deal with a Texas company to build 16 fertilizer plants in China, an early sign of engagement’s bottom-line benefits.
Diplomatic relations would ebb and flow, buffeted by domestic politics in both nations. But trade across the Pacific began a relentless upward march. Companies like IBM, Citibank and Jeep were entranced by the vastness of the Chinese market, and the pioneers of engagement marveled at how quickly commerce came to define the relationship.
Even a devastating setback, the deadly crackdown on the 1989 Tiananmen Square democracy movement, did not snuff out those ties. President George Bush, who once headed the United States liaison office in Beijing, secretly sent his national security adviser, Brent Scowcroft, to Beijing to keep the relationship from going off the rails.
In March 2000, after the United States opened the door to China’s entry into the World Trade Organization, Bill Clinton laid out the case for economic integration as the best way to bring freedom to the country. In one of the more forceful arguments for engagement made by an American president, he promised that W.T.O. membership would wean China off state-owned enterprises and open its society.
“The more China liberalizes its economy, the more fully it will liberate the potential of its people — their initiative, their imagination, their remarkable spirit of enterprise,” he said. “And when individuals have the power, not just to dream but to realize their dreams, they will demand a greater say.”
Mr. Clinton’s view was widely shared at the time, and not without reason. Under President Jiang Zemin and his prime minister, Zhu Rongji, the Communist Party withdrew from large parts of the economy, encouraged private entrepreneurship and welcomed foreign investors.
Over the decades, the United States and China built the mightiest commercial relationship in history: Trade between the two ballooned from $5 billion in 1980 to $231 billion in 2004. China soon became the manufacturer of choice for T-shirts and toys, laptops and television sets. General Motors, Motorola and other American companies that invested in China made healthy profits. To satisfy the American appetite for low-cost goods, China began exporting more to Walmart alone than it did to most entire nations.
By 2006, though, China’s transition to market economics was slowing, and it began pursuing a policy of “indigenous innovation,” establishing targets to achieve dominance in high-tech industries that were traditionally the domain of the United States and Japan. By the time Barack Obama was elected, a narrative had taken hold in some quarters that letting China into the W.T.O. was a mistake.
Mr. Obama called out Beijing on the theft of American technology and intellectual property, and needled two of his advisers, Lawrence H. Summers and Jeffrey A. Bader, about their work in negotiating with China during the Clinton administration. “Did you guys give away too much?” he asked, according to Mr. Bader.
President Trump has since turned Mr. Obama’s private gibe into a political slogan. Letting China into the W.T.O., he argues, was the original sin of America’s dealings with China — a defective agreement that gave the Chinese license to steal from American companies and siphon off American jobs.
But to Charlene Barshefsky, the United States trade representative who ran the negotiations with Beijing in the 1990s, whether China should have been admitted is a “nonsensical question.”
“Of course it was going to end up in the W.T.O.,” she said.
With a fifth of the world’s population, nuclear weapons, a permanent seat in the United Nations Security Council and a track record of economic opening, China could not realistically be kept out, she argued. It already had significant access to the world’s major economies, including the United States. If it did not join the W.T.O., it would have continued to reap the benefits without being forced to open its own markets.
“The issue is, was it going to be a substantively, commercially significant deal?” Ms. Barshefsky said. “And I would argue that the proof is in the pudding.” China, she noted, now imports more goods from the world than any country besides the United States.
But with every step China took to open its markets, it erected new barriers that hobbled foreign competitors and favored its own companies. The problem was not China’s W.T.O. membership but the failure of American officials to use the tools in the agreement to force China’s compliance with the terms, Ms. Barshefsky said.
“The U.S. did the right thing,” she said. “We just didn’t continue to do the right thing.”
‘Economic Aggression’
Peter Navarro, the bomb-throwing economist who heads Mr. Trump’s trade office, said he first noticed the corrosive impact China was having on the American economy in the early 2000s, when he was teaching evening classes at the University of California, Irvine.
During the day, most of his students held down jobs. But Mr. Navarro recalled noticing that “my students were having more and more problems in the job market. It was a puzzle to me. I thought, ‘What’s going on here?’ ”
Mr. Navarro already suspected that jobs were moving to China because of its low labor costs. But after a year of research, he concluded there were four other factors at play: China’s theft of American intellectual property, its subsidies for exporters, its currency manipulation and its dearth of environmental regulations.
“All roads led to China,” he said.
The economist remade himself into a China Cassandra, publishing books like “The Coming China Wars” and “Death by China” that put him on the radical fringe of his profession. But his views dovetailed with those of Mr. Trump, who had railed for decades against the unfair trade practices of China and, earlier, Japan.
While the Japanese threat was overblown, there is little disagreement now that China contributed to the hollowing out of American manufacturing. Cheap Chinese clothing decimated textile jobs between 1973 and 2015. Chinese furniture makers wiped out their American counterparts. For blue-collar America, “Made in China” became synonymous with the ravages of globalization.
Now ensconced in the White House, Mr. Navarro has supplied the intellectual grist for Mr. Trump’s trade war with China. In June, his office published a report titled “How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World,” which accused China of preying on American companies in a variety of ways.
Other economists still dismiss Mr. Navarro’s prescription, which consists of piling on more tariffs until China agrees to fundamental changes. But privately, many businesspeople share his diagnosis. Their immediate concern is Made in China 2025, a state policy that seeks to dominate key industries by forcing American companies to hand over technology and assisting Chinese firms with subsidies.
Occasionally, American frustrations with Chinese partners and competitors spill into the open. In July 2010, the then-chief executive of General Electric, Jeff Immelt, said at a private dinner, “I am not sure that in the end they want any of us to win, or any of us to be successful.” General Electric backpedaled furiously after his comments were reported. Despite their grievances, American business executives were still afraid of antagonizing the Chinese authorities, who could order raids on their operations.
Doing business in China became even harder after the financial crisis of 2008. By that time, China had passed Japan to become America’s largest creditor, holding about $600 billion of United States Treasury notes. Chinese officials were appalled by the bankruptcy of Lehman Brothers and fearful of their own exposure. If they were always suspicious of American politicians, now they turned against their friends on Wall Street, too, taking a harder line in negotiations and rejecting their calls to open up the Chinese economy further.
“Chinese officials began to dress down Americans and skip meetings,” said James McGregor, the chairman of greater China for APCO Worldwide, who advises companies dealing with Chinese officials. “For the Chinese leadership, this was the emperor-had-no-clothes moment.”
