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Kenneth G. Lieberthal is one of America’s leading authorities on China’s political system, including its elite politics and its foreign policy. Lieberthal taught for decades at the University of Michigan. He served in the Clinton administration as special assistant to the president for national security affairs and senior director for Asia on the U.S. National Security Council. He has also served as an advisor to various branches of the U.S. federal government, and from 2009 to 2012 served as director of the John L. Thornton China Center at the Brookings Institution. He is the author or editor of nearly two dozen books, including Governing China: From Revolution Through Reform (1995) and Managing the China Challenge: How To Achieve Corporate Success in the People’s Republic (2012). In honor of Lieberthal’s work, the University of Michigan has renamed its China center the Kenneth G. Lieberthal and Richard H. Rogel Center for Chinese Studies. What follows are excerpts of a recent interview with Professor Lieberthal.

Q: There’s a growing sense, or perhaps some revisionist history, that over the course of U.S. engagement with China — from Nixon through the Obama administration — that these presidential administrations were relatively soft on China or naive about Beijing’s leadership and the Chinese Communist Party. You watched and even participated in some of these administrations. What was your perception of the relationship and the engagement at high levels?

A: The United States — from Nixon through Obama — was neither “soft” nor “naïve” about Beijing’s leadership or the CCP. A revisionist history now suggests that successive administrations simplistically assumed that engagement would lead to democracy in China. That was never the operative assumption. Specific goals and priorities evolved as the scope and context of US-China relations changed, and relations were often buffeted by domestic and international developments in both countries. But negotiations were typically tough and protracted, and “wins” were never easily achieved. 

From Beijing’s standpoint, however, the U.S. was often not so accommodating. Washington has sought to contain China or prevent its rise. How do you respond to that?

I never sat in on a meeting in the U.S. government where I heard anyone say, “Well, how do we disrupt China’s rise? How do we make sure that they never become wealthy and strong?” I literally never once heard that raised. Wherever I got to know Chinese well enough to understand the debates within China at a very high level — and over the years, I got to know a number of such people very well — I never met one who didn’t affirm that the Chinese assumed that U.S. would disrupt their rise, that we ultimately would constrain them in every way we could. The lessons from their modern history taught them that strong countries would work against China’s interests, no matter what friendly gestures those countries might make. That historical lesson led them to embrace a conspiracy theory about the U.S. – that no matter what we did to build bridges to China and to further their engagement with the international community, we in reality were maneuvering them into a position where we would shape and limit their future. 

Let’s talk about China’s entry into the WTO. I hear again and again that the deal heavily favored Beijing’s interests. Is there any truth to that? 

I should note that I am not a trade expert. Most of the terms of China’s 2001 accession to the WTO were negotiated primarily in the US-China bilateral accession agreement of November 1999. These terms demanded an enormous amount of China, and relatively little of the United States. China’s WTO accession agreement required that the PRC make major changes. And Beijing did a tremendous amount in order to meet its obligations, which were phased in, depending upon the issue area under the WTO. The reality is, China met most of its commitments, but there were areas where it did not, no question.

Such as…

China slow-walked its implementation of some key provisions and in other important areas — such as government procurement rules — simply failed to meet its legal obligations. In addition, it engaged in ongoing wide-ranging theft of intellectual property, provided direct and indirect subsidies to various industries, and in other ways created serious problems for a number of foreign, including American, companies. When the U.S. took China to the WTO dispute resolution system, it won most of its cases. But it was often hard to bring cases because a company had to make a formal complaint and the [U.S.] companies were — rightly — afraid that China would retaliate against them. 

But if we turn back to China’s entry into the WTO, did that really ignite a global shift away from U.S. manufacturing and towards manufacturing in China?

The shift of U.S. talent and resources from manufacturing to finances and digital technology began in the 1980s, and technology developments thereafter dramatically enhanced the ease and attractiveness of optimizing supply chains on a global – rather than on a primarily domestic – basis. Given these trends, President Clinton concluded that if you want to have a global trading system that operates along some agreed upon rules of the road, with a dispute resolution mechanism and with regular conclaves that can address rules, it is imperative to bring China into that system. It would be crazy not to, and by the late 1990s the rest of the world was prepared to do that. China’s WTO accession necessitated reforms in China that reduced trade barriers, encouraged urbanization that brought hundreds of millions of low-cost migrant workers into the urban labor force and enhanced opportunities for foreign investment into the country. This combination in turn expanded opportunities for some major U.S. corporations but also led to job losses in various sectors of the U.S. economy and a ballooning trade deficit with China. This apparently worsening bilateral deficit, in part, reflected the shift of our existing deficit from the “Asian tigers” to China, as the Asian tigers moved their final assembly operations to China and then exported the final products to the U.S. from there. Given how imports are attributed, Asian firms’ products that had previously been exported directly to the U.S. from Japan, South Korea, Taiwan and Hong Kong were now getting categorized as exports from China, even though the value added in China was often very small. 

