In Washington, a Strategic Shift on China—Toward Containment

"China represents and will remain the most significant competitor to the United States for decades to come. As such, the need for a more coherent U.S. response to increasing Chinese power is long overdue."

The words are dispassionate: "significant competitor"; not "enemy.'' They are careful: "A more coherent response." That suggests that heretofore the U.S. response to increasing Chinese power has been at least somewhat coherent. But there should be no mistaking the significance of the above sentences. They are the first of many in a lengthy new report issued by the Council on Foreign Relations. For decades, the "council," as the cognoscenti call it, has been the core of the American foreign policy establishment. When it comes to foreign affairs, it doesn't just regurgitate the conventional wisdom, it creates it.

Given that, the just issued report on U.S.-China relations, co-authored by Robert Blackwill, one of the most distinguished American diplomats of his generation, signifies a major shift in establishment thinking about China. And the conclusion is, as these things go, astonishing: The U.S. should place "less strategic emphasis on the goal of integrating China into the international system, and more on balancing China's rise." Which is to say, we should basically chuck what has been U.S. policy for the past three decades, and try something that sounds almost (but not quite) like containment.

The report comes amidst whispers that senior foreign policy grandees of former administrations—both Democratic and Republican—have started to sour on hopes that Beijing could be brought without much rancor into the existing international order. They worry that President Xi Jinping is more interested in becoming No. 1, as opposed to co-existing with the U.S. at the apex of the international pecking order. It also comes amidst the Obama administration's so-called pivot to Asia, which it goes to great lengths to insist is not about containing China. The only problem with that claim is that there isn't anybody among traditional U.S. allies in the region who believes it. And the China as rival and not "strategic partner"—which is what the Obama administration used to call it—is increasingly evident. Pushing for support for the Trans Pacific Partnership—a broad free trade deal with 12 Pacific nations—Obama recently told The Wall Street Journal that "if we don't write the rules, China will write the rules out in that region."

As that kind of "us-or-them" rhetoric indicates, even the economic relationship between the two countries—which is its fundamental core—is under some strain. In their recently released annual survey of business conditions in China, the American chambers of commerce in both Shanghai and Beijing recently reported an uptick in the number of their members concerned about increasing regulatory and legal scrutiny from the government in Beijing.

The conventional wisdom is that the current leadership in Beijing watches all this and, unified, sets an ever more defiant course both abroad and at home. Beijing, it is said, suspects the U.S. of trying to encircle China—of trying to blunt if not reverse its rise. So it flexes its muscles in the east and south China seas, and moves to exert ever more influence to its west through massive government-led investment plans to create a new "silk road." (On April 21, Xi was in Islamabad hawking an aid and investment deal with Pakistan with a headline number—$46 billion—that drew attention around the world.)

There is, to be sure, an element of truth in all that. But it's also more complicated. No one at any level of the Chinese leadership ever draws attention to himself by publicly questioning the party line; but there remain people in the Beijing government who can safely be called pro-Western, and who believe a strong relationship with the United States is in the country's best interest. And they are watching, with increasing (if still muted) concern, the tide go out on what has been an era of bipartisan policy in Washington toward Beijing: one that accentuated the economic benefits to both sides in the short run, with the hope that in longer run, increasing prosperity in China would bring about some form of political liberalization.

Those days—and hopes—are gone. And the day may be drawing near when a behind-the-scenes debate breaks out in Beijing that poses a straightforward question: Who lost Washington?

In the U.S., of course, "Who lost China?" was a rancorous Cold War–era debate in the wake of the 1949 Communist takeover in Beijing. The second-guessing in China over current foreign policy will not, of course, be so public, but that doesn't mean it won't come. A scholar at a government-affiliated think tank with close ties to several senior party officials acknowledges that "there are some questions in the wind now, certainly. No one quite says, "Who lost Washington?"—we're not there yet—but people I would call "internationalists" with a pro-Western bias wonder where this is headed, and "whether we've played our hand intelligently both in terms of relations with Washington but also in our own backyard."

Those questions have to do with the perception that Beijing over the past few years has bullied small neighbors like the Philippines and Vietnam, as well as whether it needed to pick a fight with Japan over the Senkaku Islands. (China refers to them as the Diaoyu Islands and calls them "disputed"; Tokyo denies there's any doubt they belong to Japan.)

Beijing points out—and diplomats in Tokyo concur—that the two countries worked hard over the last year to drain some of the poison out of the islands dispute, which had alarmed Washington, and, as one former U.S. diplomat says, put the "pro-China crowd at the State Department very much on the defensive.'' For now, the issue has receded, and foreign ministry officials in Beijing say the effort shows that the notion that "nationalistic hawks are running wild" in the Chinese capital, as the government think tank scholar puts it, is overblown.

But there's little question that any measure of trust between Beijing and Washington has diminished; a foreign ministry official late last year told Newsweek that there is "no question" that relations between the two countries were "better when George W. Bush was president than they are today."

The question is, to what extent does that matter to Beijing? Foreign diplomats there seem increasingly to think it's not that big a deal to Xi & Co.; Beijing is increasingly suspicious of the U.S. as a rival in Asia and increasingly convinced that its own ascendancy is irreversible. The quest for supremacy in the Pacific, therefore, is likely to intensify.

If true, those attitudes will have consequences. There is increasing talk in Washington that the U.S. needs to reverse the shrinkage in its Navy. Most of the leading Republican presidential candidates support an increase in the number of aircraft carriers in the U.S. fleet, as well as a modernized version of the so-called Ohio class of nuclear submarines, which are slated to go out of business in just over a decade. Nor is it unthinkable that Hillary Clinton, should she be Barack Obama's successor in less than two years, would add more military heft to the so-called pivot to Asia—particularly if U.S. policy is to "balance" China's rise. There is also growing anger over Beijing's purported cyber offensive against both the U.S. government and big U.S. corporations. (And let's face it, the Fortune 500 is the core of Beijing's constituency in the United States.)

If China, in fact, doesn't care that it's "losing Washington," that only makes it more likely that it will lose it. And at the moment, that appears to be the road Beijing is on.