Sino-U.S. relations have reached a turning point and are at a historic crossroads. The biggest lesson that can be learned from the more than four decades of engagement between the two countries is this: to try to change the autocratic regime in China through economic engagement is pure wishful thinking. A new consensus has begun to take shape, as evident in a recent speech by U.S. Secretary of Defense Jim Mattis about the new U.S. National Defense Strategy. Mattis said: “We will continue to prosecute the campaign against terrorists, but great-power competition [with China and Russia]—not terrorism—is now the primary focus of U.S. national security.” Despite its long-overdue arrival, this understanding holds pivotal importance, affecting the future of Sino-U.S. relations and even where the world is headed.
As part of the strategy for its “great external propaganda” campaign, China has long been alternating between “soft power” and “sharp power,” with the latter only being noticed in the past two years by the international community. There are two reasons for this late realization. One is that the international community has been naïve enough to be fooled by China’s “smiling tiger” facade, lacked vigilance against a propaganda strategy that exports “Chinese characteristics,” and simply adopted a laissez-faire attitude toward it. The other reason is that the Chinese model—the vehicle for attaining “soft power”—has, at its core, values that completely run counter to humanity and world civilization: all it can do is buy “friends” with lots of cash, and it can never win hearts and minds. Therefore, after its rise and relying on its wealth, China began tearing off its veil of modesty and has put the “sharp power” prong of its strategy more fully in play. It is using means including bribery, manipulation, and coercion, as well as infiltration and recruitment, to penetrate and expand its influence in democratic countries. These efforts have clearly become more aggressive after Xi Jinping came into power.
Currently, the focus of China’s external propaganda campaign is to create an image of Xi Jinping as a strongman. This campaign utilizes the old technique of using pro-Beijing foreign media to hype Xi overseas and then, in turn, fool the people at home. It also deliberately guides the international media to embellish Xi’s image as a strongman and a global leader who is leading China to dominate the international stage. Unfortunately, many foreign media outlets fail to understand what is at work, and they do not know they are being used. For the moment, “Xi the strongman” has become a hot topic that foreign media are fighting over one another to cover, misleading public opinion inside and outside China. In fact, the power that Xi truly holds is hardly commensurate with its outward appearance. What he lacks is the support of the people—in almost all circles. This is Xi’s fatal weakness.
It is true that Xi Jinping is now in a position of great power within the Communist Party of China, acting like a strongman in domestic and international affairs. He is feverishly building a cult of personality, cleaning up the senior military echelon, and demanding “absolute loyalty” from officials at all levels. In foreign affairs, he has abandoned the longstanding “hide one’s capabilities and bide one’s time” policy, made enemies on all fronts, challenged international norms and order, and used the Trump administration’s isolationism to vie for leadership in the international community. Recently, Xi proclaimed during the “CPC in Dialogue with World Political Parties High-Level Meeting”: “We do not import foreign models, and we do not export the China model, either.” Actually, the first half of the sentence is the truth that comes from the bottom of his heart, for the sake of protecting the Party’s interest, but the second half is an out-and-out lie.
On the flip side of Xi’s apparent omnipotence, he is in fact sitting on top of a volcano, and is perhaps facing even tougher times than the trouble-plagued President Trump. After being crowned at the 19th Party Congress, instead of implementing bold new policies to win the support of the broad public, Xi let his protégé Cai Qi, the Party Secretary of Beijing, trip him up. Under Cai, the city evicted the “low-end” population without any regard for the welfare of the common people, ordered a shift from coal to natural gas without putting in place the infrastructure that makes gas use possible, and dismantled signs from buildings across Beijing, ostensibly to “cleanse the skyline.”  Instead of winning support of the people, these moves have turned them against Xi. What troubles Xi most is the question of the loyalty of the military. Xi’s lack of a support base in the military has fueled his mistrust and prompted him to unleash a purge. In his five years in office, Xi has brought down eight generals, including two vice chairmen of the Central Military Commission and the heads of two separate military departments. And there is ongoing rumor of the imminent downfall of one more vice chairman of the Central Military Commission. Xi’s moves have even surpassed Mao’s purge of veteran army commanders during the Cultural Revolution, and will only cause disillusionment, inflict fear, and sow discord in the military.