In the economic relationship with China, where could Washington have done a better job?

The U.S. could have invested more in our domestic infrastructure, provided better support for upgrading American workers’ skills, and adopted stronger measures to counter the illegal subsidies China was providing to various industries and its theft of intellectual property. On balance, the U.S. did a very inadequate job of protecting our workers from the devastation of seeing their jobs go overseas. It adopted a very laissez-faire approach. Our government also refused to impose the taxes necessary to provide for the educational opportunities, training, health care, social safety net, etc., necessary to support a transition to a more viable employment situation. This was a matter, in short, of what we were willing to do both to curb Chinese practices and to invest domestically to be more competitive ourselves. 

Should the U.S. have put restrictions on American companies moving jobs overseas and manufacturing in China, possibly aiding their military buildup? 

We did apply some restrictions, for example on satellites launched on Chinese rockets and on a variety of other sensitive technologies. But could we simply order a broad array of American companies not to invest in the PRC? That’s very hard under U.S. law, other than to protect national security. China did not play nice, but it did what realists expected it to do. Did they do things that were illegal? Did they play hardball? Absolutely! Did we push back hard enough? It’s hard to tell because we lacked a consensus on what to do. As for building up the PLA’s capabilities, the Chinese stole a lot of American IP to build their military but they mostly stole it — primarily via cyber intrusions — directly from government agencies and defense contractors inside the U.S. The Chinese were generally not stealing it from U.S operations in China itself. 

Can you say something about the efforts, under Obama, to deal with the huge trade imbalances?

After a slow start on trade issues, the Obama administration eventually really went after key trade and investment agreements. In Asia, it negotiated to develop the TPP [Trans-Pacific Partnership]. And it worked on getting a bilateral investment agreement [BIT] with China, a BIT based not on a positive list but on a negative list. As of early 2016, the Administration had gotten very far on TPP and was also well along on the BIT.

I remember going to talk with the senior Asia director on the NSC at about that time and saying TPP is just about ready to go. If we don’t move that through the Hill and get that signed, it will spell catastrophe for the U.S. in Asia because a lot of other countries have made extremely difficult TPP commitments, both to gain greater access to the U.S. market and to more securely anchor the U.S. in Asia for the long term. The Obama administration had left China out because if it included China at the beginning of the TPP negotiations, it felt it would take forever to negotiate the TPP agreement. They decided instead to negotiate it and if the Chinese then want to join it, we’d be in the catbird seat to get Beijing to adopt the measures that we have negotiated.

In the final analysis, though, we negotiated the TPP but never formally submitted it to the Congress. Former Secretary of State Hillary Clinton, sensitive to Democratic angst over job losses blamed on previous trade agreements, declared late in her 2016 presidential campaign first, that she could not endorse the TPP without having read its full text – and then shortly before the election, that she would never submit the TPP to the Congress if she won the election. I felt her initial comment was an understandable tactical campaign move but that her later comment was both unnecessary politically and deeply damaging to U.S. interests. Her opponent Donald Trump, of course, was set to blow up everything, knowing nothing about any of it. Our failure to join TPP and our failure to push harder to complete the BIT agreement set us up very badly for addressing the really big issues both bilaterally with China and multilaterally in Asia. Hillary’s preemptively backing away from TPP was such a killer that the Japanese went ahead and kept the effort together in slightly modified form (renamed as the CPTPP), and all the other parties signed it. And as of 2022, as one would have expected, it looks like a number of other major economies, including potentially the Chinese, are planning to join the CPTPP. The Chinese have also promoted and finalized RCEP [Regional Comprehensive Economic Partnership]. So, the political dynamics at the conclusion of the Obama Administration effectively left important opportunities open to China to expand its influence over trade in Asia, which Beijing has skillfully pursued.

Can we shift to the so-called “pivot to Asia.” What was the objective behind this policy shift?

