Editor's Note: The second round of China-US diplomatic and security dialogue was held in Washington on Friday. It took place when trade tensions between the two countries are simmering. Where are bilateral relations going? What is the significance of the dialogue? Global Times (GT) reporter Wang Wenwen talked to Avery Goldstein (Goldstein), director of the Centre for the Study of Contemporary China at the University of Pennsylvania, about these issues.

Photo: Xinhua

GT: How would you analyse China-US relations in the past year or so?

Goldstein: I would say that the bilateral relations have gotten significantly worse over the past year. But the reality is they began to worsen even during the second term of president Obama. There are a lot of issues over which the US and China have conflicts, and there are relatively fewer areas in which close cooperation continues, such as climate change, anti-terrorism and, until 2018, the Iran nuclear deal. But the relationship had begun to move in a direction such that by around the 2016 election, both the Democrats and Republicans were fairly united in terms of wanting to push a tougher line against China. So even if Hillary Clinton had won, her advisors would have adopted a much tougher approach toward China.

The Trump administration, however, brought on board people who were much more determined to not just confront China but to confront it in a way that suggests it's unclear whether confrontation is part of a negotiating strategy to reset the relationship or whether it's just a long-term strategy of confrontation in the hope of keeping China down.

Although this change was understood during his first year in office, at first President Trump didn't really act much on the China policy, which was significant. It was really only in last May or June that you saw steps toward implementing policies that were going to make the relationship more difficult, particularly on economic issues.

The economic conflict is not only a trade war, even though that's how folks refer to it. Trade is only a part of it, and maybe the smallest part. It's about investment, supply chains, and the security consequences of economic interdependence with China. It raises questions about cyber security, technological security, intellectual property security and ultimately military security - now including concerns in the US about the role that supply chain links to China might have in the production of US military equipment.

At its core, the fundamental problem between the US and China (now under President Trump, but this is a view shared by many Democrats is a concern in Washington about what Beijing's growing wealth and power mean for the US and its interests in the world.

GT: What are the conflicts of interests between the two?

Goldstein: The conflicts of interest are overstated. Most of the concern focuses on China's rising power. Power is not an interest. The question is what is the interest that makes you nervous about Chinese power. Many thought the US had an interest, at least before President Trump, in seeing general change in the nature of regimes around the world becoming more democratic, promoting the free flow of information on the internet and sharing values that the US thinks are in part universal values. The US hoped to see these values embraced around the world. China definitely doesn't agree with that. So, I suppose that's one area where the US and China have a conflict of interest.

But in terms of territory, for example, the US and China have no disputes. There is, however, a conflict of interest over freedom of navigation in the oceans. I don't actually believe that this is a fundamental conflict of interest, because outside of the South China Sea, China also believes in the same principles of freedom of navigation as the US, especially since I think that China will one day want to be able to do what the US does in terms of the freedom of navigation close to the US.

It's really hard to figure out what the serious conflicts of interest are, unless you believe, as some in the Trump administration appear to, that economics is a zero-sum game; that if China gets rich, America suffers. It seems that the Trump administration's view on trade, for example, is not one that sees a growing pie, but a fixed pie in which if I get a bigger slice, you get a smaller one.

GT: What is the US' fear of China?

Goldstein: The US enjoys being the most powerful country by a wide margin. A realistic assessment of military capabilities, economic capabilities and technological capabilities shows that China is still very far behind. But the US does not want to wait until China closes the gap too much because under the current circumstances, in most places around the world the US can operate without concerns of being prevented from doing what it wants. The exception is near China. China today is strong enough that even though the US has the military power to have its way, it has become very risky to press its advantage near China because Beijing can punish, or inflict costs on the US and its forces.

The American concern is if it faces this situation now in East Asia, and China becomes very powerful, the US may face such a situation elsewhere. The US would prefer to remain the most powerful country in the world by a wide margin. That is the central reason it is concerned about China catching up. The Trump administration, as well as Democrats and members of both parties in the Congress, are also concerned that China is catching up, by relying on an approach to economic competition that is unfair or inappropriate.

GT: China has been pushing forward the Belt and Road initiative and the US is holding back from it. What's your take on this?

Goldstein: The reaction from the US to the Belt and Road initiative has not been helpful. What former secretary of state Tillerson and now Pompeo and others have talked about so-called debt trap diplomacy is just propaganda. The question is how many countries where China's Belt and Road projects are being implemented, in fact, are under debts that China will use to extract concessions.