Xi knows his situation well. He has made enemies with all levels of the Chinese society, they will certainly settle scores with him once he steps down, and he must try to find ways for self-preservation. That is the reason Xi was in such a hurry to amend the Chinese Constitution during the 2nd Plenum of the 19th CPC Central Committee—by adding his “Thoughts” [“Xi Jinping Thought for the New Era of Socialism With Chinese Characteristics”] into the Constitution, so as to add a layer of political protection for himself. But the attempt to remove from the Constitution the term limit of the president, a topic which received so much hype before the 2nd Plenum, was aborted. This shows that Xi is not as powerful as the outside world has made him out to be, that he does not have the final say on certain important issues, and that he faces opposition—both open and veiled—from various forces within the party.
For Xi, 2018 is a troublesome year in terms of domestic and foreign affairs. Two “nuclear bombs” hang over his head: One is [the danger of] economic collapse, and the other the North Korean nuclear crisis. For a very long time, the Chinese economy has been sustained by large amounts of currency being pumped into the system, a move that drags the economy into a quagmire of huge debts. Last fall, Zhou Xiaochuan, chief of the People’s Bank of China, China’s central bank, warned that the Chinese economy could well be facing the “Minsky Moment,” a sudden collapse of asset prices after a long period of growth sparked by debt or currency pressures. As the rustling wind presages rain, all sorts of signs are there, but nobody is sure when the black swan will take flight. When the debt bubble bursts, it might trigger a financial crisis and even economic collapse, and, in turn, lead to social unrest and political turmoil.
In terms of foreign affairs, even though the North Korean nuclear crisis has been temporarily eased by the Winter Olympics, this apparent détente is just a stalling tactic used by Kim Jong-un. The international community has had a taste of Kim’s ruthlessness. It has also underestimated the astuteness of his calculation, which has sent major powers running in circles. Kim knows too well that nuclear weapons are his protective armor and he will never give them up. Otherwise, he will end up like Saddam Hussein and Muammar Gaddafi. Kim’s ideal scenario is to cast China aside to talk and deal directly with the United States. But President Trump’s tactic of putting economic and trade pressure on China to get it to talk North Korea into resolving the nuclear crisis has in fact landed China in a tough spot. North Korea simply does not listen to China. It even keeps fanning anti-China sentiment domestically, calling China a “thousand-year enemy.” China, in order to avoid a trade war with the United States, has no choice but to agree on the surface to deal with North Korea—only to encounter a North Korea that refuses to budge. As China cannot keep its word, President Trump’s trade sanctions against China can well be justified.
For China, the North Korean nuclear crisis is a blow to its Achilles’ heel, on top of an impending economic crisis. Xi Jinping now fears two things the most: going to war and a collapse of the economy. In light of the huge U.S. trade deficit with China, the imperative of economic security is encapsulated in President Trump’s articulation of the new U.S. national security strategy: “economic security is national security.” On the question of the U.S. trade deficit, China is in the wrong to begin with. If the U.S. were to shrink its trade deficit with China by applying trade sanctions—that would be tough medicine for China. Economic sanctions, whether they would result in a trade war with the United States, would hit China’s economy hard and intensify social unrest—presenting an unbearable burden for China.
It is safe to say that America’s new national security strategy is the ace card against China. But without mentioning human rights, the strategy is self-contradictory. With a harder look, this becomes clear: the economic problems the U.S. is facing stem from China’s ignoring international rules after joining the World Trade Organization, and using such unscrupulous competitive means as trampling on human rights and sacrificing the environment. China’s conduct has disturbed the international economic and trade order, stolen job opportunities from the United States, and created a more than $300 billion annual U.S. trade deficit with China. How can the American economy be safe without solving this fundamental problem?