The idea resulted from a review undertaken early in Obama’s first term of the disposition of U.S. military, economic and diplomatic resources. The review concluded that we were over invested in wars and counterterrorism in the Middle East and had been neglecting Asia; that because Asia is where the future lies, the U.S. should rebalance to increase its attention to Asia. National Security Advisor Tom Donilon played a big role in this reassessment and became one of the major promoters of the effort to rebalance. That involved, in part, taking some military assets that we had shifted from Asia to the Middle East and moving them back to Asia. But much more important than that, to focus on developing major bilateral and multilateral trade agreements (of which the TPP was a key pillar) and to bolster our diplomatic game there. Part of that was deciding to join the East Asia summit and being a more serious, active presence, rather than being totally consumed with Afghanistan, Iraq, and the general threat of terrorism from that region. The idea was not to drop one region in order to focus 100 percent on the other – Donilon wanted to effect a rebalance, not a pivot. The phraseology got twisted, though, in the State Department, which spoke of a “pivot” to Asia instead of a “rebalance.” And “pivot” proved a more attractive term to the media, evidently because “rebalance” sounds sort of squishy. The pivot was initially especially visible on the military side, because the U.S. quickly began to move military resources that had been stripped out of our PACOM area of responsibility back to Asia. And so, the pivot became something that increased our security presence and obligations but did not pick up sufficiently on the economic side. I wrote at the time, [A memo to President Obama: “Bringing Beijing Back in”] that Asia is especially important as a dynamic economic opportunity, with the military needing to devote sufficient resources to maintain stability in Asia so that the economic and diplomatic sides could work. After all, the economic side is a profit center, while military commitments are a cost center. But we were moving more rapidly and visibly on the military side than on the economic side. And the Chinese saw that as a threat, as something aimed right at them. 

What can you say in general about President Trump’s policies towards China? There was a trade war, sparring over Covid and Hong Kong and even calls for regime change.

President Trump vastly shook up China policy, but he simultaneously shook up policy toward almost all U.S. allies and often denigrated even basic U.S. foreign policy principles. His approach was self-centered, disdainful of past American policies and commitments, and wildly erratic over time. While he reserved special ire for China, I felt he greatly weakened the United States throughout the region. Trashing the TPP, withdrawing from the Paris Climate Agreement, treating alliance commitments as pay-for-protection deals, and related activities made the U.S. an unreliable partner, and Trump’s refusal to accept his defeat in the 2020 election inevitably affects Biden’s efforts to restore U.S. credibility now — even the possibility of a Trump victory in 2024 that could unravel Biden administration commitments casts a shadow over the future. Also, with [Secretary of State Mike] Pompeo, [advisor Peter] Navarro and [deputy National Security Advisor Matt] Pottinger, the Trump administration ultimately explicitly posited overthrowing the CCP as the goal of its China policy. Adjusting and toughening economic and trade policies toward China and other measures to deal with Beijing’s increasingly state-focused economic policies at home and assertiveness abroad would have been high on the agenda of a Clinton presidency as well as a Trump administration. That is, China bears considerable responsibility for the directions of change in U.S. policy, but Trump justified, promoted, and imposed policies that on balance were counterproductive in many cases, that reinforced China’s darkest assumptions about U.S. intentions, and that reduced the ability of any future US administration to gain the confidence of its Asian allies and partners.

What can you say about the events that have unfolded in Xinjiang, and the U.S. decision to call this an act of genocide?

I traveled to Xinjiang for the first and only time in 2017. Frankly, I was astonished at the pervasive, in-your-face repression that was everywhere in evidence. There was nothing subtle about it. It was awful. Since then, China has implemented huge additional coercive measures to suppress Uighur identity and religious practices. I believe Xi Jinping is genuinely concerned about terrorism originating in Xinjiang. I do not think that is fake at all. But his measures could well be creating longer term problems there. I personally do not regard this as amounting to “genocide.” To me, genocide is literally the physical elimination of a people. Xi’s policies in in Xinjiang are certainly a powerful effort at cultural genocide, but not mass physical extermination. So frankly, if I were [Secretary of State] Tony Blinken, I would not have said when I was about to become secretary of state that yes, in Xinjiang we are witnessing genocide. As of now, I believe the U.S. is the only country in the world to apply that term to Xinjiang. But still, what’s going on there is horrendous.

What’s your assessment of Xi Jinping?

I was initially impressed with Xi. He immediately tackled a monumental problem of corruption, sought to inspire confidence by touting the “China dream” (albeit taking more than a year to begin to flesh out the specifics of what he meant by that), initiated the massive One Belt, One Road program (now called the BRI – Belt and Road Initiative) to build infrastructure to increase connectivity abroad, and gave inconsistent but potentially hopeful indications of his support for very wide-ranging economic reforms. That was an ambitious agenda that reached far beyond pre-2012 expectations of him. And Xi did this with a flare for marketing that breathed fresh air into Beijing’s generally staid and formulaic political rhetoric.