The American response has mainly been to criticize China without citing evidence about what is really going on. Yet, part of the problem is that the US can do this because the Belt and Road initiative is not as transparent as it should have been or should be now. People can say that they think China is doing things that will cause problems for countries like Sri Lanka, Pakistan and countries in Africa, and that China is doing these things so that it can have leverage over those countries. It is very difficult to judge whether this is true because there is not enough evidence, and there is a lack of evidence because China has not made the evidence available.

When the Americans and Europeans invested in Africa or Latin America, there was also a local pushback because people are naturally suspicious of foreigners being present in large numbers and doing business in their country. I think the Chinese have now learned some lessons about this, especially in Africa. China's investment in Africa and trade with the continent in the first decade of the 21th century entailed making a lot of mistakes and in some cases it didn't seem to recognize that if it looked as though the deals would only benefit China and Chinese companies rather than the local people, that would eventually be a problem. At the recent Forum on China-Africa Cooperation, new agreements announced show that China has learned that it has to do a better job of ensuring that its investments and trade actually help African countries develop.

GT: US President Donald Trump is pulling the US back from globalization. How will it affect the world order?

Goldstein: I cannot think of a way to justify it. It is a disaster for the US to be in a position where our policies are undermining the international order that the US helped build. To me, it's clearly counterproductive. Unfortunately, if the US wants to destroy that order, as we see with TPP, the WTO and other multilateral institutions, the institutions may continue but without the support of the US, but they won't be the same. Once the US damages these institutions, it will be difficult to rebuild them, especially now in a world where the US and China are suspicious of each other.

GT: What could be the trigger for a head-on confrontation between the two?

Goldstein: I don't think economic issues are the most dangerous trigger, because the worst-case scenario is a military conflict. Incidents in the South China Sea or a change in US policy in the Taiwan Straits that leads China to believe that it needs to take action which would then require Washington to make a decision about a response are the sorts of dangerous situations that are most worrisome.

I'm less worried about the North Korea problem. President Trump has already effectively taken the military option off the table. It would be very difficult now for him to use military force in ways that would be very risky.  And I don't think he's able to return to putting "maximum pressure" on North Korea, not only because South Korea's view of the North has changed, but also because China would be less likely to go along this time.

GT: Under such circumstances, will the diplomatic and security dialogue be helpful?

Goldstein: I think it's important. It will not fundamentally change the relationship, but it's important to maintain the communications channels because both sides have to figure out how to manage the competition. There are 3 Cs - cooperation, competition and confrontation. For a long time, the Chinese said we want to build cooperation though there are still some areas of competition. The real concern now is not how much cooperation you can maintain, but can you ensure that we remain in the realm of competition and don't shift to confrontation.

If you are in the realm of competition, which a lot of US-China interactions are going to be, you want to make sure that it stays peaceful and that both sides don't misinterpret what the other is doing so that dangerous incidents don't get out of control.

I think the military-to-military exchanges are very important in terms of figuring out how to manage things such as US freedom of navigation and the freedom of overflight operations in the South China Sea, the East China Sea and near China's coast, how do we make sure that incidents in which ships collide don't take place. The dialogues are important for making sure that both sides understand how the other will behave.

GT: Will there be a cold war between China and the US?

Goldstein: Well, let's say this: a cold war is better than a hot war. In a sense, we are already in a cold war in which both sides now see each other largely as competitors, rivals, may be adversaries. And the US does increasingly view this as a bipolar competition with a main rival. But there are some differences. As of now, ideological issues are not significant between the two sides, which was the case during the cold war with the Soviet Union.

The world is different today. Whatever the rivalry between the US and China, it will include tensions and will lead both sides to plan for the possibility of a military conflict, as both already do. It will be different from the Cold War, however, because the Soviet Union and the Eastern European countries were completely isolated from the West. That's not the case today with China or the countries near China. And it's not going to be the case no matter how bad relations between the US and China become. East Asian countries, especially Southeast Asian countries, and Central Asian countries are not going to cut off their ties with China or the US.

One positive lesson from the Cold War that the US and China should embrace is the idea that it is not enough just to have strategic dialogues, that actual arms control talks can be useful because they help manage the competition between rivals and reduce the risks of escalation should crises and conflicts occur.