The United States should not be blamed for emphasizing its own national interests. But how can it so easily abandon its world leadership role, one that is shaped by its historic role as the defender of freedom, democracy, and human rights? This role is not only born of America’s founding ideals, but is also integral to its self-interest. China’s violations of human rights have long transcended its national borders and become the public enemy of the world. The hardest hit are the American blue-collar workers who lost job opportunities, and it is they who constitute Trump’s core supporters and brought him into office. In this sense, without taking decisive steps to address a fundamental problem—human rights issues in China—the talk of securing America’s economy is just empty patter. Moreover, if the United States gives up its role as the world’s leader and turns a blind eye to blatant human rights violations in other countries, autocratic regimes such as China and Russia will sneak in and take its place. If that happens, the world will suffer, and America will not be spared.
Finally, going back to the question of whether Sino-U.S. relations are headed toward engagement or hostility, it is clear that engagement is better than hostility. After more than four decades of diplomatic ties, the two countries are intertwined in many aspects and mutually dependent. Harmony will benefit both, and divergence will harm both. However, there must be a prerequisite for engagement, which is that each must keep its promises, abide by various international rules, and avoid hurting others to advance one’s own interests. That is the foundation of mutual trust. If China were to claim supremacy in the world while refusing to abide by international human rights standards and even attacking them, promoting its “value system” “with Chinese characteristics,” and disrupting the international economic and trade order, it will only be a matter of time before Sino-U.S. relations turn hostile. Skeptical? Just wait and see.
 U.S. Department of Defense, “Summary of the 2018 National Defense Strategy of the United States of America,” https://www.defense.gov/Portals/1/Documents/pubs/2018-National-Defense-Strategy-Summary.pdf.
 Dan Lamothe, “Mattis unveils new strategy focused on Russia and China, takes Congress to task for budget impasse,” Washington Post, January 19, 2018, https://www.washingtonpost.com/news/checkpoint/wp/2018/01/19/mattis-calls-for-urgent-change-to-counter-russia-and-china-in-new-pentagon-strategy/?utm_term=.7ecedb5dd764.
 Viola Zhou, “China will take a more active role in world problems, Xi Jinping says,” South China Morning Post, December 1, 2017, http://www.scmp.com/news/china/policies-politics/article/2122536/china-will-take-more-active-role-world-problems-xi.
 Cai Qi allegedly oversaw the massive and sudden eviction of hundreds of thousands of migrant workers and their family members in the city outskirts. Jun Mai, “Why a Xi Jinping protégé came under fire in Beijing over mass eviction of migrant workers,” South China Morning Post, December 22, 2017, http://www.scmp.com/news/china/policies-politics/article/2125431/why-xi-jinping-protege-came-under-fire-beijing-over.
 People in northern China have been dependent on coal-powered heating in winter. When the central government ordered a shift from coal to natural gas, many rural areas and even cities were either not equipped with natural gas infrastructure, or the local governments did not have adequate gas reserves.
 Soon after the massive eviction, Beijing launched another campaign in which logos were removed from all kinds of buildings, including hospitals and even buildings of party mouthpieces. Netizens in China criticized Xi Jinping as trying to make Beijing more like Pyongyang.
 “China central bank warns against ‘Minsky Moment’ due to excessive optimism,” Reuters, October 19, 2017, https://www.reuters.com/article/us-china-congress-debt-minskymoment/china-central-bank-warns-against-minsky-moment-due-to-excessive-optimism-idUSKBN1CO0D6.
小山 [Xiao Shan], “平壤与北京交恶? 朝鲜疑指中国是头号敌人” [“Pyongyang and Beijing become enemies? North Korea suspects China is the number one enemy”], Radio France Internationale, January 24, 2018, http://bit.ly/2FQiCfi.
 Michael C. Bender, “Trump lays out world view in which economic strength bolsters security,” Wall Street Journal, December 18, 2017, https://www.wsj.com/articles/trump-lays-out-world-view-in-which-economic-strength-bolsters-security-1513638012.