Xi’s record since those early years has been far more concerning. He has concentrated political power in his own hands and seems now to consult with only a narrow group of colleagues, carried out a ruthless and fundamentally extra-judicial anti-corruption campaign that continues to reverberate to this day, cultivated a pervasive personality cult, and both articulated and operationalized the dictum that “the Party leads everything, north, south, east and west.” Xi has also vastly increased domestic surveillance and censorship to the point where there is no room in the media for open debate on policy issues and options, sharply curtailed civil society and dramatically limited substantive input from NGOs and the private sector, drastically curtailed Chinese citizens’ access to information from abroad, and largely closed the country off from foreigners since early 2020. Of critical importance, Xi upended the leadership succession system, returning succession to a potential source of conflict and instability within the Party and state. In short, Xi has concentrated power in his hands, fostered a suffocating personality cult, reduced input from other officials, local leaders, the private sector, and civil society, and undermined the basis for an agreed-upon succession process.

Xi Jinping has done all this to give himself the power and opportunity to shape China’s future as it rises to major power status and power. He may be successful in important parts of his agenda, given his control over appointments to high political office, over information, and over the mobilization capabilities of the state, the military and security forces. But he has in the process undone many of the major political, economic, social, and foreign policy reforms that had enabled China to achieve the extraordinary economic growth and enhanced international influence that marked the period of the 1980’s through 2012. 

I think future historians will look back on Xi as a transformational, high-cost leader. But the answer to the core question of whether Xi’s Draconian measures will facilitate or inhibit his overarching strategic goals of enabling China to become a high income, technologically innovative, internationally respected major power is at this point very uncertain. I have serious doubts on that score.

How is the early Biden administration doing in handling the challenges with China?

Not well. I had hoped for a more professional, pragmatic, interest-based set of China policies after the chaos of the Trump years. But while the Biden administration has made more consistent efforts to improve relations with allies and partners, it has failed in my view to develop a forward-looking strategy toward China itself. Put simply, the administration is making the following five mistakes:

It is defining our global policy in ideological terms as democracy versus autocracy. This is a self-restricting framing, as many countries that are not liberal democracies agree with the U.S. on important China policy areas but are unwilling to side with us on the basis of helping democracies defeat autocracies. And, of course, this framing radically reduces the prospects for meaningful dialogue with Beijing. Ironically, the Biden administration is promoting this framing just when it struggles every day to sustain our democracy at home.

I had hoped for a more professional, pragmatic, interest-based set of China policies after the chaos of the Trump years. But while we have made more consistent efforts to improve relations with allies and partners, it has failed, in my view, to develop a forward-looking strategy toward China itself.

It is pegging the U.S. approach to China primarily in terms of “competition.” But the administration has not tried to define the concrete goals, priorities, tools and benchmarks to explain and evaluate this “competition.” As long as this substantive vacuum persists, there is no strategy to handle the challenges China presents. The U.S. instead is being reactive and defensive.

While China is pursuing very active bilateral and multilateral trade and investment policies, the Biden administration seems frightened to take any meaningful trade initiatives in Asia. It promises to articulate an economic framework for Asia but is in fact adopting increasingly protectionist approaches to trade and investment. That is, to put it mildly, not attractive to our friends and allies as we seek to compete with China.

The U.S. should be doing some very tough analysis of what it will take to avoid a war with China. Regionally, it has effectively enhanced our security ties with friends and allies throughout Asia. But the one issue on which military conflict with China is most likely is Taiwan and, to date, our policies toward Taiwan instead seem to be moving in directions that increase rather than mitigate the chances of military conflict across the Strait. We need to take the initiative to develop a senior-level strategic dialogue with China that can clarify and address red lines on both sides to avoid US-China conflict over Taiwan. In addition, senior-level dialogues on nuclear proliferation, nuclear arms control, crisis management and related confidence building measures should be high on our security agenda with China.

Finally, perhaps the most important thing the U.S. can do to handle its challenges with China is to get our own domestic house in order. Our domestic political polarization and dysfunction is reinforcing China’s view that the U.S. is in irreversible decline but still has the capacity and perhaps the desperation to strike out against them. Beijing therefore sees little hope that the U.S. will in the coming few decades be other than a country that tries to disrupt China’s rise and foment division and potential regime change in the PRC. That presents China with few incentives to pursue cooperation with us to tackle the major challenges that both countries face.

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