Centre of gravity

US elder statesman Henry Kissinger has said that the world’s “center of gravity” is shifting, China & US must establish strong bilateral ties.

The former Secretary of State said that the alternative would result in global destruction.

Background

United States and China are two of the largest economies in the world. Both countries consider the other as a partner in trade and an adversary in geopolitics.

Diplomatic relations between US and China was first established in 1844 with the Treaty of Wanghia. This agreement allowed the US to trade in Chinese ports. After the Qing Dynasty was overthrown, in 1911, US recognized the legitimacy of the Republic of China (ROC) government.

When civil war broke out in 1945, between Communist Party of China (CPC) and the ROC, the US supported ROC. CPC gradually gained control of the mainland and this led to the formation of People’s Republic of China. By the 1970s, US realized the geopolitical compulsion to establish relations with PRC and officially recognized the government. It continued its unofficial support to Taiwan through various trade and military deals

The two countries have established a robust framework of trade. Currently, the US-China trade relationship supports around 2.6 million jobs in the United States. In 2015, China purchased $165 billion in goods and services from the United States in 2015

After Japan, China is the US’ biggest overseas creditor. It’s holdings of US debt is around $1.12 trillion dollars.

Analysis

In July 2017, delegates from US and China concluded trade discussions that ended on a strained note. The two sides could not arrive at a consensus of bridging the US$ 347 billion trade deficit currently in favor of China.

US President Donald Trump has often been critical of China and the ties shared by the two countries. He has blamed China for loss of jobs within the US. The US President has also threatened to impose tariffs on Chinese steel. Additionally, Trump has often expressed his frustration with China for not countering North Korea.

Henry Kissinger is an elder statesman in the US who has served as the nation’s Secretary of State and National Security Advisor under the presidential administrations of Richard Nixon and Gerald Ford. During an event at Columbia University, he urged the US towards greater cooperation with China. He said that the world’s “center of gravity” was shifting and that the alternate to friendly relations would be global destruction.

Kissinger spoke about China’s Belt and Road initiative noting that the country is “seeking to connect China to Central Asia and eventually to Europe will have the practical significance of shifting the world’s centre of gravity from the Atlantic to the Pacific and will involve the cultures of Eurasia, each of whom will have to decide what relationship to this region they will see, and so will the United States.”

Kissinger had played a key role in fostering relations between US and China in the past. He was a key component in President Richard Nixon’s visit to China in 1972.

Kissinger urged American companies to engage in OBOR initiative. China is also encouraging the engagement. China’s Ambassador to Washington Cui Tiankai said, “We very much welcome participation by American companies. This initiative is not about getting an upper hand in geopolitical or geostrategic rivalry.”

China’s vice-premier Liu Yandong is currently in United States on a one-week tour. He will be in the region to conduct a number of discussions to better US-Sino relations. There will be a formal Sino-US dialogue on social and cultural issues on September 28^th, 2017.

Assessment

Our assessment is that it will be in the best interest of both US and China to pursue friendlier relations in the changing geopolitical world. China is expanding its influence across the world and a negative relationship with the US would be detrimental for two of the largest economies in the world. However, top leaders in the US remain skeptical of China. Gen. Joseph Dunford, told the US Congress on September 26^th, 2017 that China will likely be the "greatest threat" to the US within a decade.