The winds are blowing West, and this is good for US-China relations and addressing global problems.
Why am I more than cautiously optimistic?
- The "feeling out" period often associated with new administrations will be much shorter and less bumpy than had Romney prevailed. Secretary Clinton and perhaps some other cabinet secretaries will likely step down in the Spring, but there should be substantial continuity in personnel. More change will come on the Chinese side, but most of the new leaders have already been on the scene and engaged with the US and international affairs for some time. The main adjustments will be adapting to Xi Jinping's style and the new slate of members on the Central Military Commission.
- The victory allows Obama to carry out his domestic policies with renewed vigor. Although Obama did not win a clear policy mandate, and the House of Representatives is still in Republican hands, he and the Democrats performed impressively. The economic recovery is likely to continue and improve, and the US's long-term demographic transition is likely to benefit the Democratic Party. There will be tremendous pressure on the Republican Party to give up its strategy of opposing Obama at every turn. Hence, we should see a rollback of the Bush tax cuts, full implementation of Obamacare, and greater attention to US industrial competitiveness.
- Obama's policies toward China and East Asia will continue along the same trajectory developed over the past few years. Aside from token criticism of Obama's weakness vis-a-vis the Chinese curency, Romney and the Republicans had very limited critiques of Obama's foreign policy (see the second debate). The 60-plus official bilateral fora for dialogue and cooperation will continue. At the same time, the US will proceed with using the WTO and bilateral antidumping and counterveiling duty investigations as a way to push Chinese economic policies to be less harmful to US business interests. Efforts to adopt a Trans-Pacific Partnership will continue apace and perhaps with a greater PR campaign. The US will continue to highlight the importance of freedom of transit and the peaceful solution of territorial disputes in the South China Sea and expand cooperation with countries on China's periphery. And without the specter of another election, Obama may be more willing to engage multilaterally for a mini-Doha package and a substantive deal on climate change through the UN process.
- China could be on the defensive for the next few years. In early 2009, because of the global financial crisis, Obama began his presidency in a weakened position, and China's star seemed to be rising quickly. Now things look different. It is the US that is resurgent, and there are serious concerns about China's economy, in the short term due to substantial growth in debt, and in the medium/long term due to the difficulties of shifting toward a more efficient economic growth model. Although there are understandable concerns about a flair-up with Japan, I don't expect China to assume a nationalistic defensive crouch during this period. That is because the likely new Politburo Standing Committee will be relatively reformist in character, closer in temperment to the group in power in the 1990's (not surprisingly, Jiang Zemin has had a big hand in shaping the incoming group). I expect the new Chinese administration to adopt policies that help China gradually overcome many of its economic challenges (although I don't see democratic reform on the horizon). In the near term, these problems may be serious enough to constrain China's assertiveness.
In March 2012, Kenneth Lieberthal and Wang Jisi issued an important report highlighting the strategic distrust that has seeped into the relationship. I do not see that distrust dissapating easily and replaced by a straightfoward, uanbashed partnership. However, I do think the continuity of leadership on the US side, the potential greater US confidence domestically and internationally, combined with serious challenges in a China headed by a more reformist leadership may create an environment for greater cooperation. The US may be more ready to compromise on some aspects of the Doha Round and climate change, and China may need a more stable periphery and explicit support in a way it hasn't shown of late.
Thus, in multiple ways, there is a chance to re-live the 1990's all over again, but this time get it right. When the Clinton Administration came into office, the US had vanquished the Soviets and Iraq. It took over a year for the president to drop the "Butchers of Beijing" rhetoric and extend MFN to China without condition. The relationship improved somewhat, but was still hit by the Taiwan Straits crisis and the mistaken bombing of the Chinese embassy in Belgrade.
More broadly, although the Clinton Administration got the US economy rolling again (or at least supported trends eminating from Silicon Valley and elsewhere), signed NAFTA, and got the WTO launched, more could have been done in terms of addressing climate change, limiting nuclear proliferation, enhancing mechanisms of cooperative security, and adopting policies that really fostered economic development and state-building in developing countries. That agenda was cut short by the Bush victory in 2000 and 9/11. We can't erase those 8 years, but it's possible the Bush era could be seen as an interregnum, a pause taken to deal with immediate threats that pushed back addressing deep-seated, long-term global challenges.
And if China is entering a period where they recognize a new wave of domestic reform is needed, then we really could be back in a similar situation. Of course, we cannot unwind the 2000's -- the threat of Middle East terrorism, the damage to the US economy, and China's emergence -- but with Obama repeating Clinton's successful re-election bid, it does feel a little like 1996.
And if you listen, you can hear Celine Dion singing her hit of the year, "Because You Loved Me."